Document:

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                                                                   Exhibit 10.42

                           THIRD AMENDED AND RESTATED
                                CREDIT AGREEMENT
                              (REVOLVING FACILITY)

                                      AMONG

                       MHC OPERATING LIMITED PARTNERSHIP,
                        AN ILLINOIS LIMITED PARTNERSHIP,
                                  AS BORROWER,

                      MANUFACTURED HOME COMMUNITIES, INC.,
                             A MARYLAND CORPORATION,
                                    THE REIT

                             WELLS FARGO BANK, N.A.,

                             BANK OF AMERICA, N.A.,

                         COMMERZBANK AKTIENGESELLSCHAFT,
                                NEW YORK BRANCH,

                                       AND

                        LASALLE BANK NATIONAL ASSOCIATION

                          TOGETHER WITH THOSE ASSIGNEES
                        BECOMING PARTIES HERETO PURSUANT
                          TO SECTION 11.13, AS LENDERS,

                             WELLS FARGO BANK, N.A.
                          AS AGENT, SOLE LEAD ARRANGER,
                      SWINGLINE LENDER AND ISSUING LENDER,

                             BANK OF AMERICA, N.A.,
                              AS SYNDICATION AGENT,

                                       AND

                       LASALLE BANK NATIONAL ASSOCIATION,
                             AS DOCUMENTATION AGENT

                          DATED AS OF FEBRUARY 9, 2002

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                                TABLE OF CONTENTS

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                                                                                                               PAGE
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<S>                                                                                                             <C>
ARTICLE I. DEFINITIONS............................................................................................2

1.01   Certain Defined Terms......................................................................................2
1.02   Computation of Time Periods...............................................................................23
1.03   Terms.....................................................................................................23
1.04   Interrelationship With the Existing Credit Agreement......................................................23

ARTICLE II. LOANS................................................................................................23

2.01   Loan Advances and Repayment...............................................................................23
2.02   Authorization to Obtain Loans and Letters of Credit.......................................................26
2.03   Interest on the Loans.....................................................................................26
2.04   Fees.31

2.05   Payments..................................................................................................31
2.06   Increased Capital.........................................................................................32
2.07   Notice of Increased Costs.................................................................................33
2.08   Option to Replace Lenders.................................................................................33
2.09   Letters of Credit.........................................................................................34
2.10   Swingline Loans...........................................................................................38

ARTICLE III. EXTENSION OPTIONS...................................................................................40

3.01   First Extension Option....................................................................................40
3.02   Second Extension Option...................................................................................41

ARTICLE IV. CONDITIONS TO LOANS..................................................................................41

4.01   Intentionally Omitted.....................................................................................41
4.02   Conditions Precedent to All Loans and Issuance of Letters of Credit.......................................42

ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................42

5.01   Representations and Warranties as to Borrower.............................................................42
5.02   Representations and Warranties as to the REIT.............................................................47

ARTICLE VI. REPORTING COVENANTS..................................................................................51

6.01   Financial Statements and Other Financial and Operating Information........................................51
6.02   Press Releases; SEC Filings and Financial Statements......................................................53
6.03   Environmental Notices.....................................................................................53
6.04   Qualifying Unencumbered Properties........................................................................53

ARTICLE VII. AFFIRMATIVE COVENANTS...............................................................................54

7.01   With respect to Borrower:.................................................................................54
7.02   With respect to the REIT:.................................................................................56

ARTICLE VIII. NEGATIVE COVENANTS.................................................................................57

8.01   With respect to Borrower:.................................................................................57
8.02   With respect to the REIT:.................................................................................62

ARTICLE IX. FINANCIAL COVENANTS..................................................................................63

9.01   Total Liabilities to Gross Asset Value....................................................................64
9.02   Secured Debt to Gross Asset Value.........................................................................64
9.03   EBITDA to Interest Expense Ratio..........................................................................64
9.04   EBITDA to Fixed Charges Ratio.............................................................................64
9.05   Unencumbered Net Operating Income to Unsecured Interest Expense...........................................64
9.06   Unencumbered Pool.........................................................................................64
9.07   Minimum Net Worth.........................................................................................64

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<TABLE>
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<S>                                                                                                            <C>
9.08   Permitted Holdings........................................................................................64
9.09   Calculation...............................................................................................65

ARTICLE X. EVENTS OF DEFAULT; RIGHTS AND REMEDIES................................................................65

10.01  Events of Default.........................................................................................65
10.02  Rights and Remedies.......................................................................................69
10.03  Rescission................................................................................................71
10.04  Suspension of Lending.....................................................................................71

ARTICLE XI. AGENCY PROVISIONS....................................................................................71

11.01  Appointment...............................................................................................71
11.02  Nature of Duties..........................................................................................71
11.03  Loan Disbursements........................................................................................72
11.04  Distribution and Apportionment of Payments................................................................72
11.05  Rights, Exculpation, Etc..................................................................................74
11.06  Reliance..................................................................................................74
11.07  Indemnification...........................................................................................75
11.08  Agent Individually........................................................................................75
11.09  Successor Agent; Resignation of Agent; Removal of Agent...................................................75
11.10  Consents and Approvals....................................................................................76
11.11  [Intentionally Omitted]...................................................................................77
11.12  [Intentionally Omitted]...................................................................................77
11.13  Assignments and Participations............................................................................77
11.14  Ratable Sharing...........................................................................................80
11.15  Delivery of Documents.....................................................................................81
11.16  Notice of Events of Default...............................................................................81

ARTICLE XII. MISCELLANEOUS.......................................................................................81

12.01  Expenses..................................................................................................81
12.02  Indemnity.................................................................................................82
12.03  Change in Accounting Principles...........................................................................83
12.04  Setoff....................................................................................................83
12.05  Amendments and Waivers....................................................................................84
12.06  Independence of Covenants.................................................................................85
12.07  Notices and Delivery......................................................................................85
12.08  Survival of Warranties, Indemnities and Agreements........................................................86
12.09  Failure or Indulgence Not Waiver; Remedies Cumulative.....................................................86
12.10  Marshalling; Recourse to Security; Payments Set Aside.....................................................86
12.11  Severability..............................................................................................86
12.12  Headings..................................................................................................86
12.13  Governing Law.............................................................................................86
12.14  Limitation of Liability...................................................................................86
12.15  Successors and Assigns....................................................................................87
12.16  Usury Limitation..........................................................................................87
12.17  Confidentiality...........................................................................................87
12.18  Consent to Jurisdiction and Service of Process; Waiver of Jury Trial; Waiver Of Permissive Counterclaims..88
12.19  Counterparts; Effectiveness; Inconsistencies..............................................................90
12.20  Construction..............................................................................................90
12.21  Entire Agreement..........................................................................................90
12.22  Agent's Action for Its Own Protection Only................................................................90
12.23  Lenders' ERISA Covenant...................................................................................91
12.24  Sole Lead Arranger, Documentation Agent and Syndication Agent.............................................91

</TABLE>

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EXHIBITS
--------

A      -      Assignment and Assumption
B      -      REIT Guaranty
C      -      [Intentionally Deleted]
D      -      Revolving Loan Notes
E      -      Swingline Note
F      -      Qualifying Unencumbered Properties
G      -      Letter of Credit Note
H      -      Letter of Credit Application
I      -      Notice of Borrowing
J      -      Notice of Continuation/Conversion

SCHEDULES

5.01(c)    -      Ownership of Borrower
5.01(r)    -      Environmental Matters

5.01(w)    -      Subsidiaries and Investment Affiliates

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                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                  THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of February __, 2002 (as amended, supplemented or modified from time to time,
the "Agreement") and is among MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower"), Manufactured Home Communities, Inc., a
Maryland corporation (the "REIT"), each of the Lenders, as hereinafter defined,
Wells Fargo Bank, N.A ("Wells Fargo") in its capacity as Agent, as Sole Lead
Arranger, as Swingline Lender, as Issuing Lender and as a Lender, Bank of
America, N.A., as Syndication Agent and as a Lender, LaSalle Bank National
Association, as Documentation Agent and as a Lender, and Commerzbank
Aktiengesellschaft, New York Branch, as a Lender.

                                    RECITALS

                  A. Borrower, the REIT and Wells Fargo Realty Advisors Funding
Incorporated ("WFRAF"), in its capacity as Agent and as the sole Lender, have
previously entered into that certain Credit Agreement dated as of August 16,
1994 (the "Original Credit Agreement").

                  B. The Original Credit Agreement was amended and restated in
its entirety by that certain First Amended and Restated Credit Agreement dated
as of September 26, 1994 (the "First Amended Credit Agreement") by and among
Borrower, the REIT, WFRAF, as Agent and as a Lender, and Bank of America
Illinois, as Co-Agent and as Lender.

                  C. The First Amended Credit Agreement was amended and restated
in its entirety by that certain Second Amended and Restated Credit Agreement
dated as of April 28, 1998 (the "Existing Credit Agreement") by and among
Borrower, the REIT, Wells Fargo (as successor in interest to WFRAF), as Agent,
Swingline Lender, Issuing Lender, and a Lender, Bank of America National Trust
and Savings Association, as Syndication Agent and as a Lender, Morgan Guaranty
Trust Company of New York, as Documentation Agent and as a Lender, and
Commerzbank Aktiengesellschaft, New York Branch, as a Lender.

                  D. The Existing Credit Agreement has been amended by that
certain First Amendment to Second Amended and Restated Credit Agreement dated as
of December 18, 1998 (the "First Amendment") and that certain Second Amendment
to Second Amended and Restated Credit Agreement dated as of August 9, 2000 (the
"Second Amendment").

                  E. The "Lenders" under the Existing Credit Agreement (as so
amended) are Wells Fargo, Bank of America National Trust and Savings Association
(as successor in interest to Bank of America Illinois), Commerzbank
Aktiengesellschaft, New York Branch and LaSalle Bank National Association (the
"Existing Lenders").

                  F. Borrower, the REIT, Wells Fargo, as Agent, Sole Lead
Arranger, Swingline Lender, Issuing Lender and as a Lender, Bank of America
National Trust and Savings Association, as Syndication Agent and as a Lender,
LaSalle Bank National Association, as Documentation Agent and as a Lender and
the other Lenders desire to further amend and restate the Existing Credit
Agreement (as so amended) in its entirety to make certain modifications as
hereinafter set forth.

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                  NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:

                                    AGREEMENT

                                   ARTICLE I.
                                   DEFINITIONS

                  Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings (such meanings to be applicable,
except to the extent otherwise indicated in a definition of a particular term,
both to the singular and the plural forms of the terms defined):

                  "Accommodation Obligations" as applied to any Person, means
any obligation, contingent or otherwise, of that Person in respect of which that
Person is liable for any Indebtedness or other obligation or liability of
another Person, including without limitation and without duplication (i) any
such Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment other than for
value received and (ii) any obligation of such Person arising through such
Person's status as a general partner of a general or limited partnership with
respect to any Indebtedness, obligation or liability of such general or limited
partnership.

                  "Accountants" means any nationally recognized independent
accounting firm.

                  "Adjusted Asset Value" means, as of any date of determination,
(i) for any Property for which an acquisition or disposition by Borrower or any
Subsidiary has not occurred in the Fiscal Quarter most recently ended as of such
date, the product of four (4) and a fraction, the numerator of which is EBITDA
for such Fiscal Quarter attributable to such Property in a manner reasonably
acceptable to Agent, and the denominator of which is eight hundred seventy-five
ten-thousandths (0.0875), and (ii) for any Property which has been acquired by
Borrower or any Subsidiary in the Fiscal Quarter most recently ended as of such
date, the Net Price of the Property paid by Borrower or such Subsidiary for such
Property.

                  "Affiliates" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote twenty-five percent (25%) or more of the
Securities having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, (b) the ownership of a general

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partnership interest in such Person or (c) the ownership of twenty-five percent
(25%) or more of the limited partnership interests (or other ownership interests
with similarly limited voting rights) in such Person; provided, however, that in
no event shall the Affiliates of Borrower or any Subsidiary or any Investment
Affiliate include Persons holding direct or indirect ownership interests in the
REIT or any other real estate investment trust which holds a general partnership
interest in Borrower if such Person does not otherwise constitute an "Affiliate"
hereunder; provided, further, that the REIT and Borrower shall at all times be
deemed Affiliates of each other.

                  "Agent" means Wells Fargo in its capacity as administrative
agent for the Lenders under this Agreement, and shall include any successor
Agent appointed pursuant hereto and shall be deemed to refer to Wells Fargo in
its individual capacity as a Lender where the context so requires.

                  "Agreement" has the meaning ascribed to such term in the
preamble hereto.

                  "Agreement Party" means any Person, other than the REIT and
Borrower, which concurrently with the execution of this Agreement or hereafter
executes and delivers a guaranty in connection with this Agreement, which as of
the date of determination, is in force and effect.

                  "Applicable Margin" means, for any day, the rate per annum set
forth below opposite the applicable Level Period then in effect:

<TABLE>
<CAPTION>
                  Level Period                       Applicable Margin
                  ------------                       -----------------
                <S>                                <C>
                  Level I Period                          1.0%

                  Level II Period                         1.125%
</TABLE>

The Applicable Margin shall be adjusted for all purposes quarterly as soon as
reasonably practicable, but not later than five (5) days, after the date of
receipt by Agent of the quarterly financial information in accordance with the
provisions of Section 6.01(a) hereof, together with a calculation by Borrower of
the ratio of Total Liabilities to the sum of Gross Asset Values for Borrower and
each of its Subsidiaries as of the end of the applicable Fiscal Quarter. No
adjustment in the Applicable Margin shall be made retroactively.

                  "Assignment and Assumption" means an Assignment and Assumption
in the form of Exhibit A hereto (with blanks appropriately filled in) delivered
to Agent in connection with each assignment of a Lender's interest under this
Agreement pursuant to Section 11.13.

                  "Balloon Payment" means, with respect to any loan constituting
Indebtedness, any required principal payment of such loan which is either (i)
payable at the maturity of such loan or (ii) in an amount which exceeds
twenty-five percent (25%) of the original principal amount of such loan;
provided, however, that the final payment of a fully amortizing loan shall not
constitute a Balloon Payment.

                  "Base Rate" means, on any day, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall at all times be
equal to the higher of (a) the base rate of interest per annum established from
time to time by Wells Fargo, and designated as its prime

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rate and in effect on such day, and (b) the Federal Funds Rate as announced by
the Federal Reserve Bank of New York, in effect on such day plus one half
percent (0.5%) per annum. Each change in the Base Rate shall become effective
automatically as of the opening of business on the date of such change in the
Base Rate, without prior written notice to Borrower or Lenders. The Base Rate
may not be the lowest rate of interest charged by any bank, Agent or Lender on
similar loans.

                  "Base Rate Loans" means those Loans bearing interest at the
Base Rate.

                  "Base Rent" means the aggregate rent received, on a
consolidated basis, by Borrower or any Subsidiary from tenants which lease
manufactured home community sites owned by Borrower or any Subsidiary minus any
amounts specifically identified as and representing payments for trash removal,
cable television, water, electricity, other utilities, taxes and other rent
which reimburses expenses related to the tenant's occupancy.

                  "Benefit Plan" means any employee pension benefit plan as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) which a
Person or any ERISA Affiliate maintains, administers, contributes to or is
required to contribute to, or, within the immediately preceding five (5) years,
maintained, administered, contributed to or was required to contribute to, or
under which a Person or any ERISA Affiliate may have any liability.

                  "Borrower" has the meaning ascribed to such term in the
preamble hereto.

                  "Borrower Plan" shall mean any Plan (A) which Borrower, any of
its Subsidiaries or any of its ERISA Affiliates maintains, administers,
contributes to or is required to contribute to, or, within the five years prior
to the Closing Date, maintained, administered, contributed to or was required to
contribute to, or under which Borrower, any of its Subsidiaries or any of its
ERISA Affiliates may incur any liability and (B) which covers any employee or
former employee of Borrower, any of its Subsidiaries or any of its ERISA
Affiliates (with respect to their relationship with such entities).

                  "Borrower's Share" means Borrower's and/or the REIT's
collective direct or indirect share of the assets, liabilities, income, expenses
or expenditures, as applicable, of an Investment Affiliate based upon Borrower's
and/or the REIT's percentage ownership (whether direct or indirect) of such
Investment Affiliate, as the case may be.

                  "Borrowing" means a borrowing under the Facility.

                  "Business Day" means (a) with respect to any Borrowing,
payment or rate determination of LIBOR Loans, a day, other than a Saturday or
Sunday, on which Agent is open for business in Chicago and San Francisco and on
which dealings in Dollars are carried on in the London inter bank market, and
(b) for all other purposes any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the States of California and Illinois, or
is a day on which banking institutions located in California and Illinois are
required or authorized by law or other governmental action to close.

                  "Capital Expenditures" means, as applied to any Person for any
period, the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including that portion of Capital Leases
which is capitalized on the balance sheet of a

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Person) by such Person during such period that, in conformity with GAAP, are
required to be included in or reflected by the property, plant or equipment or
similar fixed asset accounts reflected in the balance sheet of such Person,
excluding any expenditures reasonably determined by such Person as having been
incurred for expansion of the number of manufactured home sites at a
manufactured home community owned by such Person.

                  "Capital Leases," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.

                  "Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two nationally recognized rating services
reasonably acceptable to Agent; (c) domestic corporate bonds, other than
domestic corporate bonds issued by Borrower or any of its Affiliates, maturing
no more than 2 years after the date of acquisition thereof and, at the time of
acquisition, having a rating of at least A or the equivalent from two nationally
recognized rating services reasonably acceptable to Agent; (d) variable-rate
domestic corporate notes or medium term corporate notes, other than notes issued
by Borrower or any of its Affiliates, maturing or resetting no more than 1 year
after the date of acquisition thereof and having a rating of at least AA or the
equivalent from two nationally recognized rating services reasonably acceptable
to Agent; (e) commercial paper (foreign and domestic) or master notes, other
than commercial paper or master notes issued by Borrower or any of its
Affiliates, and, at the time of acquisition, having a long-term rating of at
least A or the equivalent from a nationally recognized rating service reasonably
acceptable to Agent and having a short-term rating of at least A-1 and P-1 from
S&P and Moody's, respectively (or, if at any time neither S&P nor Moody's shall
be rating such obligations, then the highest rating from such other nationally
recognized rating services reasonably acceptable to Agent); (f) domestic and
Eurodollar certificates of deposit or domestic time deposits or Eurotime
deposits or bankers' acceptances (foreign or domestic) that are issued by a bank
(I) which has, at the time of acquisition, a long-term rating of at least A or
the equivalent from a nationally recognized rating service reasonably acceptable
to Agent and (II) if a domestic bank, which is a member of the FDIC; and (g)
overnight securities repurchase agreements, or reverse repurchase agreements
secured by any of the foregoing types of securities or debt instruments,
provided that the collateral supporting such repurchase agreements shall have a
value not less than 101% of the principal amount of the repurchase agreement
plus accrued interest.

                  "Closing Date" means the date on which this Agreement shall
become effective in accordance with Section 12.19, which date shall be February
__, 2002 or such later date as to which Agent and Borrower agree in writing.

                  "Commission" means the Securities and Exchange Commission.

                  "Commitment" means, with respect to any Lender, such Lender's
Pro Rata Share of the Facility which amount shall not exceed the principal
amount set out under such Lender's

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name under the heading "Loan Commitment" on the counterpart signature pages
attached to this Agreement or as set forth on an Assignment and Assumption
executed by such Lender, as assignee, as such amount may be adjusted pursuant to
the terms of this Agreement.

                  "Contaminant" means any pollutant (as that term is defined in
42 U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 C.F.R. Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), or any constituent of any such substance or waste, including, but not
limited to hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, urea formaldehyde insulation, radioactive
materials, biological substances, PCBs, pesticides, herbicides, asbestos, sewage
sludge, industrial slag, acids, metals, or solvents.

                  "Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or 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 any
restrictive covenant affecting such Person or any of its properties).

                  "Controlled Ownership Interests" means ownership interests in
a Person where the REIT or Borrower (independently or collectively) has control
over the management and operations of such Person.

                  "Convertible Securities" means evidences of indebtedness,
shares of stock, limited or general partnership interests or other ownership
interests, warrants, options, or other rights or securities which are
convertible into or exchangeable for, with or without payment of additional
consideration, shares of common stock of the REIT or partnership interests of
Borrower, as the case may be, either immediately or upon the arrival of a
specified date or the happening of a specified event.

                  "Court Order" means any judgment, writ, injunction, decree,
rule or regulation of any court or Governmental Authority binding upon the
Person in question.

                  "Debt Service" means, for any period, Interest Expense for
such period plus scheduled principal amortization (exclusive of Balloon
Payments) for such period on all Indebtedness of the REIT, on a consolidated
basis.

                  "Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under this Agreement within the time period specified
for performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of two (2) Business Days after written
notice from Agent.

                  "Development Activity" means construction in process, that is
being performed by or at the direction of Borrower, any Subsidiary or any
Investment Affiliate, of any manufactured home community that will be owned and
operated by Borrower, any Subsidiary or any Investment Affiliate upon completion
of construction, including construction in process of

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manufactured home communities not owned by Borrower, any Subsidiary or any
Investment Affiliate but which Borrower, any Subsidiary or any Investment
Affiliate has the contractual obligation to purchase, but excluding construction
in process for the purpose of expanding manufactured home communities that have
been operated for at least one (1) year prior to the commencement of such
expansion.

                  "Documentation Agent" means LaSalle Bank National Association
in its capacity as documentation agent for the Lenders under this Agreement.

                  "DOL" means the United States Department of Labor and any
successor department or agency.

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

                  "EBITDA" means, for any period and without duplication (i) Net
Income for such period, plus (ii) depreciation and amortization expense and
other non-cash items deducted in the calculation of Net Income for such period,
plus (iii) Interest Expense deducted in the calculation of Net Income for such
period, plus, (iv) Taxes deducted in the calculation of Net Income for such
period, minus (v) the gains (and plus the losses) from extraordinary or unusual
items or asset sales or write-ups or forgiveness of indebtedness included in the
calculation of Net Income, for such period, minus (vi) earnings of Subsidiaries
for such period distributed to third parties, plus (or minus in the case of a
loss) (vii) Borrower's Share of the net income (or loss) of each Investment
Affiliate for such period calculated in conformity with GAAP before
depreciation, minus (or plus in the case of a loss) (viii) Borrower's Share of
the gains (or losses) from extraordinary or unusual items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of the net
income of each Investment Affiliate for such period.

                  "Environmental Laws" means all federal, state, district, local
and foreign laws, and all orders, consent orders, judgments, notices, permits or
demand letters issued, promulgated or entered thereunder, relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or industrial substances or Contaminants into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contamination, chemicals, industrial
substances or Contaminants. The term Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"); the Toxic Substances Control Act, as
amended; the Hazardous Materials Transportation Act, as amended; the Resource
Conservation and Recovery Act, as amended ("RCRA"); the Clean Water Act, as
amended; the Safe Drinking Water Act, as amended; the Clean Air Act, as amended;
all analogous state laws; the plans, rules, regulations or ordinances adopted,
or other criteria and guidelines promulgated pursuant to the preceding laws or
other similar laws, regulations, rules or ordinances now or hereafter in effect
regulating public health, welfare or the environment.

                  "Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under federal or state Environmental Laws or
regulations, or (b) damages arising

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<PAGE>

from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.

                  "ERISA Affiliate" means any (a) corporation which is, becomes,
or is deemed by any Governmental Authority to be a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Internal
Revenue Code) as a Person or is so deemed by such Person, (b) partnership, trade
or business (whether or not incorporated) which is, becomes or is deemed by any
Governmental Authority to be under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with such Person or is so deemed by such
Person, (c) any Person which is, becomes or is deemed by any Governmental
Authority to be a member of the same "affiliated service group" (as defined in
Section 414(m) of the Internal Revenue Code) as such Person or is so deemed by
such Person, or (d) any other organization or arrangement described in Section
414(o) of the Internal Revenue Code which is, becomes or is deemed by such
Person or by any Governmental Authority to be required to be aggregated pursuant
to regulations issued under Section 414(o) of the Internal Revenue Code with
such Person pursuant to Section 414(o) of the Internal Revenue Code or is so
deemed by such Person.

                  "Event of Default" means any of the occurrences set forth in
Article X after the expiration of any applicable grace period expressly provided
therein.

                  "Existing Credit Agreement" has the meaning set forth in the
Recitals hereto.

                  "Existing Loans" means the "Loans" as defined in the Existing
Credit Agreement.

                  "Facility" means the loan facility of up to One Hundred Fifty
Million Dollars ($150,000,000) described in Section 2.01(a).

                  "FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.

                  "Federal Funds Rate" means, for any period, a fluctuating
interest rate, rounded upwards to the nearest one hundredth of one percent
(0.01%), per annum equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal Funds brokers of recognized
standing selected by Agent.

                  "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any governmental authority succeeding to its
functions.

                  "Financial Statements" has the meaning ascribed to such term
in Section 6.01(a).

                  "First Extended Maturity Date" has the meaning ascribed to
such term in Section 3.01.

                                       8
<PAGE>

                  "FIRREA" means the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended from time to time.

                  "First Amendment" has the meaning set forth in the Recitals
hereto.

                  "First Amended Credit Agreement" has the meaning set forth in
the Recitals hereto.

                  "First Extended Maturity Date" has the meaning set forth in
Section 3.01.

                  "Fiscal Quarter" means a fiscal quarter of a Fiscal Year.

                  "Fiscal Year" means the fiscal year of Borrower and the REIT
which shall be the twelve (12) month period ending on the last day of December
in each year.

                  "Fixed Charges" for any Fiscal Quarter period means the sum of
(i) Debt Service for such period, (ii) 3% of Base Rent for such period, and
(iii) Borrower's Share of Capital Expenditures from each Investment Affiliate
for such period.

                  "Funding Date" means, with respect to any Loan made after the
Closing Date, the date of the funding of such Loan.

                  "Funds from Operations" means the definition of "Funds from
Operations" of the National Association of Real Estate Investment Trusts on the
date of determination (before allocation to minority interests).

                  "GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination and which are consistent with the past practices of
the REIT and Borrower.

                  "Governmental Authority" means any nation or government, any
federal, state, local, municipal or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

                  "Gross Asset Value" means with respect to any Person as of any
date of determination, the sum of the Adjusted Asset Values for each Property
then owned by such Person plus the value of any cash or Cash Equivalent owned by
such Person and not subject to any Lien.

                  "Indebtedness," as applied to any Person (and without
duplication), means (a) all indebtedness, obligations or other liabilities
(whether secured, unsecured, recourse, non-recourse, direct, senior or
subordinate) of such Person for borrowed money, (b) all indebtedness,
obligations or other liabilities of such Person evidenced by Securities or other
similar instruments, (c) all reimbursement obligations and other liabilities of
such Person with respect to letters of credit or banker's acceptances issued for
such Person's account or other similar instruments for which a contingent
liability exists, (d) all obligations of such Person to pay the

                                       9
<PAGE>

deferred purchase price of Property or services, (e) all obligations in respect
of Capital Leases of such Person, (f) all Accommodation Obligations of such
Person, (g) all indebtedness, obligations or other liabilities of such Person or
others secured by a Lien on any asset of such Person, whether or not such
indebtedness, obligations or liabilities are assumed by, or are a personal
liability of, such Person, (h) all indebtedness, obligations or other
liabilities (other than interest expense liability) in respect of Interest Rate
Contracts and foreign currency exchange agreements excluding all indebtedness,
obligations or other liabilities in respect of such Interest Rate Contracts to
the extent that the aggregate notional amount thereof does not exceed the
aggregate principal amount of any outstanding fixed or floating rate
Indebtedness, obligations or other liabilities permitted under this Agreement
that exist as of the date that such Interest Rate Contracts are entered into or
that are incurred no more than thirty (30) days after such Interest Rate
Contracts are entered into and (i) ERISA obligations currently due and payable.

                  "Initial Maturity Date" means August 9, 2003.

                  "Interest Expense" means, for any period and without
duplication, total interest expense, whether paid, accrued or capitalized
(including loan and letter of credit fees and the interest component of Capital
Leases but excluding interest expense covered by an interest reserve established
under a loan facility) of the REIT, on a consolidated basis and determined in
accordance with GAAP.

                  "Interest Period" means, relative to any LIBOR Loans
comprising part of the same Borrowing, the period beginning on (and including)
the date on which such LIBOR Loans are made as, or converted into, LIBOR Loans,
and shall end on (but exclude) the day which numerically corresponds to such
date one (1), two (2), three (3), six (6) or twelve (12) months thereafter (or,
if such month has no numerically corresponding day, on the last Business Day of
such month), in either case as Borrower may select in its relevant Notice of
Borrowing pursuant to Section 2.01(b); provided, however, that:

                  (a) if such Interest Period would otherwise end on a day which
         is not a Business Day, such Interest Period shall end on the next
         following Business Day (unless such next following Business Day is the
         first Business Day of a calendar month, in which case such Interest
         Period shall end on the Business Day next preceding such numerically
         corresponding day);

                  (b) no Interest Period may end later than the Termination
         Date; and

                  (c) with the reasonable approval of Agent (unless any Lender
         has previously advised Agent and Borrower that it is unable to enter
         into LIBOR contracts for an Interest Period of such duration), an
         Interest Period may have a duration of less than one (1) month.

                  "Interest Rate Contracts" means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.

                  "Interim Period" has the meaning ascribed to such term in
Section 4.01(g).

                  "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor statute.

                                       10
<PAGE>

                  "Investment" means, as applied to any Person, any direct or
indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not arise
from sales of goods or services to that Person in the ordinary course of
business. The amount of any Investment shall be determined in conformity with
GAAP except as otherwise specifically provided herein.

                  "Investment Affiliate" means any Person in whom the REIT,
Borrower or any Subsidiary holds an equity interest, directly or indirectly,
whose financial results are not consolidated under GAAP with the financial
results of the REIT or Borrower on the consolidated financial statements of the
REIT and Borrower.

                  "Investment Mortgages" means mortgages securing indebtedness
directly or indirectly owed to Borrower or any of its Subsidiaries, including
certificates of interest in real estate mortgage investment conduits.

                  "Issuing Lender" means Wells Fargo in its capacity as issuer
of Letters of Credit under this Agreement, and shall include any successor
Issuing Lender appointed pursuant hereto.

                  "IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.

                  "Land" means unimproved real estate purchased or leased or to
be purchased or leased by Borrower or any of its Subsidiaries for the purpose of
future development of improvements.

                  "Lender Affiliate" as applied to any Lender, means any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Lender. For purposes of this definition, "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means (a) the possession,
directly or indirectly, of the power to vote more than fifty percent (50%) of
the Securities having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, or (b) the ownership of a general partnership interest or a
limited partnership interest representing more than fifty (50%) of the
outstanding limited partnership interests of a Person.

                  "Lender Reply Period" has the meaning ascribed to such term in
Section 11.10(a).

                  "Lender Taxes" has the meaning ascribed to such term in
Section 2.03(g).

                  "Lenders" means Wells Fargo and any other bank, finance
company, insurance or other financial institution which is or becomes a party to
this Agreement by execution of a counterpart signature page hereto or an
Assignment and Assumption, as assignee, provided that with respect to matters
requiring the consent to or approval of Requisite Lenders, the Supermajority
Lenders, or all Lenders at any given time, all then existing Defaulting Lenders

                                       11
<PAGE>

will be disregarded and excluded, and, for voting purposes only, "all Lenders"
shall be deemed to mean "all Lenders other than Defaulting Lenders."

                  "Letter of Credit Application" shall have the meaning ascribed
to such term in Section 2.09(b).

                  "Letter of Credit Documents" has the meaning set forth in
Section 2.09(j) hereof.

                  "Letter of Credit Mandatory Borrowing" has the meaning set
forth in Section 2.09(f) hereof.

                  "Letter of Credit Note" means the promissory note evidencing
the Letter of Credit Obligations in the original principal amount of Thirty
Million Dollars ($30,000,000) executed by Borrower in favor of Issuing Lender
pursuant to the Existing Credit Agreement, as it may be amended, supplemented,
replaced or modified from time to time. A copy of the Letter of Credit Note is
attached hereto as Exhibit G.

                  "Letter of Credit Obligations" means, collectively and without
duplication, (a) all reimbursement and other obligations of Borrower in respect
of Letters of Credit, and (b) all amounts paid by Lenders to Issuing Lender in
respect of Letters of Credit.

                  "Letters of Credit" means the letters of credit issued by
Issuing Lender pursuant to Section 2.09 hereof for the account of Borrower in an
aggregate face amount not to exceed $30,000,000.00 outstanding at any one time,
as they may be drawn on, replaced or modified from time to time.

                  "Level I Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for the Borrower and each of
its Subsidiaries shall be equal to or less than 0.45:1.

                  "Level II Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall exceed 0.45:1 but shall not exceed 0.60:1.

                  "Liabilities and Costs" means all claims, judgments,
liabilities, obligations, responsibilities, losses, damages (including punitive
and treble damages), costs, disbursements and expenses (including without
limitation reasonable attorneys', experts' and consulting fees and costs of
investigation and feasibility studies), fines, penalties and monetary sanctions,
interest, direct or indirect, known or unknown, absolute or contingent, past,
present or future.

                  "LIBOR" means, relative to any Interest Period for any LIBOR
Loan included in any Borrowing, the rate of interest obtained by dividing (i)
the rate of interest determined by Agent (whose determination shall be
conclusive absent manifest error, which shall not include any lower
determination by any other banks) equal to the rate (rounded upwards, if
necessary, to the nearest one one-hundredth of one percent (.01%)) per annum
reported by Wells Fargo at which Dollar deposits in immediately available funds
are offered by Wells Fargo to leading banks in the Eurodollar inter bank market
at or about 11:00 A.M. London time two (2) Business Days prior to the beginning
of such Interest Period for delivery on the first day of such Interest Period
for a period approximately equal to such Interest Period and in an amount equal
or

                                       12
<PAGE>

comparable to the LIBOR Loan to which such Interest Period relates, by (ii) a
percentage expressed as a decimal equal to one (1) minus the LIBOR Reserve
Percentage.

                  "LIBOR Loan" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to LIBOR.

                  "LIBOR Reserve Percentage" means, relative to any Interest
Period, the average daily maximum reserve requirement (including, without
limitation, all basic, emergency, supplemental, marginal and other reserves)
which is imposed under Regulation D, as Regulation D may be amended, modified or
supplemented, on "Eurocurrency liabilities" having a term equal to the
applicable Interest Period (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on LIBOR Loans
is determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to United States
residents), which requirement shall be expressed as a decimal. LIBOR shall be
adjusted automatically on, and as of the effective date of, any change in the
LIBOR Reserve Percentage.

                  "Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights-of-way, zoning restrictions
and the like), lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including without limitation any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement (other than a financing statement filed by a
"true" lessor pursuant to Section 9-408 of the Uniform Commercial Code) naming
the owner of the asset to which such Lien relates as debtor, under the Uniform
Commercial Code or other comparable law of any jurisdiction.

                  "Loans" means the loans made pursuant to the Facility,
including, without limitation, loans made pursuant to Section 2.01 hereof,
Swingline Loans, and Loans made pursuant to Mandatory Borrowings.

                  "Loan Availability" means the amount of the Facility from time
to time.

                  "Loan Documents" means, this Agreement, the Loan Notes, the
REIT Guaranty, and all other agreements, instruments and documents (together
with amendments and supplements thereto and replacements thereof) now or
hereafter executed by the REIT, Borrower or any Agreement Party, which evidence,
guaranty or secure the Obligations.

                  "Loan Notes" means the promissory notes evidencing the Loans
(other than Swingline Loans) in the aggregate original principal amount of One
Hundred Fifty Million Dollars ($150,000,000) executed by Borrower in favor of
Lenders pursuant to the Existing Credit Agreement, as they may be amended,
supplemented, replaced or modified from time to time. Copies of the Loan Notes
are attached hereto as Exhibit D.

                  "Mandatory Borrowing" means any Letter of Credit Mandatory
Borrowing or Swingline Mandatory Borrowing.

                                       13
<PAGE>

                  "Manufactured Home Community Mortgages" means Investment
Mortgages issued by any Person engaged primarily in the business of developing,
owning, and managing manufactured home communities.

                  "Manufactured Home Community Ownership Interests" means
partnership, joint venture, membership or other equity interests issued by any
Person engaged primarily in the business of developing, owning, and managing
manufactured home communities.

                  "Material Adverse Effect" means a material adverse effect upon
(i) the ability of Borrower or the REIT to perform its covenants and obligations
under this Agreement and the other Loan Documents or (ii) the ability of Agent
or Lenders to enforce the Loan Documents. The phrase "has a Material Adverse
Effect" or "will result in a Material Adverse Effect" or words substantially
similar thereto shall in all cases be intended to mean "has or will result in a
Material Adverse Effect," and the phrase "has no (or does not have a) Material
Adverse Effect" or "will not result in a Material Adverse Effect" or words
substantially similar thereto shall in all cases be intended to mean "does not
or will not result in a Material Adverse Effect."

                  "Maturity Date" means the Initial Maturity Date, as such date
may be extended pursuant to Article III.

                  "Minimum Net Worth" means Three Hundred Fifty-Eight Million
Dollars ($358,000,000), plus ninety percent (90%) of all Net Offering Proceeds
received by the REIT or Borrower after the Closing Date, minus ninety percent
(90%) of the aggregate cost to the REIT or Borrower for the repurchase of any
common stock, preferred stock, partnership interests, limited liability company
interests, Convertible Securities or other ownership or equity interests in the
REIT or Borrower; provided, however, that in no event shall the Minimum Net
Worth be less than Three Hundred Twenty Two Million Dollars ($322,000,000).

                  "Moody's" means Moody's Investors Service, a Delaware
corporation, and its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by Agent.

                  "Multiemployer Plan" means an employee benefit plan defined in
Section 4001(a)(3) or Section 3(37) of ERISA which is, or within the immediately
preceding six (6) years was, maintained, administered, contributed to by or was
required to be contributed to by a Person or any ERISA Affiliate, or under which
a Person or any ERISA Affiliate may incur any liability.

                  "Net Income" means, for any period, the net income (or loss)
after Taxes of the REIT, on a consolidated basis, for such period calculated in
conformity with GAAP; provided, however, that Net Income shall not include the
net income (or loss) of Investment Affiliates.

                  "Net Offering Proceeds" means all cash or other assets
received by the REIT or Borrower as a result of the sale of common stock,
preferred stock, partnership interests, limited liability company interests,
Convertible Securities or other ownership or equity interests in the REIT or
Borrower less customary costs and discounts of issuance paid by the REIT or
Borrower, as the case may be.

                                       14
<PAGE>

                  "Net Operating Income" means, for any period, and with respect
to any Qualifying Unencumbered Property, the net operating income of such
Qualifying Unencumbered Property (attributed to such Property in a manner
reasonably acceptable to Agent) for such period (i) determined in accordance
with GAAP, (ii) determined in a manner which is consistent with the past
practices of the REIT and Borrower, and (iii) inclusive of an allocation of
reasonable management fees and administrative costs to such Qualifying
Unencumbered Property consistent with the past practices of the REIT and
Borrower, except that, for purposes of determining Net Operating Income, income
shall not (a) include security or other deposits, lease termination or other
similar charges, delinquent rent recoveries, unless previously reflected in
reserves, or any other items reasonably deemed by Agent to be of a non-recurring
nature or (b) be reduced by depreciation or amortization or any other non-cash
item.

                  "Net Price" means, with respect to the purchase of any
Property by Borrower or any Subsidiary, without duplication, (i) cash and Cash
Equivalents paid as consideration for such purchase, plus (ii) the principal
amount of any note or other deferred payment obligation delivered in connection
with such purchase (except as described in clause (iv) below), plus (iii) the
value of any other consideration delivered in connection with such purchase or
sale (including, without limitation, shares in the REIT and operating
partnership units or preferred operating partnership units in Borrower) (as
reasonably determined by Agent), minus (iv) the value of any consideration
deposited into escrow or subject to disbursement or claim upon the occurrence of
any event, minus (v) reasonable costs of sale and taxes paid or payable in
connection with such purchase.

                  "Net Worth" means, at any time, the tangible net worth of the
REIT determined in accordance with GAAP, on a consolidated basis, not including
depreciation and amortization expense of the REIT since September 30, 2001 and
not including the REIT's share of depreciation and amortization expense of
Investment Affiliates since September 30, 2001.

                  "New Lender" shall have the meaning set forth in Section
11.13(k) hereof.

                  "Non-Manufactured Home Community Property" means Property
which is not (i) used for lease or operation of manufactured home communities,
(ii) Land, (iii) Securities consisting of stock issued by real estate investment
trusts engaged primarily in the development, ownership and management of
manufactured home communities, (iv) Manufactured Home Community Mortgages, (v)
Manufactured Home Community Ownership Interests or (vi) Taxable REIT Subsidiary
Interests.

                  "Non Pro Rata Loan" means a Loan (other than a Swingline Loan
but including a Mandatory Borrowing) or Letter of Credit draw with respect to
which less than all Lenders have funded their respective Pro Rata Shares of such
Loans or Letter of Credit draws (whether by making Loans or purchasing
participation interests in accordance with the terms hereof) and the failure of
the non-funding Lender or Lenders to fund its or their respective Pro Rata
Shares of such Loan or Letter of Credit draw constitutes a breach of this
Agreement.

                  "Non-Recourse Indebtedness" means any single loan with respect
to which recourse for payment is limited to specific assets related to a
particular Property or group of Properties encumbered by a Lien securing such
Indebtedness, so long as the Adjusted Asset Value for such Property, or the
total of the Adjusted Asset Values for such group of Properties,

                                       15
<PAGE>

does not exceed One Hundred Million Dollars ($100,000,000); provided, however,
that personal recourse to the REIT, Borrower or any Subsidiary by a holder of
any such loan for fraud, misrepresentation, misapplication of cash, waste,
environmental claims and liabilities and other circumstances customarily
excluded by institutional lenders from exculpation provisions and/or included in
separate indemnification agreements in non-recourse financing of real estate
shall not, by itself, prevent such loan from being characterized as Non-Recourse
Indebtedness.

                  "Notice of Borrowing" means, with respect to a proposed
Borrowing pursuant to Section 2.01(b) or Section 2.10, a notice of borrowing
duly executed by an authorized officer of Borrower substantially in the form of
Exhibit I.

                  "Notice of Continuation/Conversion" means a notice of
continuation or conversion of or to a LIBOR Loan duly executed by an authorized
officer of Borrower substantially in the form of Exhibit J.

                  "Obligations" means, from time to time, all Indebtedness of
Borrower owing to Agent, Swingline Lender, Issuing Lender, any Lender, or any
Person entitled to indemnification pursuant to Section 12.02, or any of their
respective successors, transferees or assigns, of every type and description,
whether or not evidenced by any note, guaranty or other instrument, arising
under or in connection with this Agreement or any other Loan Document, whether
or not for the payment of money, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, reasonable attorneys' fees
and disbursements and any other sum now or hereafter chargeable to Borrower
under or in connection with this Agreement or any other Loan Document.
Notwithstanding anything to the contrary contained in this definition,
Obligations shall not be deemed to include any obligations or liabilities of
Borrower to Agent or any Lender under an Interest Rate Contract, foreign
currency exchange agreement or other Contractual Obligation unless the same is
among Borrower and all Lenders. Obligations shall also not include the
"Obligations" under the Term Loan Credit Agreement.

                  "Officer's Certificate" means a certificate signed by a
specified officer of a Person certifying as to the matters set forth therein.

                  "Other Indebtedness" means all Indebtedness other than the
Obligations.

                  "Original Credit Agreement" has the meaning set forth in the
Recitals hereto.

                  "Original Obligations" means the "Obligations" as defined in
the Existing Credit Agreement.

                  "PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.

                  "Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.

                  "Permitted Holdings" means any of the holdings and activities
described in Section 9.08, but only to the extent permitted in Section 9.08.

                                       16
<PAGE>

                  "Permitted Liens" means:

                  (a) Liens for Taxes, assessments or other governmental charges
         not yet due and payable or which are being contested in good faith by
         appropriate proceedings promptly instituted and diligently conducted in
         accordance with Sections 7.01(d) or 7.02(g);

                  (b) statutory liens of carriers, warehousemen, mechanics,
         materialmen and other similar liens imposed by law, which are incurred
         in the ordinary course of business for sums not more than sixty (60)
         days delinquent or which are being contested in good faith in
         accordance with Sections 7.01(d) or 7.02(g);

                  (c) deposits made in the ordinary course of business to secure
         liabilities to insurance carriers;

                  (d) Liens for purchase money obligations for equipment;
         provided that (i) the Indebtedness secured by any such Lien does not
         exceed the purchase price of such equipment, (ii) any such Lien
         encumbers only the asset so purchased and the proceeds upon sale,
         disposition, loss or destruction thereof, and (iii) such Lien, after
         giving effect to the Indebtedness secured thereby, does not give rise
         to an Event of Default or Unmatured Event of Default pursuant to
         Section 8.01(a);

                  (e) easements, rights-of-way, zoning restrictions, other
         similar charges or encumbrances and all other items listed on Schedule
         B to Borrower's or any Subsidiary's, as applicable, owner's title
         insurance policies for any of Borrower's or any Subsidiary's real
         Properties, so long as the foregoing do not interfere in any material
         respect with the use or ordinary conduct of the business of Borrower or
         such Subsidiary, as applicable, and do not diminish in any material
         respect the value of the Property to which it is attached or for which
         it is listed; or

                  (f) Liens and judgments which have been or will be bonded or
         released of record within thirty (30) days after the date such Lien or
         judgment is entered or filed against the REIT, Borrower, any Subsidiary
         or any Agreement Party.

                  "Person" means any natural person, employee, corporation,
limited partnership, limited liability partnership, general partnership, joint
stock company, limited liability company, joint venture, association, company,
trust, bank, trust company, land trust, business trust, real estate investment
trust or other organization, whether or not a legal entity, or any other
nongovernmental entity, or any Governmental Authority.

                  "Plan" means an employee benefit plan defined in Section 3(3)
of ERISA (other than a Multiemployer Plan) in respect of which a Person or an
ERISA Affiliate, as applicable, is an "employer" as defined in Section 3(5) of
ERISA.

                  "Pre-Closing Financials" has the meaning ascribed to such term
in Section 5.01(g).

                  "Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the

                                       17
<PAGE>

denominator of which shall be the aggregate amount of all of the Lenders'
Commitments, as adjusted from time to time in accordance with the provisions of
this Agreement.

                  "Property" means, with respect to any Person, any real or
personal property, building, facility, structure, equipment or unit, or other
asset owned by such Person.

                  "Qualifying Unencumbered Property" means (a) the Properties
listed on Exhibit F hereto and (b) any Property designated by Borrower from time
to time pursuant to Section 6.04 which (i) is an operating manufactured home
community property wholly-owned (directly or beneficially) by Borrower or any
Subsidiary wholly-owned, directly or indirectly by Borrower and/or the REIT,
(ii) is not subject (nor are any direct or indirect equity interests in such
Property subject) to a Lien which secures Indebtedness of any Person other than
a Permitted Lien, (iii) is not subject (nor are any direct or indirect equity
interests in such Property subject) to any covenant, condition, or other
restriction which prohibits or limits the creation or assumption of any Lien
upon such Property (except as set forth in the Term Loan Credit Agreement), and
(iv) has not been designated by Agent in a notice to Borrower as not acceptable
to the Requisite Lenders pursuant to Section 6.04; provided, however, that the
weighted average occupancy rate of the Properties listed on Exhibit F together
with those designated by Borrower to be Qualifying Unencumbered Properties
pursuant to Section 6.04 (excluding expansion areas of such Properties which are
purchased and/or developed on or after the Closing Date) shall be at least
eighty-five percent (85%); and provided, further, that Borrower may, upon at
least fifteen (15) Business Days prior notice to Agent, designate that any
Property listed on Exhibit F or otherwise designated as a Qualifying
Unencumbered Property is no longer a Qualifying Unencumbered Property (and upon
such designation, such Property shall no longer be a Qualifying Unencumbered
Property).

                  "Recourse Indebtedness" means, with respect to any Person,
Indebtedness which is not Non-Recourse Indebtedness.

                  "Regulation D" means Regulation D of the Federal Reserve Board
as in effect from time to time.

                  "Regulation T" means Regulation T of the Federal Reserve Board
as in effect from time to time.

                  "Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.

                  "Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.

                  "REIT" has the meaning ascribed to such term in the preamble
hereto.

                  "REIT Guaranty" means the Amended and Restated REIT Guaranty
dated as of April 28, 1998 executed by the REIT in favor of Agent and the
Lenders. A copy of the REIT Guaranty is attached hereto as Exhibit B.

                  "Release" may be either a noun or a verb and means the
release, spill, emission, leaking, pumping, pouring, emitting, emptying,
escaping, dumping, injection, deposit, disposal,

                                       18
<PAGE>

discharge, dispersal, leaching or migration into the indoor or outdoor
environment or into or out of any property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
property.

                  "Remedial Action" means any action undertaken pursuant to
Environmental Laws to (a) clean up, remove, remedy, respond to, treat or in any
other way address Contaminants in the indoor or outdoor environment; (b) prevent
the Release or threat of Release or minimize the further Release of Contaminants
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; or (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care.

                  "Reportable Event" means any of the events described in
Section 4043(b) of ERISA, other than an event for which the thirty (30) day
notice requirement is waived by regulations, or any of the events described in
Section 4062(f) or 4063(a) of ERISA.

                  "Requirements of Law" means, as to any Person, the charter and
by-laws, partnership agreements or other organizational or governing documents
of such Person, and any law, rule or regulation, permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building or land use requirement or
Permit or occupational safety or health law, rule or regulation.

                  "Requisite Lenders" means, collectively, Lenders whose Pro
Rata Shares, in the aggregate, are at least sixty-six and two-thirds percent (66
2/3%); provided, however, that, in determining such percentage at any given
time, all then existing Defaulting Lenders will be disregarded and excluded and
the Pro Rata Shares of Lenders shall be redetermined, for voting purposes only,
to exclude the Pro Rata Shares of such Defaulting Lenders; and provided,
further, that so long as there are at least two (2) Lenders who are not
Defaulting Lenders, the Requisite Lenders must be comprised of a minimum of two
(2) Lenders; and provided, further, that for purposes of any amendment,
modification or waiver of the requirements of Article IX, the Requisite lenders
must include Agent in its capacity as a Lender (provided Agent is not a
defaulting Lender).

                  "S&P" means Standard & Poor's Rating Group, a division of
McGraw Hill, its successors and assigns, and, if Standard & Poor's Rating Group
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by Agent.

                  "Second Amendment" has the meaning set forth in the Recitals
hereto.

                  "Second Extended Maturity Date" has the meaning set forth in
Section 3.02.

                  "Secretary's Certificate" has the meaning ascribed to such
term in Section 4.01(c)(i).

                  "Secured Debt" means Indebtedness, the payment of which is
secured by a Lien on any real Property owned or leased by the REIT, Borrower, or
any Subsidiary.

                                       19
<PAGE>

                  "Securities" means any stock, partnership interests, shares,
shares of beneficial interest, voting trust certificates, bonds, debentures,
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, but shall not
include any evidence of the Obligations.

                  "Securities Act" means the Securities Act of 1933, as amended
to the date hereof and from time to time hereafter, and any successor statute.

                  "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended to the date hereof and from time to time hereafter, and any
successor statute.

                  "Senior Loans" has the meaning ascribed to such term in
Section 11.04(b).

                  "Sole Lead Arranger" means Wells Fargo Bank, N.A. in its
capacity as sole lead arranger for the Lenders under this Agreement.

                  "Solvent" means as to any Person at the time of determination,
such Person (a) owns property the value of which (both at fair valuation and at
present fair saleable value) is greater than the amount required to pay all of
such Person's liabilities (including contingent liabilities and debts); (b) is
able to pay all of its debts as such debts mature; and (c) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.

                  "Subsidiary" means any Person, whose financial results are
consolidated under GAAP with the financial results of the REIT or Borrower on
the consolidated financial statements of the REIT or Borrower.

                  "Supermajority Lenders" means, collectively, Lenders whose Pro
Rata Shares, in the aggregate, are at least eighty-five percent (85%), provided,
however, that, in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and excluded and the Pro Rata
Shares of Lenders shall be redetermined, for voting purposes only, to exclude
the Pro Rata Shares of such Defaulting Lenders; and provided, further, that, so
long as there are at least two (2) Lenders who are not Defaulting Lenders, the
Supermajority Lenders must be comprised of a minimum of two (2) Lenders; and
provided, further, that for purposes of any amendment, modification or waiver of
the requirements of Article IX, the Supermajority Lenders must include Agent in
its capacity as a Lender (provided Agent is not a Defaulting Lender).

                  "Swingline Mandatory Borrowing" has the meaning set forth in
Section 2.10(b)(iv) hereof.

                  "Swingline Lender" means Wells Fargo in its capacity as
Swingline Lender hereunder, and shall include any successor Swingline Lender
appointed pursuant hereto.

                  "Swingline Loan" means a Loan made by the Swingline Lender
pursuant to Section 2.10 hereof.

                                       20
<PAGE>

                  "Swingline Note" means the promissory note evidencing the
Swingline Loans in the original principal amount of Thirty Million Dollars
($30,000,000) executed by Borrower in favor of Swingline Lender pursuant to the
Existing Credit Agreement, as it may be amended, supplemented, replaced or
modified from time to time. A copy of the Swingline Note is attached hereto as
Exhibit E.

                  "Syndication Agent" means Bank of America, N.A. in its
capacity as syndication agent for the Lenders under this Agreement.

                  "Taxable REIT Subsidiary Interests" means equity interests in
Subsidiaries not engaged in the development, ownership or operation or real
estate and permitted to be held by Borrower and the REIT pursuant to Section
856(l) of the Internal Revenue Code (as amended from time to time) without
violating the REIT's status as a real estate investment trust.

                  "Taxes" means all federal, state, local and foreign income and
gross receipts taxes.

                  "Term Loan Credit Agreement" means that certain Term Loan
Credit Agreement dated as of February __, 2002 by and among Borrower, the REIT,
Wells Fargo, as Agent, and the lenders named therein (as the same may be
amended, modified, supplemented or amended and restated from time to time).

                  "Termination Date" has the meaning ascribed to such term in
Section 2.01(d).

                  "Termination Event" means (a) any Reportable Event, (b) the
withdrawal of a Person, or an ERISA Affiliate from a Benefit Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (c) the occurrence of an obligation arising under Section 4041 of
ERISA of a Person or an ERISA Affiliate to provide affected parties with a
written notice of an intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA, (d) the institution by the
PBGC of proceedings to terminate any Benefit Plan under Section 4042 of ERISA or
to appoint a trustee to administer any Benefit Plan, (e) any event or condition
which constitutes grounds under Section 4042 of ERISA for the appointment of a
trustee to administer a Benefit Plan, (f) the partial or complete withdrawal of
such Person or any ERISA Affiliate from a Multiemployer Plan which would have a
Material Adverse Effect, or (g) the adoption of an amendment by any Person or
any ERISA Affiliate to terminate any Benefit Plan which is subject to Title IV
of ERISA or Section 412 of the Internal Revenue Code or the treatment of an
amendment to a Benefit Plan as a termination under ERISA.

                  "Total Liabilities" means, without duplication, all
Indebtedness of the REIT on a consolidated basis, plus all other items which, in
accordance with GAAP, would be included as liabilities on the liability side of
the balance sheet of the REIT, on a consolidated basis, and in any event shall
include recourse and non-recourse mortgage debt, letters of credit, purchase
obligations, forward equity sales, repurchase obligations, unsecured debt,
accounts payable, lease obligations (including ground leases) to the extent
required, in accordance with GAAP, to be classified as capital leases on the
balance sheet of the REIT, guarantees of indebtedness, subordinated debt and
unfunded obligations; provided, however, that "Total Liabilities" shall not

                                       21
<PAGE>

include dividends declared by the REIT or Borrower which are permitted under
Section 8.01(d) but not yet paid.

                  "Unencumbered Asset Value" means, as of any date of
determination, (i) a fraction, the numerator of which is the product of four (4)
and the Net Operating Income for the most recently ended Fiscal Quarter which is
attributable (in a manner reasonably acceptable to Agent) to Qualifying
Unencumbered Properties wholly-owned (directly or beneficially) by Borrower or
any Subsidiary wholly-owned, directly or indirectly, by Borrower and/or the
REIT, for the entire Fiscal Quarter and the denominator of which is eight
hundred seventy-five ten-thousandths (0.0875) plus (ii) the aggregate of the Net
Prices paid by Borrower or such Subsidiary for all Qualifying Unencumbered
Properties which have been acquired in the Fiscal Quarter most recently ended.

                  "Unencumbered Net Operating Income" means for any Fiscal
Quarter, Net Operating Income for such period from each Qualifying Unencumbered
Property.

                  "Unfunded Pension Liabilities" means the excess of a Benefit
Plan's accrued benefits, as defined in Section 3(23) of ERISA, over the current
value of that Plan's assets, as defined in Section 3(26) of ERISA.

                  "Uniform Commercial Code" means the Uniform Commercial Code as
in effect on the date hereof in the State of Illinois.

                  "Unmatured Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.

                  "Unsecured Debt" means, as of any date of determination and
without duplication, all Indebtedness of the REIT, Borrower or any Subsidiary,
which is not Secured Debt plus all accounts payable of the REIT, Borrower or any
Subsidiary incurred in the ordinary course of business, the payment of which is
not secured by a Lien on any property owned or leased by the REIT, Borrower or
any Subsidiary.

                  "Unsecured Interest Expense" means Interest Expense other than
Interest Expense payable in respect of Secured Debt.

                  "Unused Amount" has the meaning ascribed to such term in
Section 2.04(a).

                  "Unused Facility Fee" has the meaning ascribed to such term in
Section 2.04(b).

                  "Welfare Plan" means any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, which a Person or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or
within the immediately preceding five years maintained, administered,
contributed to or was required to contribute to, or under which a Person or any
ERISA Affiliate may incur any liability.

                  "Wells Fargo" has the meaning ascribed to such term in the
preamble hereto.

                  "Wholly-Owned Subsidiary" means any Subsidiary which is
wholly-owned directly or indirectly by Borrower or the REIT.

                                       22
<PAGE>

                  "WFRAF" has the meaning set forth in the Recitals hereto.

                  Computation of Time Periods. In this Agreement, unless
otherwise specified, in the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to and including." Periods of days referred to
in this Agreement shall be counted in calendar days unless Business Days are
expressly prescribed.

                  1.03     Terms.

                  (a) Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP, provided that for purposes of references to the financial
results of the "REIT, on a consolidated basis," the REIT shall be deemed to own
one hundred percent (100%) of the partnership interests in Borrower.

                  (b) Any time the phrase "to the best of Borrower's knowledge"
or a phrase similar thereto is used herein, it means: "to the actual knowledge
of the executive officers of Borrower and the REIT, after reasonable inquiry of
those agents, employees or contractors of the REIT, Borrower, any Agreement
Party or any Subsidiary who could reasonably be anticipated to have knowledge
with respect to the subject matter or circumstances in question and review of
those documents or instruments which could reasonably be anticipated to be
relevant to the subject matter or circumstances in question."

                  (c) In each case where the consent or approval of Agent,
Requisite Lenders, Supermajority Lenders or all Lenders is required or their
non-obligatory action is requested by Borrower, such consent, approval or action
shall be in the sole and absolute discretion of Agent and, as applicable, each
Lender, unless otherwise specifically indicated.

                  Interrelationship With the Existing Credit Agreement.
Effective on the Closing Date, this Agreement shall amend and restate the
provisions of the Existing Credit Agreement (as amended by the First Amendment
and the Second Amendment) in their entirety, and all Existing Loans and all
Loans made on or after the Closing Date shall be governed exclusively by the
terms of this Agreement. All Original Obligations outstanding on the Closing
Date (including without limitation all accrued and unpaid interest and fees)
shall, to the extent not paid on the Closing Date, be deemed to be Obligations
outstanding hereunder. The REIT Guaranty shall remain in full force and effect
with respect to the Obligations and is hereby reaffirmed. The Loan Notes shall
continue to evidence the Loans (other than Swingline Loans) and are hereby
reaffirmed. The Swingline Note shall continue to evidence the Swingline Loans
and is hereby reaffirmed. The parties acknowledge and agree that the execution
and delivery of this Agreement shall not constitute a novation, payment and
reborrowing or termination of the Original Obligations and that all such
Original Obligations outstanding on the Closing Date are in all respects
continued and outstanding as Obligations under this Agreement.

                                   ARTICLE II.

                                      LOANS

                  2.01     Loan Advances and Repayment.

                                       23
<PAGE>

                  (a)      Loan Availability.

                          (i) Subject to the terms and conditions set forth in
                  this Agreement, Lenders hereby agree to make Loans (other than
                  Swingline Loans) to Borrower from time to time during the
                  period from the Closing Date to the first Business Day
                  preceding the Maturity Date; provided, that the sum of the
                  aggregate principal amount of all outstanding Loans (including
                  Swingline Loans) plus the aggregate face amount of all
                  outstanding Letters of Credit shall not exceed Loan
                  Availability; and provided, further, that if a Base Rate Loan
                  is being made pursuant to Section 2.09(e) hereof to reimburse
                  Issuing Lender for a drawn Letter of Credit, to avoid a
                  duplicative reduction in the amount of Loan Availability, the
                  drawn Letter of Credit shall not be considered outstanding.
                  All Loans (other than Swingline Loans) under this Agreement
                  shall be made by Lenders simultaneously and proportionately to
                  their respective Pro Rata Shares, it being understood that no
                  Lender shall be responsible for any failure by any other
                  Lender to perform its obligation to make a Loan hereunder and
                  that the Commitment of any Lender shall not be increased or
                  decreased as a result of the failure by any other Lender to
                  perform its obligation to make a Loan. The Loans (other than
                  Swingline Loans) will be evidenced by the Loan Notes. The
                  Swingline Loans will be evidenced by the Swingline Note.

                          (ii) Loans (including, without limitation, Swingline
                  Loans) may be voluntarily prepaid pursuant to Section 2.05(a)
                  and, subject to the provisions of this Agreement (including,
                  without limitation, the provisions of Section 2.11 hereof),
                  any amounts so prepaid may be reborrowed, up to the amount
                  available under Section 2.01(a)(i) at the time of such
                  Borrowing, until the Business Day next preceding the
                  Termination Date. The principal balance of the Loans shall be
                  payable in full on the Termination Date. During the term of
                  this Agreement and prior to the termination of the
                  Commitments, Borrower shall pay to Agent, within one (1)
                  Business Day after Borrower's receipt of a demand in writing
                  from Agent for the benefit of Lenders, such principal amounts
                  as are necessary so that the sum of the aggregate principal
                  amounts of all outstanding Loans (including Swingline Loans)
                  plus the aggregate face amount of all outstanding Letters of
                  Credit at any time does not exceed Loan Availability at such
                  time.

                  (b) Notice of Borrowing. Whenever Borrower desires to borrow
under this Section 2.01, Borrower shall give Agent, at Wells Fargo Real Estate
Group Disbursement Center, 2120 East Park Place, Suite 100, El Segundo,
California 90245, with a copy to: Wells Fargo Bank, N.A., 225 West Wacker Drive,
Suite 2550, Chicago, Illinois 60606, Attn: Account Officer, or such other
address as Agent shall designate, an original or facsimile Notice of Borrowing
no later than 10:00 A.M. (California time), not less than three (3) nor more
than five (5) Business Days prior to the proposed Funding Date of each Loan.
Each Notice of Borrowing shall specify (i) the Funding Date (which shall be a
Business Day) in respect of the Loan, (ii) the amount of the proposed Loan,
provided that the aggregate amount of such proposed Loan shall equal (A) in the
case of Base Rate Loans, One Million Dollars ($1,000,000) or integral multiples
of One Hundred Thousand Dollars ($100,000) in excess thereof, or (B) in the case
of LIBOR Loans, One Million Dollars ($1,000,000) or integral multiples of One
Hundred Thousand Dollars ($100,000) in excess thereof, and (iii) whether the
Loan to be made thereunder will be a Base

                                       24
<PAGE>

Rate Loan or a LIBOR Loan and, if a LIBOR Loan, the Interest Period. Any Notice
of Borrowing pursuant to this Section 2.01(b) shall be irrevocable. Each such
Notice of Borrowing shall be accompanied by all reports or documents required to
be delivered by Borrower to Agent or any Lender under this Agreement. Borrower
may elect (A) so long as no Event of Default has occurred and is continuing, to
convert Base Rate Loans or any portion thereof into LIBOR Loans, (B) to convert
LIBOR Loans or any portion thereof into Base Rate Loans, or (C) so long as no
Event of Default has occurred and is continuing, to continue any LIBOR Loans or
any portion thereof for an additional Interest Period, provided, however, that
the aggregate amount of Loans being continued as or converted into LIBOR Loans
shall, in the aggregate, equal One Million Dollars ($1,000,000) or an integral
multiple of One Hundred Thousand Dollars ($100,000) in excess thereof. The
applicable Interest Period for the continuation of any LIBOR Loan shall commence
on the day on which the next preceding Interest Period expires. Each such
election shall be made by giving Agent, at 2120 E. Park Place, Suite 100, El
Segundo, California 90245, Attn: Jean Randall-Hall, a Notice of
Continuation/Conversion by 10:00 A.M. (California time) on the date of a
conversion to a Base Rate Loan, or by 10:00 A.M. (California time) not less than
three (3) nor more than five (5) Business Days prior to the date of a conversion
to or continuation of a LIBOR Loan, specifying, in each case (1) whether a
conversion or continuation is to occur, (2) the amount of the conversion or
continuation, (3) the Interest Period therefor, in the case of a conversion to
or continuation of a LIBOR Loan, and (4) the date of the conversion or
continuation (which date shall be a Business Day). Agent shall promptly notify
each Lender, but in any event within one (1) Business Day after receipt of such
notice, of its receipt of each such notice and the contents thereof.
Notwithstanding anything to the contrary contained herein and subject to the
default interest provisions contained in Section 2.03, if an Event of Default
occurs and as a result thereof the Commitments are terminated, all LIBOR Loans
will convert to Base Rate Loans upon the expiration of the applicable Interest
Periods therefor or the date all Loans become due, whichever occurs first.
Except as provided above, the conversion of a LIBOR Loan to a Base Rate Loan
shall only occur on the last Business Day of the Interest Period relating to
such LIBOR Loan. In the absence of an effective election by Borrower of a LIBOR
Loan and Interest Period in accordance with the above procedures prior to the
third (3rd) Business Day prior to the expiration of the then current Interest
Period with respect to any LIBOR Loan, interest on such LIBOR Loan shall accrue
at the interest rate then applicable to a LIBOR Loan for an Interest Period of
thirty (30) days, effective immediately upon the expiration of the then-current
Interest Period, without prejudice, however, to the right of Borrower to elect a
Base Rate Loan or a different Interest Period in accordance with the terms and
provisions of this Agreement; provided, however, that if such continuation shall
cause the number of LIBOR Loan tranches to exceed six (6), such LIBOR Loan shall
be converted to a Base Rate Loan.

                  (c) Making of Loans. Subject to Section 11.03, Agent shall
make the proceeds of Loans (other than Swingline Loans) available to Borrower in
El Segundo, California on such Funding Date and shall disburse such funds in
Dollars and in immediately available funds not later than 1:00 P.M. Chicago time
to Borrower's account, at Bank of America, Account Number 73-66901095 in
Chicago, Illinois, or such other account specified in the Notice of Borrowing
acceptable to Agent, with a confirming telephone call to Quantaze Watts at (312)
279-1408 or Mark Howell at (312) 279-1402.

                  (d) Term; Principal Payment. The outstanding balance of the
Loans (other than Swingline Loans, which by their terms shall mature earlier)
shall be payable in full on the

                                       25
<PAGE>

earlier to occur of (A) the Maturity Date, and (B) the acceleration of the Loans
pursuant to Section 10.02(a) (the "Termination Date").

                  Authorization to Obtain Loans and Letters of Credit. Borrower
shall provide Agent with documentation reasonably satisfactory to Agent
indicating the names of those employees or agents of Borrower authorized by
Borrower to sign Notices of Borrowing, to request Letters of Credit and to
receive callback confirmations, and Agent and Lenders shall be entitled to rely
on such documentation until notified in writing by Borrower of any change(s) of
the persons so authorized. Agent, Swingline Lender and Issuing Lender shall be
entitled to act in good faith on the instructions of anyone identifying himself
as one of the Persons authorized to request Loans or Letters of Credit, and
Borrower shall be bound thereby in the same manner as if such Person were
actually so authorized. Borrower agrees to indemnify, defend and hold Lenders,
Agent, Swingline Lender and Issuing Lender harmless from and against any and all
Liabilities and Costs which may arise or be created by the acceptance of
instructions for making Loans, and issuing Letters of Credit.

                  2.03     Interest on the Loans

                  (a) Base Rate Loans. Subject to Section 2.03(d), all Base Rate
Loans shall bear interest on the average daily unpaid principal amount thereof
from the date made until paid in full at a fluctuating rate per annum equal to
the Base Rate. Base Rate Loans shall be made in minimum amounts of One Million
Dollars ($1,000,000) or an integral multiple of One Hundred Thousand Dollars
($100,000) in excess thereof.

                  (b) LIBOR Loans. Subject to Section 2.03(d), all LIBOR Loans
shall bear interest on the unpaid principal amount thereof during the Interest
Period applicable thereto at a rate per annum equal to the sum of LIBOR for such
Interest Period plus the Applicable Margin. Upon receipt of a Notice of
Borrowing requesting LIBOR Loans, Agent shall determine LIBOR applicable to the
Interest Period for such LIBOR Loans, and shall give notice thereof to Borrower
and Lenders; provided, however, that failure to give such notice shall not
affect the validity of such rate. Each determination by Agent of LIBOR shall be
conclusive and binding upon the parties hereto in the absence of demonstrable
error. LIBOR Loans shall be in tranches of One Million Dollars ($1,000,000) or
One Hundred Thousand Dollars ($100,000) increments in excess thereof. No more
than six (6) LIBOR Loan tranches shall be outstanding at any one time.

                  (c) Interest Payments. Subject to Section 2.03(d), interest
accrued on all Loans shall be payable by Borrower in arrears on the first
Business Day of the first calendar month following the Closing Date, and the
first Business Day of each succeeding calendar month thereafter, and on the
Termination Date.

                  (d) Default Interest. Notwithstanding the rates of interest
specified in Sections 2.03(a) and 2.03(b) and the payment dates specified in
Section 2.03(c), effective immediately upon demand by Agent after the occurrence
of an Event of Default and during the continuance of any Event of Default, the
principal balance of all Loans then outstanding and, to the extent permitted by
applicable law, any interest payments on the Loans not paid when due shall bear
interest payable upon demand at a rate which is five percent (5%) per annum in
excess of the rate or rates of interest otherwise payable under this Agreement.
All other amounts due

                                       26
<PAGE>

Agent, Swingline Lender, Issuing Lender or Lenders (whether directly or for
reimbursement) under this Agreement or any of the other Loan Documents if not
paid when due, or if no time period is expressed, if not paid within fifteen
(15) days after written demand to Borrower, shall bear interest from and after
demand at the rate which is five percent (5%) per annum in excess of the lowest
rate or rates of interest otherwise payable under this Agreement, or, if no
Loans are then outstanding, at the rate which is five percent (5%) per annum in
excess of the rate of interest applicable to Base Rate Loans.

                  (e) Late Fee. Borrower acknowledges that late payment
hereunder will cause Agent, Swingline Lender, Issuing Lender and Lenders to
incur costs not contemplated by this Agreement. Such costs include without
limitation processing and accounting charges. Therefore, if Borrower fails
timely to pay any sum due and payable hereunder through the Termination Date
(other than payments of principal), unless waived by Agent pursuant to Section
12.05(e), a late charge of four cents ($.04) for each dollar of any interest
payment due hereon and which is not paid within ten (10) days after such payment
is due or of any other amount due hereon (other than payments of principal) and
which is not paid within thirty (30) days after such payment is due, shall be
charged by Agent (for the benefit of Swingline Lender, Issuing Lender and
Lenders, as applicable) and paid by Borrower for the purpose of defraying the
expense incident to handling such delinquent payment; provided, however, that no
late charges shall be assessed with respect to any amount for which Borrower is
obligated to pay interest at the rate specified in Section 2.03(d), provided,
further, that in no event shall Agent, Swingline Lender, Issuing Lender or
Lenders be required to refund any late fees paid by Borrower, notwithstanding
the preceding proviso. Borrower, Agent, Swingline Lender, Issuing Lender, and
Lenders agree that this late charge represents a reasonable sum considering all
of the circumstances existing on the date hereof and represents a fair and
reasonable estimate of the costs that Agent, Swingline Lender, Issuing Lender
and Lenders will incur by reason of late payment. Borrower, Agent, Swingline
Lender, Issuing Lender and Lenders further agree that proof of actual damages
would be costly and inconvenient. Acceptance of any late charge shall not
constitute a waiver of the default with respect to the overdue installment, and
shall not prevent Agent from exercising any of the other rights available
hereunder or any other Loan Document. Such late charge shall be paid without
prejudice to any other rights of Agent.

                  (f) Computation of Interest. Interest and fees shall be
computed on the basis of the actual number of days elapsed in the period during
which interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; provided, however, that if a
Loan is repaid on the same day on which it is made, one (1) day's interest shall
be paid on that Loan. Notwithstanding subsections (a), (b), (d) and (e) above,
interest in respect of any Loan shall not exceed the maximum rate permitted by
applicable law.

                  (g) Changes; Legal Restrictions. In the event that after the
Closing Date (A) the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a court or Governmental Authority or
any change in the interpretation or application thereof by a court or
Governmental Authority, or (B) compliance by Agent, Swingline Lender, Issuing
Lender or any Lender with any request or directive made or issued after the
Closing Date (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) from any central bank or other
Governmental Authority or quasi-governmental authority:

                                       27
<PAGE>

                          (i) subjects Agent, Swingline Lender, Issuing Lender
                  or any Lender to any tax, duty or other charge of any kind
                  with respect to the Facility, this Agreement or any of the
                  other Loan Documents or the Loans or the Letters of Credit or
                  changes the basis of taxation of payments to Agent, Swingline
                  Lender, Issuing Lender or such Lender of principal, fees,
                  interest or any other amount payable hereunder, except for net
                  income, gross receipts, gross profits or franchise taxes
                  imposed by any jurisdiction and not specifically based upon
                  loan transactions (all such non-excepted taxes, duties and
                  other charges being hereinafter referred to as "Lender
                  Taxes");

                          (ii) imposes, modifies or holds applicable, in the
                  determination of Agent, Swingline Lender, Issuing Lender or
                  any Lender, any reserve, special deposit, compulsory loan,
                  FDIC insurance, capital allocation or similar requirement
                  against assets held by, or deposits or other liabilities in or
                  for the account of, advances or loans by, or other credit
                  extended by, or any other acquisition of funds by, Agent,
                  Swingline Lender, Issuing Lender or such Lender or any
                  applicable lending office (except to the extent that the
                  reserve and FDIC insurance requirements are reflected in the
                  "Base Rate" or "LIBOR Rate"); or

                          (iii) imposes on Agent, Swingline Lender, Issuing
                  Lender or any Lender any other condition materially more
                  burdensome in nature, extent or consequence than those in
                  existence as of the Closing Date;

and the result of any of the foregoing is to (X) increase the cost to Agent,
Swingline Lender, Issuing Lender or any Lender of making, renewing, maintaining
or participating in the Loans or issuing or participating in the Letters of
Credit or to reduce any amount receivable hereunder or thereunder or (Y) to
require Agent, Swingline Lender, Issuing Lender or any Lender or any applicable
lending office to make any payment calculated by reference to the amount of the
Loan held or interest received by it; then, in any such case, Borrower shall
promptly pay to Agent, Swingline Lender, Issuing Lender or such Lender, as
applicable, upon demand, such amount or amounts (based upon a reasonable
allocation thereof by Agent, Swingline Lender, Issuing Lender or such Lender to
the financing transactions contemplated by this Agreement and affected by this
Section 2.03(g)) as may be necessary to compensate Agent, Swingline Lender,
Issuing Lender or such Lender for any such additional cost incurred, reduced
amounts received or additional payments made to the extent Agent, Swingline
Lender, Issuing Lender or such Lender generally imposes such additional costs,
losses and payments on other borrowers in similar circumstances. Agent,
Swingline Lender, Issuing Lender or such Lender shall deliver to Borrower and in
the case of a delivery by a Lender, such Lender shall also deliver to Agent, a
written statement in reasonable detail of the claimed additional costs incurred,
reduced amounts received or additional payments made and the basis therefor as
soon as reasonably practicable after Agent or such Lender, as applicable,
obtains knowledge thereof.

                  (h)      Certain Provisions Regarding LIBOR Loans

                          (i) LIBOR Lending Unlawful. If any Lender shall
                  determine in good faith that the introduction of or any change
                  in or in the interpretation of any law makes it unlawful, or
                  any central bank or other governmental authority asserts that
                  it is unlawful, for such Lender to make or maintain any Loan
                  as a LIBOR

                                       28
<PAGE>

                  Loan, (A) the obligations of the Lenders to make or maintain
                  any Loans as LIBOR Loans shall, upon such determination,
                  forthwith be suspended until such Lender shall notify Agent
                  that the circumstances causing such suspension no longer
                  exist, and (B) if required by law or such assertion, all LIBOR
                  Loans shall automatically convert into Base Rate Loans.

                          (ii) Deposits Unavailable. If Agent shall have
                  determined in good faith that adequate means do not exist for
                  ascertaining the interest rate applicable hereunder to LIBOR
                  Loans, then, upon notice from Agent to Borrower the
                  obligations of all Lenders to make or maintain Loans as LIBOR
                  Loans shall forthwith be suspended until Agent shall notify
                  Borrower that the circumstances causing such suspension no
                  longer exist. Agent will give such notice when it determines,
                  in good faith, that such circumstances no longer exist;
                  provided, however, that Agent shall not have any liability to
                  any Person with respect to any delay in giving such notice.

                          (iii) Funding Losses. In the event any Lender shall
                  incur any loss or expense (including any loss or expense
                  incurred by reason of the liquidation or reemployment of
                  deposits or other funds acquired by such Lender to make or
                  maintain any portion of any Loan as a LIBOR Loan) as a result
                  of:

                           (A) any continuance, conversion, repayment or
                  prepayment of the principal amount of any LIBOR Loans for any
                  reason whatsoever on a date other than the scheduled last day
                  of the Interest Period applicable thereto; or

                           (B) any Loans not being made as LIBOR Loans in
                  accordance with the Notice of Borrowing therefor, other than
                  as a result of such Lender's breach of its obligation to fund
                  such Loans in accordance with the terms hereof;

         then, within fifteen (15) Business Days after Borrower's receipt of the
         written notice of such Lender to Borrower with a copy to Agent,
         Borrower shall reimburse such Lender for such loss or expense;
         provided, however, that each Lender will use reasonable efforts to
         minimize such loss or expense. Such written notice (which shall include
         calculations in reasonable detail) shall, in the absence of
         demonstrable error, be conclusive and binding on the parties hereto.

                  (i) Withholding Tax Exemption. Each Lender that is not created
or organized under the laws of the United States of America or a political
subdivision thereof shall deliver to Borrower and Agent no later than the
Closing Date (or, in the case of a Lender which becomes a Lender pursuant to
Section 11.13, the date upon which such Lender becomes a party hereto) a true
and accurate certificate executed in duplicate by a duly authorized officer of
such Lender, in a form satisfactory to Borrower and Agent, to the effect that
such Lender is capable, under the provisions of an applicable treaty concluded
by the United States of America (in which case the certificate shall be
accompanied by three (3) accurate and complete duly executed originals of Form
W-8BEN of the Internal Revenue Service) or under Section 1442 of the Internal
Revenue Code (in which case the certificate shall be accompanied by three (3)
accurate and complete duly executed originals of Form W-8ECI of the Internal
Revenue Service), of receiving payments of principal, interest and fees
hereunder without deduction or withholding of United States federal

                                       29
<PAGE>

income tax. Further, if at any time a Lender changes its applicable lending
office or selects an additional applicable lending office, it shall, at the same
time or promptly thereafter, but only to the extent the certificate and forms
previously delivered by it hereunder are no longer applicable or effective,
deliver to Borrower and Agent in replacement for, or in addition to, the
certificate and forms previously delivered by it hereunder, a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender
accompanied by three (3) accurate and complete duly executed originals of either
Form W-8BEN of the Internal Revenue Service or Form W-8ECI of the Internal
Revenue Service, whichever is applicable, indicating that such Lender is
entitled to receive payments of principal, interest and fees for the account of
such changed or additional applicable lending office under this Agreement
without deduction or withholding of United States federal tax. Each Lender
further agrees to deliver to Borrower and Agent a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender accompanied by
three (3) accurate and complete duly executed originals of either Form W-8BEN of
the Internal Revenue Service or Form W-8ECI of the Internal Revenue Service,
whichever is appropriate, substantially in a form satisfactory to Borrower and
Agent, before or promptly upon the occurrence of any event requiring a change in
the most recent certificate or Internal Revenue Service form previously
delivered by it to Borrower and Agent pursuant to this Section 2.03(j). Further,
each Lender which delivers a certificate accompanied by Form W-8BEN of the
Internal Revenue Service covenants and agrees to deliver to Borrower and Agent
within fifteen (15) days prior to January 1, 2003, and every third (3rd)
anniversary of such date thereafter, on which this Agreement is still in effect,
another such certificate and three (3) accurate and complete original signed
copies of Form W-8BEN (or any successor form or forms required under the
Internal Revenue Code or the applicable regulations promulgated thereunder), and
each Lender that delivers a certificate accompanied by Form W-8ECI of the
Internal Revenue Service covenants and agrees to deliver to Borrower and Agent
within fifteen (15) days prior to the beginning of each subsequent taxable year
of such Lender during which this Agreement is still in effect, another such
certificate and three (3) accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI (or any successor form or forms required
under the Internal Revenue Code or the applicable regulations promulgated
hereunder). If (i) any Lender is required under this Section 2.03(j) to provide
a certificate or other evidence described above and fails to deliver to Borrower
and Agent such certificate or other evidence or (ii) any Lender delivers a
certificate to the effect that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of a Governmental
Authority after the date such Lender became a party hereto, such Lender is not
capable of receiving payments of interest hereunder without deduction or
withholding of United States federal income tax as specified therein and that it
is not capable of recovering the full amount of the same from a source other
than Borrower, then, to the extent required by law, as the sole consequence of
such Lender's failure to deliver the certificate described in (i) above or such
Lender's delivery of the certificate described in (ii) above, Borrower shall be
entitled to deduct or withhold taxes from the payments owed to such Lender.

                  2.04     Fees.

                  (a)      Intentionally Deleted.

                  (b) Unused Facility Fee. Until the Obligations are paid in
full and this Agreement is terminated or, if sooner, the date the Commitments
terminate, and subject to Section 11.04(b), Borrower shall pay to Agent, for the
account of each Lender, an Unused

                                       30
<PAGE>

Facility Fee accruing from and after the Closing Date at the rate described
below upon the amount during each calendar quarter of (i) the Facility, minus
(ii) the sum of (A) the average daily aggregate principal balance of all Loans
then outstanding other than Swingline Loans and (B) the average daily aggregate
face amount of all outstanding Letters of Credit (the "Unused Amount"). The
Unused Facility Fee will be calculated and will accrue at the rate per annum of
fifteen one-hundredths of one percent (.15%). Subject to Section 11.04(b), each
Lender shall be entitled to receive its Pro Rata Share of such Unused Facility
Fee. All such Unused Facility Fees payable under this paragraph shall be payable
in arrears on the fifth Business Day in each calendar quarter beginning with the
first calendar quarter after the Closing Date.

                  (c) Arrangement and Administrative Agency Fees. Borrower shall
pay Agent such fees as are provided for in the separate fee agreement between
Agent and Borrower, as in existence from time to time.

                  (d) Letter of Credit Fee. With respect to each Letter of
Credit, Borrower agrees to pay to Agent (i) a letter of credit fee equal to the
Applicable Margin on the face amount of such Letter of Credit for the term of
such Letter of Credit to be distributed by Agent to each Lender according to its
Pro Rata Share payable in arrears on the fifth Business Day in each calendar
quarter beginning with the first calendar quarter after the Closing Date and
ending on the date of the expiration, return or termination of such Letter of
Credit if such date is a date other than the first Business Day of a calendar
month and (ii) a non-refundable issuing fee of $500.00 solely for the account of
Issuing Lender, payable in full on the date of issuance thereof.

                  (e) Payment of Fees. The fees described in this Section 2.04
represent compensation for services rendered and to be rendered separate and
apart from the lending of money or the provision of credit and do not constitute
compensation for the use, detention or forbearance of money, and the obligation
of Borrower to pay the fees described herein shall be in addition to, and not in
lieu of, the obligation of Borrower to pay interest, other fees and expenses
otherwise described in this Agreement. All fees shall be payable when due in
California in immediately available funds and shall be non-refundable when paid.
If Borrower fails to make any payment of fees or expenses specified or referred
to in this Agreement due to Agent or Lenders, including without limitation those
referred to in this Section 2.04 or otherwise under this Agreement or any
separate fee agreement between Borrower and Agent relating to this Agreement,
when due, the amount due shall bear interest until paid at the Base Rate and,
after five (5) days at the rate specified in Section 2.03(d) (but not to exceed
the maximum rate permitted by applicable law) and shall constitute part of the
Obligations. All fees described in this Section 2.04 which are expressed as a
per annum charge shall be calculated on the basis of the actual number of days
elapsed in a three hundred sixty (360) day year.

                  2.05     Payments.

                  (a) Voluntary Prepayments. Borrower may, upon not less than
three (3) Business Days prior written notice (or with written notice not later
than 1:00 P.M. (California time) on the same Business Day in the case of a
Swingline Loan), at any time and from time to time, prepay any Loans, without
premium or penalty (other than as set forth in Section 2.03(h)(iii)), in whole
or in part in amounts not less than One Hundred Thousand Dollars ($100,000) or
integral multiples of Twenty-Five Thousand Dollars ($25,000) in excess of One
Hundred Thousand Dollars ($100,000). Any notice of prepayment given to Agent
under this

                                       31
<PAGE>

Section 2.05(a) shall specify the date of prepayment and the aggregate principal
amount of the prepayment. All prepayments of principal shall be accompanied by a
payment of all accrued and unpaid interest thereon.

                  (b) Manner and Time of Payment. All payments of principal,
interest and fees hereunder payable to Agent, Swingline Lender, Issuing Lender
or the Lenders shall be made without condition or reservation of right and free
of set-off or counterclaim, in Dollars and by (i) wire transfer (pursuant to
Agent's written wire transfer instructions) of immediately available funds,
delivered to Agent not later than 11:00 A.M. (California time) (or 2:00 P.M.
(California time) in the case of a Swingline Loan) on the date due; and funds
received by Agent after that time and date shall be deemed to have been paid on
the next succeeding Business Day or (ii) by check (pursuant to Agent's written
check payment instructions) delivered to Agent, such check and the payment
intended to be covered thereby to be deemed to have been paid on the date Agent
receives immediately available funds therefor. All payments of principal,
interest and fees hereunder shall be made by (i) wire transfer of immediately
available funds to Wells Fargo Bank, N.A. (ABA number 121000248) for credit to
account number AC2963507207, reference MHC Operating Limited Partnership, loan
number 6023AMC with telephonic notice to Jean Randall-Hall at (310) 335-9492 or
(ii) check payable to Wells Fargo Bank, N.A., and delivered to Agent at 2120 E.
Park Place, Suite 100, El Segundo, California 90245, Attn: Jean Randall-Hall, or
to such other bank, account or address as Agent may specify in a written notice
to Borrower.

                  (c) Payments on Non-Business Days. Whenever any payment to be
made by Borrower hereunder shall be stated to be due on a day which is not a
Business Day, payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.04, as the case
may be.

                  Increased Capital.(a) If either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) compliance
by Agent, Swingline Lender, Issuing Lender or any Lender with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law and whether or not the failure to comply therewith would
be unlawful) made or issued after the Closing Date affects or would affect the
amount of capital required or expected to be maintained by Agent, Swingline
Lender, Issuing Lender or such Lender or any corporation controlling Agent,
Swingline Lender, Issuing Lender or such Lender, and Agent, Swingline Lender,
Issuing Lender or such Lender determines that the amount of such capital is
increased by or based upon the existence of the obligations of Agent, Swingline
Lender, Issuing Lender or such Lender, then, upon demand by Agent, Swingline
Lender, Issuing Lender or such Lender, Borrower shall immediately pay to Agent,
Swingline Lender, Issuing Lender or such Lender, from time to time as specified
by Agent, Swingline Lender, Issuing Lender or such Lender, additional amounts
sufficient to compensate Agent, Swingline Lender, Issuing Lender or such Lender
in light of such circumstances, to the extent that Agent, Swingline Lender,
Issuing Lender or such Lender reasonably determines such increase in capital to
be allocable to the existence of the obligations of Agent, Swingline Lender,
Issuing Lender or such Lender hereunder and to the extent Agent, Swingline
Lender, Issuing Lender or such Lender generally imposes such amounts on other
borrowers in similar circumstances. A certificate as to such amounts submitted
to Borrower by Agent, Swingline Lender, Issuing Lender or such Lender shall, in
the absence of manifest error, be conclusive and binding for all purposes.

                                       32
<PAGE>
 2.07 Notice of Increased Costs. Each of Agent, Swingline Lender, Issuing Lender
and the Lenders agrees that, as promptly as reasonably practicable after it
becomes aware of the occurrence of an event or the existence of a condition
which would cause it to be affected by any of the events or conditions described
in Section 2.03(g) or (h), or Section 2.06, it will notify Borrower and provide
in such notice a reasonably detailed calculation of the amount due from
Borrower, and provide a copy of such notice to Agent, of such event and the
possible effects thereof. If Agent, Swingline Lender, Issuing Lender or the
affected Lender shall fail to notify Borrower of the occurrence of any such
event or the existence of any such condition within ninety (90) days following
the end of the month during which such event occurred or such condition arose,
then Borrower's liability for any amounts described in said Sections 2.03(g) and
(h) and 2.06 incurred by Agent, Swingline Lender, Issuing Lender or such
affected Lender as a result of such event or condition shall be limited to those
attributable to the period occurring subsequent to the ninetieth (90th) day
prior to the date upon which Agent, Swingline Lender, Issuing Lender or such
affected Lender actually notified Borrower of such event or condition.

                  2.08     Option to Replace Lenders.

                  (a) Lenders. If any Lender shall make any demand for payment
or reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (a) there does not then exist any Unmatured Event of Default
or Event of Default and (b) the circumstances resulting in such demand for
payment or reimbursement are not applicable to all Lenders, Borrower may
terminate the Commitment of such Lender, in whole but not in part, by (i) giving
such Lender and Agent not less than three (3) Business Days prior written notice
thereof, which notice shall be irrevocable and effective only upon receipt
thereof by such Lender and Agent and shall specify the effective date of such
termination, (ii) paying to such Lender (and there shall become due and payable)
on such date the outstanding principal amount of all Loans made by such Lender,
all interest thereon, and all other Obligations owed to such Lender, including,
without limitation, amounts owing under Sections 2.03(g), 2.03(h)(iii), 2.04 and
2.06, if any, and (iii) pursuant to the provisions of Section 11.13, proposing
the introduction of a replacement Lender reasonably satisfactory to Agent, or
obtaining the agreement of one or more existing Lenders, to assume the entire
amount of the Commitment of the Lender whose Commitment is being terminated, on
the effective date of such termination. Upon the satisfaction of all of the
foregoing conditions, such Lender which is being terminated pursuant to this
Section 2.08 shall cease to be a "Lender" for purposes of this Agreement
provided that Borrower shall continue to be obligated to such Lender under
Sections 12.01 and 12.02 (and any other indemnifications contained herein or in
any other Loan Document) with respect to or on account of unpaid, unliquidated,
unknown or similar claims or liabilities accruing prior to such Lender ceasing
to be a "Lender" for purposes of this Agreement.

                  (b) Agent, Swingline Lender and Issuing Lender. If Agent,
Swingline Lender or Issuing Lender shall make any demand for payment or
reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (a) there does not then exist any Unmatured Event of Default
or Event of Default and (b) the circumstances resulting in such demand for
payment or reimbursement are not applicable to all Lenders, Borrower may remove
Agent, Swingline Lender and Issuing Lender by (i) giving the Lenders and Agent
not less than thirty (30) Business Days prior written notice thereof, and (ii)
paying to Agent, Swingline Lender and Issuing Lender (and there shall become due
and payable) on such date all other Obligations owed to Agent, Swingline Lender
and Issuing Lender, including, without limitation, amounts

                                       33
<PAGE>

owing under Sections 2.03(g), 2.03(h), 2.04 and 2.06, if any. Agent, Swingline
Lender and Issuing Lender shall be replaced in accordance with the provisions of
Section 11.09 hereof.

                  2.09     Letters of Credit.

                  (a) Letter of Credit Availability. Subject to the terms and
conditions set forth in this Agreement, at any time and from time to time
through the date that is thirty (30) days prior to the Maturity Date, Issuing
Lender shall issue such Letters of Credit for the account of Borrower as
Borrower may request in accordance with this Section 2.09; provided that (i)
upon issuance of such Letters of Credit, the sum of the aggregate principal
amount of all outstanding Loans (including Swingline Loans) plus the aggregate
face amount of all outstanding Letters of Credit shall not exceed Loan
Availability, provided, that if a Base Rate Loan is being made pursuant to
Section 2.09(e) hereof to reimburse Issuing Lender for a drawn Letter of Credit,
to avoid a duplicative reduction in the amount of Loan Availability, the drawn
Letter of Credit shall not be considered outstanding; (ii) the aggregate face
amount of all outstanding Letters of Credit shall not exceed Thirty Million
Dollars ($30,000,000); and (iii) unless all Lenders otherwise consent in
writing, the term of any Letter of Credit shall not extend or be extended beyond
the date which is ten (10) days prior to the Maturity Date and no Letter of
Credit shall contain an automatic extension or renewal clause. Use of funds
drawn under Letters of Credit shall be subject to the same conditions as those
for use of Loan proceeds set forth in Section 7.01(i) hereof.

                  (b) Request for Letter of Credit. Borrower shall deliver to
Agent and Issuing Lender a duly executed letter of credit application
substantially in the form attached as Exhibit H hereto (a "Letter of Credit
Application") not later than 10:00 A.M., (California time), at least five (5)
Business Days prior to the date upon which a requested Letter of Credit is to be
issued. Borrower shall further deliver to Agent and Issuing Lender such
additional instruments and documents as Issuing Lender may reasonably require,
in conformity with customary and commercially reasonable practices or law, in
connection with the issuance of such Letter of Credit.

                  (c) Issuance of Letters of Credit. Subject to the conditions
set forth in this Agreement, Issuing Lender shall issue the Letter of Credit on
or before 5:00 P.M. (California time), on or before the day which is five (5)
Business Days following receipt of the documents last due pursuant to Section
2.09(b) hereof in respect thereof. Upon issuance of a Letter of Credit, Issuing
Lender shall promptly notify Lenders of the amount and terms thereof. Issuing
Lender shall provide copies of each Letter of Credit to Lenders promptly
following issuance thereof and shall notify Lenders promptly of all payments,
reimbursements, expirations, negotiations, transfers and other activity with
respect to outstanding Letters of Credit.

                  (d) Participations. Each Lender, upon issuance by Issuing
Lender of a Letter of Credit in accordance with the provisions of this
Agreement, shall be deemed to have purchased without recourse a risk
participation from Issuing Lender in such Letter of Credit and the obligations
arising thereunder, in each case in an amount equal to its Pro Rata Share of the
obligations under such Letter of Credit, and shall absolutely, unconditionally
and irrevocably assume, as primary obligor and not as surety, and be obligated
to pay to Issuing Lender therefor and discharge when due, its Pro Rata Share of
the obligations arising under such Letter of Credit.

                                       34
<PAGE>

                  (e) Reimbursement. In the event of any drawing or request for
drawing under any Letter of Credit, Issuing Lender will promptly notify Borrower
and Agent thereof. Unless Borrower shall notify Issuing Lender of its intent to
otherwise reimburse Issuing Lender immediately upon receipt of notice from
Issuing Lender of a drawing under a Letter of Credit, Borrower shall be deemed
to have requested Base Rate Loans in the amount of the drawing as provided in
subsection (f) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. Borrower shall reimburse Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Loan obtained
hereunder or otherwise) in same day funds as provided herein. If Borrower shall
fail to reimburse Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the Base
Rate plus two percent (2%). Borrower's reimbursement obligations hereunder shall
be absolute and unconditional under all circumstances irrespective of any rights
of set-off, counterclaim or defense to payment Borrower may claim or have
against Issuing Lender, Agent, the Lenders, the beneficiary of the Letter of
Credit drawn upon or any other Person, including, without limitation, any
defense based on any failure of Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit;
provided, however, that (i) the Borrower shall not be obligated to reimburse
Issuing Lender and (ii) Lenders shall not be obligated to fund Loans or purchase
participations hereunder in reimbursement of Issuing Lender, for any wrongful
payment made by Issuing Lender under a Letter of Credit as a result of acts or
omissions constituting bad faith, willful misconduct or gross negligence on the
part of Issuing Lender. The Letter of Credit Obligations will be evidenced by
the Letter of Credit Note.

