Document:

<PAGE>

                                                                   EXHIBIT 10(e)

                    ONE HUNDRED THIRD SUPPLEMENTAL INDENTURE

                        PROVIDING AMONG OTHER THINGS FOR

                              FIRST MORTGAGE BONDS,

                   2005-1 COLLATERAL SERIES (INTEREST BEARING)

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

                            DATED AS OF MAY 18, 2005

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

                            CONSUMERS ENERGY COMPANY

                                       TO

                            JPMORGAN CHASE BANK, N.A.

                                     TRUSTEE

                                                          Counterpart ____ of 80

<PAGE>

                  THIS ONE HUNDRED THIRD SUPPLEMENTAL INDENTURE, dated as of May
18, 2005 (herein sometimes referred to as "this Supplemental Indenture"), made
and entered into by and between CONSUMERS ENERGY COMPANY, a corporation
organized and existing under the laws of the State of Michigan, with its
principal executive office and place of business at One Energy Plaza, Jackson,
Jackson County, Michigan 49201, formerly known as Consumers Power Company
(hereinafter sometimes referred to as the "Company"), and JPMORGAN CHASE BANK,
N.