                  (f) Repayment with Loans. On any day on which Borrower shall
have requested, or been deemed to have requested, Base Rate Loans to reimburse a
drawing under a Letter of Credit, Agent shall give notice to the Lenders that
such Loans have been requested or deemed requested in connection with a drawing
under a Letter of Credit, in which case such Loans (collectively, a "Letter of
Credit Mandatory Borrowing") shall be immediately made by all Lenders (without
giving effect to any termination of the Commitments pursuant to Section 10.02
hereof) pro rata based on each Lender's Pro Rata Share and the proceeds thereof
shall be paid directly to Issuing Lender for application to the respective
Letter of Credit Obligations. Each Lender hereby irrevocably agrees to make such
Loans promptly upon any such request or deemed request in the amount and in the
manner specified in the preceding sentence and on the same such date (or the
next Business Day if such notice is received after 10:00 A.M. (California time))
notwithstanding (i) the amount of the Letter of Credit Mandatory Borrowing may
not comply with the minimum amount for Borrowings otherwise required hereunder,
(ii) whether any conditions specified in Section 4.02 are then satisfied, (iii)
whether an Event of Default or Unmatured Event of Default then exists, (iv)
failure of any such request or deemed request for a Borrowing to be made by the
time otherwise required in Section 2.01 hereof, (v) the date of such Letter of
Credit Mandatory Borrowing (provided that such date must be a Business Day), or
(vi) any termination of the Commitments immediately prior to such Letter of
Credit Mandatory Borrowing or contemporaneously therewith. In the event that any
Letter of Credit Mandatory Borrowing cannot for any reason occur in respect of a
Letter of Credit on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to Borrower), then each Lender hereby agrees that it shall
forthwith fund (as of the date the Letter of Credit Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from Borrower on
or after such date and prior to such funding) its participation interest in the
outstanding obligations arising in

                                       35
<PAGE>

connection with such Letter of Credit, provided that (A) all interest payable on
Borrower's reimbursement obligation with respect to such Letter of Credit shall
be for the account of Issuing Lender until but excluding the day upon which the
Letter of Credit Mandatory Borrowing would otherwise have occurred, and (B) in
the event of a delay between the day upon which the Letter of Credit Mandatory
Borrowing would otherwise have occurred and the time any funding of a
participation pursuant to this sentence is actually made, the funding Lender
shall be required to pay to the Issuing Lender interest on the principal amount
of such participation for each day from and including the day upon which the
Letter of Credit Mandatory Borrowing would otherwise have occurred to but
excluding the date of funding of such participation, at the rate equal to the
Federal Funds Rate, for the two (2) Business Days after the date the Letter of
Credit Mandatory Borrowing would otherwise have occurred, and thereafter at a
rate equal to the Base Rate.

                  (g) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as if it were the
issuance of a new Letter of Credit hereunder.

                  (h) Uniform Customs and Practices. Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.

                  (i) Collateralization at Termination Date. Upon the occurrence
of the Termination Date prior to the expiration of all Letters of Credit,
Borrower shall provide to Issuing Lender a standby letter of credit issued by a
bank with a rating of its senior unsecured debt obligations of not less than A
by Moody's, in form and substance satisfactory to Issuing Lender, in favor of
Issuing Lender in a face amount equal to the outstanding Letters of Credit on
that date, or shall make other provisions satisfactory to Issuing Lender and
Agent for the full collateralization, by cash or cash equivalent, of such
outstanding Letters of Credit. In the event of failure of Borrower to comply
with the requirement of this Section 2.09(i), such portion of the face amount of
all outstanding Letters of Credit as to which Borrower has failed to comply
shall be deemed to be immediately due and payable.

                  (j) Limitation of Liability. Borrower assumes all risks of the
acts or omissions of any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letter of Credit absent the bad faith, gross
negligence or willful misconduct of Issuing Lender. Neither Issuing Lender,
Agent, any Lender nor any of their respective officers, directors, employees or
agents shall be liable or responsible for, nor shall Borrower's obligations
hereunder in respect of such Letters of Credit be impaired as a result of any of
the following absent the bad faith, gross negligence or willful misconduct of
Issuing Lender:

                          (i) any lack of validity or enforceability of any
                  Letter of Credit or any other agreement or instrument relating
                  thereto (such Letter of Credit and any other agreement or
                  instrument relating thereto being, collectively, the "Letter
                  of Credit Documents");

                          (ii) the use that may be made of any Letter of Credit
                  or any acts or omissions of any beneficiary or transferee in
                  connection therewith;

                                       36
<PAGE>

                          (iii) any statement or any other document presented
                  under a Letter of Credit proving to be forged, fraudulent,
                  invalid or insufficient in any respect or any statement
                  therein being untrue or inaccurate in any respect;

                          (iv) the existence of any claim, setoff, defense or
                  other right that Borrower may have at any time against any
                  beneficiary or any transferee of a Letter of Credit (or any
                  Persons for whom any such beneficiary or any such transferee
                  may be acting), Issuing Lender or any other Person, whether in
                  connection with the transactions contemplated by the Letter of
                  Credit Documents or any unrelated transaction;

                          (v) failure of any documents to bear any reference or
                  adequate reference to the Letter of Credit; or

                          (vi) any other circumstances whatsoever in making or
                  failing to make payment under any Letter of Credit.

In furtherance and not in limitation of the foregoing, Issuing Lender may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
absent the bad faith, gross negligence or willful misconduct of Issuing Lender.

                  (k) Lenders. Any action taken or omitted to be taken by
Issuing Lender under or in connection with any Letter of Credit, if taken or
omitted in the absence of bad faith, gross negligence or willful misconduct,
shall not put Issuing Lender under any resulting liability to any Lender or
relieve that Lender of its obligations hereunder to Issuing Lender. In
determining whether to pay under any Letter of Credit, Issuing Lender shall have
no obligations to Lenders other than to confirm that any documents required to
be delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit.

                  (l) Indemnification. Borrower shall indemnify and hold
harmless Issuing Lender, Agent and Lenders from and against any and all claims,
damages, losses, liabilities, reasonable costs and expenses of any kind
whatsoever, including reasonable fees and expenses of attorneys that such
indemnified Person may incur, together with all reasonable costs and expenses
resulting from the compromise or defense of any claims or liabilities
hereinafter described, by reason of or in connection with (i) the execution and
delivery or transfer of, or payment or failure to pay under, any Letter of
Credit, (ii) any suit, action or proceeding brought by any Person to require or
present payment under any Letter of Credit, or (iii) any breach by Borrower of
any warranty, covenant, term or condition in, or the occurrence of any default
under, any Letter of Credit or any related contract; provided, however, that
Borrower shall not be required to indemnify Issuing Lender, Agent or any Lender
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by the willful misconduct, gross negligence, bad
faith or fraud of such indemnified Person; and provided, further, that Issuing
Lender will be liable to Borrower for any damages suffered by Borrower as a
result of Issuing Lender's grossly negligent or willful failure to pay under any
Letter of Credit after the presentment to it of documentation in strict
compliance with the terms and conditions of

                                       37
<PAGE>

the Letter of Credit and absent any challenge by any Person (other than Issuing
Lender or any of its affiliates) to the making of such payment.

                  2.10     Swingline Loans

                  (a) Swingline Availability. Subject to the terms and
conditions set forth in this Agreement, Swingline Lender agrees to make certain
revolving loans to Borrower (each a "Swingline Loan" and, collectively, the
"Swingline Loans") from time to time during the period from the Closing Date to
the fifth day preceding the Maturity Date; provided, however, that the aggregate
amount of Swingline Loans outstanding at any time shall not exceed the lesser of
(i) THIRTY MILLION DOLLARS ($30,000,000), and (ii) the excess of Loan
Availability over the sum of the aggregate principal amount of all outstanding
Loans (excluding Swingline Loans) plus the aggregate face amount of all
outstanding Letters of Credit, provided, that if a Base Rate Loan is being made
pursuant to Section 2.09(e) hereof to reimburse Issuing Lender for a drawn
Letter of Credit, to avoid a duplicative reduction in the amount of Loan
availability, the drawn Letter of Credit shall not be considered outstanding.
Subject to the limitations set forth herein, any amounts repaid in respect of
Swingline Loans may be reborrowed.

                  (b)      Swingline Borrowings.

                          (i) Notice of Borrowing. Whenever Borrower desires to
                  borrow under this Section 2.10, Borrower shall give Swingline
                  Lender and Agent at Wells Fargo Real Estate Group Disbursement
                  Center, 2120 East Park Place, Suite 100, El Segundo,
                  California 90245, with a copy to Wells Fargo Bank, N.A., 225
                  West Wacker Drive, Suite 2550, Chicago, Illinois 60606, Attn:
                  Account Officer, or such other address as Agent shall
                  designate, an original or facsimile Notice of Borrowing no
                  later than 11:00 A.M. (California time) on the proposed date
                  of such borrowing (and confirmed by telephone by such time),
                  specifying (A) that a Swingline Loan is being requested, (B)
                  the amount of such Swingline Loan, (C) the proposed date of
                  such Swingline Loan, which shall be a Business Day, and (D)
                  stating that no Event of Default or Unmatured Event of Default
                  has occurred and is continuing both before and after giving
                  effect to such Swingline Loan. Such notice shall be
                  irrevocable.

                          (ii) Minimum Amounts; Frequency of Swingline Loans.
                  Each Swingline Loan shall be in a minimum principal amount of
                  $1,000,000, or an integral multiple of $100,000 in excess
                  thereof. Swingline Loans shall be available no more frequently
                  than six (6) times in any month.

                          (iii) Making of Swingline Loans. Swingline Lender
                  shall make the proceeds of each Swingline Loan available to
                  Borrower in El Segundo, California on the applicable Funding
                  Date in Dollars and in immediately available funds not later
                  than 1:00 P.M. (California time) on such Funding Date to
                  Borrower's account, at Bank of America, Account Number
                  75-01943 in Chicago, Illinois or such other account specified
                  in the Notice of Borrowing and acceptable to Agent.

                          (iv) Repayment of Swingline Loans. Each Swingline Loan
                  shall be due and payable on the earliest of (A) five (5) days
                  from the date of the applicable

                                       38
<PAGE>

                  Funding Date for such Swingline Loan, (B) the date of the next
                  Borrowing under Section 2.01 hereof (other than a Letter of
                  Credit Mandatory Borrowing) or (C) the Termination Date. If,
                  and to the extent, any Swingline Loans shall be outstanding on
                  the date of any Borrowing under Section 2.01 hereof (other
                  than a Letter of Credit Mandatory Borrowing), such Swingline
                  Loans shall first be repaid from the proceeds of such
                  Borrowing prior to the disbursement of the same to Borrower.
                  If, and to the extent, a Borrowing under Section 2.01 hereof
                  (other than a Letter of Credit Mandatory Borrowing) is not
                  requested prior to the Termination Date or the end of the five
                  (5) day period after a Swingline Loan is made, Borrower shall
                  be deemed to have requested Base Rate Loans in the amount of
                  the applicable Swingline Loan then outstanding, the proceeds
                  of which shall be used to repay such Swingline Loan to the
                  Swingline Lender. In addition, the Swingline Lender may, at
                  any time, in its sole discretion, by written notice to
                  Borrower and Agent, demand repayment of its Swingline Loans by
                  way of Base Rate Loans, in which case Borrower shall be deemed
                  to have requested Base Rate Loans in the amount of such
                  Swingline Loans then outstanding, the proceeds of which shall
                  be used to repay such Swingline Loans to the Swingline Lender.
                  Any Borrowing which is deemed requested by Borrower in
                  accordance with this Section 2.10(b)(iv) is hereinafter
                  referred to as a "Swingline Mandatory Borrowing". Each Lender
                  hereby irrevocably agrees to make Base Rate Loans in
                  accordance with its Pro Rata Share promptly upon receipt of
                  notice from the Swingline Lender of any such deemed request
                  for a Swingline Mandatory Borrowing in the amount and in the
                  manner specified in the preceding sentences and on the date
                  such notice is received by such Lender (or the next Business
                  Day if such notice is received after 10:00 A.M. (California
                  time)) notwithstanding (I) the amount of the Swingline
                  Mandatory Borrowing may not comply with the minimum amount for
                  Borrowings otherwise required hereunder, (II) whether any
                  conditions specified in Section 4.02 hereof are then
                  satisfied, (III) whether an Event of Default or Unmatured
                  Event of Default then exists, (IV) failure of any such deemed
                  request for a Borrowing to be made by the time otherwise
                  required in Section 2.01 hereof, (V) the date of such
                  Swingline Mandatory Borrowing (provided that such date must be
                  a Business Day), or (VI) any termination of the Commitments
                  immediately prior to such Swingline Mandatory Borrowing or
                  contemporaneously therewith; provided, however, that no Lender
                  shall be obligated to make any Loans under this Section
                  2.10(b)(iv) if an Event of Default or Unmatured Event of
                  Default then exists and the applicable Swingline Loan was made
                  by the Swingline Lender without receipt of a written Notice of
                  Borrowing in the form specified in subclause (i) above or
                  after Agent had delivered a notice of an Event of Default or
                  Unmatured Event of Default which had not been rescinded.

                          (v) Purchase of Participations. In the event that any
                  Swingline Mandatory Borrowing cannot for any reason occur on
                  the date otherwise required above (including, without
                  limitation, as a result of the commencement of a proceeding
                  under the Bankruptcy Code with respect to Borrower), then each
                  Lender hereby agrees that it shall forthwith purchase (as of
                  the date the Swingline Mandatory Borrowing would otherwise
                  have occurred, but adjusted for any payment received from
                  Borrower on or after such date and prior to such purchase)

                                       39
<PAGE>

                  from the Swingline Lender such participations in the
                  outstanding Swingline Loans as shall be necessary to cause
                  each such Lender to share in such Swingline Loans ratably
                  based upon its Pro Rata Share, provided that (A) all interest
                  payable on the Swingline Loans with respect to any
                  participation shall be for the account of the Swingline Lender
                  until but excluding the day upon which the Swingline Mandatory
                  Borrowing would otherwise have occurred, and (B) in the event
                  of a delay between the day upon which the Swingline Mandatory
                  Borrowing would otherwise have occurred and the time any
                  purchase of a participation pursuant to this sentence is
                  actually made, the purchasing Lender shall be required to pay
                  to the Swingline Lender interest on the principal amount of
                  such participation for each day from and including the day
                  upon which the Swingline Mandatory Borrowing would otherwise
                  have occurred to but excluding the date of payment for such
                  participation, at the rate equal to the Federal Funds Rate,
                  for the two (2) Business Days after the date the Swingline
                  Mandatory Borrowing would otherwise have occurred, and
                  thereafter at a rate equal to the Base Rate. Notwithstanding
                  the foregoing, no Bank shall be obligated to purchase a
                  participation in any Swingline Loan if an Event of Default or
                  Unmatured Event of Default then exists and such Swingline Loan
                  was made by the Swingline Lender without receipt of a written
                  Notice of Borrowing in the form specified in subclause (i)
                  above or after Agent had delivered a notice of an Event of
                  Default or Unmatured Event of Default which had not been
                  rescinded.

                  (c) Interest Rate. Each Swingline Loan shall bear interest at
a rate per annum equal to the Base Rate minus 1.5% per annum.

                                  ARTICLE III.

                                EXTENSION OPTIONS

                  3.01 First Extension Option. At the written request of
Borrower made at least thirty (30) days prior to the Initial Maturity Date, the
Maturity Date shall be extended to the one-year anniversary of the Initial
Maturity Date (the "First Extended Maturity Date") provided that the following
conditions are satisfied:

                  (a) no Event of Default or Unmatured Event of Default shall
have occurred and be continuing as of the Initial Maturity Date;

                  (b) all representations and warranties made by Borrower and
the REIT contained in this Agreement and the other Loan Documents shall be true
and correct in all material respects as of the Initial Maturity Date except to
the extent they related to a specific date;

                  (c) Agent shall have received Officer's Certificates of the
REIT dated as of the Initial Maturity Date stating that the executive officer
who is the signatory thereto, which officer shall be the chief executive officer
or the chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in

                                       40
<PAGE>

reasonable detail of the transactions and condition of Borrower, the REIT, the
Subsidiaries, and the Agreement Parties, and that (A) such review has not
disclosed the existence as of the date of such Officer's Certificate, and that
the signer does not have knowledge of the existence as of the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Unmatured Event of Default and (B) all representations and warranties
made by such entities contained in this Agreement and the other Loan Documents
are true and correct in all material respects as of the date of such Officer's
Certificate except to the extent they relate to a specific date; and

                  (d) on or before the Initial Maturity Date, Agent shall have
received, on behalf of Agent and Lenders, an extension fee in the amount of
one-fourth of one percent (0.25%) of the amount of the Facility.

                  3.02 Second Extension Option. At the written request of
Borrower made at least thirty (30) days prior to the First Extended Maturity
Date, the Maturity Date shall be further extended to the one-year anniversary of
the First Extended Maturity Date (the "Second Extended Maturity Date") provided
that the following conditions are satisfied:

                  (a) no Event of Default or Unmatured Event of Default shall
have occurred and be continuing as of the First Extended Maturity Date;

                  (b) all representations and warranties made by Borrower and
the REIT contained in this Agreement and the other Loan Documents shall be true
and correct in all material respects as of the First Extended Maturity Date
except to the extent they related to a specific date;

                  (c) Agent shall have received Officer's Certificates of the
REIT dated as of the First Extended Maturity Date stating that the executive
officer who is the signatory thereto, which officer shall be the chief executive
officer or the chief financial officer of the REIT, has reviewed, or caused
under his supervision to be reviewed, the terms of this Agreement and the other
Loan Documents, and has made, or caused to be made under his supervision, a
review in reasonable detail of the transactions and condition of Borrower, the
REIT, the Subsidiaries, and the Agreement Parties, and that (A) such review has
not disclosed the existence as of the date of such Officer's Certificate, and
that the signer does not have knowledge of the existence as of the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Unmatured Event of Default and (B) all representations and warranties
made by such entities contained in this Agreement and the other Loan Documents
are true and correct in all material respects as of the date of such Officer's
Certificate except to the extent they relate to a specific date; and

                  (d) on or before the First Extended Maturity Date, Agent shall
have received, on behalf of Agent and Lenders, an extension fee in the amount of
thirty-five hundredths of one percent (0.35%) of the amount of the Facility.

                                   ARTICLE IV.

                               CONDITIONS TO LOANS

                  4.01     Intentionally Omitted.

                                       41
<PAGE>

                  4.02 Conditions Precedent to All Loans and Issuance of Letters
of Credit. The obligation of each Swingline Lender to make any Swingline Loan
requested to be made by it, the obligation of Lender to make any Loan requested
to be made by it, and the obligation of Issuing Lender to issue any Letter of
Credit requested to be issued by it, on any date, is subject to satisfaction of
the following conditions precedent as of such date:

                  (a) Documents. With respect to a request for a Loan, Agent
shall have received in accordance with the provisions of Section 2.01(b) hereof
or Section 2.10 hereof (as applicable), an original and duly executed Notice of
Borrowing. With respect to a request for a Letter of Credit, Agent and Issuing
Bank shall have received in accordance with the provisions of Section 2.09(b)
hereof, an original and duly executed Letter of Credit Application together with
such other documents as shall be required under Section 2.09(b) hereof.

                  (b) Additional Matters. As of the Funding Date for any Loan or
the issuance date of any Letter of Credit and after giving effect to the Loans
and/or Letters of Credit being requested:

                          (i) Representations and Warranties. All of the
                  representations and warranties of Borrower and the REIT
                  contained in this Agreement and in any other Loan Document
                  (other than representations and warranties which expressly
                  speak only as of a different date) shall be true and correct
                  in all material respects on and as of such Funding Date or
                  issuance date, as though made on and as of such date;

                          (ii) No Default. No Event of Default or Unmatured
                  Event of Default shall have occurred and be continuing or
                  would result from the making of the requested Loan or issuance
                  for the requested Letter of Credit and all of the financial
                  covenants contained in Articles VIII and IX shall be
                  satisfied; and

                          (iii) No Material Adverse Change. No change shall have
                  occurred which shall have a Material Adverse Effect.

Each submission by Borrower to Agent of a Notice of Borrowing with respect to a
Loan or a request for a Letter of Credit and the acceptance by Borrower of the
proceeds of each such Loan made hereunder or the issuance of such Letter of
Credit hereunder shall constitute a representation and warranty by Borrower as
of the Funding Date in respect of such Loan or the date such Letter of Credit is
issued that all the conditions contained in this Section 4.02 have been
satisfied.

                                   ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES

                  5.01 Representations and Warranties as to Borrower. Borrower
hereby represents and warrants to Agent, Swingline Lender, Issuing Lender and
Lenders as follows:

                  (a) Organization; Partnership Powers. Borrower (i) is a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, (ii) is duly qualified to do
business as a foreign limited partnership and in good standing under the laws of
each jurisdiction in which the nature of its business requires it to be so

                                       42
<PAGE>

qualified, except for those jurisdictions where failure to so qualify and be in
good standing would not have a Material Adverse Effect and (iii) has all
requisite partnership power and authority to own, operate and encumber its
property and assets and to conduct its business as presently conducted and as
proposed to be conducted in connection with and following the consummation of
the transactions contemplated by the Loan Documents.

                  (b) Authority. Borrower has the requisite partnership power
and authority to execute, deliver and perform each of the Loan Documents to
which it is or will be a party. The execution, delivery and performance thereof,
and the consummation of the transactions contemplated thereby, have been duly
approved by the general partner of Borrower, and no other partnership
proceedings or authorizations on the part of Borrower or its general or limited
partners are necessary to consummate such transactions. Each of the Loan
Documents to which Borrower is a party has been duly executed and delivered by
Borrower and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally and general equitable
principles.

                  (c) Ownership of Borrower. Schedule 5.01(c) sets forth the
general partners of Borrower and their respective ownership percentages as of
the date hereof. Except as set forth in the partnership agreement of Borrower,
no partnership interests (or any securities, instruments, warrants, option or
purchase rights, conversion or exchange rights, calls, commitments or claims of
any character convertible into or exercisable for partnership interests) of
Borrower are subject to issuance under any security, instrument, warrant, option
or purchase rights, conversion or exchange rights, call, commitment or claim of
any right, title or interest therein or thereto. To Borrower's knowledge, all of
the partnership interests in Borrower have been issued in compliance with all
applicable Requirements of Law.

                  (d) No Conflict. The execution, delivery and performance by
Borrower of the Loan Documents to which it is or will be a party, and each of
the transactions contemplated thereby, do not and will not (i) conflict with or
violate Borrower's limited partnership agreement or Certificate of Limited
Partnership or other organizational documents, as the case may be, or the
organizational documents of any Subsidiary of Borrower or (ii) conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law, Contractual Obligation or Court
Order of or binding upon Borrower or any of its Subsidiaries, or require
termination of any such Contractual Obligation, the consequences of which
conflict or breach or default or termination would have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any Property (except as contemplated herein).

                  (e) Consents and Authorizations. Borrower has obtained all
consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow Borrower to lawfully execute, deliver and perform its obligations under
the Loan Documents to which Borrower is a party.

                  (f) Governmental Regulation. Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce

                                       43
<PAGE>

Act, the Investment Company Act of 1940 or any other federal or state statute or
regulation such that its ability to incur indebtedness is limited or its ability
to consummate the transactions contemplated by the Loan Documents is materially
impaired.

                  (g) Prior Financials. The Consolidated and Combined Balance
Sheet as of September 30, 2001, the Consolidated and Combined Statement of
Operations for the Quarter Ended September 30, 2001, and the Consolidated and
Combined Statement of Cash Flows for the Quarter Ended September 30, 2001 of the
REIT contained in the Form 10-Q Quarterly Report of the REIT as of September 30,
2001 (the "Pre-Closing Financials") delivered to Agent prior to the date hereof
were prepared in accordance with GAAP in effect on the date such Pre-Closing
Financials were prepared and fairly present the assets, liabilities and
financial condition of the REIT, on a consolidated basis, at such date and the
results of its operations and its cash flows, on a consolidated basis, for the
period then ended.

                  (h) Financial Statements; Projections and Forecasts. Each of
the Financial Statements to be delivered to Agent pursuant to Sections 6.01(a)
and (b), (i) has been, or will be, as applicable, prepared in accordance with
the books and records of the REIT, on a consolidated basis, and (ii) either
fairly present, or will fairly present, as applicable, the financial condition
of the REIT, on a consolidated basis, at the dates thereof (and, if applicable,
subject to normal year-end adjustments) and the results of its operations and
cash flows, on a consolidated basis, for the period then ended. Each of the
projections delivered to Agent (A) has been, or will be, as applicable, prepared
by the REIT and the REIT's financial personnel in light of the past business and
performance of the REIT, on a consolidated basis and (B) represent, or will
represent, as of the date thereof, the reasonable good faith estimates of such
personnel.

                  (i)      Litigation; Adverse Effects.

                          (i) There is no action, suit, proceeding, governmental
                  investigation or arbitration, at law or in equity, or before
                  or by any Governmental Authority, pending, or to the best of
                  Borrower's knowledge, threatened against Borrower or any of
                  its Subsidiaries or any of their respective Properties, in
                  which there is a reasonable possibility of an adverse decision
                  that could have a Material Adverse Effect; and

                          (ii) Neither Borrower nor any of its Subsidiaries is
                  (A) in violation of any Requirement of Law, which violation
                  has a Material Adverse Effect, or (B) subject to or in default
                  with respect to any Court Order which has a Material Adverse
                  Effect.

                  (j) No Material Adverse Change. Since September 30, 2001,
there has occurred no event which has a Material Adverse Effect.

                  (k) Payment of Taxes. All tax returns and reports to be filed
by Borrower or any of its Subsidiaries have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns have been
paid when due and payable, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable will not have, in the aggregate, a Material Adverse Effect.
Borrower has

                                       44
<PAGE>

no knowledge of any proposed tax assessment against Borrower or any of its
Subsidiaries that will have a Material Adverse Effect, which is not being
actively contested in good faith by such Person.

                  (l) Material Adverse Agreements. Neither Borrower nor any of
its Subsidiaries is a party to or subject to any Contractual Obligation or other
restriction contained in its partnership agreement, certificate of partnership,
by-laws, or similar governing documents which has a Material Adverse Effect.

                  (m) Performance. Neither Borrower nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, and no condition exists which, with the giving of notice or
the lapse of time or both, would constitute a default under such Contractual
Obligation in each case, except where the consequences, direct or indirect, of
such default or defaults, if any, will not have a Material Adverse Effect.

                  (n) Federal Reserve Regulations. No part of the proceeds of
the Loan hereunder will be used to purchase or carry any "margin security" as
defined in Regulation U or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of said Regulation U. Borrower is not
engaged primarily in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U. Borrower
is not engaged primarily in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U. No part of
the proceeds of the Loans will be used for any purpose that violates, or which
is inconsistent with, the provisions of Regulation X or any other regulation of
the Federal Reserve Board.

                  (o) Disclosure. Borrower has not intentionally or knowingly
withheld any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of
Borrower's future performance such representations and warranties are made in
good faith and to the best judgment of Borrower at the time such projections
were made.

                  (p) Requirements of Law. To Borrower's knowledge, Borrower and
each of its Subsidiaries are in compliance with all Requirements of Law
(including without limitation the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder, state securities law
and "Blue Sky" laws) applicable to them and their respective businesses, in each
case, where the failure to so comply will have a Material Adverse Effect.

                  (q) Patents, Trademarks, Permits, Etc. Borrower and each of
its Subsidiaries owns, is licensed or otherwise has the lawful right to use, or
has all permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of Borrower's or such Subsidiary's business as currently conducted,
the absence of which would have a Material Adverse Effect. To Borrower's
knowledge, the use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by
Borrower or such

                                       45
<PAGE>

Subsidiary does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, have a Material Adverse Effect.

                  (r) Environmental Matters. To the knowledge of Borrower,
except as would not have a Material Adverse Effect and except as set forth on
Schedule 5.01(r), (i) the Property and operations of Borrower and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of Borrower or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither Borrower nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to Borrower's knowledge has
there ever been, on or in the Property of Borrower or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither Borrower nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.

                  (s) ERISA. None of the REIT, Borrower or any Agreement Party
is an "employee pension benefit plan" as defined in Section 3(2) of ERISA, an
"employee welfare benefit plan" as defined in Section 3(1) of ERISA, a
"multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of ERISA or a
"plan" as defined in Section 4975(e)(1) of the Internal Revenue Code. Except for
a prohibited transaction arising solely because of a Lender's breach of the
covenant set forth in Section 11.23, none of the Obligations, any of the Loan
Documents or the exercise of any of the Agent's or Lenders' rights in connection
therewith constitutes a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and the taxes and penalties imposed by Section 4975 of the Internal Revenue Code
and Section 502(i) of ERISA) or otherwise results in a Lender, the Agent or the
Lenders being deemed in violation of Sections 404 or 406 of ERISA or Section
4975 of the Internal Revenue Code or will by itself result in a Lender, Agent or
the Lenders being a fiduciary or party in interest under ERISA or a
"disqualified person" as defined in Section 4975(e)(2) of the Internal Revenue
Code with respect to an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code. No assets of the REIT, Borrower or any Agreement Party
constitute "assets" (within the meaning of 29 C.F.R. ss. 2510.3-101 or any
successor regulation thereto) of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code.

                  Each Borrower Plan is in compliance with ERISA and the
applicable provisions of the Internal Revenue Code in all respects except where
the failure to comply would not have a Material Adverse Effect. There are no
claims (other than claims for benefits in the normal course), actions or
lawsuits asserted or instituted against, and none of Borrower, the REIT, any of
the Subsidiaries or any of their ERISA Affiliates has knowledge of any
threatened litigation or claims against the assets of any Borrower Plan or
against any fiduciary of such Borrower Plan

                                       46
<PAGE>

with respect to the operation of such Borrower Plan which could have a Material
Adverse Effect. No liability to the PBGC has been, or is likely to be, incurred
by Borrower, the REIT, any of the Subsidiaries or their ERISA Affiliates other
than such liabilities which, in the aggregate, would not have a Material Adverse
Effect. None of Borrower, the REIT, any of the Subsidiaries or any of their
ERISA Affiliates is now contributing to or has ever contributed to or been
obligated to contribute to any Multiemployer Plan, no employees or former
employees of Borrower, the REIT, any of the Subsidiaries or any of their ERISA
Affiliates have been covered by any Multiemployer Plan in respect of their
employment by Borrower or such Subsidiary or such ERISA Affiliate. None of
Borrower, the REIT, any of the Subsidiaries or any of their ERISA Affiliates has
engaged in a "prohibited transaction," as such term is defined in Section 4975
of the Internal Revenue Code or in a transaction subject to the prohibitions of
Section 406 of ERISA, in connection with any Benefit Plan or Welfare Plan which
would subject Borrower, the REIT, any of the Subsidiaries or any of their ERISA
Affiliates (after giving effect to any exemption) to the tax or penalty on
prohibited transactions imposed by Section 4975 of the Internal Revenue Code,
Section 502 of ERISA or any other liability under ERISA which tax, penalty or
other liability would have a Material Adverse Effect. None of the Benefit Plans
subject to Title IV of ERISA has any material Unfunded Pension Liability as to
which Borrower, the REIT, any of the Subsidiaries or any of their ERISA
Affiliates is or may be liable, which liability would have a Material Adverse
Effect.

                  (t) Solvency. Borrower is and will be Solvent after giving
effect to the disbursements of the Loans and the payment and accrual of all fees
then payable hereunder.

                  (u) Title to Assets; No Liens. Borrower has good, indefeasible
and merchantable title to the Property owned or leased by it, and all such
Property is free and clear of all Liens, except Permitted Liens and Liens
permitted by Section 8.01(b).

                  (v) Use of Proceeds. Borrower's use of the proceeds of the
Loans are, and will continue to be, legal and proper uses (and to the extent
necessary, duly authorized by Borrower's partners) and such uses are consistent
with all applicable laws and statutes and Section 7.01(i).

                  (w) Subsidiaries and Investment Affiliates. Each Subsidiary
and Investment Affiliate as of the date hereof is set forth on Schedule 5.01(w).
Schedule 5.01(w) sets forth the ownership of each such Subsidiary and Investment
Affiliate and the material Property owned by such Person as of the date hereof.

                  5.02 Representations and Warranties as to the REIT. The REIT
hereby represents and warrants to Agent, Swingline Lender, Issuing Lender and
Lenders as follows:

                  (a) Organization; Corporate Powers. The REIT (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction in which
the nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not have
a Material Adverse Effect, and (iii) has all requisite corporate power and
authority to own, operate and encumber its property and assets and to conduct
its business as presently conducted and as

                                       47
<PAGE>

proposed to be conducted in connection with and following the consummation of
the transactions contemplated by the Loan Documents.

                  (b) Authority. The REIT has the requisite corporate power and
authority to execute, deliver and perform each of the Loan Documents to which it
is or will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the Board of Directors of the REIT, and no other corporate proceedings on the
part of the REIT are necessary to consummate such transactions. Each of the Loan
Documents to which the REIT is a party has been duly executed and delivered by
the REIT and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally and general equitable
principles.

                  (c) No Conflict. The execution, delivery and performance by
the REIT of the Loan Documents to which it is a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate its Articles or Certificate of Incorporation or by-laws, or other
organizational documents, as the case may be, or the organizational documents of
Borrower or any Subsidiary, (ii) conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law, Contractual Obligation or Court Order of the REIT, Borrower
or any Subsidiary, or require termination of any such Contractual Obligation,
the consequences of which conflict or breach or default or termination will have
a Material Adverse Effect, or result in or require the creation or imposition of
any Lien whatsoever upon any of its Property, or (iii) require any approval of
the stockholders of the REIT.

                  (d) Consents and Authorizations. The REIT has obtained all
consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow the REIT to lawfully execute, deliver and perform its obligations under
the Loan Documents to which the REIT is a party.

                  (e) Governmental Regulation. The REIT is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 or
any other federal or state statute or regulation such that its ability to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by the Loan Documents is materially impaired.

                  (f) Capitalization. To the REIT's knowledge, all of the
capital stock of the REIT has been issued in compliance with all applicable
Requirements of Law.

                  (g)      Litigation; Adverse Effects.

                           (i) There is no action, suit, proceeding,
                  governmental investigation or arbitration, at law or in
                  equity, or before or by any Governmental Authority, pending,
                  or to best of the REIT's knowledge, threatened against the
                  REIT, any of its Subsidiaries or any of their respective
                  Properties in which there is a reasonable possibility of an
                  adverse decision that could have a Material Adverse Effect;
                  and

                                       48
<PAGE>

                           (ii) Neither the REIT nor any of its Subsidiaries is
                  (A) in violation of any applicable Requirement of Law, which
                  violation has a Material Adverse Effect, or (B) subject to or
                  in default with respect to any Court Order which has a
                  Material Adverse Effect.

                  (h) Payment of Taxes. All tax returns and reports to be filed
by the REIT or any of its Subsidiaries have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns have been
paid when due and payable, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect. The
REIT has no knowledge of any proposed tax assessment against the REIT or any of
its Subsidiaries that would have a Material Adverse Effect, which is not being
actively contested in good faith by the REIT or such Subsidiary.

                  (i) Material Adverse Agreements. The REIT is not a party to or
subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.

                  (j) Performance. Neither the REIT nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, and no condition exists which, with the giving of notice or
the lapse of time or both, would constitute a default under such Contractual
Obligation in each case, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.

                  (k) Securities Activities. The REIT is not engaged principally
in the business of extending credit for the purpose of purchasing or carrying
any "margin stock" (as defined in Regulation U).

                  (l) Disclosure. The REIT has not intentionally or knowingly
withheld any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of the
REIT's future performance such representations and warranties are made in good
faith and to the best judgment of the management of the REIT at the time such
projections were made.

                  (m) Requirements of Law. To the REIT's knowledge, the REIT and
each of its Subsidiaries are in compliance with all Requirements of Law
(including without limitation the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder, state securities law
and "Blue Sky" laws) applicable to them and their respective businesses, in each
case, where the failure to so comply would have a Material Adverse Effect. After
giving effect to all filings made simultaneously with the Closing Date, the REIT
has made all filings with and obtained all consents of the Commission required
under the Securities Act and the Securities Exchange Act in connection with the
execution, delivery and performance by the REIT of the Loan Documents to which
it is a party.

                  (n) Patents, Trademarks, Permits, Etc. The REIT and each of
its Subsidiaries owns, is licensed or otherwise has the lawful right to use, or
has all permits and other

                                       49
<PAGE>

governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct of the
REIT's or such Subsidiary's business as currently conducted, the absence of
which would have a Material Adverse Effect. To the REIT's knowledge, the use of
such permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes by the REIT or such Subsidiary
does not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, have a Material Adverse Effect.

                  (o) Environmental Matters. To the knowledge of the REIT,
except as would not have a Material Adverse Effect and except as set forth on
Schedule 5.01(r), (i) the Property and operations of the REIT and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of the REIT or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither the REIT nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to the REIT's knowledge has
there ever been, on or in the Property of the REIT or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither the REIT nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.

                  (p) Solvency. The REIT is and will be Solvent after giving
effect to the disbursement of the Loans and the payment of all fees then payable
hereunder.

                  (q) Status as a REIT. The REIT (i) is a real estate investment
trust as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not engaged in any "prohibited transactions" as
defined in Section 856(b)(6)(iii) of the Internal Revenue Code (or any successor
provision thereto), except for the transfer of manufactured home inventory from
Borrower to Realty Systems, Inc., a Delaware corporation (provided that such
transfer does not adversely affect the REIT's status as a real estate investment
trust under the Internal Revenue Code), and (iv) for its current "tax year" (as
defined in the Internal Revenue Code) is and for all prior tax years subsequent
to its election to be a real estate investment trust has been entitled to a
dividends paid deduction which meets the requirements of Section 857 of the
Internal Revenue Code.

                  (r) Ownership. The REIT does not own any Property or have any
interest in any Person, other than as set forth on Schedule 5.01(w).

                  (s) Listing. The common stock of the REIT is and will continue
to be listed for trading and traded on either the New York Stock Exchange or
American Stock Exchange.

                                       50
<PAGE>

                                   ARTICLE VI.

                               REPORTING COVENANTS

                  Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:

                  6.01 Financial Statements and Other Financial and Operating
Information. Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices and consistent with past practice to permit preparation of quarterly
and annual financial statements in conformity with GAAP. Borrower shall deliver
or cause to be delivered to Agent with copies for each Lender:

                  (a) Quarterly Financial Statements Certified by CFO. As soon
as practicable, and in any event within fifty (50) days after the end of each
Fiscal Quarter, except the last Fiscal Quarter of a Fiscal Year, consolidated
balance sheets, statements of income and expenses and statements of cash flow
(collectively, "Financial Statements") for the REIT, on a consolidated basis, in
the form provided to the Commission on the REIT's Form 10-Q and certified by the
REIT's chief financial officer.

                  (b) Annual Financial Statements. Within one hundred and twenty
(120) days after the close of each Fiscal Year, annual Financial Statements of
the REIT, on a consolidated basis (in the form provided to the Commission on the
REIT's Form 10K), audited and certified without qualification by the
Accountants.

                  (c) Officer's Certificate of REIT. (i) Together with each
delivery of any Financial Statement pursuant to clauses (a) and (b) above, an
Officer's Certificate of the REIT, stating that (A) the executive officer who is
the signatory thereto, which officer shall be the chief executive officer or the
chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower, the REIT, the
Subsidiaries, and the Agreement Parties, during the accounting period covered by
such Financial Statements, and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signer does not
have knowledge of the existence as of the date of the Officer's Certificate, of
any condition or event which constitutes an Event of Default or Unmatured Event
of Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action has been taken, is being
taken and is proposed to be taken with respect thereto and (B) such Financial
Statements have been prepared in accordance with the books and records of the
REIT, on a consolidated basis, and fairly present the financial condition of the
REIT, on a consolidated basis, at the date thereof (and, if applicable, subject
to normal year-end adjustments) and the results of operations and cash flows, on
a consolidated basis, for the period then ended; and (ii) together with each
delivery pursuant to clauses (a) and (b) above, a compliance certificate
demonstrating, in reasonable detail (which detail shall include actual
calculations), compliance during and at the end of such accounting periods with
the financial covenants contained in Sections 8.01(a), 8.01(d) and 8.02(a) and
Article IX.

                                       51
<PAGE>

                  (d) Knowledge of Event of Default. Promptly upon Borrower
obtaining knowledge (i) of any condition or event which constitutes an Event of
Default or Unmatured Event of Default, or (ii) of any condition or event which
has a Material Adverse Effect, an Officer's Certificate of the REIT specifying
the nature and period of existence of any such condition or event and the nature
of such claimed Event of Default, Unmatured Event of Default, event or
condition, and what action Borrower, the REIT or the Agreement Party, as the
case may be, has taken, is taking and proposes to take with respect thereto.

                  (e) Litigation, Arbitration or Government Investigation.
Promptly upon Borrower obtaining knowledge of (i) the institution of, or threat
of, any material action, suit, proceeding, governmental investigation or
arbitration against or affecting Borrower, any Agreement Party, the REIT, any
Subsidiary or any of their Property not previously disclosed in writing by
Borrower to Agent pursuant to this Section 6.01(f), or (ii) any material
development in any action, suit, proceeding, governmental investigation or
arbitration already disclosed, in which, in either case, there is a reasonable
possibility of an adverse decision that could have a Material Adverse Effect, a
notice thereof to Agent and such other information as may be reasonably
available to it to enable Agent and its counsel to evaluate such matters.

                  (f) Failure of the REIT to Qualify as Real Estate Investment
Trust. Promptly upon, and in any event within forty- eight (48) hours after
Borrower first has knowledge of (i) the REIT failing to continue to qualify as a
real estate investment trust as defined in Section 856 of the Internal Revenue
Code (or any successor provision thereof), (ii) any act by the REIT causing its
election to be taxed as a real estate investment trust to be terminated, (iii)
any act causing the REIT to be subject to the taxes imposed by Section 857(b)(6)
of the Internal Revenue Code (or any successor provision thereto), (iv) the REIT
failing to be entitled to a dividends paid deduction which meets the
requirements of Section 857 of the Internal Revenue Code, or (v) any challenge
by the IRS to the REIT's status as a real estate investment trust, a notice of
any such occurrence or circumstance.

                  (g) Management Reports. Upon and after the occurrence of an
Event of Default, copies of any management reports prepared by the Accountants
as soon as available.

                  (h) Property Changes. Notice of any material acquisition,
disposition, merger, or purchase by the REIT, Borrower, any Subsidiary or any
Agreement Party no later than ten (10) days after the consummation thereof,
specifying the nature of the transaction in reasonable detail.

                  (i) Other Information. Such other information, reports,
contracts, schedules, lists, documents, agreements and instruments in the
possession of the REIT, Borrower, any Subsidiary, or any Agreement Party with
respect to the business, financial condition, operations, performance, or
properties of Borrower, the REIT, any Subsidiary, or any Agreement Party, as
Agent may, from time to time, reasonably request, including without limitation,
annual information with respect to cash flow projections, budgets, operating
statements (current year and immediately preceding year), rent rolls, lease
expiration reports, leasing status reports, note payable summaries, bullet note
summaries, equity funding requirements, contingent liability summaries, line of
credit summaries, line of credit collateral summaries, wrap note or note
receivable summaries, schedules of outstanding letters of credit, summaries of
cash and Cash Equivalents, projections of management and leasing fees and
overhead budgets, each in the form

                                       52
<PAGE>

customarily prepared by the REIT or Borrower. If Borrower fails to provide Agent
with information requested from Borrower within the time periods provided for
herein, or if no time periods are provided for, within ten (10) Business Days
after Agent requests such information, and provided that Agent gives Borrower
reasonable prior notice and an opportunity to participate, Borrower hereby
authorizes Agent to communicate with the Accountants and authorizes the
Accountants to disclose to Agent any and all financial statements and other
information of any kind, including copies of any management letter or the
substance of any oral information, that such Accountants may have with respect
to the financial condition, operations, properties, performance and prospects of
Borrower, the REIT, any Subsidiary, or any Agreement Party. Concurrently
therewith, Agent will notify Borrower of any such communication. At Agent's
request, Borrower shall deliver a letter addressed to the Accountants
instructing them to disclose such information in compliance with this Section
6.01(s).

                  6.02 Press Releases; SEC Filings and Financial Statements. The
REIT and Borrower will deliver to the Agent as soon as practicable after public
release all press releases concerning the REIT or Borrower. The REIT and
Borrower will deliver to Agent as soon as practicable after filing with the
Commission, all reports and notices, proxy statements, registration statements
and prospectuses. All materials sent or made available generally by the REIT to
the holders of its publicly-held Securities or to a trustee under any indenture
or filed with the Commission, including all periodic reports required to be
filed with the Commission, will be delivered to Agent as soon as available.

                  6.03 Environmental Notices. Except for events or occurrences
that will not result in a Material Adverse Effect, Borrower shall notify Agent,
in writing, as soon as practicable, and in any event within ten (10) days after
Borrower's learning thereof, of any: (a) written notice or claim to the effect
that Borrower, any Agreement Party, the REIT, or any Subsidiary is or may be
liable to any Person as a result of the Release or threatened Release of any
Contaminant into the environment; (b) written notice that Borrower, any
Agreement Party, the REIT, or any Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is needed to
respond to the Release or threatened Release of any Contaminant into the
environment; (c) written notice that any Property of Borrower, any Agreement
Party, the REIT, or any Subsidiary is subject to an Environmental Lien; (d)
written notice of violation to Borrower, any Agreement Party, the REIT, or any
REIT Subsidiary or awareness of a condition which might reasonably result in a
notice of violation of any Environmental Laws by Borrower, the REIT, any REIT
Subsidiary or any Agreement Party; (e) commencement or written threat of any
judicial or administrative proceeding alleging a violation by Borrower, the
REIT, any Subsidiary or any Agreement Party of any Environmental Laws; or (f)
written notice received directly from a Governmental Authority of any changes to
any existing Environmental Laws.

                  6.04 Qualifying Unencumbered Properties. Borrower may from
time to time but no more frequently than quarterly deliver notice to the Agent
stating that Borrower intends to designate a Property to become a Qualifying
Unencumbered Property. Such notice shall (i) set forth the name of such Property
(or, if such Property has no name, such notice shall otherwise identify such
Property), and (ii) be accompanied by a statement of income, certified by the
chief financial officer of the REIT, for each such Property for the then most
recently completed Fiscal Quarter (or, if such statement of income is
unavailable, a pro forma financial statement setting forth the Net Operating
Income with respect to such Property for the then current Fiscal Quarter).

                                       53
<PAGE>

If any such Property meets the requirements set forth in the definition of
"Qualifying Unencumbered Properties" and the Agent fails to deliver written
notice to Borrower stating that the Requisite Lenders have disapproved the
designation of such Property as a Qualifying Unencumbered Property (it being
understood that such notice shall provide Borrower with information regarding
why such designation was disapproved by the Requisite Lenders and that the
Requisite Lenders will not unreasonably disapprove such designation) within
twenty (20) days after receipt of such information by Agent, such Property shall
become a Qualifying Unencumbered Property.

                                  ARTICLE VII.

                              AFFIRMATIVE COVENANTS

                  Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:

                  7.01     With respect to Borrower:

                  (a) Existence. Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership
limited liability company, trust or corporate existence, as applicable, and
preserve and keep in full force and effect its and their respective rights and
franchises unless the failure to maintain such rights and franchises does not
have a Material Adverse Effect. Borrower shall maintain its status as a limited
partnership.

                  (b) Qualification. Borrower shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses require them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect.

                  (c) Compliance with Laws, Etc. Borrower shall, and shall cause
each of its Subsidiaries to, (i) comply with all Requirements of Law and
Contractual Obligations, and all restrictive covenants affecting Borrower and
its Subsidiaries or their respective properties, performance, assets or
operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect or expose Agent or Lenders to any material liability therefor.

                  (d) Payment of Taxes and Claims. (a) Borrower shall, and shall
cause each of its Subsidiaries to, pay (i) all taxes, assessments and other
governmental charges imposed upon it or them or on any of its or their
respective properties or assets or in respect of any of its or their respective
franchises, business, income or property before any penalty or interest accrues
thereon, the failure to make payment of which in such time periods would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which would have a Material Adverse Effect; provided, however, that
no such taxes, assessments, and governmental charges referred to in clause (i)
above or

                                       54
<PAGE>

claims referred to in clause (ii) above need be paid if being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if adequate reserves shall have been set aside therefor in accordance with
GAAP.

                  (e) Maintenance of Properties; Insurance. Borrower shall, and
shall cause each of its Subsidiaries to, maintain in good repair, working order
and condition, excepting ordinary wear and tear, all of its and their respective
Property (personal and real) and will make or cause to be made all appropriate
repairs, renewals and replacements thereof, in each case where the failure to so
maintain, repair, renew or replace would have a Material Adverse Effect.
Borrower shall, and shall cause each of its Subsidiaries to, maintain with
insurance companies that have a Best Rating of "A- VII" or higher or other
insurance companies reasonably acceptable to Agent that have similar financial
resources and stability, which companies shall be qualified to do business in
the states where such Property is located, the insurance policies and programs
reasonably acceptable to Agent insuring all property and assets material to the
operations of Borrower and each of its Subsidiaries against loss or damage by
fire, theft, burglary, pilferage and loss in transit and business interruption,
together with such other hazards as is reasonably consistent with prudent
industry practice, and maintain liability insurance consistent with prudent
industry practice with financially sound insurance companies qualified to do
business in the states where such Property is located. The insurance policies
shall provide that they cannot be terminated or materially modified unless Agent
receives thirty (30) days prior written notice of said termination or
modification. At Agent's reasonable request, Borrower shall furnish evidence of
replacement costs, without cost to Agent, such as are regularly and ordinarily
made by insurance companies to determine the then replacement cost of the
improvements on any Property of Borrower or any of its Subsidiaries. In the
event Borrower fails to cause insurance to be carried as aforesaid, Agent shall
have the right (but not the obligation), with the consent of Requisite Lenders,
to place and maintain insurance required to be maintained hereunder and treat
the amounts expended therefor as additional Obligations, payable on demand;
provided however, that Agent shall give Borrower five (5) days' prior notice of
Agent's intent to place or maintain such insurance during which time Borrower
shall have the opportunity to obtain such insurance. All of the insurance
policies required hereunder shall be in form and substance reasonably
satisfactory to Agent. Agent hereby agrees that Borrower may use blanket
policies to satisfy the requirements of this Section 7.01(e), approves the
issuer, form and content of all insurance policies currently carried by Borrower
and agrees that such insurance satisfies the requirements of this Section
7.01(e). Furthermore, Agent agrees that it will not be unreasonable in
exercising any right hereunder to require Borrower to modify, alter or
supplement its insurance policies or coverage or in exercising any right it may
have hereunder to approve any changes Borrower may hereafter make with respect
to its insurance.

                  (f) Inspection of Property; Books and Records. Borrower shall
permit and shall cause each of the REIT, each Subsidiary, and each Agreement
Party to, upon reasonable prior notice by Agent to Borrower, permit any
authorized representative(s) designated by Agent to visit and inspect any of its
properties including inspection of financial and accounting records and leases,
and to make copies and take extracts therefrom, all at such times during normal
business hours and as often as Agent may reasonably request. In connection
therewith, Borrower shall pay all reasonable expenses of the types described in
Section 12.01. Borrower shall keep, and shall cause each of, the REIT, each
Subsidiary and each Agreement Party to keep proper books of record and account
in conformity with GAAP, as modified and as otherwise required by this Agreement
and applicable Requirements of Law.

                                       55
<PAGE>

                  (g) Maintenance of Licenses, Permits, Etc. Borrower shall, and
shall cause each of its Subsidiaries to, maintain in full force and effect all
licenses, permits, governmental approvals, franchises, patents, trademarks,
trade names, copyrights, authorizations or other rights necessary for the
operation of their respective businesses, except where the failure to obtain any
of the foregoing would not have a Material Adverse Effect; and notify Agent in
writing, promptly after learning thereof, of the suspension, cancellation,
revocation or discontinuance of or of any pending or threatened action or
proceeding seeking to suspend, cancel, revoke or discontinue any such material
license, permit, patent, trademark, trade name, copyright, governmental
approval, franchise authorization or right, except where the suspension,
cancellation, revocation or discontinuance would not have a Material Adverse
Effect.

                  (h) Conduct of Business. Except for Permitted Holdings and
other investments permitted under Section 8.01(c), Borrower shall engage only in
the business of owning, operating, managing and developing manufactured home
communities, whether directly or through its Subsidiaries.

                  (i) Use of Proceeds. Borrower shall use the proceeds of each
Loan only for general partnership purposes in accordance with the provisions of
this Agreement. Notwithstanding anything contained in this Agreement to the
contrary, no Swingline Loan shall be used more than once for the purpose of
refinancing another Swingline Loan, in whole or part.

                  (j) Further Assurance. Borrower shall take and shall cause its
Subsidiaries and each Agreement Party to take all such further actions and
execute all such further documents and instruments as Agent may at any time
reasonably determine to be necessary or advisable to (i) correct any technical
defect or technical error that may be discovered in any Loan Document or in the
execution, acknowledgment or recordation thereof, and (ii) cause the execution,
delivery and performance of the Loan Documents to be duly authorized.

                  7.02     With respect to the REIT:

                  (a) Corporate Existence. The REIT shall, and shall cause each
of its Subsidiaries to, at all times maintain its and their respective
partnership or corporate existence, as applicable, and preserve and keep in full
force and effect its and their respective rights and franchises unless the
failure to maintain such rights and franchises will not have a Material Adverse
Effect.

                  (b) Qualification, Name. The REIT shall, and shall cause each
of its Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses requires them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect. The REIT will transact business solely in its or
its Subsidiaries' own name.

                  (c) Securities Law Compliance. The REIT shall comply in all
material respects with all rules and regulations of the Commission and file all
reports required by the Commission relating to the REIT's publicly-held
Securities.

                  (d) Continued Status as a REIT; Prohibited Transactions. The
REIT (i) will continue to be a real estate investment trust as defined in
Section 856 of the Internal Revenue

                                       56
<PAGE>

Code (or any successor provision thereto), (ii) will not revoke its election to
be a real estate investment trust, (iii) will not engage in any "prohibited
transactions" as defined in Section 856(b)(6)(iii) of the Internal Revenue Code
(or any successor provision thereto), and (iv) will do all acts necessary to
continue to be entitled to a dividend paid deduction meeting the requirements of
Section 857 of the Internal Revenue Code.

                  (e) NYSE or ASE Listed Company. The REIT shall cause its
common stock at all times to be listed for trading and be traded on the New York
Stock Exchange or American Stock Exchange.

                  (f) Compliance with Laws, Etc. The REIT shall, and shall cause
each of its Subsidiaries to, (i) comply with all Requirements of Law and
Contractual Obligations, and all restrictive covenants affecting the REIT and
its Subsidiaries or their respective properties, performance, prospects, assets
or operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect.

                  (g) Payment of Taxes and Claims. Subject to Section 7.02(d),
the REIT shall, and shall cause each of its Subsidiaries to, pay (i) all taxes,
assessments and other governmental charges imposed upon it or them or on any of
its or their respective properties or assets or in respect of any of its or
their respective franchises, business, income or property before any penalty or
interest accrues thereon, the failure to make payment of which would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which would have a Material Adverse Effect; provided, however, that
no such taxes, assessments, and governmental charges referred to in clause (i)
above or claims referred to in clause (ii) above need be paid if being contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if adequate reserves shall have been set aside therefor in
accordance with GAAP.

                                  ARTICLE VIII.

                               NEGATIVE COVENANTS

                  Borrower and the REIT covenant and agree that, on and after
the date hereof, until payment in full of all of the Obligations, the expiration
of the Commitments and termination of this Agreement:

                  8.01     With respect to Borrower:

                  (a) Indebtedness. Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

                          (i) the Obligations;

                          (ii) trade debt incurred in the normal course of
                  business;

                                       57
<PAGE>

                          (iii)     intercompany payables and receivables owing
                  between Subsidiaries in the nature of trade debt incurred in
                  the normal course of business; and

                          (iv) Indebtedness which, after giving effect thereto,
                  may be incurred or may remain outstanding without giving rise
                  to an Event of Default or Unmatured Event of Default under any
                  provision of Articles VIII and IX; provided, however, that (A)
                  the Borrower shall not, and shall not permit any of its
                  Subsidiaries to, guarantee or otherwise become or remain
                  directly or indirectly liable with respect to the Indebtedness
                  of any Investment Affiliate, and (B) Borrower shall not permit
                  any Subsidiary to create, incur, assume or otherwise become or
                  remain directly or indirectly liable with respect to, any
                  Recourse Indebtedness in excess of Ten Million Dollars
                  ($10,000,000) per Subsidiary at any time or Thirty Million
                  Dollars ($30,000,000) in the aggregate for all Subsidiaries at
                  any time.

                  (b) Liens. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:

                          (i)       Permitted Liens; and

                          (ii)      Liens securing Indebtedness permitted to be
                  incurred and remain outstanding pursuant to Section
                  8.01(a)(iv).

                  (c) Investments. Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly make or own any Investment
except:

                          (i)       Investments in cash and Cash Equivalents;

                          (ii)      Permitted Holdings;

                          (iii)     Investments in Subsidiaries and Investment
                  Affiliates owned as of the Closing Date;

                          (iv)      Investments permitted pursuant to Section
                  8.01(e)(v).

                          (v)       Controlled Ownership Interests which do not
                  constitute Non-Manufactured Home Community Property; and

                          (vi) mortgage loans which do not constitute
                  Non-Manufactured Home Community Property and which are either
                  eliminated in the consolidation of the REIT, Borrower and the
                  Subsidiaries or are accounted for as investments in real
                  estate under GAAP.

                  (d) Distributions and Dividends. Neither Borrower nor the REIT
shall declare or make any dividend or other distribution on account of
partnership interests in excess of ninety-five percent (95%) of Funds From
Operations in any Fiscal Year; provided, however, that if an Event of Default
under Section 10.01(a) shall have occurred, neither Borrower nor the REIT shall
declare or make any dividend or other distribution on account of partnership
interests

                                       58
<PAGE>

in excess of what is required for the REIT to maintain its status as a real
estate investment trust as defined in Section 856 of the Internal Revenue Code.

                  (e)      Restrictions on Fundamental Changes.

                          (i) Borrower shall not, and shall not permit any of
                  its Subsidiaries to, enter into any merger, consolidation,
                  reorganization or recapitalization or liquidate, wind-up or
                  dissolve (or suffer any liquidation or dissolution), or
                  discontinue its business.

                          (ii) Borrower shall remain a limited partnership with
                  the REIT as its sole general partner.

                          (iii) Borrower shall not change its Fiscal Year.

                          (iv) Except for Permitted Holdings and other
                  Investments permitted under Section 8.01(c), Borrower shall
                  not engage in any line of business other than ownership,
                  operation, management and development of manufactured home
                  communities and the provision of services incidental thereto
                  and the brokerage, purchase, and sale of manufactured home
                  units, whether directly or through its Subsidiaries and
                  Investment Affiliates.

                          (v) Borrower shall not acquire by purchase or
                  otherwise all or substantially all of the business, property
                  or assets of, or stock or other evidence of beneficial
                  ownership of, any Person, unless after giving effect thereto,
                  Borrower is in pro forma compliance with this Agreement.

                  (f) ERISA. Neither Borrower nor the REIT shall, and neither
shall permit any Subsidiary or any of their ERISA Affiliates to, do any of the
following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such acts or failure to act, in a
Material Adverse Effect:

                          (i) Engage, or knowingly permit a Subsidiary or an
                  ERISA Affiliate to engage, in any prohibited transaction
                  described in Section 406 of ERISA or Section 4975 of the
                  Internal Revenue Code which is not exempt under Section 407 or
                  408 of ERISA or Section 4975(d) of the Internal Revenue Code
                  for which a class exemption is not available or a private
                  exemption has not been previously obtained from the DOL;

                          (ii) Permit to exist any accumulated funding
                  deficiency (as defined in Section 302 of ERISA and Section 412
                  of the Internal Revenue Code), whether or not waived;

                          (iii) Fail, or permit a Subsidiary or an ERISA
                  Affiliate of the REIT, Borrower or any Subsidiary to fail, to
                  pay timely required contributions or annual installments due
                  with respect to any waived funding deficiency to any Plan if
                  such failure could result in the imposition of a Lien or
                  otherwise would have a Material Adverse Effect;

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<PAGE>

                          (iv) Terminate, or permit an ERISA Affiliate of the
                  REIT, Borrower or any Subsidiary to terminate, any Benefit
                  Plan which would result in any liability of Borrower or a
                  Subsidiary or an ERISA Affiliate of the REIT, Borrower or any
                  Subsidiary under Title IV of ERISA; or

                          (v) Fail, or permit any Subsidiary or ERISA Affiliate
                  to fail to pay any required installment under section (m) of
                  Section 412 of the Internal Revenue Code or any other payment
                  required under Section 412 of the Internal Revenue Code on or
                  before the due date for such installment or other payment, if
                  such failure could result in the imposition of a Lien or
                  otherwise would have a Material Adverse Effect; or

                          (vi)      Permit to exist any Termination Event;

                          (vii) Make, or permit a Subsidiary or an ERISA
                  Affiliate of the REIT, Borrower or any Subsidiary to make, a
                  complete or partial withdrawal (within the meaning of ERISA
                  Section 4201) from any Multiemployer Plan so as to result in
                  liability to Borrower, a Subsidiary or any ERISA Affiliate of
                  the REIT, Borrower or any Subsidiary which would have a
                  Material Adverse Effect; or

                          (viii) Permit the total Unfunded Pension Liabilities
                  (using the actuarial assumptions utilized by the PBGC) for all
                  Benefit Plans (other than Benefit Plans which have no Unfunded
                  Pension Liabilities) to have a Material Adverse Effect.

None of the REIT, Borrower nor any Agreement Party shall use any "assets"
(within the meaning of ERISA or Section 4975 of the Internal Revenue Code,
including but not limited to 29 C.F.R. ss. 2510.3-101 or any successor
regulation thereto) of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code to repay or secure the Obligations if the use of such
assets may result in a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and Section 4975 of the Internal Revenue Code and the taxes and penalties
imposed by Section 4975 of the Internal Revenue Code and Section 502(i) of
ERISA) or in a Lender, Agent or the Lenders being deemed in violation of Section
404 or 406 of ERISA or Section 4975 of the Internal Revenue Code or otherwise by
itself results in or will result in a Lender, Agent or the Lenders being a
fiduciary or party in interest under ERISA or a "disqualified person" as defined
in Section 4975 (e) (2) of the Internal Revenue Code with respect to an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code. Without
limitation of any other provision of this Agreement, none of the REIT, Borrower
or any Agreement Party shall assign, sell, pledge, encumber, transfer,
hypothecate or otherwise dispose of their respective interests or rights (direct
or indirect) in any Loan Document, or attempt to do any of the foregoing or
suffer any of the foregoing, or permit any party with a direct or indirect
interest or right in any Loan Document to do any of the foregoing, nor shall the
REIT or Borrower assign, sell, pledge, encumber, transfer, hypothecate or
otherwise dispose of any of their respective rights or interests (direct or
indirect) in any Agreement Party, Borrower or the REIT, as applicable, or
attempt to do any of the foregoing or suffer any of the foregoing, if such
action would cause the Obligations, or the exercise of any of the Agent's or
Lenders' rights in connection therewith, to constitute a prohibited transaction
under ERISA or the Internal Revenue

                                       60
<PAGE>

Code (unless Borrower furnishes to Agent a legal opinion reasonably satisfactory
to Agent that the transaction is exempt from the prohibited transaction
provisions of ERISA and the Internal Revenue Code (for this purpose, Agent and
the Lenders agree to supply Borrower all relevant non-confidential factual
information reasonably necessary to such legal opinion and reasonably requested
by Borrower)) or otherwise results in a Lender, Agent or the Lenders being
deemed in violation of Sections 404 or 406 of ERISA or Section 4975 of the
Internal Revenue Code or otherwise by itself would result in a Lender, Agent or
the Lenders being a fiduciary or party in interest under ERISA or a
"disqualified person" as defined in Section 4975(e)(2) of the Internal Revenue
Code with respect to an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code.

                  (g) Environmental Liabilities. Borrower shall not, and shall
not permit any of its Subsidiaries to, become subject to any Liabilities and
Costs which would have a Material Adverse Effect arising out of or related to
(i) the Release or threatened Release of any Contaminant into the environment,
or any Remedial Action in response thereto, or (ii) any violation of any
Environmental Laws. Notwithstanding the foregoing provision, Borrower and its
Subsidiaries shall have the right to contest in good faith any claim of
violation of an Environmental Law by appropriate legal proceedings and shall be
entitled to postpone compliance with the obligation being contested as long as
(i) no Event of Default shall have occurred and be continuing, (ii) Borrower
shall have given Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject Borrower or
such Subsidiary to any criminal penalty or subject Agent to pay any civil
penalty or to prosecution for a crime, and (iv) no portion of any Property
material to Borrower or its condition or prospects shall be in imminent danger
of being sold, forfeited or lost, by reason of such contest or the continued
existence of the matter being contested.

                  (h) Amendment of Constituent Documents. Borrower shall not
permit any amendment of its limited partnership agreement, certificate of
limited partnership or by-laws, if any, which would materially and adversely
affect Agent or Lenders or their respective rights and remedies under the Loan
Documents.

                  (i) Disposal of Interests. Borrower will not directly or
indirectly convey, sell, transfer, assign, pledge or otherwise encumber or
dispose of any material portion of its partnership interests, stock or other
ownership interests in any Subsidiary or other Person in which it has an
interest unless Borrower has delivered to Agent a Compliance Certificate showing
on a pro forma basis (calculated in a manner reasonably acceptable to Agent)
that there would be no breach of any of the financial covenants contained in
Articles VIII and XI after giving effect to such conveyance, sale, transfer,
assignment, pledge, or other encumbrance or disposition.

                  (j) Margin Regulations. No portion of the proceeds of any
credit extended under this Agreement shall be used in any manner which might
cause the extension of credit or the application of such proceeds to violate
Regulation U or Regulation X or any other regulation of the Federal Reserve
Board or to violate the Securities Exchange Act or the Securities Act, in each
case as in effect on the date or dates of Borrowings and such use of proceeds.

                  (k) Transactions with Affiliates. Borrower shall not and shall
not permit any of its Subsidiaries to enter into, any transaction or series of
related transactions with any Affiliate

                                       61
<PAGE>

of Borrower, other than transactions in the ordinary course of business which
are on terms and conditions substantially as favorable to Borrower or such
Subsidiary as would be obtainable by Borrower or such Subsidiary in an
arms-length transaction with a Person other than an Affiliate.

                  8.02     With respect to the REIT:

                  (a) Indebtedness. The REIT shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

                          (i) the Obligations; and

                          (ii) Indebtedness which, after giving effect thereto,
                  may be incurred or may remain outstanding without giving rise
                  to an Event of Default or Unmatured Event of Default under any
                  provision of Articles VIII and IX; provided, however, that (A)
                  the REIT shall not, and shall not permit any of its
                  Subsidiaries to, guarantee or otherwise become or remain
                  directly or indirectly liable with respect to the Indebtedness
                  of any Investment Affiliate, and (B) the REIT shall not permit
                  any Subsidiary to create, incur, assume or otherwise become or
                  remain directly or indirectly liable with respect to, any
                  Recourse Indebtedness in excess of Ten Million Dollars
                  ($10,000,000) per Subsidiary at any time or Thirty Million
                  Dollars ($30,000,000) in the aggregate for all Subsidiaries at
                  any time.

                  (b) Liens. The REIT shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:

                          (i) Permitted Liens; and

                          (ii) Liens securing Indebtedness permitted to be
                  incurred and remain outstanding pursuant to Section
                  8.02(a)(ii).

                  (c) Restriction on Fundamental Changes.

                          (i) The REIT shall not enter into any merger,
                  consolidation, reorganization or recapitalization or
                  liquidate, wind-up or dissolve (or suffer any liquidation or
                  dissolution) or discontinue its business.

                          (ii) The REIT shall not change its Fiscal Year.

                          (iii) The REIT shall not engage in any line of
                  business other than owning partnership interests in Borrower
                  and the interests identified on Schedule 5.01(w) as being
                  owned by the REIT and any other ownership interests in
                  Subsidiaries and Investment Affiliates which are permitted
                  under the terms of Borrower's partnership agreement.

                          (iv) The REIT shall not have an Investment in any
                  Person other than Borrower and the interests identified on
                  Schedule 5.01(w) as being owned by the

                                       62
<PAGE>

                  REIT and any other ownership interests in Subsidiaries and
                  Investment Affiliates which are permitted under the terms of
                  Borrower's partnership agreement.

                          (v) The REIT shall not acquire an interest in any
                  Property other than Securities issued by Borrower and the
                  interests identified on Schedule 5.01(w) and any other
                  ownership interests in Subsidiaries and Investment Affiliates
                  which are permitted under the terms of Borrower's partnership
                  agreement.

                  (d) Environmental Liabilities. The REIT shall not, and shall
not permit any of its Subsidiaries to become subject to any Liabilities and
Costs which would have a Material Adverse Effect arising out of or related to
(i) the Release or threatened Release of any Contaminant into the environment,
or any Remedial Action in response thereto, or (ii) any violation of any
Environmental Laws. Notwithstanding the foregoing provision, the REIT and its
Subsidiaries shall have the right to contest in good faith any claim of
violation of an Environmental Law by appropriate legal proceedings and shall be
entitled to postpone compliance with the obligation being contested as long as
(i) no Event of Default shall have occurred and be continuing, (ii) the REIT
shall have given Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject the REIT or
such Subsidiary to any criminal penalty or subject Agent to pay any civil
penalty or to prosecution for a crime, and (iv) no portion of any Property
material to Borrower or its condition or prospects shall be in imminent danger
of being sold, forfeited or lost, by reason of such contest or the continued
existence of the matter being contested.

                  (e) Amendment of Charter or By-Laws. The REIT shall not permit
any amendment of its charter documents or by-laws, which would materially and
adversely affect Agent or Lenders or their respective rights and remedies under
the Loan Documents.

                  (f) Disposal of Partnership Interests. The REIT will not
directly or indirectly convey, sell, transfer, assign, pledge or otherwise
encumber or dispose of any of its partnership interests in Borrower.

                  (g) Maximum Ownership Interests. No Person or group of Persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act) (other
than Samuel Zell) shall beneficially acquire ownership (within the meaning of
Rule 13d-3 promulgated by the Commission under such Act), directly or
indirectly, of more than fifteen percent (15%) of the Securities which have the
right to elect the board of directors of the REIT under ordinary circumstances
on a combined basis, after giving effect to the conversion of any Convertible
Securities in the REIT and Borrower.

                                   ARTICLE IX.

                               FINANCIAL COVENANTS

                  Borrower covenants and agrees that, on and after the date of
this Agreement and until payment in full of all the Obligations, the expiration
of all Commitments and the termination of this Agreement:

                                       63
<PAGE>

                  9.01 Total Liabilities to Gross Asset Value. Borrower shall
not permit the ratio of Total Liabilities to the sum of Gross Asset Values for
Borrower and each of its Subsidiaries to exceed 0.6:1.

                  9.02 Secured Debt to Gross Asset Value. Borrower shall not
permit the ratio of Secured Debt to the sum of Gross Asset Values for Borrower
and each of its Subsidiaries to exceed 0.50:1.

                  9.03 EBITDA to Interest Expense Ratio. Borrower shall not
permit the ratio of EBITDA for any Fiscal Quarter to Interest Expense for such
Fiscal Quarter to be less than 2.0:1.

                  9.04 EBITDA to Fixed Charges Ratio. Borrower shall not permit
the ratio of EBITDA for any Fiscal Quarter to Fixed Charges for such Fiscal
Quarter to be less than 1.75:1.

                  9.05 Unencumbered Net Operating Income to Unsecured Interest
Expense. Borrower shall not permit the ratio of Unencumbered Net Operating
Income for any Fiscal Quarter to Unsecured Interest Expense for such Fiscal
Quarter to be less than 1.80:1.

                  9.06 Unencumbered Pool. Borrower shall not permit the ratio of
(a) the sum of (i) the Unencumbered Asset Value and (ii) the fair market value
of cash and Cash Equivalents owned collectively by Borrower and any Wholly-Owned
Subsidiary and subject to no Lien to (b) outstanding Unsecured Debt to be less
than 1.80:1.

                  9.07 Minimum Net Worth. Borrower will maintain a Net Worth of
not less than the Minimum Net Worth.

                  9.08 Permitted Holdings. Borrower's primary business will be
the ownership, operation, management and development of manufactured home
communities and any other business activities of Borrower and its Subsidiaries
will remain incidental thereto. Notwithstanding the foregoing, Borrower and its
Subsidiaries may acquire, or maintain or engage in the following Permitted
Holdings if and so long as (i) the aggregate value of such Permitted Holdings,
whether held directly or indirectly by Borrower and its Subsidiaries, does not
exceed, at any time, twenty percent (20%) of Gross Asset Value for Borrower as a
whole and (ii) the value of each such Permitted Holding, whether held directly
or indirectly by Borrower and its Subsidiaries, does not exceed, at any time,
the following percentages of Borrower's Gross Asset Value:

<TABLE>
<CAPTION>

                                                               Maximum Percentage
         Permitted Holdings                                    of Gross Asset Value
         ------------------                                    --------------------
        <S>                                                           <C>
         Non-Manufactured Home
         Community Property (other
         than cash or Cash Equivalents)                                 10%

         Land                                                           5%

         Securities issued by real estate
         investment trusts primarily
         engaged in the development,
         ownership, operation and

</TABLE>

                                       64
<PAGE>

<TABLE>

        <S>                                                         <C>
         management of manufactured
         home
         communities                                                    5%

         Manufactured Home
         Community Mortgages other than
         mortgage indebtedness which is
         either eliminated in the consolidation
         of the REIT, Borrower and the
         Subsidiaries or accounted for as
         investments in real estate under
         GAAP                                                           10%

         Manufactured Home
         Community Ownership Interests
         other than Controlled Ownership
         Interests                                                      10%

         Development Activity                                           10%

         Taxable REIT Subsidiary Interests                              5%

</TABLE>

The value of the foregoing categories of Permitted Holdings shall be calculated
as follows: (i) the value of any Non-Manufactured Home Community Property (other
than cash or Cash Equivalents) or any Manufactured Home Community Ownership
Interest (other than a Controlled Ownership Interest) shall be calculated based
upon its Adjusted Asset Value; (ii) the value of any Land or any Security issued
by a real estate investment trust primarily engaged in the development,
ownership, operation and management of manufactured home communities shall be
equal to the lesser of (A) the acquisition cost thereof or (B) the current
market value thereof (such market value to be determined in a manner reasonably
acceptable to Agent); (iii) the value of any Taxable REIT Subsidiary Interest
shall be the acquisition or investment cost thereof; (iv) the value of any
Manufactured Home Community Mortgage (other than mortgage indebtedness which is
either eliminated in the consolidation of the REIT, Borrower and the
Subsidiaries or accounted for as an investment in real estate under GAAP) shall
be equal to the book value thereof; (v) the value of Development Activity by
Borrower or any Subsidiary shall be equal to the full budgeted cost thereof; and
(vi) the value of any Development Activity by an Investment Affiliate shall be
equal to the greater of (A) Borrower's pro rata share of the full budgeted cost
thereof based upon its percentage of equity ownership, or (B) Borrower's pro
rata share of the full budgeted cost thereof based upon Borrower's economic
interest in the project (as determined by Borrower in a manner reasonably
satisfactory to Agent).

                  9.09 Calculation. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter, but
shall be satisfied at all times.

                                   ARTICLE X.
                     EVENTS OF DEFAULT; RIGHTS AND REMEDIES

                  10.01 Events of Default. Each of the following occurrences
shall constitute an Event of Default under this Agreement:

                                       65
<PAGE>

                  (a) Failure to Make Payments When Due. (i) The failure to pay
in full any amount due on the Termination Date; (ii) the failure to pay in full
any principal when due; (iii) the failure to pay in full any interest owing
hereunder or under any of the other Loan Documents within ten (10) days after
the due date thereof and, unless Agent has previously delivered two (2) or more
notices of payment default to Borrower during the term of this Agreement (in
which event the following notice shall not be required), Agent shall have given
Borrower written notice that Agent has not received such payment on or before
the date such payment was required to be made and Borrower shall have failed to
make such payment within five (5) days after receipt of such notice; or (iv) the
failure to pay in full any other payment required hereunder or under any of the
other Loan Documents, whether such payment is required to be made to Agent or to
some other Person, within ten (10) days after Agent gives Borrower written
notice that such payment is due and unpaid.

                  (b) Dividends. Borrower or the REIT shall breach the covenant
set forth in Section 8.01(d).

                  (c) Breach of Financial Covenants. Borrower shall fail to
satisfy any covenant set forth in Article IX and such failure shall continue for
forty (40) days after Borrower's knowledge thereof.

                  (d) Other Defaults. Borrower, the REIT or any Agreement Party
shall fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on Borrower, the REIT or any Agreement Party under this
Agreement or under any of the other Loan Documents (other than as described in
Section 7.01(e) or Sections 10.01(a), (b), (c), (e), (g) or (p)), and such
failure shall continue for thirty (30) days after written notice from Agent to
Borrower, the REIT or any Agreement Party (or (i) such lesser period of time as
is mandated by applicable Requirements of Law or (ii) such longer period of time
(but in no case more than ninety (90) days) as is reasonably required to cure
such failure if Borrower, the REIT, or such Agreement Party commences such cure
within such ninety (90) days and diligently pursues the completion thereof).

                  (e) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by Borrower, the REIT or any Agreement Party to
Agent or any Lender herein or in any of the other Loan Documents or in any
statement, certificate or financial statements at any time given by Borrower
pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made and, with respect to any such
representation or warranty not known by Borrower at the time made or deemed made
to be false or misleading, the defect causing such representation or warranty to
be false or misleading is not removed within thirty (30) days after written
notice thereof from Agent to Borrower.

                  (f) Default as to Other Indebtedness. Borrower, the REIT, any
Subsidiary or any Investment Affiliate shall have defaulted under any Other
Indebtedness of such party (other than Non-Recourse Indebtedness) and as a
result thereof the holders of such Other Indebtedness shall have accelerated
such Other Indebtedness (other than Non-Recourse Indebtedness), if the aggregate
amount of such accelerated Other Indebtedness (to the extent of any recourse to
Borrower, the REIT or any Subsidiary), together with the aggregate amount of any
Other Indebtedness (other than Non-Recourse Indebtedness) of Borrower, the REIT,
any Subsidiary or

                                       66
<PAGE>

any Investment Affiliate which has theretofore been accelerated (to the extent
of any recourse to Borrower, the REIT or any Subsidiary) is $10,000,000 or more.

                  (g)      Involuntary Bankruptcy; Appointment of Receiver, etc.

                          (i) An involuntary case or other proceeding shall be
                  commenced against the REIT, Borrower, any Subsidiary, or any
                  Agreement Party and the petition shall not be dismissed within
                  sixty (60) days after commencement of the case, or a court
                  having jurisdiction shall enter a decree or order for relief
                  in respect of the REIT, Borrower, any Subsidiary, or any
                  Agreement Party, as the case may be, in an involuntary case or
                  other proceeding, under any applicable bankruptcy, insolvency
                  or other similar law now or hereafter in effect; or any other
                  similar relief shall be granted under any applicable federal,
                  state or foreign law; or

                          (ii) A decree or order of a court having jurisdiction
                  in the premises for the appointment of a receiver, liquidator,
                  sequestrator, trustee, custodian or other officer having
                  similar powers over Borrower, the REIT, any Subsidiary, or any
                  Agreement Party, or over all or a substantial part of the
                  property of the REIT, Borrower, any Subsidiary, or any
                  Agreement Party shall be entered, or an interim receiver,
                  trustee or other custodian of the REIT, Borrower, any
                  Subsidiary, or any Agreement Party, or of all or a substantial
                  part of the property of the REIT, Borrower, any Subsidiary, or
                  any Agreement Party shall be appointed or a warrant of
                  attachment, execution or similar process against any
                  substantial part of the property of the REIT, Borrower, any
                  Subsidiary, or any Agreement Party shall be issued and any
                  such event shall not be stayed, vacated, dismissed, bonded or
                  discharged within sixty (60) days of entry, appointment or
                  issuance.

                  (h) Voluntary Bankruptcy; Appointment of Receiver, etc. The
REIT, Borrower, any Subsidiary, or any Agreement Party shall have an order for
relief entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent 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 shall consent to the appointment of or taking of possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; the REIT, Borrower, any Subsidiary, or any Agreement Party shall make
any assignment for the benefit of creditors or shall be unable or fail, or admit
in writing its inability, to pay its debts as such debts become due; or the
general partner(s) or Board of Directors (or any committee thereof), as
applicable, of the REIT, Borrower, any Subsidiary, or any Agreement Party adopts
any resolution or otherwise authorizes any action to approve any of the
foregoing.

                  (i) Judgments and Attachments. (i) Any money judgments (other
than a money judgment covered by insurance but only if the insurer has admitted
liability with respect to such money judgment), writs or warrants of attachment,
or similar processes involving an aggregate amount in excess of $5,000,000 shall
be entered or filed against the REIT,

                                       67
<PAGE>

Borrower, any Subsidiary, or any Agreement Party or their respective assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of
thirty (30) days, or (ii) any judgment or order of any court or administrative
agency awarding material damages shall be entered against the REIT, Borrower,
any Subsidiary, or any Agreement Party in any action under the Federal
securities laws seeking rescission of the purchase or sale of, or for damages
arising from the purchase or sale of, any Securities, such judgment or order
shall have become final after exhaustion of all available appellate remedies and
such judgment or order would have a Material Adverse Effect.

                  (j) Dissolution. Any order, judgment or decree shall be
entered against the REIT, Borrower, or any Agreement Party decreeing its
involuntary dissolution or split up and such order shall remain undischarged and
unstayed for a period in excess of thirty (30) days; or the REIT, Borrower, or
any Agreement Party shall otherwise dissolve or cease to exist.

                  (k) Loan Documents; Failure of Security or Subordination. Any
Loan Document shall cease to be in full force and effect or any Obligation shall
be subordinated or shall not have the priority contemplated by this Agreement or
the Loan Documents for any reason or any guarantor under any guaranty of all or
any portion of the Obligations shall at any time disavow or deny liability under
such guaranty in writing.

                  (l) ERISA Plan Assets. Any assets of Borrower, the REIT or any
Agreement Party shall constitute "assets" (within the meaning of 29 C.F.R. ss.
2510.3-101 or any successor regulation thereto) of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or a "plan" within the meaning of
Section 4975(e)(1) of the Internal Revenue Code or Borrower, the REIT or any
Agreement Party shall be an "employee benefit plan" as defined in Section 3(3)
of ERISA, a "multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of
ERISA, or a "plan" as defined in Section 4975(e)(1) of the Internal Revenue
Code.

                  (m) ERISA Prohibited Transaction. The Obligations, any of the
Loan Documents or the exercise of any of the Agent's or Lenders' rights in
connection therewith shall constitute a prohibited transaction under ERISA
and/or the Internal Revenue Code (which is not exempt from the restrictions of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code and the taxes
and penalties imposed by Section 4975 of the Internal Revenue Code and Section
502(i) of ERISA).

                  (n) ERISA Liabilities. (i) Any Termination Event occurs which
will or is reasonably likely to subject Borrower, the REIT, any Subsidiary, any
Agreement Party, any ERISA Affiliate thereof or any of them to a liability which
Agent reasonably determines will have a Material Adverse Effect; (ii) the plan
administrator of any Benefit Plan applies for approval under Section 412(d) of
the Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and Agent reasonably determines that
the business hardship upon which the Section 412(d) waiver request was based
will or would reasonably be anticipated to subject Borrower, the REIT, any
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
to a liability which Agent reasonably determines will have a Material Adverse
Effect; (iii) any Benefit Plan shall incur an "accumulated funding deficiency"
(as defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA)
for which a waiver shall not have been obtained in accordance with the
applicable provisions of the Internal Revenue Code or ERISA which "accumulated
funding deficiency" will or would reasonably be anticipated to subject Borrower,
the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them to a liability which the Agent reasonably determines will have a
Material Adverse Effect; (iv) Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them shall

                                       68
<PAGE>

have engaged in a transaction which is prohibited under Section 4975 of the
Internal Revenue Code or Section 406 of ERISA which will or would reasonably be
anticipated to result in the imposition of a liability on Borrower, the REIT,
any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of
them which the Agent reasonably determines will have a Material Adverse Effect;
(v) Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA
Affiliate thereof or any of them shall fail to pay when due an amount which it
shall have become liable to pay to the PBGC, a Plan or a trust established under
Title IV of ERISA which failure will or would reasonably be anticipated to
result in the imposition of a liability on Borrower, the REIT, any Subsidiary,
any Agreement Party, or any ERISA Affiliate thereof or any of them which the
Agent reasonably determines will have a Material Adverse Effect; (vi) a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that a Benefit Plan must be terminated or have a trustee
appointed to administer such Plan which condition will or would reasonably be
anticipated to result in the imposition of a liability on Borrower, the REIT,
any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of
them which the Agent reasonably determines will have a Material Adverse Effect;
(vii) a Lien shall be imposed on any assets of Borrower, the REIT, any
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
in favor of the PBGC or a Plan which the Agent reasonably determines will have a
Material Adverse Effect; (viii) Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them shall suffer a
partial or complete withdrawal from a Multiemployer Plan or shall be in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan resulting from a complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Multiemployer Plan which
will or would reasonably be anticipated to result in the imposition of a
liability on Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them which the Agent reasonably determines
will have a Material Adverse Effect; or (ix) a proceeding shall be instituted by
a fiduciary of any Multiemployer Plan against Borrower, the REIT, any
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
to enforce Section 515 of ERISA which will or would reasonably be anticipated to
result in the imposition of a liability on Borrower, the REIT, any Subsidiary,
any Agreement Party, or any ERISA Affiliate thereof or any of them which the
Agent reasonably determines will have a Material Adverse Effect.

                  (o) Solvency. Borrower, any Agreement Party or the REIT shall
cease to be Solvent.

                  (p) Board of Directors. During any 12-month period,
individuals who were directors of the REIT on the first day of such period shall
not constitute a majority of the board of directors of the REIT.

                  (q) Term Loan Credit Agreement. An "Event of Default" shall
have occurred under the Term Loan Credit Agreement.

                  An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 12.05.

                  10.02    Rights and Remedies.

                                       69
<PAGE>

                  (a) Acceleration. Upon the occurrence of any Event of Default
with respect to Borrower described in the foregoing Section 10.01(g) or
10.01(h), the Commitments (including the obligations of Swingline Lender and
Issuing Lender) shall automatically and immediately terminate and the unpaid
principal amount of and any and all accrued interest on the Loans and all of the
other Obligations shall automatically become immediately due and payable, with
all additional interest from time to time accrued thereon and without
presentment, demand or protest or other requirements of any kind (including
without limitation valuation and appraisement, diligence, presentment, notice of
intent to demand or accelerate or notice of acceleration), all of which are
hereby expressly waived by Borrower, and the obligations of Lenders to make any
Loans hereunder shall thereupon terminate; and upon the occurrence and during
the continuance of any other Event of Default, Agent shall, at the request of,
or may, with the consent of, Requisite Lenders, by written notice to Borrower,
(i) declare that the Commitments (including the obligations of Swingline Lender
and Issuing Lender) are terminated, whereupon the Commitments and the obligation
of Lenders to make any Loans hereunder shall immediately terminate, and/or (ii)
declare the unpaid principal amount of and any and all accrued and unpaid
interest on the Loans and all of the other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by Borrower. Upon
the occurrence of and during the continuance of an Event of Default, no
Agreement Party shall be permitted to make any distributions or dividends
without the prior written consent of Agent. Upon the occurrence of an Event of
Default or an acceleration of the Obligations, Agent and Lenders may exercise
all or any portion of the rights and remedies set forth in the Loan Documents.

                  (b) Access to Information. Notwithstanding anything to the
contrary contained in the Loan Documents, upon the occurrence of and during the
continuance of an Event of Default, Agent shall be entitled to request and
receive, by or through Borrower or appropriate legal process, any and all
information concerning the REIT, Borrower, any Subsidiary of Borrower, any
Investment Affiliate, any Agreement Party, or any property of any of them, which
is reasonably available to or obtainable by Borrower.

                  (c) Waiver of Demand. Demand, presentment, protest and notice
of nonpayment are hereby waived by Borrower.

                  (d) Waivers, Amendments and Remedies. No delay or omission of
Agent or Lenders to exercise any right under any Loan Document shall impair such
right or be construed to be a waiver of any Event of Default or an acquiescence
therein, and any single or partial exercise of any such right shall not preclude
other or further exercise thereof or the exercise of any other right, and no
waiver, amendment or other variation of the terms, conditions or provisions of
the Loan Documents whatsoever shall be valid unless in a writing signed by Agent
after obtaining written approval thereof or the signature thereon of those
Lenders required to approve such waiver, amendment or other variation, and then
only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to Agent and Lenders until the Obligations have been paid in
full, the Commitments have expired or terminated and this Agreement has been
terminated.

                                       70
<PAGE>

                  10.03 Rescission. If at any time after acceleration of the
maturity of the Loans, Borrower shall pay all arrears of interest and all
payments on account of principal of the Loans which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Unmatured Events of Default (other than nonpayment
of principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant to Section 12.05,
then by written notice to Borrower, Requisite Lenders may elect, in the sole
discretion of Requisite Lenders to rescind and annul the acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Unmatured Event of Default or impair any right or remedy in connection
therewith. The provisions of the preceding sentence are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders;
they are not intended to benefit Borrower and do not give Borrower the right to
require Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.

                  10.04 Suspension of Lending. At any time during which an
Unmatured Event of Default exists pursuant to Section 10.01(c) or Section
10.01(d) and is not cured (by improvement in the applicable financial measure by
compliance with the applicable financial covenant in such 40-day period or as
provided in Section 10.01(d)), Borrower shall have no right to receive any
additional Loans.

                                   ARTICLE XI.
                                AGENCY PROVISIONS

                  11.01    Appointment

                  (a) Each Lender hereby designates and appoints Wells Fargo as
Agent of such Lender under this Agreement and the Loan Documents, and each
Lender hereby irrevocably authorizes Agent to take such action on its behalf
under the provisions of this Agreement and the Loan Documents and to exercise
such powers as are set forth herein or therein, together with such other powers
as are reasonably incidental thereto. Agent agrees to act as such on the express
conditions contained in this Article XI.

                  (b) The provisions of this Article XI are solely for the
benefit of Agent and Lenders, and Borrower shall not have any rights to rely on
or enforce any of the provisions hereof. In performing its functions and duties
under this Agreement, Agent shall act solely as Agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower.

                  11.02 Nature of Duties. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be administrative in nature. Subject
to the provisions of Sections 11.05 and 11.07, Agent shall administer the Loans
in the same manner as it administers its own loans. Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Loan Documents, expressed or implied, is
intended or shall be construed to impose upon Agent any obligation in respect of
this Agreement or any of the Loan Documents except as expressly set forth herein
or therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the REIT, Borrower, the

                                       71
<PAGE>

Subsidiaries, the Investment Affiliates, and each Agreement Party in connection
with the making and the continuance of the Loans hereunder and shall make its
own assessment of the creditworthiness of the REIT, Borrower, the Subsidiaries,
the Investment Affiliates, and each Agreement Party, and, except as specifically
provided herein, Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the Closing Date or at any time or times thereafter.

                  11.03    Loan Disbursements

                  (a) Promptly after receipt of a Notice of Borrowing for a Loan
to be made pursuant to Section 2.01 hereof, but in no event later than one (1)
Business Day prior to the proposed Funding Date for a Base Rate Loan or two (2)
Business Days prior to the proposed Funding Date for a LIBOR Loan, Agent shall
notify each Lender of the proposed Borrowing and the Funding Date set forth
therein. Each Lender shall make available to Agent (or the funding bank or
entity designated by Agent), the amount of such Lender's Pro Rata Share of such
Borrowing in immediately available funds not later than the times designated in
Section 11.03(b). Unless Agent shall have been notified by any Lender prior to
such time for funding in respect of any Borrowing that such Lender does not
intend to make available to Agent such Lender's Pro Rata Share of such
Borrowing, Agent may assume that such Lender has made such amount available to
Agent and Agent, in its sole discretion, may, but shall not be obligated to,
make available to Borrower a corresponding amount. If such corresponding amount
is not in fact made available to Agent by such Lender on or prior to a Funding
Date, such Lender agrees to pay to Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to Borrower until the date such amount is paid or repaid to
Agent, at the Federal Funds Rate. If such Lender shall pay to Agent such
corresponding amount, such amount so paid shall constitute such Lender's Pro
Rata Share of such Borrowing. If such Lender shall not pay to Agent such
corresponding amount after reasonable attempts are made by Agent to collect such
amounts from such Lender, Borrower agrees to repay to Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to Borrower until the date such amount is
repaid to Agent, at the interest rate applicable thereto.

                  (b) Requests by Agent for funding by Lenders of Loans will be
made by telecopy. Each Lender shall make the amount of its Loan available to
Agent in Dollars and in immediately available funds, to such bank and account,
in El Segundo, California as Agent may designate, not later than 10:00 A.M.
(California time) on the Funding Date designated in the Notice of Borrowing with
respect to such Loan. Nothing in this Section 11.03(b) shall be deemed to
relieve any Lender of its obligation hereunder to make its Pro Rata Share of
Loans on any Funding Date, nor shall any Lender be responsible for the failure
of any other Lender to perform its obligations to make any Loan hereunder, and
the Commitment of any Lender shall not be increased or decreased as a result of
the failure by any other Lender to perform its obligation to make a Loan.

                  11.04    Distribution and Apportionment of Payments

                  (a) Subject to Section 11.04(b), payments actually received by
Agent for the account of Lenders shall be paid to them promptly after receipt
thereof by Agent, but in any

                                       72
<PAGE>

event prior to 3:00 P.M. (California time) on the day of receipt (if received by
11:00 A.M. (California time) on such day), or within one (1) Business Day
thereafter (if received after 11:00 A.M. (California time) on the day of
receipt), provided that Agent shall pay to such Lenders interest thereon at the
Federal Funds Rate from the Business Day on which such funds are required to be
paid to Lenders by Agent until such funds are actually paid in immediately
available funds to such Lenders. All payments of principal and interest in
respect of outstanding Loans (other than Swingline Loans), all payments of the
fees described in this Agreement (other than agency and arrangement fees
described in Section 2.04(c)), and all payments in respect of any other
Obligations shall be allocated among such of Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided herein.
Agent shall promptly, but in any event within two (2) Business Days (with
interest thereon, if required pursuant to this Section 11.04(a)), distribute to
each Lender at its primary address set forth on the appropriate counterpart
signature page hereof or on the Assignment and Assumption, or at such other
address as a Lender may request in writing, such funds as it may be entitled to
receive, provided that Agent shall in any event not be bound to inquire into or
determine the validity, scope or priority of any interest or entitlement of any
Lender and may suspend all payments and seek appropriate relief (including
without limitation instructions from Requisite Lenders, or all Lenders, as
applicable, or an action in the nature of interpleader) in the event of any
doubt or dispute as to any apportionment or distribution contemplated hereby.
The order of priority herein is set forth solely to determine the rights and
priorities of Lenders as among themselves and may at any time or from time to
time be changed by Lenders as they may elect, in writing in accordance with
Section 12.05, without necessity of notice to or consent of or approval by
Borrower or any other Person.

                  (b) Notwithstanding any provision hereof to the contrary,
until such time as a Defaulting Lender has funded its Pro Rata Share of a Loan
(other than a Swingline Loan but including a Mandatory Borrowing) or draw on a
Letter of Credit which was previously a Non Pro Rata Loan, or all other Lenders
have received payment in full (whether by repayment or prepayment) of the
principal and interest due in respect of such Non Pro Rata Loan, all of the
Obligations owing to such Defaulting Lender hereunder shall be subordinated in
right of payment, as provided in the following sentence, to the prior payment in
full of all principal, interest and fees in respect of all Non Pro Rata Loans in
which the Defaulting Lender has not funded its Pro Rata Share (such principal,
interest and fees being referred to as "Senior Loans"). All amounts paid by
Borrower and otherwise due to be applied to the Obligations owing to the
Defaulting Lender pursuant to the terms hereof shall be distributed by Agent to
the other Lenders in accordance with their respective Pro Rata Shares
(recalculated for purposes hereof to exclude the Defaulting Lender's
Commitment), until all Senior Loans have been paid in full. This provision
governs only the relationship among Agent, each Defaulting Lender, and the other
Lenders; nothing hereunder shall limit the obligation of Borrower to repay all
Loans in accordance with the terms of this Agreement. The provisions of this
section shall apply and be effective regardless of whether an Event of Default
occurs and is then continuing, and notwithstanding (i) any other provision of
this Agreement to the contrary, (ii) any instruction of Borrower as to its
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters which are subject to the consent or approval
of Requisite Lenders, Supermajority Lenders, or all Lenders. No Unused Facility
Fee shall accrue in favor of, or be payable to, such Defaulting Lender from the
date of any failure to fund Loans (other than Swingline Loans but including
Loans made pursuant to Mandatory Borrowings) or draws on Letters of Credit or
reimburse Agent for any Liabilities and Costs as herein provided until such

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failure has been cured and, without limitation of other provisions set forth in
this Agreement, Agent shall be entitled to (i) collect interest from such Lender
for the period from the date on which the payment was due until the date on
which the payment is made at the Federal Funds Rate for each day during such
period, (ii) withhold or set off, and to apply to the payment of the defaulted
amount and any related interest, any amounts to be paid to such Defaulting
Lender under this Agreement, and (iii) bring an action or suit against such
Defaulting Lender in a court of competent jurisdiction to recover the defaulted
amount and any related interest. In addition, the Defaulting Lender shall
indemnify, defend and hold Agent and each of the other Lenders harmless from and
against any and all Liabilities and Costs plus interest thereon at the default
rate set forth in the Loan Documents for funds advanced by Agent or any other
Lender on account of the Defaulting Lender which they may sustain or incur by
reason of or as a direct consequence of the Defaulting Lender's failure or
refusal to abide by its obligations under this Agreement.

                  11.05 Rights, Exculpation, Etc. Neither Agent, any Affiliate
of Agent, nor any of their respective officers, directors, employees, agents,
attorneys or consultants, shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
herewith or therewith, except that Agent shall be liable for its gross
negligence or willful misconduct in the performance of its express obligations
hereunder. In the absence of gross negligence or willful misconduct, Agent shall
not be liable for any apportionment or distribution of payments made by it in
good faith pursuant to Section 11.04. Agent shall not be responsible to any
Lender for any recitals, statements, representations or warranties herein or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement, or any of the other Loan
Documents, or any of the transactions contemplated hereby and thereby; or for
the financial condition of the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party. Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Loan Documents or the
financial condition of the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party, or the existence or possible existence of any
Unmatured Event of Default or Event of Default. Agent may at any time request
instructions from Lenders with respect to any actions or approvals which, by the
terms of this Agreement or of any of the Loan Documents, Agent is permitted or
required to take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from Requisite Lenders or Supermajority
Lenders, as the case may be. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against Agent as a result of Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders, Supermajority Lenders
or, where applicable, all Lenders. Agent shall promptly notify each Lender at
any time that the Requisite Lenders or Supermajority Lenders, as the case may
be, have instructed Agent to act or refrain from acting pursuant hereto.

                  11.06 Reliance. Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents, telecopies
or any telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person, and with respect to
all matters pertaining to this Agreement or any of the Loan

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Documents and its duties hereunder or thereunder, upon advice of legal counsel
(including counsel for Borrower), independent public accountant and other
experts selected by it.

                  11.07 Indemnification. To the extent that Agent or Issuing
Lender is not reimbursed and indemnified by Borrower, Lenders will reimburse,
within ten (10) days after notice from Agent, and indemnify Agent and Issuing
Lender for and against any and all Liabilities and Costs which may be imposed
on, incurred by, or asserted against it (in its capacity as Agent or Issuing
Lender) in any way relating to or arising out of this Agreement or any of the
other Loan Documents or any action taken or omitted by Agent or Issuing Lender
(in its capacity as Agent or Issuing Lender) under this Agreement or any of the
other Loan Documents, in proportion to each Lender's Pro Rata Share, provided
that no Lender shall be liable for any portion of such Liabilities and Costs
resulting from Agent's or Issuing Lender's gross negligence or willful
misconduct, bad faith or fraud. The obligations of Lenders under this Section
11.07 shall survive the payment in full of all Obligations and the termination
of this Agreement. In the event that after payment and distribution of any
amount by Agent to Lenders, any Lender or third party, including Borrower, any
creditor of Borrower or a trustee in bankruptcy, recovers from Agent any amount
found to have been wrongfully paid to Agent or disbursed by Agent to Lenders,
then Lenders, in proportion to their respective Pro Rata Shares, shall reimburse
Agent for all such amounts. Notwithstanding the foregoing, Agent shall not be
obligated to advance Liabilities and Costs and may require the deposit by each
Lender of its Pro Rata Share of any material Liabilities and Costs anticipated
by Agent before they are incurred or made payable.

                  11.08 Agent Individually. With respect to its Pro Rata Share
of the Commitments hereunder and the Loans made by it, Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Requisite Lenders", "Supermajority Lenders", or
any similar terms may include Agent in its individual capacity as a Lender, one
of the Requisite Lenders or one of the Supermajority Lenders, but Requisite
Lenders and Supermajority Lenders shall not include Agent solely in its capacity
as Agent. Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with Borrower
or any of its Subsidiaries or Affiliates as if it were not acting as Agent
pursuant hereto.

                  11.09 Successor Agent; Resignation of Agent; Removal of Agent

                  (a) Agent may resign from the performance of all its functions
and duties hereunder at any time by giving at least thirty (30) Business Days
prior written notice to Lenders and Borrower. For good cause, by a determination
of all the Lenders (excluding for such determination the Agent in its capacity
as a Lender), the Agent may be removed at any time by giving at least thirty
(30) Business Days prior written notice to Agent and Borrower. Such resignation
or removal shall take effect upon the acceptance by a successor Agent of
appointment pursuant to clauses (b) and (c) below or as otherwise provided
below.

                  (b) Upon any such notice of resignation by or removal of
Agent, Requisite Lenders shall appoint a successor Agent with the consent of
Borrower, which shall not be unreasonably withheld or delayed (and approval from
Borrower shall not be required upon the occurrence and during the continuance of
an Event of Default). Any successor Agent must be a bank (i) the senior debt
obligations of which (or such Bank's parent's senior debt obligations) are

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rated not less than Baa-1 by Moody's Inc. or a comparable rating by a rating
agency acceptable to Requisite Lenders, (ii) which has total assets in excess of
Ten Billion Dollars ($10,000,000,000) and (iii) which is a Lender as of the date
of such succession holding a Commitment without participants equal to at least
ten percent (10%) of the Facility. Agent hereby agrees to remit to any successor
Agent, a pro rata portion of any annual agent's fee received by Agent, in
advance, for the one-year period covered by such agent's fee based upon the
portion of such year then remaining.

                  (c) If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the retiring or removed Agent, with
the consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Agent who shall meet the requirements described in subsection (b) above and who
shall serve as Agent until such time, if any, as Requisite Lenders, with the
consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), appoint a successor Agent as
provided above.

                  (d) Any Person succeeding Wells Fargo (or any successor to
Wells Fargo) as Agent hereunder shall also serve as Issuing Lender and Swingline
Lender; provided, however, that the issuer of any Letter of Credit outstanding
at the time of such succession shall retain all of the rights and protections of
Issuing Lender hereunder with respect to such Letter of Credit.

                  11.10    Consents and Approvals

                  (a) Each Lender authorizes and directs Agent to enter into the
Loan Documents other than this Agreement for the benefit of Lenders. Each Lender
agrees that any action taken by Agent at the direction or with the consent of
Requisite Lenders or the Supermajority Lenders and any action taken by Agent not
requiring consent by Requisite Lenders, Supermajority Lenders, or all Lenders in
accordance with the provisions of this Agreement or any Loan Document, and the
exercise by Agent at the direction or with the consent of Requisite Lenders or
the Supermajority Lenders of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all Lenders, except for actions specifically requiring the
approval of all Lenders. All communications from Agent to Lenders requesting
Lenders' determination, consent, approval or disapproval (i) shall be given in
the form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or item as to which such determination, approval,
consent or disapproval is requested, or shall advise each Lender where such
matter or item may be inspected, or shall otherwise describe the matter or issue
to be resolved, (iii) shall include, if reasonably requested by a Lender and to
the extent not previously provided to such Lender, written materials and a
summary of all oral information provided to Agent by Borrower in respect of the
matter or issue to be resolved, and (iv) shall include Agent's recommended
course of action or determination in respect thereof. Each Lender shall reply
promptly, but in any event within fifteen (15) Business Days after receipt of
the request therefor from Agent (the "Lender Reply Period"). Unless a Lender
shall give written notice to Agent that it objects to the recommendation or
determination of Agent (together with a written explanation of the reasons
behind such objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or determination.
With respect to decisions

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requiring the approval of Requisite Lenders, Supermajority Lenders or all
Lenders, Agent shall submit its recommendation or determination for approval of
or consent to such recommendation or determination to all Lenders and upon
receiving the required approval or consent shall follow the course of action or
determination recommended to Lenders by Agent or such other course of action
recommended by Requisite Lenders or Supermajority Lenders, as the case may be,
and each non-responding Lender shall be deemed to have concurred with such
recommended course of action. The following amendments, modifications or waivers
shall require the consent of the Requisite Lenders:

                          (i) Waiver of Sections 8.01(h) or 8.02(f);

                          (ii) Acceleration following an Event of Default
                  pursuant to Section 10.02(a) (except for any Event of Default
                  pursuant to Sections 10.01(g) or 10.01(h)) or rescission of
                  such acceleration pursuant to Section 10.03;

                          (iii) Approval of the exercise of remedies requiring
                  the consent of the Requisite Lenders under Section 10.02(a);

                          (iv) Appointment of a successor Agent in accordance
                  with Sections 11.09(b) and (c);

                          (v) Disapproval of any Property as a Qualifying
                  Unencumbered Property.

                  (b) Except for amendments, modifications and waivers requiring
the consent of all Lenders pursuant to Section 12.05(b) hereof, the consent of
the Supermajority Lenders shall be required to amend or modify Sections 9.01,
9.02, 9.03, 9.04, 9.05, 9.06, 9.07 or 10.01(a) or to waive any requirement
thereof or to amend or modify this Section 11.10(b).

                  (c) In addition to the required consents or approvals referred
to in Section 12.05, Agent may at any time request instructions from Requisite
Lenders with respect to any actions or approvals which, by the terms of this
Agreement or of any of the Loan Documents, Agent is permitted or required to
take or to grant without instructions from any Lenders, and if such instructions
are promptly requested, Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from taking any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from Requisite Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting under this Agreement, any of
the other Loan Documents in accordance with the instructions of Requisite
Lenders or, where applicable, Supermajority Lenders or all Lenders. Agent shall
promptly notify each Lender at any time that the Requisite Lenders or
Supermajority Lenders have instructed Agent to act or refrain from acting
pursuant hereto.

                  11.11    [Intentionally Omitted]

                  11.12    [Intentionally Omitted]

                  11.13    Assignments and Participations

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                  (a) Subject to the provisions of Section 11.13(j), after first
obtaining the approval of Agent and Borrower, which approval will not be
unreasonably withheld (and which approval from Borrower shall not be required
upon the occurrence and during the continuance of an Event of Default), each
Lender may assign to one or more banks, finance companies, insurance or other
financial institutions all or a portion of its rights and obligations under this
Agreement in accordance with the provisions of this Section (including without
limitation all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of the assigning Lender's rights and obligations under
this Agreement and the assignment shall cover the same percentage of such
Lender's Commitment and Loans, (ii) unless Agent and Borrower otherwise consent
(which consent of Borrower shall not be required upon the occurrence and during
the continuance of an Event of Default), the aggregate amount of the Commitment
of the assigning Lender being assigned to a Person that is not already a Lender
hereunder (provided such Lender was also a Lender on the Closing Date) pursuant
to each such assignment shall in no event be less than Five Million Dollars
($5,000,000) and shall be an integral multiple of One Million Dollars
($1,000,000), (iii) the parties to each such assignment shall execute and
deliver to Agent, for its approval and acceptance, an Assignment and Assumption
and (iv) Agent shall receive from the assignor or assignors for its sole account
a processing fee of Three Thousand Dollars ($3,000). Upon such execution,
delivery, approval and acceptance, and upon the effective date specified in the
applicable Assignment and Assumption, (A) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
validly and effectively assigned to it pursuant to such Assignment and
Assumption, have the rights and obligations of a Lender hereunder and (B) the
Lender-assignor thereunder shall, to the extent that rights and obligations
hereunder have been validly and effectively assigned by it pursuant to such
Assignment and Assumption, relinquish its rights and be released from its
obligations under this Agreement.

                  (b) By executing and delivering an Assignment and Assumption,
the Lender-assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Assumption, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the REIT, Borrower,
any Subsidiary, any Investment Affiliate, or any Agreement Party or the
performance or observance by the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party of any of their respective obligations under
any Loan Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Article VI or
delivered pursuant to Article VI to the date of such assignment and such other
Loan Documents and other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Assumption; (iv) such assignee will, independently and without reliance upon
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes Agent to take such action

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as Agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.

                  (c) Agent shall maintain at its address referred to on the
counterpart signature pages hereof a copy of each Assignment and Assumption
delivered to and accepted by it and shall record the names and addresses of each
Lender and the Commitment of, and principal amount of the Loans owing to, such
Lender from time to time. Borrower, Agent and Lenders may treat each Person
whose name is so recorded as a Lender hereunder for all purposes of this
Agreement.

                  (d) Upon its receipt of an Assignment and Assumption executed
by an assigning Lender and an assignee, Agent shall, if such Assignment and
Assumption has been properly completed and is in substantially the form of
Exhibit A, (i) accept such Assignment and Assumption, (ii) record the
information contained therein and (iii) give prompt notice thereof to Borrower.
Upon request, Borrower will execute and deliver to Agent an appropriate
replacement promissory note or replacement promissory notes in favor of each
assignee (and assignor, if such assignor is retaining a portion of its
Commitment and Loans) reflecting such assignee's (and assignor's) Pro Rata
Share(s) of the Facility. Upon execution and delivery of such replacement
promissory notes, the original promissory note or notes evidencing all or a
portion of the Commitments and Loans being assigned shall be canceled and
returned to Borrower.

                  (e) Each Lender may sell participations to one or more banks,
finance companies, insurance or other entities in or to all or a portion of its
rights and obligations under this Agreement (including without limitation all or
a portion of its Commitment and the Loans owing to it); provided, however, that
(i) such Lender's obligations under this Agreement (including without limitation
its Commitment to Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) Borrower, Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement and (iv) the holder of any such
participation shall not be entitled to voting rights under this Agreement except
that such Participant may have the contractual right in the applicable
participation agreement to prevent (A) increases in the Facility, (B) extensions
of the Maturity Date (except pursuant to Article III hereof), (C) decreases in
the interest rates described in this Agreement, and (D) a release of the REIT
Guaranty.

                  (f) Borrower will use reasonable efforts to cooperate with
Agent and Lenders in connection with the assignment of interests under this
Agreement or the sale of participations herein.

                  (g) Anything in this Agreement to the contrary
notwithstanding, and without the need to comply with any of the formal or
procedural requirements of this Agreement, including Section 11.13, any Lender
may at any time and from time to time pledge and assign all or any portion of
its rights under all or any of the Loan Documents to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from its
obligations

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<PAGE>

thereunder. To facilitate any such pledge or assignment, Agent shall, at the
request of such Lender, enter into a letter agreement with the Federal Reserve
Bank in, or substantially in, the form of the exhibit to Appendix C to the
Federal Reserve Bank of New York Operating Circular No 12.

                  (h) Anything in this Agreement to the contrary
notwithstanding, any Lender may assign all or any portion of its rights and
obligations under this Agreement to a Lender Affiliate of such Lender without
first obtaining the approval of Agent and Borrower, provided that (i) at the
time of such assignment such Lender is not a Defaulting Lender, (ii) such Lender
gives Agent and Borrower at least fifteen (15) days prior written notice of any
such assignment; (iii) the parties to each such assignment execute and deliver
to Agent an Assignment and Assumption, and (iv) Agent receives from assignor for
its sole account a processing fee of Three Thousand Dollars ($3,000).

                  (i) No Lender shall be permitted to assign, or sell a
participation interest in, all or any portion of its rights and obligations
under this Agreement to Borrower or any Affiliate of Borrower.

                  (j) Anything in this Agreement to the contrary
notwithstanding, so long as no Event of Default shall have occurred and be
continuing, no Lender shall be permitted to enter into an assignment of its
rights and obligations hereunder which would result in such Lender holding a
Commitment of less than Ten Million Dollars ($10,000,000). In the event Agent
ceases to hold a Commitment of less than ten percent (10%) of the Facility,
Agent shall resign from the performance of all of its functions and duties
hereunder; provided, however, that no such resignation shall be required during
the continuance of an Event of Default.

                  11.14 Ratable Sharing. Subject to Sections 11.03 and 11.04,
Lenders agree among themselves that (i) with respect to all amounts received by
them which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among them ratably in accordance with their Pro Rata Shares, whether received by
voluntary payment, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, banker's lien or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 11.14 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 12.04, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.

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<PAGE>

                  11.15 Delivery of Documents. Agent shall as soon as reasonably
practicable distribute to each Lender at its primary address set forth on the
appropriate counterpart signature page hereof or at such other address as a
Lender may request in writing, (i) all documents to which such Lender is a party
or of which such Lender is a beneficiary and (ii) all documents of which Agent
receives copies from Borrower for distribution to Lenders pursuant to Sections
6.01 and 12.07. In addition, within ten (10) Business Days after receipt of a
request in writing from a Lender for written information or documents provided
by or prepared by Borrower, the REIT or any Agreement Party, Agent shall deliver
such written information or documents to such requesting Lender if Agent has
possession of such written information or documents in its capacity as Agent or
as a Lender.

                  11.16 Notice of Events of Default. Except as expressly
provided in this Section 11.16, Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Event of Default or Event of Default
(other than nonpayment of principal of or interest on the Loans) unless Agent
has received notice in writing from a Lender or Borrower referring to this
Agreement or the other Loan Documents, describing such event or condition and
expressly stating that such notice is a notice of an Unmatured Event of Default
or Event of Default. Should Agent receive such notice of the occurrence of an
Unmatured Event of Default or Event of Default, or should Agent send Borrower a
notice of Unmatured Event of Default or Event of Default, Agent shall promptly
give notice thereof to each Lender.

                                  ARTICLE XII.
                                  MISCELLANEOUS

                  12.01    Expenses

                  (a) Generally. Borrower agrees, within thirty (30) days after
receipt of a written notice from the Agent, to pay or reimburse Agent for all of
Agent's reasonable costs and expenses incurred by Agent at any time (whether
prior to, on or after the date of this Agreement) in connection with: (A) the
negotiation, preparation and execution of this Agreement and the other Loan
Documents and any amendments or waivers with respect hereto requested by
Borrower, including, without limitation, the reasonable fees, expenses and
disbursements of Agent's outside counsel incurred in connection therewith; (B)
the making of the Loans and (C) the collection or enforcement by Agent of any of
the Obligations, including, without limitation, reasonable attorneys' fees and
costs incurred in connection therewith.

                  (b) After Event of Default. Borrower further agrees to pay, or
reimburse Agent and Lenders, for all reasonable costs and expenses, including
without limitation reasonable attorneys' fees and disbursements incurred by
Agent or Lenders after the occurrence of an Event of Default (i) in enforcing
any Obligation or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating to
Borrower, the REIT or any Agreement Party and related to or arising out of the
transactions contemplated hereby; (iv) in taking any other action in or with
respect to any suit or proceeding (whether in bankruptcy or otherwise); (v) in
protecting, preserving, collecting, leasing, selling, taking possession of, or
liquidating any such collateral; or

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(vi) attempting to enforce or enforcing any rights under the Loan Documents;
provided, however, that the attorneys' fees and disbursements for which Borrower
is obligated under this subsection (b) shall be limited to the reasonable
non-duplicative fees and disbursements of counsel for Agent and counsel for all
Lenders as a group. For purposes of this Section 12.01(b), (i) counsel for Agent
shall mean a single outside law firm representing Agent plus any additional law
firms providing special local law representation in connection with the
enforcement of the Loan Documents, and (ii) counsel for all Lenders as a group
shall mean a single outside law firm representing such Lenders as a group.

                  12.02    Indemnity

                  (a) Generally. Borrower shall indemnify and defend Agent,
Swingline Lender, Issuing Lender and each Lender and their respective
affiliates, participants, officers, directors, employees and agents (each an
"Indemnitee") against, and shall hold each such Indemnitee harmless from, any
and all losses, damages (whether general, punitive or otherwise), liabilities,
claims, causes of action (whether legal, equitable or administrative),
judgments, court costs and legal or other expenses (including reasonable
attorneys' fees) which such Indemnitee may suffer or incur: (i) in connection
with claims made by third parties against such Indemnitee for losses or damages
suffered by such third party as a result of (A) such Indemnitee's performance of
this Agreement or any of the other Loan Documents, including without limitation
such Indemnitee's exercise or failure to exercise any rights, remedies or powers
in connection with this Agreement or any of the other Loan Documents or (B) the
failure by Borrower, the REIT or any Agreement Party to perform any of their
respective obligations under this Agreement or any of the other Loan Documents
as and when required hereby or thereby, including without limitation any failure
of any representation or warranty of Borrower, the REIT or any Agreement Party
to be true and correct; (ii) in connection with any claim or cause of action of
any kind by any Person to the effect that such Indemnitee is in any way
responsible or liable for any act or omission by Borrower, the REIT or any
Agreement Party, whether on account of any theory of derivative liability or
otherwise, (iii) in connection with the past, present or future environmental
condition of any Property owned by Borrower, the REIT, Subsidiary or any
Agreement Party, the presence of asbestos-containing materials at any such
Property, the presence of Contaminants in groundwater at any such Property, or
the Release or threatened Release of any Contaminant into the environment from
any such Property; or (iv) in connection with any claim or cause of action of
any kind by any Person which would have the effect of denying such Indemnitee
the full benefit or protection of any provision of this Agreement or any of the
other Loan Documents.

                  (b) ERISA. Without limitation of the provisions of subsection
(a) above, Borrower shall indemnify and hold each Indemnitee free and harmless
from and against all loss, costs (including reasonable attorneys' fees and
expenses), expenses, taxes, and damages (including consequential damages) such
Indemnitee may suffer or incur by reason of the investigation, defense and
settlement of claims and in obtaining any prohibited transaction exemption under
ERISA or the Internal Revenue Code necessary in such Indemnitee's reasonable
judgment by reason of the inaccuracy of the representations and warranties set
forth in the first paragraph of Section 5.01(s) or a breach of the provisions
set forth in the last paragraph of Section 8.01(f).

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<PAGE>

                  (c) Exceptions; Limitations. Notwithstanding anything to the
contrary set forth in this Section 12.02, Borrower shall have no obligation to
any Indemnitee hereunder with respect to (i) any intentional tort, fraud or act
of gross negligence or bad faith which any Indemnitee is personally determined
by the judgment of a court of competent jurisdiction (sustained on appeal, if
any) to have committed, (ii) any liability of such Indemnitee to any third party
based upon contractual obligations of such Indemnitee owing to such third party
which are not expressly set forth in the Loan Documents or (iii) violations of
Environmental Laws relating to a Property which are caused by the act or
omission of such Indemnitee after such Indemnitee takes possession of such
Property and which would not have occurred if such Indemnitee had exercised
reasonable care under the circumstances. In addition, the indemnification set
forth in this Section 12.02 in favor of any officer, director, partner, employee
or agent of Agent, Swingline Lender, Issuing or any Lender shall be solely in
their respective capacities as such officer, director, partner, employee or
agent. Such indemnification in favor of any affiliate of Agent, Swingline
Lender, Issuing Lender or any Lender shall be solely in its capacity as the
provider of services to Agent, Swingline Lender, Issuing Lender or such Lender
in connection with this Agreement, and such indemnification in favor of any
participant of Agent or any Lender shall be solely in its capacity as a
participant in the Commitments and the Loans.

                  (d) Payment; Survival. Borrower shall pay any amount owing
under this Section 12.02 within thirty (30) days after written demand therefor
by the applicable Indemnitee together with reasonable supporting documentation
therefor. The indemnity set forth in this Section 12.02 shall survive the
payment of all amounts payable pursuant to, and secured by, this Agreement and
the other Loan Documents. Payment by any Indemnitee shall not be a condition
precedent to the obligations of Borrower under this Section 12.02. To the extent
that any indemnification obligation set forth in this Section 12.02 may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of the applicable
indemnified matter.

                  12.03 Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT,
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of the REIT, on a consolidated basis, shall be the same
after such changes as if such changes had not been made; provided, however, that
no change in GAAP that would affect the method of calculation of any of the
financial covenants, standards or terms shall be given effect in such
calculations until such provisions are amended, in a manner satisfactory to
Agent and all Lenders, to so reflect such change in accounting principles.

                  12.04 Setoff. In addition to any Liens granted to Agent and
any rights now or hereafter granted under applicable law and not by way of
limitation of any such Lien or rights,

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<PAGE>

upon the occurrence and during the continuance of any Event of Default, Agent
and each Lender are hereby authorized by Borrower at any time or from time to
time, with concurrent notice to Borrower, or to any other Person (any such
notice being hereby expressly waived) to set off and to appropriate and to apply
any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured
but not including trust accounts) and any other indebtedness at any time held or
owing by Agent or such Lender solely to or for the credit or the account of
Borrower against and on account of the Obligations of Borrower to Agent or such
Lender including but not limited to all Loans and all claims of any nature or
description arising out of or connected with this Agreement or any of the other
Loan Documents, irrespective of whether or not (a) Agent or such Lender shall
have made any demand hereunder or (b) Agent shall have declared the principal of
and interest on the Loans and other amounts due hereunder to be due and payable
as permitted by Article XI and although said obligations and liabilities, or any
of them, may be contingent or unmatured.

                  12.05 Amendments and Waivers. No amendment or modification of
any provision of this Agreement shall be effective without the written agreement
of Requisite Lenders (after notice to all Lenders) as provided in Section
11.10(a) and Borrower provided that the agreement of Requisite Lenders shall not
be required for amendments or modifications that are purely of a clerical nature
or that correct a manifest error and no termination or waiver of any such
provision of this Agreement (including without limitation any waiver of an Event
of Default which does not specifically require the consent of all Lenders), or
consent to any departure by Borrower therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders (after notice to all
Lenders) as provided in Section 11.10(a), which Requisite Lenders shall have the
right to grant or withhold at their sole discretion, except that the amendments,
modifications or waivers specified in Section 11.10(b) shall require the consent
of the Supermajority Lenders and the following amendments, modifications or
waivers shall require the consent of all Lenders (other than Section 12.05(j)
which shall require the consent of all Lenders other than Agent):

                  (a) Increasing the Commitments or any Lender's Commitments;

                  (b) Changing the principal amount or final maturity of the
Loans;

                  (c) Reducing or increasing the interest rates applicable to
the Loans (other than Swingline Loans);

                  (d) Reducing the rates on which fees payable pursuant hereto
are determined;

                  (e) Forgiving or delaying any amount payable under Article II
(other than late fees);

                  (f) Changing the definition of "Requisite Lenders," "Loan
Availability," "Supermajority Lenders," or "Pro Rata Shares";

                  (g) Changing any provision contained in Section 12.05;

                  (h) Releasing any obligor under any Loan Document, unless such
release is otherwise required by the terms of this Agreement or any other Loan
Document;

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<PAGE>

                  (a) Issuing a Letter of Credit for a term extending beyond the
Maturity Date;

                  (i) Removal of Agent for good cause in accordance with Section
11.09(a); and

                  (j) Modifying or waiving any other provision herein which
specifically requires the consent of all Lenders.

Notwithstanding anything to the contrary contained in this Agreement, Borrower
shall have no right to consent to any amendment, modification, termination or
waiver of any provision of Article XI hereof; provided, however, that no
amendment, modification, termination or waiver of Section 11.09(b), 11.09(c),
11.10(a), or 11.13 (except subsection (i) thereof) which has an adverse effect
on Borrower or Borrower's rights hereunder shall be effective without the
written concurrence of Borrower. Agent and Lenders further acknowledge and agree
that the remaining provisions of Article XI are intended to and shall continue
to address only the rights and obligations of Agent and Lenders amongst each
other and do not and shall not impose obligations or restrictions upon Borrower
or result in any way in the loss of any rights, claims or defenses of Borrower.
No amendment, modification, termination or waiver of any provision of Article XI
hereof or any other provision referring to any Agent, Swingline Lender or
Issuing Lender shall be effective without the written concurrence of the Agent,
Swingline Lender or Issuing Lender, as applicable. Any waiver or consent 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 to any other further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section shall be binding on each assignee,
transferee or recipient of Agent's powers, functions or duties or any Lender's
Commitment under this Agreement or the Loans at the time outstanding.

                  12.06 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Unmatured Event of Default if
such action is taken or condition exists.

                  12.07 Notices and Delivery. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required or
permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy or if deposited in the United States mail (registered or
certified, with postage prepaid and properly addressed) upon receipt or refusal
to accept delivery. Notices to Agent, Swingline Lender or Issuing Lender
pursuant to Article II shall not be effective until received by Agent, Swingline
Lender or Issuing Lender, as applicable. For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as provided
in this Section 12.07) shall be as set forth below each party's name on the
signature pages hereof, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties. All
deliveries to be made to Agent for

                                       85
<PAGE>

distribution to the Lenders shall be made to Agent at the addresses specified
for notice on the signature page hereto and, in addition, a sufficient number of
copies of each such delivery shall be delivered to Agent for delivery to each
Lender at the address specified for deliveries on the signature page hereto or
such other address as may be designated by Agent or Lenders in a written notice.

                  12.08 Survival of Warranties, Indemnities and Agreements. All
agreements, representations, warranties and indemnities made or given herein or
pursuant hereto shall survive the execution and delivery of this Agreement and
the other Loan Documents and the making and repayment of the Loans hereunder and
such indemnities shall survive termination hereof.

                  12.09 Failure or Indulgence Not Waiver; Remedies Cumulative.
Except as otherwise expressly provided in this Agreement or any other Loan
Document, no failure or delay on the part of Agent, Swingline Lender, Issuing
Lender or any Lender in the exercise of any power, right or privilege under any
of the Loan Documents 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 the Loan Documents are cumulative to and not
exclusive of any rights or remedies otherwise available.

                  12.10 Marshalling; Recourse to Security; Payments Set Aside.
Neither any Lender, Swingline Lender, Issuing Lender nor Agent shall be under
any obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. Recourse to security
shall not be required at any time. To the extent that Borrower makes a payment
or payments to Agent, Swingline Lender, Issuing Lender or the Lenders or Agent,
Swingline Lender, Issuing Lender or the Lenders enforce their Liens or exercise
their 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, 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.

                  12.11 Severability. In case any provision in or obligation
under this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

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

                  12.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.

                  12.14 Limitation of Liability. To the extent permitted by
applicable law, no claim may be made by Borrower, the REIT, any Lender or any
other Person against Agent, Swingline Lender, Issuing Lender or any Lender, or
the affiliates, directors, officers, employees,

                                       86
<PAGE>

attorneys or agents of any of them, for any punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and Borrower, the REIT, and each
Lender hereby waive, release and agree not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

                  12.15 Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of Agent and Lenders. The terms
and provisions of this Agreement shall inure to the benefit of any permitted
assignee or transferee of the Loans and the Commitments of Lenders under this
Agreement, and in the event of such transfer or assignment, the rights and
privileges herein conferred upon Agent and Lenders shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and obligations hereunder, shall not be assigned (whether
directly, indirectly, by operation of law or otherwise) without the consent of
all Lenders.

                  12.16 Usury Limitation. Each Loan Document is expressly
limited so that in no contingency or event whatsoever, whether by reason of
error of fact or law, payment, prepayment or advancement of the proceeds of the
Loans, acceleration of maturity of the unpaid principal balance of the Loans, or
otherwise, shall the amount paid or agreed to be paid to Lenders for the use,
forbearance, or retention of money, including any fees or charges collected or
made in connection with the Loans which may be treated as interest under
applicable law, if any, exceed the maximum legal limit (if any such limit is
applicable) under United States federal laws or state laws (to the extent not
preempted by federal law, if any), now or hereafter governing the interest
payable under such Loan Documents. If, from any circumstances whatsoever,
fulfillment of any provision hereof or any of the other Loan Documents at the
time performance of such provision shall be due, shall involve transcending the
limit of validity (if any) prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any
circumstances Lenders shall ever receive as interest an amount which would
exceed the maximum legal limit (if any such limit is applicable), such amount
which would be excessive interest shall be applied to the reduction of the
unpaid principal balance due under the Loan Documents and not to the payment of
interest or, if necessary, to Borrower. Notwithstanding any other provision of
this Agreement or any of the other Loan Documents, this provision shall control
every other provision of all Loan Documents.

                  12.17 Confidentiality. Agent, Swingline Lender, Issuing Lender
and Lenders shall use reasonable efforts to assure that any information about
Borrower, the REIT, Subsidiaries and Investment Affiliates (and their respective
Properties) not generally disclosed to the public which is furnished to Agent,
Swingline Lender, Issuing Lender or Lenders pursuant to the provisions of this
Agreement or any of the other Loan Documents is used only for the purposes of
this Agreement and the other Loan Documents and shall not be divulged to any
other Person other than Agent, Swingline Lender, Issuing Lender and Lenders and
their respective affiliates, officers, directors, employees and agents who are
actively and directly participating in the evaluation, administration or
enforcement of the Obligations; provided, however, that

                                       87
<PAGE>

nothing herein shall affect the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for Agent, Swingline Lender, Issuing Lender or Lenders or to their
accountants, (iii) to bank examiners and auditors, (iv) to any transferee or
participant or prospective transferee or participant hereunder who agrees to be
bound by this provision, (v) in connection with the enforcement of the rights of
Agent, Swingline Lender, Issuing Lender and Lenders under this Agreement and the
other Loan Documents, or (vi) in connection with any litigation to which Agent,
Swingline Lender, Issuing Lender or any Lender is a party so long as Agent,
Swingline Lender, Issuing Lender or such Lender provides Borrower with prior
written notice of the need for such disclosure and exercises reasonable efforts
to obtain a protective order with respect to such information from the court or
other tribunal before which such litigation is pending.

12.18 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial;
Waiver Of Permissive Counterclaims. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
BORROWER OR THE REIT WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE AND ALL JUDICIAL PROCEEDINGS BROUGHT BY BORROWER OR THE REIT WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION HAVING SITUS WITHIN THE BOUNDARIES OF
THE FEDERAL COURT DISTRICT OF THE NORTHERN DISTRICT OF ILLINOIS, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER AND THE REIT ACCEPT, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. BORROWER AND THE REIT HEREBY DESIGNATE AND APPOINT ELLEN KELLEHER,
ESQ., MANUFACTURED HOME COMMUNITIES, INC., TWO NORTH RIVERSIDE PLAZA, SUITE 800,
CHICAGO, ILLINOIS 60606, TO RECEIVE ON THEIR BEHALF SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED
BY SUCH PERSON TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. SUCH
APPOINTMENT SHALL BE REVOCABLE ONLY WITH AGENT'S PRIOR WRITTEN APPROVAL.
BORROWER AND THE REIT IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS
RESPECTIVE NOTICE ADDRESS SPECIFIED ON THE SIGNATURE PAGES HEREOF, SUCH SERVICE
TO BECOME EFFECTIVE UPON RECEIPT. BORROWER, THE REIT, AGENT AND LENDERS
IRREVOCABLY WAIVE (A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING
WITHOUT LIMITATION ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS
OF ANY OTHER

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<PAGE>

JURISDICTION. BORROWER AND THE REIT AGREE THAT THEY WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIM IN ANY PROCEEDING BROUGHT BY LENDER WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

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<PAGE>

                  12.19 Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective when Borrower, the
initial Lenders, Swingline Lender, Issuing Lender and Agent have duly executed
and delivered counterpart execution pages of this Agreement to each other
(delivery by Borrower and the REIT to Lenders and by any Lender to Borrower, the
REIT and any other Lender being deemed to have been made by delivery to Agent).
This Agreement and each of the other Loan Documents shall be construed to the
extent reasonable to be consistent one with the other, but to the extent that
the terms and conditions of this Agreement are actually and directly
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.

                  12.20 Construction. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.

                  12.21 Entire Agreement. This Agreement, taken together with
all of the other Loan Documents and all certificates and other documents
delivered by Borrower to Agent in connection herewith, embodies the entire
agreement and supersede all prior agreements, written and oral, relating to the
subject matter hereof.

                  12.22 Agent's Action for Its Own Protection Only. The
authority herein conferred upon Agent, and any action taken by Agent, to inspect
any Property will be exercised and taken by Agent for its own protection only
and may not be relied upon by Borrower for any purposes whatsoever, and Agent
shall not be deemed to have assumed any responsibility to Borrower with respect
to any such action herein authorized or taken by Agent. Any review,
investigation or inspection conducted by Agent, any consultants retained by
Agent or any agent or representative of Agent in order to verify independently
Borrower's satisfaction of any conditions precedent to the Loans, Borrower's
performance of any of the covenants, agreements and obligations of Borrower
under this Agreement, or the validity of any representations and warranties made
by Borrower hereunder (regardless of whether or not the party conducting such
review, investigation or inspection should have discovered that any of such
conditions precedent were not satisfied or that any such covenants, agreements
or obligations were not performed or that any such representations or warranties
were not true), shall not affect (or constitute a waiver by Agent or Lenders of)
(i) any of Borrower's representations and warranties under this Agreement or
Agent's or Lenders' reliance thereon or (ii) Agent's or Lenders' reliance upon
any certifications of Borrower required under this Agreement or any other facts,
information or reports furnished to Agent and Lenders by Borrower hereunder.

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<PAGE>

                  12.23 Lenders' ERISA Covenant. Each Lender, by its signature
hereto or on the applicable Assignment and Assumption, hereby agrees (a) that on
the date any Loan is disbursed hereunder no portion of such Lender's Pro Rata
Share of such Loan will constitute "assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an "employee benefit plan" within the meaning of Section 3(3) of
ERISA or a "plan" within the meaning of Section 4975(e)(1) of the Internal
Revenue Code, and (b) that following such date such Lender shall not allocate
such Lender's Pro Rata Share of any Loan to an account of such Lender if such
allocation (i) by itself would cause such Pro Rata Share of such Loan to then
constitute "assets" (within the meaning of 29 C.F.R. ss. 2510.3-101 or any
successor regulation thereto) of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code and (ii) by itself would cause such Loan to constitute
a prohibited transaction under ERISA or the Internal Revenue Code (which is not
exempt from the restrictions of Section 406 of ERISA and Section 4975 of the
Internal Revenue Code and the taxes and penalties imposed by Section 4975 of the
Internal Revenue Code and Section 502(i) of ERISA) or any Agent or Lender being
deemed in violation of Section 404 of ERISA.

                  12.24 Sole Lead Arranger, Documentation Agent and Syndication
Agent. Each of the parties to this Agreement acknowledges and agrees that the
obligations of Sole Lead Arranger, Documentation Agent and Syndication Agent
hereunder shall be limited to those obligations that are expressly set forth
herein, if any, and Sole Lead Arranger, Documentation Agent and Syndication
Agent shall not be required to take any action or assume any liability except as
may be required in their respective capacities as a Lender hereunder. Each of
the parties to this Agreement agrees that, for purposes of the indemnifications
set forth herein, the term "Agent" shall be deemed to include Sole Lead
Arranger, Documentation Agent and Syndication Agent.

                            [SIGNATURE PAGES FOLLOW]

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<PAGE>

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

                                   "Borrower"

                                   MHC OPERATING LIMITED
                                   PARTNERSHIP, an Illinois limited
                                   partnership

                                   By:  MANUFACTURED HOME
                                        COMMUNITIES, INC., a Maryland
                                        corporation, as General Partner

                                   By:  /s/ JOHN M. ZOELLER
                                      ------------------------------------------
                                      Name: John M. Zoeller
                                      Title: Vice President/Chief Financial
                                      Officer

                                    Address:
                                    Two North Riverside Plaza, Suite 800
                                    Chicago, Illinois 60606
                                    Telecopy: 312/279-1710

                                      S-1
<PAGE>

                                     "REIT"

                                        MANUFACTURED HOME
                                        COMMUNITIES, INC., a Maryland
                                        corporation

                                        By: /s/ JOHN M. ZOELLER
                                           -------------------------------------
                                           Name: John M. Zoeller
                                           Title: Vice President/Chief Financial
                                           Officer

                                        Address:
                                        Two North Riverside Plaza, Suite 800
                                        Chicago, Illinois 60606
                                        Telecopy: 312/279-1710

AGREED AND ACKNOWLEDGED
FOR PURPOSES OF SECTION 1.04:

"REIT GUARANTOR"

MANUFACTURED HOME
COMMUNITIES, INC., a Maryland corporation

By: /s/ JOHN M. ZOELLER
---------------------------------------------
Name: John M. Zoeller
Title: Vice President/Chief Financial Officer

Address:
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606
Telecopy: 312/279-1710

                                      S-2
<PAGE>

WELLS FARGO BANK, N.A,
as Agent, Sole Lead Arranger, Swingline
Lender, Issuing Lender and a Lender

By: /s/ Steven R. Lowery
----------------------------------------------
Name: Steven R. Lowery
----------------------------------------------
Title: Vice President
----------------------------------------------

Address:
225 West Wacker Drive
Suite 2550
Chicago, Illinois 60601
Attn.: Senior Loan Officer
Telecopy: 312/782-0969

WITH A COPY TO:
Wells Fargo & Co.
Real Estate Group
420 Montgomery Street, Floor 6
San Francisco, California 94163
Attn.: Chief Credit Officer
Telecopy: 415/391-2971

WITH A COPY TO (FOR
FINANCIAL STATEMENTS AND REPORTING
INFORMATION ONLY):

Wells Fargo Bank
2030 Main Street
Suite 800
Irvine, California 92714
Attn: Jim Furuyama
Telecopy 949/251-4343

Commitment: $50,000,000
            33.333333%

                                      S-3
<PAGE>

BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender

By: /s/ Megan McBride
----------------------------------------------
Name: Megan McBride
----------------------------------------------
Title: Principal
----------------------------------------------

Address:
231 S. LaSalle Street, 15th Floor
Chicago, Illinois 60697
Attn: Megan McBride
Telecopy: 312/974-4970

Commitment: $33,333,333.33
            22.222222%

                                      S-4
<PAGE>

LASALLE BANK NATIONAL
ASSOCIATION, as Documentation Agent
and as a Lender

By: /s/ Crystal DiDomenico
----------------------------------------
Name: Crystal DiDomenico
----------------------------------------
Title: Relationship Manager
----------------------------------------

Address:
60 Wall Street, 22nd Floor
New York, New York 10260-0060
Attention: Crystal DiDomenico
Telecopy:  __________________

Commitment: $33,333,333.34
            22.222222%

                                      S-5
<PAGE>

COMMERZBANK AKTIENGESELLSCHAFT, New York
Branch, as a Lender

By: /s/ David Buettner
-------------------------------------------
Name: David Buettner
-------------------------------------------
Title: Assistant Vice President
-------------------------------------------

By: /s/ E. Marcus Perry
-------------------------------------------
Name: E. Marcus Perry
-------------------------------------------
Title: Assistant Vice President
-------------------------------------------

Address:

1251 Avenue of the Americas
New York, New York 10020
Attention: David Buettner
Telecopy: 212/400-5773

Commitment: $33,333,333.33
            22.222222%

                                      S-6<PAGE>

                                                                   EXHIBIT 10.43

                                                              [WELLS FARGO LOGO]

MODIFICATION AGREEMENT

Loan No. 31-0900553R

THIS MODIFICATION AGREEMENT ("Agreement") dated December 6, 2001 is entered into
by and between WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), and MHC
STAGECOACH, L.L.C., a Delaware limited liability company, ("Borrower").

                                 R E C I T A L S

A.    Pursuant to the terms of a promissory note dated July 31, 2001 executed by
      Borrower in favor of Lender ("Note"), Lender made a loan to Borrower in
      the principal amount of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is further evidenced by the documents
      described in the Note as "Loan Documents". The Note is secured by, among
      other things: (i) that certain Deed of Trust and Absolute Assignment of
      Rents and Leases and Security Agreement (And Fixture Filing) ("Casa del
      Sol III Deed of Trust") of even date therewith, executed by Borrower
      encumbering certain real property and improvements located in Peoria,
      Arizona; (ii) that certain Deed of Trust and Absolute Assignment of Rents
      And Leases and Security Agreement (And Fixture Filing) ("Apollo Village
      Deed of Trust") of even date therewith, executed by Borrower encumbering
      certain other real property and improvements located in Peoria, Arizona;
      (iii) that certain Deed of Trust and Absolute Assignment of Rents and
      Leases and Security Agreement (And Fixture Filing) ("Woodland Hills Deed
      of Trust") of even date therewith, executed by Borrower encumbering
      certain real property and improvements located in Thornton, Colorado; (iv)
      that certain Deed of Trust and Absolute Assignment of Rents and Leases and
      Security Agreement (And Fixture Filing) ("Cabana Deed of Trust") of even
      date therewith, executed by Borrower encumbering certain real property and
      improvements located in Las Vegas, Nevada; (v) that certain Mortgage and
      Absolute Assignment of Rents and Leases and Security Agreement (And
      Fixture Filing) ("Pickwick Village Mortgage") of even date therewith,
      executed by Borrower encumbering certain real property and improvements
      located in Port Orange, Florida; (vi) that certain Mortgage and Absolute
      Assignment of Rents and Leases and Security Agreement (And Fixture Filing)
      ("Indian Oaks Mortgage") of even date therewith, executed by Borrower
      encumbering certain real property and improvements located in Rockledge,
      Florida; and (vii) that certain Mortgage and Absolute Assignment of Rents
      and Leases and Security Agreement (And Fixture Filing) ("Windmill Manor
      Mortgage") of even date therewith, executed by Borrower encumbering
      certain real property and improvements located in Bradenton, Florida. The
      Casa del Sol III Deed of Trust, the Apollo Village Deed of Trust, the
      Woodland Hills Deed of Trust, the Cabana Deed of Trust, the Pickwick
      Village Mortgage, the Indian Oaks Mortgage and the Windmill Manor Mortgage
      are referred to herein collectively and individually, as applicable, and
      as modified, extended or renewed, as the "Mortgage" or the "Mortgages."

B.    The Note, Mortgages, this Agreement, and the other documents described in
      the Note as "Loan Documents", together with all modifications and
      amendments thereto and any document required hereunder, are collectively
      referred to herein as the "Loan Documents".

C.    By this Agreement, Borrower and Lender intend to modify and amend certain
      terms and provisions of the Loan Documents.

NOW, THEREFORE, the parties agree as follows:

1.    REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants to
      Lender that no Default, breach or failure of condition has occurred, or
      would exist with notice or the lapse of time or both, under any of the
      Loan Documents (as modified by this Agreement) and that all
      representations and warranties therein are true and correct, which
      representations and warranties shall survive execution of this Agreement.
      Borrower also hereby represents, warrants and re-affirms to Lender that
      the representations and warranties contained in the Loan Documents are, to
      Borrower's current actual knowledge after reasonable investigation and
      inquiry, true and correct as of the date hereof.

2.    MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby amended as
      follows:

      2.1   Section 3.6 of Exhibit A to the Note is hereby amended and restated
            in its entirety as follows:

                                       1
<PAGE>
            "3.6  BORROWER LETTER OF CREDIT.

                  a.    Delivery to Lender. Lender has agreed that in lieu of
                        the Capital Expenditure Impounds required by Subsection
                        3.1(c) above, Lender will accept and Borrower may
                        deliver by November 14, 2001 an irrevocable standby
                        letter of credit (such letter of credit, together with
                        any replacement or renewal thereof, is referred to
                        herein as the "Borrower Letter of Credit") in the
                        aggregate principal amount of $306,991 issued by an
                        issuer reasonably acceptable to Lender in favor of
                        Lender, in form and content reasonably satisfactory to
                        Lender. Subject to the provisions of this Section 3.6,
                        Lender shall retain custody of any Borrower Letter of
                        Credit until such time as the Loan is repaid in full
                        (other than through judicial or nonjudicial foreclosure
                        of the Mortgages or deeds in lieu thereof).

                  b.    Right to Draw. Lender shall have the right to draw upon
                        the Borrower Letter of Credit in the full amount thereof
                        upon the occurrence of any Default. In the event that
                        the Borrower Letter of Credit will not be renewed for
                        any reason, Borrower shall either (a) deliver a
                        substitute or replacement letter of credit in form and
                        content reasonably satisfactory to Lender (a
                        "Replacement Letter of Credit") prior to the date (the
                        "Replacement Date") that is thirty (30) days prior to
                        the expiration of the Borrower Letter of Credit or (b)
                        elect to reinstate the Capital Expenditure Impounds by
                        delivering to Lender the sum of $61,308 (the
                        "Reinstatement Deposit") prior to the Replacement Date
                        and $10,218 on each payment date thereafter for payment
                        or reimbursement of Capital Expenditures. The failure of
                        Borrower to either deliver a Replacement Letter of
                        Credit or the Reinstatement Deposit prior to the
                        Replacement Date shall be considered a Default under the
                        Loan Documents, and Lender shall, in addition to any
                        other remedy available to Lender under the Loan
                        Documents, be entitled to draw upon the Borrower Letter
                        of Credit in the full amount thereof.

                  c.    Application of Proceeds. The proceeds of any draw under
                        the Borrower Letter of Credit shall be retained by
                        Lender as Impounds and shall be governed by the terms
                        and conditions of this Note and the other Loan
                        Documents.

                  d.    Release of the Borrower Letter of Credit. Lender shall
                        surrender the Borrower Letter of Credit to Borrower and
                        refund to Borrower all sums drawn that Lender is holding
                        (and that have not otherwise been applied or spent) at
                        such time as the Loan is repaid in full (other than
                        through judicial or nonjudicial foreclosure of the
                        Mortgages or deeds in lieu thereof)."

      2.2   All references to the term "Note" in the Loan Documents shall mean
            the Note, as amended hereby and as the same may hereafter be
            amended, restated, supplemented or modified from time to time.

      2.3   The Mortgages and other Loan Documents which recite they are
            security instruments shall secure, in addition to any other
            obligations secured thereby, the payment and performance by Borrower
            of all obligations under (a) the Note, as amended hereby; and (b)
            this Agreement, as amended, modified, extended or renewed in writing
            by Borrower and Lender.

3.    FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has previously delivered
      to Lender all of the relevant formation and organizational documents of
      Borrower, of the partners or joint venturers of Borrower (if any), and of
      all guarantors of the Loan (if any), and all such formation documents
      remain in full force and effect and have not been amended or modified
      since they were delivered to Lender. Borrower hereby certifies that: (i)
      the above documents previously delivered to Lender are all of the relevant
      formation and organizational documents of Borrower; (ii) they remain in
      full force and effect; and (iii) they have not been amended or modified
      since they were previously delivered to Lender.

4.    NON-IMPAIRMENT. Except as expressly provided herein, nothing in this
      Agreement shall alter or affect any provision, condition, or covenant
      contained in the Note or any other Loan Document or affect or impair any
      rights, powers, or remedies of Lender, it being the intent of the parties
      hereto that the provisions of the Note and other Loan Documents shall
      continue in full force and effect except as expressly modified hereby.

5.    MISCELLANEOUS. This Agreement and the other Loan Documents shall be
      governed by and interpreted in accordance with the laws of the State of
      California, except to the extent the same are preempted by Federal law. In
      any

                                       2
<PAGE>
      action brought or arising out of this Agreement or the Loan Documents,
      Borrower, and the general partners and joint venturers of Borrower (if
      any), hereby consent to the jurisdiction of any Federal or State Court
      having proper venue within the State of California and also consent to the
      service of process by any means authorized by California or federal law.
      The headings used in this Agreement are for convenience only and shall be
      disregarded in interpreting the substantive provisions of this Agreement.
      Except as expressly provided otherwise herein, all terms used herein shall
      have the meaning given to them in the other Loan Documents. Time is of the
      essence of each term of the Loan Documents, including this Agreement. If
      any provision of this Agreement or any of the other Loan Documents shall
      be determined by a court of competent jurisdiction to be invalid, illegal
      or unenforceable, that portion shall be deemed severed from this Agreement
      and the remaining parts shall remain in full force as though the invalid,
      illegal, or unenforceable portion had never been a part thereof.

6.    INTEGRATION; INTERPRETATION. The Loan Documents, including this Agreement,
      contain or expressly incorporate by reference the entire agreement of the
      parties with respect to the matters contemplated therein and supersede all
      prior negotiations. The Loan Documents shall not be modified except by
      written instrument executed by all parties.

7.    EXECUTION IN COUNTERPART. This Agreement, and other Loan Documents which
      expressly so provide, may be executed in any number of counterparts, each
      of which when executed and delivered will be deemed to be an original and
      all of which, taken together, will be deemed to be one and the same
      instrument.

IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be duly
executed as of the date first above written.

                          "LENDER"

WELLS FARGO BANK,
NATIONAL ASSOCIATION

By: /s/ Steven R. Lowery
    ------------------------------
Name: Steven R. Lowery
Title: Vice President

                        "BORROWER"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member

      By: /s/ John M. Zoeller
         ---------------------------------
      Name: John M. Zoeller
      Its:  Vice President, Chief Financial
            Officer and Treasurer

                                       3
<PAGE>
                               GUARANTOR'S CONSENT

The undersigned ("Guarantor") consents to the foregoing Modification Agreement
and the transactions contemplated thereby and reaffirms its obligations under
the Limited Guaranty ("Guaranty") dated July 31, 2001, and its waivers, as set
forth in the Guaranty, of each and every one of the possible defenses to such
obligations. Guarantor further reaffirms that its obligations under the Guaranty
are separate and distinct from the obligations of Borrower (as defined in the
Guaranty).

AGREED:

Dated as of: December 6, 2001                             "GUARANTOR"

                                        MANUFACTURED HOME COMMUNITIES, INC.,
                                        a Maryland corporation

                                        By: /s/ John M. Zoeller
                                           -------------------------------------
                                        Name: John M. Zoeller
                                        Its: Vice President, Chief Financial
                                             Officer and Treasurer

                                       4
<PAGE>
[WELLS FARGO LOGO]

                                            PROMISSORY NOTE SECURED BY MORTGAGES

                                                            Loan No. 31-0900553R
$50,000,000.00                                         San Francisco, California
                                                                   July 31, 2001

            THIS PROMISSORY NOTE SECURED BY MORTGAGES (this "Note") is made and
entered into by and between MHC STAGECOACH, L.L.C., a Delaware limited liability
company ("Borrower"), and WELLS FARGO NATIONAL BANK, NATIONAL ASSOCIATION
("Lender").

1.    PROMISE TO PAY. For value received, Borrower promises to pay to the order
      of Lender, at 1320 Willow Pass Road, Suite 205, Concord, California 94520,
      or at such other place as may be designated in writing by Lender, the
      principal sum of FIFTY MILLION AND NO/100THS DOLLARS ($50,000,000.00)
      ("Loan"), with interest thereon as specified herein. All sums owing
      hereunder are payable in lawful money of the United States of America, in
      immediately available funds, without offset, deduction or counterclaim of
      any kind.

2.    SECURED BY MORTGAGES. This Note is secured by, among other things: (i)
      that certain Deed of Trust and Absolute Assignment of Rents and Leases and
      Security Agreement (And Fixture Filing) ("Casa del Sol III Deed of Trust")
      of even date herewith, executed by Borrower encumbering certain real
      property and improvements located in Peoria, Arizona, as more particularly
      described therein ("Casa del Sol III Property"); (ii) that certain Deed of
      Trust and Absolute Assignment of Rents And Leases and Security Agreement
      (And Fixture Filing) ("Apollo Village Deed of Trust") of even date
      herewith, executed by Borrower encumbering certain real property and
      improvements located in Peoria, Arizona, as more particularly described
      therein ("Apollo Village Property"); (iii) that certain Deed of Trust and
      Absolute Assignment of Rents and Leases and Security Agreement (And
      Fixture Filing) ("Woodland Hills Deed of Trust") of even date herewith,
      executed by Borrower encumbering certain real property and improvements
      located in Thornton, Colorado, as more particularly described therein
      ("Woodland Hills Property"); (iv) that certain Deed of Trust and Absolute
      Assignment of Rents and Leases and Security Agreement (And Fixture Filing)
      ("Cabana Deed of Trust") of even date herewith, executed by Borrower
      encumbering certain real property and improvements located in Las Vegas,
      Nevada and as more particularly described therein ("Cabana Property"); (v)
      that certain Mortgage and Absolute Assignment of Rents and Leases and
      Security Agreement (And Fixture Filing) ("Pickwick Village Mortgage") of
      even date herewith, executed by Borrower encumbering certain real property
      and improvements located in Port Orange, Florida, as more particularly
      described therein ("Pickwick Village Property"); (vi) that certain
      Mortgage and Absolute Assignment of Rents and Leases and Security
      Agreement (And Fixture Filing) ("Indian Oaks Mortgage") of even date
      herewith, executed by Borrower encumbering certain real property and
      improvements located in Rockledge, Florida, as more particularly described
      therein ("Indian Oaks Property"); and (vii) that certain Mortgage and
      Absolute Assignment of Rents and Leases and Security Agreement (And
      Fixture Filing) ("Windmill Manor Mortgage") of even date herewith,
      executed by Borrower encumbering certain real property and improvements
      located in Bradenton, Florida, as more particularly described therein
      ("Windmill Manor Property"). The Casa del Sol III Deed of Trust, the
      Apollo Village Deed of Trust, the Woodland Hills Deed of Trust, the Cabana
      Deed of Trust, the Pickwick Village Mortgage, the Indian Oaks Mortgage and
      the Windmill Manor Mortgage are referred to herein collectively and
      individually, as applicable, and as modified, extended or renewed, as the
      "Mortgage" or the "Mortgages." The Casa del Sol III Property, the Apollo
      Village Property, the Woodland Hills Property, the Cabana Property, the
      Pickwick Village Property, the Indian Oaks Property and the Windmill Manor
      Property are referred to herein collectively and individually, as
      applicable, as the "Property" or the "Properties."

3.    DEFINITIONS. For the purposes of this Note, the following terms shall have
      the following meanings:

      "Affiliate" shall mean, as to any specified Person, any other Person that,
      directly or indirectly, is in Control of, is Controlled by or is under
      common Control with such specified Person.

      "Business Day" shall mean any day other than a Saturday, Sunday, legal
      holiday or other day on which commercial banks in California are
      authorized or required by law to close. All references in this Note to a
      "day" or a "date" shall be to a calendar day unless specifically
      referenced as a Business Day.

                                       1
<PAGE>
      "Control" shall mean with respect to any specified Person either (i)
      ownership directly or through other entities of more than 100% of all
      beneficial equity interest in such Person and (ii) the power to direct the
      management, operation and business of such person.

      "Debt Service Coverage Ratio" shall mean, as of the last day of the
      calendar month immediately preceding the applicable calculation date, the
      ratio in which (a) the numerator is the sum of the Net Operating Income
      for each of the applicable Properties for the immediately preceding twelve
      month period and (b) the denominator is the aggregate amount of principal
      and interest that would be due under this Note for such period based upon
      a debt service constant of seven and 97/100ths percent (7.97%).

      "Default" shall have the meaning set forth in the Mortgages.

      "Disbursement Date" shall mean the date upon which the Loan proceeds are
      funded into escrow in connection with the closing of the Loan.

      "Effective Date" shall mean the date Lender authorizes the Loan proceeds
      to be released to Borrower.

      "Loan Documents" shall mean the documents listed in Exhibit B attached
      hereto and incorporated herein by this reference.

      "Loan-to-Value Ratio" shall mean, as of the last day of the calendar month
      immediately preceding the applicable calculation date, the ratio in which
      (a) the numerator is the aggregate amount of principal and interest then
      due under this Note and (b) the denominator is the "as-is" value of the
      applicable Properties as set forth in the appraisals for such Properties.

      "Maturity Date" shall mean September 1, 2011.

      "Net Operating Income" shall mean, with respect to a Property, (i) the
      rental payments actually received by Borrower ("Gross Rents"); plus (ii)
      the expense reimbursements actually received by Borrower ("Expense
      Reimbursements"); minus the sum of (w) an adjustment for
      vacancy/collection losses equal to the greater of actual, market or five
      percent (5%) of the Gross Rents and Expense Reimbursements; and (x) the
      actual Operating Expenses; and (y) an amount for reasonable management
      expenses equal to the greater of (A) four percent (4%) of Gross Rents or
      (B) actual management expenses; and (z) a capital improvement reserve
      equal to $17,612 for the Casa del Sol III Property, $16,450 for the Apollo
      Village Property, $28,644 for the Woodland Hills Property, $13,150 for the
      Cabana Property, $21,600 for the Pickwick Village Property, $10,550 for
      the Indian Oaks Property, and $14,600 for the Windmill Manor Property, and
      such amount as shall be reasonably determined by Lender for any
      Replacement Property (as hereinafter defined).

      "Operating Expenses" shall mean, with respect to a Property, all
      reasonable operating expenses of such Property, including, without
      limitation, those for maintenance, repairs, annual taxes, bond
      assessments, ground lease payments, insurance, utilities, and other annual
      expenses (but not capital expenses) that are standard and customary for
      properties of this type. Operating Expenses for this purpose shall not
      include any interest or principal payments on the Loan or any allowance
      for depreciation.

      "Person" shall mean any individual, corporation, partnership, joint
      venture, estate, trust, unincorporated association, any federal, state,
      county or municipal government or any bureau, department or agency thereof
      and any fiduciary acting in such capacity on behalf of any of the
      foregoing.

      "Property Worth" shall mean the fair market value of the Property or
      Properties owned by Borrower as of the Disbursement Date.

      "Rating Agency" shall mean each of Standard & Poor's Ratings Services,
      Moody's Investors Services, Inc., and Fitch IBCA, Inc., and their
      successors or assigns, or any other nationally recognized statistical
      rating agency which rates securities in connection with a securitization.

      "Remaining Properties" shall mean all of the Properties other than those
      that have been released or requested to be released from the lien of the
      applicable Mortgage pursuant to a Defeasance (hereinafter defined in
      Section 14) or in exchange for a Replacement Property.

                                       2
<PAGE>
4.    INTEREST; PAYMENTS.

      4.1   DEFINITIONS. The following terms shall have the meanings indicated:

            "Actual/360 Basis" shall mean on the basis of a 360-day year and
            charged on the basis of actual days elapsed for any whole or partial
            month in which interest is being calculated.

            "30/360 Basis" shall mean on the basis of a 360-day year consisting
            of 12 months of 30 days each.

            "Interest Rate" shall mean a fixed interest rate equal to 6.98%.

      4.2   INTEREST ACCRUAL. Interest on the outstanding principal balance of
            this Note shall accrue from the Disbursement Date at an annual rate
            equal to the Interest Rate calculated on an Actual/360 Basis.

      4.3   PAYMENTS. Monthly payments hereunder shall commence on the first day
            of the calendar month following the Disbursement Date and continue
            on the first day of each calendar month thereafter through the
            Maturity Date. If the Disbursement Date is a date other than the
            first day of a calendar month, the first monthly payment shall be
            interest only. Subsequent monthly payments shall be calculated on
            the basis of an equal-payment thirty (30) year amortization of
            principal and interest. Notwithstanding that interest on this Note
            accrues on an Actual/360 Basis, the total amount of each such
            amortized monthly payment of principal and interest shall be
            determined using a 30/360 Basis. On the Maturity Date, all unpaid
            principal and accrued but unpaid interest shall be due and owing in
            full. All interest shall be paid in arrears.

      4.4   ACKNOWLEDGMENTS. Borrower acknowledges that interest calculated on
            an Actual/360 Basis exceeds interest calculated on a 30/360 Basis
            and, therefore: (a) a greater portion of each monthly installment of
            principal and interest will be applied to interest using the
            Actual/360 Basis than would be the case if interest accrued on a
            30/360 Basis; and (b) the unpaid principal balance of this Note on
            the Maturity Date will be greater using the Actual/360 Basis than
            would be the case if interest accrued on a 30/360 Basis.

      4.5   APPLICATION OF PAYMENTS. In the absence of a specific determination
            by Lender to the contrary, all payments paid by Borrower to Lender
            in connection with the obligations of Borrower under this Note and
            under the other Loan Documents shall be applied in the following
            order of priority: (a) to amounts, other than principal and
            interest, due to Lender pursuant to this Note or the other Loan
            Documents; (b) to accrued but unpaid interest on this Note; and (c)
            to the unpaid principal balance of this Note. Upon the occurrence of
            a Default: (i) Borrower irrevocably waives the right to direct the
            application of any and all payments at any time thereafter received
            by Lender from or on behalf of Borrower, and (ii) Borrower
            irrevocably agrees that Lender shall have the continuing exclusive
            right to apply any and all such payments against the then due and
            owing obligations of Borrower in such order of priority as Lender
            may deem advisable.

5.    LATE CHARGE; DEFAULT RATE.

      5.1   LATE CHARGE. If any payment required hereunder is not paid on or
            before the fifth calendar day of the month in which it is due,
            Borrower shall pay a late or collection charge, as liquidated
            damages, equal to 4% of the amount of such unpaid payment. Borrower
            acknowledges that Lender will incur additional expenses as a result
            of any late payments hereunder, which expenses would be
            impracticable to quantify, and that Borrower's payments under this
            paragraph are a reasonable estimate of such expenses. The foregoing
            to the contrary notwithstanding, no late or collection charge shall
            be payable by Borrower as a result of any delay in the payment of
            any sum due and payable on the Maturity Date.

      5.2   DEFAULT RATE. Commencing upon a Default and continuing until such
            Default shall have been cured by Borrower, all sums owing on this
            Note shall bear interest until paid in full at a rate per annum
            equal to 5% plus the Interest Rate ("Default Rate").

6.    MAXIMUM RATE PERMITTED BY LAW. Neither this Note nor any of the other Loan
      Documents shall require the payment or permit the collection of any
      interest or any late payment charge in excess of the maximum rate
      permitted by law. If any such excess interest or late payment charge is
      provided for under this Note or any of the other Loan Documents or if this
      Note or any of the other Loan Documents shall be adjudicated to provide
      for such excess, neither

                                       3
<PAGE>
      Borrower nor Borrower's successors or assigns shall be obligated to pay
      such excess, and the right to demand the payment of any such excess shall
      be and hereby is waived, and this provision shall control any other
      provision of this Note or any of the other Loan Documents. If Lender shall
      collect amounts which are deemed to constitute interest and which would
      increase the effective interest rate to a rate in excess of the maximum
      rate permitted by law, all such amounts deemed to constitute interest in
      excess of the maximum legal rate shall, upon such determination, at the
      option of Lender, be returned to Borrower or credited against the
      outstanding principal balance of this Note.

7.    ACCELERATION. If (a) Borrower shall fail to pay when due, subject to any
      applicable grace or cure period, any sums payable under this Note; (b) any
      other Default shall occur; or (c) any other event or condition shall occur
      which, under the terms of any of the Mortgages or any other Loan Document,
      gives rise to a right of acceleration of sums owing under this Note, then
      Lender, at its sole option, shall have the right to declare all sums owing
      under this Note immediately due and payable; provided, however, that if
      any of the Mortgages or any other Loan Document provides for the automatic
      acceleration of payment of sums owing under this Note, all sums owing
      under this Note shall be automatically due and payable in accordance with
      the terms of such of the Mortgages or such other Loan Document.

8.    BORROWER'S LIABILITY.

      8.1   LIMITATION. Except as otherwise provided in this Section 8, Lender's
            recovery against Borrower under this Note and the other Loan
            Documents shall be limited solely to the Properties and the
            "Collateral" (as defined in the Mortgages).

      8.2   EXCEPTIONS. Nothing contained in Section 8.1 or elsewhere in this
            Note or the other Loan Documents, however, shall limit in any way
            the personal liability of Borrower owed to Lender for any losses or
            damages incurred by Lender (including, without limitation, any
            impairment of Lender's security for the Loan) with respect to any of
            the following matters: (a) fraud or willful misrepresentation; (b)
            material physical waste of the Properties (or any portions thereof)
            or the Collateral; (c) failure to pay property or other taxes,
            assessments or charges (other than amounts paid to Lender for taxes,
            assessments or charges pursuant to Impounds as defined in Exhibit A
            and where Lender elects not to apply such funds toward payment of
            the taxes, assessments or charges owed) which may create liens
            senior to the lien of any of the Mortgages on all or any portion of
            the Properties; (d) failure to deliver any insurance or condemnation
            proceeds or awards or any security deposits received by Borrower to
            Lender as required under the terms of the Loan Documents or any
            other instrument now or hereafter securing this Note or to otherwise
            apply such sums as required under the terms of the Loan Documents or
            any other instrument now or hereafter securing this Note; (e)
            failure to apply any rents, royalties, accounts, revenues, income,
            issues, profits and other benefits from the Properties (or any
            portion thereof) which are collected or received by Borrower during
            the period of any Default or after acceleration of the indebtedness
            and other sums owing under the Loan Documents to the payment of
            either (i) such indebtedness or other sums or (ii) the normal and
            necessary operating expenses of the Properties; or (f) any breach by
            Borrower of any covenant in this Note or in any of the Mortgages
            regarding Hazardous Materials (as defined in the Mortgages) or any
            representation or warranty of Borrower regarding Hazardous Materials
            proving to have been untrue when made.

      8.3   NO RELEASE OR IMPAIRMENT. Nothing contained in Section 8.1 shall be
            deemed to release, affect or impair the indebtedness evidenced by
            this Note or the obligations of Borrower under, or the liens and
            security interests created by the Loan Documents, or Lender's rights
            to enforce its remedies under this Note and the other Loan
            Documents, including, without limitation, the right to pursue any
            remedy for injunctive or other equitable relief, or any suit or
            action in connection with the preservation, enforcement or
            foreclosure of the liens, mortgages, deeds of trust, assignments and
            security interests which are now or at any time hereafter security
            for the payment and performance of all obligations under this Note
            or the other Loan Documents.

      8.4   PREVAIL AND CONTROL. The provisions of this Section 8 shall prevail
            and control over any contrary provisions elsewhere in this Note or
            the other Loan Documents.

9.    NON-MORTGAGOR BORROWER. If Borrower is not also a "Mortgagor" under the
      Mortgages, Borrower hereby makes all representations and warranties in
      favor of Lender contained in Article 5 of the Mortgages, all covenants
      contained in Section 6.15 of the Mortgages, and all indemnities of Lender
      contained in Section 6.19 of the Mortgages, jointly and severally with the
      "Mortgagor" under each of the Mortgages.

                                       4
<PAGE>
10.   MISCELLANEOUS.

      10.1  JOINT AND SEVERAL LIABILITY. If this Note is executed by more than
            one person or entity as Borrower, the obligations of each such
            person or entity shall be joint and several. No person or entity
            shall be a mere accommodation maker, but each shall be primarily and
            directly liable hereunder.

      10.2  WAIVER OF PRESENTMENT. Except as otherwise provided herein or in any
            other Loan Document, Borrower hereby waives presentment, demand,
            notice of dishonor, notice of default or delinquency, notice of
            acceleration, notice of nonpayment, notice of costs, expenses or
            losses and interest thereon, and notice of interest on interest and
            late charges.

      10.3  DELAY IN ENFORCEMENT. No previous waiver or failure or delay by
            Lender in acting with respect to the terms of this Note or the
            Mortgages shall constitute a waiver of any breach, default or
            failure of condition under this Note, the Mortgages or the
            obligations secured thereby. A waiver of any term of this Note, the
            Mortgages or of any of the obligations secured thereby must be made
            in writing signed by Lender, shall be limited to the express terms
            of such waiver, and shall not constitute a waiver of any subsequent
            obligation of Borrower. The acceptance at any time by Lender of any
            past-due amount shall not be deemed to be a waiver of the right to
            require prompt payment when due of any other amounts then or
            thereafter due and payable.

      10.4  TIME OF THE ESSENCE. Time is of the essence with respect to every
            provision hereof.

      10.5  GOVERNING LAW. This Note was accepted by Lender in the state of
            California and the proceeds of this Note were disbursed from the
            state of California, which state the parties agree has a substantial
            relationship to the parties and to the underlying transaction
            embodied hereby. Accordingly, in all respects, including, without
            limiting the generality of the foregoing, matters of construction,
            validity, enforceability and performance, this Note, the Mortgages
            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 California applicable to contracts
            made and performed in such state and any applicable law of the
            United States of America, except that at all times the provisions
            for the foreclosure of the liens granted under the Mortgages
            securing this Note and the creation, perfection and enforcement of
            the security interests created pursuant thereto and pursuant to the
            other Loan Documents shall be governed by and construed according to
            the law of the states where the Properties are located. Except as
            provided in the immediately preceding sentence, Borrower hereby
            unconditionally and irrevocably waives, to the fullest extent
            permitted by law, any claim to assert that the law of any
            jurisdiction other than California governs the Mortgages, this Note
            and the other Loan Documents.

      10.6  CONSENT TO JURISDICTION. Borrower irrevocably submits to the
            jurisdiction of: (a) any state or federal court sitting in the state
            of California over any suit, action, or proceeding, brought by
            Borrower against Lender, arising out of or relating to this Note or
            the Loan evidenced hereby; (b) any state or federal court sitting in
            any of the states where the Properties are located or the state in
            which Borrower's principal place of business is located over any
            suit, action or proceeding, brought by Lender against Borrower,
            arising out of or relating to this Note or the Loan evidenced
            hereby; and (c) any state court sitting in any of the counties of
            the states where the Properties are located over any suit, action,
            or proceeding, brought by Lender to exercise its rights of
            foreclosure under the applicable Mortgage or any action brought by
            Lender to enforce its rights with respect to the Collateral.
            Borrower irrevocably waives, to the fullest extent permitted by law,
            any objection that Borrower may now or hereafter have to the laying
            of venue of any such suit, action, or proceeding brought in any such
            court and any claim that any such suit, action, or proceeding
            brought in any such court has been brought in an inconvenient forum.

      10.7  COUNTERPARTS. This Note may be executed in any number of
            counterparts, each of which when executed and delivered shall be
            deemed an original and all of which taken together shall be deemed
            to be one and the same Note.

      10.8  HEIRS, SUCCESSORS AND ASSIGNS. All of the terms, covenants,
            conditions and indemnities contained in this Note and the other Loan
            Documents shall be binding upon the heirs, successors and assigns of
            Borrower and shall inure to the benefit of the successors and
            assigns of Lender. The foregoing sentence shall not be construed to
            permit Borrower to assign the Loan except as otherwise permitted in
            this Note or the other Loan Documents.

      10.9  SEVERABILITY. If any term of this Note, or the application thereof
            to any person or circumstances, shall, to any extent, be invalid or
            unenforceable, the remainder of this Note, or the application of
            such term to persons or

                                       5
<PAGE>
            circumstances other than those as to which it is invalid or
            unenforceable, shall not be affected thereby, and each term of this
            Note shall be valid and enforceable to the fullest extent permitted
            by law.

      10.10 CONSENTS, APPROVALS AND EXPENSES. Wherever Lender's consent,
            approval, acceptance or satisfaction is required under any provision
            of this Note (including, without limitation, Exhibits A and B
            hereto) or any of the other Loan Documents, such consent, approval,
            acceptance or satisfaction shall not be unreasonably withheld,
            conditioned or delayed by Lender unless such provision expressly so
            provides. Wherever costs or expenses are required to be paid under
            any provision of this Note or any of the other Loan Documents, such
            costs or expenses shall be reasonable.

11.   NOTICES. All requests, demands, notices and other communications that are
      required or permitted to be given to a party under this Note shall be in
      writing and shall be sent to such party, either by personal delivery, by
      overnight delivery service, by certified first class mail, return receipt
      requested, or by facsimile transmission to the address or facsimile number
      below. All such notices and communications shall be effective upon receipt
      of such delivery or facsimile transmission, together with a printed
      receipt of the successful delivery of such facsimile transmission. The
      addresses and facsimile numbers of the parties shall be:

      Borrower:                                 Lender:
      --------                                  ------
      MHC Stagecoach, L.L.C.                    Wells Fargo Bank, N.A.
      c/o Manufactured Home Communities, Inc.   1320 Willow Pass Road, Suite 205
      Two North Riverside Plaza                 Concord, CA  94520
      Suite 800                                 Loan No. 31-0900553R
      Chicago, Illinois 60606                   FAX No.: (925) 691-5947
      Attention:  General Counsel
      FAX No.:  (312) 279-1715

      With a copy to:

      Katz Randall Weinberg & Richmond
      333 West Wacker Drive
      Suite 1800
      Chicago, IL 60606-1288
      Attention: Benjamin J. Randall
      FAX No.: (312) 807-3903

12.   ADDITIONAL TERMS AND CONDITIONS. The additional terms and conditions set
      forth in Exhibit A and Exhibit B attached hereto are incorporated herein
      by this reference.

13.   PREPAYMENT. Borrower acknowledges that any prepayment of this Note will
      cause Lender to lose its interest rate yield on this Note and will
      possibly require that Lender reinvest any such prepayment amount in loans
      of a lesser interest rate yield (including, without limitation, in debt
      obligations other than first mortgage loans on commercial properties). As
      a consequence, Borrower agrees as follows, as an integral part of the
      consideration for Lender's making the Loan:

      13.1  RESTRICTIONS. Any voluntary prepayment of this Note: (a) is
            prohibited except during the last 3 months of the term, (b) is
            permitted in full only, and not in part, and (c) may only be made on
            the first day of a month.

      13.2  PREPAYMENT CHARGE. Except as provided below, if this Note is prepaid
            prior to the last three (3) months of the term, whether such
            prepayment is involuntary or upon acceleration of the principal
            amount of this Note by Lender following a Default, Borrower shall
            pay to Lender on the prepayment date (in addition to all other sums
            then due and owing to Lender under the Loan Documents) a prepayment
            charge equal to the greater of the following two amounts: (a) an
            amount equal to 1% of the then outstanding principal balance of the
            Loan; or (b) an amount equal to (i) the amount, if any, by which the
            sum of the present values as of the prepayment date of all unpaid
            principal and interest payments required under this Note, calculated
            by discounting such payments from their respective scheduled payment
            dates back to the prepayment date at a discount rate equal to the
            Periodic Treasury Yield (defined below) exceeds the outstanding
            principal balance of the Loan as of the prepayment date, multiplied
            by (ii) a fraction whose numerator is the amount of the prepayment
            and whose denominator is the outstanding principal balance of the
            Loan as of the prepayment date. Notwithstanding the

                                       6
<PAGE>
            foregoing, no prepayment charge shall apply in respect to any
            insurance or condemnation proceeds received by Lender and applied by
            Lender to the outstanding principal balance of the Loan. For
            purposes of the foregoing, "Periodic Treasury Yield" means (c) the
            annual yield to maturity of the actively traded non-callable United
            States Treasury fixed interest rate security (other than any such
            security which can be surrendered at the option of the holder at
            face value in payment of federal estate tax or which was issued at a
            substantial discount) that has a maturity closest to (whether
            before, on or after) the Maturity Date (or if two or more such
            securities have maturity dates equally close to the Maturity Date,
            the average annual yield to maturity of all such securities), as
            reported in The Wall Street Journal or other authoritative
            publication or news retrieval service on the fifth Business Day
            preceding the prepayment date, divided by (d) 12, if scheduled
            payment dates are monthly, or 4, if scheduled payment dates are
            quarterly.

      13.3  WAIVER. Borrower waives any right to prepay this Note except under
            the terms and conditions set forth in this Section and agrees that
            if this Note is prepaid, Borrower will pay the prepayment charge set
            forth above. Borrower hereby acknowledges that: (a) the inclusion of
            this waiver of prepayment rights and agreement to pay the prepayment
            charge for the right to prepay this Note was separately negotiated
            with Lender; (b) the economic value of the various elements of this
            waiver and agreement was discussed; (c) the consideration given by
            Borrower for the Loan was adjusted to reflect the specific waiver
            and agreement negotiated between Borrower and Lender and contained
            herein; and (d) this waiver is intended to comply with California
            Civil Code Section 2954.10.

                                               Borrower's Initials: ________

      13.4  INSURANCE PROCEEDS; CONDEMNATION AWARDS. Notwithstanding anything
            herein to the contrary, no prepayment charge shall be due and owing
            with respect to any involuntary prepayment resulting from Lender's
            application of any insurance proceeds or condemnation awards to the
            Loan.

14.   DEFEASANCE. At any time after the Lockout Expiration Date (defined below),
      Borrower may elect to cause Lender to release one or more of the
      Properties from the lien of any of the Mortgages and the other Loan
      Documents and to accept other collateral in substitution therefor, in
      accordance with the provisions of this Section ("Defeasance"), at
      Borrower's sole cost and expense. "Lockout Expiration Date" means the
      earlier of (a) the second anniversary of the "startup day" (as defined in
      Internal Revenue Code Section 860(G)(a)(9)) of any "real estate mortgage
      investment conduit" (as defined in Internal Revenue Code Section 860D)
      that holds this Note and (b) the third anniversary of the date of this
      Note. For purposes of this Section 14 only, (a) the values of the Casa del
      Sol III Property, the Apollo Village Property, the Woodland Hills
      Property, the Cabana Property, the Pickwick Village Property, the Indian
      Oaks Property and the Windmill Manor Property, expressed as a percentage
      of the total principal amount of the Loan ("Allocated Loan Percentage"),
      shall be deemed to be 13.3%, 10.6%, 23.6%, 16.9%, 16.8%, 6.2%, and 12.6%,
      respectively; and (b) the portion of the principal amount of the Loan
      allocable to each of the Properties ("Allocated Loan Amount") shall be
      deemed initially to be the Allocated Loan Percentage for such Property
      multiplied by the initial total principal amount of the Loan and,
      thereafter, the same such amount as the same shall be reduced by ratable
      application of payments of principal made under this Note from time to
      time.

      14.1  CONDITIONS. Borrower shall only have the right to cause a Defeasance
            if no Default has occurred and is continuing and all of the
            following conditions have been satisfied:

            a.    Notice. Borrower shall give at least 60 days but not more than
                  90 days' written notice to Lender specifying the date of
                  Borrower's intended Defeasance ("Release Date"), which date
                  shall be a scheduled payment date and such notice shall
                  indicate the principal amount of the Note to be defeased;

            b.    Payments. Borrower shall pay in full, on or before the Release
                  Date, all accrued and unpaid interest and all other sums due
                  under this Note and the other Loan Documents on or before the
                  Release Date, including, without limitation, (i) all costs and
                  expenses paid or incurred by Lender or its agents in
                  connection with the Defeasance, the purchase of the Defeasance
                  Collateral (defined below), the release of the applicable
                  Properties, the review of the proposed Defeasance Collateral
                  and the preparation of the Defeasance Security Agreement
                  (defined below) and related documentation, and (ii) any
                  revenue, documentary stamp, intangible or other taxes, charges
                  or fees due in connection with the transfer or assumption of
                  this Note or the Defeasance;

            c.    Deliveries. Borrower shall deliver the following items to
                  Lender on or before the Release Date:

                                       7
<PAGE>
                  (i)     immediately available funds ("Defeasance Deposit") in
                          an amount sufficient to enable Lender to purchase,
                          through means and sources customarily employed and
                          available to Lender, for the account of Borrower,
                          direct, non-callable obligations of the United States
                          of America that provide for payments prior, but as
                          close as possible, to all successive scheduled payment
                          dates occurring after the Release Date, with each such
                          payment being equal to or greater than one hundred
                          twenty five percent (125%) of the product of the
                          Allocated Loan Percentage for the Properties that are
                          the subject of the applicable Defeasance multiplied by
                          the installments of principal and interest required to
                          be paid under this Note (including, without
                          limitation, all amounts due on the Maturity Date) for
                          the balance of the term hereof ("Defeasance
                          Collateral"), each of which shall be duly endorsed by
                          the holder as directed by Lender or accompanied by a
                          written instrument of transfer in form and substance
                          satisfactory to Lender in its sole discretion
                          (including, without limitation, such instruments as
                          may be required by the depository institution holding
                          such securities or the issuer of such securities, as
                          the case may be, to effectuate book-entry transfers
                          and pledges through the book-entry facilities of such
                          institution) in order to perfect upon the delivery of
                          the Defeasance Security Agreement (as defined below)
                          the first priority security interest in the Defeasance
                          Collateral in favor of Lender;

                  (ii)    a pledge and security agreement, in form and substance
                          satisfactory to Lender in its reasonable discretion,
                          creating a first priority security interest in favor
                          of Lender in the Defeasance Collateral ("Defeasance
                          Security Agreement"), which shall provide, among other
                          things, that any payments generated by the applicable
                          Defeasance Collateral shall be paid directly to Lender
                          and applied by Lender to amounts then due and payable
                          under this Note allocable to the Allocated Loan Amount
                          for the Properties that are the subject of the
                          applicable Defeasance and that any excess received by
                          Lender from the applicable Defeasance Collateral over
                          the amounts payable by Borrower under this Note
                          allocable to the Allocated Loan Amount for the
                          Properties that are the subject of the applicable
                          Defeasance shall be first, paid to Lender and applied
                          by Lender to any other amounts then due and payable
                          under this Note, and second, refunded to Borrower
                          promptly after each scheduled payment date;

                  (iii)   a certificate of Borrower certifying that all of the
                          requirements of this Section 14.1 have been satisfied;

                  (iv)    an opinion of counsel for Borrower in form and
                          substance and delivered by counsel satisfactory to
                          Lender in its sole discretion, subject, however, to
                          standard enforceability opinion qualifications and
                          limitations, stating, among other things, that (aa)
                          Lender has a perfected first priority security
                          interest in the Defeasance Collateral, (bb) the
                          Defeasance Security Agreement is enforceable against
                          Borrower in accordance with its terms and (cc) any
                          REMIC Trust formed pursuant to a securitization will
                          not fail to maintain its status as a "real estate
                          mortgage investment conduit" within the meaning of
                          Internal Revenue Code Section 860D, as amended from
                          time to time, or any successor statute, as a result of
                          the Defeasance;

                  (v)     a certificate from a firm of independent certified
                          public accountants acceptable to Lender certifying
                          that the Defeasance Collateral satisfies the
                          requirements of Section 14.1c(i);

                  (vi)    written evidence from the applicable Rating Agencies
                          that the Defeasance will not result in a downgrading,
                          withdrawal or qualification of the respective ratings
                          in effect immediately prior to the Defeasance for any
                          securities issued in connection with the
                          securitization which are then outstanding;

                  (vii)   a conveyance of title to the Property to be released
                          to a Person other than Borrower; and

                  (viii)  such other certificates, documents or instruments as
                          Lender may reasonably require, including, without
                          limitation, such amendments to this Note and the other
                          Loan Documents as Lender reasonably deems appropriate
                          to reflect the Defeasance.

                                       8
<PAGE>
      14.2  RELEASE OF LIEN. Upon satisfaction of all conditions specified above
            with respect to any Defeasance, the Property subject to such
            Defeasance shall be released from the lien of the applicable
            Mortgage and the other Loan Documents to which it is subject, and
            the applicable Defeasance Collateral, any Defeasance Collateral
            previously delivered to Lender under this Note, the Remaining
            Properties and the proceeds thereof shall constitute the only
            collateral which shall secure the obligations of Borrower under this
            Note and the other Loan Documents. Simultaneously with the release
            of a Property pursuant to this Section, Lender shall release that
            portion of all cash or other accounts maintained pursuant to the
            Loan Documents relating to such Property. Lender shall, at
            Borrower's expense, execute and deliver any agreements reasonably
            requested by Borrower to release the lien of the applicable Mortgage
            from the applicable Property. Upon any Defeasance, this Note shall
            be automatically amended such that the Allocated Loan Percentage for
            each of the Remaining Properties after such Defeasance shall be
            equal to (A) one hundred (100) times (B) the Allocated Loan
            Percentage for such Remaining Property immediately prior to such
            Defeasance divided by (C) the sum of the Allocated Loan Percentages
            for all of the Remaining Properties immediately prior to such
            Defeasance (such that at all times the sum of the Allocated Loan
            Percentages for all Remaining Properties shall be equal to one
            hundred percent (100%)).

      14.3  DEFEASANCE DEPOSIT. Borrower hereby authorizes and directs Lender,
            using the means and sources customarily employed and available to
            Lender, to use the Defeasance Deposit to purchase the Defeasance
            Collateral as agent and for the account of Borrower. Payments from
            the Defeasance Collateral shall be made directly to Lender for
            application to the Loan as provided hereinabove. Any part of the
            Defeasance Deposit exceeding the amount necessary to purchase the
            Defeasance Collateral and to pay the other costs which Borrower is
            obligated to pay under this Section 14 shall be refunded to
            Borrower. Borrower agrees to pay all sums referred to in Section
            14.1b above on or before the Release Date.

      14.4  ASSIGNMENT AND ASSUMPTION. Upon the release of any of the Properties
            in accordance with this Section 14, Borrower shall, at the request
            of Lender, assign all of its right, title and interest in and to the
            pledged Defeasance Collateral, any Defeasance Collateral previously
            delivered to Lender under this Note and all its obligations and
            rights under this Note, the Defeasance Security Agreement, any
            Defeasance Security Agreement previously delivered to Lender under
            this Note and the other Loan Documents, to a successor entity
            designated by Borrower and approved by Lender in its sole
            discretion. Such successor entity shall execute an assumption
            agreement in form and substance satisfactory to Lender in its sole
            discretion pursuant to which it shall assume Borrower's obligations
            under this Note, the Defeasance Security Agreement, any Defeasance
            Security Agreement previously delivered to Lender under this Note
            and the other Loan Documents. As conditions to such assignment and
            assumption, Borrower shall: (a) deliver to Lender a new limited
            guaranty in form and substance satisfactory to Lender in its sole
            discretion executed by the principals of such successor entity; (b)
            deliver to Lender an opinion of counsel in form and substance and
            delivered by counsel satisfactory to Lender in its sole discretion
            subject, however, to standard enforceability opinion qualifications
            and limitations, stating, among other things, that such assumption
            agreement is enforceable against Borrower and such successor entity
            in accordance with its terms and that this Note, the Defeasance
            Security Agreement, any Defeasance Security Agreement previously
            delivered to Lender under this Note and the other Loan Documents, as
            so assumed, are enforceable against such successor entity in
            accordance with their respective terms; and (c) pay all costs and
            expenses incurred by Lender or its agents in connection with such
            assignment and assumption (including, without limitation, the review
            of the proposed transferee and the preparation of the assumption
            agreement and related documentation). Upon such assumption, Borrower
            shall be relieved of its obligations under this Note, the Defeasance
            Security Agreement, any Defeasance Security Agreement previously
            delivered to Lender under this Note and the other Loan Documents
            other than those obligations which are specifically intended to
            survive the payment of the Loan or other termination, satisfaction
            or assignment of this Note, the Defeasance Security Agreement, any
            Defeasance Security Agreement previously delivered to Lender under
            this Note or the other Loan Documents or Lender's exercise of its
            rights and remedies under any of such documents and instruments.

15.   WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY
      AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
      RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
      CONNECTION WITH, THIS NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
      CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
      ACTIONS OF LENDER OR BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
      LENDER TO MAKE THE

                                       9
<PAGE>
      LOAN TO BORROWER. BY ACCEPTANCE OF THIS EXECUTED NOTE, LENDER AGREES TO
      THE FOREGOING WAIVER.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       10
<PAGE>
"BORROWER"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By: MHC-QRS STAGECOACH, INC.,
    a  Delaware corporation,
    its Managing Member

    By: /s/ John M. Zoeller
       ----------------------------------
    Name: John M. Zoeller
    Its: Vice President, Chief Financial
         Officer and Treasurer

                                       11
<PAGE>
                                                            Loan No. 31-0900553R

                          EXHIBIT A TO PROMISSORY NOTE
                         ADDITIONAL TERMS AND CONDITIONS

This Exhibit A is attached to and forms a part of that Promissory Note Secured
by Mortgages ("Note") executed by MHC STAGECOACH, L.L.C., a Delaware limited
liability company ("Borrower") in favor of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Lender").

1.    DISBURSEMENT OF LOAN PROCEEDS; LIMITATION OF LIABILITY. Borrower hereby
      authorizes Lender to disburse the proceeds of the Loan, after deducting
      any and all fees owed by Borrower to Lender in connection with the Loan,
      to Commonwealth Land Title Insurance Company (the "Title Company"). With
      respect to such disbursement, Borrower understands and agrees that Lender
      does not accept responsibility for errors, acts or omissions of others,
      including, without limitation, the escrow company, other banks,
      communications carriers or clearinghouses through which the transfer of
      Loan proceeds may be made or through which Lender receives or transmits
      information, and no such entity shall be deemed Lender's agent. As a
      consequence, Lender shall not be liable to Borrower for any actual
      (whether direct or indirect), consequential or punitive damages which may
      arise with respect to the disbursement of Loan proceeds, whether or not
      (a) any claim for such damages is based on tort or contract, or (b) either
      Lender or Borrower knew or should have known of the likelihood of such
      damages in any situation.

2.    FINANCIAL STATEMENTS.

      2.1   STATEMENTS REQUIRED. During the term of the Loan and while any
            liabilities of Borrower to Lender under any of the Loan Documents
            remain outstanding and unless Lender otherwise consents in writing,
            Borrower shall provide to Lender the following:

            a.    OPERATING STATEMENT. Not later than 10 days after and as of
                  each calendar month during the first 6 months of the term of
                  the Loan, and thereafter not later than 30 days after and as
                  of the end of each calendar quarter, an operating statement,
                  signed and dated by Borrower and in a form acceptable to
                  Lender, showing all revenues and expenses during such month or
                  quarter and year-to-date, relating to each of the Properties,
                  including, without limitation, all information requested under
                  any of the Loan Documents;

            b.    RENT ROLL. Not later than 10 days after and as of each
                  calendar month during the first 6 months of the term of the
                  Loan, and thereafter not later than 30 days after and as of
                  the end of each calendar quarter, a rent roll signed and dated
                  by Borrower and in a form acceptable to Lender, showing the
                  following lease information with regard to each tenant: the
                  name of the tenant, monthly or other periodic rental amount,
                  date of commencement of the lease, and payment status;

            c.    BALANCE SHEET. If requested by Lender, not later than 90 days
                  after and as of the end of each fiscal year, a balance sheet,
                  signed and dated by Borrower and in a form acceptable to
                  Lender (or audited financial statements if Borrower obtains
                  them), showing all assets and liabilities of Borrower; and

            d.    OTHER INFORMATION. From time to time, upon Lender's delivery
                  to Borrower of at least 10 days' prior written notice, such
                  other information with regard to Borrower, principals of
                  Borrower, guarantors or the Properties as Lender may
                  reasonably request in writing.

      2.2   FORM; WARRANTY. Borrower agrees that all financial statements to be
            delivered to Lender pursuant to Section 2.1 shall: (a) be complete
            and correct in all material respects; (b) present fairly the
            financial condition of the party; (c) disclose all liabilities that
            are required to be reflected or reserved against; and (d) be
            prepared in accordance with the same accounting standard used by
            Borrower to prepare the financial statements delivered to and
            approved by Lender in connection with the making of the Loan or
            other accounting standards acceptable to Lender. Borrower shall be
            deemed to warrant and represent that, as of the date of delivery of
            any such financial statement, there has been no material adverse
            change in financial condition, nor have any assets or properties
            been sold, transferred, assigned, mortgaged, pledged or encumbered
            since the date of such

                                    EXHIBIT A
                                        1
<PAGE>
            financial statement except as disclosed by Borrower in a writing
            delivered to Lender. Borrower agrees that all rent rolls and other
            information to be delivered to Lender pursuant to Section 2.1 shall
            not contain any misrepresentation or omission of a material fact.

      2.3   LATE CHARGE. If any financial statement, leasing schedule or other
            item required to be delivered to Lender pursuant to Section 2.1 is
            not timely delivered, Borrower shall promptly pay to Lender, as a
            late charge, the sum of $500 per item. In addition, Borrower shall
            promptly pay to Lender an additional late charge of $500 per item
            for each full month during which such item remains undelivered
            following written notice from Lender. Borrower acknowledges that
            Lender will incur additional expenses as a result of any such late
            deliveries, which expenses would be impracticable to quantify, and
            that Borrower's payments under this Section 2.3 are a reasonable
            estimate of such expenses. Notwithstanding anything to the contrary
            contained herein, once during each year of the term of the Loan
            Lender will give notice to Borrower of its failure to provide any
            item required to be delivered to Lender pursuant to Section 2.1 and
            if any such items are not delivered within three (3) Business Days
            following such notice, then at such time the late charge specified
            herein shall take effect.

3.    IMPOUNDS.

      3.1   AMOUNTS. Borrower shall deposit with Lender the amounts ("Impounds")
            stated below on the dates stated below, for the purpose of paying
            the costs stated below:

            a.    TAXES. (i) $364,529.00 on the Disbursement Date, and (ii) on
                  the first payment date on which both principal and interest
                  under the Loan are payable and on each payment date
                  thereafter, an amount estimated from time to time by Lender in
                  its reasonable discretion to be sufficient to pay for taxes
                  and other liabilities payable by Borrower under Section 6.9 of
                  each of the Mortgages. The initial estimated monthly amount to
                  be deposited by Borrower on each payment date is $46,881.00.

            b.    INSURANCE. (i) $35,144.00 on the Disbursement Date, and (ii)
                  on the first payment date on which both principal and interest
                  under the Loan are payable and on each payment date
                  thereafter, an amount estimated from time to time by Lender in
                  its reasonable discretion to be sufficient to pay for premiums
                  for insurance payable by Borrower under Section 6.10 of each
                  of the Mortgages. The initial estimated monthly amount to be
                  deposited by Borrower on each payment date is $4,393.00.

            c.    CAPITAL EXPENDITURES. $10,218 on the first payment date on
                  which both principal and interest under the Loan are payable
                  and on each payment date thereafter for payment or
                  reimbursement of Capital Expenditures (defined below).

      3.2   APPLICATION.

            a.    TAXES. If no Default exists, Lender shall apply the Impounds
                  in a timely fashion to the payment of the taxes and other
                  liabilities stated above.

            b.    INSURANCE. If no Default exists, Lender shall apply the
                  Impounds to the payment of the insurance premiums stated
                  above.

            c.    CAPITAL EXPENDITURES. If no Default exists, Lender shall
                  release the Impounds to Borrower once a quarter, no less than
                  $10,000.00 per release, to pay or reimburse Borrower for the
                  Capital Expenditures (defined below); provided, however, that
                  Lender shall have received and approved each of the following:

                  (i)   Borrower's written request for such release, describing
                        the Capital Expenditures and certifying that all Capital
                        Expenditures have been paid or incurred by Borrower for
                        work completed lien-free and in a workmanlike manner;

                  (ii)  copies of invoices supporting the request for such
                        release; and

                                    EXHIBIT A
                                        2
<PAGE>
                  (iii) if deemed necessary by Lender, an inspection report
                        signed by an inspector selected by Lender, whose fees
                        and expenses shall be paid by Borrower, and such other
                        evidence as Lender shall reasonably require, confirming
                        borrower's certification.

      3.3   GENERAL. Any portion of the Impounds that exceeds the amount
            required for payment of the foregoing costs shall be repaid to
            Borrower upon Borrower's compliance with the foregoing. Reference is
            made to Section 6.12(b) of each of the Mortgages for a description
            of the account into which the Impounds shall be deposited and for a
            description of certain rights and remedies of Lender with respect to
            amounts in such account.

      3.4   MAINTENANCE AND CONSTRUCTION.

            a.    CAPITAL EXPENDITURES. Borrower shall complete the lien-free
                  performance or installation of the Capital Expenditures (as
                  defined below) from time to time as necessary, in a
                  workmanlike manner and in accordance with all applicable laws,
                  ordinances, rules and regulations. "Capital Expenditures"
                  shall mean major repairs and replacements to maintain or
                  improve the Properties, including, without limitation,
                  structural repairs, roof replacements, HVAC repairs and
                  replacements, mechanical and plumbing repairs and replacements
                  and boiler repair and replacements.

            b.    RIGHT OF INSPECTION. Lender shall have the right to enter upon
                  the Properties at all reasonable times, subject to reasonable
                  notice except in the event of an emergency, in which case no
                  notice shall be required, to inspect all work for the purpose
                  of verifying information disclosed or required pursuant to
                  this Note, in a manner which does not unreasonably interfere
                  with the operations on the Properties. Notwithstanding the
                  foregoing, Lender shall not be obligated to supervise or
                  inspect any work or to inform Borrower or any third party
                  regarding any aspect of any work.

      3.5   RELEASE. Lender shall release any Impounds to Borrower through a
            funds transfer of such Impounds initiated by Lender to the following
            account or such other account as Borrower specifies in a notice to
            Lender:

                     Bank Name:  Bank of America
                                 -------------------------------------
               ABA Routing No.:  071-000039
                                 -------------------------------------
                  Account Name:  7366-9-01095
                                 -------------------------------------
                     Reference:  MHC Operating Limited Partnership
                                 -------------------------------------
                        Advise:  Megan McBride (312) 828-6274
                                 -------------------------------------

            Lender will determine the funds transfer system and other means to
            be used in making each such release. Borrower agrees that each such
            funds transfer initiated by Lender will be deemed to be a funds
            transfer properly authorized by Borrower, even if the transfer is
            not actually properly authorized by Borrower. Borrower acknowledges
            that Lender will rely on the account number and ABA routing number
            set forth above or specified in a notice from Borrower to Lender,
            even if such account number identifies an account with a name
            different from the name so specified, or the routing number
            identifies a bank different from the bank so specified. If Borrower
            learns of any error in the transfer of any Impounds or of any
            transfer which was not properly authorized, Borrower shall notify
            Lender as soon as possible in writing but in no case more than 14
            days after Lender's first confirmation to Borrower of such transfer.

      3.6   LETTER OF CREDIT.

            a.    Delivery to Lender. Lender has agreed that in lieu of the
                  Capital Expenditure Impounds required by Subsection 3.1(d)
                  above, Lender will accept and Borrower may deliver within ten
                  (10) Business Days after the Disbursement Date an irrevocable
                  standby letter of credit (such letter of credit, together with
                  any replacement or renewal thereof, is referred to herein as
                  the "Borrower Letter of Credit") in the aggregate principal
                  amount of $306,991 issued by an issuer reasonably acceptable
                  to Lender in favor of Lender, in form and content reasonably
                  satisfactory to Lender. Subject to the provisions of this
                  Section 3.6, Lender shall retain custody of any Borrower
                  Letter of Credit until such time as the Loan is repaid in full
                  (other than through judicial or nonjudicial foreclosure of the
                  Mortgages or deeds in lieu thereof).

                                    EXHIBIT A
                                        3
<PAGE>
            b.    Right to Draw. Lender shall have the right to draw upon the
                  Borrower Letter of Credit in the full amount thereof upon the
                  occurrence of (i) any Default or (ii) the receipt by Lender of
                  notice stating that the Borrower Letter of Credit will not be
                  renewed (as provided for in such Borrower Letter of Credit)
                  and, in the event of such nonrenewal (whether by notice by the
                  issuing bank or otherwise), the failure of Borrower to deliver
                  a substitute or replacement letter of credit in form and
                  content satisfactory to Lender prior to the date that is
                  thirty (30) days prior to the expiration of the Borrower
                  Letter of Credit.

            c.    Application of Proceeds. The proceeds of any draw under the
                  Borrower Letter of Credit shall be retained by Lender as
                  Impounds and shall be governed by the terms and conditions of
                  this Note and the other Loan Documents.

            d.    Release of the Borrower Letter of Credit. Lender shall
                  surrender the Borrower Letter of Credit to Borrower and refund
                  to Borrower all sums drawn that Lender is holding (and have
                  not otherwise been applied or spent) at such time as the Loan
                  is repaid in full (other than through judicial or nonjudicial
                  foreclosure of the Mortgages or deeds in lieu thereof).

4.    ONE-TIME RIGHT OF TRANSFER OF PROPERTIES TO THIRD PARTY. Notwithstanding
      anything to the contrary contained in Section 6.15 of the Mortgages,
      Lender shall, one time only, consent to the voluntary sale or exchange of
      all (but not less than all) of the Properties to a bona-fide third party
      purchaser ("Transfer"), if no Default has occurred and is continuing, no
      event has occurred which, with the giving of notice or the passage of
      time, or both, would constitute a Default and all of the following
      conditions have been satisfied:

      4.1   Lender receives at least sixty-five (65) days prior written notice
            of the proposed Transfer;

      4.2   Lender's reasonable determination that the proposed purchaser, the
            proposed guarantor, if any, and the Properties all satisfy Lender's
            then applicable credit review and underwriting standards, taking
            into consideration, among other things, (a) any decrease in the
            Properties' cash flow which would result from any increase in real
            property taxes due to any anticipated reassessment of the Properties
            for tax purposes and (b) any then applicable requirement of Lender
            that such proposed borrowing entity constitute a single purpose
            asset and bankruptcy remote entity which, at the time of the
            Transfer, shall be in full compliance with the representations and
            covenants set forth in Section 5.2 of the Mortgages (as such
            representations may be reasonably modified by Lender after reviewing
            the ownership structure of the proposed borrowing entity);

      4.3   if required by Lender, delivery to Lender of a non-consolidation
            opinion from a law firm reasonably acceptable to Lender and in form
            and substance reasonably satisfactory to Lender;

      4.4   Lender's reasonable determination that the proposed purchaser
            possesses satisfactory recent experience in the ownership and
            operation of properties comparable to the Properties;

      4.5   the execution and delivery to Lender of such documents and
            instruments as Lender shall reasonably require, in form and content
            reasonably satisfactory to Lender, including, without limitation,
            (i) an assumption agreement under which the purchaser assumes all
            obligations and liabilities of Borrower under this Note and the
            other Loan Documents and agrees to periodically pay such new or
            additional Impounds to Lender as Lender may reasonably require, and
            (ii) a consent to the Transfer by any existing guarantor and a
            reaffirmation of such guarantor's obligations and liabilities under
            any guaranty made in connection with the Loan or a new guaranty
            executed by a new guarantor reasonably satisfactory to Lender;

      4.6   if required by Lender, delivery to Lender of evidence of title
            insurance reasonably satisfactory to Lender insuring Lender that the
            liens of the Mortgages and the priority thereof will not be impaired
            or affected by reason of such Transfer of the Properties;

      4.7   payment to Lender of an assumption fee equal to 0.5% of the then
            outstanding principal balance of this Note;

      4.8   if reasonably required by Lender, deposit with Lender of any new or
            additional Impounds;

      4.9   reimbursement to Lender of any and all costs and expenses paid or
            incurred by Lender in connection with such Transfer, including,
            without limitation, all in-house or outside counsel attorneys' fees,
            title insurance fees,

                                    EXHIBIT A
                                        4
<PAGE>
            appraisal fees, inspection fees, environmental consultants' fees and
            any fees or charges of the applicable Rating Agencies;

      4.10  if required by Lender, delivery to Lender of written evidence from
            the applicable Rating Agencies that such Transfer will not result in
            a downgrading, withdrawal or qualification of the respective ratings
            in effect immediately prior to the Transfer for any securities
            issued in connection with the securitization of the Loan which are
            then outstanding; and

      4.11  any third party consents or approvals that are required in order to
            consummate the contemplated transaction shall have been obtained and
            Lender shall be provided with satisfactory evidence of same.

Lender shall fully release Borrower and any existing guarantor from any further
obligation or liability to Lender under this Note and the other Loan Documents
upon the assumption by the purchaser and any new guarantor of all such
obligations and liabilities and the satisfaction of all other conditions
precedent to a Transfer in accordance with the provisions of this Section.

5.    TRANSFER OF PROPERTY TO AN AFFILIATE. Notwithstanding anything to the
      contrary contained in Section 6.15 of the Mortgage, Lender shall one time
      only with respect to each of the Properties consent to the voluntary sale
      or exchange of such Property by deed to an Affiliate of Manufactured Home
      Communities, Inc. ("MHC") (such sale or exchange being herein referred to
      as an "Affiliate Transfer"), if no Default has occurred and is continuing,
      no event has occurred which, with the giving of notice or the passage of
      time, or both, would constitute a Default and all of the following
      conditions have been satisfied:

      5.1   Lender receives at least sixty-five (65) days prior written notice
            of the proposed Affiliate Transfer;

      5.2   Lender's reasonable determination that (a) such Property's cash flow
            will not be materially and adversely impacted due to any increase in
            real property taxes resulting from the Affiliate Transfer and (b)
            the Affiliate of MHC satisfies any then applicable requirement of
            Lender that such proposed borrowing entity constitute a single
            purpose asset and bankruptcy remote entity which, at the time of the
            transfer, shall be in full compliance with the representations and
            covenants set forth in Section 5.2 of the Mortgage encumbering such
            Property (as such representations may be reasonably modified by
            Lender after reviewing the ownership structure of the proposed
            borrowing entity);

      5.3   if required by Lender, delivery to Lender of a non-consolidation
            opinion from a law firm reasonably acceptable to Lender and in form
            and substance reasonably satisfactory to Lender;

      5.4   the execution and delivery to Lender of such documents and
            instruments as Lender shall reasonably require, in form and content
            reasonably satisfactory to Lender, including, without limitation,
            (i) an assumption agreement under which the purchaser assumes all
            obligations and liabilities of Borrower under this Note and the
            other Loan Documents and agrees to periodically pay such new or
            additional Impounds to Lender as Lender may reasonably require, and
            (ii) a consent to the Affiliate Transfer by any existing guarantor
            and a reaffirmation of such guarantor's obligations and liabilities
            under any guaranty made in connection with the Loan or a new
            guaranty executed by a new guarantor reasonably satisfactory to
            Lender;

      5.5   if required by Lender, delivery to Lender of evidence of title
            insurance reasonably satisfactory to Lender insuring Lender that the
            lien of such Mortgage and the priority thereof will not be impaired
            or affected by reason of such Affiliate Transfer of any such
            Property;

      5.6   reimbursement to Lender of any and all costs and expenses paid or
            incurred by Lender in connection with such Affiliate Transfer,
            including, without limitation, all in-house or outside counsel
            attorneys' fees, title insurance fees, appraisal fees, inspection
            fees, environmental consultants' fees and any fees or charges of the
            applicable Rating Agencies;

      5.7   if required by Lender, delivery to Lender of written evidence from
            the applicable Rating Agencies that such Affiliate Transfer will not
            result in a downgrading, withdrawal or qualification of the
            respective ratings in effect immediately prior to the Affiliate
            Transfer for any securities issued in connection with the
            securitization of the Loan which are then outstanding; and

                                    EXHIBIT A
                                        5
<PAGE>
      5.8   any third party consents or approvals that are required in order to
            consummate the contemplated transaction shall have been obtained and
            Lender shall be provided with satisfactory evidence of same.

      Lender shall fully release Borrower from any further obligation or
      liability to Lender under this Note and the other Loan Documents upon the
      assumption by the Affiliate of all such obligations and liabilities and
      the satisfaction of all other conditions precedent to an Affiliate
      Transfer in accordance with the provisions of this Section. In addition to
      the Affiliate Transfers permitted above, Lender's consent shall not be
      required for the normal day to day trading of shares of MHC in the public
      securities market and such transactions shall not constitute an Affiliate
      Transfer hereunder.

6.    REPLACEMENT PROPERTIES. Upon at least 65 days' but not more than 90 days'
      written notice to Lender specifying the date of Borrower's intended
      substitution ("Substitution Date"), which date shall be a scheduled
      payment date, Borrower may elect to cause Lender to release one or more of
      the Properties from the lien of the Mortgage encumbering such Property,
      provided that simultaneously with such release, Borrower shall execute and
      deliver to Lender, as security for the Loan, a mortgage, deed of trust or
      deed to secure debt, as applicable ("Replacement Mortgage"), encumbering a
      manufactured housing community property ("Replacement Property"), in
      substantially the same form as the Mortgage to be released, such other
      documents as Lender may reasonably require for the purpose of granting
      Lender a first priority, perfected lien on and security interest in such
      Replacement Property and all related rents, personal property, reserves
      and escrows on the same terms and conditions as the liens and security
      interests granted to Lender in such Property on the Effective Date, and
      such other modifications and amendments to the Loan Documents as may be
      necessitated due to the substitution of the Replacement Property for the
      Property that will be released (all of the foregoing, together with the
      Replacement Mortgage, the "Replacement Documents").

      6.1   Borrower's right to obtain a release of a Property shall also be
            subject to the following conditions and restrictions:

            a.    no Default shall have occurred and be continuing and no event
                  has occurred which, with the giving of notice or the passage
                  of time, or both, would constitute a Default;

            b.    Borrower shall not, over the life of the Loan, be entitled to
                  replace Properties having, in the aggregate, an Allocated Loan
                  Amount of more twenty-five percent (25%) of the Loan;

            c.    at least sixty-five (65) days prior to the proposed date of
                  such release, Lender shall have obtained an appraisal of the
                  Replacement Property and, if required by Lender, updated
                  appraisals of the Remaining Properties, prepared by Cushman &
                  Wakefield, or such other third-party real estate professional
                  that is approved by the Rating Agencies, indicating that the
                  Loan-to-Value Ratio as of the date of such release, obtained
                  by using the "as-is" value of the proposed Replacement
                  Property set forth in such appraisal together with the "as-is"
                  value of the Remaining Properties as of the date of such
                  proposed release if new appraisals are required by Lender for
                  the Remaining Properties, or as of the Disbursement Date if
                  new appraisals are not required by Lender, is at least equal
                  to the Loan-to-Value Ratio existing on the Disbursement Date
                  which is sixty-four percent (64%);

            d.    Lender shall have obtained a Phase I environmental report and,
                  if recommended by such Phase I report, a Phase II
                  environmental report prepared by SI Group, or such other
                  environmental consultant as is approved by the Rating
                  Agencies, stating that the Replacement Property complies with
                  all applicable environmental laws;

            e.    Lender shall have obtained an engineering report, prepared by
                  SI Group, or such other consulting engineer as is approved by
                  the Rating Agencies, stating that the Replacement Property
                  complies with all applicable building laws and does not
                  require performance of deferred maintenance, or if remedial
                  steps are required to effect such compliance or such deferred
                  maintenance, identifying such steps and projecting the cost
                  thereof, which may not exceed $10,000, and in which case
                  Borrower shall be required to deposit with Lender an amount
                  equal to one hundred fifty percent (150%) of such projected
                  costs, which shall be deemed Impounds to be released
                  substantially in accordance with the provisions contained in
                  Section 3 of Exhibit A to this Note;

            f.    Borrower shall have caused to be delivered all leases, title
                  commitments, title insurance policies, surveys, hazard and
                  liability insurance, evidence of compliance with zoning and
                  other laws, legal

                                    EXHIBIT A
                                        6
<PAGE>
                  opinions and other items of due diligence with respect to the
                  Replacement Property as the Rating Agencies may require, all
                  of which shall be in form and substance acceptable to the
                  Rating Agencies;

            g.    the Debt Service Coverage Ratio, calculated by substituting
                  the Net Operating Income of the Replacement Property for the
                  Net Operating Income of the Property to be released, combined
                  with the Net Operating Income of the Remaining Properties, as
                  of the time of such release shall be at least equal to the
                  Debt Service Coverage Ratio existing on the Disbursement Date
                  which is 1.55 to 1;

            h.    the Person transferring the Replacement Property to Borrower
                  shall be solvent and shall be making such transfer on an arm's
                  length basis and for fair consideration, and Borrower and such
                  Person shall deliver certifications and evidence to such
                  effect and such other certifications as Lender shall
                  reasonably require to assure itself that the substitution does
                  not constitute a fraudulent conveyance on the part of any
                  Person (assuming such Person was not solvent at the time of
                  substitution);

            i.    Borrower shall comply with such other terms and conditions as
                  the Rating Agencies shall require in connection with such
                  substitution;

            j.    the organizational documents of Borrower shall, if required,
                  be modified to permit the ownership and operation of the
                  Replacement Property;

            k.    an opinion of counsel for Borrower in form and substance and
                  delivered by counsel satisfactory to Lender in its sole
                  discretion stating, among other things, that any REMIC Trust
                  formed pursuant to a securitization will not fail to maintain
                  its status as a "real estate mortgage investment conduit"
                  within the meaning of Internal Revenue Code Section 860D, as
                  amended from time to time, or any successor statute, as a
                  result of the release of such Property and the substitution of
                  the Replacement Property;

            l.    Borrower shall transfer title to the Property to be released
                  to a Person other than Borrower or any other borrower;

            m.    written evidence from the applicable Rating Agencies that the
                  proposed release of such Property and substitution of the
                  Replacement Property will not result in a downgrading,
                  withdrawal or qualification of the respective ratings in
                  effect immediately prior to such release and substitution for
                  any securities issued in connection with the securitization
                  which are then outstanding;

            n.    any third party consents or approvals that are required in
                  order to consummate the contemplated transaction shall have
                  been obtained and Lender shall be provided with satisfactory
                  evidence of same;

            o.    delivery to Lender of evidence of title insurance reasonably
                  satisfactory to Lender; and

            p.    reimbursement to Lender of any and all costs and expenses paid
                  or incurred by Lender in connection with the request to
                  substitute a Replacement Property, including, without
                  limitation, all in-house or outside counsel attorneys' fees,
                  title insurance fees, appraisal fees, inspection fees,
                  environmental consultants' fees and any fees or charges of the
                  applicable Rating Agencies.

                                    EXHIBIT A
                                       7
<PAGE>
                                                            Loan No. 31-0900553R

                          EXHIBIT B TO PROMISSORY NOTE
                   LOAN DOCUMENTS AND OTHER RELATED DOCUMENTS

This Exhibit B is attached to and forms a part of that Promissory Note Secured
by Mortgages ("Note") executed by MHC STAGECOACH, L.L.C., a Delaware limited
liability company ("Borrower") in favor of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Lender").

1.    LOAN DOCUMENTS. The documents numbered 1.1 through 1.13 below of even date
      herewith (unless otherwise specified) and any amendments, modifications
      and supplements thereto which have received the prior written approval of
      Lender and any documents executed in the future that are approved by
      Lender and that recite that they are "Loan Documents" for purposes of this
      Note are collectively referred to as the "Loan Documents".

      1.1   This Note;

      1.2   Casa del Sol III Deed of Trust, Apollo Village Deed of Trust,
            Woodland Hills Deed of Trust, Cabana Deed of Trust, Pickwick Village
            Mortgage, Indian Oaks Mortgage and Windmill Manor Mortgage

      1.3   State of Arizona Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.4   State of Colorado Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.5   State of Delaware Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.6   State of Florida Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.7   State of Illinois Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.8   State of Nevada Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.9   Limited Liability Company Borrowing Certificate;

      1.10  Corporate Resolution Authorizing Limited Liability Company Activity
            and Certificate of Incumbency;

      1.11  Corporate Resolution Authorizing Execution of Guaranty and
            Endorsement and Hypothecation of Property and Certificate of
            Incumbency;

      1.12  Assignment of Management Contracts and Consent and Subordination of
            Manager; and

      1.13  O&M Plan Letters executed for Casa del Sol III Property, Cabana
            Property, Apollo Village Property, Pickwick Village Property, Indian
            Oaks Property, and Woodland Hills Property, respectively.

2.    OTHER RELATED DOCUMENTS WHICH ARE NOT LOAN DOCUMENTS.

      2.1   Flood Hazard Notice with respect to Pickwick Property;

      2.2   Limited Guaranty; and

      2.3   Bankruptcy Non-Consolidation Opinion of Borrower's legal counsel.

                                    EXHIBIT B
                                        1
<PAGE>
Recording requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC #A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention: CMO Loan Admin.
Loan No.: 31-0900553R
Property Name: Windmill Manor

Prepared by:

Lee M. Smolen
Sidley Austin Brown & Wood
10 South Dearborn
Chicago, Illinois 60603

                  MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND
               LEASES AND SECURITY AGREEMENT (AND FIXTURE FILING)

                                                                   July 31, 2001

THIS MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(AND FIXTURE FILING) (the "Mortgage") is made and entered into by and among MHC
STAGECOACH, L.L.C., a Delaware limited liability company ("Mortgagor"), having
an address at c/o Manufactured Home Communities, Inc., Two North Riverside
Plaza, Suite 800, Chicago, Illinois 60606, and WELLS FARGO NATIONAL BANK,
NATIONAL ASSOCIATION ("Lender" or "Mortgagee").

THIS MORTGAGE EVIDENCES A MULTI-STATE LOAN WHICH IS SECURED BY REAL PROPERTY
LOCATED OUTSIDE THE STATE OF FLORIDA AND REAL PROPERTY LOCATED IN BREVARD,
VOLUSIA, AND MANATEE COUNTIES, FLORIDA. FLORIDA DOCUMENTARY STAMP TAX IN THE
AMOUNT OF $61,250.00 AND FLORIDA NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX
IN THE AMOUNT OF $35,000.00 ARE BEING PAID UPON RECORDATION OF ONE OF THE
FLORIDA MORTGAGES IN THE PUBLIC RECORDS OF VOLUSIA COUNTY, FLORIDA. ATTACHED
HERETO AS EXHIBIT B IS A DESCRIPTION OF THE CALCULATION OF LIABILITY FOR
DOCUMENTARY STAMP TAX AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX.

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                                 R E C I T A L S

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Mortgagee, and Mortgagee proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Mortgage, payable to
      the order of Mortgagee in the principal amount of the Loan. The maturity
      date of the Loan is September 1, 2011.

B.    The loan documents include this Mortgage, the Note and the other documents
      described in the Note as Loan Documents ("Loan Documents").

                              ARTICLE I. MORTGAGE

                  1.1 GRANT. For the purposes of and upon the terms and
conditions of this Mortgage, Mortgagor irrevocably mortgages, grants, bargains,
sells, conveys, transfers, pledges, sets over and assigns, and grants a security
interest to Mortgagee, its successors and assign, with right of entry and
possession, all of Mortgagor's right, title and interest, whether now owned or
hereafter acquired, in or to all of the following:

                  (a) That real property ("Land") located in Bradenton, county
of Manatee, state of Florida, and more particularly described on Exhibit A
attached hereto;

                  (b) All appurtenances, easements, rights of way, water and
water rights, pumps, pipes, flumes and ditches and ditch rights, water stock,
ditch and/or reservoir stock or interests, royalties, development rights and
credits, air rights, minerals, oil rights, all sewer capacity rights, and gas
rights, now or later used or useful in connection with, appurtenant to or
related to the Land;

                  (c) All buildings, structures, facilities, other improvements
and fixtures now or hereafter located on the Land;

                  (d) All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and substitutions
therefor used in the operation or occupancy of the Land, it being intended by
the parties that all such items shall be conclusively considered to be a part of
the Land, whether or not attached or affixed to the Land;

                  (e) All land lying in the right-of-way of any street, road,
avenue, alley or right-of-way opened, proposed or vacated, and all sidewalks,
strips and gores of land adjacent to or used in connection with the Land;

                  (f) All additions and accretions to the property described
above;

                  (g) All licenses, authorizations, certificates, variances,
consents, approvals and other permits now or hereafter pertaining to the Land
and all estate, right, title and interest of Mortgagor in, to, under or derived
from all tradenames or business names relating to the Land or the present or
future development, construction, operation or use of the Land; and

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            (h) All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.

                        ARTICLE II. OBLIGATIONS SECURED

            2.1 OBLIGATIONS SECURED. Mortgagor makes the foregoing grant and
assignment for the purpose of securing the following obligations ("Secured
Obligations"):

            (a) Full and punctual payment to Mortgagee of all sums at any time
owing under the Note;

            (b) Payment and performance of all covenants and obligations of
Mortgagor under this Mortgage, including, without limitation, indemnification
obligations and advances made to protect the Property;

            (c) Payment and performance of all additional covenants and
obligations of Borrower and Mortgagor under the Loan Documents;

            (d) Payment and performance of all covenants and obligations, if
any, which any rider attached as an exhibit to this Mortgage recites are secured
hereby;

            (e) Payment and performance of all future advances and other
obligations that the then record owner of all or part of the Property may agree
to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Mortgagee, when the obligation is evidenced by a writing which
recites that it is secured by this Mortgage;

            (f) All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges and loan fees;
and

            (g) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without limitation:
(i) modifications of the required principal payment dates or interest payment
dates or both, as the case may be, deferring or accelerating payment dates
wholly or partly; and (ii) modifications, extensions or renewals at a different
rate of interest whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

            2.2 FUTURE ADVANCES. This Mortgage is given to secure not only the
Secured Obligations, but also such future advances, whether such advances are
obligatory or are to be made at the option of Mortgagee or the holder hereof, or
otherwise as are made within twenty years from the date hereof, to the same
extent as if such future advances were made on the date of the execution of this
Mortgage. The total amount of Secured Obligations that may be so secured by this
Mortgage may be increased or decreased from time to time, but the total unpaid
balance so secured at any one time shall not exceed twice the face amount of the
Note, plus interest thereon, and any disbursements made under this Mortgage for
the payment of impositions, taxes, assessments, levies, insurance, or otherwise
with interest on such disbursements as provided for

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herein, plus any increases in the principal balance as the result of negative
amortization or deferred interest, if any. It is agreed that any additional sum
or sums advanced by Mortgagee pursuant to the terms hereof shall be equally
secured with and have the same priority as the original Secured Obligations and
shall be subject to all of the terms, provisions and conditions of this
Mortgage, whether or not such additional loans or advances are evidenced by
other promissory notes or other guaranties of Mortgagor and whether or not
identified by a recital that it or they are secured by this Mortgage. It is
further agreed that any additional promissory note or guaranty or promissory
notes or guaranties executed and delivered pursuant to this paragraph shall
automatically be deemed to be included in the term "Note" wherever it appears in
the context of this Mortgage. Without the prior written consent of Mortgagee,
which Mortgagee may grant or withhold in its sole discretion, Mortgagor shall
not file for record any notice limiting the maximum principal amount that may be
secured by this Mortgage to a sum less than the maximum principal amount set
forth in this paragraph.

            2.3 OBLIGATIONS. The term "obligations" is used herein in its
broadest and most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges and loan
fees at any time accruing or assessed on any of the Secured Obligations.

            2.4 MATURITY DATE. The maturity date of the Note is September 1,
2011.

            2.5 INCORPORATION. All terms and conditions of the documents which
evidence any of the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall
be deemed to have notice of the terms of the Secured Obligations and to have
notice that the rate of interest on one or more Secured Obligations may vary
from time to time.

              ARTICLE III. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

            3.1 ASSIGNMENT. Mortgagor irrevocably assigns to Mortgagee all of
Mortgagor's right, title and interest in, to and under: (a) all present and
future leases of the Property or any portion thereof, all licenses and
agreements relating to the management, leasing or operation of the Property or
any portion thereof, and all other agreements of any kind relating to the use or
occupancy of the Property or any portion thereof, whether such leases, licenses
and agreements are now existing or entered into after the date hereof
("Leases"); and (b) the rents, issues, deposits and profits of the Property,
including, without limitation, all amounts payable and all rights and benefits
accruing to Mortgagor under the Leases ("Payments"). The term "Leases" shall
also include all guarantees of and security for the tenants' performance
thereunder, and all amendments, extensions, renewals or modifications thereto
which are permitted hereunder. This is a present and absolute assignment, not an
assignment for security purposes only, and Mortgagee's right to the Leases and
Payments is not contingent upon, and may be exercised without possession of, the
Property.

            3.2 GRANT OF LICENSE. Notwithstanding the terms contained in Section
3.1, Mortgagee confers upon Mortgagor a revocable license ("License") to collect
and retain the Payments as they become due and payable, until the occurrence of
a Default (as hereinafter defined). Upon a Default, the License shall be
automatically revoked and Mortgagee may collect

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and apply the Payments pursuant to the terms hereof without notice and without
taking possession of the Property. Upon Mortgagor's cure of the Default,
Mortgagee shall re-confer upon Mortgagor a revocable license to collect and
retain the Payments as they become due and payable, until the occurrence of a
Default. All Payments thereafter collected by Mortgagor shall be held by
Mortgagor as trustee under a constructive trust for the benefit of Mortgagee.
Mortgagor hereby irrevocably authorizes and directs the tenants under the
Leases, upon notice of a Default from Mortgagee, to rely upon and comply with
any notice or demand by Mortgagee for the payment to Mortgagee of any rental or
other sums which may at any time become due under the Leases, or for the
performance of any of the tenants' undertakings under the Leases, and the
tenants shall have no right or duty to inquire as to whether any Default has
actually occurred or is then existing. Mortgagor hereby relieves the tenants
from any liability to Mortgagor by reason of relying upon and complying with any
such notice or demand by Mortgagee. Mortgagee may apply, in its sole discretion,
any Payments so collected by Mortgagee against any Secured Obligation or any
other obligation of Borrower, Mortgagor or any other person or entity, under any
document or instrument related to or executed in connection with the Loan
Documents, whether existing on the date hereof or hereafter arising. Collection
of any Payments by Mortgagee shall not cure or waive any Default or notice of
Default or invalidate any acts done pursuant to such notice.

            3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the tenants
under any of the Leases or by any other parties; for any dangerous or defective
condition of the Property; or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee, invitee or other person; or (d) responsible for or
impose upon Mortgagee any duty to produce rents or profits. Mortgagee shall not
directly or indirectly be liable to Mortgagor or any other person as a
consequence of: (e) the exercise of or failure to exercise any of the rights,
remedies or powers granted to Mortgagee hereunder; or (f) the failure or refusal
of Mortgagee to perform or discharge any obligation, duty or liability of
Mortgagor arising under the Leases.

            3.4 COVENANTS.

            (a) ALL LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense:

            (i) perform all obligations of the landlord under the Leases and use
reasonable efforts to enforce performance by the tenants of all obligations of
the tenants under the Leases;

            (ii) use reasonable efforts to keep the Property leased at all times
to tenants whom Mortgagor reasonably and in good faith believes are creditworthy
at rents not less than the fair market rental value (including, but not limited
to, free or discounted rents to the extent the market so requires);

            (iii) promptly upon Mortgagee's request, deliver to Mortgagee a copy
of each requested Lease and all amendments thereto and waivers thereof; and

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            (iv) promptly upon Mortgagee's request, execute and record any
additional assignments of landlord's interest under any Lease to Mortgagee and
specific subordinations of any Lease to this Mortgage, in form and substance
satisfactory to Mortgagee.

Unless consented to in writing by Mortgagee or otherwise permitted under any
other provision of the Loan Documents, Mortgagor shall not:

            (v) grant any tenant under any Lease any option, right of first
refusal or other right to purchase all or any portion of the Property under any
circumstances;

            (vi) grant any tenant under any Lease any right to prepay rent more
than 1 month in advance;

            (vii) except upon Mortgagee's request, execute any assignment of
landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
other than to collect rent 1 month in advance of the time when it becomes due.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

Mortgagor shall deposit with Mortgagee any sums received by Mortgagor in
consideration of any termination, modification or amendment of any Lease or any
release or discharge of any tenant under any Lease from any obligation
thereunder and any such sums received by Mortgagor shall be held in trust by
Mortgagor for such purpose. Notwithstanding the foregoing, so long as no Default
exists, the portion of any such sum received by Mortgagor with respect to any
Lease which is less than $50,000 shall be payable to Mortgagor. All such sums
received by Mortgagee with respect to any Lease shall be deemed "Impounds" (as
defined in Section 6.12) and shall be deposited by Mortgagee into a pledged
account in accordance with Section 6.12. If no Default exists, Mortgagee shall
release such Impounds to Mortgagor from time to time as necessary to pay or
reimburse Mortgagor for such tenant improvements, brokerage commissions and
other leasing costs as may be required to re-tenant the affected space;
provided, however, Mortgagee shall have received and approved each of the
following for each tenant for which such costs were incurred; (1) Mortgagor's
written request for such release, including the name of the tenant, the location
and net rentable area of the space and a description and cost breakdown of the
tenant improvements or other leasing costs covered by the request; (2)
Mortgagor's certification that any tenant improvements have been completed
lien-free and in a workmanlike manner; (3) a fully executed Lease, or extension
or renewal of the current Lease; (4) an estoppel certificate executed by the
tenant including its acknowledgement that all tenant improvements have been
satisfactorily completed; and (5) such other information with respect to such
costs as Mortgagee may require. Following the re-tenanting of all affected space
(including, without limitation, the completion of all tenant improvements), and
provided no Default exists, Mortgagee shall release any remaining such Impounds
relating to the affected space to Mortgagor. Mortgagor shall construct all
tenant improvements in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations.

            (b) MAJOR LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense, give Mortgagee prompt written notice of any material default by
landlord or tenant under any

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Major Lease (as defined below). Unless consented to in writing by Mortgagee or
otherwise permitted under any other provision of the Loan Documents, Mortgagor
shall not:

            (i) enter into any Major Lease which (aa) is not on fair market
terms (which terms may include free or discounted rent to the extent the market
so requires); (bb) does not contain a provision requiring the tenant to execute
and deliver to the landlord an estoppel certificate in form and substance
satisfactory to the landlord promptly upon the landlord's request; or (cc)
allows the tenant to assign or sublet the premises without the landlord's
consent;

            (ii) materially reduce any rent or other sums due from the tenant
under any Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv) release or discharge the tenant or any guarantor under any
Major Lease from any material obligation thereunder.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

"Major Lease", as used herein, shall mean any Lease, which is, at any time: (1)
a Lease of more than 20% of the total rentable area of the Property, as
reasonably determined by Mortgagee; or (2) a Lease which generates a gross base
monthly rent exceeding 20% of the total gross base monthly rent generated by all
Leases (excluding all Leases under which the tenant is then in default), as
reasonably determined by Mortgagee. Mortgagor's obligations with respect to
Major Leases shall be governed by the provisions of Section 3.4(a) as well as by
the provisions of this Section.

            (c) FAILURE TO DENY REQUEST Mortgagee's failure to deny any written
request by Mortgagor for Mortgagee's consent under the provisions of Sections
3.4(a) or 3.4(b) within 10 Business Days after Mortgagee's receipt of such
request (and all documents and information reasonably related thereto) shall be
deemed to constitute Mortgagee's consent to such request.

            3.5 RIGHT OF SUBORDINATION. Mortgagee may at any time and from time
to time by specific written instrument intended for the purpose unilaterally
subordinate the lien of this Mortgage to any Lease, without joinder or consent
of, or notice to, Mortgagor, any tenant or any other person. Notice is hereby
given to each tenant under a Lease of such right to subordinate. No
subordination referred to in this Section shall constitute a subordination to
any lien or other encumbrance, whenever arising, or improve the right of any
junior lienholder. Nothing herein shall be construed as subordinating this
Mortgage to any Lease.

               ARTICLE IV. SECURITY AGREEMENT AND FIXTURE FILING

            4.1 SECURITY INTEREST. Mortgagor grants and assigns to Mortgagee a
security interest to secure payment and performance of all of the Secured
Obligations, in all of Mortgagor's right, title and interest in and to the
following described personal property in which Mortgagor now or at any time
hereafter has any interest ("Collateral"):

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      All goods, building and other materials, supplies, work in process,
      equipment, machinery, fixtures, furniture, furnishings, signs and other
      personal property, wherever situated, which are or are to be incorporated
      into, used in connection with or appropriated for use on the Property; all
      rents, issues, deposits and profits of the Property (to the extent, if
      any, they are not subject to the Absolute Assignment of Rents and Leases);
      all inventory, accounts, cash receipts, deposit accounts, impounds,
      accounts receivable, contract rights, general intangibles, software,
      chattel paper, instruments, documents, promissory notes, drafts, letters
      of credit, letter of credit rights, supporting obligations, insurance
      policies, insurance and condemnation awards and proceeds, any other rights
      to the payment of money, trade names, trademarks and service marks arising
      from or related to the Property or any business now or hereafter conducted
      thereon by Mortgagor; all permits, consents, approvals, licenses,
      authorizations and other rights granted by, given by or obtained from, any
      governmental entity with respect to the Property; all deposits or other
      security now or hereafter made with or given to utility companies by
      Mortgagor with respect to the Property; all advance payments of insurance
      premiums made by Mortgagor with respect to the Property; all plans,
      drawings and specifications relating to the Property; all loan funds held
      by Mortgagee, whether or not disbursed; all funds deposited with Mortgagee
      pursuant to any Loan Document, all reserves, deferred payments, deposits,
      accounts, refunds, cost savings and payments of any kind related to the
      Property or any portion thereof, including, without limitation, all
      "Impounds" as defined herein; together with all replacements and proceeds
      of, and additions and accessions to, any of the foregoing, and all books,
      records and files relating to any of the foregoing.

            As to all of the above described personal property which is or which
hereafter becomes a "fixture" under the Florida Uniform Commercial Code (the
"UCC"), this Mortgage constitutes a fixture filing under Florida Statutes
Section 679.313 and 679.402, as amended and recodified from time to time, this
Mortgage shall constitute a fixture filing recorded in the real estate records.
Notwithstanding the foregoing, nothing herein shall be deemed to create any lien
or interest in favor of Mortgagee under this Mortgage in any such Collateral
which is not a fixture, and the purpose of this Article IV is to create a
fixture filing under Florida Statutes Section 679.313 and 679.402, as amended or
recodified from time to time.

            4.2 COVENANTS. Mortgagor agrees: (a) to execute and deliver such
documents as Mortgagee reasonably deems necessary to create, perfect and
continue the security interests contemplated hereby; (b) not to change its name,
and, as applicable, its chief executive offices, its principal residence or the
jurisdiction in which it is organized without giving Mortgagee at least 30 days'
prior written notice thereof; and (c) to cooperate with Mortgagee in perfecting
all security interests granted herein and in obtaining such agreements from
third parties as Mortgagee deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of Mortgagee's rights
hereunder.

            4.3 RIGHTS OF MORTGAGEE. In addition to Mortgagee's rights as a
"Secured Party" under the UCC, Mortgagee may, but shall not be obligated to, at
any time without notice and at the expense of Mortgagor: (a) give notice to any
person of Mortgagee's rights hereunder and enforce such rights at law or in
equity; (b) insure, protect, defend and

                                     Page 8
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preserve the Collateral or any rights or interests of Mortgagee therein; and (c)
inspect the Collateral during normal business hours upon reasonable prior
written notice, provided, however, that such notice shall not be required in the
event of an emergency. Notwithstanding the above, in no event shall Mortgagee be
deemed to have accepted any property other than cash in satisfaction of any
obligation of Mortgagor to Mortgagee unless Mortgagee shall make an express
written election of said remedy under the UCC or other applicable law.

            4.4 ADDITIONAL RIGHTS OF MORTGAGEE UPON DEFAULT. Upon the occurrence
of a Default, then in addition to all of Mortgagee's rights as a "Secured Party"
under the UCC or otherwise at law:

            (a) DISPOSITION OF COLLATERAL. Mortgagee may: (i) upon written
notice, require Mortgagor to assemble the Collateral and make it available to
Mortgagee at a place reasonably designated by Mortgagee; (ii) without prior
notice (to the extent permitted by law), enter upon the Property or other place
where the Collateral may be located and take possession of, collect, sell,
lease, license and otherwise dispose of the Collateral, and store the same at
locations acceptable to Mortgagee at Mortgagor's expense; or (iii) sell, assign
and deliver the Collateral at any place or in any lawful manner and bid and
become purchaser at any such sales; and

            (b) OTHER RIGHTS. Mortgagee may, for the account of Mortgagor and at
Mortgagor's expense: (i) operate, use, consume, sell, lease, license or
otherwise dispose of the Collateral as Mortgagee reasonably deems appropriate
for the purpose of performing any or all of the Secured Obligations; (ii) enter
into any agreement, compromise or settlement including insurance claims, which
Mortgagee may reasonably deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title for, and receive,
enforce and collect by legal action or otherwise, all indebtedness and
obligations now or hereafter owing to Mortgagor in connection with or on account
of the Collateral.

            Mortgagor acknowledges and agrees that a disposition of the
Collateral in accordance with Mortgagee's rights and remedies as heretofore
provided is a disposition thereof in a commercially reasonable manner and that 5
Business Days prior notice of such disposition is commercially reasonable
notice. Mortgagee shall have no obligation to process or prepare the Collateral
for sale or other disposition. In disposing of the Collateral, Mortgagee may
disclaim all warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any sale or other disposition of the Collateral may be applied by
Mortgagee first to the reasonable expenses incurred by Mortgagee in connection
therewith, including, without limitation, reasonable attorneys' fees and
disbursements, and then to the payment of the Secured Obligations, in such order
of application as Mortgagee may from time to time elect.

            4.5 POWER OF ATTORNEY. Mortgagor hereby irrevocably appoints
Mortgagee as Mortgagor's attorney-in-fact (such agency being coupled with an
interest), and as such attorney-in-fact, Mortgagee may, without the obligation
to do so, in Mortgagee's name or in the name of Mortgagor, prepare, execute,
file and record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve any of
Mortgagee's security interests and rights in or to the Collateral, and upon a
Default, take

                                     Page 9
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any other action required of Mortgagor; provided, however, that Mortgagee as
such attorney-in-fact shall be accountable only for such funds as are actually
received by Mortgagee.

                   ARTICLE V. REPRESENTATIONS AND WARRANTIES

            5.1 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and
warrants to Mortgagee that, to Mortgagor's current actual knowledge after
reasonable investigation and inquiry, the following statements are true and
correct as of the Effective Date:

            (a) LEGAL STATUS. Mortgagor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in which Mortgagor
and Borrower are organized. Mortgagor and Borrower are qualified or licensed to
do business in all jurisdictions in which such qualification or licensing is
required.

            (b) PERMITS. Mortgagor and Borrower possess all permits, franchises
and licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, necessary to enable Mortgagor and Borrower to conduct
the business(es) in which Mortgagor and Borrower are now engaged in compliance
with applicable law.

            (c) AUTHORIZATION AND VALIDITY. The execution and delivery of the
Loan Documents have been duly authorized and the Loan Documents constitute valid
and binding obligations of Mortgagor, Borrower or the party which executed the
same, enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights, or by the application of rules
of equity.

            (d) VIOLATIONS. The execution, delivery and performance by Mortgagor
and Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or result in any breach or default under any contract,
obligation, indenture or other instrument to which Mortgagor or Borrower is a
party or by which Mortgagor or Borrower is bound.

            (e) LITIGATION. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental authority, court or
administrative agency which may adversely affect the financial condition or
operations of Mortgagor or Borrower other than those previously disclosed in
writing by Mortgagor or Borrower to Mortgagee.

            (f) FINANCIAL STATEMENTS. The financial statements of Mortgagor and
Borrower, of each general partner (if Mortgagor or Borrower is a partnership),
of each member (if Mortgagor or Borrower is a limited liability company) and of
each guarantor, if any, previously delivered by Mortgagor or Borrower to
Mortgagee: (i) are materially complete and correct; (ii) present fairly the
financial condition of such party; and (iii) have been prepared in accordance
with the same accounting standard used by Mortgagor or Borrower to prepare the
financial statements delivered to and approved by Mortgagee in connection with
the making of the Loan, or other accounting standards approved by Mortgagee.
Since the date of such financial statements, there has been no material adverse
change in such financial condition, nor have any assets or properties reflected
on such financial statements been sold, transferred, assigned, mortgaged,

                                    Page 10
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pledged or encumbered except as previously disclosed in writing by Mortgagor or
Borrower to Mortgagee and approved in writing by Mortgagee.

            (g) REPORTS. All reports, documents, instruments and information
delivered to Mortgagee in connection with the Loan: (i) are correct in all
material respects and sufficiently complete to give Mortgagee accurate knowledge
of their subject matter; and (ii) do not contain any misrepresentation of a
material fact or omission of a material fact which omission makes the provided
information misleading.

            (h) INCOME TAXES. There are no material pending assessments or
adjustments of Mortgagor's or Borrower's income tax payable with respect to any
year.

            (i) SUBORDINATION. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would require the
subordination in right of payment of any of Borrower's obligations under the
Note to an obligation owed to another party.

            (J) TITLE. Mortgagor lawfully holds and possesses fee simple title
to the Property, without limitation on the right to encumber same. This Mortgage
is a first lien on the Property prior and superior to all other liens and
encumbrances on the Property except: (i) liens for real estate taxes and
assessments not yet due and payable; (ii) senior exceptions previously approved
by Mortgagee and shown in the title insurance policy insuring the lien of this
Mortgage; and (iii) other matters, if any, previously disclosed to Mortgagee by
Mortgagor in a writing specifically referring to this representation and
warranty.

            (k) MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to any such liens) affecting the
Property which are or may be prior to or equal to the lien of this Mortgage,
other than those (if any) previously approved by Mortgagee and shown in the
title insurance policy insuring the lien of this Mortgage.

            (l) ENCROACHMENTS. Except as shown in the survey, if any, previously
delivered to Mortgagee, none of the buildings or other improvements which were
included for the purpose of determining the appraised value of the Property lies
outside of the boundaries or building restriction lines of the Property and no
buildings or other improvements located on adjoining properties encroach upon
the Property.

            (m) LEASES. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. Except as disclosed on a
rent roll provided to Mortgagee prior to the date hereof, no material breach or
default by any party, or event which would constitute a material breach or
default by any party after notice or the passage of time, or both, exists under
any existing Lease. None of the landlord's interests under any of the Leases,
including, but not limited to, rents, additional rents, charges, issues or
profits, has been transferred or assigned. Except as disclosed on a rent roll
provided to Mortgagee prior to the date hereof, no rent or other payment under
any existing Lease has been paid by any tenant for more than 1 month in advance.

            (n) COLLATERAL. Mortgagor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if any, previously
disclosed to Mortgagee by Mortgagor in writing specifically referring to this
representation and warranty. Mortgagor's chief

                                    Page 11
<PAGE>
executive office (or principal residence, if applicable) is located at the
address shown on page one of this Mortgage. Mortgagor is an organization
organized solely under the laws of the State of Delaware. All organizational
documents of Mortgagor delivered to Mortgagee are complete and accurate in every
respect. Mortgagor's legal name is exactly as shown on page one of this
Mortgage.

            (o) CONDITION OF PROPERTY. Except as shown in the property condition
survey or other engineering reports, if any, previously delivered to or obtained
by Mortgagee, the Property is in good condition and repair and is free from any
damage that would materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.

            (p) HAZARDOUS MATERIALS. Except as shown in the environmental
assessment report(s), if any, previously delivered to or obtained by Mortgagee,
the Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of Hazardous Materials (as hereinafter
defined) in violation of Hazardous Materials Laws (as hereinafter defined)
except as otherwise previously disclosed in writing by Mortgagor to Mortgagee.

            (q) HAZARDOUS MATERIALS LAWS. The Property complies with all
Hazardous Materials Laws.

            (r) HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
Hazardous Materials Claims (as hereinafter defined).

            (s) WETLANDS. No part of the Property consists of or is classified
as wetlands, tidelands or swamp and overflow lands.

            (t) COMPLIANCE WITH LAWS. All federal, state and local laws, rules
and regulations applicable to the Property, including, without limitation, all
zoning and building requirements and all requirements of the Americans With
Disabilities Act of 1990, as amended from time to time (42 U. S. C. Section
12101 et seq.) have been satisfied or complied with. Mortgagor is in possession
of all certificates of occupancy and all other licenses, permits and other
authorizations required by applicable law for the existing use of the Property.
All such certificates of occupancy and other licenses, permits and
authorizations are valid and in full force and effect.

            (u) PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, and ground
rents, if any, which previously became due and owing in respect of the Property
have been paid.

            (v) CONDEMNATION. There is no proceeding pending or threatened for
the total or partial condemnation of the Property.

            (w) HOMESTEAD. There is no homestead or other exemption available to
Mortgagor which would materially interfere with the right to sell the Property
or the right to foreclose this Mortgage.

            (x) SOLVENCY. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or defraud any
present or future creditors

                                    Page 12
<PAGE>
of Mortgagor, and Mortgagor, on the Effective Date, will have received fair and
reasonably equivalent value in good faith for the grant of the liens or security
interests effected by the Loan Documents. On the Effective Date, Mortgagor will
be solvent and will not be rendered insolvent by the transactions contemplated
by the Loan Documents. Mortgagor is able to pay its debts as they become due.

            (y) SEPARATE TAX PARCEL(S). The Property is assessed for real estate
tax purposes as one or more wholly independent tax parcels, separate from any
other real property, and no other real property is assessed and taxed together
with the Property or any portion thereof.

            5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS
(LEVEL V SPE). Mortgagor hereby represents, warrants and covenants to Mortgagee
that with respect to both Mortgagor and MHC-QRS STAGECOACH, INC., a Delaware
corporation, the managing member of Mortgagor:

      (a) each such entity was organized solely for the purpose of (i) owning
the Properties (as defined in the Note); (ii) acting as a general partner of a
limited partnership which owns the Properties; or (iii) acting as a managing
member of a limited liability company which owns the Properties;

      (b) each such entity has not engaged and will not engage in any business
unrelated to (i) the ownership of the Properties; (ii) acting as general partner
of a limited partnership which owns the Properties; or (iii) acting as a
managing member of a limited liability company which owns the Properties;

      (c) each such entity has not had and will not have any assets other than
the Properties (and personal property incidental to the ownership and operation
of the Properties) or its partnership or membership interest in the limited
partnership or limited liability company which owns the Properties, as
applicable;

      (d) each such entity has not and will not engage in, seek or consent to
any dissolution, winding up, liquidation, consolidation, merger, asset sale,
transfer of partnership or membership interest, or amendment of its articles of
incorporation, articles of organization, certificate of formation, operating
agreement or limited partnership agreement, as applicable;

      (e) if any such entity is a limited partnership, all of its general
partners are corporations that satisfy the requirements set forth in this
Section 5.2;

      (f) if any such entity is a limited liability company, it has at least one
managing member that is a corporation that satisfies the requirements set forth
in this Section 5.2;

      (g) each such entity, without the unanimous consent of all of its general
partners, directors or members, as applicable, shall not file or consent to the
filing of any bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or any other entity in which it
has a direct or indirect legal or beneficial ownership interest;

      (h) each such entity has no indebtedness (and will have no indebtedness)
other than (i) the Loan (to the extent it is liable under the terms of the Loan
Documents); and (ii) unsecured

                                    Page 13
<PAGE>
trade debt not to exceed $1,000,000 in the aggregate with respect to Mortgagor
or $10,000 in the aggregate with respect to its managing member, which is not
evidenced by a note and is incurred in the ordinary course of its business in
connection with owning, operating and maintaining the Property (or its interest
in Mortgagor, as applicable) and is paid within thirty (30) days from the date
incurred;

      (i) each such entity has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;

      (j) each such entity has maintained and will maintain its accounts, books
and records separate from any other person or entity;

      (k) each such entity has maintained and will maintain its books, records,
resolutions and agreements as official records;

      (l) each such entity (i) has not commingled and will not commingle its
funds or assets with those of any other entity; and (ii) has held and will hold
its assets in its own name;

      (m) each such entity has conducted and will conduct its business in its
own name or in a registered trade name;

      (n) each such entity has maintained and will maintain its accounting
records and other entity documents separate from any other person or entity;

      (o) each such entity has prepared and will prepare separate tax returns
and financial statements, or if part of a consolidated group, is shown as a
separate member of such group;

      (p) each such entity has paid and will pay its own liabilities and
expenses out of its own funds and assets;

      (q) each such entity has held and will hold regular meetings, as
appropriate, to conduct its business and has observed and will observe all
corporate, partnership or limited liability company formalities and record
keeping, as applicable;

      (r) each such entity has not assumed or guaranteed and will not assume or
guarantee or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity;

      (s) each such entity has not acquired and will not acquire obligations or
securities of its partners, members or shareholders;

      (t) each such entity has allocated and will allocate fairly and reasonably
the costs associated with common employees and any overhead for shared office
space and each such entity has used and will use separate stationery, invoices
and checks under its own name or under its registered trade name;

      (u) each such entity has not pledged and will not pledge its assets for
the benefit of any other person or entity;

                                    Page 14
<PAGE>
      (v) each such entity has held out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its own
name or under its registered trade name and not as a division or part of any
other person or entity;

      (w) each such entity has not made and will not make loans to any person or
entity;

      (x) each such entity has not identified and will not identify its
partners, members or shareholders, or any affiliates of any of the foregoing, as
a division or part of it;

      (y) each such entity has not entered into and will not enter into or be a
party to, any transaction with its partners, members, shareholders, or any
affiliates of any of the foregoing, except in the ordinary course of its
business pursuant to written agreements and on terms which are intrinsically
fair and are no less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;

      (z) if any such entity is a corporation, the directors of such entity
shall consider the interests of the creditors of such entity in connection with
all corporate action;

      (aa) each such entity has paid and will pay the salaries of its own
employees and has maintained and will maintain a sufficient number of employees
in light of its contemplated business operations;

      (bb) each such entity has maintained and will maintain adequate capital in
light of its contemplated business operations;

      (cc) if any such entity is a limited partnership with more than one
general partner, its limited partnership agreement requires the remaining
partners to continue the partnership as long as one solvent general partner
exists;

      (dd) if any such entity is a limited liability company, its operating
agreement, if any such entity is a limited partnership, its limited partnership
agreement, and if any such entity is a corporation, to the full extent permitted
by applicable law, its articles of incorporation, contain the provisions set
forth in this Section 5.2 and any such entity shall conduct its business and
operations in strict compliance with the terms contained therein;

      (ee) each such entity will, as a condition to the closing of the Loan,
deliver to Mortgagee a nonconsolidation opinion in form and substance acceptable
to Mortgagee;

      (ff) if any such entity is a corporation, it has maintained and will
continue to maintain at least one Independent Director (as hereinafter defined);
and

      (gg) if any such entity is a corporation, it has not caused or allowed and
will not cause or allow the board of directors of such entity to take any action
requiring the unanimous affirmative vote of 100% of the members of the board of
directors unless an Independent Director shall have participated in such vote.

An "Independent Director" shall be an individual who, except in his or her
capacity as an Independent Director of the corporation is not, and has not been
during the five (5) years

                                    Page 15
<PAGE>
immediately before such individual's appointment as an Independent Director: (i)
a stockholder, director, partner, officer or employee of the corporation or its
Affiliates; (ii) affiliated with a customer or supplier of the corporation or
its Affiliates; or (iii) a spouse, parent, sibling, child or other family
relative of any person described by (i) or (ii) above.

As used herein, the term "Affiliate" shall mean any person or entity other than
the corporation (i) which owns beneficially, directly or indirectly, any
outstanding shares of the corporation's stock, or (ii) which controls, is
controlled by or is under common control with the corporation. The term
"control" 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 ownership of voting securities, by contract or otherwise.

            5.3 COMMERCIAL LOAN. Borrower warrants that the loan evidenced by
this Note is being made solely to acquire or carry on a business or commercial
enterprise, and/or Borrower is a business or commercial organization. Borrower
further warrants that all of the proceeds of the Note shall be used for
commercial purposes and stipulates that the loan evidenced by the Note shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family or household purposes.

ARTICLE VI. RIGHTS AND DUTIES OF THE PARTIES

            6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Mortgagor shall,
or shall cause the property manager to: (a) keep the Property in good condition
and repair; (b) complete or restore promptly and in workmanlike manner the
Property or any part thereof which may be damaged or destroyed (unless, if and
to the extent permitted under Section 6.11, Mortgagee elects to require that
insurance proceeds be used to reduce the Secured Obligations and after such
repayment the ratio of Secured Obligations to the value of the Property, as
reasonably determined by Mortgagee is the same as or lower than it was
immediately before the loss or taking occurred); (c) comply and cause the
Property to comply with (i) all laws, ordinances, regulations and standards,
(ii) all covenants, conditions, restrictions and equitable servitudes, whether
public or private, of every kind and character and (iii) all requirements of
insurance companies and any bureau or agency which establishes standards of
insurability, which laws, covenants or requirements affect the Property and
pertain to acts committed or conditions existing thereon, including, without
limitation, any work of alteration, improvement or demolition as such laws,
covenants or requirements mandate; (d) operate and manage the Property at all
times in a professional manner and do all other acts which from the character or
use of the Property may be reasonably necessary to maintain and preserve its
value; (e) promptly after execution, deliver to Mortgagee a copy of any
management agreement concerning the Property and all amendments thereto and
waivers thereof; and (f) execute and acknowledge all further documents,
instruments and other papers as Mortgagee reasonably deems necessary or
appropriate to preserve, continue, perfect and enjoy the benefits of this
Mortgage and perform Mortgagor's obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no offset.
Mortgagor shall not, without Mortgagee's prior written consent: (g) remove or
demolish all or any material part of the Property; (h) alter either (i) the
exterior of the Property in a manner which materially and adversely affects the
value of the Property or (ii) the roof or other structural elements of the

                                    Page 16
<PAGE>
Property in a manner which requires a building permit except for tenant
improvements required under the Leases; (i) initiate or acquiesce in any change
in any zoning or other land classification which affects the Property; (j)
materially alter the type of occupancy or use of all or any part of the
Property; or (k) commit or permit physical waste of the Property.

            6.2 HAZARDOUS MATERIALS. Without limiting any other provision of
this Mortgage, Mortgagor agrees as follows:

            (a) PROHIBITED ACTIVITIES. Mortgagor shall not cause or permit the
Property to be used as a site for the use, generation, manufacture, storage,
treatment, release, discharge, disposal, transportation or presence of any oil
or other petroleum products, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are "hazardous substances," "hazardous wastes," "hazardous materials" or
"toxic substances" under the Hazardous Materials Laws (defined below) and/or
other applicable environmental laws, ordinances or regulations ("Hazardous
Materials").

            The foregoing to the contrary notwithstanding, (i) Mortgagor may
store, maintain and use on the Property janitorial and maintenance supplies,
paint and other Hazardous Materials of a type and in a quantity readily
available for purchase by the general public and normally stored, maintained and
used by owners and managers of properties of a type similar to the Property; and
(ii) tenants of the Property may store, maintain and use on the Property (and,
if any tenant is a retail business, hold in inventory and sell in the ordinary
course of such tenant's business) household and consumer cleaning supplies and
other Hazardous Materials of a type and quantity readily available for purchase
by the general public and normally stored, maintained and used (and, if tenant
is a retail business, sold) by tenants of properties similar to the Property or
in similar lines of business on properties similar to the Property.

            (b) HAZARDOUS MATERIALS LAWS. Mortgagor shall comply and cause the
Property to comply with all federal, state and local laws, ordinances and
regulations relating to Hazardous Materials ("Hazardous Materials Laws"),
including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of
other jurisdictions or orders and regulations.

            (c) NOTICES. Mortgagor shall immediately notify Mortgagee in writing
of: (i) the discovery of any Hazardous Materials on, under or about the Property
(other than Hazardous Materials permitted under Section 6.2(a)); (ii) any
knowledge by Mortgagor that the Property does not comply with any Hazardous
Materials Laws; (iii) any claims or actions ("Hazardous Materials

                                    Page 17
<PAGE>
Claims") pending or threatened in writing against Mortgagor or the Property by
any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to the Hazardous Materials Laws; and (iv) the
discovery 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 become contaminated by or with Hazardous Materials.

            (d) REMEDIAL ACTION. In response to knowledge of or notification to
Mortgagor of the presence of any Hazardous Materials on, under or about the
Property, Mortgagor shall immediately take, at Mortgagor's sole expense, all
remedial action required of Mortgagor by any Hazardous Materials Laws or any
judgment, consent decree, settlement or compromise in respect to any Hazardous
Materials Claims.

            (e) INSPECTION BY MORTGAGEE. Upon reasonable prior notice to
Mortgagor (except in the event of an emergency) and during normal business
hours, Mortgagee, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Property for the purpose of determining the
existence, location, nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto, beneath or from the
Property.

            (f) LEGAL EFFECT OF SECTION. Mortgagor and Mortgagee agree that: (i)
this Hazardous Materials Section is intended as Mortgagee's written request for
information (and Mortgagor's response) concerning the environmental condition of
the real property security as required by California Code of Civil Procedure
Section 726.5, or any other applicable law; and (ii) each representation and
warranty and covenant in this Section (together with any indemnity applicable to
a breach of any such representation and warranty) with respect to the
environmental condition of the Property is intended by Mortgagee and Mortgagor
to be an "environmental provision" for purposes of California Code of Civil
Procedure Section 736, or any other applicable law.

            6.3 COMPLIANCE WITH LAWS. Mortgagor shall comply with all federal,
state and local laws, rules and regulations applicable to the Property,
including, without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C. Section
12101 et seq.), as amended from time to time. Mortgagor shall possess and
maintain or cause Borrower to possess and maintain in full force and effect at
all times (a) all certificates of occupancy and other licenses, permits and
authorizations required by applicable law for the existing use of the Property
and (b) all permits, franchises and licenses and all rights to all trademarks,
trade names, patents and fictitious names, if any, required by applicable law
for Mortgagor and Borrower to conduct the business(es) in which Mortgagor and
Borrower are now engaged.

            6.4 LITIGATION. Mortgagor shall promptly notify Mortgagee in writing
of any litigation pending or threatened in writing against Mortgagor or Borrower
claiming damages in excess of $100,000 and of all pending or threatened (in
writing) litigation against Mortgagor or Borrower if the aggregate damage claims
against Mortgagor or Borrower exceed $500,000.

            6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Mortgagor shall not:
(a) merge or consolidate with any other entity or permit Borrower to merge or

                                    Page 18
<PAGE>
consolidate with any other entity; (b) make any substantial change in the nature
of Mortgagor's business or structure or permit Borrower to make any substantial
change in the nature of Borrower's business or structure; (c) acquire all or
substantially all of the assets of any other entity or permit Borrower to
acquire all or substantially all of the assets of any other entity; or (d) sell,
lease, assign, transfer or otherwise dispose of a material part of Mortgagor's
assets except in the ordinary course of Mortgagor's business or permit Borrower
to sell, lease, assign, transfer or otherwise dispose of a material part of
Borrower's assets except in the ordinary course of Borrower's business.

            6.6 ACCOUNTING RECORDS. Mortgagor shall maintain and cause Borrower
to maintain adequate books and records in accordance with the same accounting
standard used by Mortgagor or Borrower to prepare the financial statements
delivered to and approved by Mortgagee in connection with the making of the Loan
or other accounting standards approved by Mortgagee. Mortgagor shall permit and
shall cause Borrower to permit any representative of Mortgagee, at any
reasonable time and from time to time, upon reasonable prior notice to
Mortgagor, to inspect, audit and examine such books and records and make copies
of same.

            6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor shall pay to
Mortgagee the full amount of all costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses of Mortgagee's in-house or
outside counsel, incurred by Mortgagee in connection with: (a) appraisals and
inspections of the Property or Collateral required by Mortgagee as a result of
(i) a Transfer or proposed Transfer (as defined below), or (ii) a Default; (b)
appraisals and inspections of the Property or Collateral required by applicable
law, including, without limitation, federal or state regulatory reporting
requirements; and (c) any acts performed by Mortgagee at Mortgagor's request or
wholly or partially for the benefit of Mortgagor (including, without limitation,
the preparation or review of amendments, assumptions, waivers, releases,
reconveyances, estoppel certificates or statements of amounts owing under any
Secured Obligation). In connection with appraisals and inspections, Mortgagor
specifically (but not by way of limitation) acknowledges that: (aa) a formal
written appraisal of the Property by a state certified or licensed appraiser may
be required by federal regulatory reporting requirements on an annual or more
frequent basis; and (bb) Mortgagee may require inspection of the Property by an
independent supervising architect, a cost engineering specialist, or both.
Mortgagor shall pay all indebtedness arising under this Section immediately upon
demand by Mortgagee together with interest thereon following notice of such
indebtedness at the rate of interest then applicable to the principal balance of
the Note as specified therein.

            6.8 LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section
8.4, Mortgagor shall immediately discharge by bonding or otherwise any lien,
charge or other encumbrance which attaches to the Property in violation of
Section 6.15. Subject to Mortgagor's right to contest such matters under this
Mortgage or as expressly permitted in the Loan Documents, Mortgagor shall pay
when due all obligations secured by or reducible to liens and encumbrances which
shall now or hereafter encumber or appear to encumber all or any part of the
Property or any interest therein, whether senior or subordinate hereto,
including, without limitation, all claims for work or labor performed, or
materials or supplies furnished, in connection with any work of demolition,
alteration, repair, improvement or construction of or upon the Property, except
such as Mortgagor may in good faith contest or as to which a bona fide dispute
may arise (provided provision is made to the satisfaction of Mortgagee for
eventual payment thereof in the

                                    Page 19
<PAGE>
event that Mortgagor is obligated to make such payment and that any recorded
claim of lien, charge or other encumbrance against the Property is immediately
discharged by bonding or otherwise).

            6.9 TAXES AND OTHER LIABILITIES. Mortgagor shall pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and local
property taxes and assessments. Mortgagor shall promptly provide to Mortgagee
copies of all tax and assessment notices pertaining to the Property. Mortgagor
hereby authorizes Mortgagee to obtain, at Mortgagor's expense, a tax service
contract which shall provide tax information on the Property to Mortgagee for
the term of the Loan and any extensions or renewals of the Loan.

            6.10 INSURANCE COVERAGE. Mortgagor shall insure the Property against
loss or damage by fire and such other hazards as Mortgagee shall from time to
time require; provided, however, (a) Mortgagee, at Mortgagee's election, may
only require flood insurance if all or any portion of the improvements located
on the Property is or becomes located in a special flood hazard area, and (b)
Mortgagee, at Mortgagee's election, may only require earthquake insurance if all
or any portion of the Property is or becomes located in an earthquake fault
zone. Mortgagor shall also carry public liability insurance and such other
insurance as Mortgagee may reasonably require, including, without limitation,
business interruption insurance or loss of rents insurance. Such policies shall
contain a standard mortgage clause naming Mortgagee and its successors in
interest as a loss payee and requiring at least 30 days prior notice to the
holder at termination or cancellation. Mortgagor shall maintain all required
insurance throughout the term of the Loan and while any liabilities of Borrower
or Mortgagor to Mortgagee under any of the Loan Documents remain outstanding at
Mortgagor's expense, with companies, and in substance and form satisfactory to
Mortgagee. Mortgagee, by reason of accepting, rejecting, approving or obtaining
insurance shall not incur any liability for: (c) the existence, nonexistence,
form or legal sufficiency of any insurance; (d) the solvency of any insurer; or
(e) the payment of claims.

            6.11 INSURANCE AND CONDEMNATION PROCEEDS.

            (a) ASSIGNMENT OF CLAIMS. Mortgagor absolutely and irrevocably
assigns to Mortgagee all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid to Mortgagee: (i) all
awards of damages and all other compensation payable directly or indirectly by
reason of a condemnation or proposed condemnation for public or private use
affecting all or any part of, or any interest in, the Property; (ii) all other
claims and awards for damages to or decrease in value of all or any part of, or
any interest in, the Property; (iii) all proceeds of any insurance policies
payable by reason of loss sustained to all or any part of the Property; and (iv)
all interest which may accrue on any of the foregoing. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty affecting, or
the institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof. So long as no Default has occurred and
is continuing at the time, Mortgagor shall have the right to adjust, compromise
and settle any Claim of $100,000 or less without the consent of Mortgagee,
provided, however, all awards, proceeds and other sums described herein shall
continue to be payable to Mortgagee. Mortgagee may commence, appear in, defend
or prosecute any Claim exceeding $100,000, and may adjust, compromise and settle
all Claims (except for Claims which Mortgagor may settle as provided herein),
but shall not be responsible

                                    Page 20
<PAGE>
for any failure to commence, appear in, defend, prosecute or collect any such
Claim regardless of the cause of the failure. All awards, proceeds and other
sums described herein shall be payable to Mortgagee.

            (b) APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
occurred and is continuing at the time of Mortgagee's receipt of the proceeds of
the Claims ("Proceeds") and no Default occurs thereafter, Mortgagee shall apply
the Proceeds in the following order of priority: First, to Mortgagee's expenses
in settling, prosecuting or defending the Claims; Second, to the repair or
restoration of the Property; and Third, to Mortgagor if the repair or
restoration of the Property has been completed, but to the Secured Obligations
in any order without suspending, extending or reducing any obligation of
Mortgagor to make installment payments if the repair or restoration of the
Property has not been completed. Notwithstanding the foregoing, Mortgagee shall
have no obligation to make any Proceeds available for the repair or restoration
of the Property unless and until all the following conditions have been
satisfied: (i) delivery to Mortgagee of the Proceeds plus any additional amount
which is needed to pay all costs of the repair or restoration (including,
without limitation, taxes, financing charges, insurance and rent during the
repair period); (ii) establishment of an arrangement for lien releases and
disbursement of funds acceptable to Mortgagee; (iii) delivery to Mortgagee in
form and content acceptable to Mortgagee of all of the following: (aa) plans and
specifications for the work; (bb) a contract for the work, signed by a
contractor acceptable to Mortgagee; (cc) a cost breakdown for the work; (dd) if
reasonably required by Mortgagee, a payment and performance bond for the work;
(ee) evidence of the continuation of substantially all Leases unless consented
to in writing by Mortgagee; (ff) evidence that, upon completion of the work, the
size, capacity, value, and income coverage ratios for the Property will be at
least as great as those which existed immediately before the damage or
condemnation occurred; and (gg) evidence of the satisfaction of any additional
conditions that Mortgagee may reasonably establish to protect Mortgagee's
security. Mortgagor acknowledges that the specific conditions described above
are reasonable.

            (c) APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and
is continuing at the time of Mortgagee's receipt of the Proceeds or if a Default
occurs at any time thereafter, Mortgagee may, at Mortgagee's absolute discretion
and regardless of any impairment of security or lack of impairment of security,
but subject to applicable law governing use of the Proceeds, if any, apply all
or any of the Proceeds to Mortgagee's expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured Obligations in
any order without suspending, extending or reducing any obligation of Mortgagor
to make installment payments, and may release all or any part of the Proceeds to
Mortgagor upon any conditions Mortgagee chooses.

            6.12 IMPOUNDS.

            (a) POST-DEFAULT IMPOUNDS. If required by Mortgagee at any time
after a Default occurs (and regardless of whether such Default is thereafter
cured), Mortgagor shall deposit with Mortgagee such amounts ("Post-Default
Impounds") on such dates (determined by Mortgagee as provided below) as will be
sufficient to pay any or all "Costs" (as defined below) specified by Mortgagee.
Mortgagee in its reasonable discretion shall estimate the amount of such Costs
that will be payable or required during any period selected by Mortgagee not
exceeding 1 year and shall determine the fractional portion thereof that
Mortgagor shall deposit with Mortgagee

                                    Page 21
<PAGE>
on each date specified by Mortgagee during such period. If the Post-Default
Impounds paid by Mortgagor are not sufficient to pay the related Costs,
Mortgagor shall deposit with Mortgagee upon demand an amount equal to the
deficiency. All Post-Default Impounds shall be payable by Mortgagor in addition
to (but without duplication of) any other Impounds (as defined below).

            (b) ALL IMPOUNDS. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively called "Impounds".
All Impounds shall be deposited into one or more segregated or commingled
accounts maintained by Mortgagee or its servicing agent. Except as otherwise
provided in the Note, such account(s) shall not bear interest. Mortgagee shall
not be a trustee, special depository or other fiduciary for Mortgagor with
respect to such account, and the existence of such account shall not limit
Mortgagee's rights under this Mortgage, any other agreement or any provision of
law. If no Default exists, Mortgagee shall apply all Impounds to the payment of
the related Costs, or in Mortgagee's sole discretion may release any or all
Impounds to Mortgagor for application to and payment of such Costs. If a Default
exists, Mortgagee may apply any or all Impounds to any Secured Obligation and/or
to cure such Default, whereupon Mortgagor shall restore all Impounds so applied
and cure all Defaults not cured by such application. The obligations of
Mortgagor hereunder shall not be diminished by deposits of Impounds made by
Mortgagor, except to the extent that such obligations have actually been met by
application of such Impounds. Upon any assignment of this Mortgage, Mortgagee
may assign all Impounds in its possession to Mortgagee's assignee, whereupon
Mortgagee shall be released from all liability with respect to such Impounds.
Within 60 days following full repayment of the Secured Obligations (other than
as a consequence of foreclosure or conveyance in lieu of foreclosure) or at such
earlier time as Mortgagee may elect, Mortgagee shall pay to Mortgagor all
Impounds in its possession, and no other party shall have any right or claim
thereto. "Costs" means (i) all taxes and other liabilities payable by Mortgagor
under Section 6.9, (ii) all insurance premiums payable by Mortgagor under
Section 6.10, (iii) all other costs and expenses for which Impounds are required
under the Note, and/or (iv) all other amounts that will be required to preserve
the value of the Property. Mortgagor shall deliver to Mortgagee, promptly upon
receipt, all bills for Costs for which Mortgagee has required Post-Default
Impounds.

            6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Mortgagor
shall protect, preserve and defend the Property and title to and right of
possession of the Property, the security of this Mortgage and the rights and
powers of Mortgagee hereunder at Mortgagor's sole expense against all adverse
claims, whether the claim: (a) is against a possessory or non-possessory
interest; (b) arose prior or subsequent to the Effective Date; or (c) is senior
or junior to Mortgagor's or Mortgagee's rights. Mortgagor shall give Mortgagee
prompt notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to the Property and of any
condemnation offer or action.

            6.14 RIGHT OF INSPECTION. Mortgagee and its independent contractors,
agents and employees may enter the Property from time to time at any reasonable
time upon reasonable prior notice to Mortgagor (except that such notice shall
not be required in the event of an emergency) for the purpose of inspecting the
Property and ascertaining Mortgagor's compliance with the terms of this
Mortgage. Mortgagee shall use reasonable efforts to assure that Mortgagee's
entry upon and inspection of the Property shall not materially and unreasonably
interfere with the business or operations of Mortgagor or Mortgagor's tenants on
the Property.

                                    Page 22
<PAGE>
            6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN MORTGAGOR.
Mortgagor acknowledges that Mortgagee has relied upon the principals of
Mortgagor and Borrower and their experience in owning and operating properties
similar to the Property in connection with the closing of the Loan. Accordingly,
except with the prior written consent of Mortgagee or as otherwise expressly
permitted in the Note, Mortgagor shall not cause or permit any sale, exchange,
mortgage, pledge, hypothecation, assignment, encumbrance or other transfer,
conveyance or disposition, whether voluntarily, involuntarily or by operation of
law ("Transfer") of all or any part of, or all or any direct or indirect
interest in, the Property or the Collateral (except for equipment and inventory
in the ordinary course of its business), or cause or permit a Transfer of any
direct or indirect interest (whether general partnership interest, stock,
non-managing member limited liability company interest, trust, or otherwise) in
Mortgagor or Borrower. In the event of any Transfer that is not expressly
permitted in the Note and is without the prior written consent of Mortgagee,
Mortgagee shall have the absolute right at its option, without prior demand or
notice, to declare all of the Secured Obligations immediately due and payable,
except to the extent prohibited by law, and pursue its rights and remedies under
Section 7.3 herein. Mortgagor agrees to pay any prepayment fee as set forth in
the Note in the event the Secured Obligations are accelerated pursuant to the
terms of this Section. Consent to one such Transfer shall not be deemed to be a
waiver of the right to require the consent to future or successive Transfers.
Except for Transfers expressly permitted under the Note, Mortgagee's consent to
any Transfer may be withheld, conditioned or delayed in Mortgagee's sole and
absolute discretion.

            6.16 INTENTIONALLY OMITTED.

            6.17 INTENTIONALLY OMITTED.

            6.18 EXCULPATION. Mortgagee shall not directly or indirectly be
liable to Mortgagor or any other person as a consequence of: (a) the exercise of
the rights, remedies or powers granted to Mortgagee in this Mortgage; (b) the
failure or refusal of Mortgagee to perform or discharge any obligation or
liability of Mortgagor under any agreement related to the Property or under this
Mortgage; or (c) any loss sustained by Mortgagor or any third party resulting
from Mortgagee's failure to lease the Property after a Default or from any other
act or omission of Mortgagee in managing the Property after a Default unless the
loss is caused by the willful misconduct and bad faith of Mortgagee and no such
liability shall be asserted or enforced against Mortgagee, all such liability
being expressly waived and released by Mortgagor.

            6.19 INDEMNITY. Without in any way limiting any other indemnity
contained in this Mortgage, Mortgagor agrees to defend, indemnify and hold
harmless the Mortgagee Group (as hereinafter defined) from and against any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of: (a) the making of the Loan, except for violations of banking laws or
regulations by the Mortgagee Group; (b) this Mortgage; (c) the execution of this
Mortgage or the performance of any act required or permitted hereunder or by
law; (d) any failure of Mortgagor to perform Mortgagor's obligations under this
Mortgage or the other Loan Documents; (e) any alleged obligation or undertaking
on the Mortgagee Group's part to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations
contained in any other document related to the Property; (f) any act or omission
by Mortgagor or any contractor, agent, employee or representative of Mortgagor
with respect to the Property; or (g) any claim, loss, damage, cost, expense or
liability directly or indirectly arising out of: (i) the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of any Hazardous Materials which are found
in, on, under or about the Property (including, without limitation, underground
contamination); or (ii) the breach of any covenant, representation or warranty
of Mortgagor under Section 6.2 above. The foregoing to the contrary
notwithstanding, this indemnity shall not include any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of the gross negligence
or willful misconduct of any member of the Mortgagee Group, or any claim, loss,
damage, cost, expense or liability incurred by the Mortgagee Group arising from
any act or incident on the Property occurring after the full reconveyance and
release of the lien of this Mortgage on the Property, or with respect to the
matters set forth in clause (g) above, any claim, loss,

                                    Page 23
<PAGE>
damage, cost, expense or liability incurred by the Mortgagee Group resulting
from the introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure sale
under this Mortgage, either pursuant to judicial decree or the power of sale, or
by deed in lieu of such foreclosure. This indemnity shall include, without
limitation: (aa) all consequential damages (including, without limitation, any
third party tort claims or governmental claims, fines or penalties against the
Mortgagee Group); (bb) all court costs and reasonable attorneys' fees
(including, without limitation, expert witness fees) paid or incurred by the
Mortgagee Group; and (cc) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Property which is
required by any governmental entity or is otherwise necessary to render the
Property in compliance with all laws and regulations pertaining to Hazardous
Materials. "Mortgagee Group", as used herein, shall mean (1) Mortgagee
(including, without limitation, any participant in the Loan), (2) any entity
controlling, controlled by or under common control with Mortgagee, (3) the
directors, officers, employees and agents of Mortgagee and such other entities,
and (4) the successors, heirs and assigns of the entities and persons described
in foregoing clauses (1) through (3). Mortgagor shall pay immediately upon
Mortgagee's demand any amounts owing under this indemnity together with interest
from the date the indebtedness arises until paid at the rate of interest
applicable to the principal balance of the Note as specified therein. Mortgagor
agrees to use legal counsel reasonably acceptable to the Mortgagee Group in any
action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
SECTION SHALL SURVIVE THE SATISFACTION AND RELEASE OF THIS MORTGAGE, BUT
MORTGAGOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF
THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            6.20 INTENTIONALLY OMITTED.

            6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
Without notice to or the consent, approval or agreement of any persons or
entities having any interest at any time in the Property or in any manner
obligated under the Secured Obligations ("Interested Parties"), Mortgagee may,
from time to time: (a) fully or partially release any person or entity from
liability for the payment or performance of any Secured Obligation; (b) extend
the maturity of any Secured Obligation; (c) make any agreement with Borrower
increasing the amount or otherwise altering the terms of any Secured Obligation;
(d) accept additional security for any Secured Obligation; or (e) release all or
any portion of the Property, Collateral and other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the personal
liability of any of said Interested Parties, or release or impair the priority
of the lien of this Mortgage upon the Property.

                                    Page 24
<PAGE>
            6.22 SALE OR PARTICIPATION OF LOAN. Mortgagor agrees that Mortgagee
may at any time sell, assign, participate or securitize all or any portion of
Mortgagee's rights and obligations under the Loan Documents, and that any such
sale, assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, and/or into the
public securities market, in Mortgagee's sole discretion. Mortgagor further
agrees that Mortgagee may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and financial and
other information heretofore or hereafter provided to or known to Mortgagee with
respect to: (a) the Property and its operation; and/or (b) any party connected
with the Loan (including, without limitation, Mortgagor, any partner or member
of Mortgagor, any constituent partner or member of Mortgagor, any guarantor and
any nonborrower mortgagor). In the event of any such sale, assignment,
participation or securitization, Mortgagee and the other parties to the same
shall share in the rights and obligations of Mortgagee set forth in the Loan
Documents as and to the extent they shall agree among themselves. In connection
with any such sale, assignment, participation or securitization, Mortgagor
further agrees that the Loan Documents shall be sufficient evidence of the
obligations of Mortgagor to each purchaser, assignee or participant, and
Mortgagor shall, within 15 days after request by Mortgagee, (x) deliver an
estoppel certificate verifying for the benefit of Mortgagee and any other party
designated by Mortgagee the status and the terms and provisions of the Loan in
form and substance acceptable to Mortgagee, (y) provide any information, legal
opinions or documents regarding Mortgagor, Guarantor (as defined in the Loan
Documents), the Property and any tenants of the Property as Mortgagee or
Mortgagee's rating agencies may reasonably request, and (z) enter into such
amendments or modifications to the Loan Documents or the organizational
documents of Mortgagor as may be reasonably required in order to facilitate any
such sale, assignment, participation or securitization without impairing
Mortgagor's rights or increasing Mortgagor's obligations. The indemnity
obligations of Mortgagor under the Loan Documents shall also apply with respect
to any purchaser, assignee or participant.

            6.23 RELEASE. Upon payment in full of the Secured Obligations, and
satisfaction of all of the covenants, warranties, undertakings and agreements
made in this Mortgage and in the other Loan Documents (including, without
limitation, repayment in full of all principal, interest and other amounts owing
under the Note) are kept and performed, and all obligations, if any, of
Mortgagee for further advances have been terminated, then, and in that event
only, Mortgagee shall release, without warranty, the Property or that portion
thereof then held hereunder. The recitals of any matters or facts in any release
executed hereunder shall be conclusive proof of the truthfulness thereof. To the
extent permitted by law, the release may describe the grantee as "the person or
persons legally entitled thereto". Mortgagee shall have no duty to determine the
rights of persons claiming to be rightful grantees of any release. When the
Property has been fully released, the last such release shall operate as a
reassignment of all future rents, issues and profits of the Property to the
person or persons legally entitled thereto.

            6.24 SUBROGATION. Mortgagee shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole or in part by
Mortgagee pursuant to this Mortgage or by the proceeds of any loan secured by
this Mortgage.

            6.25 MANAGEMENT AGREEMENTS. Without the prior written consent of
Mortgagee, Mortgagor shall not terminate, modify, amend or enter into any
agreement providing for the management, leasing or operation of the Property.
Mortgagor represents,

                                    Page 25
<PAGE>
warrants and covenants that any existing management agreement includes, and any
future management agreement entered into by Mortgagor shall include, a provision
which provides that the management agreement is automatically terminated upon
the transfer of the Property by Mortgagor, either by sale, foreclosure, deed in
lieu of foreclosure, or otherwise, to Mortgagee or any other purchaser of the
Property. Upon a Default under the Loan Documents or a default under any
management agreement then in effect, which default is not cured within any
applicable grace or cure period, Mortgagee shall have the right to terminate, or
to direct Mortgagor to terminate, such management agreement upon thirty (30)
days' written notice and to retain, or to direct Mortgagor to retain, a new
management agent approved by Mortgagee.

                              ARTICLE VII. DEFAULT

            7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as defined
below).

            (a) OPTIONAL DEFAULT. An "Optional Default" shall occur, at
Mortgagee's option, upon the occurrence of any of the following events:

            (i) MONETARY. Borrower or Mortgagor shall fail to (aa) pay when due
any sums payable under the Loan Documents which by their express terms require
immediate payment without any grace period or sums which are payable on the
Maturity Date, or (bb) pay within 5 days when due any other sums payable under
the Note, this Mortgage or any of the other Loan Documents, including, without
limitation, any monthly payment due under the Note.

            (ii) FAILURE TO PERFORM. Borrower or Mortgagor shall fail to
observe, perform or discharge any of Borrower's or Mortgagor's obligations,
covenants, conditions or agreements, other than Borrower's or Mortgagor's
payment obligations, under the Note, this Mortgage or any of the other Loan
Documents, and (aa) such failure shall remain uncured for 30 days after written
notice thereof shall have been given to Borrower or Mortgagor, as the case may
be, by Mortgagee or (bb) if such failure is of such a nature that it cannot be
cured within such 30 day period, Borrower or Mortgagor shall fail to commence to
cure such failure within such 30 day period or shall fail to diligently
prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certificate or other statement (financial or otherwise) made or furnished by or
on behalf of Borrower, Mortgagor, or a guarantor, if any, to Mortgagee or in
connection with any of the Loan Documents, or as an inducement to Mortgagee to
make the Loan, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished.

            (iv) CONDEMNATION; ATTACHMENT. The condemnation, seizure or
appropriation of any material portion (as reasonably determined by Mortgagee) of
the Property; or the sequestration or attachment of, or levy or execution upon
any of the Property, the Collateral or any other collateral provided by Borrower
or Mortgagor under any of the Loan Documents, or any material portion of the
other assets of Borrower or Mortgagor, which sequestration, attachment, levy or
execution is not released or dismissed within 45 days after its occurrence; or
the sale of any assets affected by any of the foregoing.

                                    Page 26
<PAGE>
            (v) UNINSURED CASUALTY. The occurrence of an uninsured casualty with
respect to any material portion (as reasonably determined by Mortgagee) of the
Property unless: (aa) no other Default has occurred and is continuing at the
time of such casualty or occurs thereafter; (bb) Mortgagor promptly notifies
Mortgagee of the occurrence of such casualty; and (cc) not more than 45 days
after the occurrence of such casualty, Mortgagor delivers to Mortgagee
immediately available funds in an amount sufficient, in Mortgagee's reasonable
opinion, to pay all costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent during the repair
period). So long as no Default has occurred and is continuing at the time of
Mortgagee's receipt of such funds and no Default occurs thereafter, Mortgagee
shall make such funds available for the repair or restoration of the Property.
Notwithstanding the foregoing, Mortgagee shall have no obligation to make any
funds available for repair or restoration of the Property unless and until all
the conditions set forth in clauses (ii) and (iii) of the second sentence of
Section 6.11(b) of this Mortgage have been satisfied. Mortgagor acknowledges
that the specific conditions described above are reasonable.

            (vi) ADVERSE FINANCIAL CHANGE. Any material adverse change in the
financial condition of Borrower or any general partner or managing member of
Borrower, any guarantor, or any other person or entity from the condition shown
on the financial statement(s) submitted to Mortgagee and relied upon by
Mortgagee in making the Loan, and which change Mortgagee reasonably determines
will have a material adverse effect on (aa) the business, operations or
condition of the Property; or (bb) the ability of Borrower or Mortgagor to pay
or perform Borrower's or Mortgagor's obligations in accordance with the terms of
the Note, this Mortgage, and the other Loan Documents.

            (b) AUTOMATIC DEFAULT. An "Automatic Default" shall occur
automatically upon the occurrence of any of the following events:

            (i) VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
filing a petition for relief under the Bankruptcy Reform Act of 1978, as amended
or recodified ("Bankruptcy Code"), or under any other present or future state or
federal law regarding bankruptcy, reorganization or other relief to debtors
(collectively, "Debtor Relief Law"); or (bb) Borrower's filing any pleading in
any involuntary proceeding under the Bankruptcy Code or other Debtor Relief Law
which admits the jurisdiction of a court to regulate Borrower or the Property or
the petition's material allegations regarding Borrower's insolvency; or (cc)
Borrower's making a general assignment for the benefit of creditors; or (dd)
Borrower's applying for, or the appointment of, a receiver, trustee, custodian
or liquidator of Borrower or any of its property; or (ee) the filing by Borrower
of a petition seeking the liquidation or dissolution of Borrower or the
commencement of any other procedure to liquidate or dissolve Borrower.

            (ii) INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
dismissal of any involuntary petition under the Bankruptcy Code or other Debtor
Relief Law that is filed against Borrower or in any way restrains or limits
Borrower or Mortgagee regarding the Loan or the Property, prior to the earlier
of the entry of any order granting relief sought in the involuntary petition or
45 days after the date of filing of the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
clauses (i) or (ii) as to Mortgagor, any general partner or managing member of
Borrower or Mortgagor,

                                    Page 27
<PAGE>
or any guarantor or other person or entity in any manner obligated to Mortgagee
under the Loan Documents.

            7.2 ACCELERATION. Upon the occurrence of an Optional Default,
Mortgagee may, at its option, declare all sums owing to Mortgagee under the Note
and the other Loan Documents immediately due and payable. Upon the occurrence of
an Automatic Default, all sums owing to Mortgagee under the Note and the other
Loan Documents shall automatically become immediately due and payable.

            7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in
Section 7.2 above, at any time after a Default, Mortgagee shall have all of the
following rights and remedies:

            (a) ENTRY ON PROPERTY. With or without notice, and without releasing
Mortgagor from any Secured Obligation, and without becoming a mortgagee in
possession, to enter upon the Property from time to time and to do such acts and
things as Mortgagee deems necessary or desirable in order to inspect,
investigate, assess and protect the security hereof or to cure any Default,
including, without limitation: (i) to take and possess all documents, books,
records, papers and accounts of Mortgagor, Borrower or the then owner of the
Property which relate to the Property; (ii) to make, terminate, enforce or
modify leases of the Property upon such terms and conditions as Mortgagee deems
proper; (iii) to make repairs, alterations and improvements to the Property
necessary, in Mortgagee's reasonable judgment, to protect or enhance the
security hereof; (iv) to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Mortgagee
hereunder; (v) to pay, purchase, contest or compromise any encumbrance, charge,
lien or claim of lien which, in the sole judgment of Mortgagee, is or may be
senior in priority hereto, the judgment of Mortgagee being conclusive as between
the parties hereto; (vi) to obtain insurance; (vii) to pay any premiums or
charges with respect to insurance required to be carried hereunder; (viii) to
obtain a court order to enforce Mortgagee's right to enter and inspect the
Property for Hazardous Materials, in which regard the decision of Mortgagee as
to whether there exists a release or threatened release of Hazardous Materials
onto the Property shall be deemed reasonable and conclusive as between the
parties hereto; (ix) to have a receiver appointed pursuant to applicable law to
enforce Mortgagee's rights to enter and inspect the Property for Hazardous
Materials; and/or (x) to employ legal counsel, accountants, engineers,
consultants, contractors and other appropriate persons to assist them;

            (b) APPOINTMENT OF RECEIVER. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain appointment of a
receiver, trustee, liquidator or conservator of the Property, for any purpose,
including, without limitation, to enforce Mortgagee's rights to collect Payments
and to enter on and inspect the Property for Hazardous Materials, as a matter of
strict right and without regard to: (i) the adequacy of the security for the
repayment of the Secured Obligations; (ii) the existence of a declaration that
the Secured Obligations are immediately due and payable; (iii) the filing of a
notice of default; or (iv) the solvency of Mortgagor, Borrower or any guarantor
or other person or entity in any manner obligated to Mortgagee under the Loan
Documents;

                                    Page 28
<PAGE>
            (c) INJUNCTION. To commence and maintain an action or actions in any
court of competent jurisdiction to obtain specific enforcement of the covenants
of Mortgagor hereunder, and Mortgagor agrees that such covenants shall be
specifically enforceable by injunction or any other appropriate equitable remedy
and that for the purposes of any suit brought under this subparagraph, Mortgagor
waives the defense of laches and any applicable statute of limitations;

            (d) FORECLOSURE. Immediately commence an action to foreclose this
Mortgage or to specifically enforce its provisions or any of the indebtedness
secured hereby pursuant to the statutes in such case made and provided and sell
the Property or cause the Property to be sold in accordance with the
requirements and procedures provided by said statutes in a single parcel or in
several parcels at the option of Mortgagee.

            (i) In the event foreclosure proceedings are filed by Mortgagee, all
expenses incident to such proceeding, including, but not limited to, reasonable
attorneys' fees and costs, shall be paid by Mortgagor and secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. The secured indebtedness and all other
obligations secured by this Mortgage, including, without limitation, interest at
the Default Rate (as defined in the Note), any prepayment charge, fee or premium
required to be paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys' fees and any other amounts
due and unpaid to Mortgagee under the Loan Documents, may be bid by Mortgagee in
the event of a foreclosure sale hereunder. In the event of a judicial sale
pursuant to a foreclosure decree, it is understood and agreed that Mortgagee or
its assigns may become the purchaser of the Property or any part thereof.

            (ii) Mortgagee may, by following the procedures and satisfying the
requirements prescribed by applicable law, foreclose on only a portion of the
Property and, in such event, said foreclosure shall not affect the lien of this
Mortgage on the remaining portion of the Property foreclosed.

            Upon sale of the Property at any foreclosure, Mortgagee may credit
bid (as determined by Mortgagee in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Mortgagee
may, but is not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or adjusted by
Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and
costs incurred by Mortgagee with respect to the Property prior to foreclosure;
(iii) expenses and costs which Mortgagee anticipates will be incurred with
respect to the Property after foreclosure, but prior to resale, including,
without limitation, costs of structural reports and other due diligence, costs
to carry the Property prior to resale, costs of resale (e.g. commissions,
attorneys' fees, and taxes), costs of any Hazardous Materials clean-up and
monitoring, costs of deferred maintenance, repair, refurbishment and retrofit,
costs of defending or settling litigation affecting the Property, and lost
opportunity costs (if any), including the time value of money during any
anticipated holding period by Mortgagee; (iv) declining trends in real property
values generally and with respect to properties similar to the Property; (v)
anticipated discounts upon resale of the Property as a distressed or foreclosed
property; (vi) the fact of additional collateral (if any), for the Secured
Obligations; and (vii) such other factors or matters that Mortgagee (in its sole
and absolute discretion) deems appropriate. In regard to the above, Mortgagor
acknowledges and

                                    Page 29
<PAGE>
agrees that: (viii) Mortgagee is not required to use any or all of the foregoing
factors to determine the amount of its credit bid; (ix) this paragraph does not
impose upon Mortgagee any additional obligations that are not imposed by law at
the time the credit bid is made; (x) the amount of Mortgagee's credit bid need
not have any relation to any loan-to-value ratios specified in the Loan
Documents or previously discussed between Mortgagor and Mortgagee; and (xi)
Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion)
higher or lower than any appraised value of the Property;

            (e) MULTIPLE FORECLOSURES. To resort to and realize upon the
security hereunder and any other security now or later held by Mortgagee
concurrently or successively and in one or several consolidated or independent
judicial actions and to apply the proceeds received upon the Secured Obligations
all in such order and manner as Mortgagee determines in its sole discretion;

            (f) RIGHTS TO COLLATERAL. To exercise all rights Mortgagee may have
with respect to the Collateral under this Mortgage, the UCC or otherwise at law;
and

            (g) OTHER RIGHTS. To exercise such other rights as Mortgagee may
have at law or in equity or pursuant to the terms and conditions of this
Mortgage or any of the other Loan Documents.

            In connection with any sale or sales hereunder, Mortgagee may elect
to treat any of the Property which consists of a right in action or which is
property that can be severed from the Property (including, without limitation,
any improvements forming a part thereof) without causing structural damage
thereto as if the same were personal property or a fixture, as the case may be,
and dispose of the same in accordance with applicable law, separate and apart
from the sale of the Property. Any sale of Collateral hereunder shall be
conducted in any manner permitted by the UCC.

            7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. To the fullest extent
permitted by law, proceeds of any sale under this Mortgage shall be applied to
the extent funds are so available to the following items in such order as
Mortgagee in its discretion may determine:

            (a) To payment of the costs, expenses and fees of taking possession
of the Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee's right and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers' fees, court costs, reasonable
attorneys', accountants', appraisers', managers', and other professional fees,
title charges and transfer taxes.

            (b) To payment of all sums expended by Mortgagee under the terms of
any of the Loan Documents and not yet repaid, together with interest on such
sums at the Default Rate.

            (c) To payment of the secured indebtedness and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Rate and, to the extent permitted by applicable law, any prepayment fee, charge
or premium required to be paid under the Note in order to prepay principal, in
any order that Mortgagee chooses in its sole discretion.

                                    Page 30
<PAGE>
            7.5 WAIVER OF MARSHALING RIGHTS. Mortgagor, for itself and for all
parties claiming through or under Mortgagor, and for all parties who may acquire
a lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property, including, without limitation, the
Collateral, which is now or later may be security for any Secured Obligation,
marshaled upon any foreclosure of this Mortgage or on a foreclosure of any other
security for any of the Secured Obligations.

            7.6 NO CURE OR WAIVER. Neither Mortgagee's nor any receiver's entry
upon and taking possession of all or any part of the Property, nor any
collection of rents, issues, profits, insurance proceeds, condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation, nor the exercise of
any other right or remedy by Mortgagee or any receiver shall cure or waive any
Default or notice of default under this Mortgage, or nullify the effect of any
notice of default or sale (unless all Secured Obligations then due have been
paid or performed and Mortgagor has cured all other Defaults hereunder), or
impair the status of the security, or prejudice Mortgagee in the exercise of any
right or remedy, or be construed as an affirmation by Mortgagee of any tenancy,
lease or option or a subordination of the lien of this Mortgage.

            7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor agrees
to pay to Mortgagee immediately and upon demand all costs and expenses incurred
by Mortgagee in the enforcement of the terms and conditions of this Mortgage
(including, without limitation, court costs and attorneys' fees, whether
incurred in litigation or not) with interest from the date of expenditure until
said sums have been paid at the rate of interest applicable to the principal
balance of the Note as specified therein.

            7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Mortgagor hereby
irrevocably appoints Mortgagee and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest, to perform any
obligation of Mortgagor hereunder upon the occurrence of an event, act or
omission which, with notice or passage of time or both, would constitute a
Default, provided, however, that: (a) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(b) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to act under this Section.

            7.9 REMEDIES CUMULATIVE. All rights and remedies of Mortgagee
provided hereunder are cumulative and are in addition to all rights and remedies
provided by applicable law (including specifically that of foreclosure of this
instrument as though it were a mortgage) or in any other agreements between
Mortgagor and Mortgagee. Mortgagee may enforce any one or more remedies or
rights hereunder successively or concurrently.

                     ARTICLE VIII. MISCELLANEOUS PROVISIONS

            8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
by reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan Documents
grant further rights to Mortgagee and contain further agreements and affirmative
and negative covenants by Mortgagor which apply to this Mortgage and to the
Property and such further rights and agreements are incorporated herein by this
reference. THE OBLIGATIONS AND LIABILITIES OF MORTGAGOR UNDER THIS

                                    Page 31
<PAGE>
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE
SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            8.2 NON-WAIVER. By accepting payment of any amount secured hereby
after its due date or late performance of any other Secured Obligation,
Mortgagee shall not waive its right against any person obligated directly or
indirectly hereunder or on any Secured Obligation, either to require prompt
payment or performance when due of all other sums and obligations so secured or
to declare default for failure to make such prompt payment or performance. No
exercise of any right or remedy by Mortgagee hereunder shall constitute a waiver
of any other right or remedy herein contained or provided by law. No failure by
Mortgagee to exercise any right or remedy hereunder arising upon any Default
shall be construed to prejudice Mortgagee's rights or remedies upon the
occurrence of any other or subsequent Default. No delay by Mortgagee in
exercising any such right or remedy shall be construed to preclude Mortgagee
from the exercise thereof at any time while that Default is continuing. No
notice to nor demand on Mortgagor shall of itself entitle Mortgagor to any other
or further notice or demand in similar or other circumstances.

            8.3 CONSENTS, APPROVALS AND EXPENSES. Wherever Mortgagee's consent,
approval, acceptance or satisfaction is required under any provision of this
Mortgage or any of the other Loan Documents, such consent, approval, acceptance
or satisfaction shall not be unreasonably withheld, conditioned or delayed by
Mortgagee unless such provision expressly so provides. Wherever costs or
expenses are required to be paid under any provision of this Mortgage or any of
the other Loan Documents, such costs or expenses shall be reasonable.

            8.4 PERMITTED CONTESTS. After prior written notice to Mortgagee,
Mortgagor may contest, by appropriate legal or other proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any lien, levy, tax or assessment, or any lien of any laborer,
mechanic, materialman, supplier or vendor, or the application to Mortgagor or
the Property of any law or the validity thereof, the assertion or imposition of
which, or the failure to pay when due, would constitute a Default; provided that
(a) Mortgagor pursues the contest diligently, in a manner which Mortgagee
determines is not prejudicial to Mortgagee, and does not impair the lien of this
Mortgage; (b) the Property, or any part hereof or estate or interest therein,
shall not be in any danger of being sold, forfeited or lost by reason of such
proceedings; (c) in the case of the contest of any law or other legal
requirement, Mortgagee shall not be in any danger of any civil or criminal
liability; and (d) if required by Mortgagee, Mortgagor deposits with Mortgagee
any funds or other forms of assurance (including a bond or letter of credit)
satisfactory to Mortgagee to protect Mortgagee from the consequences of the
contest being unsuccessful. Mortgagor's right to contest pursuant to the terms
of this provision shall in no way relieve Mortgagor or Borrower of its
obligations under the Loan or to make payments to Mortgagee as and when due.

            8.5 FURTHER ASSURANCES. Mortgagor shall, upon demand by Mortgagee,
execute, acknowledge (if appropriate) and deliver any and all documents and
instruments and do or cause to be done all further acts reasonably necessary or
appropriate to effectuate the provisions hereof.

                                    Page 32
<PAGE>
            8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is
commenced between Mortgagor and Mortgagee regarding their respective rights and
obligations under this Mortgage or any of the other Loan Documents, the
prevailing party shall be entitled to recover, in addition to damages or other
relief, costs and expenses, reasonable attorneys' fees and court costs
(including, without limitation, expert witness fees). As used herein the term
"prevailing party" shall mean the party which obtains the principal relief it
has sought, whether by compromise settlement or judgment. If the party which
commenced or instituted the action, suit or proceeding shall dismiss or
discontinue it without the concurrence of the other party, such other party
shall be deemed the prevailing party.

            8.7 MORTGAGOR AND MORTGAGEE DEFINED. The term "Mortgagor" includes
both the original Mortgagor and any subsequent owner or owners of any of the
Property, and the term "Mortgagee" includes the original Mortgagee and any
future owner or holder, including assignees, pledgees and participants, of the
Note or any interest therein.

            8.8 DISCLAIMERS.

            (a) RELATIONSHIP. The relationship of Mortgagor and Mortgagee under
this Mortgage and the other Loan Documents is, and shall at all times remain,
solely that of borrower and lender; and Mortgagee neither undertakes nor assumes
any responsibility or duty to Mortgagor or to any third party with respect to
the Property. Notwithstanding any other provisions of this Mortgage and the
other Loan Documents: (i) Mortgagee is not, and shall not be construed to be, a
partner, joint venturer, member, alter ego, manager, controlling person or other
business associate or participant of any kind of Mortgagor, and Mortgagee does
not intend to ever assume such status; (ii) Mortgagee's activities in connection
with this Mortgage and the other Loan Documents shall not be "outside the scope
of activities of a lender of money" within the meaning of California Civil Code
Section 3434, as amended or recodified from time to time, and Mortgagee does not
intend to ever assume any responsibility to any person for the quality,
suitability, safety or condition of the Property; and (iii) Mortgagee shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Mortgagor.

            (b) NO LIABILITY. Mortgagee shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action, liability,
indebtedness, damage or injury of any kind or character to any person or
property arising from any construction on, or occupancy or use of, the Property,
whether caused by or arising from: (i) any defect in any building, structure,
grading, fill, landscaping or other improvements thereon or in any on-site or
off-site improvement or other facility therein or thereon; (ii) any act or
omission of Mortgagor or any of Mortgagor's agents, employees, independent
contractors, licensees or invitees; (iii) any accident in or on the Property or
any fire, flood or other casualty or hazard thereon; (iv) the failure of
Mortgagor or any of Mortgagor's licensees, employees, invitees, agents,
independent contractors or other representatives to maintain the Property in a
safe condition; or (v) any nuisance made or suffered on any part of the
Property.

            8.9 SEVERABILITY. If any term of this Mortgage, or the application
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Mortgage, or the application of such term
to persons or circumstances other than those as to

                                    Page 33
<PAGE>
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Mortgage shall be valid and enforceable to the fullest extent
permitted by law.

            8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Mortgagee under the Mortgage established by Article 1 and the security agreement
established by Article 4 are independent and cumulative, and there shall be no
merger of any lien created by the Mortgage with any security interest created by
the security agreement. Mortgagee may elect to exercise or enforce any of its
rights, remedies or interests under either or both the Mortgage or the security
agreement as Mortgagee may from time to time deem appropriate. The absolute
assignment of rents and leases established by Article 3 is similarly independent
of and separate from the Mortgage and the security agreement.

            8.11 MERGER. No merger shall occur as a result of Mortgagee's
acquiring any other estate in, or any other lien on, the Property unless
Mortgagee consents to a merger in writing.

            8.12 OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL. If more than one
person has executed this Mortgage as "Mortgagor", the obligations of all such
persons hereunder shall be joint and several.

            8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who
executes this Mortgage as a Mortgagor agrees that any money judgment which
Mortgagee obtains pursuant to the terms of this Mortgage or any other obligation
of that married person secured by this Mortgage may be collected by execution
upon any separate property or community property of that person.

            8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or
expressly incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior negotiations
or agreements, written or oral. The Loan Documents shall not be modified except
by written instrument executed by all parties. Any reference in any of the Loan
Documents to the Property or Collateral shall include all or any part of the
Property or Collateral. Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Mortgagee in
writing. When the identity of the parties or other circumstances make it
appropriate, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.

            8.15 CAPITALIZED TERMS. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Note.

            8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions
herein contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence shall not
be construed to permit Mortgagor to assign the Loan except as otherwise
permitted under the Note or the other Loan Documents.

            8.17 GOVERNING LAW. This Mortgage was accepted by Mortgagee in the
state of California and the proceeds of the Note secured hereby were disbursed
from the state of California, which state the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality of the
foregoing, matters of construction, validity, enforceability and

                                    Page 34
<PAGE>
performance, this Mortgage, the Note 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 California applicable to contracts
made and performed in such state and any applicable law of the United States of
America, except that at all times the provisions for the creation, perfection
and enforcement of the liens and security interests created pursuant thereto and
pursuant to the other Loan Documents shall be governed by and construed
according to the law of the state where the Property is located. Except as
provided in the immediately preceding sentence, Mortgagor hereby unconditionally
and irrevocably waives, to the fullest extent permitted by law, any claim to
assert that the law of any jurisdiction other than California governs this
Mortgage, the Note and other Loan Documents.

            8.18 CONSENT TO JURISDICTION. Mortgagor irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Mortgagor against
Mortgagee, arising out of or relating to this Mortgage, the Note or the Loan;
(b) any state or federal court sitting in the state where the Property is
located or the state in which Mortgagor's principal place of business is located
over any suit, action or proceeding, brought by Mortgagee against Mortgagor,
arising out of or relating to this Mortgage, the Note or the Loan; and (c) any
state court sitting in the county of the state where the Property is located
over any suit, action, or proceeding, brought by Mortgagee to foreclose this
Mortgage or any action brought by Mortgagee to enforce its rights with respect
to the Collateral. Mortgagor irrevocably waives, to the fullest extent permitted
by law, any objection that Mortgagor may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such court and any
claim that any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum.

            8.19 EXHIBITS. Exhibit A is incorporated into this Mortgage by this
reference.

            8.20 ADDRESSES; REQUEST FOR NOTICE. All requests, demands, notices
and other communications that are required or permitted to be given to a party
under this Mortgage shall be in writing, refer to the Loan number, and shall be
sent to such party, either by personal delivery, by overnight delivery service,
by certified first class mail, return receipt requested, or by facsimile
transmission to the addressee or facsimile number below. All such notices and
communications shall be effective upon receipt of such delivery or facsimile
transmission, together with a printed receipt of the successful delivery of such
facsimile transmission. The addresses of the parties are set forth on page 1 of
this Mortgage and the facsimile numbers for the parties are as follows:

            Mortgagee:   WELLS FARGO BANK, N.A.
                         FAX NO.: (925) 691-5947

            Mortgagor:   MHC STAGECOACH, L.L.C.
                         FAX NO.: (312) 279-1715

      Mortgagor's principal place of business is at the address set forth on
page 1 of this Mortgage. A copy of any notice to Mortgagor shall be sent as
follows:

                                    Page 35
<PAGE>
                           Katz Randall Weinberg & Richmond
                           333 West Wacker Drive
                           Suite 1800
                           Chicago, Illinois 60606
                           Attention: Benjamin Randall
                           Facsimile: (312) 807-3903

      Any Mortgagor whose address is set forth on page 1 of this Mortgage hereby
requests that a copy of notice of default and notice of sale be delivered to it
at that address. Failure to insert an address shall constitute a designation of
Mortgagor's last known address as the address for such notice. Any party shall
have the right to change its address for notice hereunder to any other location
within the continental United States by giving 30 days notice to the other
parties in the manner set forth above.

            8.21 COUNTERPARTS. This Mortgage may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed an
original and all of which taken together, will be deemed to be one and the same
instrument.

            8.22 WAIVER OF JURY TRIAL. MORTGAGEE (BY ITS ACCEPTANCE HEREOF) AND
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF MORTGAGEE OR MORTGAGOR. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGEE TO ENTER INTO THIS MORTGAGE.

                                    Page 36
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage as of the
day and year first above written.

WITNESS/ATTEST:                       MORTGAGOR:

                                      MHC STAGECOACH, L.L.C., a Delaware limited
                                      liability company

/s/ Lawrence M. Gritton               By: MHC-QRS STAGECOACH, INC.,
-------------------------------           a  Delaware corporation,
Print Name: Lawrence M. Gritton           its Managing Member

/s/ Benjamin Randall                  By: /s/ John M. Zoeller
-------------------------------          -----------------------------------
Print Name: Benjamin Randall          Name: John M. Zoeller
                                      Its:  Vice President, Chief Financial
                                            Officer and Treasurer
<PAGE>
STATE OF IL           )
                      )  SS:
COUNTY OF COOK        )

            On 8/1, 2001 before me, M. Dobronski, Notary Public,
personally appeared John M. Zoeller, as Vice President, Chief Financial Officer
and Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company,
personally known to me to be the person whose name is subscribed in the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument, the person or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

                                         /s/ Mary Dobronski
                                         --------------------------
                                         Print Name: Mary Dobronski

My Commission Expires:

11/3/03
[NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:

                                    EXHIBIT A

<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A
                               DESCRIPTION OF LAND

Exhibit A to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Land referred to in this Mortgage is situated in the
county of Manatee, state of Florida and is described as follows:

PARCEL A:

Begin at the Northwest corner of the Southeast 1/4 of the Northeast 1/4 of
Section 16, Township 35 South, Range 18 East, Manatee County, Florida; thence
South 00(Degree)14'17" East, 1327.25 feet to the Southwest corner of the
Southeast 1/4 of the Northeast 1/4 of the aforementioned Section 16; thence
North 89(Degree)58'09" East, 1322.53 feet to the Southeast corner of the
Southeast 1/4 of the Northeast 1/4 of Section 16; thence South 00(Degree)24'10"
East, 137.28 Feet; thence North 89(Degree)40'44" East, 1269.21 feet; thence
North 00(Degree)15'02" West, 137.28 feet; thence North 89(Degree)40'56" East,
42.00 feet along the South line of the Southwest 1/4 of the Northwest 1/4 of
Section 15, Township 35 South, Range 18 East, Manatee County, Florida to a
point, said point being the Southwest corner of the Easterly 8.00 feet of the
Southwest 1/4 of the Northwest 1/4 of Section 15; thence North 00(Degree) 15'02"
West along the West line of said Easterly 8.00 feet, 529.06 feet; thence North
89(Degree)54'48" West, 352.77 feet; thence North 83(Degree)03'14" West, 41.33
feet; thence North 89(Degree)58'10" West, 384.29 feet; thence North
64(Degree)05'35" West, 45.06 feet; thence North 89(Degree)49'37" West, 69.63
feet; thence North 00(Degree)27'02" West, 39.77 feet; thence South
89(Degree)57'27" West, 229.20 feet; thence South 00(Degree)34'37" West, 52.86
feet; thence South 89(Degree)50'04" West, 69.88 feet; thence North
68(Degree)46'00' West, 42.84 feet; thence North 89(Degree)02'58" West, 70.09
feet; thence North 00(Degree)46'23" West, 36.15 feet; thence South
89(Degree)58'50" West, 204.28 feet; thence South 01(Degree)06'03" West, 34.82
feet; thence North 89(Degree)55'45" West, 69.61 feet; thence North
61(Degree)14'43" West, 46.29 feet; thence North 89(Degree)47'56" West, 49.68
feet; thence North 01(Degree)06'00" West, 14.20 feet; thence South
89(Degree)37'41" West, 244.94 feet; thence North 14(Degree)02'42 West, 20.66
feet; thence North 00(Degree)04'49" East, 50.12 feet; thence North
07(Degree)13'20" West, 40.26 feet; thence North 00(Degree)29'42" West, 229.78
feet; thence North 89(Degree)19'18" East, 21.87 feet; thence North
00(Degree)01'05" East, 69.28 feet; thence North 16(Degree)42'43" West, 41.53
feet; thence North 00(Degree)18'37" East, 70.77 feet; thence North
90(Degree)00'00" West, 443.35 feet; thence North 02(Degree)07'48" West, 80.67
feet; thence North 25(Degree)58'34" East, 33.85 feet; thence North
00(Degree)07'24" East, 93.96 feet; thence South 89(Degree)59'49" West, 295.60
feet to the Point of Beginning.

PARCEL B:

Non-exclusive rights-of-way and easements as contained in Agreements recorded
January 13, 1939, in Deed Book 159, page 331, and re-recorded February 16, 1939,
in Deed Book 160, page

                                    EXHIBIT A
<PAGE>
23; recorded October 30, 1939, in Deed Book 164, page 340, and recorded May 31,
1974, in Official Records Book 673, page 646, all of the Public Records of
Manatee County, Florida.

                                    EXHIBIT A
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT B

      CALCULATION OF DOCUMENTARY STAMP AND INTANGIBLE PERSONAL PROPERTY TAX

Exhibit B to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

      This Mortgage is part of an out-of-state loan transaction which only
partially secures the loan. This Mortgage encumbers the property described on
Exhibit A, and separate mortgages are being executed and delivered by Mortgagor
encumbering certain other property located in Florida and in other states (such
other property being further described on Exhibit C and being referred to as the
"Other Property"). The Florida collateral is located in Brevard, Volusia and
Manatee Counties, and three (3) separate mortgages (the Florida Mortgages")
encumbering three (3) properties are being executed and delivered by Mortgagor
for simultaneous recording in the various Florida counties described above. The
total indebtedness secured by this Mortgage equals $50,000,000.00, as evidenced
by one (1) promissory note in the aggregate original principal amount of
$50,000,000.00 (the "Note"). The Note was made, executed and delivered outside
the State of Florida. The value of the Florida property encumbered by the
Florida Mortgages equals $27,200,000.00. The aggregate value of all other
property securing the loan and located outside the State of Florida equals
$50,400,000.00. Thus, the total aggregate value of all property securing the
loan equals $77,600,000.00. The property encumbered by the Florida Mortgages and
located in Florida represents thirty-five (35%) percent [$27,200,000.00 /
$77,600,000.00] of the total value of all property securing the loan. In
accordance with Florida Statutes, Section 201.08, and Florida Administrative
Code, Rule 12B-4.053(32)(b), documentary stamp tax is computed based upon the
percentage of indebtedness which the value of the mortgaged property located in
Florida bears to the total value of all mortgaged property (which, in this case,
equals $17,500,000.00). Accordingly, documentary stamp tax in the amount of
$61,250.00 is due upon the recording of the Florida Mortgages in the Florida
counties listed above. Pursuant to Chapter 199, Florida Statutes, non-recurring
intangible personal property tax is computed and payable based upon that portion
of the indebtedness which bears the same relation as the value of the mortgaged
property located in Florida bears to the total value of all mortgaged property,
which, in this case, equals [$50,000,000.00 x ($27,200,000.00 /
$77,600,000.00)]. Thus, non-recurring intangible personal property tax in the
amount of $35,000.00 is due and payable upon recording of the Florida Mortgages
in the Florida counties listed above.

                                    EXHIBIT B
<PAGE>
                                    EXHIBIT C
                          DESCRIPTION OF OTHER PROPERTY

Exhibit C to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Other Property referred to in this Mortgage is
described as follows:

                                 CABANA PROPERTY

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16,
Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01(Degree) 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89o 09' 31" East, along said Southerly right of way of Twain Avenue a
distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89(Degree) 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01o 22' 27" East along said Westerly right of way line of Cabana
Drive a distance of 1238.26 feet; thence South 88(Degree) 17' 57" West a
distance of 1271.25 feet; thence North 01(Degree) 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.

                                    EXHIBIT C
<PAGE>
                             WOODLAND HILLS PROPERTY

Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of the
Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th P.M.,
County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.

                                    EXHIBIT C
<PAGE>
                              INDIAN OAKS PROPERTY

PARCEL A:

A parcel of land lying in the Northwest 1/4 of Section 21, Township 25 South,
Range 36 East, Brevard County, Florida, being more particularly described as
follows:

Commence at the Northwest corner of said Section 21, and run North 89(Degree)
50' 50" East, along the North line of said Section 21, a distance of 330.04 feet
to the Point of Beginning; thence continue North 89(Degree) 50' 50" East, along
said North line, a distance of 816.83 feet; thence South 05(Degree) 47' 10"
West, a distance of 2488.78 feet; thence North 89(Degree) 53' 00" West, a
distance of 419.86 feet; thence South 01(Degree) 04' 00" East, a distance of
150.00 feet, to a point on the North Right of Way line of Barnes Boulevard (a
100 foot Right of Way); thence North 89(Degree) 53' 00" West, along said North
Right of Way line, a distance of 100.02 feet; thence North 01(Degree) 04' 00"
West, parallel to the West line of said Northwest 1/4, a distance of 2623.29
feet, to the Point of Beginning.

PARCEL B:

A perpetual non-exclusive easement for the benefit of Parcel A for surface water
runoff from "Pod #2" through a weir on said land eastward to an existing
drainage ditch as set forth in Grant of Easement from George M. Green, Jr. and
Sandie J. Green in favor of The Indian Oaks Corporation, dated July 27, 1987,
recorded August 4, 1987, in the Public Records of Brevard County, Florida, at
Official Records Book 2826, page 2681; and modified by Stipulated Settlement in
Civil Action No. 87-9785-CA-C, The Indian Oaks Corporation, a Florida
corporation, Plaintiffs, vs. George M. Green, Jr. and Sandie J. Green, his wife,
Defendants, dated July 27, 1987, recorded August 20, 1987, in the Public Records
of Brevard County, Florida, at Official Records Book 2831, page 2211, more
particularly described as follows:

Beginning at the approximate Southwest corner of land to the East as described
in Deed recorded in Official Records Book 2471, page 2094, Public Records of
Brevard County, Florida, said point being on the public drainage ditch on the
north side of Barnes Boulevard; thence north along an existing approximately
twenty (20) foot wide drainage ditch on the westerly boundary of the land
described in said Deed for an approximate distance of 844.00 feet to an outlet
pipe which extends easterly into said drainage ditch from a Type "C" inlet weir
located on "Pod #2" of Parcel A.

                                    EXHIBIT C
<PAGE>
                            PICKWICK VILLAGE PROPERTY

PARCEL A:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East, also a portion of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East, Volusia
County, Florida being more particularly described as follows:

As a point of reference begin at the Southwest corner of Section 6, Township 16
South, Range 33 East, thence along the South line of Section 6 South 89 degrees
35 minutes 25 seconds East a distance of 3300.00 feet to the Point of Beginning;
thence North 00 degrees 24 minutes 35 seconds East a distance of 330.00 feet;
thence North 89 degrees 35 minutes 25 seconds West a distance of 660.00 feet;
thence North 00 degrees 24 minutes 35 seconds East a distance of 200.00 feet;
thence South 89 degrees 35 minutes 25 seconds East a distance of 612.36 feet to
a point on the Southerly right-of-way line of Clyde Morris Blvd. (a 100.00 foot
right-of-way as now laid out and used); thence South 41 degrees 06 minutes 50
seconds East along the Southerly right-of-way line of said Clyde Morris Blvd. a
distance of 1067.45 feet to a point on the East line of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East; thence
South 00 degrees 24 minutes 35 seconds West along the said East line of the West
one-half of the Northeast one-quarter of said Section 7 a distance of 2370.82
feet; thence North 89 degrees 35 minutes 25 seconds West a distance of 1320.00
feet to a point in the West line of the West one-half of the Northeast
one-quarter of Section 7; thence North 00 degrees 24 minutes 35 seconds East
along the West line of the West one-half of the Northeast one-quarter of Section
7 a distance of 1650.00 feet; thence South 89 degrees 35 minutes 25 seconds East
a distance of 660.00 feet; thence North 00 degrees 24 minutes 35 seconds East a
distance of 990.00 feet to the Point of Beginning of this description.

PARCEL B:

A portion of the Northwest one-quarter of Section 7, Township 16 South, Range 33
East, Volusia County, Florida, being more particularly described as follows: As
a point of reference, commence at a concrete monument marking the Northwest
corner of Willow Run Subdivision, Unit 2, as per map recorded September 17,
1979, in Map Book 36, Pages 16 and 17 of the Public Records of Volusia County,
Florida; thence run North 00 degrees 41 minutes 47 seconds West along a
Northerly extension of the Westerly line of said Willow Run Subdivision, Unit 2,
a distance of 230.08 feet to a point in the North line of 230.00 foot Florida
Power and Light Company right-of-way as described in instrument recorded October
5, 1973, in Official Records Book 1664, Pages 448-450, of the Public Records of
Volusia County, Florida, said point also being in the Southerly line of Pickwick
Village Mobile Home Park, an unrecorded subdivision; thence run South 89 degrees
35 minutes 24 seconds West along the North line of said Florida Power and Light
Company right-of-way, being also the Southerly line of Pickwick Village, a
distance of 1.13 feet to a concrete monument marking the Southwest corner of
said Pickwick Village; thence North 00 degrees 24 minutes 10 seconds West, a
distance of 400.00 feet to the Point of Beginning; thence North 89 degrees 45
minutes 45 seconds West, a distance of 440.02 feet to the center line of an
80.00 foot drainage ditch easement as described in instrument

                                    EXHIBIT C
<PAGE>
recorded June 28, 1966, in Official Records Book 847, Pages 429 through 444, of
the Public Records of Volusia County, Florida; thence North 00 degrees 24
minutes 10 seconds West along the center line of said drainage ditch easement, a
distance of 1250.34 feet; thence South 89 degrees 45 minutes 45 seconds East, a
distance of 440.02 feet to a point on the Westerly line of said Pickwick Village
Subdivision; thence South 00 degrees 24 minutes 10 seconds East along said
Westerly line, a distance of 1250.34 feet to the Point of Beginning.

SAID PROPERTY ALSO BEING DESCRIBED AS FOLLOWS:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East; also a portion of the West one-half of the
Northeast one-quarter and a portion of the Northwest one-quarter, all lying in
Section 7, Township 16 South, Range 33 East in Volusia County, Florida, being
more particularly described as follows: Commence at the Southwest corner of said
Section 6, Township 16 South, Range 33 East and run South 89(Degree) 35' 25"
East along the South line of the Southwest one-quarter a distance of 2635.46
feet to the Southwest corner of the Southeast one-quarter of said Section 6;
thence North 01(Degree) 17' 05" East along the West line of the Southeast
one-quarter of said Section 6 a distance of 328.72 feet to an iron pipe labeled
LS 2048 and the Point of Beginning of this description; from said Point of
Beginning, continue North 01(Degree) 17' 05" East along the West line of the
Southeast one-quarter a distance of 201.23 feet to an iron pipe labeled LS 2048;
thence South 89(Degree) 35' 25" East, 619.16 feet to an iron pipe labeled LS
2048, said point being on the Southwesterly right-of-way line of Clyde Morris
Boulevard; thence South 40(Degree) 56' 13" East along the Southwesterly
right-of-way line of said Clyde Morris Boulevard a distance of 1061.80 feet to
an iron pipe labeled LS 2048, said point being on the East line of the West
one-half of the Northeast one-quarter of the aforementioned Section 7, Township
16 South, Range 33 East; thence South 00(Degree) 34' 32" West along the East
line of the West one-half of the Northeast one-quarter of said Section 7, a
distance of 2362.20 feet to an iron pin labeled LB 707, said point being on the
North line of the 230 foot wide Florida Power and Light Company right-of-way, as
described in Official Records Book 1664, Pages 448, 449, and 450 of the Public
Records of Volusia County, Florida; thence North 89o 13' 53" West along the
North line of the 230 foot wide Florida Power and Light Company right-of-way a
distance of 1321.12 feet to an iron pipe labeled LS 2048, said point being on
the West line of the West one-half of the Northeast one-quarter of the
aforementioned Section 7; thence North 00(Degree) 23' 35" East along the West
line of the West one-half of the Northeast one-quarter a distance of 400.00 feet
to an iron pipe labeled LS 2048; thence North 89(Degree) 13' 53" West, 440.02
feet to an iron pipe labled LS 2048, said point being the centerline of a
drainage ditch; thence North 00(Degree) 23' 35" East along said drainage ditch
centerline a distance of 1250.34 feet to an iron pipe labeled LS 2048; thence
South 89(Degree) 13' 53" East, 440.02 feet to an iron pipe labeled LS 2048, said
point being on the West line of the West one-half of the Northeast one-quarter
of the aforementioned Section 7; thence South 00(Degree) 23' 35" West along the
West line of the West one-half of the Northeast one-quarter a distance of 12.16
feet to an iron pipe labeled LS 2048; thence South 89(Degree) 27' 21" East,
661.65 feet to an iron pipe labeled LS 2048; thence North 00(Degree) 25' 26"
East, 984.46 feet to an iron pipe labeled LS 2048; thence North 01(Degree) 14'
43" East, 328.45 feet to a nail in disk in pavement labeled LB 707; thence North
89(Degree) 33' 59" West, 661.95 feet to the Point of Beginning.

                                    EXHIBIT C
<PAGE>
                             APOLLO VILLAGE PROPERTY

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;
THENCE North 00(Degree) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;
THENCE South 89(Degree) 25' 45" East 65.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 25' 45" East 126.95 feet;
THENCE North 87(Degree) 23' 37" East 116.40 feet;
THENCE South 00(Degree) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;
THENCE South 00(Degree) 34' 44" West along the East line of said property 156.09
feet to a point on a line 500.00 feet North and parallel to the South line of
said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;
THENCE South 00(Degree) 27' 31" West 435.31 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 51.93 feet;
THENCE North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 20' 40" East along said West line 807.45 feet to a point
on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;
THENCE South 86(Degree) 58' 05" West along said South line and the South line of
the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;
THENCE South 00(Degree) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;
THENCE North 89(Degree) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;
THENCE South 00(Degree) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;
THENCE North 00(Degree) 27' 31" East 65.05 feet to the POINT OF BEGINNING;
THENCE continuing North 00(Degree) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;
THENCE North 87(Degree) 25' 34" East 36.52 feet;
THENCE South 02(Degree) 21' 45" East 308.14 feet;

                                    EXHIBIT C
<PAGE>
THENCE South 00(Degree) 20' 35" West 127.50 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE South 88(Degree) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 08' 29" East (North 88(Degree) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 06' 45" East 669.32 feet ( North 00(Degree) 20' 40" East
669.45, record) along said West line to the POINT OF BEGINNING;
THENCE North 89(Degree) 47' 06" West (North 89(Degree) 39' 20" West, record)
115.00 feet;
THENCE North 16(Degree) 08' 00" East 325.00 feet;
THENCE North 52(Degree) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;
THENCE South 00(Degree) 06' 45" West (South 00(Degree) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;
THENCE North 00(Degree) 20' 35" East 65.04 feet to a point on a line parallel to
and 65.00 feet North of the South line of said Section 21;
THENCE continuing North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 21.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 39' 20" East 55.00 feet;
THENCE North 00(Degree) 20' 40" East 40.00 feet;
THENCE North 89(Degree) 39' 20" West 55.00 feet;
THENCE South 00(Degree) 20' 40" West 40.00 feet to the POINT OF BEGINNING.

                                    EXHIBIT C
<PAGE>
                            CASA DEL SOL III PROPERTY

PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;
THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;
THENCE North 01(Degree) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;
THENCE West along said North line 627.98 feet;
THENCE North 45(Degree) 44' 20" East 28.64 feet;
THENCE North 01(Degree) 28' 40" East 307.70 feet;
THENCE North 45(Degree) 00' 00" East 149.61 feet;
THENCE North 32(Degree) 31' 59" West 76.22 feet;
THENCE North 01(Degree) 38' 30" East 420.00 feet;
THENCE North 89(Degree) 57' 50" East 11.71 feet;
THENCE North 01(Degree) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80(Degree) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23(Degree) 03'
59";
THENCE Northeasterly along said curve 575.86 feet;
THENCE North 01(Degree) 38' 30" East 84.00 feet;
THENCE North 89(Degree) 57' 50" East 738.38 feet;
THENCE South 01(Degree) 38' 30" West 1,407.21 feet;
THENCE West 200.00 feet;
THENCE South 01(Degree) 38' 30" West 300.11 feet to the TRUE POINT OF BEGINNING.

PARCEL NO. 2:

A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
THENCE West 1,326.54 feet along the South line of said Section 24;
THENCE North 01(Degree) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;
THENCE North 01(Degree) 38' 30" East 306.11 feet;
THENCE East 206.00 feet to the point of termination; and

                                    EXHIBIT C
<PAGE>
BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,757.00 feet and
South 89(Degree) 57' 50" West 1,120.55 feet from the Southeast corner of said
Section 24;
THENCE South 89(Degree) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 3:

A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:

BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,760.50 feet and
South 89(Degree) 57' 50" West 55.00 feet from the Southeast corner of Section
24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona;
THENCE South 89(Degree) 57' 50" West 1,833.37 feet to the point of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 4:

A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:

COMMENCING at the South quarter corner of Section 24;
THENCE North 01(Degree) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;
THENCE North 89(Degree) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;
THENCE continuing North 89(Degree) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;
THENCE South 01(Degree) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76(Degree) 55' 57" West;
THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19(Degree) 06' 47" an arc length of 477.16
feet;

                                    EXHIBIT C
<PAGE>
THENCE South 89(Degree) 55' 44" West to a point 6.00 feet West of and parallel
to said Easterly and Westerly boundary lines to the beginning of a curve concave
Easterly and having a radius of 1,436.40 feet;
THENCE Northerly along said curve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19(Degree) 03'
50" an arc length of 477.93 feet;
THENCE North 01(Degree) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.

                                    EXHIBIT C
<PAGE>
Recording Requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention: CMO Loan Admin.
Loan No. : 31-0900553R
Property Name: Woodland Hills

                                  DEED OF TRUST
                                       AND
                     ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
                                       AND
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001 are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, the PUBLIC
TRUSTEE OF ADAMS COUNTY, STATE OF COLORADO ("Trustee"), for the benefit of WELLS
FARGO BANK, NATIONAL ASSOCIATION ("Beneficiary"), with a mailing address at 1320
Willow Pass Road, Suite 205, Concord, California 94520.

                                 R E C I T A L S

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan
      and having a maturity date of September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, conveys and assigns to Trustee, in
      trust for the benefit of Beneficiary, with POWER OF SALE AND RIGHT OF
      ENTRY AND POSSESSION, all estate, right, title, power, privileges and
      interest which Trustor now has or may hereafter acquire in, to, under or
      derived from any or all of the following:

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      a.    That real property ("Land") located in Thornton, county of Adams,
            state of Colorado, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            wells and well rights, well permits, spring and spring rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock rights or interests, royalties,
            development rights and credits, air rights, minerals, oil rights,
            and gas rights, all crops, timber, trees, and landscaping,
            historically used, or now or later used or useful in connection
            with, appurtenant to or related to the Land and all of Trustor's
            rights and interest to obtain sewer and other services from service
            districts;

      c.    All buildings, structures, facilities, other improvements and
            fixtures whether real, personal, or mixed, and whether or not
            affixed, now or hereafter located on the Land;

      d.    All machines, articles, apparatus, equipment, machinery and
            appliances and all accessions thereto and renewals and replacements
            thereof and substitutions therefor used in the operation or
            occupancy of the Land, it being intended by the parties that all
            such items shall be conclusively considered to be a part of the
            Land, whether or not attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

      All of the property described above is hereinafter collectively defined as
      the "Property". The listing of specific rights or property shall not be
      interpreted as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for

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<PAGE>
            the benefit of Beneficiary, when the obligation is evidenced by a
            writing which recites that it is secured by this Deed of Trust;

      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.

               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to

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<PAGE>
      such notice. If and when no Default exists, Beneficiary shall re-confer
      the License upon Trustor until the occurrence of another Default.

3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      a.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants which Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All

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<PAGE>
            such sums received by Beneficiary with respect to any Lease shall be
            deemed "Impounds" (as defined in Section 6.12b) and shall be
            deposited by Beneficiary into a pledged account in accordance with
            Section 6.12b. If no Default exists, Beneficiary shall release such
            Impounds to Trustor from time to time as necessary to pay or
            reimburse Trustor for such tenant improvements, brokerage
            commissions and other leasing costs as may be required to re-tenant
            the affected space; provided, however, Beneficiary shall have
            received and approved each of the following for each tenant for
            which such costs were incurred; (1) Trustor's written request for
            such release, including the name of the tenant, the location and net
            rentable area of the space and a description and cost breakdown of
            the tenant improvements or other leasing costs covered by the
            request; (2) Trustor's certification that any tenant improvements
            have been completed lien-free and in a workmanlike manner; (3) a
            fully executed Lease, or extension or renewal of the current Lease;
            (4) an estoppel certificate executed by the tenant including its
            acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4a or 3.4b within 10 Business Days after Beneficiary's
            receipt of such request (and all documents and information
            reasonably related thereto) shall be deemed to constitute
            Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant

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<PAGE>
      under a Lease of such right to subordinate. No subordination referred to
      in this Section shall constitute a subordination to any lien or other
      encumbrance, whenever arising, or improve the right of any junior
      lienholder. Nothing herein shall be construed as subordinating this Deed
      of Trust to any Lease.

                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
      interest to secure payment and performance of all of the Secured
      Obligations, in all of Trustor's right, title and interest in and to the
      following described personal property in which Trustor now or at any time
      hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Colorado Uniform Commercial Code,
      as amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any

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<PAGE>
      obligation of Trustor to Beneficiary unless Beneficiary shall make an
      express written election of said remedy under the UCC or other applicable
      law.

4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble any or all of the Collateral and make it
            available to Beneficiary at a place reasonably designated by
            Beneficiary; (ii) without prior notice (to the extent permitted by
            law), enter upon the Property or other place where any of the
            Collateral may be located and take possession of, collect, sell,
            lease, license and otherwise dispose of the Collateral, and store
            the same at locations acceptable to Beneficiary at Trustor's
            expense; (iii) sell, assign and deliver the Collateral at any place
            or in any lawful manner and bid and become purchaser at any such
            sales. In the event of a foreclosure sale, whether made by the
            Trustee under the terms hereof or under judgment of a court; (iv)
            the Collateral may, at the option of the Beneficiary, be sold as a
            whole; (v) it shall not be necessary that Beneficiary take
            possession of the Collateral prior to the time any sale is conducted
            nor shall it be necessary that said Collateral be present at the
            location of such sale; and (vi) Beneficiary may designate any one or
            more persons as agent to perform any act necessary to any sale held
            by Beneficiary, including the sending of notices and the conduct of
            the sale, but in the name and on behalf of Beneficiary; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

      It is hereby agreed that to the extent permitted by law, all of the
      Collateral is to be deemed and held to be a part of and affixed to the
      Property. The foregoing security interest shall also cover Trustor's
      leasehold interest in any of the foregoing Collateral which is leased by
      Trustor. Notwithstanding the foregoing, all of the foregoing Collateral
      shall be owned by Trustor and no leasing or installment sales or other
      financing in connection therewith shall be permitted without the prior
      written approval of Beneficiary. All of the Collateral shall be kept at
      the location of the Land.

      Beneficiary shall give Trustor at least 10 Business Days' prior written
      notice of the time and place of any public sale of such Collateral or of
      the time of or after which any private sale or any other intended
      disposition thereof is to be made, and if such notice is sent to Trustor,
      as the same is provided for the mailing of notices herein, it is hereby
      deemed that such notice shall be and is reasonable notice to Trustor. No
      such notice is necessary for any such Collateral which is perishable,
      threatens to decline speedily in value or is of a type customarily sold on
      a recognized market.

      Trustor acknowledges and agrees that a disposition of the Collateral in
      accordance with Beneficiary's rights and remedies as heretofore provided
      shall be deemed to have been a public sale thereof in a commercially
      reasonable manner if held contemporaneously with the sale under power of
      sale (nonjudicial foreclosure) as provided in Section 7.3(c)(ii) hereof
      upon giving the same notice with respect to the sale of the Collateral
      hereunder as is required under said Section 7.3(c)(ii). Beneficiary shall
      have no obligation to process or prepare the Collateral for sale or other
      disposition. In disposing of the Collateral, Beneficiary may disclaim all
      warranties of title, possession, quiet enjoyment and the like. Any
      proceeds of any sale or other disposition of the Collateral may be applied
      by Beneficiary first to the reasonable expenses incurred by Beneficiary in
      connection therewith, including, without limitation, reasonable attorneys'
      fees and disbursements, and then to the payment of the Secured
      Obligations, in such order of application as Beneficiary may from time to
      time elect.

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<PAGE>
4.5   POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
      Trustor's attorney-in-fact (such agency being coupled with an interest),
      and as such attorney-in-fact, Beneficiary may, without the obligation to
      do so, in Beneficiary's name or in the name of Trustor, prepare, execute,
      file and record financing statements, continuation statements,
      applications for registration and like papers necessary to create, perfect
      or preserve any of Beneficiary's security interests and rights in or to
      the Collateral, and upon a Default, take any other action required of
      Trustor; provided, however, that Beneficiary as such attorney-in-fact
      shall be accountable only for such funds as are actually received by
      Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.

      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity.

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.

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<PAGE>
      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.

      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.

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<PAGE>
      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.

      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;

                                       10
<PAGE>
      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not engaged and will not engage in, seek or
            consent to any dissolution, winding up, liquidation, consolidation,
            merger, asset sale, transfer of partnership or membership interest,
            or amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;

      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            $1,000,000 in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;

                                       11
<PAGE>
      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;

      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not and will not identify its partners, members
            or shareholders, or any affiliates of any of the foregoing, as a
            division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this

                                       12
<PAGE>
            Section 5.2 and any such entity shall conduct its business and
            operations in strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" 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 ownership of voting securities, by contract or otherwise.

                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property;

                                       13
<PAGE>
      (j) materially alter the type of occupancy or use of all or any part of
      the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.

      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous Materials Laws"), including, without limitation: the
            Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
            Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
            1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
            amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive
            Environmental Response, Compensation and Liability Act of 1980, as
            amended (including the Superfund Amendments and Reauthorization Act
            of 1986, "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic
            Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.;
            the Occupational Safety and Health Act, as amended, 29 U.S.C.
            Section 651; the Emergency Planning and Community Right-to-Know Act
            of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health
            Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
            Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all
            comparable state and local laws, laws of other jurisdictions or
            orders and regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery 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 become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.

                                       14
<PAGE>
      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that: (i)
            this Hazardous Materials Section is intended as Beneficiary's
            written request for information (and Trustor's response) concerning
            the environmental condition of the real property security as
            required by California Code of Civil Procedure Section 726.5; and
            (ii) each representation and warranty and covenant in this Section
            (together with any indemnity applicable to a breach of any such
            representation and warranty) with respect to the environmental
            condition of the Property is intended by Beneficiary and Trustor to
            be an "environmental provision" for purposes of California Code of
            Civil Procedure Section 736.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened
      (in writing) litigation against Trustor or Borrower if the aggregate
      damage claims against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation,

                                       15
<PAGE>
      the preparation or review of amendments, assumptions, waivers, releases,
      reconveyances, estoppel certificates or statements of amounts owing under
      any Secured Obligation). In connection with appraisals and inspections,
      Trustor specifically (but not by way of limitation) acknowledges that:
      (aa) a formal written appraisal of the Property by a state certified or
      licensed appraiser may be required by federal regulatory reporting
      requirements on an annual or more frequent basis; and (bb) Beneficiary may
      require inspection of the Property by an independent supervising
      architect, a cost engineering specialist, or both. Trustor shall pay all
      indebtedness arising under this Section immediately upon demand by
      Beneficiary together with interest thereon following notice of such
      indebtedness at the rate of interest then applicable to the principal
      balance of the Note as specified therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, (a) Beneficiary, at Beneficiary's
      election, may only require flood insurance if all or any portion of the
      improvements located on the Property is or becomes located in a special
      flood hazard area, and (b) Beneficiary, at Beneficiary's election, may
      only require earthquake insurance if all or any portion of the Property is
      or becomes located in an earthquake fault zone. Trustor shall also carry
      public liability insurance and such other insurance as Beneficiary may
      reasonably require, including, without limitation, business interruption
      insurance or loss of rents insurance. Such policies shall contain a
      standard mortgage clause naming Beneficiary and its successors in interest
      as a loss payee and requiring at least 30 days prior notice to the holder
      at termination or cancellation. Trustor shall maintain all required
      insurance throughout the term of the Loan and while any liabilities of
      Borrower or Trustor to Beneficiary under any of the Loan Documents remain
      outstanding at Trustor's expense, with companies, and in substance and
      form satisfactory to Beneficiary. Neither Beneficiary nor Trustee, by
      reason of accepting, rejecting, approving or obtaining insurance shall
      incur any liability for: (c) the existence, nonexistence, form or legal
      sufficiency of any insurance; (d) the solvency of any insurer; or (e) the
      payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by

                                       16
<PAGE>
            reason of loss sustained to all or any part of the Property; and
            (iv) all interest which may accrue on any of the foregoing. Trustor
            shall give Beneficiary prompt written notice of the occurrence of
            any casualty affecting, or the institution of any proceedings for
            eminent domain or for the condemnation of, the Property or any
            portion thereof. So long as no Default has occurred and is
            continuing at the time, Trustor shall have the right to adjust,
            compromise and settle any Claim of $100,000 or less without the
            consent of Beneficiary, provided, however, all awards, proceeds and
            other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost
            breakdown for the work; (dd) if reasonably required by Beneficiary,
            a payment and performance bond for the work; (ee) evidence of the
            continuation of substantially all Leases unless consented to in
            writing by Beneficiary; (ff) evidence that, upon completion of the
            work, the size, capacity, value, and income coverage ratios for the
            Property will be at least as great as those which existed
            immediately before the damage or condemnation occurred; and (gg)
            evidence of the satisfaction of any additional conditions that
            Beneficiary may reasonably establish to protect Beneficiary's
            security. Trustor acknowledges that the specific conditions
            described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the

                                       17
<PAGE>
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.

6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower

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<PAGE>
      (other than the sale or exchange of a limited partnership interest or a
      non-managing membership interest). If any Transfer not expressly permitted
      in the Note or this Deed of Trust is made without the prior written
      consent of Beneficiary, Beneficiary shall have the absolute right at its
      option, without prior demand or notice, to declare all of the Secured
      Obligations immediately due and payable, except to the extent prohibited
      by law, and pursue its rights and remedies under Section 7.3 herein.
      Trustor agrees to pay any prepayment fee as set forth in the Note in the
      event the Secured Obligations are accelerated pursuant to the terms of
      this Section. Consent to one such Transfer shall not be deemed to be a
      waiver of the right to require the consent to future or successive
      Transfers. Except for Transfers expressly permitted under the Note,
      Beneficiary's consent to any Transfer may be withheld, conditioned or
      delayed in Beneficiary's sole and absolute discretion.

6.16  INTENTIONALLY OMITTED.

6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee compensation and
      reimbursement for services and expenses in the administration of this
      trust pursuant to C.R.S. Sections 38-37-102 et seq., including, without
      limitation, reasonable attorneys' fees. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Trustee or
      Beneficiary together with interest thereon from the date the indebtedness
      arises at the rate of interest then applicable to the principal balance of
      the Note as specified therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      the Beneficiary Group (as defined below) from and against any claim, loss,
      damage, cost, expense or liability directly or indirectly arising out of:
      (a) the making of the Loan, except for violations of banking laws or
      regulations by the Beneficiary Group; (b) this Deed of Trust; (c) the
      execution of this Deed of Trust or the performance of any act required or
      permitted hereunder or by law; (d) any failure of Trustor to perform
      Trustor's obligations under this Deed of Trust or the other Loan
      Documents; (e) any alleged obligation or undertaking on the Beneficiary
      Group's part to perform or discharge any of the representations,
      warranties, conditions, covenants or other obligations contained in any
      other document related to the Property; (f) any act or omission by Trustor
      or any contractor, agent, employee or representative of Trustor with
      respect to the Property; or (g) any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of: (i) the use, generation,
      manufacture, storage, treatment, release, threatened release, discharge,
      disposal, transportation or presence of any Hazardous Materials which are
      found in, on, under or about the Property (including, without limitation,
      underground contamination); or (ii) the breach of any covenant,
      representation or warranty of Trustor under Sections 5.1.p, 5.1.q, 5.1.r,
      or 6.2 above. The foregoing to the contrary notwithstanding, this
      indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group, or any claim,
      loss, damage, cost, expense or liability incurred by the Beneficiary Group
      arising from any act or incident on the Property occurring after the full
      reconveyance and release of the lien of this Deed of Trust on the
      Property, or with respect to the matters set forth in clause (g) above,
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group resulting from the introduction and initial release of
      Hazardous Materials on the Property occurring after the transfer of title
      to the Property at a foreclosure sale under this Deed of Trust, either
      pursuant to judicial decree or the power of sale, or by deed in lieu of
      such foreclosure. This indemnity shall include, without limitation: (aa)
      all consequential damages (including, without limitation, any third party
      tort claims or governmental claims, fines or penalties against the
      Beneficiary Group); (bb) all court costs and reasonable attorneys' fees
      (including, without limitation, expert witness fees) paid or incurred by
      the Beneficiary Group; and (cc) the costs, whether foreseeable or

                                       19
<PAGE>
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Beneficiary's demand any amounts owing under this indemnity together with
      interest from the date the indebtedness arises until paid at the rate of
      interest applicable to the principal balance of the Note as specified
      therein. Trustor agrees to use legal counsel reasonably acceptable to the
      Beneficiary Group in any action or proceeding arising under this
      indemnity. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE TERMINATION OF
      THIS DEED OF TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE
      SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE ENTITLED "BORROWER'S
      LIABILITY."

6.20  INTENTIONALLY OMITTED.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RELEASE OF DEED OF TRUST. If the principal and interest and all other sums
      due or to become due under the Note shall have been paid, then and in that
      event only, the estate, right, title and interest of Trustee and
      Beneficiary in the Property shall cease, and upon (a) written notice from
      Beneficiary that all of the Secured Obligations have been paid, (b)
      presentment of the original Note marked "cancelled," (c) surrender

                                       20
<PAGE>
      of this Deed of Trust and said cancelled Note to Trustee, (d) execution of
      the statutory form of request for release by Beneficiary and Trustee, in
      due form at Trustor's cost, and (e) payment of Trustee's fees and costs
      and all recording costs, Trustee shall release this Deed of Trust and the
      Property shall become wholly free of the liens, security interests,
      conveyances and assignments created and evidenced hereby. No release of
      this Deed of Trust or the lien hereof shall be valid unless executed by
      Beneficiary and Trustee.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if any, to Beneficiary or in connection with any of
                  the Loan Documents, or as an inducement to Beneficiary to make
                  the Loan, shall be false, incorrect, incomplete or misleading
                  in any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or

                                       21
<PAGE>
                  attachment of, or levy or execution upon any of the Property,
                  the Collateral or any other collateral provided by Borrower or
                  Trustor under any of the Loan Documents, or any material
                  portion of the other assets of Borrower or Trustor, which
                  sequestration, attachment, levy or execution is not released
                  or dismissed within 45 days after its occurrence; or the sale
                  of any assets affected by any of the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.

                                       22
<PAGE>
            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, either in person or by agent,
            with or without bringing any action or proceeding, or by a receiver
            appointed by a court and without regard to the adequacy of its
            security, and without becoming a mortgagee in possession, to enter
            upon the Property from time to time and to do such acts and things
            as Beneficiary or Trustee deem necessary or desirable in order to
            inspect, investigate, assess and protect the security hereof or to
            cure any Default, including, without limitation: (i) to take and
            possess all documents, books, records, papers and accounts of
            Trustor, Borrower or the then owner of the Property which relate to
            the Property; (ii) to make, terminate, enforce or modify leases of
            the Property upon such terms and conditions as Beneficiary deems
            proper; (iii) to make repairs, alterations and improvements to the
            Property necessary, in Trustee's or Beneficiary's reasonable
            judgment, to protect or enhance the security hereof; (iv) to appear
            in and defend any action or proceeding purporting to affect the
            security hereof or the rights or powers of Beneficiary or Trustee
            hereunder; (v) to pay, purchase, contest or compromise any
            encumbrance, charge, lien or claim of lien which, in the sole
            judgment of either Beneficiary or Trustee, is or may be senior in
            priority hereto, the judgment of Beneficiary or Trustee being
            conclusive as between the parties hereto; (vi) to obtain insurance;
            (vii) to pay any premiums or charges with respect to insurance
            required to be carried hereunder; (viii) to obtain a court order to
            enforce Beneficiary's right to enter and inspect the Property for
            Hazardous Materials in which regard the decision of Beneficiary as
            to whether there exists a release or threatened release of Hazardous
            Materials onto the Property shall be deemed reasonable and
            conclusive as between the parties hereto; (ix) to have a receiver
            appointed pursuant to applicable law to enforce Beneficiary's rights
            to enter and inspect the Property for Hazardous Materials; and/or
            (x) to employ legal counsel, accountants, engineers, consultants,
            contractors and other appropriate persons to assist them. All sums
            expended by Beneficiary in connection with such entry and
            possession, together with interest thereon at the Default Interest
            Rate, shall be immediately due and payable to Beneficiary by Trustor
            on demand and shall be secured hereby and by all of the other Loan
            Documents securing all or any part of the indebtedness evidenced by
            the Note;

      b.    APPOINTMENT OF RECEIVER. With or without notice to Trustor or
            Borrower and without a hearing, which are hereby waived by Trustor
            and Borrower, to ex parte to apply to a court of competent
            jurisdiction for and obtain appointment of a receiver of the
            Property as a matter of strict right and Beneficiary's right to
            collect Payments, and without regard to: (i) the adequacy of the
            security for the repayment of the Secured Obligations; or (ii) the
            existence of a declaration that the Secured Obligations are
            immediately due and payable; and Trustor hereby irrevocably consents
            to such appointment and waives any and all notices of and defenses
            to such appointment and agrees not to oppose any application
            therefor by Beneficiary, but nothing herein is to be construed to
            deprive Beneficiary of any other right, remedy or privilege
            Beneficiary may now have under the law to have a receiver appointed,
            provided, however, that, the appointment of such receiver, trustee
            or other appointee by virtue of any court order, statute or
            regulation shall not impair or in any manner prejudice the rights of
            Beneficiary to receive Payments under the Leases pursuant to other
            terms and provisions hereof. Any such receiver shall have all of the
            usual powers and duties of receivers in similar cases, including,
            without limitation, the full power to hold, develop, rent, lease,
            manage,

                                       23
<PAGE>
            maintain, operate and otherwise use or permit the use of the
            Property upon such terms and conditions as said receiver may deem to
            be prudent and reasonable. Such receivership shall, at the option of
            Beneficiary, continue until full payment of the Secured Obligations
            or until title to the Property shall be passed by foreclosure sale
            under this Deed of Trust or deed in lieu of foreclosure;

      c.    FORECLOSURE.

            (i)   JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain or
                  cause Trustee to commence and maintain an action or actions in
                  any court of competent jurisdiction to foreclose this
                  instrument as a mortgage or to obtain specific enforcement of
                  the covenants of Trustor hereunder, and Trustor agrees that
                  such covenants shall be specifically enforceable by injunction
                  or any other appropriate equitable remedy and that for the
                  purposes of any suit brought under this subparagraph, Trustor
                  waives the defense of laches and any applicable statute of
                  limitations;

            (ii)  NONJUDICIAL FORECLOSURE. To commence foreclosure proceedings
                  against the Property by exercise of the power of sale herein
                  contained and cause the Property to be sold in accordance with
                  the requirements and procedures provided by applicable law in
                  a single parcel or in several parcels at the option of
                  Beneficiary. Should Beneficiary elect to foreclose by exercise
                  of the power of sale herein contained, Beneficiary shall file
                  with Trustee a written notice of election and demand for sale
                  and all other documents, certificates and affidavits as are
                  required by applicable law. Thereupon, Trustee shall cause a
                  copy of the notice of election and demand for sale to be
                  recorded in the Clerk and Recorder's Office of the county in
                  which the Property is located. Trustee shall then give such
                  notices as are required by law and shall conduct the
                  foreclosure sale of the Property in accordance with applicable
                  law. Trustee shall sell and dispose of the Property (en masse
                  or in separate parcels, as Trustee may think best) and all the
                  right, title and interest of Trustor and its successors and
                  assigns therein, at public auction at any place permitted by
                  applicable law for the highest and best price the same will
                  bring in cash. Subject to compliance with applicable law,
                  Trustee may postpone the sale of all or any portion of the
                  Property by public announcement at the 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. When the sale is held, Trustee shall execute and
                  deliver to the purchaser of the Property or portions thereof
                  at such sale a certificate of purchase as required by
                  applicable law. Thereafter, following the expiration of all
                  applicable redemption periods and satisfaction of any other
                  requirements prescribed by law, Trustee shall execute and
                  deliver a deed for the Property to the person entitled
                  thereto, which deed shall be in such form as is required by
                  law. Such sale and said deed shall be a perpetual bar, both in
                  law and equity, against Trustor and its successors and
                  assigns, and all other persons claiming the Property or any
                  part thereof by, through, from or under Trustor. Beneficiary
                  may purchase the Property, or any part thereof, and may bid in
                  any part or all of the Secured Obligations and it shall not be
                  obligatory upon the purchaser at any such sale to see to the
                  application of the purchase money;

            (iii) GENERAL. (aa) Beneficiary may, by following the procedures and
                  satisfying the requirements prescribed by applicable law,
                  judicially or nonjudicially foreclose on only a portion of the
                  Property and, in such event, said foreclosure shall not affect
                  the lien of this Deed of Trust on the remaining portion of the
                  Property not foreclosed. (bb) If a nonjudicial foreclosure
                  hereunder shall be commenced by Trustee, Beneficiary may at
                  any time before the sale of the Property direct Trustee to
                  abandon the sale, and may then institute suit for the
                  collection of the Note and the other Secured Obligations and
                  for the judicial foreclosure of this Deed of Trust. If
                  Beneficiary should institute a suit for the collection of the
                  Note or any other Secured Obligation and for the judicial
                  foreclosure of this Deed of Trust, Beneficiary may at any time
                  before the entry of a final judgment in said suit dismiss the
                  same, and require Trustee to sell

                                       24
<PAGE>
                  the Property in accordance with the provisions of this Deed of
                  Trust. (cc) Upon sale of the Property at any judicial or
                  nonjudicial foreclosure, Beneficiary may credit bid (as
                  determined by Beneficiary in its sole and absolute discretion)
                  all or any portion of the Secured Obligations. In determining
                  such credit bid, Beneficiary may, but is not obligated to,
                  take into account all or any of the following: (i) appraisals
                  of the Property as such appraisals may be discounted or
                  adjusted by Beneficiary in its sole and absolute underwriting
                  discretion; (ii) expenses and costs incurred by Beneficiary
                  with respect to the Property prior to foreclosure, provided
                  such amounts comprise a part of the Secured Obligations; (iii)
                  estimated reasonable expenses and costs, net of income of
                  holding, marketing and selling the Property, which Beneficiary
                  anticipates will be incurred with respect to the Property
                  after foreclosure, but prior to resale, including, without
                  limitation, costs of structural reports and other due
                  diligence, costs to carry the Property prior to resale, costs
                  of resale (e.g. commissions, attorneys' fees, and taxes),
                  costs of any Hazardous Materials clean-up and monitoring,
                  costs of deferred maintenance, repair, refurbishment and
                  retrofit, costs of defending or settling litigation affecting
                  the Property, (iv) the fact of additional collateral (if any),
                  for the Secured Obligations; and (v) such other factors or
                  matters that Beneficiary (in its sole and absolute discretion)
                  deems appropriate. In regard to the above, Trustor
                  acknowledges and agrees that: (vi) Beneficiary is not required
                  to use any or all of the foregoing factors to determine the
                  amount of its credit bid; (vii) this paragraph does not impose
                  upon Beneficiary any additional obligations that are not
                  imposed by law at the time the credit bid is made; (viii) the
                  amount of Beneficiary's credit bid need not have any relation
                  to any loan-to-value ratios specified in the Loan Documents or
                  previously discussed between Trustor and Beneficiary; and (ix)
                  Beneficiary's credit bid may be (at Beneficiary's sole and
                  absolute discretion) higher or lower than any appraised value
                  of the Property;

      d.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Trustee and
            Beneficiary or either of them determine in their sole discretion;

      e.    COLLECTION OF PAYMENTS. With or without taking possession of the
            Property, sue for or otherwise collect Payments under the Leases,
            including those past due and unpaid, and apply the same, less costs
            and expenses of operation and collection, including, without
            limitation, attorneys' fees, against the Secured Obligations in such
            order as Beneficiary may determine in its discretion, without in any
            way curing or waiving any default.

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and

      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal property or a
      fixture, as the case may be, and dispose of the same in accordance with
      applicable law, separate and apart from the sale of the Property. Any sale
      of Collateral hereunder shall be conducted in any manner permitted by the
      UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, Trustee shall apply the proceeds of such sale in the following
      order of priority: First, to the costs, fees and expenses of exercising
      the power of sale and of sale, including, without limitation, the payment
      of the Trustee's fees

                                       25
<PAGE>
      and attorneys' fees; Second, to the payment of the Secured Obligations
      which are secured by this Deed of Trust, in such order as Beneficiary
      shall determine in its sole discretion; Third, to satisfy the outstanding
      balance of obligations secured by any junior liens or encumbrances in the
      order of their priority; and Fourth, to the Trustor or the Trustor's
      successor in interest, or in the event the Property has been sold or
      transferred to another, to the vested owner of record at the time of the
      Trustee's sale.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      sale (unless all Secured Obligations then due have been paid or performed
      and Trustor has cured all other Defaults hereunder), or impair the status
      of the security, or prejudice Beneficiary in the exercise of any right or
      remedy, or be construed as an affirmation by Beneficiary of any tenancy,
      lease or option or a subordination of the lien of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.

7.10  DISCONTINUANCE OF PROCEEDINGS. If Beneficiary shall invoke any right,
      remedy or recourse permitted hereunder or under the other Loan Documents
      and shall thereafter elect to discontinue or abandon the same for any
      reason, Beneficiary shall have the unqualified right to do so and, in such
      an event, Trustor and Beneficiary shall be restored to their former
      positions with respect to the Secured Obligations, the Loan Documents, the
      Property and otherwise, and the rights, remedies, recourses and powers of
      Beneficiary shall continue as if the same had never been invoked.

                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The

                                       26
<PAGE>
      Loan Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses, reasonable attorneys' fees and court
      costs (including, without limitation, expert witness fees). As used herein
      the term "prevailing party" shall mean the party which obtains the
      principal relief it has sought, whether by compromise settlement or
      judgment. If the party which commenced or instituted the action, suit or
      proceeding shall dismiss or discontinue it without the concurrence of the
      other party, such other party shall be deemed the prevailing party.

                                       27
<PAGE>
8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledges and participants,
      of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem appropriate. The
      absolute assignment of rents and leases established by Article 3 is
      similarly independent of and separate from the deed of trust and the
      security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.

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<PAGE>
8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents shall be binding upon and inure to
      the benefit of the heirs, successors and assigns of the parties. The
      foregoing sentence shall not be construed to permit Trustor to assign the
      Loan except as otherwise permitted under the Note or the other Loan
      Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note 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
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder and the creation, perfection
      and enforcement of the security interests created pursuant hereto and
      pursuant to the other Loan Documents in any Collateral which is located in
      the state where the Property is located shall be governed by and construed
      according to the law of the state where the Property is located. Except as
      provided in the immediately preceding sentence, Trustor hereby
      unconditionally and irrevocably waives, to the fullest extent permitted by
      law, any claim to assert that the law of any jurisdiction other than
      California governs this Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the Property is located over any suit, action, or proceeding,
      brought by Beneficiary to exercise its STATUTORY POWER OF SALE under this
      Deed of Trust or any action brought by Beneficiary to enforce its rights
      with respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.

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<PAGE>
8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                       Trustor:
      ------------                       --------

      WELLS FARGO BANK, N.A.             MHC STAGECOACH, L.L.C.
      FAX No.: (925) 691-5947            FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                           Katz Randall Weinberg & Richmond
                           333 West Wacker Drive
                           Suite 1800
                           Chicago, Illinois 60606
                           Attention: Benjamin Randall
                           Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR.
      THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS
      DEED OF TRUST.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                                       30
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                   "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By: MHC-QRS STAGECOACH, INC.,
    a  Delaware corporation,
    its Managing Member

    By: /s/ John M. Zoeller
       -------------------------------------
    Name: John M. Zoeller
    Its: Vice President, Chief Financial
         Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL                )
                           )  SS:
COUNTY OF COOK             )

            The foregoing instrument was acknowledged before me this 8/1,
2001 by John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company.

WITNESS my hand and official seal.

                                                  /s/ Mary Dobronski
                                          -----------------------------------
                                          Print Name: Mary Dobronski

My Commission Expires:

     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A
                               DESCRIPTION OF LAND

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor", PUBLIC
TRUSTEE OF ADAMS COUNTY, STATE OF COLORADO, as "Trustee", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Adams, state of Colorado and more particularly known as Thornton,
Colorado and is described as follows:

Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of the
Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th P.M.,
County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.

                                    EXHIBIT A
<PAGE>
Recording Requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:      CMO Loan Admin.
Loan No. :      31-0900553R
Property Name:  Apollo Village

                                  DEED OF TRUST
                                       AND
                     ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
                                      AND
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001 are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, TRANSNATION TITLE
INSURANCE COMPANY ("Trustee"), with a mailing address at 234 N. Central Avenue,
Phoenix, Arizona, 85004 and WELLS FARGO BANK, NATIONAL ASSOCIATION
("Beneficiary"), with a mailing address at 1320 Willow Pass Road, Suite 205,
Concord, California 94520.

                                    RECITALS

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan.
      The maturity date of the Loan is September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, conveys and assigns to Trustee, in
      trust for the benefit of Beneficiary, with power of sale and right of
      entry and possession, all estate, right, title and interest which Trustor
      now has or may hereafter acquire in, to, under or derived from any or all
      of the following:

                                       1
<PAGE>
      a.    That real property ("Land") located in Peoria, county of Maricopa,
            state of Arizona, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock or interests, royalties, development
            rights and credits, air rights, minerals, oil rights, and gas
            rights, now or later used or useful in connection with, appurtenant
            to or related to the Land;

      c.    All buildings, structures, facilities, other improvements and
            fixtures now or hereafter located on the Land;

      d.    All apparatus, equipment, machinery and appliances and all
            accessions thereto and renewals and replacements thereof and
            substitutions therefor used in the operation or occupancy of the
            Land, it being intended by the parties that all such items shall be
            conclusively considered to be a part of the Land, whether or not
            attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust, including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for the benefit of Beneficiary, when the obligation is evidenced by
            a writing which recites that it is secured by this Deed of Trust;

                                       2
<PAGE>
      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.

               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to such notice. If and when no Default
      exists, Beneficiary shall re-confer the License upon Trustor until the
      occurrence of another Default.

                                       3
<PAGE>
3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise of or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      A.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants whom Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

           (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All such sums received by
            Beneficiary with respect to any Lease shall be deemed "Impounds" (as
            defined in Section 6.12b) and shall be deposited by Beneficiary into
            a pledged account in accordance with Section 6.12b. If no Default
            exists, Beneficiary shall release such Impounds to Trustor from time
            to time

                                       4
<PAGE>
            as necessary to pay or reimburse Trustor for such tenant
            improvements, brokerage commissions and other leasing costs as may
            be required to re-tenant the affected space; provided, however,
            Beneficiary shall have received and approved each of the following
            for each tenant for which such costs were incurred; (1) Trustor's
            written request for such release, including the name of the tenant,
            the location and net rentable area of the space and a description
            and cost breakdown of the tenant improvements or other leasing costs
            covered by the request; (2) Trustor's certification that any tenant
            improvements have been completed lien-free and in a workmanlike
            manner; (3) a fully executed Lease, or extension or renewal of the
            current Lease; (4) an estoppel certificate executed by the tenant
            including its acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4(a) or 3.4(b) within 10 Business Days after
            Beneficiary's receipt of such request (and all documents and
            information reasonably related thereto) shall be deemed to
            constitute Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant under a Lease of such right to
      subordinate. No subordination referred to in this Section shall constitute
      a subordination to any lien or other encumbrance, whenever arising, or
      improve the right of any junior lienholder. Nothing herein shall be
      construed as subordinating this Deed of Trust to any Lease.

                                       5
<PAGE>
                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
      interest to secure payment and performance of all of the Secured
      Obligations, in all of Trustor's right, title and interest in and to the
      following described personal property in which Trustor now or at any time
      hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Arizona Uniform Commercial Code, as
      amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any obligation of Trustor to Beneficiary unless
      Beneficiary shall make an express written election of said remedy under
      the UCC or other applicable law.

                                       6
<PAGE>
4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble the Collateral and make it available to
            Beneficiary at a place reasonably designated by Beneficiary; (ii)
            without prior notice (to the extent permitted by law), enter upon
            the Property or other place where the Collateral may be located and
            take possession of, collect, sell, lease, license and otherwise
            dispose of the Collateral, and store the same at locations
            acceptable to Beneficiary at Trustor's expense; or (iii) sell,
            assign and deliver the Collateral at any place or in any lawful
            manner and bid and become purchaser at any such sales; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

        Trustor acknowledges and agrees that a disposition of the Collateral in
        accordance with Beneficiary's rights and remedies as heretofore provided
        is a disposition thereof in a commercially reasonable manner and that 5
        Business Days prior notice of such disposition is commercially
        reasonable notice. Beneficiary shall have no obligation to process or
        prepare the Collateral for sale or other disposition. In disposing of
        the Collateral, Beneficiary may disclaim all warranties of title,
        possession, quiet enjoyment and the like. Any proceeds of any sale or
        other disposition of the Collateral may be applied by Beneficiary first
        to the reasonable expenses incurred by Beneficiary in connection
        therewith, including, without limitation, reasonable attorneys' fees and
        disbursements, and then to the payment of the Secured Obligations, in
        such order of application as Beneficiary may from time to time elect.

4.5     POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
        Trustor's attorney-in-fact (such agency being coupled with an interest),
        and as such attorney-in-fact, Beneficiary may, without the obligation to
        do so, in Beneficiary's name or in the name of Trustor, prepare,
        execute, file and record financing statements, continuation statements,
        applications for registration and like papers necessary to create,
        perfect or preserve any of Beneficiary's security interests and rights
        in or to the Collateral, and upon a Default, take any other action
        required of Trustor; provided, however, that Beneficiary as such
        attorney-in-fact shall be accountable only for such funds as are
        actually received by Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.

                                       7
<PAGE>
      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity .

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.

      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.

                                       8
<PAGE>
      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.

      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.

                                       9
<PAGE>
      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;

      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not and will not engage in, seek or consent to
            any dissolution, winding up, liquidation, consolidation, merger,
            asset sale, transfer of partnership or membership interest, or
            amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;

                                       10
<PAGE>
      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            ____________ in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;

      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;

                                       11
<PAGE>
      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not identified and will not identify its
            partners, members or shareholders, or any affiliates of any of the
            foregoing, as a division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this Section 5.2
            and any such entity shall conduct its business and operations in
            strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" 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 ownership of voting securities, by contract or otherwise.

                                       12
<PAGE>
                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property; (j) materially alter the type of occupancy or use of all or any
      part of the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.

      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous

                                       13
<PAGE>
            Materials Laws"), including, without limitation: the Clean Air Act,
            as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water
            Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.;
            the Resource Conservation and Recovery Act of 1976, as amended, 42
            U.S.C. Section 6901 et seq.; the Comprehensive Environmental
            Response, Compensation and Liability Act of 1980, as amended
            (including the Superfund Amendments and Reauthorization Act of 1986,
            "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substances
            Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the
            Occupational Safety and Health Act, as amended, 29 U.S.C. Section
            651; the Emergency Planning and Community Right-to-Know Act of 1986,
            42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
            1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking
            Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state
            and local laws, laws of other jurisdictions or orders and
            regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery 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 become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.

      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that: (i)
            this Hazardous Materials Section is intended as Beneficiary's
            written request for information (and Trustor's response) concerning
            the environmental condition of the real property security as
            required by California Code of Civil Procedure Section 726.5; and
            (ii) each representation and warranty and covenant in this Section
            (together with any indemnity applicable to a breach of any such
            representation and warranty) with respect to the environmental
            condition of the Property is intended by Beneficiary and Trustor to
            be an "environmental provision" for purposes of California Code of
            Civil Procedure Section 736.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened

                                       14
<PAGE>
      (in writing) litigation against Trustor or Borrower if the aggregate
      damage claims against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation, the preparation or
      review of amendments, assumptions, waivers, releases, reconveyances,
      estoppel certificates or statements of amounts owing under any Secured
      Obligation). In connection with appraisals and inspections, Trustor
      specifically (but not by way of limitation) acknowledges that: (aa) a
      formal written appraisal of the Property by a state certified or licensed
      appraiser may be required by federal regulatory reporting requirements on
      an annual or more frequent basis; and (bb) Beneficiary may require
      inspection of the Property by an independent supervising architect, a cost
      engineering specialist, or both. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Beneficiary together
      with interest thereon following notice of such indebtedness at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's

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<PAGE>
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, Beneficiary, at Beneficiary's election,
      may only require flood insurance if all or any portion of the improvements
      located on the Property is or becomes located in a special flood hazard
      area, and Beneficiary, at Beneficiary's election, may only require
      earthquake insurance if all or any portion of the Property is or becomes
      located in an earthquake fault zone. Trustor shall also carry public
      liability insurance and such other insurance as Beneficiary may reasonably
      require, including, without limitation, business interruption insurance or
      loss of rents insurance. Such policies shall contain a standard mortgage
      clause naming Beneficiary and its successors in interest as a loss payee
      and requiring at least 30 days prior notice to the holder at termination
      or cancellation. Trustor shall maintain all required insurance throughout
      the term of the Loan and while any liabilities of Borrower or Trustor to
      Beneficiary under any of the Loan Documents remain outstanding at
      Trustor's expense, with companies, and in substance and form satisfactory
      to Beneficiary. Neither Beneficiary nor Trustee, by reason of accepting,
      rejecting, approving or obtaining insurance shall incur any liability for:
      (a) the existence, nonexistence, form or legal sufficiency of any
      insurance; (b) the solvency of any insurer; or (c) the payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by reason of loss sustained to all or any part of
            the Property; and (iv) all interest which may accrue on any of the
            foregoing. Trustor shall give Beneficiary prompt written notice of
            the occurrence of any casualty affecting, or the institution of any
            proceedings for eminent domain or for the condemnation of, the
            Property or any portion thereof. So long as no Default has occurred
            and is continuing at the time, Trustor shall have the right to
            adjust, compromise and settle any Claim of $100,000 or less without
            the consent of Beneficiary, provided, however, all awards, proceeds
            and other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost

                                       16
<PAGE>
            breakdown for the work; (dd) if reasonably required by Beneficiary,
            a payment and performance bond for the work; (ee) evidence of the
            continuation of substantially all Leases unless consented to in
            writing by Beneficiary; (ff) evidence that, upon completion of the
            work, the size, capacity, value, and income coverage ratios for the
            Property will be at least as great as those which existed
            immediately before the damage or condemnation occurred; and (gg)
            evidence of the satisfaction of any additional conditions that
            Beneficiary may reasonably establish to protect Beneficiary's
            security. Trustor acknowledges that the specific conditions
            described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.

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<PAGE>
6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower (other than
      the sale or exchange of a limited partnership interest or a non-managing
      membership interest). If any Transfer not expressly permitted in the Note
      or this Deed of Trust is made without the prior written consent of
      Beneficiary, Beneficiary shall have the absolute right at its option,
      without prior demand or notice, to declare all of the Secured Obligations
      immediately due and payable, except to the extent prohibited by law, and
      pursue its rights and remedies under Section 7.3 herein. Trustor agrees to
      pay any prepayment fee as set forth in the Note in the event the Secured
      Obligations are accelerated pursuant to the terms of this Section. Consent
      to one such Transfer shall not be deemed to be a waiver of the right to
      require the consent to future or successive Transfers. Except for
      Transfers expressly permitted under the Note, Beneficiary's consent to any
      Transfer may be withheld, conditioned or delayed in Beneficiary's sole and
      absolute discretion.

6.16  ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
      trust when this Deed of Trust is recorded. From time to time and without
      affecting the personal liability of any person for payment of any
      indebtedness or performance of any Secured Obligation, Beneficiary, or
      Trustee at the direction of Beneficiary, may, without liability therefor
      and without notice: (a) reconvey all or any part of the Property; (b)
      consent to the making of any map or plat of the Property; (c) join with
      Trustor in granting any easement on the Property; (d) join with Trustor in
      any declaration of covenants and restrictions; or (e) join in any
      extension agreement or any agreement subordinating the lien or charge of
      this Deed of Trust. Nothing contained in the immediately preceding
      sentence shall be construed to limit, impair or otherwise affect the
      rights of Trustor in any respect. Except as may otherwise be required by
      applicable law, Trustee or Beneficiary may from time to time apply to any
      court of competent jurisdiction for aid and direction in the execution of
      the trusts hereunder and the enforcement of the rights and remedies
      available hereunder, and Trustee or Beneficiary may obtain orders or
      decrees directing or confirming or approving acts in the execution of said
      trusts and the enforcement of said remedies. Trustee has no obligation to
      notify any party of any pending sale or any action or proceeding
      (including, without limitation, actions in which Trustor, Beneficiary or
      Trustee shall be a party) unless held or commenced and maintained by
      Trustee under this Deed of Trust. Trustee shall not be obligated to
      perform any act required of it hereunder unless the performance of the act
      is requested in writing and Trustee is reasonably indemnified and held
      harmless against loss, cost, liability and expense.

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<PAGE>
6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
      compensation and reimbursement for services and expenses in the
      administration of this trust, including, without limitation, reasonable
      attorneys' fees. Trustor shall pay all indebtedness arising under this
      Section immediately upon demand by Trustee or Beneficiary together with
      interest thereon from the date the indebtedness arises at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      Trustee and the Beneficiary Group (as defined below) from and against any
      claim, loss, damage, cost, expense or liability directly or indirectly
      arising out of: (a) the making of the Loan, except for violations of
      banking laws or regulations by the Beneficiary Group; (b) this Deed of
      Trust; (c) the execution of this Deed of Trust or the performance of any
      act required or permitted hereunder or by law; (d) any failure of Trustor
      to perform Trustor's obligations under this Deed of Trust or the other
      Loan Documents; (e) any alleged obligation or undertaking on the
      Beneficiary Group's part to perform or discharge any of the
      representations, warranties, conditions, covenants or other obligations
      contained in any other document related to the Property; (f) any act or
      omission by Trustor or any contractor, agent, employee or representative
      of Trustor with respect to the Property; or (g) any claim, loss, damage,
      cost, expense or liability directly or indirectly arising out of: (i) the
      use, generation, manufacture, storage, treatment, release, threatened
      release, discharge, disposal, transportation or presence of any Hazardous
      Materials which are found in, on, under or about the Property (including,
      without limitation, underground contamination); or (ii) the breach of any
      covenant, representation or warranty of Trustor under Sections 5.1.p,
      5.1.q, 5.1.r, or 6.2 above. The foregoing to the contrary notwithstanding,
      this indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group or Trustee, or
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group or Trustee arising from any act or incident on the
      Property occurring after the full reconveyance and release of the lien of
      this Deed of Trust on the Property, or with respect to the matters set
      forth in clause (g) above, any claim, loss, damage, cost, expense or
      liability incurred by the Beneficiary Group resulting from the
      introduction and initial release of Hazardous Materials on the Property
      occurring after the transfer of title to the Property at a foreclosure
      sale under this Deed of Trust, either pursuant to judicial decree or the
      power of sale, or by deed in lieu of such foreclosure. This indemnity
      shall include, without limitation: (aa) all consequential damages
      (including, without limitation, any third party tort claims or
      governmental claims, fines or penalties against Trustee or the Beneficiary
      Group); (bb) all court costs and reasonable attorneys' fees (including,
      without limitation, expert witness fees) paid or incurred by Trustee or
      the Beneficiary Group; and (cc) the costs, whether foreseeable or
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Trustee's or Beneficiary's demand any amounts owing under this indemnity
      together with interest from the date the indebtedness arises until paid at
      the rate of interest applicable to the principal balance of the Note as
      specified therein. Trustor agrees to use legal counsel reasonably
      acceptable to Trustee and the Beneficiary Group in any action or
      proceeding arising under this indemnity. THE PROVISIONS OF THIS SECTION
      SHALL SURVIVE THE TERMINATION AND

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<PAGE>
      RECONVEYANCE OF THIS DEED OF TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS
      INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

6.20  SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
      acknowledged by Beneficiary, Beneficiary may appoint another trustee to
      act in the place and stead of Trustee or any successor. Such writing shall
      set forth any information required by law and shall be recorded in the
      Office of the Recorder of the County in which the Property is situated.
      Beneficiary shall give such additional notice as may be required by law.
      Such instrument of substitution and the compliance with any other
      requirements of applicable law shall discharge Trustee herein named and
      shall appoint the new trustee as the trustee hereunder with the same
      effect as if originally named trustee herein. A writing recorded pursuant
      to the provisions of this Section shall be conclusive proof of the proper
      substitution of such new trustee.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
      this Deed of Trust or certified copy thereof and any note, instrument or
      instruments setting forth all obligations secured hereby to Trustee for
      cancellation, Trustee shall reconvey, without warranty, the Property or
      that portion thereof then held hereunder. The recitals of any matters or
      facts in any reconveyance executed hereunder shall be conclusive proof of
      the truthfulness thereof. To the extent permitted by law, the reconveyance
      may describe the grantee as "the person or persons legally entitled
      thereto". Neither Beneficiary nor Trustee shall have any duty to determine
      the rights of persons claiming to be rightful grantees of any
      reconveyance. When the Property has been fully reconveyed,

                                       20
<PAGE>
      the last such reconveyance shall operate as a reassignment of all future
      rents, issues and profits of the Property to the person or persons legally
      entitled thereto.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  COMMUNITY FACILITIES DISTRICT. Without obtaining the prior written consent
      of Beneficiary, Trustor shall not consent to, or vote in favor of, the
      inclusion of all or any part of the Property in any Community Facilities
      District formed pursuant to the Community Facilities District Act, A.R.S.
      Section 48-701, et seq., as amended from time to time. Trustor shall
      immediately give notice to Beneficiary of any notification or advice that
      Trustor may receive from any municipality or other third party of any
      intent or proposal to include all or any part of the Property in a
      Community Facilities District. Beneficiary shall have the right to file a
      written objection to the inclusion of all or any part of the Property in a
      Community Facilities District, either in its own name or in the name of
      Trustor, and to appear at, and participate in, any hearing with respect to
      the formation of any such district.

6.26  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including, without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if

                                       21
<PAGE>
                  any, to Beneficiary or in connection with any of the Loan
                  Documents, or as an inducement to Beneficiary to make the
                  Loan, shall be false, incorrect, incomplete or misleading in
                  any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or attachment of, or levy or execution upon any
                  of the Property, the Collateral or any other collateral
                  provided by Borrower or Trustor under any of the Loan
                  Documents, or any material portion of the other assets of
                  Borrower or Trustor, which sequestration, attachment, levy or
                  execution is not released or dismissed within 45 days after
                  its occurrence; or the sale of any assets affected by any of
                  the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower

                                       22
<PAGE>
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, and without becoming a
            mortgagee in possession, to enter upon the Property from time to
            time and to do such acts and things as Beneficiary or Trustee deem
            necessary or desirable in order to inspect, investigate, assess and
            protect the security hereof or to cure any Default, including,
            without limitation: (i) to take and possess all documents, books,
            records, papers and accounts of Trustor, Borrower or the then owner
            of the Property which relate to the Property; (ii) to make,
            terminate, enforce or modify leases of the Property upon such terms
            and conditions as Beneficiary deems proper; (iii) to make repairs,
            alterations and improvements to the Property necessary, in Trustee's
            or Beneficiary's reasonable judgment, to protect or enhance the
            security hereof; (iv) to appear in and defend any action or
            proceeding purporting to affect the security hereof or the rights or
            powers of Beneficiary or Trustee hereunder; (v) to pay, purchase,
            contest or compromise any encumbrance, charge, lien or claim of lien
            which, in the sole judgment of either Beneficiary or Trustee, is or
            may be senior in priority hereto, the judgment of Beneficiary or
            Trustee being conclusive as between the parties hereto; (vi) to
            obtain insurance; (vii) to pay any premiums or charges with respect
            to insurance required to be carried hereunder; (viii) to obtain a
            court order to enforce Beneficiary's right to enter and inspect the
            Property for Hazardous Materials, in which regard the decision of
            Beneficiary as to whether there exists a release or threatened
            release of Hazardous Materials onto the Property shall be deemed
            reasonable and conclusive as between the parties hereto; (ix) to
            have a receiver appointed pursuant to applicable law to enforce
            Beneficiary's rights to enter and inspect the Property for Hazardous
            Materials; and/or (x) to employ legal counsel, accountants,
            engineers, consultants, contractors and other appropriate persons to
            assist them;

      b.    APPOINTMENT OF RECEIVER. With or without notice or hearing, to apply
            to a court of competent jurisdiction for and obtain appointment of a
            receiver, trustee, liquidator or conservator of the Property, for
            any purpose, including, without limitation, to enforce Beneficiary's
            right to collect Payments and to enter on and inspect the Property
            for Hazardous Materials, as a matter of strict right and without
            regard to: (i) the adequacy of the security for the repayment of the
            Secured Obligations; (ii) the existence of a declaration that the
            Secured Obligations are immediately due and payable; (iii) the
            filing of a notice of default; or (iv) the solvency of Trustor,
            Borrower or any guarantor or other person or entity in any manner
            obligated to Beneficiary under the Loan Documents;

      c.    JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain an action
            or actions in any court of competent jurisdiction to foreclose this
            instrument as a mortgage or to obtain specific enforcement of the
            covenants of Trustor hereunder, and Trustor agrees that such
            covenants shall be specifically enforceable by injunction or any
            other appropriate equitable remedy and that for the purposes of any
            suit brought under this subparagraph, Trustor waives the defense of
            laches and any applicable statute of limitations;

                                       23
<PAGE>
      d.    NONJUDICIAL FORECLOSURE. To give such notice of Default and of
            election to cause the Property to be sold as may be required by law
            or as may be necessary to cause the Trustee to exercise the power of
            sale granted herein. Trustee shall give and record such notice as
            the law then requires as a condition precedent to a trustee's sale.
            When the minimum period of time required by law after such notice
            has elapsed, Trustee, without notice to or demand upon Trustor
            except as required by law, shall sell the Property at the time and
            place of sale fixed by it in the notice of sale, at one or several
            sales, either as a whole or in separate parcels and in such manner
            and order, as directed by Beneficiary, or by Trustor to the extent
            required by law, at public auction to the highest bidder for cash,
            in lawful money of the United States, payable at time of sale.
            Except as required by law, neither Trustor nor any other person or
            entity other than Beneficiary shall have the right to direct the
            order in which the Property is sold. Subject to requirements and
            limits imposed by law, Trustee may, from time to time postpone sale
            of all or any portion of the Property by public announcement at such
            time and place of sale, and from time to time may postpone the sale
            by public announcement at the time and place fixed by the preceding
            postponement. A sale of less than the whole of the Property or any
            defective or irregular sale made hereunder shall not exhaust the
            power of sale provided for herein. Trustee shall deliver to the
            purchaser at such sale a deed conveying the Property or portion
            thereof so sold, but without any covenant or warranty, express or
            implied. The recitals in the deed of any matters or facts shall be
            conclusive proof of the truthfulness thereof. Any person, including
            Trustee, Trustor or Beneficiary, may purchase at the sale.

            Upon sale of the Property at any judicial or nonjudicial
            foreclosure, Beneficiary may credit bid (as determined by
            Beneficiary in its sole and absolute discretion) all or any portion
            of the Secured Obligations. In determining such credit bid,
            Beneficiary may, but is not obligated to, take into account all or
            any of the following: (i) appraisals of the Property as such
            appraisals may be discounted or adjusted by Beneficiary in its sole
            and absolute underwriting discretion; (ii) expenses and costs
            incurred by Beneficiary with respect to the Property prior to
            foreclosure; (iii) expenses and costs which Beneficiary anticipates
            will be incurred with respect to the Property after foreclosure, but
            prior to resale, including, without limitation, costs of structural
            reports and other due diligence, costs to carry the Property prior
            to resale, costs of resale (e.g. commissions, attorneys' fees, and
            taxes), costs of any Hazardous Materials clean-up and monitoring,
            costs of deferred maintenance, repair, refurbishment and retrofit,
            costs of defending or settling litigation affecting the Property,
            and lost opportunity costs (if any), including the time value of
            money during any anticipated holding period by Beneficiary; (iv)
            declining trends in real property values generally and with respect
            to properties similar to the Property; (v) anticipated discounts
            upon resale of the Property as a distressed or foreclosed property;
            (vi) the fact of additional collateral (if any), for the Secured
            Obligations; and (vii) such other factors or matters that
            Beneficiary (in its sole and absolute discretion) deems appropriate.
            In regard to the above, Trustor acknowledges and agrees that: (viii)
            Beneficiary is not required to use any or all of the foregoing
            factors to determine the amount of its credit bid; (ix) this
            paragraph does not impose upon Beneficiary any additional
            obligations that are not imposed by law at the time the credit bid
            is made; (x) the amount of Beneficiary's credit bid need not have
            any relation to any loan-to-value ratios specified in the Loan
            Documents or previously discussed between Trustor and Beneficiary;
            and (xi) Beneficiary's credit bid may be (at Beneficiary's sole and
            absolute discretion) higher or lower than any appraised value of the
            Property;

      e.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Beneficiary
            determines in its sole discretion;

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and

                                       24
<PAGE>
      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal property or a
      fixture, as the case may be, and dispose of the same in accordance with
      applicable law, separate and apart from the sale of the Property. Any sale
      of Collateral hereunder shall be conducted in any manner permitted by the
      UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, except as otherwise may be required by applicable law, Trustee
      shall apply the proceeds of such sale in the following order of priority:
      First, to the costs and expenses of exercising the power of sale and of
      sale, including the payment of the trustee's fees and reasonable
      attorneys' fees actually incurred; Second, to the payment of the contract
      or contracts secured; Third, to the payment of all other Secured
      Obligations; Fourth, to junior lienholders or encumbrancers in order of
      their priority; and Fifth, the remainder, if any, to the person or persons
      legally entitled thereto.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      default or sale (unless all Secured Obligations then due have been paid or
      performed and Trustor has cured all other Defaults hereunder), or impair
      the status of the security, or prejudice Beneficiary or Trustee in the
      exercise of any right or remedy, or be construed as an affirmation by
      Beneficiary of any tenancy, lease or option or a subordination of the lien
      of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.

                                       25
<PAGE>
                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The Loan
      Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses,

                                       26
<PAGE>
      reasonable attorneys' fees and court costs (including, without limitation,
      expert witness fees). Court costs and attorneys' fees shall be set by the
      court and not by a jury. As used herein the term "prevailing party" shall
      mean the party which obtains the principal relief it has sought, whether
      by compromise settlement or judgment. If the party which commenced or
      instituted the action, suit or proceeding shall dismiss or discontinue it
      without the concurrence of the other party, such other party shall be
      deemed the prevailing party.

8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledgees and
      participants, of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law. In addition, should this instrument be or
      become ineffective as a deed of trust, then these presents shall be
      construed and enforced as a realty mortgage with the Trustor being the
      mortgagor and Beneficiary being the mortgagee.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem

                                       27
<PAGE>
      appropriate. The absolute assignment of rents and leases established by
      Article 3 is similarly independent of and separate from the deed of trust
      and the security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.

8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents herein and in the other Loan
      Documents shall be binding upon and inure to the benefit of the heirs,
      successors and assigns of the parties. The foregoing sentence shall not be
      construed to permit Trustor to assign the Loan except as otherwise
      permitted under the Note or the other Loan Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note 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
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder and the creation, perfection
      and enforcement of the security interests created pursuant hereto and
      pursuant to the other Loan Documents in any Collateral which is located in
      the state where the Property is located shall be governed by and construed
      according to the law of the state where the Property is located. Except as
      provided in the immediately preceding sentence, Trustor hereby
      unconditionally and irrevocably waives, to the fullest extent permitted by
      law, any claim to assert that the law of any jurisdiction other than
      California governs this Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the

                                       28
<PAGE>
      Property is located over any suit, action, or proceeding, brought by
      Beneficiary to exercise its STATUTORY POWER OF SALE under this Deed of
      Trust or any action brought by Beneficiary to enforce its rights with
      respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.

8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                        Trustee:

      WELLS FARGO BANK, N.A.              TRANSNATION TITLE  INSURANCE  COMPANY
      FAX No.: (925) 691-5947             FAX No.: (602) 247-2694

      Trustor:

      MHC STAGECOACH, L.L.C.
      FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                              Katz Randall Weinberg & Richmond
                              333 West Wacker Drive
                              Suite 1800
                              Chicago, Illinois 60606
                              Attention: Benjamin Randall
                              Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER

                                       29
<PAGE>
ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS DEED OF TRUST.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       30
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                      "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member

      By: /s/ John M. Zoeller
         ----------------------------
      Name: John M. Zoeller
      Its:  Vice President, Chief Financial
            Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL             )
                        )  SS:
COUNTY OF COOK          )

            The foregoing instrument was acknowledged before me this 8/1,
2001 by John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company, on
behalf of the corporation.

WITNESS my hand and official seal.

                                           /s/ Mary Dobronski
                                           -------------------------------------
                                           Print Name: Mary Dobronski

My Commission Expires:

     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:_______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               Description Of Land

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor",
TRANSNATION TITLE INSURANCE COMPANY, as "Trustee", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Maricopa, state of Arizona and is described as follows:

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;
THENCE North 00(Degree) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;
THENCE South 89(Degree) 25' 45" East 65.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 25' 45" East 126.95 feet;
THENCE North 87(Degree) 23' 37" East 116.40 feet;
THENCE South 00(Degree) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;
THENCE South 00(Degree) 34' 44" West along the East line of said property 156.09
feet to a point on a line 500.00 feet North and parallel to the South line of
said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;
THENCE South 00(Degree) 27' 31" West 435.31 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 51.93 feet;
THENCE North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 20' 40" East along said West line 807.45 feet to a point
on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;
THENCE South 86(Degree) 58' 05" West along said South line and the South line of
the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;
THENCE South 00(Degree) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;
THENCE North 89(Degree) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;
THENCE South 00(Degree) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;

                                   EXHIBIT A
<PAGE>
THENCE North 00(Degree) 27' 31" East 65.05 feet to the POINT OF BEGINNING;
THENCE continuing North 00(Degree) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;
THENCE North 87(Degree) 25' 34" East 36.52 feet;
THENCE South 02(Degree) 21' 45" East 308.14 feet;
THENCE South 00(Degree) 20' 35" West 127.50 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE South 88(Degree) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 08' 29" East (North 88(Degree) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 06' 45" East 669.32 feet ( North 00(Degree) 20' 40" East
669.45, record) along said West line to the POINT OF BEGINNING;
THENCE North 89(Degree) 47' 06" West (North 89(Degree) 39' 20" West, record)
115.00 feet;
THENCE North 16(Degree) 08' 00" East 325.00 feet;
THENCE North 52(Degree) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;
THENCE South 00(Degree) 06' 45" West (South 00(Degree) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;
THENCE North 00(Degree) 20' 35" East 65.04 feet to a point on a line parallel to
and 65.00 feet North of the South line of said Section 21;
THENCE continuing North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 21.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 39' 20" East 55.00 feet;
THENCE North 00(Degree) 20' 40" East 40.00 feet;
THENCE North 89(Degree) 39' 20" West 55.00 feet;
THENCE South 00(Degree) 20' 40" West 40.00 feet to the POINT OF BEGINNING.

                                   EXHIBIT A
<PAGE>
Recording Requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:      CMO Loan Admin.
Loan No. :      31-0900553R
Property Name:  Casa del Sol III

                                  DEED OF TRUST
                                       and
                     ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
                                       and
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001 are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, TRANSNATION TITLE
INSURANCE COMPANY, an Arizona corporation ("Trustee"), with a mailing address at
234 N. Central Avenue, Phoenix, Arizona, 85004 and WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Beneficiary"), with a mailing address at 1320 Willow Pass Road,
Suite 205, Concord, California 94520.

                                    RECITALS

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan.
      The maturity date of the Loan is September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, conveys and assigns to Trustee, in
      trust for the benefit of Beneficiary, with power of sale and right of
      entry and possession, all estate, right, title and interest which Trustor
      now has or may hereafter acquire in, to, under or derived from any or all
      of the following:

                                       1
<PAGE>
      a.    That real property ("Land") located in Peoria, county of Maricopa,
            state of Arizona, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock or interests, royalties, development
            rights and credits, air rights, minerals, oil rights, and gas
            rights, now or later used or useful in connection with, appurtenant
            to or related to the Land;

      c.    All buildings, structures, facilities, other improvements and
            fixtures now or hereafter located on the Land;

      d.    All apparatus, equipment, machinery and appliances and all
            accessions thereto and renewals and replacements thereof and
            substitutions therefor used in the operation or occupancy of the
            Land, it being intended by the parties that all such items shall be
            conclusively considered to be a part of the Land, whether or not
            attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

      All of the property described above is hereinafter collectively defined as
      the "Property". The listing of specific rights or property shall not be
      interpreted as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust, including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for the benefit of Beneficiary, when the obligation is evidenced by
            a writing which recites that it is secured by this Deed of Trust;

                                       2
<PAGE>
      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.

               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to such notice. If and when no Default
      exists, Beneficiary shall re-confer the License upon Trustor until the
      occurrence of another Default.

                                       3
<PAGE>
3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise of or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      a.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants whom Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

           (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All such sums received by
            Beneficiary with respect to any Lease shall be deemed "Impounds" (as
            defined in Section 6.12b) and shall be deposited by Beneficiary into
            a pledged account in accordance with Section 6.12b. If no Default
            exists, Beneficiary shall release such Impounds to Trustor from time
            to time

                                       4
<PAGE>
            as necessary to pay or reimburse Trustor for such tenant
            improvements, brokerage commissions and other leasing costs as may
            be required to re-tenant the affected space; provided, however,
            Beneficiary shall have received and approved each of the following
            for each tenant for which such costs were incurred; (1) Trustor's
            written request for such release, including the name of the tenant,
            the location and net rentable area of the space and a description
            and cost breakdown of the tenant improvements or other leasing costs
            covered by the request; (2) Trustor's certification that any tenant
            improvements have been completed lien-free and in a workmanlike
            manner; (3) a fully executed Lease, or extension or renewal of the
            current Lease; (4) an estoppel certificate executed by the tenant
            including its acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4(a) or 3.4(b) within 10 Business Days after
            Beneficiary's receipt of such request (and all documents and
            information reasonably related thereto) shall be deemed to
            constitute Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant under a Lease of such right to
      subordinate. No subordination referred to in this Section shall constitute
      a subordination to any lien or other encumbrance, whenever arising, or
      improve the right of any junior lienholder. Nothing herein shall be
      construed as subordinating this Deed of Trust to any Lease.

                                       5
<PAGE>
                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
      interest to secure payment and performance of all of the Secured
      Obligations, in all of Trustor's right, title and interest in and to the
      following described personal property in which Trustor now or at any time
      hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Arizona Uniform Commercial Code, as
      amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any obligation of Trustor to Beneficiary unless
      Beneficiary shall make an express written election of said remedy under
      the UCC or other applicable law.

                                       6
<PAGE>
4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble the Collateral and make it available to
            Beneficiary at a place reasonably designated by Beneficiary; (ii)
            without prior notice (to the extent permitted by law), enter upon
            the Property or other place where the Collateral may be located and
            take possession of, collect, sell, lease, license and otherwise
            dispose of the Collateral, and store the same at locations
            acceptable to Beneficiary at Trustor's expense; or (iii) sell,
            assign and deliver the Collateral at any place or in any lawful
            manner and bid and become purchaser at any such sales; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

      Trustor acknowledges and agrees that a disposition of the Collateral in
      accordance with Beneficiary's rights and remedies as heretofore provided
      is a disposition thereof in a commercially reasonable manner and that 5
      Business Days prior notice of such disposition is commercially reasonable
      notice. Beneficiary shall have no obligation to process or prepare the
      Collateral for sale or other disposition. In disposing of the Collateral,
      Beneficiary may disclaim all warranties of title, possession, quiet
      enjoyment and the like. Any proceeds of any sale or other disposition of
      the Collateral may be applied by Beneficiary first to the reasonable
      expenses incurred by Beneficiary in connection therewith, including,
      without limitation, reasonable attorneys' fees and disbursements, and then
      to the payment of the Secured Obligations, in such order of application as
      Beneficiary may from time to time elect.

4.5   POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
      Trustor's attorney-in-fact (such agency being coupled with an interest),
      and as such attorney-in-fact, Beneficiary may, without the obligation to
      do so, in Beneficiary's name or in the name of Trustor, prepare, execute,
      file and record financing statements, continuation statements,
      applications for registration and like papers necessary to create, perfect
      or preserve any of Beneficiary's security interests and rights in or to
      the Collateral, and upon a Default, take any other action required of
      Trustor; provided, however, that Beneficiary as such attorney-in-fact
      shall be accountable only for such funds as are actually received by
      Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.

                                       7
<PAGE>
      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity .

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.

      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.

                                       8
<PAGE>
      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.

      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.

                                       9
<PAGE>
      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;

      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not and will not engage in, seek or consent to
            any dissolution, winding up, liquidation, consolidation, merger,
            asset sale, transfer of partnership or membership interest, or
            amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;

                                       10
<PAGE>
      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            $1,000,000 in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;

      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;

                                       11
<PAGE>
      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not identified and will not identify its
            partners, members or shareholders, or any affiliates of any of the
            foregoing, as a division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this Section 5.2
            and any such entity shall conduct its business and operations in
            strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" 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 ownership of voting securities, by contract or otherwise.

                                       12
<PAGE>
                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property; (j) materially alter the type of occupancy or use of all or any
      part of the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.

      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous

                                       13
<PAGE>
            Materials Laws"), including, without limitation: the Clean Air Act,
            as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water
            Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.;
            the Resource Conservation and Recovery Act of 1976, as amended, 42
            U.S.C. Section 6901 et seq.; the Comprehensive Environmental
            Response, Compensation and Liability Act of 1980, as amended
            (including the Superfund Amendments and Reauthorization Act of 1986,
            "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substances
            Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the
            Occupational Safety and Health Act, as amended, 29 U.S.C. Section
            651; the Emergency Planning and Community Right-to-Know Act of 1986,
            42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
            1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking
            Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state
            and local laws, laws of other jurisdictions or orders and
            regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery 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 become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.

      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that: (i)
            this Hazardous Materials Section is intended as Beneficiary's
            written request for information (and Trustor's response) concerning
            the environmental condition of the real property security as
            required by California Code of Civil Procedure Section 726.5; and
            (ii) each representation and warranty and covenant in this Section
            (together with any indemnity applicable to a breach of any such
            representation and warranty) with respect to the environmental
            condition of the Property is intended by Beneficiary and Trustor to
            be an "environmental provision" for purposes of California Code of
            Civil Procedure Section 736.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened
      (in writing)

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<PAGE>
      litigation against Trustor or Borrower if the aggregate damage claims
      against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation, the preparation or
      review of amendments, assumptions, waivers, releases, reconveyances,
      estoppel certificates or statements of amounts owing under any Secured
      Obligation). In connection with appraisals and inspections, Trustor
      specifically (but not by way of limitation) acknowledges that: (aa) a
      formal written appraisal of the Property by a state certified or licensed
      appraiser may be required by federal regulatory reporting requirements on
      an annual or more frequent basis; and (bb) Beneficiary may require
      inspection of the Property by an independent supervising architect, a cost
      engineering specialist, or both. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Beneficiary together
      with interest thereon following notice of such indebtedness at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's

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<PAGE>
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, Beneficiary, at Beneficiary's election,
      may only require flood insurance if all or any portion of the improvements
      located on the Property is or becomes located in a special flood hazard
      area, and Beneficiary, at Beneficiary's election, may only require
      earthquake insurance if all or any portion of the Property is or becomes
      located in an earthquake fault zone. Trustor shall also carry public
      liability insurance and such other insurance as Beneficiary may reasonably
      require, including, without limitation, business interruption insurance or
      loss of rents insurance. Such policies shall contain a standard mortgage
      clause naming Beneficiary and its successors in interest as a loss payee
      and requiring at least 30 days prior notice to the holder at termination
      or cancellation. Trustor shall maintain all required insurance throughout
      the term of the Loan and while any liabilities of Borrower or Trustor to
      Beneficiary under any of the Loan Documents remain outstanding at
      Trustor's expense, with companies, and in substance and form satisfactory
      to Beneficiary. Neither Beneficiary nor Trustee, by reason of accepting,
      rejecting, approving or obtaining insurance shall incur any liability for:
      (a) the existence, nonexistence, form or legal sufficiency of any
      insurance; (b) the solvency of any insurer; or (c) the payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by reason of loss sustained to all or any part of
            the Property; and (iv) all interest which may accrue on any of the
            foregoing. Trustor shall give Beneficiary prompt written notice of
            the occurrence of any casualty affecting, or the institution of any
            proceedings for eminent domain or for the condemnation of, the
            Property or any portion thereof. So long as no Default has occurred
            and is continuing at the time, Trustor shall have the right to
            adjust, compromise and settle any Claim of $100,000 or less without
            the consent of Beneficiary, provided, however, all awards, proceeds
            and other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost

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<PAGE>
            breakdown for the work; (dd) if reasonably required by Beneficiary,
            a payment and performance bond for the work; (ee) evidence of the
            continuation of substantially all Leases unless consented to in
            writing by Beneficiary; (ff) evidence that, upon completion of the
            work, the size, capacity, value, and income coverage ratios for the
            Property will be at least as great as those which existed
            immediately before the damage or condemnation occurred; and (gg)
            evidence of the satisfaction of any additional conditions that
            Beneficiary may reasonably establish to protect Beneficiary's
            security. Trustor acknowledges that the specific conditions
            described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.

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<PAGE>
6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower (other than
      the sale or exchange of a limited partnership interest or a non-managing
      membership interest). If any Transfer not expressly permitted in the Note
      or this Deed of Trust is made without the prior written consent of
      Beneficiary, Beneficiary shall have the absolute right at its option,
      without prior demand or notice, to declare all of the Secured Obligations
      immediately due and payable, except to the extent prohibited by law, and
      pursue its rights and remedies under Section 7.3 herein. Trustor agrees to
      pay any prepayment fee as set forth in the Note in the event the Secured
      Obligations are accelerated pursuant to the terms of this Section. Consent
      to one such Transfer shall not be deemed to be a waiver of the right to
      require the consent to future or successive Transfers. Except for
      Transfers expressly permitted under the Note, Beneficiary's consent to any
      Transfer may be withheld, conditioned or delayed in Beneficiary's sole and
      absolute discretion.

6.16  ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
      trust when this Deed of Trust is recorded. From time to time and without
      affecting the personal liability of any person for payment of any
      indebtedness or performance of any Secured Obligation, Beneficiary, or
      Trustee at the direction of Beneficiary, may, without liability therefor
      and without notice: (a) reconvey all or any part of the Property; (b)
      consent to the making of any map or plat of the Property; (c) join with
      Trustor in granting any easement on the Property; (d) join with Trustor in
      any declaration of covenants and restrictions; or (e) join in any
      extension agreement or any agreement subordinating the lien or charge of
      this Deed of Trust. Nothing contained in the immediately preceding
      sentence shall be construed to limit, impair or otherwise affect the
      rights of Trustor in any respect. Except as may otherwise be required by
      applicable law, Trustee or Beneficiary may from time to time apply to any
      court of competent jurisdiction for aid and direction in the execution of
      the trusts hereunder and the enforcement of the rights and remedies
      available hereunder, and Trustee or Beneficiary may obtain orders or
      decrees directing or confirming or approving acts in the execution of said
      trusts and the enforcement of said remedies. Trustee has no obligation to
      notify any party of any pending sale or any action or proceeding
      (including, without limitation, actions in which Trustor, Beneficiary or
      Trustee shall be a party) unless held or commenced and maintained by
      Trustee under this Deed of Trust. Trustee shall not be obligated to
      perform any act required of it hereunder unless the performance of the act
      is requested in writing and Trustee is reasonably indemnified and held
      harmless against loss, cost, liability and expense.

                                       18
<PAGE>
6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
      compensation and reimbursement for services and expenses in the
      administration of this trust, including, without limitation, reasonable
      attorneys' fees. Trustor shall pay all indebtedness arising under this
      Section immediately upon demand by Trustee or Beneficiary together with
      interest thereon from the date the indebtedness arises at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      Trustee and the Beneficiary Group (as defined below) from and against any
      claim, loss, damage, cost, expense or liability directly or indirectly
      arising out of: (a) the making of the Loan, except for violations of
      banking laws or regulations by the Beneficiary Group; (b) this Deed of
      Trust; (c) the execution of this Deed of Trust or the performance of any
      act required or permitted hereunder or by law; (d) any failure of Trustor
      to perform Trustor's obligations under this Deed of Trust or the other
      Loan Documents; (e) any alleged obligation or undertaking on the
      Beneficiary Group's part to perform or discharge any of the
      representations, warranties, conditions, covenants or other obligations
      contained in any other document related to the Property; (f) any act or
      omission by Trustor or any contractor, agent, employee or representative
      of Trustor with respect to the Property; or (g) any claim, loss, damage,
      cost, expense or liability directly or indirectly arising out of: (i) the
      use, generation, manufacture, storage, treatment, release, threatened
      release, discharge, disposal, transportation or presence of any Hazardous
      Materials which are found in, on, under or about the Property (including,
      without limitation, underground contamination); or (ii) the breach of any
      covenant, representation or warranty of Trustor under Sections 5.1.p,
      5.1.q, 5.1.r, or 6.2 above. The foregoing to the contrary notwithstanding,
      this indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group or Trustee, or
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group or Trustee arising from any act or incident on the
      Property occurring after the full reconveyance and release of the lien of
      this Deed of Trust on the Property, or with respect to the matters set
      forth in clause (g) above, any claim, loss, damage, cost, expense or
      liability incurred by the Beneficiary Group resulting from the
      introduction and initial release of Hazardous Materials on the Property
      occurring after the transfer of title to the Property at a foreclosure
      sale under this Deed of Trust, either pursuant to judicial decree or the
      power of sale, or by deed in lieu of such foreclosure. This indemnity
      shall include, without limitation: (aa) all consequential damages
      (including, without limitation, any third party tort claims or
      governmental claims, fines or penalties against Trustee or the Beneficiary
      Group); (bb) all court costs and reasonable attorneys' fees (including,
      without limitation, expert witness fees) paid or incurred by Trustee or
      the Beneficiary Group; and (cc) the costs, whether foreseeable or
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Trustee's or Beneficiary's demand any amounts owing under this indemnity
      together with interest from the date the indebtedness arises until paid at
      the rate of interest applicable to the principal balance of the Note as
      specified therein. Trustor agrees to use legal counsel reasonably
      acceptable to Trustee and the Beneficiary Group in any action or
      proceeding arising under this indemnity. THE PROVISIONS OF THIS SECTION
      SHALL SURVIVE THE TERMINATION AND

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<PAGE>
      RECONVEYANCE OF THIS DEED OF TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS
      INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

6.20  SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
      acknowledged by Beneficiary, Beneficiary may appoint another trustee to
      act in the place and stead of Trustee or any successor. Such writing shall
      set forth any information required by law and shall be recorded in the
      Office of the Recorder of the County in which the Property is situated.
      Beneficiary shall give such additional notice as may be required by law.
      Such instrument of substitution and the compliance with any other
      requirements of applicable law shall discharge Trustee herein named and
      shall appoint the new trustee as the trustee hereunder with the same
      effect as if originally named trustee herein. A writing recorded pursuant
      to the provisions of this Section shall be conclusive proof of the proper
      substitution of such new trustee.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
      this Deed of Trust or certified copy thereof and any note, instrument or
      instruments setting forth all obligations secured hereby to Trustee for
      cancellation, Trustee shall reconvey, without warranty, the Property or
      that portion thereof then held hereunder. The recitals of any matters or
      facts in any reconveyance executed hereunder shall be conclusive proof of
      the truthfulness thereof. To the extent permitted by law, the reconveyance
      may describe the grantee as "the person or persons legally entitled
      thereto". Neither Beneficiary nor Trustee shall have any duty to determine
      the rights of persons claiming to be rightful grantees of any
      reconveyance. When the Property has been fully reconveyed,

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<PAGE>
      the last such reconveyance shall operate as a reassignment of all future
      rents, issues and profits of the Property to the person or persons legally
      entitled thereto.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  COMMUNITY FACILITIES DISTRICT. Without obtaining the prior written consent
      of Beneficiary, Trustor shall not consent to, or vote in favor of, the
      inclusion of all or any part of the Property in any Community Facilities
      District formed pursuant to the Community Facilities District Act, A.R.S.
      Section 48-701, et seq., as amended from time to time. Trustor shall
      immediately give notice to Beneficiary of any notification or advice that
      Trustor may receive from any municipality or other third party of any
      intent or proposal to include all or any part of the Property in a
      Community Facilities District. Beneficiary shall have the right to file a
      written objection to the inclusion of all or any part of the Property in a
      Community Facilities District, either in its own name or in the name of
      Trustor, and to appear at, and participate in, any hearing with respect to
      the formation of any such district.

6.26  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including, without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if

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<PAGE>
                  any, to Beneficiary or in connection with any of the Loan
                  Documents, or as an inducement to Beneficiary to make the
                  Loan, shall be false, incorrect, incomplete or misleading in
                  any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or attachment of, or levy or execution upon any
                  of the Property, the Collateral or any other collateral
                  provided by Borrower or Trustor under any of the Loan
                  Documents, or any material portion of the other assets of
                  Borrower or Trustor, which sequestration, attachment, levy or
                  execution is not released or dismissed within 45 days after
                  its occurrence; or the sale of any assets affected by any of
                  the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower

                                       22
<PAGE>
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, and without becoming a
            mortgagee in possession, to enter upon the Property from time to
            time and to do such acts and things as Beneficiary or Trustee deem
            necessary or desirable in order to inspect, investigate, assess and
            protect the security hereof or to cure any Default, including,
            without limitation: (i) to take and possess all documents, books,
            records, papers and accounts of Trustor, Borrower or the then owner
            of the Property which relate to the Property; (ii) to make,
            terminate, enforce or modify leases of the Property upon such terms
            and conditions as Beneficiary deems proper; (iii) to make repairs,
            alterations and improvements to the Property necessary, in Trustee's
            or Beneficiary's reasonable judgment, to protect or enhance the
            security hereof; (iv) to appear in and defend any action or
            proceeding purporting to affect the security hereof or the rights or
            powers of Beneficiary or Trustee hereunder; (v) to pay, purchase,
            contest or compromise any encumbrance, charge, lien or claim of lien
            which, in the sole judgment of either Beneficiary or Trustee, is or
            may be senior in priority hereto, the judgment of Beneficiary or
            Trustee being conclusive as between the parties hereto; (vi) to
            obtain insurance; (vii) to pay any premiums or charges with respect
            to insurance required to be carried hereunder; (viii) to obtain a
            court order to enforce Beneficiary's right to enter and inspect the
            Property for Hazardous Materials, in which regard the decision of
            Beneficiary as to whether there exists a release or threatened
            release of Hazardous Materials onto the Property shall be deemed
            reasonable and conclusive as between the parties hereto; (ix) to
            have a receiver appointed pursuant to applicable law to enforce
            Beneficiary's rights to enter and inspect the Property for Hazardous
            Materials; and/or (x) to employ legal counsel, accountants,
            engineers, consultants, contractors and other appropriate persons to
            assist them;

      b.    APPOINTMENT OF RECEIVER. With or without notice or hearing, to apply
            to a court of competent jurisdiction for and obtain appointment of a
            receiver, trustee, liquidator or conservator of the Property, for
            any purpose, including, without limitation, to enforce Beneficiary's
            right to collect Payments and to enter on and inspect the Property
            for Hazardous Materials, as a matter of strict right and without
            regard to: (i) the adequacy of the security for the repayment of the
            Secured Obligations; (ii) the existence of a declaration that the
            Secured Obligations are immediately due and payable; (iii) the
            filing of a notice of default; or (iv) the solvency of Trustor,
            Borrower or any guarantor or other person or entity in any manner
            obligated to Beneficiary under the Loan Documents;

      c.    JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain an action
            or actions in any court of competent jurisdiction to foreclose this
            instrument as a mortgage or to obtain specific enforcement of the
            covenants of Trustor hereunder, and Trustor agrees that such
            covenants shall be specifically enforceable by injunction or any
            other appropriate equitable remedy and that for the purposes of any
            suit brought under this subparagraph, Trustor waives the defense of
            laches and any applicable statute of limitations;

                                       23
<PAGE>
      d.    NONJUDICIAL FORECLOSURE. To give such notice of Default and of
            election to cause the Property to be sold as may be required by law
            or as may be necessary to cause the Trustee to exercise the power of
            sale granted herein. Trustee shall give and record such notice as
            the law then requires as a condition precedent to a trustee's sale.
            When the minimum period of time required by law after such notice
            has elapsed, Trustee, without notice to or demand upon Trustor
            except as required by law, shall sell the Property at the time and
            place of sale fixed by it in the notice of sale, at one or several
            sales, either as a whole or in separate parcels and in such manner
            and order, as directed by Beneficiary, or by Trustor to the extent
            required by law, at public auction to the highest bidder for cash,
            in lawful money of the United States, payable at time of sale.
            Except as required by law, neither Trustor nor any other person or
            entity other than Beneficiary shall have the right to direct the
            order in which the Property is sold. Subject to requirements and
            limits imposed by law, Trustee may, from time to time postpone sale
            of all or any portion of the Property by public announcement at such
            time and place of sale, and from time to time may postpone the sale
            by public announcement at the time and place fixed by the preceding
            postponement. A sale of less than the whole of the Property or any
            defective or irregular sale made hereunder shall not exhaust the
            power of sale provided for herein. Trustee shall deliver to the
            purchaser at such sale a deed conveying the Property or portion
            thereof so sold, but without any covenant or warranty, express or
            implied. The recitals in the deed of any matters or facts shall be
            conclusive proof of the truthfulness thereof. Any person, including
            Trustee, Trustor or Beneficiary, may purchase at the sale.

            Upon sale of the Property at any judicial or nonjudicial
            foreclosure, Beneficiary may credit bid (as determined by
            Beneficiary in its sole and absolute discretion) all or any portion
            of the Secured Obligations. In determining such credit bid,
            Beneficiary may, but is not obligated to, take into account all or
            any of the following: (i) appraisals of the Property as such
            appraisals may be discounted or adjusted by Beneficiary in its sole
            and absolute underwriting discretion; (ii) expenses and costs
            incurred by Beneficiary with respect to the Property prior to
            foreclosure; (iii) expenses and costs which Beneficiary anticipates
            will be incurred with respect to the Property after foreclosure, but
            prior to resale, including, without limitation, costs of structural
            reports and other due diligence, costs to carry the Property prior
            to resale, costs of resale (e.g. commissions, attorneys' fees, and
            taxes), costs of any Hazardous Materials clean-up and monitoring,
            costs of deferred maintenance, repair, refurbishment and retrofit,
            costs of defending or settling litigation affecting the Property,
            and lost opportunity costs (if any), including the time value of
            money during any anticipated holding period by Beneficiary; (iv)
            declining trends in real property values generally and with respect
            to properties similar to the Property; (v) anticipated discounts
            upon resale of the Property as a distressed or foreclosed property;
            (vi) the fact of additional collateral (if any), for the Secured
            Obligations; and (vii) such other factors or matters that
            Beneficiary (in its sole and absolute discretion) deems appropriate.
            In regard to the above, Trustor acknowledges and agrees that: (viii)
            Beneficiary is not required to use any or all of the foregoing
            factors to determine the amount of its credit bid; (ix) this
            paragraph does not impose upon Beneficiary any additional
            obligations that are not imposed by law at the time the credit bid
            is made; (x) the amount of Beneficiary's credit bid need not have
            any relation to any loan-to-value ratios specified in the Loan
            Documents or previously discussed between Trustor and Beneficiary;
            and (xi) Beneficiary's credit bid may be (at Beneficiary's sole and
            absolute discretion) higher or lower than any appraised value of the
            Property;

      e.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Beneficiary
            determines in its sole discretion;

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and

                                       24
<PAGE>
      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal property or a
      fixture, as the case may be, and dispose of the same in accordance with
      applicable law, separate and apart from the sale of the Property. Any sale
      of Collateral hereunder shall be conducted in any manner permitted by the
      UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, except as otherwise may be required by applicable law, Trustee
      shall apply the proceeds of such sale in the following order of priority:
      First, to the costs and expenses of exercising the power of sale and of
      sale, including the payment of the trustee's fees and reasonable
      attorneys' fees actually incurred; Second, to the payment of the contract
      or contracts secured; Third, to the payment of all other Secured
      Obligations; Fourth, to junior lienholders or encumbrancers in order of
      their priority; and Fifth, the remainder, if any, to the person or persons
      legally entitled thereto.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      default or sale (unless all Secured Obligations then due have been paid or
      performed and Trustor has cured all other Defaults hereunder), or impair
      the status of the security, or prejudice Beneficiary or Trustee in the
      exercise of any right or remedy, or be construed as an affirmation by
      Beneficiary of any tenancy, lease or option or a subordination of the lien
      of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.

                                       25
<PAGE>
                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The Loan
      Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses,

                                       26
<PAGE>
      reasonable attorneys' fees and court costs (including, without limitation,
      expert witness fees). Court costs and attorneys' fees shall be set by the
      court and not by a jury. As used herein the term "prevailing party" shall
      mean the party which obtains the principal relief it has sought, whether
      by compromise settlement or judgment. If the party which commenced or
      instituted the action, suit or proceeding shall dismiss or discontinue it
      without the concurrence of the other party, such other party shall be
      deemed the prevailing party.

8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledgees and
      participants, of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law. In addition, should this instrument be or
      become ineffective as a deed of trust, then these presents shall be
      construed and enforced as a realty mortgage with the Trustor being the
      mortgagor and Beneficiary being the mortgagee.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem

                                       27
<PAGE>
      appropriate. The absolute assignment of rents and leases established by
      Article 3 is similarly independent of and separate from the deed of trust
      and the security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.

8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents herein and in the other Loan
      Documents shall be binding upon and inure to the benefit of the heirs,
      successors and assigns of the parties. The foregoing sentence shall not be
      construed to permit Trustor to assign the Loan except as otherwise
      permitted under the Note or the other Loan Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note 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
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder and the creation, perfection
      and enforcement of the security interests created pursuant hereto and
      pursuant to the other Loan Documents in any Collateral which is located in
      the state where the Property is located shall be governed by and construed
      according to the law of the state where the Property is located. Except as
      provided in the immediately preceding sentence, Trustor hereby
      unconditionally and irrevocably waives, to the fullest extent permitted by
      law, any claim to assert that the law of any jurisdiction other than
      California governs this Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the

                                       28
<PAGE>
      Property is located over any suit, action, or proceeding, brought by
      Beneficiary to exercise its STATUTORY POWER OF SALE under this Deed of
      Trust or any action brought by Beneficiary to enforce its rights with
      respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.

8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                          Trustee:

      WELLS FARGO BANK, N.A.                TRANSNATION TITLE INSURANCE COMPANY
      FAX No.: (925) 691-5947               FAX No.: (602) 247-2694

      Trustor:

      MHC STAGECOACH, L.L.C.
      FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                              Katz Randall Weinberg & Richmond
                              333 West Wacker Drive
                              Suite 1800
                              Chicago, Illinois 60606
                              Attention: Benjamin Randall
                              Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER

                                       29
<PAGE>
      ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR. THIS PROVISION IS A
      MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS DEED OF TRUST.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       30
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                      "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member

      By: /s/ John M. Zoeller
         -----------------------------
      Name: John M. Zoeller
      Its: Vice President, Chief Financial
           Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL               )
                          )  SS:
COUNTY OF COOK            )

      The foregoing instrument was acknowledged before me this 8/1, 2001 by
John M. Zoeller, as Vice President, Chief Financial Officer and Treasurer of
MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing member of MHC
STAGECOACH, L.L.C., a Delaware limited liability company, on behalf of the
corporation.

WITNESS my hand and official seal.

                                          /s/ Mary Dobronski
                                          -----------------------------------
                                          Print Name: Mary Dobronski

My Commission Expires:

     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:________________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               DESCRIPTION OF LAND

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor",
TRANSNATION TITLE INSURANCE COMPANY, as "Trustee", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Maricopa, state of Arizona and is described as follows:

PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;
THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;
THENCE North 01(Degree) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;
THENCE West along said North line 627.98 feet;
THENCE North 45(Degree) 44' 20" East 28.64 feet;
THENCE North 01(Degree) 28' 40" East 307.70 feet;
THENCE North 45(Degree) 00' 00" East 149.61 feet;
THENCE North 32(Degree) 31' 59" West 76.22 feet;
THENCE North 01(Degree) 38' 30" East 420.00 feet;
THENCE North 89(Degree) 57' 50" East 11.71 feet;
THENCE North 01(Degree) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80(Degree) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23(Degree) 03'
59";
THENCE Northeasterly along said curve 575.86 feet;
THENCE North 01(Degree) 38' 30" East 84.00 feet;
THENCE North 89(Degree) 57' 50" East 738.38 feet;
THENCE South 01(Degree) 38' 30" West 1,407.21 feet;
THENCE West 200.00 feet;
THENCE South 01(Degree) 38' 30" West 300.11 feet to the TRUE POINT OF BEGINNING.

PARCEL NO. 2:

A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
THENCE West 1,326.54 feet along the South line of said Section 24;
THENCE North 01(Degree) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;
THENCE North 01(Degree) 38' 30" East 306.11 feet;

                                   EXHIBIT A
<PAGE>
THENCE East 206.00 feet to the point of termination; and

BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,757.00 feet and
South 89(Degree) 57' 50" West 1,120.55 feet from the Southeast corner of said
Section 24;
THENCE South 89(Degree) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 3:

A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:

BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,760.50 feet and
South 89(Degree) 57' 50" West 55.00 feet from the Southeast corner of Section
24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona;
THENCE South 89(Degree) 57' 50" West 1,833.37 feet to the point of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 4:

A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:

COMMENCING at the South quarter corner of Section 24;
THENCE North 01(Degree) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;
THENCE North 89(Degree) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;
THENCE continuing North 89(Degree) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;
THENCE South 01(Degree) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76(Degree) 55' 57" West;
THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19(Degree) 06' 47" an arc length of 477.16
feet;
THENCE South 89(Degree) 55' 44" West to a point 6.00 feet West of and
parallel to said Easterly and Westerly boundary lines to the beginning of a
curve concave Easterly and having a radius of 1,436.40 feet;
THENCE Northerly along said curve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19(Degree) 03'
50" an arc length of 477.93 feet;
THENCE North 01(Degree) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.

                                   EXHIBIT A
<PAGE>
RECORDING Requested by                                  APN:  161-16-301-006
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:      CMO Loan Admin.
Loan No. :      31-0900553R
Property Name:  Cabana

                                  DEED OF TRUST
                                       AND
                   ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001, are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, AMERICAN
SECURITIES COMPANY OF NEVADA, a Nevada corporation ("Trustee"), with a mailing
address at 1320 Willow Pass Road, Suite 205, Concord, California 94520, and
WELLS FARGO BANK, NATIONAL ASSOCIATION ("Beneficiary"), with a mailing address
at 1320 Willow Pass Road, Suite 205, Concord, California 94520.

                                 R E C I T A L S

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan.
      The maturity date of the Loan is September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, bargains, sells, conveys and assigns
      to Trustee, in trust for the benefit of Beneficiary, with power of sale
      and right of entry and possession, all estate, right, title and interest
      which Trustor now has or may hereafter acquire in, to, under or derived
      from any or all of the following:

                                       1
<PAGE>
      a.    That real property ("Land") located in Las Vegas, county of Clark,
            state of Nevada, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock or interests, royalties, development
            rights and credits, air rights, minerals, oil rights, and gas
            rights, now or later used or useful in connection with, appurtenant
            to or related to the Land;

      c.    All buildings, structures, facilities, other improvements and
            fixtures now or hereafter located on the Land;

      d.    All apparatus, equipment, machinery and appliances and all
            accessions thereto and renewals and replacements thereof and
            substitutions therefor used in the operation or occupancy of the
            Land, it being intended by the parties that all such items shall be
            conclusively considered to be a part of the Land, whether or not
            attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

      All of the property described above is hereinafter collectively defined as
      the "Property". The listing of specific rights or property shall not be
      interpreted as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for the benefit of Beneficiary, when the obligation is evidenced by
            a writing which recites that it is secured by this Deed of Trust;

                                       2
<PAGE>
      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.

               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms of contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to such notice. If and when no Default
      exists, Beneficiary shall re-confer the License upon Trustor until the
      occurrence of another Default.

                                       3
<PAGE>
3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      a.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants which Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

           (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All such sums received by
            Beneficiary with respect to any Lease shall be deemed "Impounds" (as
            defined in Section 6.12b) and shall be deposited by Beneficiary into
            a pledged account in accordance with Section 6.12b. If no Default
            exists, Beneficiary shall release such Impounds to Trustor from time
            to time

                                       4
<PAGE>
            as necessary to pay or reimburse Trustor for such tenant
            improvements, brokerage commissions and other leasing costs as may
            be required to re-tenant the affected space; provided, however,
            Beneficiary shall have received and approved each of the following
            for each tenant for which such costs were incurred; (1) Trustor's
            written request for such release, including the name of the tenant,
            the location and net rentable area of the space and a description
            and cost breakdown of the tenant improvements or other leasing costs
            covered by the request; (2) Trustor's certification that any tenant
            improvements have been completed lien-free and in a workmanlike
            manner; (3) a fully executed Lease, or extension or renewal of the
            current Lease; (4) an estoppel certificate executed by the tenant
            including its acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4(a) or 3.4(b) within 10 Business Days after
            Beneficiary's receipt of such request (and all documents and
            information reasonably related thereto) shall be deemed to
            constitute Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant under a Lease of such right to
      subordinate. No subordination referred to in this Section shall constitute
      a subordination to any lien or other encumbrance, whenever arising, or
      improve the right of any junior lienholder. Nothing herein shall be
      construed as subordinating this Deed of Trust to any Lease.

                                       5
<PAGE>
                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor pledges to Beneficiary and grants and assigns
      to Beneficiary a security interest to secure payment and performance of
      all of the Secured Obligations, in all of Trustor's right, title and
      interest in and to the following described personal property in which
      Trustor now or at any time hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Uniform Commercial Code, as enacted
      in the State of Nevada, Chapters 104 and 104A of the Nevada Revised
      Statutes, as amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any obligation of Trustor to Beneficiary unless
      Beneficiary shall make an express written election of said remedy under
      the UCC or other applicable law.

                                       6
<PAGE>
4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble the Collateral and make it available to
            Beneficiary at a place reasonably designated by Beneficiary; (ii)
            without prior notice (to the extent permitted by law), enter upon
            the Property or other place where the Collateral may be located and
            take possession of, collect, sell, lease, license and otherwise
            dispose of the Collateral, and store the same at locations
            acceptable to Beneficiary at Trustor's expense; or (iii) sell,
            assign and deliver the Collateral at any place or in any lawful
            manner and bid and become purchaser at any such sales; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

      Trustor acknowledges and agrees that a disposition of the Collateral in
      accordance with Beneficiary's rights and remedies as heretofore provided
      is a disposition thereof in a commercially reasonable manner and that 5
      Business Days prior notice of such disposition is commercially reasonable
      notice. Beneficiary shall have no obligation to process or prepare the
      Collateral for sale or other disposition. In disposing of the Collateral,
      Beneficiary may disclaim all warranties of title, possession, quiet
      enjoyment and the like. Any proceeds of any sale or other disposition of
      the Collateral may be applied by Beneficiary first to the reasonable
      expenses incurred by Beneficiary in connection therewith, including,
      without limitation, reasonable attorneys' fees and disbursements, and then
      to the payment of the Secured Obligations, in such order of application as
      Beneficiary may from time to time elect.

4.5   POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
      Trustor's attorney-in-fact (such agency being coupled with an interest),
      and as such attorney-in-fact, Beneficiary may, without the obligation to
      do so, in Beneficiary's name or in the name of Trustor, prepare, execute,
      file and record financing statements, continuation statements,
      applications for registration and like papers necessary to create, perfect
      or preserve any of Beneficiary's security interests and rights in or to
      the Collateral, and upon a Default, take any other action required of
      Trustor; provided, however, that Beneficiary as such attorney-in-fact
      shall be accountable only for such funds as are actually received by
      Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.

                                       7
<PAGE>
      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity .

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.

      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.

                                       8
<PAGE>
      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.

      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.

                                       9
<PAGE>
      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;

      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not and will not engage in, seek or consent to
            any dissolution, winding up, liquidation, consolidation, merger,
            asset sale, transfer of partnership or membership interest, or
            amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;

                                       10
<PAGE>
      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            $1,000,000 in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;

      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;

                                       11
<PAGE>
      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not identified and will not identify its
            partners, members or shareholders, or any affiliates of any of the
            foregoing, as a division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this Section 5.2
            and any such entity shall conduct its business and operations in
            strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" 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 ownership of voting securities, by contract or otherwise.

                                       12
<PAGE>
                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property; (j) materially alter the type of occupancy or use of all or any
      part of the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.

                                       13
<PAGE>
      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous Materials Laws"), including, without limitation: the
            Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
            Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
            1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
            amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive
            Environmental Response, Compensation and Liability Act of 1980, as
            amended (including the Superfund Amendments and Reauthorization Act
            of 1986, "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic
            Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.;
            the Occupational Safety and Health Act, as amended, 29 U.S.C.
            Section 651; the Emergency Planning and Community Right-to-Know Act
            of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health
            Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
            Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all
            comparable state and local laws, laws of other jurisdictions or
            orders and regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery 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 become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.

      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that each
            representation and warranty and covenant in this Section (together
            with any indemnity applicable to a breach of any such representation
            and warranty) with respect to the environmental condition of the
            Property is intended by Beneficiary and Trustor to be an
            "environmental provision" for purposes of Nevada Revised Statutes
            Section 40.502.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened

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<PAGE>
      (in writing) litigation against Trustor or Borrower if the aggregate
      damage claims against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation, the preparation or
      review of amendments, assumptions, waivers, releases, reconveyances,
      estoppel certificates or statements of amounts owing under any Secured
      Obligation). In connection with appraisals and inspections, Trustor
      specifically (but not by way of limitation) acknowledges that: (aa) a
      formal written appraisal of the Property by a state certified or licensed
      appraiser may be required by federal regulatory reporting requirements on
      an annual or more frequent basis; and (bb) Beneficiary may require
      inspection of the Property by an independent supervising architect, a cost
      engineering specialist, or both. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Beneficiary together
      with interest thereon following notice of such indebtedness at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's

                                       15
<PAGE>
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, (a) Beneficiary, at Beneficiary's
      election, may only require flood insurance if all or any portion of the
      improvements located on the Property is or becomes located in a special
      flood hazard area, and (b) Beneficiary, at Beneficiary's election, may
      only require earthquake insurance if all or any portion of the Property is
      or becomes located in an earthquake fault zone. Trustor shall also carry
      public liability insurance and such other insurance as Beneficiary may
      reasonably require, including, without limitation, business interruption
      insurance or loss of rents insurance. Such policies shall contain a
      standard mortgage clause naming Beneficiary and its successors in interest
      as a loss payee and requiring at least 30 days prior notice to the holder
      at termination or cancellation. Trustor shall maintain all required
      insurance throughout the term of the Loan and while any liabilities of
      Borrower or Trustor to Beneficiary under any of the Loan Documents remain
      outstanding at Trustor's expense, with companies, and in substance and
      form satisfactory to Beneficiary. Neither Beneficiary nor Trustee, by
      reason of accepting, rejecting, approving or obtaining insurance shall
      incur any liability for: (c) the existence, nonexistence, form or legal
      sufficiency of any insurance; (d) the solvency of any insurer; or (e) the
      payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by reason of loss sustained to all or any part of
            the Property; and (iv) all interest which may accrue on any of the
            foregoing. Trustor shall give Beneficiary prompt written notice of
            the occurrence of any casualty affecting, or the institution of any
            proceedings for eminent domain or for the condemnation of, the
            Property or any portion thereof. So long as no Default has occurred
            and is continuing at the time, Trustor shall have the right to
            adjust, compromise and settle any Claim of $100,000 or less without
            the consent of Beneficiary, provided, however, all awards, proceeds
            and other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost
            breakdown for the work; (dd) if

                                       16
<PAGE>
            reasonably required by Beneficiary, a payment and performance bond
            for the work; (ee) evidence of the continuation of substantially all
            Leases unless consented to in writing by Beneficiary; (ff) evidence
            that, upon completion of the work, the size, capacity, value, and
            income coverage ratios for the Property will be at least as great as
            those which existed immediately before the damage or condemnation
            occurred; and (gg) evidence of the satisfaction of any additional
            conditions that Beneficiary may reasonably establish to protect
            Beneficiary's security. Trustor acknowledges that the specific
            conditions described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.

                                       17
<PAGE>
6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower (other than
      the sale or exchange of a limited partnership interest or a non-managing
      membership interest). If any Transfer not expressly permitted in the Note
      or this Deed of Trust is made without the prior written consent of
      Beneficiary, Beneficiary shall have the absolute right at its option,
      without prior demand or notice, to declare all of the Secured Obligations
      immediately due and payable, except to the extent prohibited by law, and
      pursue its rights and remedies under Section 7.3 herein. Trustor agrees to
      pay any prepayment fee as set forth in the Note in the event the Secured
      Obligations are accelerated pursuant to the terms of this Section. Consent
      to one such Transfer shall not be deemed to be a waiver of the right to
      require the consent to future or successive Transfers. Except for
      Transfers expressly permitted under the Note, Beneficiary's consent to any
      Transfer may be withheld, conditioned or delayed in Beneficiary's sole and
      absolute discretion.

6.16  ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
      trust when this Deed of Trust is recorded. From time to time upon written
      request of Beneficiary and presentation of this Deed of Trust, or a
      certified copy thereof, for endorsement, and without affecting the
      personal liability of any person for payment of any indebtedness or
      performance of any Secured Obligation, Trustee may, without liability
      therefor and without notice: (a) reconvey all or any part of the Property;
      (b) consent to the making of any map or plat of the Property; (c) join
      with Trustor in granting any easement on the Property; (d) join with
      Trustor in any declaration of covenants and restrictions; or (e) join in
      any extension agreement or any agreement subordinating the lien or charge
      of this Deed of Trust. Nothing contained in the immediately preceding
      sentence shall be construed to limit, impair or otherwise affect the
      rights of Trustor in any respect. Except as may otherwise be required by
      applicable law, Trustee or Beneficiary may from time to time apply to any
      court of competent jurisdiction for aid and direction in the execution of
      the trusts hereunder and the enforcement of the rights and remedies
      available hereunder, and Trustee or Beneficiary may obtain orders or
      decrees directing or confirming or approving acts in the execution of said
      trusts and the enforcement of said remedies. Trustee has no obligation to
      notify any party of any pending sale or any action or proceeding
      (including, without limitation, actions in which Trustor, Beneficiary or
      Trustee shall be a party) unless held or commenced and maintained by
      Trustee under this Deed of Trust. Trustee shall not be obligated to
      perform any act required of it hereunder

                                       18
<PAGE>
      unless the performance of the act is requested in writing and Trustee is
      reasonably indemnified and held harmless against loss, cost, liability and
      expense.

6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
      compensation and reimbursement for services and expenses in the
      administration of this trust, including, without limitation, reasonable
      attorneys' fees. Trustor shall pay all indebtedness arising under this
      Section immediately upon demand by Trustee or Beneficiary together with
      interest thereon from the date the indebtedness arises at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      Trustee and the Beneficiary Group (as defined below) from and against any
      claim, loss, damage, cost, expense or liability directly or indirectly
      arising out of: (a) the making of the Loan, except for violations of
      banking laws or regulations by the Beneficiary Group; (b) this Deed of
      Trust; (c) the execution of this Deed of Trust or the performance of any
      act required or permitted hereunder or by law; (d) any failure of Trustor
      to perform Trustor's obligations under this Deed of Trust or the other
      Loan Documents; (e) any alleged obligation or undertaking on the
      Beneficiary Group's part to perform or discharge any of the
      representations, warranties, conditions, covenants or other obligations
      contained in any other document related to the Property; (f) any act or
      omission by Trustor or any contractor, agent, employee or representative
      of Trustor with respect to the Property; or (g) any claim, loss, damage,
      cost, expense or liability directly or indirectly arising out of: (i) the
      use, generation, manufacture, storage, treatment, release, threatened
      release, discharge, disposal, transportation or presence of any Hazardous
      Materials which are found in, on, under or about the Property (including,
      without limitation, underground contamination); or (ii) the breach of any
      covenant, representation or warranty of Trustor under Sections 5.1.p,
      5.1.q, 5.1.r, or 6.2 above. The foregoing to the contrary notwithstanding,
      this indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group or Trustee, or
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group or Trustee arising from any act or incident on the
      Property occurring after the full reconveyance and release of the lien of
      this Deed of Trust on the Property, or with respect to the matters set
      forth in clause (g) above, any claim, loss, damage, cost, expense or
      liability incurred by the Beneficiary Group resulting from the
      introduction and initial release of Hazardous Materials on the Property
      occurring after the transfer of title to the Property at a foreclosure
      sale under this Deed of Trust, either pursuant to judicial decree or the
      power of sale, or by deed in lieu of such foreclosure. This indemnity
      shall include, without limitation: (aa) all consequential damages
      (including, without limitation, any third party tort claims or
      governmental claims, fines or penalties against Trustee or the Beneficiary
      Group); (bb) all court costs and reasonable attorneys' fees (including,
      without limitation, expert witness fees) paid or incurred by Trustee or
      the Beneficiary Group; and (cc) the costs, whether foreseeable or
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Trustee's or Beneficiary's demand any amounts owing under this indemnity
      together with interest from the date the indebtedness arises until paid at
      the rate of interest applicable to the principal balance of the Note as
      specified therein. Trustor agrees to use legal

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      counsel reasonably acceptable to Trustee and the Beneficiary Group in any
      action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
      SECTION SHALL SURVIVE THE TERMINATION AND RECONVEYANCE OF THIS DEED OF
      TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO
      THE PROVISIONS OF THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

6.20  SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
      acknowledged by Beneficiary and recorded in the Office of the Recorder of
      the County in which the Property is situated, Beneficiary may appoint
      another trustee to act in the place and stead of Trustee or any successor.
      Such writing shall set forth any information required by law. The
      recordation of such instrument of substitution shall discharge Trustee
      herein named and shall appoint the new trustee as the trustee hereunder
      with the same effect as if originally named trustee herein. A writing
      recorded pursuant to the provisions of this Section shall be conclusive
      proof of the proper substitution of such new trustee.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
      this Deed of Trust or certified copy thereof and any note, instrument or
      instruments setting forth all obligations secured hereby to Trustee for
      cancellation, Trustee shall reconvey, without warranty, the Property or
      that portion thereof then held hereunder. The recitals of any matters or
      facts in any reconveyance executed hereunder shall be conclusive proof of
      the truthfulness thereof. To the extent permitted by law, the reconveyance
      may describe the grantee as "the person or persons legally entitled
      thereto". Neither Beneficiary nor Trustee shall have any duty to determine
      the rights

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<PAGE>
      of persons claiming to be rightful grantees of any reconveyance. When the
      Property has been fully reconveyed, the last such reconveyance shall
      operate as a reassignment of all future rents, issues and profits of the
      Property to the person or persons legally entitled thereto.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if any, to Beneficiary or in connection with any of
                  the Loan Documents, or as an inducement to Beneficiary to make
                  the Loan, shall be false, incorrect, incomplete or misleading
                  in any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or attachment of, or levy or execution upon any
                  of the Property, the Collateral or any other collateral
                  provided by Borrower or Trustor under any of the Loan
                  Documents, or any material portion of

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<PAGE>
                  the other assets of Borrower or Trustor, which sequestration,
                  attachment, levy or execution is not released or dismissed
                  within 45 days after its occurrence; or the sale of any assets
                  affected by any of the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.

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<PAGE>
            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, and without becoming a
            mortgagee in possession, to enter upon the Property from time to
            time and to do such acts and things as Beneficiary or Trustee deem
            necessary or desirable in order to inspect, investigate, assess and
            protect the security hereof or to cure any Default, including,
            without limitation: (i) to take and possess all documents, books,
            records, papers and accounts of Trustor, Borrower or the then owner
            of the Property which relate to the Property; (ii) to make,
            terminate, enforce or modify leases of the Property upon such terms
            and conditions as Beneficiary deems proper; (iii) to make repairs,
            alterations and improvements to the Property necessary, in Trustee's
            or Beneficiary's reasonable judgment, to protect or enhance the
            security hereof; (iv) to appear in and defend any action or
            proceeding purporting to affect the security hereof or the rights or
            powers of Beneficiary or Trustee hereunder; (v) to pay, purchase,
            contest or compromise any encumbrance, charge, lien or claim of lien
            which, in the sole judgment of either Beneficiary or Trustee, is or
            may be senior in priority hereto, the judgment of Beneficiary or
            Trustee being conclusive as between the parties hereto; (vi) to
            obtain insurance; (vii) to pay any premiums or charges with respect
            to insurance required to be carried hereunder; (viii) to obtain a
            court order to enforce Beneficiary's right to enter and inspect the
            Property for Hazardous Materials, in which regard the decision of
            Beneficiary as to whether there exists a release or threatened
            release of Hazardous Materials onto the Property shall be deemed
            reasonable and conclusive as between the parties hereto; (ix) to
            have a receiver appointed pursuant to applicable law to enforce
            Beneficiary's rights to enter and inspect the Property for Hazardous
            Materials; and/or (x) to employ legal counsel, accountants,
            engineers, consultants, contractors and other appropriate persons to
            assist them;

      b.    APPOINTMENT OF RECEIVER. With or without notice or hearing, to apply
            to a court of competent jurisdiction for and obtain appointment of a
            receiver, trustee, liquidator or conservator of the Property, for
            any purpose, including, without limitation, to enforce Beneficiary's
            right to collect Payments and to enter on and inspect the Property
            for Hazardous Materials, as a matter of strict right and without
            regard to: (i) the adequacy of the security for the repayment of the
            Secured Obligations; (ii) the existence of a declaration that the
            Secured Obligations are immediately due and payable; (iii) the
            filing of a notice of default; or (iv) the solvency of Trustor,
            Borrower or any guarantor or other person or entity in any manner
            obligated to Beneficiary under the Loan Documents;

      c.    JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain an action
            or actions in any court of competent jurisdiction to foreclose this
            instrument as a mortgage or to obtain specific enforcement of the
            covenants of Trustor hereunder, and Trustor agrees that such
            covenants shall be specifically enforceable by injunction or any
            other appropriate equitable remedy and that for the purposes of any
            suit brought under this subparagraph, Trustor waives the defense of
            laches and any applicable statute of limitations;

      d.    NONJUDICIAL FORECLOSURE. To execute a written notice of such Default
            and of the election to cause the Property to be sold to satisfy the
            Secured Obligations. Trustee shall give and record such notice as
            the law then requires as a condition precedent to a trustee's sale.
            When the minimum period of time required by law after such notice
            has elapsed, Trustee, without notice to or demand upon Trustor
            except as

                                       23
<PAGE>
            required by law, shall sell the Property at the time and place of
            sale fixed by it in the notice of sale, at one or several sales,
            either as a whole or in separate parcels and in such manner and
            order, all as Beneficiary in its sole discretion may determine, at
            public auction to the highest bidder for cash, in lawful money of
            the United States, payable at time of sale. Neither Trustor nor any
            other person or entity other than Beneficiary shall have the right
            to direct the order in which the Property is sold. Subject to
            requirements and limits imposed by law, Trustee may, from time to
            time postpone sale of all or any portion of the Property by public
            announcement at such time and place of sale, and from time to time
            may postpone the sale by public announcement at the time and place
            fixed by the preceding postponement. A sale of less than the whole
            of the Property or any defective or irregular sale made hereunder
            shall not exhaust the power of sale provided for herein. Trustee
            shall deliver to the purchaser at such sale a deed conveying the
            Property or portion thereof so sold, but without any covenant or
            warranty, express or implied. The recitals in the deed of any
            matters or facts shall be conclusive proof of the truthfulness
            thereof. Any person, including Trustee, Trustor or Beneficiary may
            purchase at the sale;

            Upon sale of the Property at any judicial or nonjudicial
            foreclosure, Beneficiary may credit bid (as determined by
            Beneficiary in its sole and absolute discretion) all or any portion
            of the Secured Obligations. In determining such credit bid,
            Beneficiary may, but is not obligated to, take into account all or
            any of the following: (i) appraisals of the Property as such
            appraisals may be discounted or adjusted by Beneficiary in its sole
            and absolute underwriting discretion; (ii) expenses and costs
            incurred by Beneficiary with respect to the Property prior to
            foreclosure; (iii) expenses and costs which Beneficiary anticipates
            will be incurred with respect to the Property after foreclosure, but
            prior to resale, including, without limitation, costs of structural
            reports and other due diligence, costs to carry the Property prior
            to resale, costs of resale (e.g. commissions, attorneys' fees, and
            taxes), costs of any Hazardous Materials clean-up and monitoring,
            costs of deferred maintenance, repair, refurbishment and retrofit,
            costs of defending or settling litigation affecting the Property,
            and lost opportunity costs (if any), including the time value of
            money during any anticipated holding period by Beneficiary; (iv)
            declining trends in real property values generally and with respect
            to properties similar to the Property; (v) anticipated discounts
            upon resale of the Property as a distressed or foreclosed property;
            (vi) the fact of additional collateral (if any), for the Secured
            Obligations; and (vii) such other factors or matters that
            Beneficiary (in its sole and absolute discretion) deems appropriate.
            In regard to the above, Trustor acknowledges and agrees that: (viii)
            Beneficiary is not required to use any or all of the foregoing
            factors to determine the amount of its credit bid; (ix) this
            paragraph does not impose upon Beneficiary any additional
            obligations that are not imposed by law at the time the credit bid
            is made; (x) the amount of Beneficiary's credit bid need not have
            any relation to any loan-to-value ratios specified in the Loan
            Documents or previously discussed between Trustor and Beneficiary;
            and (xi) Beneficiary's credit bid may be (at Beneficiary's sole and
            absolute discretion) higher or lower than any appraised value of the
            Property;

      e.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Trustee and
            Beneficiary or either of them determine in their sole discretion;

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and

      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal

                                       24
<PAGE>
      property or a fixture, as the case may be, and dispose of the same in
      accordance with applicable law, separate and apart from the sale of the
      Property. Any sale of Collateral hereunder shall be conducted in any
      manner permitted by the UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, Trustee shall apply the proceeds of such sale in the following
      order of priority: First, to the costs, fees and expenses of exercising
      the power of sale and of sale, including, without limitation, the payment
      of reasonable Trustee's fees and attorneys' fees; Second, to the payment
      of the Secured Obligations which are secured by this Deed of Trust, in
      such order as Beneficiary shall determine in its sole discretion; Third,
      to satisfy the outstanding balance of obligations secured by any junior
      liens or encumbrances in the order of their priority; and Fourth, to the
      Trustor or the Trustor's successor in interest, or in the event the
      Property has been sold or transferred to another, to the vested owner of
      record at the time of the Trustee's sale.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      default or sale (unless all Secured Obligations then due have been paid or
      performed and Trustor has cured all other Defaults hereunder), or impair
      the status of the security, or prejudice Beneficiary or Trustee in the
      exercise of any right or remedy, or be construed as an affirmation by
      Beneficiary of any tenancy, lease or option or a subordination of the lien
      of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.

                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The

                                       25
<PAGE>
      Loan Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses, reasonable attorneys' fees and court
      costs (including, without limitation, expert witness fees). As used herein
      the term "prevailing party" shall mean the party which obtains the
      principal relief it has sought, whether by compromise settlement or
      judgment. If the party which commenced or instituted the action, suit or
      proceeding shall dismiss or discontinue it without the concurrence of the
      other party, such other party shall be deemed the prevailing party.

                                       26
<PAGE>
8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledges and participants,
      of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem appropriate. The
      absolute assignment of rents and leases established by Article 3 is
      similarly independent of and separate from the deed of trust and the
      security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.

                                       27
<PAGE>
8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents shall be binding upon and inure to
      the benefit of the heirs, successors and assigns of the parties. The
      foregoing sentence shall not be construed to permit Trustor to assign the
      Loan except as otherwise permitted under the Note or the other Loan
      Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note 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
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder, Beneficiary's rights under
      Section 6.2 above, and the creation, perfection and enforcement of the
      security interests created pursuant hereto and pursuant to the other Loan
      Documents in any Collateral which is located in the state where the
      Property is located shall be governed by and construed according to the
      law of the state where the Property is located. Except as provided in the
      immediately preceding sentence, Trustor hereby unconditionally and
      irrevocably waives, to the fullest extent permitted by law, any claim to
      assert that the law of any jurisdiction other than California governs this
      Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the Property is located over any suit, action, or proceeding,
      brought by Beneficiary to exercise its STATUTORY POWER OF SALE under this
      Deed of Trust or any action brought by Beneficiary to enforce its rights
      with respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.

                                       28
<PAGE>
8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                         Trustee:

      WELLS FARGO BANK, N.A.               AMERICAN SECURITIES COMPANY
      FAX No.: (925) 691-5947              OF NEVADA
                                           FAX No.: (925) 691-5947

      Trustor:

      MHC STAGECOACH, L.L.C.
      FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                                    Katz Randall Weinberg & Richmond
                                    333 West Wacker Drive
                                    Suite 1800
                                    Chicago, Illinois 60606
                                    Attention: Benjamin Randall
                                    Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR.
      THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS
      DEED OF TRUST.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       29
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                      "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member

      By: /s/ John M. Zoeller
         -------------------------
      Name:  John M. Zoeller
      Its:   Vice President, Chief Financial
             Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL                )
                           )  SS:
COUNTY OF COOK             )

            This instrument was acknowledged before me on 8/1, 2001 by
John M. Zoeller, as Vice President, Chief Financial Officer and Treasurer of
MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing member of MHC
STAGECOACH, L.L.C., a Delaware limited liability company.

WITNESS my hand and official seal.

                                             /s/ Mary Dobronski
                                             ------------------------------
                                             Print Name: Mary Dobronski

My Commission Expires:

     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:_______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               DESCRIPTION OF LAND

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor", AMERICAN
SECURITIES COMPANY OF NEVADA, as "Trustee", and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Clark, state of Nevada and is described as follows:

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16,
Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01(Degree) 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89(Degree) 09' 31" East, along said Southerly right of way of Twain Avenue
a distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89(Degree) 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01(Degree) 22' 27" East along said Westerly right of way line of
Cabana Drive a distance of 1238.26 feet; thence South 88(Degree) 17' 57" West a
distance of 1271.25 feet; thence North 01(Degree) 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.

                                    EXHIBIT A
<PAGE>
Recording requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC #A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:  CMO Loan Admin.
Loan No.: 31-0900553R
Property Name:  Indian Oaks

Prepared by:

Lee M. Smolen
Sidley Austin Brown & Wood
10 South Dearborn
Chicago, Illinois 60603

                  MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND
               LEASES AND SECURITY AGREEMENT (AND FIXTURE FILING)

                                                                   July 31, 2001

THIS MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(AND FIXTURE FILING) (the "Mortgage") is made and entered into by and among MHC
STAGECOACH, L.L.C., a Delaware limited liability company ("Mortgagor"), having
an address at c/o Manufactured Home Communities, Inc., Two North Riverside
Plaza, Suite 800, Chicago, Illinois 60606, and WELLS FARGO NATIONAL BANK,
NATIONAL ASSOCIATION ("Lender" or "Mortgagee").

THIS MORTGAGE EVIDENCES A MULTI-STATE LOAN WHICH IS SECURED BY REAL PROPERTY
LOCATED OUTSIDE THE STATE OF FLORIDA AND REAL PROPERTY LOCATED IN BREVARD,
VOLUSIA, AND MANATEE COUNTIES, FLORIDA. FLORIDA DOCUMENTARY STAMP TAX IN THE
AMOUNT OF $61,250.00 AND FLORIDA NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX
IN THE AMOUNT OF $35,000.00 ARE BEING PAID UPON RECORDATION OF ONE OF THE
FLORIDA MORTGAGES IN THE PUBLIC RECORDS OF VOLUSIA COUNTY, FLORIDA. ATTACHED
HERETO AS EXHIBIT B IS A DESCRIPTION OF THE CALCULATION OF LIABILITY FOR
DOCUMENTARY STAMP TAX AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX.

                                     Page 1
<PAGE>
                                 R E C I T A L S

A. MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
   proposes to borrow from Mortgagee, and Mortgagee proposes to lend to Borrower
   the principal sum of FIFTY MILLION AND NO/100THS DOLLARS ($50,000,000.00)
   ("Loan"). The Loan is evidenced by a promissory note ("Note") executed by
   Borrower, dated the date of this Mortgage, payable to the order of Mortgagee
   in the principal amount of the Loan. The maturity date of the Loan is
   September 1, 2011.

B. The loan documents include this Mortgage, the Note and the other documents
   described in the Note as Loan Documents ("Loan Documents").

                              ARTICLE I. MORTGAGE

            1.1 GRANT. For the purposes of and upon the terms and conditions of
this Mortgage, Mortgagor irrevocably mortgages, grants, bargains, sells,
conveys, transfers, pledges, sets over and assigns, and grants a security
interest to Mortgagee, its successors and assign, with right of entry and
possession, all of Mortgagor's right, title and interest, whether now owned or
hereafter acquired, in or to all of the following:

            (a) That real property ("Land") located in Rockledge, county of
Brevard, state of Florida, and more particularly described on Exhibit A attached
hereto;

            (b) All appurtenances, easements, rights of way, water and water
rights, pumps, pipes, flumes and ditches and ditch rights, water stock, ditch
and/or reservoir stock or interests, royalties, development rights and credits,
air rights, minerals, oil rights, all sewer capacity rights, and gas rights, now
or later used or useful in connection with, appurtenant to or related to the
Land;

            (c) All buildings, structures, facilities, other improvements and
fixtures now or hereafter located on the Land;

            (d) All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and substitutions
therefor used in the operation or occupancy of the Land, it being intended by
the parties that all such items shall be conclusively considered to be a part of
the Land, whether or not attached or affixed to the Land;

            (e) All land lying in the right-of-way of any street, road, avenue,
alley or right-of-way opened, proposed or vacated, and all sidewalks, strips and
gores of land adjacent to or used in connection with the Land;

            (f) All additions and accretions to the property described above;

            (g) All licenses, authorizations, certificates, variances, consents,
approvals and other permits now or hereafter pertaining to the Land and all
estate, right, title and interest of Mortgagor in, to, under or derived from all
tradenames or business names relating to the Land or the present or future
development, construction, operation or use of the Land; and

                                     Page 2
<PAGE>
            (h) All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.

                        ARTICLE II. OBLIGATIONS SECURED

            2.1 OBLIGATIONS SECURED. Mortgagor makes the foregoing grant and
assignment for the purpose of securing the following obligations ("Secured
Obligations"):

            (a) Full and punctual payment to Mortgagee of all sums at any time
owing under the Note;

            (b) Payment and performance of all covenants and obligations of
Mortgagor under this Mortgage, including, without limitation, indemnification
obligations and advances made to protect the Property;

            (c) Payment and performance of all additional covenants and
obligations of Borrower and Mortgagor under the Loan Documents;

            (d) Payment and performance of all covenants and obligations, if
any, which any rider attached as an exhibit to this Mortgage recites are secured
hereby;

            (e) Payment and performance of all future advances and other
obligations that the then record owner of all or part of the Property may agree
to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Mortgagee, when the obligation is evidenced by a writing which
recites that it is secured by this Mortgage;

            (f) All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges and loan fees;
and

            (g) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without limitation:
(i) modifications of the required principal payment dates or interest payment
dates or both, as the case may be, deferring or accelerating payment dates
wholly or partly; and (ii) modifications, extensions or renewals at a different
rate of interest whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

            2.2 FUTURE ADVANCES. This Mortgage is given to secure not only the
Secured Obligations, but also such future advances, whether such advances are
obligatory or are to be made at the option of Mortgagee or the holder hereof, or
otherwise as are made within twenty years from the date hereof, to the same
extent as if such future advances were made on the date of the execution of this
Mortgage. The total amount of Secured Obligations that may be so secured by this
Mortgage may be increased or decreased from time to time, but the total unpaid
balance so secured at any one time shall not exceed twice the face amount of the
Note, plus interest thereon, and any disbursements made under this Mortgage for
the payment of impositions, taxes, assessments, levies, insurance, or otherwise
with interest on such disbursements as provided for

                                     Page 3
<PAGE>
herein, plus any increases in the principal balance as the result of negative
amortization or deferred interest, if any. It is agreed that any additional sum
or sums advanced by Mortgagee pursuant to the terms hereof shall be equally
secured with and have the same priority as the original Secured Obligations and
shall be subject to all of the terms, provisions and conditions of this
Mortgage, whether or not such additional loans or advances are evidenced by
other promissory notes or other guaranties of Mortgagor and whether or not
identified by a recital that it or they are secured by this Mortgage. It is
further agreed that any additional promissory note or guaranty or promissory
notes or guaranties executed and delivered pursuant to this paragraph shall
automatically be deemed to be included in the term "Note" wherever it appears in
the context of this Mortgage. Without the prior written consent of Mortgagee,
which Mortgagee may grant or withhold in its sole discretion, Mortgagor shall
not file for record any notice limiting the maximum principal amount that may be
secured by this Mortgage to a sum less than the maximum principal amount set
forth in this paragraph.

            2.3 OBLIGATIONS. The term "obligations" is used herein in its
broadest and most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges and loan
fees at any time accruing or assessed on any of the Secured Obligations.

            2.4 MATURITY DATE. The maturity date of the Note is September 1,
2011.

            2.5 INCORPORATION. All terms and conditions of the documents which
evidence any of the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall
be deemed to have notice of the terms of the Secured Obligations and to have
notice that the rate of interest on one or more Secured Obligations may vary
from time to time.

              ARTICLE III. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

            3.1 ASSIGNMENT. Mortgagor irrevocably assigns to Mortgagee all of
Mortgagor's right, title and interest in, to and under: (a) all present and
future leases of the Property or any portion thereof, all licenses and
agreements relating to the management, leasing or operation of the Property or
any portion thereof, and all other agreements of any kind relating to the use or
occupancy of the Property or any portion thereof, whether such leases, licenses
and agreements are now existing or entered into after the date hereof
("Leases"); and (b) the rents, issues, deposits and profits of the Property,
including, without limitation, all amounts payable and all rights and benefits
accruing to Mortgagor under the Leases ("Payments"). The term "Leases" shall
also include all guarantees of and security for the tenants' performance
thereunder, and all amendments, extensions, renewals or modifications thereto
which are permitted hereunder. This is a present and absolute assignment, not an
assignment for security purposes only, and Mortgagee's right to the Leases and
Payments is not contingent upon, and may be exercised without possession of, the
Property.

            3.2 GRANT OF LICENSE. Notwithstanding the terms contained in Section
3.1, Mortgagee confers upon Mortgagor a revocable license ("License") to collect
and retain the Payments as they become due and payable, until the occurrence of
a Default (as hereinafter defined). Upon a Default, the License shall be
automatically revoked and Mortgagee may collect

                                     Page 4
<PAGE>
and apply the Payments pursuant to the terms hereof without notice and without
taking possession of the Property. Upon Mortgagor's cure of the Default,
Mortgagee shall re-confer upon Mortgagor a revocable license to collect and
retain the Payments as they become due and payable, until the occurrence of a
Default. All Payments thereafter collected by Mortgagor shall be held by
Mortgagor as trustee under a constructive trust for the benefit of Mortgagee.
Mortgagor hereby irrevocably authorizes and directs the tenants under the
Leases, upon notice of a Default from Mortgagee, to rely upon and comply with
any notice or demand by Mortgagee for the payment to Mortgagee of any rental or
other sums which may at any time become due under the Leases, or for the
performance of any of the tenants' undertakings under the Leases, and the
tenants shall have no right or duty to inquire as to whether any Default has
actually occurred or is then existing. Mortgagor hereby relieves the tenants
from any liability to Mortgagor by reason of relying upon and complying with any
such notice or demand by Mortgagee. Mortgagee may apply, in its sole discretion,
any Payments so collected by Mortgagee against any Secured Obligation or any
other obligation of Borrower, Mortgagor or any other person or entity, under any
document or instrument related to or executed in connection with the Loan
Documents, whether existing on the date hereof or hereafter arising. Collection
of any Payments by Mortgagee shall not cure or waive any Default or notice of
Default or invalidate any acts done pursuant to such notice.

            3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the tenants
under any of the Leases or by any other parties; for any dangerous or defective
condition of the Property; or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee, invitee or other person; or (d) responsible for or
impose upon Mortgagee any duty to produce rents or profits. Mortgagee shall not
directly or indirectly be liable to Mortgagor or any other person as a
consequence of: (e) the exercise of or failure to exercise any of the rights,
remedies or powers granted to Mortgagee hereunder; or (f) the failure or refusal
of Mortgagee to perform or discharge any obligation, duty or liability of
Mortgagor arising under the Leases.

            3.4 COVENANTS.

            (a) ALL LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense:

            (i) perform all obligations of the landlord under the Leases and use
reasonable efforts to enforce performance by the tenants of all obligations of
the tenants under the Leases;

            (ii) use reasonable efforts to keep the Property leased at all times
to tenants whom Mortgagor reasonably and in good faith believes are creditworthy
at rents not less than the fair market rental value (including, but not limited
to, free or discounted rents to the extent the market so requires);

            (iii) promptly upon Mortgagee's request, deliver to Mortgagee a copy
of each requested Lease and all amendments thereto and waivers thereof; and

                                     Page 5
<PAGE>
            (iv) promptly upon Mortgagee's request, execute and record any
additional assignments of landlord's interest under any Lease to Mortgagee and
specific subordinations of any Lease to this Mortgage, in form and substance
satisfactory to Mortgagee.

Unless consented to in writing by Mortgagee or otherwise permitted under any
other provision of the Loan Documents, Mortgagor shall not:

            (v) grant any tenant under any Lease any option, right of first
refusal or other right to purchase all or any portion of the Property under any
circumstances;

            (vi) grant any tenant under any Lease any right to prepay rent more
than 1 month in advance;

            (vii) except upon Mortgagee's request, execute any assignment of
landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
other than to collect rent 1 month in advance of the time when it becomes due.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

Mortgagor shall deposit with Mortgagee any sums received by Mortgagor in
consideration of any termination, modification or amendment of any Lease or any
release or discharge of any tenant under any Lease from any obligation
thereunder and any such sums received by Mortgagor shall be held in trust by
Mortgagor for such purpose. Notwithstanding the foregoing, so long as no Default
exists, the portion of any such sum received by Mortgagor with respect to any
Lease which is less than $50,000 shall be payable to Mortgagor. All such sums
received by Mortgagee with respect to any Lease shall be deemed "Impounds" (as
defined in Section 6.12) and shall be deposited by Mortgagee into a pledged
account in accordance with Section 6.12. If no Default exists, Mortgagee shall
release such Impounds to Mortgagor from time to time as necessary to pay or
reimburse Mortgagor for such tenant improvements, brokerage commissions and
other leasing costs as may be required to re-tenant the affected space;
provided, however, Mortgagee shall have received and approved each of the
following for each tenant for which such costs were incurred; (1) Mortgagor's
written request for such release, including the name of the tenant, the location
and net rentable area of the space and a description and cost breakdown of the
tenant improvements or other leasing costs covered by the request; (2)
Mortgagor's certification that any tenant improvements have been completed
lien-free and in a workmanlike manner; (3) a fully executed Lease, or extension
or renewal of the current Lease; (4) an estoppel certificate executed by the
tenant including its acknowledgement that all tenant improvements have been
satisfactorily completed; and (5) such other information with respect to such
costs as Mortgagee may require. Following the re-tenanting of all affected space
(including, without limitation, the completion of all tenant improvements), and
provided no Default exists, Mortgagee shall release any remaining such Impounds
relating to the affected space to Mortgagor. Mortgagor shall construct all
tenant improvements in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations.

            (b) MAJOR LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense, give Mortgagee prompt written notice of any material default by
landlord or tenant under any

                                     Page 6
<PAGE>
Major Lease (as defined below). Unless consented to in writing by Mortgagee or
otherwise permitted under any other provision of the Loan Documents, Mortgagor
shall not:

            (i) enter into any Major Lease which (aa) is not on fair market
terms (which terms may include free or discounted rent to the extent the market
so requires); (bb) does not contain a provision requiring the tenant to execute
and deliver to the landlord an estoppel certificate in form and substance
satisfactory to the landlord promptly upon the landlord's request; or (cc)
allows the tenant to assign or sublet the premises without the landlord's
consent;

            (ii) materially reduce any rent or other sums due from the tenant
under any Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv) release or discharge the tenant or any guarantor under any
Major Lease from any material obligation thereunder.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

"Major Lease", as used herein, shall mean any Lease, which is, at any time: (1)
a Lease of more than 20% of the total rentable area of the Property, as
reasonably determined by Mortgagee; or (2) a Lease which generates a gross base
monthly rent exceeding 20% of the total gross base monthly rent generated by all
Leases (excluding all Leases under which the tenant is then in default), as
reasonably determined by Mortgagee. Mortgagor's obligations with respect to
Major Leases shall be governed by the provisions of Section 3.4(a) as well as by
the provisions of this Section.

            (c) FAILURE TO DENY REQUEST Mortgagee's failure to deny any written
request by Mortgagor for Mortgagee's consent under the provisions of Sections
3.4(a) or 3.4(b) within 10 Business Days after Mortgagee's receipt of such
request (and all documents and information reasonably related thereto) shall be
deemed to constitute Mortgagee's consent to such request.

            3.5 RIGHT OF SUBORDINATION. Mortgagee may at any time and from time
to time by specific written instrument intended for the purpose unilaterally
subordinate the lien of this Mortgage to any Lease, without joinder or consent
of, or notice to, Mortgagor, any tenant or any other person. Notice is hereby
given to each tenant under a Lease of such right to subordinate. No
subordination referred to in this Section shall constitute a subordination to
any lien or other encumbrance, whenever arising, or improve the right of any
junior lienholder. Nothing herein shall be construed as subordinating this
Mortgage to any Lease.

               ARTICLE IV. SECURITY AGREEMENT AND FIXTURE FILING

            4.1 SECURITY INTEREST. Mortgagor grants and assigns to Mortgagee a
security interest to secure payment and performance of all of the Secured
Obligations, in all of Mortgagor's right, title and interest in and to the
following described personal property in which Mortgagor now or at any time
hereafter has any interest ("Collateral"):

                                     Page 7
<PAGE>
      All goods, building and other materials, supplies, work in process,
      equipment, machinery, fixtures, furniture, furnishings, signs and other
      personal property, wherever situated, which are or are to be incorporated
      into, used in connection with or appropriated for use on the Property; all
      rents, issues, deposits and profits of the Property (to the extent, if
      any, they are not subject to the Absolute Assignment of Rents and Leases);
      all inventory, accounts, cash receipts, deposit accounts, impounds,
      accounts receivable, contract rights, general intangibles, software,
      chattel paper, instruments, documents, promissory notes, drafts, letters
      of credit, letter of credit rights, supporting obligations, insurance
      policies, insurance and condemnation awards and proceeds, any other rights
      to the payment of money, trade names, trademarks and service marks arising
      from or related to the Property or any business now or hereafter conducted
      thereon by Mortgagor; all permits, consents, approvals, licenses,
      authorizations and other rights granted by, given by or obtained from, any
      governmental entity with respect to the Property; all deposits or other
      security now or hereafter made with or given to utility companies by
      Mortgagor with respect to the Property; all advance payments of insurance
      premiums made by Mortgagor with respect to the Property; all plans,
      drawings and specifications relating to the Property; all loan funds held
      by Mortgagee, whether or not disbursed; all funds deposited with Mortgagee
      pursuant to any Loan Document, all reserves, deferred payments, deposits,
      accounts, refunds, cost savings and payments of any kind related to the
      Property or any portion thereof, including, without limitation, all
      "Impounds" as defined herein; together with all replacements and proceeds
      of, and additions and accessions to, any of the foregoing, and all books,
      records and files relating to any of the foregoing.

            As to all of the above described personal property which is or which
hereafter becomes a "fixture" under the Florida Uniform Commercial Code (the
"UCC"), this Mortgage constitutes a fixture filing under Florida Statutes
Section 679.313 and 679.402, as amended and recodified from time to time, this
Mortgage shall constitute a fixture filing recorded in the real estate records.
Notwithstanding the foregoing, nothing herein shall be deemed to create any lien
or interest in favor of Mortgagee under this Mortgage in any such Collateral
which is not a fixture, and the purpose of this Article IV is to create a
fixture filing under Florida Statutes Section 679.313 and 679.402, as amended or
recodified from time to time.

            4.2 COVENANTS. Mortgagor agrees: (a) to execute and deliver such
documents as Mortgagee reasonably deems necessary to create, perfect and
continue the security interests contemplated hereby; (b) not to change its name,
and, as applicable, its chief executive offices, its principal residence or the
jurisdiction in which it is organized without giving Mortgagee at least 30 days'
prior written notice thereof; and (c) to cooperate with Mortgagee in perfecting
all security interests granted herein and in obtaining such agreements from
third parties as Mortgagee deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of Mortgagee's rights
hereunder.

            4.3 RIGHTS OF MORTGAGEE. In addition to Mortgagee's rights as a
"Secured Party" under the UCC, Mortgagee may, but shall not be obligated to, at
any time without notice and at the expense of Mortgagor: (a) give notice to any
person of Mortgagee's rights hereunder and enforce such rights at law or in
equity; (b) insure, protect, defend and

                                     Page 8
<PAGE>
preserve the Collateral or any rights or interests of Mortgagee therein; and (c)
inspect the Collateral during normal business hours upon reasonable prior
written notice, provided, however, that such notice shall not be required in the
event of an emergency. Notwithstanding the above, in no event shall Mortgagee be
deemed to have accepted any property other than cash in satisfaction of any
obligation of Mortgagor to Mortgagee unless Mortgagee shall make an express
written election of said remedy under the UCC or other applicable law.

            4.4 ADDITIONAL RIGHTS OF MORTGAGEE UPON DEFAULT. Upon the occurrence
of a Default, then in addition to all of Mortgagee's rights as a "Secured Party"
under the UCC or otherwise at law:

            (a) DISPOSITION OF COLLATERAL. Mortgagee may: (i) upon written
notice, require Mortgagor to assemble the Collateral and make it available to
Mortgagee at a place reasonably designated by Mortgagee; (ii) without prior
notice (to the extent permitted by law), enter upon the Property or other place
where the Collateral may be located and take possession of, collect, sell,
lease, license and otherwise dispose of the Collateral, and store the same at
locations acceptable to Mortgagee at Mortgagor's expense; or (iii) sell, assign
and deliver the Collateral at any place or in any lawful manner and bid and
become purchaser at any such sales; and

            (b) OTHER RIGHTS. Mortgagee may, for the account of Mortgagor and at
Mortgagor's expense: (i) operate, use, consume, sell, lease, license or
otherwise dispose of the Collateral as Mortgagee reasonably deems appropriate
for the purpose of performing any or all of the Secured Obligations; (ii) enter
into any agreement, compromise or settlement including insurance claims, which
Mortgagee may reasonably deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title for, and receive,
enforce and collect by legal action or otherwise, all indebtedness and
obligations now or hereafter owing to Mortgagor in connection with or on account
of the Collateral.

            Mortgagor acknowledges and agrees that a disposition of the
Collateral in accordance with Mortgagee's rights and remedies as heretofore
provided is a disposition thereof in a commercially reasonable manner and that 5
Business Days prior notice of such disposition is commercially reasonable
notice. Mortgagee shall have no obligation to process or prepare the Collateral
for sale or other disposition. In disposing of the Collateral, Mortgagee may
disclaim all warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any sale or other disposition of the Collateral may be applied by
Mortgagee first to the reasonable expenses incurred by Mortgagee in connection
therewith, including, without limitation, reasonable attorneys' fees and
disbursements, and then to the payment of the Secured Obligations, in such order
of application as Mortgagee may from time to time elect.

            4.5 POWER OF ATTORNEY. Mortgagor hereby irrevocably appoints
Mortgagee as Mortgagor's attorney-in-fact (such agency being coupled with an
interest), and as such attorney-in-fact, Mortgagee may, without the obligation
to do so, in Mortgagee's name or in the name of Mortgagor, prepare, execute,
file and record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve any of
Mortgagee's security interests and rights in or to the Collateral, and upon a
Default, take

                                     Page 9
<PAGE>
any other action required of Mortgagor; provided, however, that Mortgagee as
such attorney-in-fact shall be accountable only for such funds as are actually
received by Mortgagee.

                   ARTICLE V. REPRESENTATIONS AND WARRANTIES

            5.1 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and
warrants to Mortgagee that, to Mortgagor's current actual knowledge after
reasonable investigation and inquiry, the following statements are true and
correct as of the Effective Date:

            (a) LEGAL STATUS. Mortgagor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in which Mortgagor
and Borrower are organized. Mortgagor and Borrower are qualified or licensed to
do business in all jurisdictions in which such qualification or licensing is
required.

            (b) PERMITS. Mortgagor and Borrower possess all permits, franchises
and licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, necessary to enable Mortgagor and Borrower to conduct
the business(es) in which Mortgagor and Borrower are now engaged in compliance
with applicable law.

            (c) AUTHORIZATION AND VALIDITY. The execution and delivery of the
Loan Documents have been duly authorized and the Loan Documents constitute valid
and binding obligations of Mortgagor, Borrower or the party which executed the
same, enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights, or by the application of rules
of equity.

            (d) VIOLATIONS. The execution, delivery and performance by Mortgagor
and Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or result in any breach or default under any contract,
obligation, indenture or other instrument to which Mortgagor or Borrower is a
party or by which Mortgagor or Borrower is bound.

            (e) LITIGATION. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental authority, court or
administrative agency which may adversely affect the financial condition or
operations of Mortgagor or Borrower other than those previously disclosed in
writing by Mortgagor or Borrower to Mortgagee.

            (f) FINANCIAL STATEMENTS. The financial statements of Mortgagor and
Borrower, of each general partner (if Mortgagor or Borrower is a partnership),
of each member (if Mortgagor or Borrower is a limited liability company) and of
each guarantor, if any, previously delivered by Mortgagor or Borrower to
Mortgagee: (i) are materially complete and correct; (ii) present fairly the
financial condition of such party; and (iii) have been prepared in accordance
with the same accounting standard used by Mortgagor or Borrower to prepare the
financial statements delivered to and approved by Mortgagee in connection with
the making of the Loan, or other accounting standards approved by Mortgagee.
Since the date of such financial statements, there has been no material adverse
change in such financial condition, nor have any assets or properties reflected
on such financial statements been sold, transferred, assigned, mortgaged,

                                    Page 10
<PAGE>
pledged or encumbered except as previously disclosed in writing by Mortgagor or
Borrower to Mortgagee and approved in writing by Mortgagee.

            (g) REPORTS. All reports, documents, instruments and information
delivered to Mortgagee in connection with the Loan: (i) are correct in all
material respects and sufficiently complete to give Mortgagee accurate knowledge
of their subject matter; and (ii) do not contain any misrepresentation of a
material fact or omission of a material fact which omission makes the provided
information misleading.

            (h) INCOME TAXES. There are no material pending assessments or
adjustments of Mortgagor's or Borrower's income tax payable with respect to any
year.

            (i) SUBORDINATION. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would require the
subordination in right of payment of any of Borrower's obligations under the
Note to an obligation owed to another party.

            (j) TITLE. Mortgagor lawfully holds and possesses fee simple title
to the Property, without limitation on the right to encumber same. This Mortgage
is a first lien on the Property prior and superior to all other liens and
encumbrances on the Property except: (i) liens for real estate taxes and
assessments not yet due and payable; (ii) senior exceptions previously approved
by Mortgagee and shown in the title insurance policy insuring the lien of this
Mortgage; and (iii) other matters, if any, previously disclosed to Mortgagee by
Mortgagor in a writing specifically referring to this representation and
warranty.

            (k) MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to any such liens) affecting the
Property which are or may be prior to or equal to the lien of this Mortgage,
other than those (if any) previously approved by Mortgagee and shown in the
title insurance policy insuring the lien of this Mortgage.

            (l) ENCROACHMENTS. Except as shown in the survey, if any, previously
delivered to Mortgagee, none of the buildings or other improvements which were
included for the purpose of determining the appraised value of the Property lies
outside of the boundaries or building restriction lines of the Property and no
buildings or other improvements located on adjoining properties encroach upon
the Property.

            (m) LEASES. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. Except as disclosed on a
rent roll provided to Mortgagee prior to the date hereof, no material breach or
default by any party, or event which would constitute a material breach or
default by any party after notice or the passage of time, or both, exists under
any existing Lease. None of the landlord's interests under any of the Leases,
including, but not limited to, rents, additional rents, charges, issues or
profits, has been transferred or assigned. Except as disclosed on a rent roll
provided to Mortgagee prior to the date hereof, no rent or other payment under
any existing Lease has been paid by any tenant for more than 1 month in advance.

            (n) COLLATERAL. Mortgagor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if any, previously
disclosed to Mortgagee by Mortgagor in writing specifically referring to this
representation and warranty. Mortgagor's chief

                                    Page 11
<PAGE>
executive office (or principal residence, if applicable) is located at the
address shown on page one of this Mortgage. Mortgagor is an organization
organized solely under the laws of the State of Delaware. All organizational
documents of Mortgagor delivered to Mortgagee are complete and accurate in every
respect. Mortgagor's legal name is exactly as shown on page one of this
Mortgage.

            (o) CONDITION OF PROPERTY. Except as shown in the property condition
survey or other engineering reports, if any, previously delivered to or obtained
by Mortgagee, the Property is in good condition and repair and is free from any
damage that would materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.

            (p) HAZARDOUS MATERIALS. Except as shown in the environmental
assessment report(s), if any, previously delivered to or obtained by Mortgagee,
the Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of Hazardous Materials (as hereinafter
defined) in violation of Hazardous Materials Laws (as hereinafter defined)
except as otherwise previously disclosed in writing by Mortgagor to Mortgagee.

            (q) HAZARDOUS MATERIALS LAWS. The Property complies with all
Hazardous Materials Laws.

            (r) HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
Hazardous Materials Claims (as hereinafter defined).

            (s) WETLANDS. No part of the Property consists of or is classified
as wetlands, tidelands or swamp and overflow lands.

            (t) COMPLIANCE WITH LAWS. All federal, state and local laws, rules
and regulations applicable to the Property, including, without limitation, all
zoning and building requirements and all requirements of the Americans With
Disabilities Act of 1990, as amended from time to time (42 U. S. C. Section
12101 et seq.) have been satisfied or complied with. Mortgagor is in possession
of all certificates of occupancy and all other licenses, permits and other
authorizations required by applicable law for the existing use of the Property.
All such certificates of occupancy and other licenses, permits and
authorizations are valid and in full force and effect.

            (u) PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, and ground
rents, if any, which previously became due and owing in respect of the Property
have been paid.

            (v) CONDEMNATION. There is no proceeding pending or threatened for
the total or partial condemnation of the Property.

            (w) HOMESTEAD. There is no homestead or other exemption available to
Mortgagor which would materially interfere with the right to sell the Property
or the right to foreclose this Mortgage.

            (x) SOLVENCY. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or defraud any
present or future creditors

                                    Page 12
<PAGE>
of Mortgagor, and Mortgagor, on the Effective Date, will have received fair and
reasonably equivalent value in good faith for the grant of the liens or security
interests effected by the Loan Documents. On the Effective Date, Mortgagor will
be solvent and will not be rendered insolvent by the transactions contemplated
by the Loan Documents. Mortgagor is able to pay its debts as they become due.

            (y) SEPARATE TAX PARCEL(S). The Property is assessed for real estate
tax purposes as one or more wholly independent tax parcels, separate from any
other real property, and no other real property is assessed and taxed together
with the Property or any portion thereof.

            5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS
(LEVEL V SPE). Mortgagor hereby represents, warrants and covenants to Mortgagee
that with respect to both Mortgagor and MHC-QRS STAGECOACH, INC., a Delaware
corporation, the managing member of Mortgagor:

      (a) each such entity was organized solely for the purpose of (i) owning
the Properties (as defined in the Note); (ii) acting as a general partner of a
limited partnership which owns the Properties; or (iii) acting as a managing
member of a limited liability company which owns the Properties;

      (b) each such entity has not engaged and will not engage in any business
unrelated to (i) the ownership of the Properties; (ii) acting as general partner
of a limited partnership which owns the Properties; or (iii) acting as a
managing member of a limited liability company which owns the Properties;

      (c) each such entity has not had and will not have any assets other than
the Properties (and personal property incidental to the ownership and operation
of the Properties) or its partnership or membership interest in the limited
partnership or limited liability company which owns the Properties, as
applicable;

      (d) each such entity has not and will not engage in, seek or consent to
any dissolution, winding up, liquidation, consolidation, merger, asset sale,
transfer of partnership or membership interest, or amendment of its articles of
incorporation, articles of organization, certificate of formation, operating
agreement or limited partnership agreement, as applicable;

      (e) if any such entity is a limited partnership, all of its general
partners are corporations that satisfy the requirements set forth in this
Section 5.2;

      (f) if any such entity is a limited liability company, it has at least one
managing member that is a corporation that satisfies the requirements set forth
in this Section 5.2;

      (g) each such entity, without the unanimous consent of all of its general
partners, directors or members, as applicable, shall not file or consent to the
filing of any bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or any other entity in which it
has a direct or indirect legal or beneficial ownership interest;

      (h) each such entity has no indebtedness (and will have no indebtedness)
other than (i) the Loan (to the extent it is liable under the terms of the Loan
Documents); and (ii) unsecured

                                    Page 13
<PAGE>
trade debt not to exceed $1,000,000 in the aggregate with respect to Mortgagor
or $10,000 in the aggregate with respect to its managing member, which is not
evidenced by a note and is incurred in the ordinary course of its business in
connection with owning, operating and maintaining the Property (or its interest
in Mortgagor, as applicable) and is paid within thirty (30) days from the date
incurred;

      (i) each such entity has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;

      (j) each such entity has maintained and will maintain its accounts, books
and records separate from any other person or entity;

      (k) each such entity has maintained and will maintain its books, records,
resolutions and agreements as official records;

      (l) each such entity (i) has not commingled and will not commingle its
funds or assets with those of any other entity; and (ii) has held and will hold
its assets in its own name;

      (m) each such entity has conducted and will conduct its business in its
own name or in a registered trade name;

      (n) each such entity has maintained and will maintain its accounting
records and other entity documents separate from any other person or entity;

      (o) each such entity has prepared and will prepare separate tax returns
and financial statements, or if part of a consolidated group, is shown as a
separate member of such group;

      (p) each such entity has paid and will pay its own liabilities and
expenses out of its own funds and assets;

      (q) each such entity has held and will hold regular meetings, as
appropriate, to conduct its business and has observed and will observe all
corporate, partnership or limited liability company formalities and record
keeping, as applicable;

      (r) each such entity has not assumed or guaranteed and will not assume or
guarantee or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity;

      (s) each such entity has not acquired and will not acquire obligations or
securities of its partners, members or shareholders;

      (t) each such entity has allocated and will allocate fairly and reasonably
the costs associated with common employees and any overhead for shared office
space and each such entity has used and will use separate stationery, invoices
and checks under its own name or under its registered trade name;

      (u) each such entity has not pledged and will not pledge its assets for
the benefit of any other person or entity;

                                    Page 14
<PAGE>
      (v) each such entity has held out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its own
name or under its registered trade name and not as a division or part of any
other person or entity;

      (w) each such entity has not made and will not make loans to any person or
entity;

      (x) each such entity has not identified and will not identify its
partners, members or shareholders, or any affiliates of any of the foregoing, as
a division or part of it;

      (y) each such entity has not entered into and will not enter into or be a
party to, any transaction with its partners, members, shareholders, or any
affiliates of any of the foregoing, except in the ordinary course of its
business pursuant to written agreements and on terms which are intrinsically
fair and are no less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;

      (z) if any such entity is a corporation, the directors of such entity
shall consider the interests of the creditors of such entity in connection with
all corporate action;

      (aa) each such entity has paid and will pay the salaries of its own
employees and has maintained and will maintain a sufficient number of employees
in light of its contemplated business operations;

      (bb)  each  such entity has maintained and will maintain adequate
capital in light of its contemplated business operations;

      (cc) if any such entity is a limited partnership with more than one
general partner, its limited partnership agreement requires the remaining
partners to continue the partnership as long as one solvent general partner
exists;

      (dd) if any such entity is a limited liability company, its operating
agreement, if any such entity is a limited partnership, its limited partnership
agreement, and if any such entity is a corporation, to the full extent permitted
by applicable law, its articles of incorporation, contain the provisions set
forth in this Section 5.2 and any such entity shall conduct its business and
operations in strict compliance with the terms contained therein;

      (ee) each such entity will, as a condition to the closing of the Loan,
deliver to Mortgagee a nonconsolidation opinion in form and substance acceptable
to Mortgagee;

      (ff)  if any such entity is a corporation, it has maintained and will
continue to maintain at least one Independent Director (as hereinafter
defined); and

      (gg) if any such entity is a corporation, it has not caused or allowed and
will not cause or allow the board of directors of such entity to take any action
requiring the unanimous affirmative vote of 100% of the members of the board of
directors unless an Independent Director shall have participated in such vote.

An "Independent Director" shall be an individual who, except in his or her
capacity as an Independent Director of the corporation is not, and has not been
during the five (5) years

                                    Page 15
<PAGE>
immediately before such individual's appointment as an Independent Director: (i)
a stockholder, director, partner, officer or employee of the corporation or its
Affiliates; (ii) affiliated with a customer or supplier of the corporation or
its Affiliates; or (iii) a spouse, parent, sibling, child or other family
relative of any person described by (i) or (ii) above.

As used herein, the term "Affiliate" shall mean any person or entity other than
the corporation (i) which owns beneficially, directly or indirectly, any
outstanding shares of the corporation's stock, or (ii) which controls, is
controlled by or is under common control with the corporation. The term
"control" 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 ownership of voting securities, by contract or otherwise.

            5.3 COMMERCIAL LOAN. Borrower warrants that the loan evidenced by
this Note is being made solely to acquire or carry on a business or commercial
enterprise, and/or Borrower is a business or commercial organization. Borrower
further warrants that all of the proceeds of the Note shall be used for
commercial purposes and stipulates that the loan evidenced by the Note shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family or household purposes.

                  ARTICLE VI. RIGHTS AND DUTIES OF THE PARTIES

            6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Mortgagor shall,
or shall cause the property manager to: (a) keep the Property in good condition
and repair; (b) complete or restore promptly and in workmanlike manner the
Property or any part thereof which may be damaged or destroyed (unless, if and
to the extent permitted under Section 6.11, Mortgagee elects to require that
insurance proceeds be used to reduce the Secured Obligations and after such
repayment the ratio of Secured Obligations to the value of the Property, as
reasonably determined by Mortgagee is the same as or lower than it was
immediately before the loss or taking occurred); (c) comply and cause the
Property to comply with (i) all laws, ordinances, regulations and standards,
(ii) all covenants, conditions, restrictions and equitable servitudes, whether
public or private, of every kind and character and (iii) all requirements of
insurance companies and any bureau or agency which establishes standards of
insurability, which laws, covenants or requirements affect the Property and
pertain to acts committed or conditions existing thereon, including, without
limitation, any work of alteration, improvement or demolition as such laws,
covenants or requirements mandate; (d) operate and manage the Property at all
times in a professional manner and do all other acts which from the character or
use of the Property may be reasonably necessary to maintain and preserve its
value; (e) promptly after execution, deliver to Mortgagee a copy of any
management agreement concerning the Property and all amendments thereto and
waivers thereof; and (f) execute and acknowledge all further documents,
instruments and other papers as Mortgagee reasonably deems necessary or
appropriate to preserve, continue, perfect and enjoy the benefits of this
Mortgage and perform Mortgagor's obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no offset.
Mortgagor shall not, without Mortgagee's prior written consent: (g) remove or
demolish all or any material part of the Property; (h) alter either (i) the
exterior of the Property in a manner which materially and adversely affects the
value of the Property or (ii) the roof or other structural elements of the

                                    Page 16
<PAGE>
Property in a manner which requires a building permit except for tenant
improvements required under the Leases; (i) initiate or acquiesce in any change
in any zoning or other land classification which affects the Property; (j)
materially alter the type of occupancy or use of all or any part of the
Property; or (k) commit or permit physical waste of the Property.

            6.2 HAZARDOUS MATERIALS. Without limiting any other provision of
this Mortgage, Mortgagor agrees as follows:

            (a) PROHIBITED ACTIVITIES. Mortgagor shall not cause or permit the
Property to be used as a site for the use, generation, manufacture, storage,
treatment, release, discharge, disposal, transportation or presence of any oil
or other petroleum products, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are "hazardous substances," "hazardous wastes," "hazardous materials" or
"toxic substances" under the Hazardous Materials Laws (defined below) and/or
other applicable environmental laws, ordinances or regulations ("Hazardous
Materials").

            The foregoing to the contrary notwithstanding, (i) Mortgagor may
store, maintain and use on the Property janitorial and maintenance supplies,
paint and other Hazardous Materials of a type and in a quantity readily
available for purchase by the general public and normally stored, maintained and
used by owners and managers of properties of a type similar to the Property; and
(ii) tenants of the Property may store, maintain and use on the Property (and,
if any tenant is a retail business, hold in inventory and sell in the ordinary
course of such tenant's business) household and consumer cleaning supplies and
other Hazardous Materials of a type and quantity readily available for purchase
by the general public and normally stored, maintained and used (and, if tenant
is a retail business, sold) by tenants of properties similar to the Property or
in similar lines of business on properties similar to the Property.

            (b) HAZARDOUS MATERIALS LAWS. Mortgagor shall comply and cause the
Property to comply with all federal, state and local laws, ordinances and
regulations relating to Hazardous Materials ("Hazardous Materials Laws"),
including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of
other jurisdictions or orders and regulations.

            (c) NOTICES. Mortgagor shall immediately notify Mortgagee in writing
of: (i) the discovery of any Hazardous Materials on, under or about the Property
(other than Hazardous Materials permitted under Section 6.2(a)); (ii) any
knowledge by Mortgagor that the Property does not comply with any Hazardous
Materials Laws; (iii) any claims or actions ("Hazardous Materials

                                    Page 17
<PAGE>
Claims") pending or threatened in writing against Mortgagor or the Property by
any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to the Hazardous Materials Laws; and (iv) the
discovery 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 become contaminated by or with Hazardous Materials.

            (d) REMEDIAL ACTION. In response to knowledge of or notification to
Mortgagor of the presence of any Hazardous Materials on, under or about the
Property, Mortgagor shall immediately take, at Mortgagor's sole expense, all
remedial action required of Mortgagor by any Hazardous Materials Laws or any
judgment, consent decree, settlement or compromise in respect to any Hazardous
Materials Claims.

            (e) INSPECTION BY MORTGAGEE. Upon reasonable prior notice to
Mortgagor (except in the event of an emergency) and during normal business
hours, Mortgagee, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Property for the purpose of determining the
existence, location, nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto, beneath or from the
Property.

            (f) LEGAL EFFECT OF SECTION. Mortgagor and Mortgagee agree that: (i)
this Hazardous Materials Section is intended as Mortgagee's written request for
information (and Mortgagor's response) concerning the environmental condition of
the real property security as required by California Code of Civil Procedure
Section 726.5, or any other applicable law; and (ii) each representation and
warranty and covenant in this Section (together with any indemnity applicable to
a breach of any such representation and warranty) with respect to the
environmental condition of the Property is intended by Mortgagee and Mortgagor
to be an "environmental provision" for purposes of California Code of Civil
Procedure Section 736, or any other applicable law.

            6.3 COMPLIANCE WITH LAWS. Mortgagor shall comply with all federal,
state and local laws, rules and regulations applicable to the Property,
including, without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C. Section
12101 et seq.), as amended from time to time. Mortgagor shall possess and
maintain or cause Borrower to possess and maintain in full force and effect at
all times (a) all certificates of occupancy and other licenses, permits and
authorizations required by applicable law for the existing use of the Property
and (b) all permits, franchises and licenses and all rights to all trademarks,
trade names, patents and fictitious names, if any, required by applicable law
for Mortgagor and Borrower to conduct the business(es) in which Mortgagor and
Borrower are now engaged.

            6.4 LITIGATION. Mortgagor shall promptly notify Mortgagee in writing
of any litigation pending or threatened in writing against Mortgagor or Borrower
claiming damages in excess of $100,000 and of all pending or threatened (in
writing) litigation against Mortgagor or Borrower if the aggregate damage claims
against Mortgagor or Borrower exceed $500,000.

            6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Mortgagor shall not:
(a) merge or consolidate with any other entity or permit Borrower to merge or

                                    Page 18
<PAGE>
consolidate with any other entity; (b) make any substantial change in the nature
of Mortgagor's business or structure or permit Borrower to make any substantial
change in the nature of Borrower's business or structure; (c) acquire all or
substantially all of the assets of any other entity or permit Borrower to
acquire all or substantially all of the assets of any other entity; or (d) sell,
lease, assign, transfer or otherwise dispose of a material part of Mortgagor's
assets except in the ordinary course of Mortgagor's business or permit Borrower
to sell, lease, assign, transfer or otherwise dispose of a material part of
Borrower's assets except in the ordinary course of Borrower's business.

            6.6 ACCOUNTING RECORDS. Mortgagor shall maintain and cause Borrower
to maintain adequate books and records in accordance with the same accounting
standard used by Mortgagor or Borrower to prepare the financial statements
delivered to and approved by Mortgagee in connection with the making of the Loan
or other accounting standards approved by Mortgagee. Mortgagor shall permit and
shall cause Borrower to permit any representative of Mortgagee, at any
reasonable time and from time to time, upon reasonable prior notice to
Mortgagor, to inspect, audit and examine such books and records and make copies
of same.

            6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor shall pay to
Mortgagee the full amount of all costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses of Mortgagee's in-house or
outside counsel, incurred by Mortgagee in connection with: (a) appraisals and
inspections of the Property or Collateral required by Mortgagee as a result of
(i) a Transfer or proposed Transfer (as defined below), or (ii) a Default; (b)
appraisals and inspections of the Property or Collateral required by applicable
law, including, without limitation, federal or state regulatory reporting
requirements; and (c) any acts performed by Mortgagee at Mortgagor's request or
wholly or partially for the benefit of Mortgagor (including, without limitation,
the preparation or review of amendments, assumptions, waivers, releases,
reconveyances, estoppel certificates or statements of amounts owing under any
Secured Obligation). In connection with appraisals and inspections, Mortgagor
specifically (but not by way of limitation) acknowledges that: (aa) a formal
written appraisal of the Property by a state certified or licensed appraiser may
be required by federal regulatory reporting requirements on an annual or more
frequent basis; and (bb) Mortgagee may require inspection of the Property by an
independent supervising architect, a cost engineering specialist, or both.
Mortgagor shall pay all indebtedness arising under this Section immediately upon
demand by Mortgagee together with interest thereon following notice of such
indebtedness at the rate of interest then applicable to the principal balance of
the Note as specified therein.

            6.8 LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section
8.4, Mortgagor shall immediately discharge by bonding or otherwise any lien,
charge or other encumbrance which attaches to the Property in violation of
Section 6.15. Subject to Mortgagor's right to contest such matters under this
Mortgage or as expressly permitted in the Loan Documents, Mortgagor shall pay
when due all obligations secured by or reducible to liens and encumbrances which
shall now or hereafter encumber or appear to encumber all or any part of the
Property or any interest therein, whether senior or subordinate hereto,
including, without limitation, all claims for work or labor performed, or
materials or supplies furnished, in connection with any work of demolition,
alteration, repair, improvement or construction of or upon the Property, except
such as Mortgagor may in good faith contest or as to which a bona fide dispute
may arise (provided provision is made to the satisfaction of Mortgagee for
eventual payment thereof in the

                                    Page 19
<PAGE>
event that Mortgagor is obligated to make such payment and that any recorded
claim of lien, charge or other encumbrance against the Property is immediately
discharged by bonding or otherwise).

            6.9 TAXES AND OTHER LIABILITIES. Mortgagor shall pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and local
property taxes and assessments. Mortgagor shall promptly provide to Mortgagee
copies of all tax and assessment notices pertaining to the Property. Mortgagor
hereby authorizes Mortgagee to obtain, at Mortgagor's expense, a tax service
contract which shall provide tax information on the Property to Mortgagee for
the term of the Loan and any extensions or renewals of the Loan.

            6.10 INSURANCE COVERAGE. Mortgagor shall insure the Property against
loss or damage by fire and such other hazards as Mortgagee shall from time to
time require; provided, however, (a) Mortgagee, at Mortgagee's election, may
only require flood insurance if all or any portion of the improvements located
on the Property is or becomes located in a special flood hazard area, and (b)
Mortgagee, at Mortgagee's election, may only require earthquake insurance if all
or any portion of the Property is or becomes located in an earthquake fault
zone. Mortgagor shall also carry public liability insurance and such other
insurance as Mortgagee may reasonably require, including, without limitation,
business interruption insurance or loss of rents insurance. Such policies shall
contain a standard mortgage clause naming Mortgagee and its successors in
interest as a loss payee and requiring at least 30 days prior notice to the
holder at termination or cancellation. Mortgagor shall maintain all required
insurance throughout the term of the Loan and while any liabilities of Borrower
or Mortgagor to Mortgagee under any of the Loan Documents remain outstanding at
Mortgagor's expense, with companies, and in substance and form satisfactory to
Mortgagee. Mortgagee, by reason of accepting, rejecting, approving or obtaining
insurance shall not incur any liability for: (c) the existence, nonexistence,
form or legal sufficiency of any insurance; (d) the solvency of any insurer; or
(e) the payment of claims.

            6.11 INSURANCE AND CONDEMNATION PROCEEDS.

            (a) ASSIGNMENT OF CLAIMS. Mortgagor absolutely and irrevocably
assigns to Mortgagee all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid to Mortgagee: (i) all
awards of damages and all other compensation payable directly or indirectly by
reason of a condemnation or proposed condemnation for public or private use
affecting all or any part of, or any interest in, the Property; (ii) all other
claims and awards for damages to or decrease in value of all or any part of, or
any interest in, the Property; (iii) all proceeds of any insurance policies
payable by reason of loss sustained to all or any part of the Property; and (iv)
all interest which may accrue on any of the foregoing. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty affecting, or
the institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof. So long as no Default has occurred and
is continuing at the time, Mortgagor shall have the right to adjust, compromise
and settle any Claim of $100,000 or less without the consent of Mortgagee,
provided, however, all awards, proceeds and other sums described herein shall
continue to be payable to Mortgagee. Mortgagee may commence, appear in, defend
or prosecute any Claim exceeding $100,000, and may adjust, compromise and settle
all Claims (except for Claims which Mortgagor may settle as provided herein),
but shall not be responsible

                                    Page 20
<PAGE>
for any failure to commence, appear in, defend, prosecute or collect any such
Claim regardless of the cause of the failure. All awards, proceeds and other
sums described herein shall be payable to Mortgagee.

            (b) APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
occurred and is continuing at the time of Mortgagee's receipt of the proceeds of
the Claims ("Proceeds") and no Default occurs thereafter, Mortgagee shall apply
the Proceeds in the following order of priority: First, to Mortgagee's expenses
in settling, prosecuting or defending the Claims; Second, to the repair or
restoration of the Property; and Third, to Mortgagor if the repair or
restoration of the Property has been completed, but to the Secured Obligations
in any order without suspending, extending or reducing any obligation of
Mortgagor to make installment payments if the repair or restoration of the
Property has not been completed. Notwithstanding the foregoing, Mortgagee shall
have no obligation to make any Proceeds available for the repair or restoration
of the Property unless and until all the following conditions have been
satisfied: (i) delivery to Mortgagee of the Proceeds plus any additional amount
which is needed to pay all costs of the repair or restoration (including,
without limitation, taxes, financing charges, insurance and rent during the
repair period); (ii) establishment of an arrangement for lien releases and
disbursement of funds acceptable to Mortgagee; (iii) delivery to Mortgagee in
form and content acceptable to Mortgagee of all of the following: (aa) plans and
specifications for the work; (bb) a contract for the work, signed by a
contractor acceptable to Mortgagee; (cc) a cost breakdown for the work; (dd) if
reasonably required by Mortgagee, a payment and performance bond for the work;
(ee) evidence of the continuation of substantially all Leases unless consented
to in writing by Mortgagee; (ff) evidence that, upon completion of the work, the
size, capacity, value, and income coverage ratios for the Property will be at
least as great as those which existed immediately before the damage or
condemnation occurred; and (gg) evidence of the satisfaction of any additional
conditions that Mortgagee may reasonably establish to protect Mortgagee's
security. Mortgagor acknowledges that the specific conditions described above
are reasonable.

            (c) APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and
is continuing at the time of Mortgagee's receipt of the Proceeds or if a Default
occurs at any time thereafter, Mortgagee may, at Mortgagee's absolute discretion
and regardless of any impairment of security or lack of impairment of security,
but subject to applicable law governing use of the Proceeds, if any, apply all
or any of the Proceeds to Mortgagee's expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured Obligations in
any order without suspending, extending or reducing any obligation of Mortgagor
to make installment payments, and may release all or any part of the Proceeds to
Mortgagor upon any conditions Mortgagee chooses.

            6.12 IMPOUNDS.

            (a) POST-DEFAULT IMPOUNDS. If required by Mortgagee at any time
after a Default occurs (and regardless of whether such Default is thereafter
cured), Mortgagor shall deposit with Mortgagee such amounts ("Post-Default
Impounds") on such dates (determined by Mortgagee as provided below) as will be
sufficient to pay any or all "Costs" (as defined below) specified by Mortgagee.
Mortgagee in its reasonable discretion shall estimate the amount of such Costs
that will be payable or required during any period selected by Mortgagee not
exceeding 1 year and shall determine the fractional portion thereof that
Mortgagor shall deposit with Mortgagee

                                    Page 21
<PAGE>
on each date specified by Mortgagee during such period. If the Post-Default
Impounds paid by Mortgagor are not sufficient to pay the related Costs,
Mortgagor shall deposit with Mortgagee upon demand an amount equal to the
deficiency. All Post-Default Impounds shall be payable by Mortgagor in addition
to (but without duplication of) any other Impounds (as defined below).

            (b) ALL IMPOUNDS. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively called "Impounds".
All Impounds shall be deposited into one or more segregated or commingled
accounts maintained by Mortgagee or its servicing agent. Except as otherwise
provided in the Note, such account(s) shall not bear interest. Mortgagee shall
not be a trustee, special depository or other fiduciary for Mortgagor with
respect to such account, and the existence of such account shall not limit
Mortgagee's rights under this Mortgage, any other agreement or any provision of
law. If no Default exists, Mortgagee shall apply all Impounds to the payment of
the related Costs, or in Mortgagee's sole discretion may release any or all
Impounds to Mortgagor for application to and payment of such Costs. If a Default
exists, Mortgagee may apply any or all Impounds to any Secured Obligation and/or
to cure such Default, whereupon Mortgagor shall restore all Impounds so applied
and cure all Defaults not cured by such application. The obligations of
Mortgagor hereunder shall not be diminished by deposits of Impounds made by
Mortgagor, except to the extent that such obligations have actually been met by
application of such Impounds. Upon any assignment of this Mortgage, Mortgagee
may assign all Impounds in its possession to Mortgagee's assignee, whereupon
Mortgagee shall be released from all liability with respect to such Impounds.
Within 60 days following full repayment of the Secured Obligations (other than
as a consequence of foreclosure or conveyance in lieu of foreclosure) or at such
earlier time as Mortgagee may elect, Mortgagee shall pay to Mortgagor all
Impounds in its possession, and no other party shall have any right or claim
thereto. "Costs" means (i) all taxes and other liabilities payable by Mortgagor
under Section 6.9, (ii) all insurance premiums payable by Mortgagor under
Section 6.10, (iii) all other costs and expenses for which Impounds are required
under the Note, and/or (iv) all other amounts that will be required to preserve
the value of the Property. Mortgagor shall deliver to Mortgagee, promptly upon
receipt, all bills for Costs for which Mortgagee has required Post-Default
Impounds.

            6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Mortgagor
shall protect, preserve and defend the Property and title to and right of
possession of the Property, the security of this Mortgage and the rights and
powers of Mortgagee hereunder at Mortgagor's sole expense against all adverse
claims, whether the claim: (a) is against a possessory or non-possessory
interest; (b) arose prior or subsequent to the Effective Date; or (c) is senior
or junior to Mortgagor's or Mortgagee's rights. Mortgagor shall give Mortgagee
prompt notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to the Property and of any
condemnation offer or action.

            6.14 RIGHT OF INSPECTION. Mortgagee and its independent contractors,
agents and employees may enter the Property from time to time at any reasonable
time upon reasonable prior notice to Mortgagor (except that such notice shall
not be required in the event of an emergency) for the purpose of inspecting the
Property and ascertaining Mortgagor's compliance with the terms of this
Mortgage. Mortgagee shall use reasonable efforts to assure that Mortgagee's
entry upon and inspection of the Property shall not materially and unreasonably
interfere with the business or operations of Mortgagor or Mortgagor's tenants on
the Property.

                                    Page 22
<PAGE>
            6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN MORTGAGOR.
Mortgagor acknowledges that Mortgagee has relied upon the principals of
Mortgagor and Borrower and their experience in owning and operating properties
similar to the Property in connection with the closing of the Loan. Accordingly,
except with the prior written consent of Mortgagee or as otherwise expressly
permitted in the Note, Mortgagor shall not cause or permit any sale, exchange,
mortgage, pledge, hypothecation, assignment, encumbrance or other transfer,
conveyance or disposition, whether voluntarily, involuntarily or by operation of
law ("Transfer") of all or any part of, or all or any direct or indirect
interest in, the Property or the Collateral (except for equipment and inventory
in the ordinary course of its business), or cause or permit a Transfer of any
direct or indirect interest (whether general partnership interest, stock,
non-managing member limited liability company interest, trust, or otherwise) in
Mortgagor or Borrower. In the event of any Transfer that is not expressly
permitted in the Note and is without the prior written consent of Mortgagee,
Mortgagee shall have the absolute right at its option, without prior demand or
notice, to declare all of the Secured Obligations immediately due and payable,
except to the extent prohibited by law, and pursue its rights and remedies under
Section 7.3 herein. Mortgagor agrees to pay any prepayment fee as set forth in
the Note in the event the Secured Obligations are accelerated pursuant to the
terms of this Section. Consent to one such Transfer shall not be deemed to be a
waiver of the right to require the consent to future or successive Transfers.
Except for Transfers expressly permitted under the Note, Mortgagee's consent to
any Transfer may be withheld, conditioned or delayed in Mortgagee's sole and
absolute discretion.

            6.16 INTENTIONALLY OMITTED.

            6.17 INTENTIONALLY OMITTED.

            6.18 EXCULPATION. Mortgagee shall not directly or indirectly be
liable to Mortgagor or any other person as a consequence of: (a) the exercise of
the rights, remedies or powers granted to Mortgagee in this Mortgage; (b) the
failure or refusal of Mortgagee to perform or discharge any obligation or
liability of Mortgagor under any agreement related to the Property or under this
Mortgage; or (c) any loss sustained by Mortgagor or any third party resulting
from Mortgagee's failure to lease the Property after a Default or from any other
act or omission of Mortgagee in managing the Property after a Default unless the
loss is caused by the willful misconduct and bad faith of Mortgagee and no such
liability shall be asserted or enforced against Mortgagee, all such liability
being expressly waived and released by Mortgagor.

            6.19 INDEMNITY. Without in any way limiting any other indemnity
contained in this Mortgage, Mortgagor agrees to defend, indemnify and hold
harmless the Mortgagee Group (as hereinafter defined) from and against any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of: (a) the making of the Loan, except for violations of banking laws or
regulations by the Mortgagee Group; (b) this Mortgage; (c) the execution of this
Mortgage or the performance of any act required or permitted hereunder or by
law; (d) any failure of Mortgagor to perform Mortgagor's obligations under this
Mortgage or the other Loan Documents; (e) any alleged obligation or undertaking
on the Mortgagee Group's part to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations
contained in any other document related to the Property; (f) any act or omission
by Mortgagor or any contractor, agent, employee or representative of Mortgagor
with respect to the Property; or (g) any claim, loss,

                                    Page 23
<PAGE>
damage, cost, expense or liability directly or indirectly arising out of: (i)
the use, generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any Hazardous
Materials which are found in, on, under or about the Property (including,
without limitation, underground contamination); or (ii) the breach of any
covenant, representation or warranty of Mortgagor under Section 6.2 above. The
foregoing to the contrary notwithstanding, this indemnity shall not include any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of the gross negligence or willful misconduct of any member of the Mortgagee
Group, or any claim, loss, damage, cost, expense or liability incurred by the
Mortgagee Group arising from any act or incident on the Property occurring after
the full reconveyance and release of the lien of this Mortgage on the Property,
or with respect to the matters set forth in clause (g) above, any claim, loss,
damage, cost, expense or liability incurred by the Mortgagee Group resulting
from the introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure sale
under this Mortgage, either pursuant to judicial decree or the power of sale, or
by deed in lieu of such foreclosure. This indemnity shall include, without
limitation: (aa) all consequential damages (including, without limitation, any
third party tort claims or governmental claims, fines or penalties against the
Mortgagee Group); (bb) all court costs and reasonable attorneys' fees
(including, without limitation, expert witness fees) paid or incurred by the
Mortgagee Group; and (cc) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Property which is
required by any governmental entity or is otherwise necessary to render the
Property in compliance with all laws and regulations pertaining to Hazardous
Materials. "Mortgagee Group", as used herein, shall mean (1) Mortgagee
(including, without limitation, any participant in the Loan), (2) any entity
controlling, controlled by or under common control with Mortgagee, (3) the
directors, officers, employees and agents of Mortgagee and such other entities,
and (4) the successors, heirs and assigns of the entities and persons described
in foregoing clauses (1) through (3). Mortgagor shall pay immediately upon
Mortgagee's demand any amounts owing under this indemnity together with interest
from the date the indebtedness arises until paid at the rate of interest
applicable to the principal balance of the Note as specified therein. Mortgagor
agrees to use legal counsel reasonably acceptable to the Mortgagee Group in any
action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
SECTION SHALL SURVIVE THE SATISFACTION AND RELEASE OF THIS MORTGAGE, BUT
MORTGAGOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF
THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            6.20 INTENTIONALLY OMITTED.

            6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
Without notice to or the consent, approval or agreement of any persons or
entities having any interest at any time in the Property or in any manner
obligated under the Secured Obligations ("Interested Parties"), Mortgagee may,
from time to time: (a) fully or partially release any person or entity from
liability for the payment or performance of any Secured Obligation; (b) extend
the maturity of any Secured Obligation; (c) make any agreement with Borrower
increasing the amount or otherwise altering the terms of any Secured Obligation;
(d) accept additional security for any Secured Obligation; or (e) release all or
any portion of the Property, Collateral and other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the personal
liability of any of said Interested Parties, or release or impair the priority
of the lien of this Mortgage upon the Property.

                                    Page 24
<PAGE>
            6.22 SALE OR PARTICIPATION OF LOAN. Mortgagor agrees that Mortgagee
may at any time sell, assign, participate or securitize all or any portion of
Mortgagee's rights and obligations under the Loan Documents, and that any such
sale, assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, and/or into the
public securities market, in Mortgagee's sole discretion. Mortgagor further
agrees that Mortgagee may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and financial and
other information heretofore or hereafter provided to or known to Mortgagee with
respect to: (a) the Property and its operation; and/or (b) any party connected
with the Loan (including, without limitation, Mortgagor, any partner or member
of Mortgagor, any constituent partner or member of Mortgagor, any guarantor and
any nonborrower mortgagor). In the event of any such sale, assignment,
participation or securitization, Mortgagee and the other parties to the same
shall share in the rights and obligations of Mortgagee set forth in the Loan
Documents as and to the extent they shall agree among themselves. In connection
with any such sale, assignment, participation or securitization, Mortgagor
further agrees that the Loan Documents shall be sufficient evidence of the
obligations of Mortgagor to each purchaser, assignee or participant, and
Mortgagor shall, within 15 days after request by Mortgagee, (x) deliver an
estoppel certificate verifying for the benefit of Mortgagee and any other party
designated by Mortgagee the status and the terms and provisions of the Loan in
form and substance acceptable to Mortgagee, (y) provide any information, legal
opinions or documents regarding Mortgagor, Guarantor (as defined in the Loan
Documents), the Property and any tenants of the Property as Mortgagee or
Mortgagee's rating agencies may reasonably request, and (z) enter into such
amendments or modifications to the Loan Documents or the organizational
documents of Mortgagor as may be reasonably required in order to facilitate any
such sale, assignment, participation or securitization without impairing
Mortgagor's rights or increasing Mortgagor's obligations. The indemnity
obligations of Mortgagor under the Loan Documents shall also apply with respect
to any purchaser, assignee or participant.

            6.23 RELEASE. Upon payment in full of the Secured Obligations, and
satisfaction of all of the covenants, warranties, undertakings and agreements
made in this Mortgage and in the other Loan Documents (including, without
limitation, repayment in full of all principal, interest and other amounts owing
under the Note) are kept and performed, and all obligations, if any, of
Mortgagee for further advances have been terminated, then, and in that event
only, Mortgagee shall release, without warranty, the Property or that portion
thereof then held hereunder. The recitals of any matters or facts in any release
executed hereunder shall be conclusive proof of the truthfulness thereof. To the
extent permitted by law, the release may describe the grantee as "the person or
persons legally entitled thereto". Mortgagee shall have no duty to determine the
rights of persons claiming to be rightful grantees of any release. When the
Property has been fully released, the last such release shall operate as a
reassignment of all future rents, issues and profits of the Property to the
person or persons legally entitled thereto.

            6.24 SUBROGATION. Mortgagee shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole or in part by
Mortgagee pursuant to this Mortgage or by the proceeds of any loan secured by
this Mortgage.

            6.25 MANAGEMENT AGREEMENTS. Without the prior written consent of
Mortgagee, Mortgagor shall not terminate, modify, amend or enter into any
agreement providing for the management, leasing or operation of the Property.
Mortgagor represents,

                                    Page 25
<PAGE>
warrants and covenants that any existing management agreement includes, and any
future management agreement entered into by Mortgagor shall include, a provision
which provides that the management agreement is automatically terminated upon
the transfer of the Property by Mortgagor, either by sale, foreclosure, deed in
lieu of foreclosure, or otherwise, to Mortgagee or any other purchaser of the
Property. Upon a Default under the Loan Documents or a default under any
management agreement then in effect, which default is not cured within any
applicable grace or cure period, Mortgagee shall have the right to terminate, or
to direct Mortgagor to terminate, such management agreement upon thirty (30)
days' written notice and to retain, or to direct Mortgagor to retain, a new
management agent approved by Mortgagee.

                              ARTICLE VII. DEFAULT

            7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as defined
below).

            (a) OPTIONAL DEFAULT. An "Optional Default" shall occur, at
Mortgagee's option, upon the occurrence of any of the following events:

      (i) MONETARY. Borrower or Mortgagor shall fail to (aa) pay when due any
sums payable under the Loan Documents which by their express terms require
immediate payment without any grace period or sums which are payable on the
Maturity Date, or (bb) pay within 5 days when due any other sums payable under
the Note, this Mortgage or any of the other Loan Documents, including, without
limitation, any monthly payment due under the Note.

      (ii) FAILURE TO PERFORM. Borrower or Mortgagor shall fail to observe,
perform or discharge any of Borrower's or Mortgagor's obligations, covenants,
conditions or agreements, other than Borrower's or Mortgagor's payment
obligations, under the Note, this Mortgage or any of the other Loan Documents,
and (aa) such failure shall remain uncured for 30 days after written notice
thereof shall have been given to Borrower or Mortgagor, as the case may be, by
Mortgagee or (bb) if such failure is of such a nature that it cannot be cured
within such 30 day period, Borrower or Mortgagor shall fail to commence to cure
such failure within such 30 day period or shall fail to diligently prosecute
such curative action thereafter.

      (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certificate or other statement (financial or otherwise) made or furnished by or
on behalf of Borrower, Mortgagor, or a guarantor, if any, to Mortgagee or in
connection with any of the Loan Documents, or as an inducement to Mortgagee to
make the Loan, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished.

      (iv) CONDEMNATION; ATTACHMENT. The condemnation, seizure or appropriation
of any material portion (as reasonably determined by Mortgagee) of the Property;
or the sequestration or attachment of, or levy or execution upon any of the
Property, the Collateral or any other collateral provided by Borrower or
Mortgagor under any of the Loan Documents, or any material portion of the other
assets of Borrower or Mortgagor, which sequestration, attachment, levy or
execution is not released or dismissed within 45 days after its occurrence; or
the sale of any assets affected by any of the foregoing.

                                    Page 26
<PAGE>
      (v) UNINSURED CASUALTY. The occurrence of an uninsured casualty with
respect to any material portion (as reasonably determined by Mortgagee) of the
Property unless: (aa) no other Default has occurred and is continuing at the
time of such casualty or occurs thereafter; (bb) Mortgagor promptly notifies
Mortgagee of the occurrence of such casualty; and (cc) not more than 45 days
after the occurrence of such casualty, Mortgagor delivers to Mortgagee
immediately available funds in an amount sufficient, in Mortgagee's reasonable
opinion, to pay all costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent during the repair
period). So long as no Default has occurred and is continuing at the time of
Mortgagee's receipt of such funds and no Default occurs thereafter, Mortgagee
shall make such funds available for the repair or restoration of the Property.
Notwithstanding the foregoing, Mortgagee shall have no obligation to make any
funds available for repair or restoration of the Property unless and until all
the conditions set forth in clauses (ii) and (iii) of the second sentence of
Section 6.11(b) of this Mortgage have been satisfied. Mortgagor acknowledges
that the specific conditions described above are reasonable.

      (vi) ADVERSE FINANCIAL CHANGE. Any material adverse change in the
financial condition of Borrower or any general partner or managing member of
Borrower, any guarantor, or any other person or entity from the condition shown
on the financial statement(s) submitted to Mortgagee and relied upon by
Mortgagee in making the Loan, and which change Mortgagee reasonably determines
will have a material adverse effect on (aa) the business, operations or
condition of the Property; or (bb) the ability of Borrower or Mortgagor to pay
or perform Borrower's or Mortgagor's obligations in accordance with the terms of
the Note, this Mortgage, and the other Loan Documents.

            (b) AUTOMATIC DEFAULT. An "Automatic Default" shall occur
automatically upon the occurrence of any of the following events:

      (i) VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's filing
a petition for relief under the Bankruptcy Reform Act of 1978, as amended or
recodified ("Bankruptcy Code"), or under any other present or future state or
federal law regarding bankruptcy, reorganization or other relief to debtors
(collectively, "Debtor Relief Law"); or (bb) Borrower's filing any pleading in
any involuntary proceeding under the Bankruptcy Code or other Debtor Relief Law
which admits the jurisdiction of a court to regulate Borrower or the Property or
the petition's material allegations regarding Borrower's insolvency; or (cc)
Borrower's making a general assignment for the benefit of creditors; or (dd)
Borrower's applying for, or the appointment of, a receiver, trustee, custodian
or liquidator of Borrower or any of its property; or (ee) the filing by Borrower
of a petition seeking the liquidation or dissolution of Borrower or the
commencement of any other procedure to liquidate or dissolve Borrower.

      (ii) INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full dismissal
of any involuntary petition under the Bankruptcy Code or other Debtor Relief Law
that is filed against Borrower or in any way restrains or limits Borrower or
Mortgagee regarding the Loan or the Property, prior to the earlier of the entry
of any order granting relief sought in the involuntary petition or 45 days after
the date of filing of the petition.

      (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
clauses (i) or (ii) as to Mortgagor, any general partner or managing member of
Borrower or Mortgagor,

                                    Page 27
<PAGE>
or any guarantor or other person or entity in any manner obligated to Mortgagee
under the Loan Documents.

            7.2 ACCELERATION. Upon the occurrence of an Optional Default,
Mortgagee may, at its option, declare all sums owing to Mortgagee under the Note
and the other Loan Documents immediately due and payable. Upon the occurrence of
an Automatic Default, all sums owing to Mortgagee under the Note and the other
Loan Documents shall automatically become immediately due and payable.

            7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in
Section 7.2 above, at any time after a Default, Mortgagee shall have all of the
following rights and remedies:

            (a) ENTRY ON PROPERTY. With or without notice, and without releasing
Mortgagor from any Secured Obligation, and without becoming a mortgagee in
possession, to enter upon the Property from time to time and to do such acts and
things as Mortgagee deems necessary or desirable in order to inspect,
investigate, assess and protect the security hereof or to cure any Default,
including, without limitation: (i) to take and possess all documents, books,
records, papers and accounts of Mortgagor, Borrower or the then owner of the
Property which relate to the Property; (ii) to make, terminate, enforce or
modify leases of the Property upon such terms and conditions as Mortgagee deems
proper; (iii) to make repairs, alterations and improvements to the Property
necessary, in Mortgagee's reasonable judgment, to protect or enhance the
security hereof; (iv) to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Mortgagee
hereunder; (v) to pay, purchase, contest or compromise any encumbrance, charge,
lien or claim of lien which, in the sole judgment of Mortgagee, is or may be
senior in priority hereto, the judgment of Mortgagee being conclusive as between
the parties hereto; (vi) to obtain insurance; (vii) to pay any premiums or
charges with respect to insurance required to be carried hereunder; (viii) to
obtain a court order to enforce Mortgagee's right to enter and inspect the
Property for Hazardous Materials, in which regard the decision of Mortgagee as
to whether there exists a release or threatened release of Hazardous Materials
onto the Property shall be deemed reasonable and conclusive as between the
parties hereto; (ix) to have a receiver appointed pursuant to applicable law to
enforce Mortgagee's rights to enter and inspect the Property for Hazardous
Materials; and/or (x) to employ legal counsel, accountants, engineers,
consultants, contractors and other appropriate persons to assist them;

            (b) APPOINTMENT OF RECEIVER. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain appointment of a
receiver, trustee, liquidator or conservator of the Property, for any purpose,
including, without limitation, to enforce Mortgagee's rights to collect Payments
and to enter on and inspect the Property for Hazardous Materials, as a matter of
strict right and without regard to: (i) the adequacy of the security for the
repayment of the Secured Obligations; (ii) the existence of a declaration that
the Secured Obligations are immediately due and payable; (iii) the filing of a
notice of default; or (iv) the solvency of Mortgagor, Borrower or any guarantor
or other person or entity in any manner obligated to Mortgagee under the Loan
Documents;

                                    Page 28
<PAGE>
            (c) INJUNCTION. To commence and maintain an action or actions in any
court of competent jurisdiction to obtain specific enforcement of the covenants
of Mortgagor hereunder, and Mortgagor agrees that such covenants shall be
specifically enforceable by injunction or any other appropriate equitable remedy
and that for the purposes of any suit brought under this subparagraph, Mortgagor
waives the defense of laches and any applicable statute of limitations;

            (d) FORECLOSURE. Immediately commence an action to foreclose this
Mortgage or to specifically enforce its provisions or any of the indebtedness
secured hereby pursuant to the statutes in such case made and provided and sell
the Property or cause the Property to be sold in accordance with the
requirements and procedures provided by said statutes in a single parcel or in
several parcels at the option of Mortgagee.

      (i) In the event foreclosure proceedings are filed by Mortgagee, all
expenses incident to such proceeding, including, but not limited to, reasonable
attorneys' fees and costs, shall be paid by Mortgagor and secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. The secured indebtedness and all other
obligations secured by this Mortgage, including, without limitation, interest at
the Default Rate (as defined in the Note), any prepayment charge, fee or premium
required to be paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys' fees and any other amounts
due and unpaid to Mortgagee under the Loan Documents, may be bid by Mortgagee in
the event of a foreclosure sale hereunder. In the event of a judicial sale
pursuant to a foreclosure decree, it is understood and agreed that Mortgagee or
its assigns may become the purchaser of the Property or any part thereof.

      (ii) Mortgagee may, by following the procedures and satisfying the
requirements prescribed by applicable law, foreclose on only a portion of the
Property and, in such event, said foreclosure shall not affect the lien of this
Mortgage on the remaining portion of the Property foreclosed.

            Upon sale of the Property at any foreclosure, Mortgagee may credit
bid (as determined by Mortgagee in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Mortgagee
may, but is not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or adjusted by
Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and
costs incurred by Mortgagee with respect to the Property prior to foreclosure;
(iii) expenses and costs which Mortgagee anticipates will be incurred with
respect to the Property after foreclosure, but prior to resale, including,
without limitation, costs of structural reports and other due diligence, costs
to carry the Property prior to resale, costs of resale (e.g. commissions,
attorneys' fees, and taxes), costs of any Hazardous Materials clean-up and
monitoring, costs of deferred maintenance, repair, refurbishment and retrofit,
costs of defending or settling litigation affecting the Property, and lost
opportunity costs (if any), including the time value of money during any
anticipated holding period by Mortgagee; (iv) declining trends in real property
values generally and with respect to properties similar to the Property; (v)
anticipated discounts upon resale of the Property as a distressed or foreclosed
property; (vi) the fact of additional collateral (if any), for the Secured
Obligations; and (vii) such other factors or matters that Mortgagee (in its sole
and absolute discretion) deems appropriate. In regard to the above, Mortgagor
acknowledges and

                                    Page 29
<PAGE>
agrees that: (viii) Mortgagee is not required to use any or all of the foregoing
factors to determine the amount of its credit bid; (ix) this paragraph does not
impose upon Mortgagee any additional obligations that are not imposed by law at
the time the credit bid is made; (x) the amount of Mortgagee's credit bid need
not have any relation to any loan-to-value ratios specified in the Loan
Documents or previously discussed between Mortgagor and Mortgagee; and (xi)
Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion)
higher or lower than any appraised value of the Property;

            (e) MULTIPLE FORECLOSURES. To resort to and realize upon the
security hereunder and any other security now or later held by Mortgagee
concurrently or successively and in one or several consolidated or independent
judicial actions and to apply the proceeds received upon the Secured Obligations
all in such order and manner as Mortgagee determines in its sole discretion;

            (f) RIGHTS TO COLLATERAL. To exercise all rights Mortgagee may have
with respect to the Collateral under this Mortgage, the UCC or otherwise at law;
and

            (g) OTHER RIGHTS. To exercise such other rights as Mortgagee may
have at law or in equity or pursuant to the terms and conditions of this
Mortgage or any of the other Loan Documents.

            In connection with any sale or sales hereunder, Mortgagee may elect
to treat any of the Property which consists of a right in action or which is
property that can be severed from the Property (including, without limitation,
any improvements forming a part thereof) without causing structural damage
thereto as if the same were personal property or a fixture, as the case may be,
and dispose of the same in accordance with applicable law, separate and apart
from the sale of the Property. Any sale of Collateral hereunder shall be
conducted in any manner permitted by the UCC.

            7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. To the fullest extent
permitted by law, proceeds of any sale under this Mortgage shall be applied to
the extent funds are so available to the following items in such order as
Mortgagee in its discretion may determine:

            (a) To payment of the costs, expenses and fees of taking possession
of the Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee's right and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers' fees, court costs, reasonable
attorneys', accountants', appraisers', managers', and other professional fees,
title charges and transfer taxes.

            (b) To payment of all sums expended by Mortgagee under the terms of
any of the Loan Documents and not yet repaid, together with interest on such
sums at the Default Rate.

            (c) To payment of the secured indebtedness and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Rate and, to the extent permitted by applicable law, any prepayment fee, charge
or premium required to be paid under the Note in order to prepay principal, in
any order that Mortgagee chooses in its sole discretion.

                                    Page 30
<PAGE>
            7.5 WAIVER OF MARSHALING RIGHTS. Mortgagor, for itself and for all
parties claiming through or under Mortgagor, and for all parties who may acquire
a lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property, including, without limitation, the
Collateral, which is now or later may be security for any Secured Obligation,
marshaled upon any foreclosure of this Mortgage or on a foreclosure of any other
security for any of the Secured Obligations.

            7.6 NO CURE OR WAIVER. Neither Mortgagee's nor any receiver's entry
upon and taking possession of all or any part of the Property, nor any
collection of rents, issues, profits, insurance proceeds, condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation, nor the exercise of
any other right or remedy by Mortgagee or any receiver shall cure or waive any
Default or notice of default under this Mortgage, or nullify the effect of any
notice of default or sale (unless all Secured Obligations then due have been
paid or performed and Mortgagor has cured all other Defaults hereunder), or
impair the status of the security, or prejudice Mortgagee in the exercise of any
right or remedy, or be construed as an affirmation by Mortgagee of any tenancy,
lease or option or a subordination of the lien of this Mortgage.

            7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor agrees
to pay to Mortgagee immediately and upon demand all costs and expenses incurred
by Mortgagee in the enforcement of the terms and conditions of this Mortgage
(including, without limitation, court costs and attorneys' fees, whether
incurred in litigation or not) with interest from the date of expenditure until
said sums have been paid at the rate of interest applicable to the principal
balance of the Note as specified therein.

            7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Mortgagor hereby
irrevocably appoints Mortgagee and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest, to perform any
obligation of Mortgagor hereunder upon the occurrence of an event, act or
omission which, with notice or passage of time or both, would constitute a
Default, provided, however, that: (a) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(b) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to act under this Section.

            7.9 REMEDIES CUMULATIVE. All rights and remedies of Mortgagee
provided hereunder are cumulative and are in addition to all rights and remedies
provided by applicable law (including specifically that of foreclosure of this
instrument as though it were a mortgage) or in any other agreements between
Mortgagor and Mortgagee. Mortgagee may enforce any one or more remedies or
rights hereunder successively or concurrently.

                     ARTICLE VIII. MISCELLANEOUS PROVISIONS

            8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
by reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan Documents
grant further rights to Mortgagee and contain further agreements and affirmative
and negative covenants by Mortgagor which apply to this Mortgage and to the
Property and such further rights and agreements are incorporated herein by this
reference. THE OBLIGATIONS AND LIABILITIES OF MORTGAGOR UNDER THIS

                                    Page 31
<PAGE>
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE
SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            8.2 NON-WAIVER. By accepting payment of any amount secured hereby
after its due date or late performance of any other Secured Obligation,
Mortgagee shall not waive its right against any person obligated directly or
indirectly hereunder or on any Secured Obligation, either to require prompt
payment or performance when due of all other sums and obligations so secured or
to declare default for failure to make such prompt payment or performance. No
exercise of any right or remedy by Mortgagee hereunder shall constitute a waiver
of any other right or remedy herein contained or provided by law. No failure by
Mortgagee to exercise any right or remedy hereunder arising upon any Default
shall be construed to prejudice Mortgagee's rights or remedies upon the
occurrence of any other or subsequent Default. No delay by Mortgagee in
exercising any such right or remedy shall be construed to preclude Mortgagee
from the exercise thereof at any time while that Default is continuing. No
notice to nor demand on Mortgagor shall of itself entitle Mortgagor to any other
or further notice or demand in similar or other circumstances.

            8.3 CONSENTS, APPROVALS AND EXPENSES. Wherever Mortgagee's consent,
approval, acceptance or satisfaction is required under any provision of this
Mortgage or any of the other Loan Documents, such consent, approval, acceptance
or satisfaction shall not be unreasonably withheld, conditioned or delayed by
Mortgagee unless such provision expressly so provides. Wherever costs or
expenses are required to be paid under any provision of this Mortgage or any of
the other Loan Documents, such costs or expenses shall be reasonable.

            8.4 PERMITTED CONTESTS. After prior written notice to Mortgagee,
Mortgagor may contest, by appropriate legal or other proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any lien, levy, tax or assessment, or any lien of any laborer,
mechanic, materialman, supplier or vendor, or the application to Mortgagor or
the Property of any law or the validity thereof, the assertion or imposition of
which, or the failure to pay when due, would constitute a Default; provided that
(a) Mortgagor pursues the contest diligently, in a manner which Mortgagee
determines is not prejudicial to Mortgagee, and does not impair the lien of this
Mortgage; (b) the Property, or any part hereof or estate or interest therein,
shall not be in any danger of being sold, forfeited or lost by reason of such
proceedings; (c) in the case of the contest of any law or other legal
requirement, Mortgagee shall not be in any danger of any civil or criminal
liability; and (d) if required by Mortgagee, Mortgagor deposits with Mortgagee
any funds or other forms of assurance (including a bond or letter of credit)
satisfactory to Mortgagee to protect Mortgagee from the consequences of the
contest being unsuccessful. Mortgagor's right to contest pursuant to the terms
of this provision shall in no way relieve Mortgagor or Borrower of its
obligations under the Loan or to make payments to Mortgagee as and when due.

            8.5 FURTHER ASSURANCES. Mortgagor shall, upon demand by Mortgagee,
execute, acknowledge (if appropriate) and deliver any and all documents and
instruments and do or cause to be done all further acts reasonably necessary or
appropriate to effectuate the provisions hereof.

                                    Page 32
<PAGE>
            8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is
commenced between Mortgagor and Mortgagee regarding their respective rights and
obligations under this Mortgage or any of the other Loan Documents, the
prevailing party shall be entitled to recover, in addition to damages or other
relief, costs and expenses, reasonable attorneys' fees and court costs
(including, without limitation, expert witness fees). As used herein the term
"prevailing party" shall mean the party which obtains the principal relief it
has sought, whether by compromise settlement or judgment. If the party which
commenced or instituted the action, suit or proceeding shall dismiss or
discontinue it without the concurrence of the other party, such other party
shall be deemed the prevailing party.

            8.7 MORTGAGOR AND MORTGAGEE DEFINED. The term "Mortgagor" includes
both the original Mortgagor and any subsequent owner or owners of any of the
Property, and the term "Mortgagee" includes the original Mortgagee and any
future owner or holder, including assignees, pledgees and participants, of the
Note or any interest therein.

            8.8 DISCLAIMERS.

            (a) RELATIONSHIP. The relationship of Mortgagor and Mortgagee under
this Mortgage and the other Loan Documents is, and shall at all times remain,
solely that of borrower and lender; and Mortgagee neither undertakes nor assumes
any responsibility or duty to Mortgagor or to any third party with respect to
the Property. Notwithstanding any other provisions of this Mortgage and the
other Loan Documents: (i) Mortgagee is not, and shall not be construed to be, a
partner, joint venturer, member, alter ego, manager, controlling person or other
business associate or participant of any kind of Mortgagor, and Mortgagee does
not intend to ever assume such status; (ii) Mortgagee's activities in connection
with this Mortgage and the other Loan Documents shall not be "outside the scope
of activities of a lender of money" within the meaning of California Civil Code
Section 3434, as amended or recodified from time to time, and Mortgagee does not
intend to ever assume any responsibility to any person for the quality,
suitability, safety or condition of the Property; and (iii) Mortgagee shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Mortgagor.

            (b) NO LIABILITY. Mortgagee shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action, liability,
indebtedness, damage or injury of any kind or character to any person or
property arising from any construction on, or occupancy or use of, the Property,
whether caused by or arising from: (i) any defect in any building, structure,
grading, fill, landscaping or other improvements thereon or in any on-site or
off-site improvement or other facility therein or thereon; (ii) any act or
omission of Mortgagor or any of Mortgagor's agents, employees, independent
contractors, licensees or invitees; (iii) any accident in or on the Property or
any fire, flood or other casualty or hazard thereon; (iv) the failure of
Mortgagor or any of Mortgagor's licensees, employees, invitees, agents,
independent contractors or other representatives to maintain the Property in a
safe condition; or (v) any nuisance made or suffered on any part of the
Property.

            8.9 SEVERABILITY. If any term of this Mortgage, or the application
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Mortgage, or the application of such term
to persons or circumstances other than those as to

                                    Page 33
<PAGE>
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Mortgage shall be valid and enforceable to the fullest extent
permitted by law.

            8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Mortgagee under the Mortgage established by Article 1 and the security agreement
established by Article 4 are independent and cumulative, and there shall be no
merger of any lien created by the Mortgage with any security interest created by
the security agreement. Mortgagee may elect to exercise or enforce any of its
rights, remedies or interests under either or both the Mortgage or the security
agreement as Mortgagee may from time to time deem appropriate. The absolute
assignment of rents and leases established by Article 3 is similarly independent
of and separate from the Mortgage and the security agreement.

            8.11 MERGER. No merger shall occur as a result of Mortgagee's
acquiring any other estate in, or any other lien on, the Property unless
Mortgagee consents to a merger in writing.

            8.12 OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL. If more than one
person has executed this Mortgage as "Mortgagor", the obligations of all such
persons hereunder shall be joint and several.

            8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who
executes this Mortgage as a Mortgagor agrees that any money judgment which
Mortgagee obtains pursuant to the terms of this Mortgage or any other obligation
of that married person secured by this Mortgage may be collected by execution
upon any separate property or community property of that person.

            8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or
expressly incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior negotiations
or agreements, written or oral. The Loan Documents shall not be modified except
by written instrument executed by all parties. Any reference in any of the Loan
Documents to the Property or Collateral shall include all or any part of the
Property or Collateral. Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Mortgagee in
writing. When the identity of the parties or other circumstances make it
appropriate, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.

            8.15 CAPITALIZED TERMS. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Note.

            8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions
herein contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence shall not
be construed to permit Mortgagor to assign the Loan except as otherwise
permitted under the Note or the other Loan Documents.

            8.17 GOVERNING LAW. This Mortgage was accepted by Mortgagee in the
state of California and the proceeds of the Note secured hereby were disbursed
from the state of California, which state the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality of the
foregoing, matters of construction, validity, enforceability and

                                    Page 34
<PAGE>
performance, this Mortgage, the Note 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 California applicable to contracts
made and performed in such state and any applicable law of the United States of
America, except that at all times the provisions for the creation, perfection
and enforcement of the liens and security interests created pursuant thereto and
pursuant to the other Loan Documents shall be governed by and construed
according to the law of the state where the Property is located. Except as
provided in the immediately preceding sentence, Mortgagor hereby unconditionally
and irrevocably waives, to the fullest extent permitted by law, any claim to
assert that the law of any jurisdiction other than California governs this
Mortgage, the Note and other Loan Documents.

            8.18 CONSENT TO JURISDICTION. Mortgagor irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Mortgagor against
Mortgagee, arising out of or relating to this Mortgage, the Note or the Loan;
(b) any state or federal court sitting in the state where the Property is
located or the state in which Mortgagor's principal place of business is located
over any suit, action or proceeding, brought by Mortgagee against Mortgagor,
arising out of or relating to this Mortgage, the Note or the Loan; and (c) any
state court sitting in the county of the state where the Property is located
over any suit, action, or proceeding, brought by Mortgagee to foreclose this
Mortgage or any action brought by Mortgagee to enforce its rights with respect
to the Collateral. Mortgagor irrevocably waives, to the fullest extent permitted
by law, any objection that Mortgagor may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such court and any
claim that any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum.

            8.19 EXHIBITS. Exhibit A is incorporated into this Mortgage by this
reference.

            8.20 ADDRESSES; REQUEST FOR NOTICE. All requests, demands, notices
and other communications that are required or permitted to be given to a party
under this Mortgage shall be in writing, refer to the Loan number, and shall be
sent to such party, either by personal delivery, by overnight delivery service,
by certified first class mail, return receipt requested, or by facsimile
transmission to the addressee or facsimile number below. All such notices and
communications shall be effective upon receipt of such delivery or facsimile
transmission, together with a printed receipt of the successful delivery of such
facsimile transmission. The addresses of the parties are set forth on page 1 of
this Mortgage and the facsimile numbers for the parties are as follows:

            Mortgagee:  WELLS FARGO BANK, N.A.
                        FAX NO.: (925) 691-5947

            Mortgagor:  MHC STAGECOACH, L.L.C.
                        FAX NO.: (312) 279-1715

      Mortgagor's principal place of business is at the address set forth on
page 1 of this Mortgage. A copy of any notice to Mortgagor shall be sent as
follows:

                                    Page 35
<PAGE>
                        Katz Randall Weinberg & Richmond
                        333 West Wacker Drive
                        Suite 1800
                        Chicago, Illinois 60606
                        Attention: Benjamin Randall
                        Facsimile: (312) 807-3903

      Any Mortgagor whose address is set forth on page 1 of this Mortgage hereby
requests that a copy of notice of default and notice of sale be delivered to it
at that address. Failure to insert an address shall constitute a designation of
Mortgagor's last known address as the address for such notice. Any party shall
have the right to change its address for notice hereunder to any other location
within the continental United States by giving 30 days notice to the other
parties in the manner set forth above.

            8.21 COUNTERPARTS. This Mortgage may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed an
original and all of which taken together, will be deemed to be one and the same
instrument.

            8.22 WAIVER OF JURY TRIAL. MORTGAGEE (BY ITS ACCEPTANCE HEREOF) AND
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF MORTGAGEE OR MORTGAGOR. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGEE TO ENTER INTO THIS MORTGAGE.

                                    Page 36
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage as of the
day and year first above written.

WITNESS/ATTEST:                    MORTGAGOR:

                                   MHC STAGECOACH, L.L.C., a Delaware
                                   limited liability company

/s/ Lawrence M. Gritton            By:   MHC-QRS STAGECOACH, INC.,
Print Name: Lawrence M. Gritton          a  Delaware corporation,
                                         its Managing Member

/s/ Benjamin J. Randall                  By: /s/ John M. Zoeller
Print Name: Benjamin J. Randall              -------------------------
                                               Name: John M. Zoeller
                                         Its:  Vice President, Chief Financial
                                               Officer and Treasurer
<PAGE>
STATE OF IL          )
                     )  SS:
COUNTY OF COOK       )

            On 8/1, 2001 before me, Jennifer Usher, Notary Public, personally
appeared John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company,
personally known to me to be the person whose name is subscribed in the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument, the person or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

                                    /s/ Jennifer Usher
                                    ---------------------------
                                    Print Name: Jennifer Usher

My Commission Expires:

     1/6/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:__________________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               DESCRIPTION OF LAND

Exhibit A to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Land referred to in this Mortgage is situated in the
county of Brevard, state of Florida and is described as follows:

PARCEL A:

A parcel of land lying in the Northwest 1/4 of Section 21, Township 25 South,
Range 36 East, Brevard County, Florida, being more particularly described as
follows:

Commence at the Northwest corner of said Section 21, and run North 89(degrees)
50' 50" East, along the North line of said Section 21, a distance of 330.04 feet
to the Point of Beginning; thence continue North 89(degrees) 50' 50" East, along
said North line, a distance of 816.83 feet; thence South 05(degrees) 47' 10"
West, a distance of 2488.78 feet; thence North 89(degrees) 53' 00" West, a
distance of 419.86 feet; thence South 01(degrees) 04' 00" East, a distance of
150.00 feet, to a point on the North Right of Way line of Barnes Boulevard (a
100 foot Right of Way); thence North 89(degrees) 53' 00" West, along said North
Right of Way line, a distance of 100.02 feet; thence North 01(degrees) 04' 00"
West, parallel to the West line of said Northwest 1/4, a distance of 2623.29
feet, to the Point of Beginning.

PARCEL B:

A perpetual non-exclusive easement for the benefit of Parcel A for surface water
runoff from "Pod #2" through a weir on said land eastward to an existing
drainage ditch as set forth in Grant of Easement from George M. Green, Jr. and
Sandie J. Green in favor of The Indian Oaks Corporation, dated July 27, 1987,
recorded August 4, 1987, in the Public Records of Brevard County, Florida, at
Official Records Book 2826, page 2681; and modified by Stipulated Settlement in
Civil Action No. 87-9785-CA-C, The Indian Oaks Corporation, a Florida
corporation, Plaintiffs, vs. George M. Green, Jr. and Sandie J. Green, his wife,
Defendants, dated July 27, 1987, recorded August 20, 1987, in the Public Records
of Brevard County, Florida, at Official Records Book 2831, page 2211, more
particularly described as follows:

Beginning at the approximate Southwest corner of land to the East as described
in Deed recorded in Official Records Book 2471, page 2094, Public Records of
Brevard County, Florida, said point being on the public drainage ditch on the
north side of Barnes Boulevard; thence north along an existing approximately
twenty (20) foot wide drainage ditch on the westerly boundary of the land
described in said Deed for an approximate distance of 844.00 feet to an outlet
pipe which extends easterly into said drainage ditch from a Type "C" inlet weir
located on "Pod #2" of Parcel A.

                                    EXHIBIT A
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT B

    CALCULATION OF DOCUMENTARY STAMP AND INTANGIBLE PERSONAL PROPERTY TAX

Exhibit B to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

      This Mortgage is part of an out-of-state loan transaction which only
partially secures the loan. This Mortgage encumbers the property described on
Exhibit A, and separate mortgages are being executed and delivered by Mortgagor
encumbering certain other property located in Florida and in other states (such
other property being further described on Exhibit C and being referred to as the
"Other Property"). The Florida collateral is located in Brevard, Volusia and
Manatee Counties, and three (3) separate mortgages (the Florida Mortgages")
encumbering three (3) properties are being executed and delivered by Mortgagor
for simultaneous recording in the various Florida counties described above. The
total indebtedness secured by this Mortgage equals $50,000,000.00, as evidenced
by one (1) promissory note in the aggregate original principal amount of
$50,000,000.00 (the "Note"). The Note was made, executed and delivered outside
the State of Florida. The value of the Florida property encumbered by the
Florida Mortgages equals $27,200,000.00. The aggregate value of all other
property securing the loan and located outside the State of Florida equals
$50,400,000.00. Thus, the total aggregate value of all property securing the
loan equals $77,600,000.00. The property encumbered by the Florida Mortgages and
located in Florida represents thirty-five (35%) percent [$27,200,000.00 /
$77,600,000.00] of the total value of all property securing the loan. In
accordance with Florida Statutes, Section 201.08, and Florida Administrative
Code, Rule 12B-4.053(32)(b), documentary stamp tax is computed based upon the
percentage of indebtedness which the value of the mortgaged property located in
Florida bears to the total value of all mortgaged property (which, in this case,
equals $17,500,000.00). Accordingly, documentary stamp tax in the amount of
$61,250.00 is due upon the recording of the Florida Mortgages in the Florida
counties listed above. Pursuant to Chapter 199, Florida Statutes, non-recurring
intangible personal property tax is computed and payable based upon that portion
of the indebtedness which bears the same relation as the value of the mortgaged
property located in Florida bears to the total value of all mortgaged property,
which, in this case, equals [$50,000,000.00 x ($27,200,000.00 /
$77,600,000.00)]. Thus, non-recurring intangible personal property tax in the
amount of $35,000.00 is due and payable upon recording of the Florida Mortgages
in the Florida counties listed above.

                                    EXHIBIT B
<PAGE>
                                    EXHIBIT C

                          DESCRIPTION OF OTHER PROPERTY

Exhibit C to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Other Property referred to in this Mortgage is
described as follows:

                                 CABANA PROPERTY

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section
16, Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01 degree 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89 degrees 09' 31" East, along said Southerly right of way of Twain Avenue
a distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89 degrees 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01 degree 22' 27" East along said Westerly right of way line of
Cabana Drive a distance of 1238.26 feet; thence South 88 degrees 17' 57" West a
distance of 1271.25 feet; thence North 01 degree 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.

                                    EXHIBIT C
<PAGE>
                             WOODLAND HILLS PROPERTY

Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of
the Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th
P.M., County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.

                                    EXHIBIT C
<PAGE>
                                WINDMILL PROPERTY

PARCEL A:

Begin at the Northwest corner of the Southeast 1/4 of the Northeast 1/4 of
Section 16, Township 35 South, Range 18 East, Manatee County, Florida; thence
South 00(degrees) 14' 17" East, 1327.25 feet to the Southwest corner of the
Southeast 1/4 of the Northeast 1/4 of the aforementioned Section 16; thence
North 89(degrees) 58' 09" East, 1322.53 feet to the Southeast corner of the
Southeast 1/4 of the Northeast 1/4 of Section 16; thence South 00(degrees) 24'
10" East, 137.28 feet; thence North 89(degrees) 40' 44" East, 1269.21 feet;
thence North 00(degrees) 15' 02" West, 137.28 feet; thence North 89(degrees) 40'
56" East, 42.00 feet along the South line of the Southwest 1/4 of the Northwest
1/4 of Section 15, Township 35 South, Range 18 East, Manatee County, Florida to
a point, said point being the Southwest corner of the Easterly 8.00 feet of the
Southwest 1/4 of the Northwest 1/4 of Section 15; thence North 00(degrees) 15'
02" West along the West line of said Easterly 8.00 feet, 529.06 feet; thence
North 89(degrees) 54' 48" West, 352.77 feet; thence North 83(degrees) 03' 14"
West, 41.33 feet; North 89(degrees) 58' 10" West, 384.29 feet; thence North
64(degrees) 05' 35" West, 45.06 feet; thence North 89(degrees) 49' 37" West,
69.63 feet; thence North 00(degrees) 27' 02" West, 39.77 feet; thence South
89(degrees) 57' 27" West, 229.20 feet; thence South 00(degrees) 34' 37" West,
52.86 feet; thence South 89(degrees) 50' 04" West, 69.88 feet; thence North
68(degrees) 46' 00" West, 42.84 feet; thence North 89(degrees) 02' 58" West,
70.09 feet; thence North 00(degrees) 46' 23" West, 36.15 feet; thence South
89(degrees) 58' 50" West, 204.28 feet; thence South 01(degrees) 06' 03" West,
34.82 feet; thence North 89(degrees) 55' 45" West, 69.61 feet; thence North
61(degrees) 14' 43" West, 46.29 feet; thence North 89(degrees) 47' 56" West,
49.68 feet; thence North 01(degrees) 06' 00" West, 14.20 feet; thence South
89(degrees) 37' 41" West, 244.94 feet; thence North 14(degrees) 02' 42" West,
20.66 feet; thence North 00(degrees) 04' 49" East, 50.12 feet; thence North
07(degrees) 13' 20" West, 40.26 feet; thence North 00(degrees) 29' 42" West,
229.78 feet; thence North 89(degrees) 19' 18" East, 21.87 feet; thence North
00(degrees) 01' 05" East, 69.28 feet; thence North 16(degrees) 42' 43" West,
41.53 feet; thence North 00(degrees) 18' 37" East, 70.77 feet; thence North
90(degrees) 00' 00" West, 443.35 feet; thence North 02(degrees) 07' 48" West,
80.67 feet; thence North 25(degrees) 58' 34" East, 33.85 feet; thence North
00(degrees) 07' 24" East, 93.96 feet; thence South 89(degrees) 59' 49" West,
295.60 feet to the Point of Beginning.

PARCEL B:

Perpetual non-exclusive rights-of-way and easements as contained in Agreements
recorded January 13, 1939, in Deed Book 159, page 331, and rerecorded February
16, 1939, in Deed Book 160, page 23; recorded October 30, 1939, in Deed Book
164, page 340; and recorded May 31, 1974, in Official Records Book 673, page
646, all of the Public Records of Manatee County, Florida.

                                    EXHIBIT C
<PAGE>
                            PICKWICK VILLAGE PROPERTY

PARCEL A:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East, also a portion of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East, Volusia
County, Florida being more particularly described as follows:

As a point of reference begin at the Southwest corner of Section 6, Township 16
South, Range 33 East, thence along the South line of Section 6 South 89 degrees
35 minutes 25 seconds East a distance of 3300.00 feet to the Point of Beginning;
thence North 00 degrees 24 minutes 35 seconds East a distance of 330.00 feet;
thence North 89 degrees 35 minutes 25 seconds West a distance of 660.00 feet;
thence North 00 degrees 24 minutes 35 seconds East a distance of 200.00 feet;
thence South 89 degrees 35 minutes 25 seconds East a distance of 612.36 feet to
a point on the Southerly right-of-way line of Clyde Morris Blvd. (a 100.00 foot
right-of-way as now laid out and used); thence South 41 degrees 06 minutes 50
seconds East along the Southerly right-of-way line of said Clyde Morris Blvd. a
distance of 1067.45 feet to a point on the East line of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East; thence
South 00 degrees 24 minutes 35 seconds West along the said East line of the West
one-half of the Northeast one-quarter of said Section 7 a distance of 2370.82
feet; thence North 89 degrees 35 minutes 25 seconds West a distance of 1320.00
feet to a point in the West line of the West one-half of the Northeast
one-quarter of Section 7; thence North 00 degrees 24 minutes 35 seconds East
along the West line of the West one-half of the Northeast one-quarter of Section
7 a distance of 1650.00 feet; thence South 89 degrees 35 minutes 25 seconds East
a distance of 660.00 feet; thence North 00 degrees 24 minutes 35 seconds East a
distance of 990.00 feet to the Point of Beginning of this description.

PARCEL B:

A portion of the Northwest one-quarter of Section 7, Township 16 South, Range 33
East, Volusia County, Florida, being more particularly described as follows: As
a point of reference, commence at a concrete monument marking the Northwest
corner of Willow Run Subdivision, Unit 2, as per map recorded September 17,
1979, in Map Book 36, Pages 16 and 17 of the Public Records of Volusia County,
Florida; thence run North 00 degrees 41 minutes 47 seconds West along a
Northerly extension of the Westerly line of said Willow Run Subdivision, Unit 2,
a distance of 230.08 feet to a point in the North line of 230.00 foot Florida
Power and Light Company right-of-way as described in instrument recorded October
5, 1973, in Official Records Book 1664, Pages 448-450, of the Public Records of
Volusia County, Florida, said point also being in the Southerly line of Pickwick
Village Mobile Home Park, an unrecorded subdivision; thence run South 89 degrees
35 minutes 24 seconds West along the North line of said Florida Power and Light
Company right-of-way, being also the Southerly line of Pickwick Village, a
distance of 1.13 feet to a concrete monument marking the Southwest corner of
said Pickwick Village; thence North 00 degrees 24 minutes 10 seconds West, a
distance of 400.00 feet to the Point of Beginning; thence North 89 degrees 45
minutes 45 seconds West, a distance of 440.02 feet to the center line of an
80.00 foot drainage ditch easement as described in instrument
<PAGE>
recorded June 28, 1966, in Official Records Book 847, Pages 429 through 444, of
the Public Records of Volusia County, Florida; thence North 00 degrees 24
minutes 10 seconds West along the center line of said drainage ditch easement, a
distance of 1250.34 feet; thence South 89 degrees 45 minutes 45 seconds East, a
distance of 440.02 feet to a point on the Westerly line of said Pickwick Village
Subdivision; thence South 00 degrees 24 minutes 10 seconds East along said
Westerly line, a distance of 1250.34 feet to the Point of Beginning.

SAID PROPERTY ALSO BEING DESCRIBED AS FOLLOWS:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East; also a portion of the West one-half of the
Northeast one-quarter and a portion of the Northwest one-quarter, all lying in
Section 7, Township 16 South, Range 33 East in Volusia County, Florida, being
more particularly described as follows: Commence at the Southwest corner of said
Section 6, Township 16 South, Range 33 East and run South 89(degrees) 35' 25"
East along the South line of the Southwest one-quarter a distance of 2635.46
feet to the Southwest corner of the Southeast one-quarter of said Section 6;
thence North 01(degrees) 17' 05" East along the West line of the Southeast
one-quarter of said Section 6 a distance of 328.72 feet to an iron pipe labeled
LS 2048 and the Point of Beginning of this description; from said Point of
Beginning, continue North 01(degrees) 17' 05" East along the West line of the
Southeast one-quarter a distance of 201.23 feet to an iron pipe labeled LS 2048;
thence South 89(degrees) 35' 25" East, 619.16 feet to an iron pipe labeled LS
2048, said point being on the Southwesterly right-of-way line of Clyde Morris
Boulevard; thence South 40(degrees) 56' 13" East along the Southwesterly
right-of-way line of said Clyde Morris Boulevard a distance of 1061.80 feet to
an iron pipe labeled LS 2048, said point being on the East line of the West
one-half of the Northeast one-quarter of the aforementioned Section 7, Township
16 South, Range 33 East; thence South 00(degrees) 34' 32" West along the East
line of the West one-half of the Northeast one-quarter of said Section 7, a
distance of 2362.20 feet to an iron pin labeled LB 707, said point being on the
North line of the 230 foot wide Florida Power and Light Company right-of-way, as
described in Official Records Book 1664, Pages 448, 449, and 450 of the Public
Records of Volusia County, Florida; thence North 89(degrees) 13' 53" West along
the North line of the 230 foot wide Florida Power and Light Company right-of-way
a distance of 1321.12 feet to an iron pipe labeled LS 2048, said point being on
the West line of the West one-half of the Northeast one-quarter of the
aforementioned Section 7; thence North 00(degrees) 23' 35" East along the West
line of the West one-half of the Northeast one-quarter a distance of 400.00 feet
to an iron pipe labeled LS 2048; thence North 89(degrees) 13' 53" West, 440.02
feet to an iron pipe labeled LS 2048, said point being the centerline of a
drainage ditch; thence North 00(degrees) 23' 35" East along said drainage ditch
centerline a distance of 1250.34 feet to an iron pipe labeled LS 2048; thence
South 89(degrees) 13' 53" East, 440.02 feet to an iron pipe labeled LS 2048,
said point being on the West line of the West one-half of the Northeast
one-quarter of the aforementioned Section 7; thence South 00(degrees) 23' 35"
West along the West line of the West one-half of the Northeast one-quarter a
distance of 12.16 feet to an iron pipe labeled LS 2048; thence South 89(degrees)
27' 21" East, 661.65 feet to an iron pipe labeled LS 2048; thence North
00(degrees) 25' 26" East, 984.46 feet to an iron pipe labeled LS 2048; thence
North 01(degrees) 14' 43" East, 328.45 feet to a nail in disk in pavement
labeled LB 707; thence North 89(degrees) 33' 59" West, 661.95 feet to the Point
of Beginning.

                                    EXHIBIT C
<PAGE>

                             APOLLO VILLAGE PROPERTY

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;

THENCE North 00(degrees) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;

THENCE South 89(degrees) 25' 45" East 65.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89(degrees) 25' 45" East 126.95 feet;

THENCE North 87(degrees) 23' 37" East 116.40 feet;

THENCE South 00(degrees) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;

THENCE South 00(degrees) 34' 44" West along the East line of said property
156.09 feet to a point on a line 500.00 feet North and parallel to the South
line of said Section 21;

THENCE North 88(degrees) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;

THENCE South 00(degrees) 27' 31" West 435.31 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE North 88(degrees) 16' 15" East along said line 51.93 feet;

THENCE North 00(degrees) 20' 35" East 127.50 feet;

THENCE North 02(degrees) 21' 45" West 308.14 feet;

THENCE North 88(degrees) 15' 20" East 445.27 feet;

THENCE North 21(degrees) 52' 10" East 195.00 feet;

THENCE South 89(degrees) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00(degrees) 20' 40" East along said West line 807.45 feet to a
point on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;

THENCE South 86(degrees) 58' 05" West along said South line and the South line
of the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;

THENCE South 00(degrees) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;

THENCE North 89(degrees) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;

THENCE South 00(degrees) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88(degrees) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;

THENCE North 00(degrees) 27' 31" East 65.05 feet to the POINT OF BEGINNING;

THENCE continuing North 00(degrees) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;

THENCE North 87(degrees) 25' 34" East 36.52 feet;

THENCE South 02(degrees) 21' 45" East 308.14 feet;

                                   EXHIBIT C
<PAGE>
THENCE South 00(degrees) 20' 35" West 127.50 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE South 88(degrees) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88(degrees) 08' 29" East (North 88(degrees) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00(degrees) 06' 45" East 669.32 feet ( North 00(degrees) 20' 40"
East 669.45, record) along said West line to the POINT OF BEGINNING;

THENCE North 89(degrees) 47' 06" West (North 89(degrees) 39' 20" West, record)
115.00 feet;

THENCE North 16(degrees) 08' 00" East 325.00 feet;

THENCE North 52(degrees) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;

THENCE South 00(degrees) 06' 45" West (South 00(degrees) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88(degrees) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;

THENCE North 00(degrees) 20' 35" East 65.04 feet to a point on a line parallel
to and 65.00 feet North of the South line of said Section 21;

THENCE continuing North 00(degrees) 20' 35" East 127.50 feet;

THENCE North 02(degrees) 21' 45" West 308.14 feet;

THENCE North 88(degrees) 15' 20" East 445.27 feet;

THENCE North 21(degrees) 52' 10" East 195.00 feet;

THENCE South 89(degrees) 39' 20" East 21.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89(degrees) 39' 20" East 55.00 feet;

THENCE North 00(degrees) 20' 40" East 40.00 feet;

THENCE North 89(degrees) 39' 20" West 55.00 feet;

THENCE South 00(degrees) 20' 40" West 40.00 feet to the POINT OF BEGINNING.

                                   EXHIBIT C
<PAGE>
                            CASA DEL SOL III PROPERTY

PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;

THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;

THENCE North 01(degrees) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;

THENCE West along said North line 627.98 feet;

THENCE North 45(degrees) 44' 20" East 28.64 feet;

THENCE North 01(degrees) 28' 40" East 307.70 feet;

THENCE North 45(degrees) 00' 00" East 149.61 feet;

THENCE North 32(degrees) 31' 59" West 76.22 feet;

THENCE North 01(degrees) 38' 30" East 420.00 feet;

THENCE North 89(degrees) 57' 50" East 11.71 feet;

THENCE North 01(degrees) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80(degrees) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23(degrees) 03'
59";

THENCE Northeasterly along said curve 575.86 feet;

THENCE North 01(degrees) 38' 30" East 84.00 feet;

THENCE North 89(degrees) 57' 50" East 738.38 feet;

THENCE South 01(degrees) 38' 30" West 1,407.21 feet;

THENCE West 200.00 feet;

THENCE South 01(degrees) 38' 30" West 300.11 feet to the TRUE POINT OF
BEGINNING.

PARCEL NO. 2:

A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;

THENCE West 1,326.54 feet along the South line of said Section 24;

THENCE North 01(degrees) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;

THENCE North 01(degrees) 38' 30" East 306.11 feet;

THENCE East 206.00 feet to the point of termination; and

                                   EXHIBIT C
<PAGE>
BEGINNING at a point which bears North 01(degrees) 38' 30" East 1,757.00 feet
and South 89(degrees) 57' 50" West 1,120.55 feet from the Southeast corner of
said Section 24;

THENCE South 89(degrees) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 3:

A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:

BEGINNING at a point which bears North 01(degrees) 38' 30" East 1,760.50 feet
and South 89(degrees) 57' 50" West 55.00 feet from the Southeast corner of
Section 24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona;

THENCE South 89(degrees) 57' 50" West 1,833.37 feet to the point of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 4:

A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:

COMMENCING at the South quarter corner of Section 24;

THENCE North 01(degrees) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;

THENCE North 89(degrees) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;

THENCE continuing North 89(degrees) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;

THENCE South 01(degrees) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76(degrees) 55' 57" West;

THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19(degrees) 06' 47" an arc length of 477.16
feet;

                                   EXHIBIT C
<PAGE>
THENCE South 89(degrees) 55' 44" West to a point 6.00 feet West of and parallel
to said Easterly and Westerly boundary lines to the beginning of a curve concave
Easterly and having a radius of 1,436.40 feet;

THENCE Northerly along said curve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19(degrees) 03'
50" an arc length of 477.93 feet;

THENCE North 01(degrees) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.

                                   EXHIBIT C

<PAGE>
Recording requested by and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC #A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:  CMO Loan Admin.
Loan No.: 31-0900553R
Property Name:  Pickwick Village

Prepared by:

Lee M. Smolen
Sidley Austin Brown & Wood
10 South Dearborn
Chicago, Illinois 60603

                MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND
              LEASES AND SECURITY AGREEMENT (AND FIXTURE FILING)

                                                                   July 31, 2001

THIS MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(AND FIXTURE FILING) (the "Mortgage") is made and entered into by and among MHC
STAGECOACH, L.L.C., a Delaware limited liability company ("Mortgagor"), having
an address at c/o Manufactured Home Communities, Inc., Two North Riverside
Plaza, Suite 800, Chicago, Illinois 60606, and WELLS FARGO NATIONAL BANK,
NATIONAL ASSOCIATION ("Lender" or "Mortgagee").

THIS MORTGAGE EVIDENCES A MULTI-STATE LOAN WHICH IS SECURED BY REAL PROPERTY
LOCATED OUTSIDE THE STATE OF FLORIDA AND REAL PROPERTY LOCATED IN BREVARD,
VOLUSIA, AND MANATEE COUNTIES, FLORIDA. FLORIDA DOCUMENTARY STAMP TAX IN THE
AMOUNT OF $61,250.00 AND FLORIDA NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX
IN THE AMOUNT OF $35,000.00 ARE BEING PAID UPON RECORDATION OF ONE OF THE
FLORIDA MORTGAGES IN THE PUBLIC RECORDS OF VOLUSIA COUNTY, FLORIDA. ATTACHED
HERETO AS EXHIBIT B IS A DESCRIPTION OF THE CALCULATION OF LIABILITY FOR
DOCUMENTARY STAMP TAX AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX.

                                     Page 1
<PAGE>
                               R E C I T A L S

A. MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
   proposes to borrow from Mortgagee, and Mortgagee proposes to lend to Borrower
   the principal sum of FIFTY MILLION AND NO/100THS DOLLARS ($50,000,000.00)
   ("Loan"). The Loan is evidenced by a promissory note ("Note") executed by
   Borrower, dated the date of this Mortgage, payable to the order of Mortgagee
   in the principal amount of the Loan. The maturity date of the Loan is
   September 1, 2011.

B. The loan documents include this Mortgage, the Note and the other documents
   described in the Note as Loan Documents ("Loan Documents").

                             ARTICLE I. MORTGAGE

            1.1 GRANT. For the purposes of and upon the terms and conditions of
this Mortgage, Mortgagor irrevocably mortgages, grants, bargains, sells,
conveys, transfers, pledges, sets over and assigns, and grants a security
interest to Mortgagee, its successors and assign, with right of entry and
possession, all of Mortgagor's right, title and interest, whether now owned or
hereafter acquired, in or to all of the following:

            (a) That real property ("Land") located in Port Orange, county of
Volusia, state of Florida, and more particularly described on Exhibit A attached
hereto;

            (b) All appurtenances, easements, rights of way, water and water
rights, pumps, pipes, flumes and ditches and ditch rights, water stock, ditch
and/or reservoir stock or interests, royalties, development rights and credits,
air rights, minerals, oil rights, all sewer capacity rights, and gas rights, now
or later used or useful in connection with, appurtenant to or related to the
Land;

            (c) All buildings, structures, facilities, other improvements and
fixtures now or hereafter located on the Land;

            (d) All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and substitutions
therefor used in the operation or occupancy of the Land, it being intended by
the parties that all such items shall be conclusively considered to be a part of
the Land, whether or not attached or affixed to the Land;

            (e) All land lying in the right-of-way of any street, road, avenue,
alley or right-of-way opened, proposed or vacated, and all sidewalks, strips and
gores of land adjacent to or used in connection with the Land;

            (f) All additions and accretions to the property described above;

            (g) All licenses, authorizations, certificates, variances, consents,
approvals and other permits now or hereafter pertaining to the Land and all
estate, right, title and interest of Mortgagor in, to, under or derived from all
tradenames or business names relating to the Land or the present or future
development, construction, operation or use of the Land; and

                                     Page 2
<PAGE>
            (h) All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.

                         ARTICLE II. OBLIGATIONS SECURED

            2.1 OBLIGATIONS SECURED. Mortgagor makes the foregoing grant and
assignment for the purpose of securing the following obligations ("Secured
Obligations"):

            (a) Full and punctual payment to Mortgagee of all sums at any time
owing under the Note;

            (b) Payment and performance of all covenants and obligations of
Mortgagor under this Mortgage, including, without limitation, indemnification
obligations and advances made to protect the Property;

            (c) Payment and performance of all additional covenants and
obligations of Borrower and Mortgagor under the Loan Documents;

            (d) Payment and performance of all covenants and obligations, if
any, which any rider attached as an exhibit to this Mortgage recites are secured
hereby;

            (e) Payment and performance of all future advances and other
obligations that the then record owner of all or part of the Property may agree
to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Mortgagee, when the obligation is evidenced by a writing which
recites that it is secured by this Mortgage;

            (f) All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges and loan fees;
and

            (g) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without limitation:
(i) modifications of the required principal payment dates or interest payment
dates or both, as the case may be, deferring or accelerating payment dates
wholly or partly; and (ii) modifications, extensions or renewals at a different
rate of interest whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

            2.2 FUTURE ADVANCES. This Mortgage is given to secure not only the
Secured Obligations, but also such future advances, whether such advances are
obligatory or are to be made at the option of Mortgagee or the holder hereof, or
otherwise as are made within twenty years from the date hereof, to the same
extent as if such future advances were made on the date of the execution of this
Mortgage. The total amount of Secured Obligations that may be so secured by this
Mortgage may be increased or decreased from time to time, but the total unpaid
balance so secured at any one time shall not exceed twice the face amount of the
Note, plus interest thereon, and any disbursements made under this Mortgage for
the payment of impositions, taxes, assessments, levies, insurance, or otherwise
with interest on such disbursements as provided for

                                     Page 3
<PAGE>
herein, plus any increases in the principal balance as the result of negative
amortization or deferred interest, if any. It is agreed that any additional sum
or sums advanced by Mortgagee pursuant to the terms hereof shall be equally
secured with and have the same priority as the original Secured Obligations and
shall be subject to all of the terms, provisions and conditions of this
Mortgage, whether or not such additional loans or advances are evidenced by
other promissory notes or other guaranties of Mortgagor and whether or not
identified by a recital that it or they are secured by this Mortgage. It is
further agreed that any additional promissory note or guaranty or promissory
notes or guaranties executed and delivered pursuant to this paragraph shall
automatically be deemed to be included in the term "Note" wherever it appears in
the context of this Mortgage. Without the prior written consent of Mortgagee,
which Mortgagee may grant or withhold in its sole discretion, Mortgagor shall
not file for record any notice limiting the maximum principal amount that may be
secured by this Mortgage to a sum less than the maximum principal amount set
forth in this paragraph.

            2.3 OBLIGATIONS. The term "obligations" is used herein in its
broadest and most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges and loan
fees at any time accruing or assessed on any of the Secured Obligations.

            2.4 MATURITY DATE. The maturity date of the Note is September 1,
2011.

            2.5 INCORPORATION. All terms and conditions of the documents which
evidence any of the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall
be deemed to have notice of the terms of the Secured Obligations and to have
notice that the rate of interest on one or more Secured Obligations may vary
from time to time.

             ARTICLE III. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

            3.1 ASSIGNMENT. Mortgagor irrevocably assigns to Mortgagee all of
Mortgagor's right, title and interest in, to and under: (a) all present and
future leases of the Property or any portion thereof, all licenses and
agreements relating to the management, leasing or operation of the Property or
any portion thereof, and all other agreements of any kind relating to the use or
occupancy of the Property or any portion thereof, whether such leases, licenses
and agreements are now existing or entered into after the date hereof
("Leases"); and (b) the rents, issues, deposits and profits of the Property,
including, without limitation, all amounts payable and all rights and benefits
accruing to Mortgagor under the Leases ("Payments"). The term "Leases" shall
also include all guarantees of and security for the tenants' performance
thereunder, and all amendments, extensions, renewals or modifications thereto
which are permitted hereunder. This is a present and absolute assignment, not an
assignment for security purposes only, and Mortgagee's right to the Leases and
Payments is not contingent upon, and may be exercised without possession of, the
Property.

            3.2 GRANT OF LICENSE. Notwithstanding the terms contained in Section
3.1, Mortgagee confers upon Mortgagor a revocable license ("License") to collect
and retain the Payments as they become due and payable, until the occurrence of
a Default (as hereinafter defined). Upon a Default, the License shall be
automatically revoked and Mortgagee may collect

                                     Page 4
<PAGE>
and apply the Payments pursuant to the terms hereof without notice and without
taking possession of the Property. Upon Mortgagor's cure of the Default,
Mortgagee shall re-confer upon Mortgagor a revocable license to collect and
retain the Payments as they become due and payable, until the occurrence of a
Default. All Payments thereafter collected by Mortgagor shall be held by
Mortgagor as trustee under a constructive trust for the benefit of Mortgagee.
Mortgagor hereby irrevocably authorizes and directs the tenants under the
Leases, upon notice of a Default from Mortgagee, to rely upon and comply with
any notice or demand by Mortgagee for the payment to Mortgagee of any rental or
other sums which may at any time become due under the Leases, or for the
performance of any of the tenants' undertakings under the Leases, and the
tenants shall have no right or duty to inquire as to whether any Default has
actually occurred or is then existing. Mortgagor hereby relieves the tenants
from any liability to Mortgagor by reason of relying upon and complying with any
such notice or demand by Mortgagee. Mortgagee may apply, in its sole discretion,
any Payments so collected by Mortgagee against any Secured Obligation or any
other obligation of Borrower, Mortgagor or any other person or entity, under any
document or instrument related to or executed in connection with the Loan
Documents, whether existing on the date hereof or hereafter arising. Collection
of any Payments by Mortgagee shall not cure or waive any Default or notice of
Default or invalidate any acts done pursuant to such notice.

            3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the tenants
under any of the Leases or by any other parties; for any dangerous or defective
condition of the Property; or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee, invitee or other person; or (d) responsible for or
impose upon Mortgagee any duty to produce rents or profits. Mortgagee shall not
directly or indirectly be liable to Mortgagor or any other person as a
consequence of: (e) the exercise of or failure to exercise any of the rights,
remedies or powers granted to Mortgagee hereunder; or (f) the failure or refusal
of Mortgagee to perform or discharge any obligation, duty or liability of
Mortgagor arising under the Leases.

            3.4 COVENANTS.

            (a) ALL LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense:

            (i) perform all obligations of the landlord under the Leases and use
reasonable efforts to enforce performance by the tenants of all obligations of
the tenants under the Leases;

            (ii) use reasonable efforts to keep the Property leased at all times
to tenants whom Mortgagor reasonably and in good faith believes are creditworthy
at rents not less than the fair market rental value (including, but not limited
to, free or discounted rents to the extent the market so requires);

            (iii) promptly upon Mortgagee's request, deliver to Mortgagee a copy
of each requested Lease and all amendments thereto and waivers thereof; and

                                     Page 5
<PAGE>
            (iv) promptly upon Mortgagee's request, execute and record any
additional assignments of landlord's interest under any Lease to Mortgagee and
specific subordinations of any Lease to this Mortgage, in form and substance
satisfactory to Mortgagee.

Unless consented to in writing by Mortgagee or otherwise permitted under any
other provision of the Loan Documents, Mortgagor shall not:

            (v) grant any tenant under any Lease any option, right of first
refusal or other right to purchase all or any portion of the Property under any
circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent
more than 1 month in advance;

            (vii) except upon Mortgagee's request, execute any assignment of
landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
other than to collect rent 1 month in advance of the time when it becomes due.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

Mortgagor shall deposit with Mortgagee any sums received by Mortgagor in
consideration of any termination, modification or amendment of any Lease or any
release or discharge of any tenant under any Lease from any obligation
thereunder and any such sums received by Mortgagor shall be held in trust by
Mortgagor for such purpose. Notwithstanding the foregoing, so long as no Default
exists, the portion of any such sum received by Mortgagor with respect to any
Lease which is less than $50,000 shall be payable to Mortgagor. All such sums
received by Mortgagee with respect to any Lease shall be deemed "Impounds" (as
defined in Section 6.12) and shall be deposited by Mortgagee into a pledged
account in accordance with Section 6.12. If no Default exists, Mortgagee shall
release such Impounds to Mortgagor from time to time as necessary to pay or
reimburse Mortgagor for such tenant improvements, brokerage commissions and
other leasing costs as may be required to re-tenant the affected space;
provided, however, Mortgagee shall have received and approved each of the
following for each tenant for which such costs were incurred; (1) Mortgagor's
written request for such release, including the name of the tenant, the location
and net rentable area of the space and a description and cost breakdown of the
tenant improvements or other leasing costs covered by the request; (2)
Mortgagor's certification that any tenant improvements have been completed
lien-free and in a workmanlike manner; (3) a fully executed Lease, or extension
or renewal of the current Lease; (4) an estoppel certificate executed by the
tenant including its acknowledgement that all tenant improvements have been
satisfactorily completed; and (5) such other information with respect to such
costs as Mortgagee may require. Following the re-tenanting of all affected space
(including, without limitation, the completion of all tenant improvements), and
provided no Default exists, Mortgagee shall release any remaining such Impounds
relating to the affected space to Mortgagor. Mortgagor shall construct all
tenant improvements in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations.

            (b) MAJOR LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense, give Mortgagee prompt written notice of any material default by
landlord or tenant under any

                                     Page 6
<PAGE>
Major Lease (as defined below). Unless consented to in writing by Mortgagee or
otherwise permitted under any other provision of the Loan Documents, Mortgagor
shall not:

            (i) enter into any Major Lease which (aa) is not on fair market
terms (which terms may include free or discounted rent to the extent the market
so requires); (bb) does not contain a provision requiring the tenant to execute
and deliver to the landlord an estoppel certificate in form and substance
satisfactory to the landlord promptly upon the landlord's request; or (cc)
allows the tenant to assign or sublet the premises without the landlord's
consent;

            (ii) materially reduce any rent or other sums due from the tenant
under any Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv) release or discharge the tenant or any guarantor under any
Major Lease from any material obligation thereunder.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

"Major Lease", as used herein, shall mean any Lease, which is, at any time: (1)
a Lease of more than 20% of the total rentable area of the Property, as
reasonably determined by Mortgagee; or (2) a Lease which generates a gross base
monthly rent exceeding 20% of the total gross base monthly rent generated by all
Leases (excluding all Leases under which the tenant is then in default), as
reasonably determined by Mortgagee. Mortgagor's obligations with respect to
Major Leases shall be governed by the provisions of Section 3.40 as well as by
the provisions of this Section.

            (c) FAILURE TO DENY REQUEST Mortgagee's failure to deny any written
request by Mortgagor for Mortgagee's consent under the provisions of Sections
3.4(a) or 3.4(b) within 10 Business Days after Mortgagee's receipt of such
request (and all documents and information reasonably related thereto) shall be
deemed to constitute Mortgagee's consent to such request.

            3.5 RIGHT OF SUBORDINATION. Mortgagee may at any time and from time
to time by specific written instrument intended for the purpose unilaterally
subordinate the lien of this Mortgage to any Lease, without joinder or consent
of, or notice to, Mortgagor, any tenant or any other person. Notice is hereby
given to each tenant under a Lease of such right to subordinate. No
subordination referred to in this Section shall constitute a subordination to
any lien or other encumbrance, whenever arising, or improve the right of any
junior lienholder. Nothing herein shall be construed as subordinating this
Mortgage to any Lease.

              ARTICLE IV. SECURITY AGREEMENT AND FIXTURE FILING

            4.1 SECURITY INTEREST. Mortgagor grants and assigns to Mortgagee a
security interest to secure payment and performance of all of the Secured
Obligations, in all of Mortgagor's right, title and interest in and to the
following described personal property in which Mortgagor now or at any time
hereafter has any interest ("Collateral"):

                                     Page 7
<PAGE>
      All goods, building and other materials, supplies, work in process,
      equipment, machinery, fixtures, furniture, furnishings, signs and other
      personal property, wherever situated, which are or are to be incorporated
      into, used in connection with or appropriated for use on the Property; all
      rents, issues, deposits and profits of the Property (to the extent, if
      any, they are not subject to the Absolute Assignment of Rents and Leases);
      all inventory, accounts, cash receipts, deposit accounts, impounds,
      accounts receivable, contract rights, general intangibles, software,
      chattel paper, instruments, documents, promissory notes, drafts, letters
      of credit, letter of credit rights, supporting obligations, insurance
      policies, insurance and condemnation awards and proceeds, any other rights
      to the payment of money, trade names, trademarks and service marks arising
      from or related to the Property or any business now or hereafter conducted
      thereon by Mortgagor; all permits, consents, approvals, licenses,
      authorizations and other rights granted by, given by or obtained from, any
      governmental entity with respect to the Property; all deposits or other
      security now or hereafter made with or given to utility companies by
      Mortgagor with respect to the Property; all advance payments of insurance
      premiums made by Mortgagor with respect to the Property; all plans,
      drawings and specifications relating to the Property; all loan funds held
      by Mortgagee, whether or not disbursed; all funds deposited with Mortgagee
      pursuant to any Loan Document, all reserves, deferred payments, deposits,
      accounts, refunds, cost savings and payments of any kind related to the
      Property or any portion thereof, including, without limitation, all
      "Impounds" as defined herein; together with all replacements and proceeds
      of, and additions and accessions to, any of the foregoing, and all books,
      records and files relating to any of the foregoing.

            As to all of the above described personal property which is or which
hereafter becomes a "fixture" under the Florida Uniform Commercial Code (the
"UCC"), this Mortgage constitutes a fixture filing under Florida Statutes
Section 679.313 and 679.402, as amended and recodified from time to time, this
Mortgage shall constitute a fixture filing recorded in the real estate records.
Notwithstanding the foregoing, nothing herein shall be deemed to create any lien
or interest in favor of Mortgagee under this Mortgage in any such Collateral
which is not a fixture, and the purpose of this Article IV is to create a
fixture filing under Florida Statutes Section 679.313 and 679.402, as amended or
recodified from time to time.

            4.2 COVENANTS. Mortgagor agrees: (a) to execute and deliver such
documents as Mortgagee reasonably deems necessary to create, perfect and
continue the security interests contemplated hereby; (b) not to change its name,
and, as applicable, its chief executive offices, its principal residence or the
jurisdiction in which it is organized without giving Mortgagee at least 30 days'
prior written notice thereof; and (c) to cooperate with Mortgagee in perfecting
all security interests granted herein and in obtaining such agreements from
third parties as Mortgagee deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of Mortgagee's rights
hereunder.

            4.3 RIGHTS OF MORTGAGEE. In addition to Mortgagee's rights as a
"Secured Party" under the UCC, Mortgagee may, but shall not be obligated to, at
any time without notice and at the expense of Mortgagor: (a) give notice to any
person of Mortgagee's rights hereunder and enforce such rights at law or in
equity; (b) insure, protect, defend and

                                     Page 8
<PAGE>
preserve the Collateral or any rights or interests of Mortgagee therein; and (c)
inspect the Collateral during normal business hours upon reasonable prior
written notice, provided, however, that such notice shall not be required in the
event of an emergency. Notwithstanding the above, in no event shall Mortgagee be
deemed to have accepted any property other than cash in satisfaction of any
obligation of Mortgagor to Mortgagee unless Mortgagee shall make an express
written election of said remedy under the UCC or other applicable law.

            4.4 ADDITIONAL RIGHTS OF MORTGAGEE UPON DEFAULT. Upon the occurrence
of a Default, then in addition to all of Mortgagee's rights as a "Secured Party"
under the UCC or otherwise at law:

            (a) DISPOSITION OF COLLATERAL. Mortgagee may: (i) upon written
notice, require Mortgagor to assemble the Collateral and make it available to
Mortgagee at a place reasonably designated by Mortgagee; (ii) without prior
notice (to the extent permitted by law), enter upon the Property or other place
where the Collateral may be located and take possession of, collect, sell,
lease, license and otherwise dispose of the Collateral, and store the same at
locations acceptable to Mortgagee at Mortgagor's expense; or (iii) sell, assign
and deliver the Collateral at any place or in any lawful manner and bid and
become purchaser at any such sales; and

            (b) OTHER RIGHTS. Mortgagee may, for the account of Mortgagor and at
Mortgagor's expense: (i) operate, use, consume, sell, lease, license or
otherwise dispose of the Collateral as Mortgagee reasonably deems appropriate
for the purpose of performing any or all of the Secured Obligations; (ii) enter
into any agreement, compromise or settlement including insurance claims, which
Mortgagee may reasonably deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title for, and receive,
enforce and collect by legal action or otherwise, all indebtedness and
obligations now or hereafter owing to Mortgagor in connection with or on account
of the Collateral.

            Mortgagor acknowledges and agrees that a disposition of the
Collateral in accordance with Mortgagee's rights and remedies as heretofore
provided is a disposition thereof in a commercially reasonable manner and that 5
Business Days prior notice of such disposition is commercially reasonable
notice. Mortgagee shall have no obligation to process or prepare the Collateral
for sale or other disposition. In disposing of the Collateral, Mortgagee may
disclaim all warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any sale or other disposition of the Collateral may be applied by
Mortgagee first to the reasonable expenses incurred by Mortgagee in connection
therewith, including, without limitation, reasonable attorneys' fees and
disbursements, and then to the payment of the Secured Obligations, in such order
of application as Mortgagee may from time to time elect..

            4.5 POWER OF ATTORNEY. Mortgagor hereby irrevocably appoints
Mortgagee as Mortgagor's attorney-in-fact (such agency being coupled with an
interest), and as such attorney-in-fact, Mortgagee may, without the obligation
to do so, in Mortgagee's name or in the name of Mortgagor, prepare, execute,
file and record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve any of
Mortgagee's security interests and rights in or to the Collateral, and upon a
Default, take

                                     Page 9
<PAGE>
any other action required of Mortgagor; provided, however, that Mortgagee as
such attorney-in-fact shall be accountable only for such funds as are actually
received by Mortgagee.

                  ARTICLE V. REPRESENTATIONS AND WARRANTIES

            5.1 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and
warrants to Mortgagee that, to Mortgagor's current actual knowledge after
reasonable investigation and inquiry, the following statements are true and
correct as of the Effective Date:

            (a) LEGAL STATUS. Mortgagor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in which Mortgagor
and Borrower are organized. Mortgagor and Borrower are qualified or licensed to
do business in all jurisdictions in which such qualification or licensing is
required.

            (b) PERMITS. Mortgagor and Borrower possess all permits, franchises
and licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, necessary to enable Mortgagor and Borrower to conduct
the business(es) in which Mortgagor and Borrower are now engaged in compliance
with applicable law.

            (c) AUTHORIZATION AND VALIDITY. The execution and delivery of the
Loan Documents have been duly authorized and the Loan Documents constitute valid
and binding obligations of Mortgagor, Borrower or the party which executed the
same, enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights, or by the application of rules
of equity.

            (d) VIOLATIONS. The execution, delivery and performance by Mortgagor
and Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or result in any breach or default under any contract,
obligation, indenture or other instrument to which Mortgagor or Borrower is a
party or by which Mortgagor or Borrower is bound.

            (e) LITIGATION. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental authority, court or
administrative agency which may adversely affect the financial condition or
operations of Mortgagor or Borrower other than those previously disclosed in
writing by Mortgagor or Borrower to Mortgagee.

            (f) FINANCIAL STATEMENTS. The financial statements of Mortgagor and
Borrower, of each general partner (if Mortgagor or Borrower is a partnership),
of each member (if Mortgagor or Borrower is a limited liability company) and of
each guarantor, if any, previously delivered by Mortgagor or Borrower to
Mortgagee: (i) are materially complete and correct; (ii) present fairly the
financial condition of such party; and (iii) have been prepared in accordance
with the same accounting standard used by Mortgagor or Borrower to prepare the
financial statements delivered to and approved by Mortgagee in connection with
the making of the Loan, or other accounting standards approved by Mortgagee.
Since the date of such financial statements, there has been no material adverse
change in such financial condition, nor have any assets or properties reflected
on such financial statements been sold, transferred, assigned, mortgaged,

                                    Page 10
<PAGE>
pledged or encumbered except as previously disclosed in writing by Mortgagor or
Borrower to Mortgagee and approved in writing by Mortgagee.

            (g) REPORTS. All reports, documents, instruments and information
delivered to Mortgagee in connection with the Loan: (i) are correct in all
material respects and sufficiently complete to give Mortgagee accurate knowledge
of their subject matter; and (ii) do not contain any misrepresentation of a
material fact or omission of a material fact which omission makes the provided
information misleading.

            (h)         INCOME TAXES.  There are no material pending
assessments or adjustments of Mortgagor's or Borrower's income tax payable
with respect to any year.

            (i) SUBORDINATION. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would require the
subordination in right of payment of any of Borrower's obligations under the
Note to an obligation owed to another party.

            (j) TITLE. Mortgagor lawfully holds and possesses fee simple title
to the Property, without limitation on the right to encumber same. This Mortgage
is a first lien on the Property prior and superior to all other liens and
encumbrances on the Property except: (i) liens for real estate taxes and
assessments not yet due and payable; (ii) senior exceptions previously approved
by Mortgagee and shown in the title insurance policy insuring the lien of this
Mortgage; and (iii) other matters, if any, previously disclosed to Mortgagee by
Mortgagor in a writing specifically referring to this representation and
warranty.

            (k) MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to any such liens) affecting the
Property which are or may be prior to or equal to the lien of this Mortgage,
other than those (if any) previously approved by Mortgagee and shown in the
title insurance policy insuring the lien of this Mortgage.

            (l) ENCROACHMENTS. Except as shown in the survey, if any, previously
delivered to Mortgagee, none of the buildings or other improvements which were
included for the purpose of determining the appraised value of the Property lies
outside of the boundaries or building restriction lines of the Property and no
buildings or other improvements located on adjoining properties encroach upon
the Property.

            (m) LEASES. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. Except as disclosed on a
rent roll provided to Mortgagee prior to the date hereof, no material breach or
default by any party, or event which would constitute a material breach or
default by any party after notice or the passage of time, or both, exists under
any existing Lease. None of the landlord's interests under any of the Leases,
including, but not limited to, rents, additional rents, charges, issues or
profits, has been transferred or assigned. Except as disclosed on a rent roll
provided to Mortgagee prior to the date hereof, no rent or other payment under
any existing Lease has been paid by any tenant for more than 1 month in advance.

            (n) COLLATERAL. Mortgagor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if any, previously
disclosed to Mortgagee by Mortgagor in writing specifically referring to this
representation and warranty. Mortgagor's chief

                                    Page 11
<PAGE>
executive office (or principal residence, if applicable) is located at the
address shown on page one of this Mortgage. Mortgagor is an organization
organized solely under the laws of the State of Delaware. All organizational
documents of Mortgagor delivered to Mortgagee are complete and accurate in every
respect. Mortgagor's legal name is exactly as shown on page one of this
Mortgage.

            (o) CONDITION OF PROPERTY. Except as shown in the property condition
survey or other engineering reports, if any, previously delivered to or obtained
by Mortgagee, the Property is in good condition and repair and is free from any
damage that would materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.

            (p) HAZARDOUS MATERIALS. Except as shown in the environmental
assessment report(s), if any, previously delivered to or obtained by Mortgagee,
the Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of Hazardous Materials (as hereinafter
defined) in violation of Hazardous Materials Laws (as hereinafter defined)
except as otherwise previously disclosed in writing by Mortgagor to Mortgagee.

            (q)         HAZARDOUS MATERIALS LAWS.  The Property complies with
all Hazardous Materials Laws.

            (r)         HAZARDOUS MATERIALS CLAIMS.  There are no pending or
threatened Hazardous Materials Claims (as hereinafter defined).

            (s)         WETLANDS.  No part of the Property consists of or is
classified as wetlands, tidelands or swamp and overflow lands.

            (t)         COMPLIANCE WITH LAWS.  All federal, state and local
laws, rules and regulations applicable to the Property, including, without
limitation, all zoning and building requirements  and all requirements of the
Americans With Disabilities Act of 1990, as amended from time to time (42 U.
S. C. Section 12101 et seq.) have been satisfied or complied with.  Mortgagor
is in possession of all certificates of occupancy and all other licenses,
permits and other authorizations required by applicable law for the existing
use of the Property.  All such certificates of occupancy and other  licenses,
permits and authorizations are valid and in full force and effect.

            (u) PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, and ground
rents, if any, which previously became due and owing in respect of the Property
have been paid.

            (v)         CONDEMNATION.  There is no proceeding pending or
threatened for the total or partial condemnation of the Property.

            (w) HOMESTEAD. There is no homestead or other exemption available to
Mortgagor which would materially interfere with the right to sell the Property
or the right to foreclose this Mortgage.

            (x) SOLVENCY. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or defraud any
present or future creditors

                                    Page 12
<PAGE>
of Mortgagor, and Mortgagor, on the Effective Date, will have received fair and
reasonably equivalent value in good faith for the grant of the liens or security
interests effected by the Loan Documents. On the Effective Date, Mortgagor will
be solvent and will not be rendered insolvent by the transactions contemplated
by the Loan Documents. Mortgagor is able to pay its debts as they become due.

            (y) SEPARATE TAX PARCEL(S). The Property is assessed for real estate
tax purposes as one or more wholly independent tax parcels, separate from any
other real property, and no other real property is assessed and taxed together
with the Property or any portion thereof.

            5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS
(LEVEL V SPE). Mortgagor hereby represents, warrants and covenants to Mortgagee
that with respect to both Mortgagor and MHC-QRS STAGECOACH, INC., a Delaware
corporation, the managing member of Mortgagor:

      (a) each such entity was organized solely for the purpose of (i) owning
the Properties (as defined in the Note); (ii) acting as a general partner of a
limited partnership which owns the Properties; or (iii) acting as a managing
member of a limited liability company which owns the Properties;

      (b) each such entity has not engaged and will not engage in any business
unrelated to (i) the ownership of the Properties; (ii) acting as general partner
of a limited partnership which owns the Properties; or (iii) acting as a
managing member of a limited liability company which owns the Properties;

      (c) each such entity has not had and will not have any assets other than
the Properties (and personal property incidental to the ownership and operation
of the Properties) or its partnership or membership interest in the limited
partnership or limited liability company which owns the Properties, as
applicable;

      (d) each such entity has not and will not engage in, seek or consent to
any dissolution, winding up, liquidation, consolidation, merger, asset sale,
transfer of partnership or membership interest, or amendment of its articles of
incorporation, articles of organization, certificate of formation, operating
agreement or limited partnership agreement, as applicable;

      (e) if any such entity is a limited partnership, all of its general
partners are corporations that satisfy the requirements set forth in this
Section 5.2;

      (f) if any such entity is a limited liability company, it has at least one
managing member that is a corporation that satisfies the requirements set forth
in this Section 5.2;

      (g) each such entity, without the unanimous consent of all of its general
partners, directors or members, as applicable, shall not file or consent to the
filing of any bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or any other entity in which it
has a direct or indirect legal or beneficial ownership interest;

      (h) each such entity has no indebtedness (and will have no indebtedness)
other than (i) the Loan (to the extent it is liable under the terms of the Loan
Documents); and (ii) unsecured

                                    Page 13
<PAGE>
trade debt not to exceed $1,000,000 in the aggregate with respect to Mortgagor
or $10,000 in the aggregate with respect to its managing member, which is not
evidenced by a note and is incurred in the ordinary course of its business in
connection with owning, operating and maintaining the Property (or its interest
in Mortgagor, as applicable) and is paid within thirty (30) days from the date
incurred;

      (i) each such entity has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;

      (j) each such entity has maintained and will maintain its accounts, books
and records separate from any other person or entity;

      (k) each such entity has maintained and will maintain its books, records,
resolutions and agreements as official records;

      (l) each such entity (i) has not commingled and will not commingle its
funds or assets with those of any other entity; and (ii) has held and will hold
its assets in its own name;

      (m) each such entity has conducted and will conduct its business in its
own name or in a registered trade name;

      (n) each such entity has maintained and will maintain its accounting
records and other entity documents separate from any other person or entity;

      (o) each such entity has prepared and will prepare separate tax returns
and financial statements, or if part of a consolidated group, is shown as a
separate member of such group;

      (p) each such entity has paid and will pay its own liabilities and
expenses out of its own funds and assets;

      (q) each such entity has held and will hold regular meetings, as
appropriate, to conduct its business and has observed and will observe all
corporate, partnership or limited liability company formalities and record
keeping, as applicable;

      (r) each such entity has not assumed or guaranteed and will not assume or
guarantee or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity;

      (s) each such entity has not acquired and will not acquire obligations or
securities of its partners, members or shareholders;

      (t) each such entity has allocated and will allocate fairly and reasonably
the costs associated with common employees and any overhead for shared office
space and each such entity has used and will use separate stationery, invoices
and checks under its own name or under its registered trade name;

      (u)   each such entity has not pledged and will not pledge its assets
for the benefit of any other person or entity;

                                    Page 14
<PAGE>
      (v) each such entity has held out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its own
name or under its registered trade name and not as a division or part of any
other person or entity;

      (w) each such entity has not made and will not make loans to any person or
entity;

      (x) each such entity has not identified and will not identify its
partners, members or shareholders, or any affiliates of any of the foregoing, as
a division or part of it;

      (y) each such entity has not entered into and will not enter into or be a
party to, any transaction with its partners, members, shareholders, or any
affiliates of any of the foregoing, except in the ordinary course of its
business pursuant to written agreements and on terms which are intrinsically
fair and are no less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;

      (z) if any such entity is a corporation, the directors of such entity
shall consider the interests of the creditors of such entity in connection with
all corporate action;

      (aa) each such entity has paid and will pay the salaries of its own
employees and has maintained and will maintain a sufficient number of employees
in light of its contemplated business operations;

      (bb)  each  such entity has maintained and will maintain adequate
capital in light of its contemplated business operations;

      (cc) if any such entity is a limited partnership with more than one
general partner, its limited partnership agreement requires the remaining
partners to continue the partnership as long as one solvent general partner
exists;

      (dd) if any such entity is a limited liability company, its operating
agreement, if any such entity is a limited partnership, its limited partnership
agreement, and if any such entity is a corporation, to the full extent permitted
by applicable law, its articles of incorporation, contain the provisions set
forth in this Section 5.2 and any such entity shall conduct its business and
operations in strict compliance with the terms contained therein;

      (ee) each such entity will, as a condition to the closing of the Loan,
deliver to Mortgagee a nonconsolidation opinion in form and substance acceptable
to Mortgagee;

      (ff) if any such entity is a corporation, it has maintained and will
continue to maintain at least one Independent Director (as hereinafter defined);
and

      (gg) if any such entity is a corporation, it has not caused or allowed and
will not cause or allow the board of directors of such entity to take any action
requiring the unanimous affirmative vote of 100% of the members of the board of
directors unless an Independent Director shall have participated in such vote.

An "Independent Director" shall be an individual who, except in his or her
capacity as an Independent Director of the corporation is not, and has not been
during the five (5) years

                                    Page 15
<PAGE>
immediately before such individual's appointment as an Independent Director: (i)
a stockholder, director, partner, officer or employee of the corporation or its
Affiliates; (ii) affiliated with a customer or supplier of the corporation or
its Affiliates; or (iii) a spouse, parent, sibling, child or other family
relative of any person described by (i) or (ii) above.

As used herein, the term "Affiliate" shall mean any person or entity other than
the corporation (i) which owns beneficially, directly or indirectly, any
outstanding shares of the corporation's stock, or (ii) which controls, is
controlled by or is under common control with the corporation. The term
"control" 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 ownership of voting securities, by contract or otherwise.

            5.3 COMMERCIAL LOAN. Borrower warrants that the loan evidenced by
this Note is being made solely to acquire or carry on a business or commercial
enterprise, and/or Borrower is a business or commercial organization. Borrower
further warrants that all of the proceeds of the Note shall be used for
commercial purposes and stipulates that the loan evidenced by the Note shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family or household purposes.

                  ARTICLE VI. RIGHTS AND DUTIES OF THE PARTIES

            6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Mortgagor shall,
or shall cause the property manager to: (a) keep the Property in good condition
and repair; (b) complete or restore promptly and in workmanlike manner the
Property or any part thereof which may be damaged or destroyed (unless, if and
to the extent permitted under Section 0, Mortgagee elects to require that
insurance proceeds be used to reduce the Secured Obligations and after such
repayment the ratio of Secured Obligations to the value of the Property, as
reasonably determined by Mortgagee is the same as or lower than it was
immediately before the loss or taking occurred); (c) comply and cause the
Property to comply with (i) all laws, ordinances, regulations and standards,
(ii) all covenants, conditions, restrictions and equitable servitudes, whether
public or private, of every kind and character and (iii) all requirements of
insurance companies and any bureau or agency which establishes standards of
insurability, which laws, covenants or requirements affect the Property and
pertain to acts committed or conditions existing thereon, including, without
limitation, any work of alteration, improvement or demolition as such laws,
covenants or requirements mandate; (d) operate and manage the Property at all
times in a professional manner and do all other acts which from the character or
use of the Property may be reasonably necessary to maintain and preserve its
value; (e) promptly after execution, deliver to Mortgagee a copy of any
management agreement concerning the Property and all amendments thereto and
waivers thereof; and (f) execute and acknowledge all further documents,
instruments and other papers as Mortgagee reasonably deems necessary or
appropriate to preserve, continue, perfect and enjoy the benefits of this
Mortgage and perform Mortgagor's obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no offset.
Mortgagor shall not, without Mortgagee's prior written consent: (g) remove or
demolish all or any material part of the Property; (h) alter either (i) the
exterior of the Property in a manner which materially and adversely affects the
value of the Property or (ii) the roof or other structural elements of the

                                    Page 16
<PAGE>
Property in a manner which requires a building permit except for tenant
improvements required under the Leases; (i) initiate or acquiesce in any change
in any zoning or other land classification which affects the Property; (j)
materially alter the type of occupancy or use of all or any part of the
Property; or (k) commit or permit physical waste of the Property.

            6.2 HAZARDOUS MATERIALS. Without limiting any other provision of
this Mortgage, Mortgagor agrees as follows:

            (a) PROHIBITED ACTIVITIES. Mortgagor shall not cause or permit the
Property to be used as a site for the use, generation, manufacture, storage,
treatment, release, discharge, disposal, transportation or presence of any oil
or other petroleum products, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are "hazardous substances," "hazardous wastes," "hazardous materials" or
"toxic substances" under the Hazardous Materials Laws (defined below) and/or
other applicable environmental laws, ordinances or regulations ("Hazardous
Materials").

            The foregoing to the contrary notwithstanding, (i) Mortgagor may
store, maintain and use on the Property janitorial and maintenance supplies,
paint and other Hazardous Materials of a type and in a quantity readily
available for purchase by the general public and normally stored, maintained and
used by owners and managers of properties of a type similar to the Property; and
(ii) tenants of the Property may store, maintain and use on the Property (and,
if any tenant is a retail business, hold in inventory and sell in the ordinary
course of such tenant's business) household and consumer cleaning supplies and
other Hazardous Materials of a type and quantity readily available for purchase
by the general public and normally stored, maintained and used (and, if tenant
is a retail business, sold) by tenants of properties similar to the Property or
in similar lines of business on properties similar to the Property.

            (b) HAZARDOUS MATERIALS LAWS. Mortgagor shall comply and cause the
Property to comply with all federal, state and local laws, ordinances and
regulations relating to Hazardous Materials ("Hazardous Materials Laws"),
including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of
other jurisdictions or orders and regulations.

            (c) NOTICES. Mortgagor shall immediately notify Mortgagee in writing
of: (i) the discovery of any Hazardous Materials on, under or about the Property
(other than Hazardous Materials permitted under Section 00); (ii) any knowledge
by Mortgagor that the Property does not comply with any Hazardous Materials
Laws; (iii) any claims or actions ("Hazardous Materials

                                    Page 17
<PAGE>
Claims") pending or threatened in writing against Mortgagor or the Property by
any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to the Hazardous Materials Laws; and (iv) the
discovery 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 become contaminated by or with Hazardous Materials.

            (d) REMEDIAL ACTION. In response to knowledge of or notification to
Mortgagor of the presence of any Hazardous Materials on, under or about the
Property, Mortgagor shall immediately take, at Mortgagor's sole expense, all
remedial action required of Mortgagor by any Hazardous Materials Laws or any
judgment, consent decree, settlement or compromise in respect to any Hazardous
Materials Claims.

            (e) INSPECTION BY MORTGAGEE. Upon reasonable prior notice to
Mortgagor (except in the event of an emergency) and during normal business
hours, Mortgagee, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Property for the purpose of determining the
existence, location, nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto, beneath or from the
Property.

            (f) LEGAL EFFECT OF SECTION. Mortgagor and Mortgagee agree that: (i)
this Hazardous Materials Section is intended as Mortgagee's written request for
information (and Mortgagor's response) concerning the environmental condition of
the real property security as required by California Code of Civil Procedure
Section 726.5, or any other applicable law; and (ii) each representation and
warranty and covenant in this Section (together with any indemnity applicable to
a breach of any such representation and warranty) with respect to the
environmental condition of the Property is intended by Mortgagee and Mortgagor
to be an "environmental provision" for purposes of California Code of Civil
Procedure Section 736, or any other applicable law.

            6.3 COMPLIANCE WITH LAWS. Mortgagor shall comply with all federal,
state and local laws, rules and regulations applicable to the Property,
including, without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C. Section
12101 et seq.), as amended from time to time. Mortgagor shall possess and
maintain or cause Borrower to possess and maintain in full force and effect at
all times (a) all certificates of occupancy and other licenses, permits and
authorizations required by applicable law for the existing use of the Property
and (b) all permits, franchises and licenses and all rights to all trademarks,
trade names, patents and fictitious names, if any, required by applicable law
for Mortgagor and Borrower to conduct the business(es) in which Mortgagor and
Borrower are now engaged.

            6.4 LITIGATION. Mortgagor shall promptly notify Mortgagee in writing
of any litigation pending or threatened in writing against Mortgagor or Borrower
claiming damages in excess of $100,000 and of all pending or threatened (in
writing) litigation against Mortgagor or Borrower if the aggregate damage claims
against Mortgagor or Borrower exceed $500,000.

            6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Mortgagor shall not:
(a) merge or consolidate with any other entity or permit Borrower to merge or

                                    Page 18
<PAGE>
consolidate with any other entity; (b) make any substantial change in the nature
of Mortgagor's business or structure or permit Borrower to make any substantial
change in the nature of Borrower's business or structure; (c) acquire all or
substantially all of the assets of any other entity or permit Borrower to
acquire all or substantially all of the assets of any other entity; or (d) sell,
lease, assign, transfer or otherwise dispose of a material part of Mortgagor's
assets except in the ordinary course of Mortgagor's business or permit Borrower
to sell, lease, assign, transfer or otherwise dispose of a material part of
Borrower's assets except in the ordinary course of Borrower's business.

            6.6 ACCOUNTING RECORDS. Mortgagor shall maintain and cause Borrower
to maintain adequate books and records in accordance with the same accounting
standard used by Mortgagor or Borrower to prepare the financial statements
delivered to and approved by Mortgagee in connection with the making of the Loan
or other accounting standards approved by Mortgagee. Mortgagor shall permit and
shall cause Borrower to permit any representative of Mortgagee, at any
reasonable time and from time to time, upon reasonable prior notice to
Mortgagor, to inspect, audit and examine such books and records and make copies
of same.

            6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor shall pay to
Mortgagee the full amount of all costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses of Mortgagee's in-house or
outside counsel, incurred by Mortgagee in connection with: (a) appraisals and
inspections of the Property or Collateral required by Mortgagee as a result of
(i) a Transfer or proposed Transfer (as defined below), or (ii) a Default; (b)
appraisals and inspections of the Property or Collateral required by applicable
law, including, without limitation, federal or state regulatory reporting
requirements; and (c) any acts performed by Mortgagee at Mortgagor's request or
wholly or partially for the benefit of Mortgagor (including, without limitation,
the preparation or review of amendments, assumptions, waivers, releases,
reconveyances, estoppel certificates or statements of amounts owing under any
Secured Obligation). In connection with appraisals and inspections, Mortgagor
specifically (but not by way of limitation) acknowledges that: (aa) a formal
written appraisal of the Property by a state certified or licensed appraiser may
be required by federal regulatory reporting requirements on an annual or more
frequent basis; and (bb) Mortgagee may require inspection of the Property by an
independent supervising architect, a cost engineering specialist, or both.
Mortgagor shall pay all indebtedness arising under this Section immediately upon
demand by Mortgagee together with interest thereon following notice of such
indebtedness at the rate of interest then applicable to the principal balance of
the Note as specified therein.

            6.8 LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section
8.4, Mortgagor shall immediately discharge by bonding or otherwise any lien,
charge or other encumbrance which attaches to the Property in violation of
Section 0. Subject to Mortgagor's right to contest such matters under this
Mortgage or as expressly permitted in the Loan Documents, Mortgagor shall pay
when due all obligations secured by or reducible to liens and encumbrances which
shall now or hereafter encumber or appear to encumber all or any part of the
Property or any interest therein, whether senior or subordinate hereto,
including, without limitation, all claims for work or labor performed, or
materials or supplies furnished, in connection with any work of demolition,
alteration, repair, improvement or construction of or upon the Property, except
such as Mortgagor may in good faith contest or as to which a bona fide dispute
may arise (provided provision is made to the satisfaction of Mortgagee for
eventual payment thereof in the

                                    Page 19
<PAGE>
event that Mortgagor is obligated to make such payment and that any recorded
claim of lien, charge or other encumbrance against the Property is immediately
discharged by bonding or otherwise).

            6.9 TAXES AND OTHER LIABILITIES. Mortgagor shall pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and local
property taxes and assessments. Mortgagor shall promptly provide to Mortgagee
copies of all tax and assessment notices pertaining to the Property. Mortgagor
hereby authorizes Mortgagee to obtain, at Mortgagor's expense, a tax service
contract which shall provide tax information on the Property to Mortgagee for
the term of the Loan and any extensions or renewals of the Loan.

            6.10 INSURANCE COVERAGE. Mortgagor shall insure the Property against
loss or damage by fire and such other hazards as Mortgagee shall from time to
time require; provided, however, (a) Mortgagee, at Mortgagee's election, may
only require flood insurance if all or any portion of the improvements located
on the Property is or becomes located in a special flood hazard area, and (b)
Mortgagee, at Mortgagee's election, may only require earthquake insurance if all
or any portion of the Property is or becomes located in an earthquake fault
zone. Mortgagor shall also carry public liability insurance and such other
insurance as Mortgagee may reasonably require, including, without limitation,
business interruption insurance or loss of rents insurance. Such policies shall
contain a standard mortgage clause naming Mortgagee and its successors in
interest as a loss payee and requiring at least 30 days prior notice to the
holder at termination or cancellation. Mortgagor shall maintain all required
insurance throughout the term of the Loan and while any liabilities of Borrower
or Mortgagor to Mortgagee under any of the Loan Documents remain outstanding at
Mortgagor's expense, with companies, and in substance and form satisfactory to
Mortgagee. Mortgagee, by reason of accepting, rejecting, approving or obtaining
insurance shall not incur any liability for: (c) the existence, nonexistence,
form or legal sufficiency of any insurance; (d) the solvency of any insurer; or
(e) the payment of claims.

            6.11  INSURANCE AND CONDEMNATION PROCEEDS.

            (a) ASSIGNMENT OF CLAIMS. Mortgagor absolutely and irrevocably
assigns to Mortgagee all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid to Mortgagee: (i) all
awards of damages and all other compensation payable directly or indirectly by
reason of a condemnation or proposed condemnation for public or private use
affecting all or any part of, or any interest in, the Property; (ii) all other
claims and awards for damages to or decrease in value of all or any part of, or
any interest in, the Property; (iii) all proceeds of any insurance policies
payable by reason of loss sustained to all or any part of the Property; and (iv)
all interest which may accrue on any of the foregoing. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty affecting, or
the institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof. So long as no Default has occurred and
is continuing at the time, Mortgagor shall have the right to adjust, compromise
and settle any Claim of $100,000 or less without the consent of Mortgagee,
provided, however, all awards, proceeds and other sums described herein shall
continue to be payable to Mortgagee. Mortgagee may commence, appear in, defend
or prosecute any Claim exceeding $100,000, and may adjust, compromise and settle
all Claims (except for Claims which Mortgagor may settle as provided herein),
but shall not be responsible

                                    Page 20
<PAGE>
for any failure to commence, appear in, defend, prosecute or collect any such
Claim regardless of the cause of the failure. All awards, proceeds and other
sums described herein shall be payable to Mortgagee.

            (b) APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
occurred and is continuing at the time of Mortgagee's receipt of the proceeds of
the Claims ("Proceeds") and no Default occurs thereafter, Mortgagee shall apply
the Proceeds in the following order of priority: First, to Mortgagee's expenses
in settling, prosecuting or defending the Claims; Second, to the repair or
restoration of the Property; and Third, to Mortgagor if the repair or
restoration of the Property has been completed, but to the Secured Obligations
in any order without suspending, extending or reducing any obligation of
Mortgagor to make installment payments if the repair or restoration of the
Property has not been completed. Notwithstanding the foregoing, Mortgagee shall
have no obligation to make any Proceeds available for the repair or restoration
of the Property unless and until all the following conditions have been
satisfied: (i) delivery to Mortgagee of the Proceeds plus any additional amount
which is needed to pay all costs of the repair or restoration (including,
without limitation, taxes, financing charges, insurance and rent during the
repair period); (ii) establishment of an arrangement for lien releases and
disbursement of funds acceptable to Mortgagee; (iii) delivery to Mortgagee in
form and content acceptable to Mortgagee of all of the following: (aa) plans and
specifications for the work; (bb) a contract for the work, signed by a
contractor acceptable to Mortgagee; (cc) a cost breakdown for the work; (dd) if
reasonably required by Mortgagee, a payment and performance bond for the work;
(ee) evidence of the continuation of substantially all Leases unless consented
to in writing by Mortgagee; (ff) evidence that, upon completion of the work, the
size, capacity, value, and income coverage ratios for the Property will be at
least as great as those which existed immediately before the damage or
condemnation occurred; and (gg) evidence of the satisfaction of any additional
conditions that Mortgagee may reasonably establish to protect Mortgagee's
security. Mortgagor acknowledges that the specific conditions described above
are reasonable.

            (c) APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and
is continuing at the time of Mortgagee's receipt of the Proceeds or if a Default
occurs at any time thereafter, Mortgagee may, at Mortgagee's absolute discretion
and regardless of any impairment of security or lack of impairment of security,
but subject to applicable law governing use of the Proceeds, if any, apply all
or any of the Proceeds to Mortgagee's expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured Obligations in
any order without suspending, extending or reducing any obligation of Mortgagor
to make installment payments, and may release all or any part of the Proceeds to
Mortgagor upon any conditions Mortgagee chooses.

            6.12  IMPOUNDS.

            (a) POST-DEFAULT IMPOUNDS. If required by Mortgagee at any time
after a Default occurs (and regardless of whether such Default is thereafter
cured), Mortgagor shall deposit with Mortgagee such amounts ("Post-Default
Impounds") on such dates (determined by Mortgagee as provided below) as will be
sufficient to pay any or all "Costs" (as defined below) specified by Mortgagee.
Mortgagee in its reasonable discretion shall estimate the amount of such Costs
that will be payable or required during any period selected by Mortgagee not
exceeding 1 year and shall determine the fractional portion thereof that
Mortgagor shall deposit with Mortgagee

                                    Page 21
<PAGE>
on each date specified by Mortgagee during such period. If the Post-Default
Impounds paid by Mortgagor are not sufficient to pay the related Costs,
Mortgagor shall deposit with Mortgagee upon demand an amount equal to the
deficiency. All Post-Default Impounds shall be payable by Mortgagor in addition
to (but without duplication of) any other Impounds (as defined below).

            (b) ALL IMPOUNDS. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively called "Impounds".
All Impounds shall be deposited into one or more segregated or commingled
accounts maintained by Mortgagee or its servicing agent. Except as otherwise
provided in the Note, such account(s) shall not bear interest. Mortgagee shall
not be a trustee, special depository or other fiduciary for Mortgagor with
respect to such account, and the existence of such account shall not limit
Mortgagee's rights under this Mortgage, any other agreement or any provision of
law. If no Default exists, Mortgagee shall apply all Impounds to the payment of
the related Costs, or in Mortgagee's sole discretion may release any or all
Impounds to Mortgagor for application to and payment of such Costs. If a Default
exists, Mortgagee may apply any or all Impounds to any Secured Obligation and/or
to cure such Default, whereupon Mortgagor shall restore all Impounds so applied
and cure all Defaults not cured by such application. The obligations of
Mortgagor hereunder shall not be diminished by deposits of Impounds made by
Mortgagor, except to the extent that such obligations have actually been met by
application of such Impounds. Upon any assignment of this Mortgage, Mortgagee
may assign all Impounds in its possession to Mortgagee's assignee, whereupon
Mortgagee shall be released from all liability with respect to such Impounds.
Within 60 days following full repayment of the Secured Obligations (other than
as a consequence of foreclosure or conveyance in lieu of foreclosure) or at such
earlier time as Mortgagee may elect, Mortgagee shall pay to Mortgagor all
Impounds in its possession, and no other party shall have any right or claim
thereto. "Costs" means (i) all taxes and other liabilities payable by Mortgagor
under Section 0, (ii) all insurance premiums payable by Mortgagor under Section
0, (iii) all other costs and expenses for which Impounds are required under the
Note, and/or (iv) all other amounts that will be required to preserve the value
of the Property. Mortgagor shall deliver to Mortgagee, promptly upon receipt,
all bills for Costs for which Mortgagee has required Post-Default Impounds.

            6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Mortgagor
shall protect, preserve and defend the Property and title to and right of
possession of the Property, the security of this Mortgage and the rights and
powers of Mortgagee hereunder at Mortgagor's sole expense against all adverse
claims, whether the claim: (a) is against a possessory or non-possessory
interest; (b) arose prior or subsequent to the Effective Date; or (c) is senior
or junior to Mortgagor's or Mortgagee's rights. Mortgagor shall give Mortgagee
prompt notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to the Property and of any
condemnation offer or action.

            6.14 RIGHT OF INSPECTION. Mortgagee and its independent contractors,
agents and employees may enter the Property from time to time at any reasonable
time upon reasonable prior notice to Mortgagor (except that such notice shall
not be required in the event of an emergency) for the purpose of inspecting the
Property and ascertaining Mortgagor's compliance with the terms of this
Mortgage. Mortgagee shall use reasonable efforts to assure that Mortgagee's
entry upon and inspection of the Property shall not materially and unreasonably
interfere with the business or operations of Mortgagor or Mortgagor's tenants on
the Property.

                                    Page 22
<PAGE>
            6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN MORTGAGOR.
Mortgagor acknowledges that Mortgagee has relied upon the principals of
Mortgagor and Borrower and their experience in owning and operating properties
similar to the Property in connection with the closing of the Loan. Accordingly,
except with the prior written consent of Mortgagee or as otherwise expressly
permitted in the Note, Mortgagor shall not cause or permit any sale, exchange,
mortgage, pledge, hypothecation, assignment, encumbrance or other transfer,
conveyance or disposition, whether voluntarily, involuntarily or by operation of
law ("Transfer") of all or any part of, or all or any direct or indirect
interest in, the Property or the Collateral (except for equipment and inventory
in the ordinary course of its business), or cause or permit a Transfer of any
direct or indirect interest (whether general partnership interest, stock,
non-managing member limited liability company interest, trust, or otherwise) in
Mortgagor or Borrower. In the event of any Transfer that is not expressly
permitted in the Note and is without the prior written consent of Mortgagee,
Mortgagee shall have the absolute right at its option, without prior demand or
notice, to declare all of the Secured Obligations immediately due and payable,
except to the extent prohibited by law, and pursue its rights and remedies under
Section 0 herein. Mortgagor agrees to pay any prepayment fee as set forth in the
Note in the event the Secured Obligations are accelerated pursuant to the terms
of this Section. Consent to one such Transfer shall not be deemed to be a waiver
of the right to require the consent to future or successive Transfers. Except
for Transfers expressly permitted under the Note, Mortgagee's consent to any
Transfer may be withheld, conditioned or delayed in Mortgagee's sole and
absolute discretion.

            6.16 INTENTIONALLY OMITTED.

            6.17 INTENTIONALLY OMITTED.

            6.18 EXCULPATION. Mortgagee shall not directly or indirectly be
liable to Mortgagor or any other person as a consequence of: (a) the exercise of
the rights, remedies or powers granted to Mortgagee in this Mortgage; (b) the
failure or refusal of Mortgagee to perform or discharge any obligation or
liability of Mortgagor under any agreement related to the Property or under this
Mortgage; or (c) any loss sustained by Mortgagor or any third party resulting
from Mortgagee's failure to lease the Property after a Default or from any other
act or omission of Mortgagee in managing the Property after a Default unless the
loss is caused by the willful misconduct and bad faith of Mortgagee and no such
liability shall be asserted or enforced against Mortgagee, all such liability
being expressly waived and released by Mortgagor.

            6.19 INDEMNITY. Without in any way limiting any other indemnity
contained in this Mortgage, Mortgagor agrees to defend, indemnify and hold
harmless the Mortgagee Group (as hereinafter defined) from and against any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of: (a) the making of the Loan, except for violations of banking laws or
regulations by the Mortgagee Group; (b) this Mortgage; (c) the execution of this
Mortgage or the performance of any act required or permitted hereunder or by
law; (d) any failure of Mortgagor to perform Mortgagor's obligations under this
Mortgage or the other Loan Documents; (e) any alleged obligation or undertaking
on the Mortgagee Group's part to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations
contained in any other document related to the Property; (f) any act or omission
by Mortgagor or any contractor, agent, employee or representative of Mortgagor
with respect to the Property; or (g) any claim, loss,

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<PAGE>
damage, cost, expense or liability directly or indirectly arising out of: (i)
the use, generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any Hazardous
Materials which are found in, on, under or about the Property (including,
without limitation, underground contamination); or (ii) the breach of any
covenant, representation or warranty of Mortgagor under Section 0 above. The
foregoing to the contrary notwithstanding, this indemnity shall not include any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of the gross negligence or willful misconduct of any member of the Mortgagee
Group, or any claim, loss, damage, cost, expense or liability incurred by the
Mortgagee Group arising from any act or incident on the Property occurring after
the full reconveyance and release of the lien of this Mortgage on the Property,
or with respect to the matters set forth in clause (g) above, any claim, loss,
damage, cost, expense or liability incurred by the Mortgagee Group resulting
from the introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure sale
under this Mortgage, either pursuant to judicial decree or the power of sale, or
by deed in lieu of such foreclosure. This indemnity shall include, without
limitation: (aa) all consequential damages (including, without limitation, any
third party tort claims or governmental claims, fines or penalties against the
Mortgagee Group); (bb) all court costs and reasonable attorneys' fees
(including, without limitation, expert witness fees) paid or incurred by the
Mortgagee Group; and (cc) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Property which is
required by any governmental entity or is otherwise necessary to render the
Property in compliance with all laws and regulations pertaining to Hazardous
Materials. "Mortgagee Group", as used herein, shall mean (1) Mortgagee
(including, without limitation, any participant in the Loan), (2) any entity
controlling, controlled by or under common control with Mortgagee, (3) the
directors, officers, employees and agents of Mortgagee and such other entities,
and (4) the successors, heirs and assigns of the entities and persons described
in foregoing clauses (1) through (3). Mortgagor shall pay immediately upon
Mortgagee's demand any amounts owing under this indemnity together with interest
from the date the indebtedness arises until paid at the rate of interest
applicable to the principal balance of the Note as specified therein. Mortgagor
agrees to use legal counsel reasonably acceptable to the Mortgagee Group in any
action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
SECTION SHALL SURVIVE THE SATISFACTION AND RELEASE OF THIS MORTGAGE, BUT
MORTGAGOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF
THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            6.20 INTENTIONALLY OMITTED.

            6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
Without notice to or the consent, approval or agreement of any persons or
entities having any interest at any time in the Property or in any manner
obligated under the Secured Obligations ("Interested Parties"), Mortgagee may,
from time to time: (a) fully or partially release any person or entity from
liability for the payment or performance of any Secured Obligation; (b) extend
the maturity of any Secured Obligation; (c) make any agreement with Borrower
increasing the amount or otherwise altering the terms of any Secured Obligation;
(d) accept additional security for any Secured Obligation; or (e) release all or
any portion of the Property, Collateral and other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the personal
liability of any of said Interested Parties, or release or impair the priority
of the lien of this Mortgage upon the Property.

                                    Page 24
<PAGE>
            6.22 SALE OR PARTICIPATION OF LOAN. Mortgagor agrees that Mortgagee
may at any time sell, assign, participate or securitize all or any portion of
Mortgagee's rights and obligations under the Loan Documents, and that any such
sale, assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, and/or into the
public securities market, in Mortgagee's sole discretion. Mortgagor further
agrees that Mortgagee may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and financial and
other information heretofore or hereafter provided to or known to Mortgagee with
respect to: (a) the Property and its operation; and/or (b) any party connected
with the Loan (including, without limitation, Mortgagor, any partner or member
of Mortgagor, any constituent partner or member of Mortgagor, any guarantor and
any nonborrower mortgagor). In the event of any such sale, assignment,
participation or securitization, Mortgagee and the other parties to the same
shall share in the rights and obligations of Mortgagee set forth in the Loan
Documents as and to the extent they shall agree among themselves. In connection
with any such sale, assignment, participation or securitization, Mortgagor
further agrees that the Loan Documents shall be sufficient evidence of the
obligations of Mortgagor to each purchaser, assignee or participant, and
Mortgagor shall, within 15 days after request by Mortgagee, (x) deliver an
estoppel certificate verifying for the benefit of Mortgagee and any other party
designated by Mortgagee the status and the terms and provisions of the Loan in
form and substance acceptable to Mortgagee, (y) provide any information, legal
opinions or documents regarding Mortgagor, Guarantor (as defined in the Loan
Documents), the Property and any tenants of the Property as Mortgagee or
Mortgagee's rating agencies may reasonably request, and (z) enter into such
amendments or modifications to the Loan Documents or the organizational
documents of Mortgagor as may be reasonably required in order to facilitate any
such sale, assignment, participation or securitization without impairing
Mortgagor's rights or increasing Mortgagor's obligations. The indemnity
obligations of Mortgagor under the Loan Documents shall also apply with respect
to any purchaser, assignee or participant.

            6.23 RELEASE. Upon payment in full of the Secured Obligations, and
satisfaction of all of the covenants, warranties, undertakings and agreements
made in this Mortgage and in the other Loan Documents (including, without
limitation, repayment in full of all principal, interest and other amounts owing
under the Note) are kept and performed, and all obligations, if any, of
Mortgagee for further advances have been terminated, then, and in that event
only, Mortgagee shall release, without warranty, the Property or that portion
thereof then held hereunder. The recitals of any matters or facts in any release
executed hereunder shall be conclusive proof of the truthfulness thereof. To the
extent permitted by law, the release may describe the grantee as "the person or
persons legally entitled thereto". Mortgagee shall have no duty to determine the
rights of persons claiming to be rightful grantees of any release. When the
Property has been fully released, the last such release shall operate as a
reassignment of all future rents, issues and profits of the Property to the
person or persons legally entitled thereto.

            6.24 SUBROGATION. Mortgagee shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole or in part by
Mortgagee pursuant to this Mortgage or by the proceeds of any loan secured by
this Mortgage.

            6.25 MANAGEMENT AGREEMENTS. Without the prior written consent of
Mortgagee, Mortgagor shall not terminate, modify, amend or enter into any
agreement providing for the management, leasing or operation of the Property.
Mortgagor represents,

                                    Page 25
<PAGE>
warrants and covenants that any existing management agreement includes, and any
future management agreement entered into by Mortgagor shall include, a provision
which provides that the management agreement is automatically terminated upon
the transfer of the Property by Mortgagor, either by sale, foreclosure, deed in
lieu of foreclosure, or otherwise, to Mortgagee or any other purchaser of the
Property. Upon a Default under the Loan Documents or a default under any
management agreement then in effect, which default is not cured within any
applicable grace or cure period, Mortgagee shall have the right to terminate, or
to direct Mortgagor to terminate, such management agreement upon thirty (30)
days' written notice and to retain, or to direct Mortgagor to retain, a new
management agent approved by Mortgagee.

                             ARTICLE VII. DEFAULT

            7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as defined
below).

            (a) OPTIONAL DEFAULT. An "Optional Default" shall occur, at
Mortgagee's option, upon the occurrence of any of the following events:

            (i) MONETARY. Borrower or Mortgagor shall fail to (aa) pay when due
any sums payable under the Loan Documents which by their express terms require
immediate payment without any grace period or sums which are payable on the
Maturity Date, or (bb) pay within 5 days when due any other sums payable under
the Note, this Mortgage or any of the other Loan Documents, including, without
limitation, any monthly payment due under the Note.

            (ii) FAILURE TO PERFORM. Borrower or Mortgagor shall fail to
observe, perform or discharge any of Borrower's or Mortgagor's obligations,
covenants, conditions or agreements, other than Borrower's or Mortgagor's
payment obligations, under the Note, this Mortgage or any of the other Loan
Documents, and (aa) such failure shall remain uncured for 30 days after written
notice thereof shall have been given to Borrower or Mortgagor, as the case may
be, by Mortgagee or (bb) if such failure is of such a nature that it cannot be
cured within such 30 day period, Borrower or Mortgagor shall fail to commence to
cure such failure within such 30 day period or shall fail to diligently
prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certificate or other statement (financial or otherwise) made or furnished by or
on behalf of Borrower, Mortgagor, or a guarantor, if any, to Mortgagee or in
connection with any of the Loan Documents, or as an inducement to Mortgagee to
make the Loan, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished.

            (iv) CONDEMNATION; ATTACHMENT. The condemnation, seizure or
appropriation of any material portion (as reasonably determined by Mortgagee) of
the Property; or the sequestration or attachment of, or levy or execution upon
any of the Property, the Collateral or any other collateral provided by Borrower
or Mortgagor under any of the Loan Documents, or any material portion of the
other assets of Borrower or Mortgagor, which sequestration, attachment, levy or
execution is not released or dismissed within 45 days after its occurrence; or
the sale of any assets affected by any of the foregoing.

                                    Page 26
<PAGE>
            (v) UNINSURED CASUALTY. The occurrence of an uninsured casualty with
respect to any material portion (as reasonably determined by Mortgagee) of the
Property unless: (aa) no other Default has occurred and is continuing at the
time of such casualty or occurs thereafter; (bb) Mortgagor promptly notifies
Mortgagee of the occurrence of such casualty; and (cc) not more than 45 days
after the occurrence of such casualty, Mortgagor delivers to Mortgagee
immediately available funds in an amount sufficient, in Mortgagee's reasonable
opinion, to pay all costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent during the repair
period). So long as no Default has occurred and is continuing at the time of
Mortgagee's receipt of such funds and no Default occurs thereafter, Mortgagee
shall make such funds available for the repair or restoration of the Property.
Notwithstanding the foregoing, Mortgagee shall have no obligation to make any
funds available for repair or restoration of the Property unless and until all
the conditions set forth in clauses (ii) and (iii) of the second sentence of
Section 6.11(b) of this Mortgage have been satisfied. Mortgagor acknowledges
that the specific conditions described above are reasonable.

            (vi) ADVERSE FINANCIAL CHANGE. Any material adverse change in the
financial condition of Borrower or any general partner or managing member of
Borrower, any guarantor, or any other person or entity from the condition shown
on the financial statement(s) submitted to Mortgagee and relied upon by
Mortgagee in making the Loan, and which change Mortgagee reasonably determines
will have a material adverse effect on (aa) the business, operations or
condition of the Property; or (bb) the ability of Borrower or Mortgagor to pay
or perform Borrower's or Mortgagor's obligations in accordance with the terms of
the Note, this Mortgage, and the other Loan Documents.

            (b) AUTOMATIC DEFAULT.  An "Automatic Default" shall occur
automatically upon the occurrence of any of the following events:

            (i) VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
filing a petition for relief under the Bankruptcy Reform Act of 1978, as amended
or recodified ("Bankruptcy Code"), or under any other present or future state or
federal law regarding bankruptcy, reorganization or other relief to debtors
(collectively, "Debtor Relief Law"); or (bb) Borrower's filing any pleading in
any involuntary proceeding under the Bankruptcy Code or other Debtor Relief Law
which admits the jurisdiction of a court to regulate Borrower or the Property or
the petition's material allegations regarding Borrower's insolvency; or (cc)
Borrower's making a general assignment for the benefit of creditors; or (dd)
Borrower's applying for, or the appointment of, a receiver, trustee, custodian
or liquidator of Borrower or any of its property; or (ee) the filing by Borrower
of a petition seeking the liquidation or dissolution of Borrower or the
commencement of any other procedure to liquidate or dissolve Borrower.

            (ii) INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
dismissal of any involuntary petition under the Bankruptcy Code or other Debtor
Relief Law that is filed against Borrower or in any way restrains or limits
Borrower or Mortgagee regarding the Loan or the Property, prior to the earlier
of the entry of any order granting relief sought in the involuntary petition or
45 days after the date of filing of the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
clauses (i) or (ii) as to Mortgagor, any general partner or managing member of
Borrower or Mortgagor,

                                    Page 27
<PAGE>
or any guarantor or other person or entity in any manner obligated to Mortgagee
under the Loan Documents.

            7.2 ACCELERATION. Upon the occurrence of an Optional Default,
Mortgagee may, at its option, declare all sums owing to Mortgagee under the Note
and the other Loan Documents immediately due and payable. Upon the occurrence of
an Automatic Default, all sums owing to Mortgagee under the Note and the other
Loan Documents shall automatically become immediately due and payable.

            7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in
Section 0 above, at any time after a Default, Mortgagee shall have all of the
following rights and remedies:

            (a) ENTRY ON PROPERTY. With or without notice, and without releasing
Mortgagor from any Secured Obligation, and without becoming a mortgagee in
possession, to enter upon the Property from time to time and to do such acts and
things as Mortgagee deems necessary or desirable in order to inspect,
investigate, assess and protect the security hereof or to cure any Default,
including, without limitation: (i) to take and possess all documents, books,
records, papers and accounts of Mortgagor, Borrower or the then owner of the
Property which relate to the Property; (ii) to make, terminate, enforce or
modify leases of the Property upon such terms and conditions as Mortgagee deems
proper; (iii) to make repairs, alterations and improvements to the Property
necessary, in Mortgagee's reasonable judgment, to protect or enhance the
security hereof; (iv) to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Mortgagee
hereunder; (v) to pay, purchase, contest or compromise any encumbrance, charge,
lien or claim of lien which, in the sole judgment of Mortgagee, is or may be
senior in priority hereto, the judgment of Mortgagee being conclusive as between
the parties hereto; (vi) to obtain insurance; (vii) to pay any premiums or
charges with respect to insurance required to be carried hereunder; (viii) to
obtain a court order to enforce Mortgagee's right to enter and inspect the
Property for Hazardous Materials, in which regard the decision of Mortgagee as
to whether there exists a release or threatened release of Hazardous Materials
onto the Property shall be deemed reasonable and conclusive as between the
parties hereto; (ix) to have a receiver appointed pursuant to applicable law to
enforce Mortgagee's rights to enter and inspect the Property for Hazardous
Materials; and/or (x) to employ legal counsel, accountants, engineers,
consultants, contractors and other appropriate persons to assist them;

            (b) APPOINTMENT OF RECEIVER. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain appointment of a
receiver, trustee, liquidator or conservator of the Property, for any purpose,
including, without limitation, to enforce Mortgagee's rights to collect Payments
and to enter on and inspect the Property for Hazardous Materials, as a matter of
strict right and without regard to: (i) the adequacy of the security for the
repayment of the Secured Obligations; (ii) the existence of a declaration that
the Secured Obligations are immediately due and payable; (iii) the filing of a
notice of default; or (iv) the solvency of Mortgagor, Borrower or any guarantor
or other person or entity in any manner obligated to Mortgagee under the Loan
Documents;

                                    Page 28
<PAGE>
            (c) INJUNCTION. To commence and maintain an action or actions in any
court of competent jurisdiction to obtain specific enforcement of the covenants
of Mortgagor hereunder, and Mortgagor agrees that such covenants shall be
specifically enforceable by injunction or any other appropriate equitable remedy
and that for the purposes of any suit brought under this subparagraph, Mortgagor
waives the defense of laches and any applicable statute of limitations;

            (d) FORECLOSURE. Immediately commence an action to foreclose this
Mortgage or to specifically enforce its provisions or any of the indebtedness
secured hereby pursuant to the statutes in such case made and provided and sell
the Property or cause the Property to be sold in accordance with the
requirements and procedures provided by said statutes in a single parcel or in
several parcels at the option of Mortgagee.

            (i) In the event foreclosure proceedings are filed by Mortgagee, all
expenses incident to such proceeding, including, but not limited to, reasonable
attorneys' fees and costs, shall be paid by Mortgagor and secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. The secured indebtedness and all other
obligations secured by this Mortgage, including, without limitation, interest at
the Default Rate (as defined in the Note), any prepayment charge, fee or premium
required to be paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys' fees and any other amounts
due and unpaid to Mortgagee under the Loan Documents, may be bid by Mortgagee in
the event of a foreclosure sale hereunder. In the event of a judicial sale
pursuant to a foreclosure decree, it is understood and agreed that Mortgagee or
its assigns may become the purchaser of the Property or any part thereof.

            (ii) Mortgagee may, by following the procedures and satisfying the
requirements prescribed by applicable law, foreclose on only a portion of the
Property and, in such event, said foreclosure shall not affect the lien of this
Mortgage on the remaining portion of the Property foreclosed.

            Upon sale of the Property at any foreclosure, Mortgagee may credit
bid (as determined by Mortgagee in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Mortgagee
may, but is not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or adjusted by
Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and
costs incurred by Mortgagee with respect to the Property prior to foreclosure;
(iii) expenses and costs which Mortgagee anticipates will be incurred with
respect to the Property after foreclosure, but prior to resale, including,
without limitation, costs of structural reports and other due diligence, costs
to carry the Property prior to resale, costs of resale (e.g. commissions,
attorneys' fees, and taxes), costs of any Hazardous Materials clean-up and
monitoring, costs of deferred maintenance, repair, refurbishment and retrofit,
costs of defending or settling litigation affecting the Property, and lost
opportunity costs (if any), including the time value of money during any
anticipated holding period by Mortgagee; (iv) declining trends in real property
values generally and with respect to properties similar to the Property; (v)
anticipated discounts upon resale of the Property as a distressed or foreclosed
property; (vi) the fact of additional collateral (if any), for the Secured
Obligations; and (vii) such other factors or matters that Mortgagee (in its sole
and absolute discretion) deems appropriate. In regard to the above, Mortgagor
acknowledges and

                                    Page 29
<PAGE>
agrees that: (viii) Mortgagee is not required to use any or all of the foregoing
factors to determine the amount of its credit bid; (ix) this paragraph does not
impose upon Mortgagee any additional obligations that are not imposed by law at
the time the credit bid is made; (x) the amount of Mortgagee's credit bid need
not have any relation to any loan-to-value ratios specified in the Loan
Documents or previously discussed between Mortgagor and Mortgagee; and (xi)
Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion)
higher or lower than any appraised value of the Property;

            (e) MULTIPLE FORECLOSURES. To resort to and realize upon the
security hereunder and any other security now or later held by Mortgagee
concurrently or successively and in one or several consolidated or independent
judicial actions and to apply the proceeds received upon the Secured Obligations
all in such order and manner as Mortgagee determines in its sole discretion;

            (f) RIGHTS TO COLLATERAL.  To exercise all rights Mortgagee may have
with respect to the Collateral under this Mortgage, the UCC or otherwise at law;
and

            (g) OTHER RIGHTS.  To exercise such other rights as Mortgagee may
have at law or in equity or pursuant to the terms and conditions of this
Mortgage or any of the other Loan Documents.

            In connection with any sale or sales hereunder, Mortgagee may elect
to treat any of the Property which consists of a right in action or which is
property that can be severed from the Property (including, without limitation,
any improvements forming a part thereof) without causing structural damage
thereto as if the same were personal property or a fixture, as the case may be,
and dispose of the same in accordance with applicable law, separate and apart
from the sale of the Property. Any sale of Collateral hereunder shall be
conducted in any manner permitted by the UCC.

            7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. To the fullest extent
permitted by law, proceeds of any sale under this Mortgage shall be applied to
the extent funds are so available to the following items in such order as
Mortgagee in its discretion may determine:

            (a) To payment of the costs, expenses and fees of taking possession
of the Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee's right and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers' fees, court costs, reasonable
attorneys', accountants', appraisers', managers', and other professional fees,
title charges and transfer taxes.

            (b) To payment of all sums expended by Mortgagee under the terms of
any of the Loan Documents and not yet repaid, together with interest on such
sums at the Default Rate.

            (c) To payment of the secured indebtedness and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Rate and, to the extent permitted by applicable law, any prepayment fee, charge
or premium required to be paid under the Note in order to prepay principal, in
any order that Mortgagee chooses in its sole discretion.

                                    Page 30
<PAGE>
            7.5 WAIVER OF MARSHALING RIGHTS. Mortgagor, for itself and for all
parties claiming through or under Mortgagor, and for all parties who may acquire
a lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property, including, without limitation, the
Collateral, which is now or later may be security for any Secured Obligation,
marshaled upon any foreclosure of this Mortgage or on a foreclosure of any other
security for any of the Secured Obligations.

            7.6 NO CURE OR WAIVER. Neither Mortgagee's nor any receiver's entry
upon and taking possession of all or any part of the Property, nor any
collection of rents, issues, profits, insurance proceeds, condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation, nor the exercise of
any other right or remedy by Mortgagee or any receiver shall cure or waive any
Default or notice of default under this Mortgage, or nullify the effect of any
notice of default or sale (unless all Secured Obligations then due have been
paid or performed and Mortgagor has cured all other Defaults hereunder), or
impair the status of the security, or prejudice Mortgagee in the exercise of any
right or remedy, or be construed as an affirmation by Mortgagee of any tenancy,
lease or option or a subordination of the lien of this Mortgage.

            7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor agrees
to pay to Mortgagee immediately and upon demand all costs and expenses incurred
by Mortgagee in the enforcement of the terms and conditions of this Mortgage
(including, without limitation, court costs and attorneys' fees, whether
incurred in litigation or not) with interest from the date of expenditure until
said sums have been paid at the rate of interest applicable to the principal
balance of the Note as specified therein.

            7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Mortgagor hereby
irrevocably appoints Mortgagee and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest, to perform any
obligation of Mortgagor hereunder upon the occurrence of an event, act or
omission which, with notice or passage of time or both, would constitute a
Default, provided, however, that: (a) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(b) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to act under this Section.

            7.9 REMEDIES CUMULATIVE. All rights and remedies of Mortgagee
provided hereunder are cumulative and are in addition to all rights and remedies
provided by applicable law (including specifically that of foreclosure of this
instrument as though it were a mortgage) or in any other agreements between
Mortgagor and Mortgagee. Mortgagee may enforce any one or more remedies or
rights hereunder successively or concurrently.

                    ARTICLE VIII. MISCELLANEOUS PROVISIONS

            8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
by reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan Documents
grant further rights to Mortgagee and contain further agreements and affirmative
and negative covenants by Mortgagor which apply to this Mortgage and to the
Property and such further rights and agreements are incorporated herein by this
reference. THE OBLIGATIONS AND LIABILITIES OF MORTGAGOR UNDER THIS

                                    Page 31
<PAGE>
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE
SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            8.2 NON-WAIVER. By accepting payment of any amount secured hereby
after its due date or late performance of any other Secured Obligation,
Mortgagee shall not waive its right against any person obligated directly or
indirectly hereunder or on any Secured Obligation, either to require prompt
payment or performance when due of all other sums and obligations so secured or
to declare default for failure to make such prompt payment or performance. No
exercise of any right or remedy by Mortgagee hereunder shall constitute a waiver
of any other right or remedy herein contained or provided by law. No failure by
Mortgagee to exercise any right or remedy hereunder arising upon any Default
shall be construed to prejudice Mortgagee's rights or remedies upon the
occurrence of any other or subsequent Default. No delay by Mortgagee in
exercising any such right or remedy shall be construed to preclude Mortgagee
from the exercise thereof at any time while that Default is continuing. No
notice to nor demand on Mortgagor shall of itself entitle Mortgagor to any other
or further notice or demand in similar or other circumstances.

            8.3 CONSENTS, APPROVALS AND EXPENSES. Wherever Mortgagee's consent,
approval, acceptance or satisfaction is required under any provision of this
Mortgage or any of the other Loan Documents, such consent, approval, acceptance
or satisfaction shall not be unreasonably withheld, conditioned or delayed by
Mortgagee unless such provision expressly so provides. Wherever costs or
expenses are required to be paid under any provision of this Mortgage or any of
the other Loan Documents, such costs or expenses shall be reasonable.

            8.4 PERMITTED CONTESTS. After prior written notice to Mortgagee,
Mortgagor may contest, by appropriate legal or other proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any lien, levy, tax or assessment, or any lien of any laborer,
mechanic, materialman, supplier or vendor, or the application to Mortgagor or
the Property of any law or the validity thereof, the assertion or imposition of
which, or the failure to pay when due, would constitute a Default; provided that
(a) Mortgagor pursues the contest diligently, in a manner which Mortgagee
determines is not prejudicial to Mortgagee, and does not impair the lien of this
Mortgage; (b) the Property, or any part hereof or estate or interest therein,
shall not be in any danger of being sold, forfeited or lost by reason of such
proceedings; (c) in the case of the contest of any law or other legal
requirement, Mortgagee shall not be in any danger of any civil or criminal
liability; and (d) if required by Mortgagee, Mortgagor deposits with Mortgagee
any funds or other forms of assurance (including a bond or letter of credit)
satisfactory to Mortgagee to protect Mortgagee from the consequences of the
contest being unsuccessful. Mortgagor's right to contest pursuant to the terms
of this provision shall in no way relieve Mortgagor or Borrower of its
obligations under the Loan or to make payments to Mortgagee as and when due.

            8.5 FURTHER ASSURANCES. Mortgagor shall, upon demand by Mortgagee,
execute, acknowledge (if appropriate) and deliver any and all documents and
instruments and do or cause to be done all further acts reasonably necessary or
appropriate to effectuate the provisions hereof.

                                    Page 32
<PAGE>
            8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is
commenced between Mortgagor and Mortgagee regarding their respective rights and
obligations under this Mortgage or any of the other Loan Documents, the
prevailing party shall be entitled to recover, in addition to damages or other
relief, costs and expenses, reasonable attorneys' fees and court costs
(including, without limitation, expert witness fees). As used herein the term
"prevailing party" shall mean the party which obtains the principal relief it
has sought, whether by compromise settlement or judgment. If the party which
commenced or instituted the action, suit or proceeding shall dismiss or
discontinue it without the concurrence of the other party, such other party
shall be deemed the prevailing party.

            8.7 MORTGAGOR AND MORTGAGEE DEFINED. The term "Mortgagor" includes
both the original Mortgagor and any subsequent owner or owners of any of the
Property, and the term "Mortgagee" includes the original Mortgagee and any
future owner or holder, including assignees, pledgees and participants, of the
Note or any interest therein.

            8.8 DISCLAIMERS.

            (a) RELATIONSHIP. The relationship of Mortgagor and Mortgagee under
this Mortgage and the other Loan Documents is, and shall at all times remain,
solely that of borrower and lender; and Mortgagee neither undertakes nor assumes
any responsibility or duty to Mortgagor or to any third party with respect to
the Property. Notwithstanding any other provisions of this Mortgage and the
other Loan Documents: (i) Mortgagee is not, and shall not be construed to be, a
partner, joint venturer, member, alter ego, manager, controlling person or other
business associate or participant of any kind of Mortgagor, and Mortgagee does
not intend to ever assume such status; (ii) Mortgagee's activities in connection
with this Mortgage and the other Loan Documents shall not be "outside the scope
of activities of a lender of money" within the meaning of California Civil Code
Section 3434, as amended or recodified from time to time, and Mortgagee does not
intend to ever assume any responsibility to any person for the quality,
suitability, safety or condition of the Property; and (iii) Mortgagee shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Mortgagor.

            (b) NO LIABILITY. Mortgagee shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action, liability,
indebtedness, damage or injury of any kind or character to any person or
property arising from any construction on, or occupancy or use of, the Property,
whether caused by or arising from: (i) any defect in any building, structure,
grading, fill, landscaping or other improvements thereon or in any on-site or
off-site improvement or other facility therein or thereon; (ii) any act or
omission of Mortgagor or any of Mortgagor's agents, employees, independent
contractors, licensees or invitees; (iii) any accident in or on the Property or
any fire, flood or other casualty or hazard thereon; (iv) the failure of
Mortgagor or any of Mortgagor's licensees, employees, invitees, agents,
independent contractors or other representatives to maintain the Property in a
safe condition; or (v) any nuisance made or suffered on any part of the
Property.

            8.9 SEVERABILITY. If any term of this Mortgage, or the application
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Mortgage, or the application of such term
to persons or circumstances other than those as to

                                    Page 33
<PAGE>
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Mortgage shall be valid and enforceable to the fullest extent
permitted by law.

            8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Mortgagee under the Mortgage established by Article 1 and the security agreement
established by Article 4 are independent and cumulative, and there shall be no
merger of any lien created by the Mortgage with any security interest created by
the security agreement. Mortgagee may elect to exercise or enforce any of its
rights, remedies or interests under either or both the Mortgage or the security
agreement as Mortgagee may from time to time deem appropriate. The absolute
assignment of rents and leases established by Article 3 is similarly independent
of and separate from the Mortgage and the security agreement.

            8.11 MERGER. No merger shall occur as a result of Mortgagee's
acquiring any other estate in, or any other lien on, the Property unless
Mortgagee consents to a merger in writing.

            8.12  OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL.  If more than
one person has executed this Mortgage as "Mortgagor", the obligations of all
such persons hereunder shall be joint and several.

            8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who
executes this Mortgage as a Mortgagor agrees that any money judgment which
Mortgagee obtains pursuant to the terms of this Mortgage or any other obligation
of that married person secured by this Mortgage may be collected by execution
upon any separate property or community property of that person.

            8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or
expressly incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior negotiations
or agreements, written or oral. The Loan Documents shall not be modified except
by written instrument executed by all parties. Any reference in any of the Loan
Documents to the Property or Collateral shall include all or any part of the
Property or Collateral. Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Mortgagee in
writing. When the identity of the parties or other circumstances make it
appropriate, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.

            8.15  CAPITALIZED TERMS.  Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Note.

            8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions
herein contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence shall not
be construed to permit Mortgagor to assign the Loan except as otherwise
permitted under the Note or the other Loan Documents.

            8.17 GOVERNING LAW. This Mortgage was accepted by Mortgagee in the
state of California and the proceeds of the Note secured hereby were disbursed
from the state of California, which state the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality of the
foregoing, matters of construction, validity, enforceability and

                                    Page 34
<PAGE>
performance, this Mortgage, the Note 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 California applicable to contracts
made and performed in such state and any applicable law of the United States of
America, except that at all times the provisions for the creation, perfection
and enforcement of the liens and security interests created pursuant thereto and
pursuant to the other Loan Documents shall be governed by and construed
according to the law of the state where the Property is located. Except as
provided in the immediately preceding sentence, Mortgagor hereby unconditionally
and irrevocably waives, to the fullest extent permitted by law, any claim to
assert that the law of any jurisdiction other than California governs this
Mortgage, the Note and other Loan Documents.

            8.18 CONSENT TO JURISDICTION. Mortgagor irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Mortgagor against
Mortgagee, arising out of or relating to this Mortgage, the Note or the Loan;
(b) any state or federal court sitting in the state where the Property is
located or the state in which Mortgagor's principal place of business is located
over any suit, action or proceeding, brought by Mortgagee against Mortgagor,
arising out of or relating to this Mortgage, the Note or the Loan; and (c) any
state court sitting in the county of the state where the Property is located
over any suit, action, or proceeding, brought by Mortgagee to foreclose this
Mortgage or any action brought by Mortgagee to enforce its rights with respect
to the Collateral. Mortgagor irrevocably waives, to the fullest extent permitted
by law, any objection that Mortgagor may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such court and any
claim that any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum.

            8.19  EXHIBITS.  Exhibit A is incorporated into this Mortgage by
this reference.

            8.20 ADDRESSES; REQUEST FOR NOTICE. All requests, demands, notices
and other communications that are required or permitted to be given to a party
under this Mortgage shall be in writing, refer to the Loan number, and shall be
sent to such party, either by personal delivery, by overnight delivery service,
by certified first class mail, return receipt requested, or by facsimile
transmission to the addressee or facsimile number below. All such notices and
communications shall be effective upon receipt of such delivery or facsimile
transmission, together with a printed receipt of the successful delivery of such
facsimile transmission. The addresses of the parties are set forth on page 1 of
this Mortgage and the facsimile numbers for the parties are as follows:

            Mortgagee:  WELLS FARGO BANK, N.A.
                        FAX NO.: (925) 691-5947

            Mortgagor:  MHC STAGECOACH, L.L.C.
                        FAX NO.: (312) 279-1715

      Mortgagor's principal place of business is at the address set forth on
page 1 of this Mortgage. A copy of any notice to Mortgagor shall be sent as
follows:

                                    Page 35
<PAGE>
                        Katz Randall Weinberg & Richmond
                        333 West Wacker Drive
                        Suite 1800
                        Chicago, Illinois 60606
                        Attention: Benjamin Randall
                        Facsimile: (312) 807-3903

      Any Mortgagor whose address is set forth on page 1 of this Mortgage hereby
requests that a copy of notice of default and notice of sale be delivered to it
at that address. Failure to insert an address shall constitute a designation of
Mortgagor's last known address as the address for such notice. Any party shall
have the right to change its address for notice hereunder to any other location
within the continental United States by giving 30 days notice to the other
parties in the manner set forth above.

            8.21 COUNTERPARTS. This Mortgage may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed an
original and all of which taken together, will be deemed to be one and the same
instrument.

            8.22 WAIVER OF JURY TRIAL. MORTGAGEE (BY ITS ACCEPTANCE HEREOF) AND
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF MORTGAGEE OR MORTGAGOR. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGEE TO ENTER INTO THIS MORTGAGE.

                                    Page 36
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage as of the
day and year first above written.

WITNESS/ATTEST:                     MORTGAGOR:

                                    MHC STAGECOACH, L.L.C., a Delaware
                                    limited liability company

/s/ Lawrence M. Gritton
-------------------------------     By:   MHC-QRS STAGECOACH, INC.,
Print Name: Lawrence M. Gritton           a  Delaware corporation,
                                          its Managing Member
/s/ Benjamin J. Randall
-------------------------------           By: /s/ John M. Zoeller
Print Name: Benjamin J. Randall              --------------------------
                                                Name: John M. Zoeller
                                          Its:  Vice President, Chief Financial
                                                Officer and Treasurer
<PAGE>
STATE OF IL            )
                       )  SS:
COUNTY OF COOK         )

            On 8/1, 2001 before me, Jennifer Usher, Notary Public, personally
appeared John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company,
personally known to me to be the person whose name is subscribed in the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument, the person or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

                                    /s/ Jennifer Usher
                                    ------------------------------------------
                                    Print Name: Jennifer Usher

My Commission Expires:

     1/6/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL

Serial No., if any:_______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A
                               DESCRIPTION OF LAND

Exhibit A to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Land referred to in this Mortgage is situated in the
county of Volusia, state of Florida and is described as follows:

PARCEL A:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East, also a portion of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East, Volusia
County, Florida being more particularly described as follows:

As a point of reference begin at the Southwest corner of Section 6, Township 16
South, Range 33 East, thence along the South line of Section 6 South 89 degrees
35 minutes 25 seconds East a distance of 3300.00 feet to the Point of Beginning;
thence North 00 degrees 24 minutes 35 seconds East a distance of 330.00 feet;
thence North 89 degrees 35 minutes 25 seconds West a distance of 660.00 feet;
thence North 00 degrees 24 minutes 35 seconds East a distance of 200.00 feet;
thence South 89 degrees 35 minutes 25 seconds East a distance of 612.36 feet to
a point on the Southerly right-of-way line of Clyde Morris Blvd. (a 100.00 foot
right-of-way as now laid out and used); thence South 41 degrees 06 minutes 50
seconds East along the Southerly right-of-way line of said Clyde Morris Blvd. a
distance of 1067.45 feet to a point on the East line of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East; thence
South 00 degrees 24 minutes 35 seconds West along the said East line of the West
one-half of the Northeast one-quarter of said Section 7 a distance of 2370.82
feet; thence North 89 degrees 35 minutes 25 seconds West a distance of 1320.00
feet to a point in the West line of the West one-half of the Northeast
one-quarter of Section 7; thence North 00 degrees 24 minutes 35 seconds East
along the West line of the West one-half of the Northeast one-quarter of Section
7 a distance of 1650.00 feet; thence South 89 degrees 35 minutes 25 seconds East
a distance of 660.00 feet; thence North 00 degrees 24 minutes 35 seconds East a
distance of 990.00 feet to the Point of Beginning of this description.

PARCEL B:

A portion of the Northwest one-quarter of Section 7, Township 16 South, Range 33
East, Volusia County, Florida, being more particularly described as follows: As
a point of reference, commence at a concrete monument marking the Northwest
corner of Willow Run Subdivision, Unit 2, as per map recorded September 17,
1979, in Map Book 36, Pages 16 and 17 of the Public Records of Volusia County,
Florida; thence run North 00 degrees 41 minutes 47 seconds West along a
Northerly extension of the Westerly line of said Willow Run Subdivision, Unit
2, a

                                    EXHIBIT A
<PAGE>
distance of 230.08 feet to a point in the North line of 230.00 foot Florida
Power and Light Company right-of-way as described in instrument recorded October
5, 1973, in Official Records Book 1664, Pages 448-450, of the Public Records of
Volusia County, Florida, said point also being in the Southerly line of Pickwick
Village Mobile Home Park, an unrecorded subdivision; thence run South 89 degrees
35 minutes 24 seconds West along the North line of said Florida Power and Light
Company right-of-way, being also the Southerly line of Pickwick Village, a
distance of 1.13 feet to a concrete monument marking the Southwest corner of
said Pickwick Village; thence North 00 degrees 24 minutes 10 seconds West, a
distance of 400.00 feet to the Point of Beginning; thence North 89 degrees 45
minutes 45 seconds West, a distance of 440.02 feet to the center line of an
80.00 foot drainage ditch easement as described in instrument recorded June 28,
1966, in Official Records Book 847, Pages 429 through 444, of the Public Records
of Volusia County, Florida; thence North 00 degrees 24 minutes 10 seconds West
along the center line of said drainage ditch easement, a distance of 1250.34
feet; thence South 89 degrees 45 minutes 45 seconds East, a distance of 440.02
feet to a point on the Westerly line of said Pickwick Village Subdivision;
thence South 00 degrees 24 minutes 10 seconds East along said Westerly line, a
distance of 1250.34 feet to the Point of Beginning.

SAID PROPERTY ALSO BEING DESCRIBED AS FOLLOWS:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East; also a portion of the West one-half of the
Northeast one-quarter and a portion of the Northwest one-quarter, all lying in
Section 7, Township 16 South, Range 33 East in Volusia County, Florida, being
more particularly described as follows: Commence at the Southwest corner of said
Section 6, Township 16 South, Range 33 East and run South 89 degree 35' 25" East
along the South line of the Southwest one-quarter a distance of 2635.46 feet to
the Southwest corner of the Southeast one-quarter of said Section 6; thence
North 01 degree 17' 05" East along the West line of the Southeast one-quarter of
said Section 6 a distance of 328.72 feet to an iron pipe labeled LS 2048 and the
Point of Beginning of this description; from said Point of Beginning, continue
North 01 degree 17' 05" East along the West line of the Southeast one-quarter a
distance of 201.23 feet to an iron pipe labeled LS 2048; thence South 89 degree
35' 25" East, 619.16 feet to an iron pipe labeled LS 2048, said point being on
the Southwesterly right-of-way line of Clyde Morris Boulevard; thence South 40
degree 56' 13" East along the Southwesterly right-of-way line of said Clyde
Morris Boulevard a distance of 1061.80 feet to an iron pipe labeled LS 2048,
said point being on the East line of the West one-half of the Northeast
one-quarter of the aforementioned Section 7, Township 16 South, Range 33 East;
thence South 00 degree 34' 32" West along the East line of the West one-half of
the Northeast one-quarter of said Section 7, a distance of 2362.20 feet to an
iron pin labeled LB 707, said point being on the North line of the 230 foot wide
Florida Power and Light Company right-of-way, as described in Official Records
Book 1664, Pages 448, 449, and 450 of the Public Records of Volusia County,
Florida; thence North 89 degree 13' 53" West along the North line of the 230
foot wide Florida Power and Light Company right-of-way a distance of 1321.12
feet to an iron pipe labeled LS 2048, said point being on the West line of the
West one-half of the Northeast one-quarter of the aforementioned Section 7;
thence North 00 degree 23' 35" East along the West line of the West one-half of
the Northeast one-quarter a distance of 400.00 feet to an iron pipe labeled LS
2048; thence North 89 degree 13' 53" West, 440.02 feet to an iron pipe labeled
LS 2048, said point being the centerline of a drainage ditch; thence North 00
degree 23' 35" East along said drainage ditch centerline a distance of 1250.34
feet to

                                    EXHIBIT A
<PAGE>
an iron pipe labeled LS 2048; thence South 89 degrees 13' 53" East, 440.02 feet
to an iron pipe labeled LS 2048, said point being on the West line of the West
one-half of the Northeast one-quarter of the aforementioned Section 7; thence
South 00 degrees 23' 35" West along the West line of the West one-half of the
Northeast one-quarter a distance of 12.16 feet to an iron pipe labeled LS 2048;
thence South 89 degrees 27' 21" East, 661.65 feet to an iron pipe labeled LS
2048; thence North 00 degrees 25' 26" East, 984.46 feet to an iron pipe labeled
LS 2048; thence North 01 degrees 14' 43" East, 328.45 feet to a nail in disk in
pavement labeled LB 707; thence North 89 degrees 33' 59" West, 661.95 feet to
the Point of Beginning.

                                    EXHIBIT A
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT B
    CALCULATION OF DOCUMENTARY STAMP AND INTANGIBLE PERSONAL PROPERTY TAX

Exhibit B to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

      This Mortgage is part of an out-of-state loan transaction which only
partially secures the loan. This Mortgage encumbers the property described on
Exhibit A, and separate mortgages are being executed and delivered by Mortgagor
encumbering certain other property located in Florida and in other states (such
other property being further described on Exhibit C and being referred to as the
"Other Property"). The Florida collateral is located in Brevard, Volusia and
Manatee Counties, and three (3) separate mortgages (the Florida Mortgages")
encumbering three (3) properties are being executed and delivered by Mortgagor
for simultaneous recording in the various Florida counties described above. The
total indebtedness secured by this Mortgage equals $50,000,000.00, as evidenced
by one (1) promissory note in the aggregate original principal amount of
$50,000,000.00 (the "Note"). The Note was made, executed and delivered outside
the State of Florida. The value of the Florida property encumbered by the
Florida Mortgages equals $27,200,000.00. The aggregate value of all other
property securing the loan and located outside the State of Florida equals
$50,400,000.00. Thus, the total aggregate value of all property securing the
loan equals $77,600,000.00. The property encumbered by the Florida Mortgages and
located in Florida represents thirty-five (35%) percent [$27,200,000.00 /
$77,600,000.00] of the total value of all property securing the loan. In
accordance with Florida Statutes, Section 201.08, and Florida Administrative
Code, Rule 12B-4.053(32)(b), documentary stamp tax is computed based upon the
percentage of indebtedness which the value of the mortgaged property located in
Florida bears to the total value of all mortgaged property (which, in this case,
equals $17,500,000.00). Accordingly, documentary stamp tax in the amount of
$61,250.00 is due upon the recording of the Florida Mortgages in the Florida
counties listed above. Pursuant to Chapter 199, Florida Statutes, non-recurring
intangible personal property tax is computed and payable based upon that portion
of the indebtedness which bears the same relation as the value of the mortgaged
property located in Florida bears to the total value of all mortgaged property,
which, in this case, equals [$50,000,000.00 x ($27,200,000.00 /
$77,600,000.00)]. Thus, non-recurring intangible personal property tax in the
amount of $35,000.00 is due and payable upon recording of the Florida Mortgages
in the Florida counties listed above.

                                    EXHIBIT B
<PAGE>
                                    EXHIBIT C

                          DESCRIPTION OF OTHER PROPERTY

Exhibit C to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Other Property referred to in this Mortgage is
described as follows:

                                 CABANA PROPERTY

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16,
Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01 degree 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89 degrees 09' 31" East, along said Southerly right of way of Twain Avenue
a distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89 degrees 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01 degree 22' 27" East along said Westerly right of way line of
Cabana Drive a distance of 1238.26 feet; thence South 88 degrees 17' 57" West a
distance of 1271.25 feet; thence North 01 degree 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.

                                    EXHIBIT C
<PAGE>
                             WOODLAND HILLS PROPERTY

Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of
the Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th
P.M., County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.

                                    EXHIBIT C

<PAGE>
                                WINDMILL PROPERTY

PARCEL A:

Begin at the Northwest corner of the Southeast 1/4 of the Northeast 1/4 of
Section 16, Township 35 South, Range 18 East, Manatee County, Florida; thence
South 00 (degrees) 14' 17" East, 1327.25 feet to the Southwest corner of the
Southeast 1/4 of the Northeast 1/4 of the aforementioned Section 16; thence
North 89 (degrees) 58' 09" East, 1322.53 feet to the Southeast corner of the
Southeast 1/4 of the Northeast 1/4 of Section 16; thence South 00 (degrees) 24'
10" East, 137.28 feet; thence North 89 (degrees) 40' 44" East, 1269.21 feet;
thence North 00 (degrees) 15' 02" West, 137.28 feet; thence North 89 (degrees)
40' 56" East, 42.00 feet along the South line of the Southwest 1/4 of the
Northwest 1/4 of Section 15, Township 35 South, Range 18 East, Manatee County,
Florida to a point, said point being the Southwest corner of the Easterly 8.00
feet of the Southwest 1/4 of the Northwest 1/4 of Section 15; thence North 00
(degrees) 15' 02" West along the West line of said Easterly 8.00 feet, 529.06
feet; thence North 89 (degrees) 54' 48" West, 352.77 feet; thence North 83
(degrees) 03' 14" West, 41.33 feet; North 89 (degrees) 58' 10" West, 384.29
feet; thence North 64 (degrees) 05' 35" West, 45.06 feet; thence North 89
(degrees) 49' 37" West, 69.63 feet; thence North 00 (degrees) 27' 02" West,
39.77 feet; thence South 89 (degrees) 57' 27" West, 229.20 feet; thence South 00
(degrees) 34' 37" West, 52.86 feet; thence South 89 (degrees) 50' 04" West,
69.88 feet; thence North 68 (degrees) 46' 00" West, 42.84 feet; thence North 89
(degrees) 02' 58" West, 70.09 feet; thence North 00 (degrees) 46' 23" West,
36.15 feet; thence South 89 (degrees) 58' 50" West, 204.28 feet; thence South 01
(degrees) 06' 03" West, 34.82 feet; thence North 89 (degrees) 55' 45" West,
69.61 feet; thence North 61 (degrees) 14' 43" West, 46.29 feet; thence North 89
(degrees) 47' 56" West, 49.68 feet; thence North 01 (degrees) 06' 00" West,
14.20 feet; thence South 89 (degrees) 37' 41" West, 244.94 feet; thence North 14
(degrees) 02' 42" West, 20.66 feet; thence North 00 (degrees) 04' 49" East,
50.12 feet; thence North 07 (degrees) 13' 20" West, 40.26 feet; thence North 00
(degrees) 29' 42" West, 229.78 feet; thence North 89 (degrees) 19' 18" East,
21.87 feet; thence North 00 (degrees) 01' 05" East, 69.28 feet; thence North 16
(degrees) 42' 43" West, 41.53 feet; thence North 00 (degrees) 18' 37" East,
70.77 feet; thence North 90 (degrees) 00' 00" West, 443.35 feet; thence North 02
(degrees) 07' 48" West, 80.67 feet; thence North 25 (degrees) 58' 34" East,
33.85 feet; thence North 00 (degrees) 07' 24" East, 93.96 feet; thence South 89
(degrees) 59' 49" West, 295.60 feet to the Point of Beginning.

PARCEL B:

Perpetual non-exclusive rights-of-way and easements as contained in Agreements
recorded January 13, 1939, in Deed Book 159, page 331, and rerecorded February
16, 1939, in Deed Book 160, page 23; recorded October 30, 1939, in Deed Book
164, page 340; and recorded May 31, 1974, in Official Records Book 673, page
646, all of the Public Records of Manatee County, Florida.

                                    EXHIBIT C
<PAGE>
                              INDIAN OAKS PROPERTY

PARCEL A:

A parcel of land lying in the Northwest 1/4 of Section 21, Township 25 South,
Range 36 East, Brevard County, Florida, being more particularly described as
follows:

Commence at the Northwest corner of said Section 21, and run North 89 (degrees)
50' 50" East, along the North line of said Section 21, a distance of 330.04 feet
to the Point of Beginning; thence continue North 89 (degrees) 50' 50" East,
along said North line, a distance of 816.83 feet; thence South 05 (degrees) 47'
10" West, a distance of 2488.78 feet; thence North 89 (degrees) 53' 00" West, a
distance of 419.86 feet; thence South 01 (degrees) 04' 00" East, a distance of
150.00 feet, to a point on the North Right of Way line of Barnes Boulevard (a
100 foot Right of Way); thence North 89 (degrees) 53' 00" West, along said North
Right of Way line, a distance of 100.02 feet; thence North 01 (degrees) 04' 00"
West, parallel to the West line of said Northwest 1/4, a distance of 2623.29
feet, to the Point of Beginning.

PARCEL B:

A perpetual non-exclusive easement for the benefit of Parcel A for surface water
runoff from "Pod #2" through a weir on said land eastward to an existing
drainage ditch as set forth in Grant of Easement from George M. Green, Jr. and
Sandie J. Green in favor of The Indian Oaks Corporation, dated July 27, 1987,
recorded August 4, 1987, in the Public Records of Brevard County, Florida, at
Official Records Book 2826, page 2681; and modified by Stipulated Settlement in
Civil Action No. 87-9785-CA-C, The Indian Oaks Corporation, a Florida
corporation, Plaintiffs, vs. George M. Green, Jr. and Sandie J. Green, his wife,
Defendants, dated July 27, 1987, recorded August 20, 1987, in the Public Records
of Brevard County, Florida, at Official Records Book 2831, page 2211, more
particularly described as follows:

Beginning at the approximate Southwest corner of land to the East as described
in Deed recorded in Official Records Book 2471, page 2094, Public Records of
Brevard County, Florida, said point being on the public drainage ditch on the
north side of Barnes Boulevard; thence north along an existing approximately
twenty (20) foot wide drainage ditch on the westerly boundary of the land
described in said Deed for an approximate distance of 844.00 feet to an outlet
pipe which extends easterly into said drainage ditch from a Type "C" inlet weir
located on "Pod #2" of Parcel A.

                                    EXHIBIT C
<PAGE>
                             APOLLO VILLAGE PROPERTY

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;

THENCE North 00 (DEGREE) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;

THENCE South 89 (DEGREE) 25' 45" East 65.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89 (DEGREE) 25' 45" East 126.95 feet;

THENCE North 87 (DEGREE) 23' 37" East 116.40 feet;

THENCE South 00 (DEGREE) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;

THENCE South 00 (DEGREE) 34' 44" West along the East line of said property
156.09 feet to a point on a line 500.00 feet North and parallel to the South
line of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;

THENCE South 00 (DEGREE) 27' 31" West 435.31 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East along said line 51.93 feet;

THENCE North 00 (DEGREE) 20' 35" East 127.50 feet;

THENCE North 02 (DEGREE) 21' 45" West 308.14 feet;

THENCE North 88 (DEGREE) 15' 20" East 445.27 feet;

THENCE North 21 (DEGREE) 52' 10" East 195.00 feet;

THENCE South 89 (DEGREE) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00 (DEGREE) 20' 40" East along said West line 807.45 feet to a
point on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;

THENCE South 86 (DEGREE) 58' 05" West along said South line and the South line
of the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;

THENCE South 00 (DEGREE) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;

THENCE North 89 (DEGREE) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;

THENCE South 00 (DEGREE) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;

THENCE North 00 (DEGREE) 27' 31" East 65.05 feet to the POINT OF BEGINNING;

THENCE continuing North 00 (DEGREE) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;

THENCE North 87 (DEGREE) 25' 34" East 36.52 feet;

THENCE South 02 (DEGREE) 21' 45" East 308.14 feet;

                                    EXHIBIT C
<PAGE>
THENCE South 00 (DEGREE) 20' 35" West 127.50 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE South 88 (DEGREE) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88 (DEGREE) 08' 29" East (North 88 (DEGREE) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00 (DEGREE) 06' 45" East 669.32 feet (North 00 (DEGREE) 20' 40"
East 669.45, record) along said West line to the POINT OF BEGINNING;

THENCE North 89 (DEGREE) 47' 06" West (North 89 (DEGREE) 39' 20" West, record)
115.00 feet;

THENCE North 16 (DEGREE) 08' 00" East 325.00 feet;

THENCE North 52 (DEGREE) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;

THENCE South 00 (DEGREE) 06' 45" West (South 00 (DEGREE) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;

THENCE North 00 (DEGREE) 20' 35" East 65.04 feet to a point on a line parallel
to and 65.00 feet North of the South line of said Section 21;

THENCE continuing North 00 (DEGREE) 20' 35" East 127.50 feet;

THENCE North 02 (DEGREE) 21' 45" West 308.14 feet;

THENCE North 88 (DEGREE) 15' 20" East 445.27 feet;

THENCE North 21 (DEGREE) 52' 10" East 195.00 feet;

THENCE South 89 (DEGREE) 39' 20" East 21.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89 (DEGREE) 39' 20" East 55.00 feet;

THENCE North 00 (DEGREE) 20' 40" East 40.00 feet;

THENCE North 89 (DEGREE) 39' 20" West 55.00 feet;

THENCE South 00 (DEGREE) 20' 40" West 40.00 feet to the POINT OF BEGINNING.

                                    EXHIBIT C
<PAGE>
                            CASA DEL SOL III PROPERTY

PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;

THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;

THENCE North 01 (DEGREE) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;

THENCE West along said North line 627.98 feet;

THENCE North 45 (DEGREE) 44' 20" East 28.64 feet;

THENCE North 01 (DEGREE) 28' 40" East 307.70 feet;

THENCE North 45 (DEGREE) 00' 00" East 149.61 feet;

THENCE North 32 (DEGREE) 31' 59" West 76.22 feet;

THENCE North 01 (DEGREE) 38' 30" East 420.00 feet;

THENCE North 89 (DEGREE) 57' 50" East 11.71 feet;

THENCE North 01 (DEGREE) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80 (DEGREE) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23 (DEGREE) 03'
59";

THENCE Northeasterly along said curve 575.86 feet;

THENCE North 01 (DEGREE) 38' 30" East 84.00 feet;

THENCE North 89 (DEGREE) 57' 50" East 738.38 feet;

THENCE South 01 (DEGREE) 38' 30" West 1,407.21 feet;

THENCE West 200.00 feet;

THENCE South 01 (DEGREE) 38' 30" West 300.11 feet to the TRUE POINT OF
BEGINNING.

PARCEL NO. 2:

A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;

THENCE West 1,326.54 feet along the South line of said Section 24;

THENCE North 01 (DEGREE) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;

THENCE North 01 (DEGREE) 38' 30" East 306.11 feet;

THENCE East 206.00 feet to the point of termination; and

                                    EXHIBIT C
<PAGE>
BEGINNING at a point which bears North 01(DEGREE)38' 30" East 1,757.00 feet and
South 89 (DEGREE) 57' 50" West 1,120.55 feet from the Southeast corner of said
Section 24;

THENCE South 89 (DEGREE) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 3:

A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:

BEGINNING at a point which bears North 01 (DEGREE) 38' 30" East 1,760.50 feet
and South 89 (DEGREE) 57' 50" West 55.00 feet from the Southeast corner of
Section 24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona; THENCE South 89 (DEGREE) 57' 50" West
1,833.37 feet to the point of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 4:

A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:

COMMENCING at the South quarter corner of Section 24;

THENCE North 01 (DEGREE) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;

THENCE North 89 (DEGREE) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;

THENCE continuing North 89 (DEGREE) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;

THENCE South 01 (DEGREE) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76 (degree) 55' 57" West;

THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19 (DEGREE) 06' 47" an arc length of 477.16
feet;

                                    EXHIBIT C
<PAGE>
THENCE South 89 (DEGREE) 55' 44" West to a point 6.00 feet West of and parallel
to said Easterly and Westerly boundary lines to the beginning of a curve concave
Easterly and having a radius of 1,436.40 feet;

THENCE Northerly along said cur ve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19 (DEGREE) 03'
50" an arc length of 477.93 feet;

THENCE North 01 (DEGREE) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.

                                    EXHIBIT C

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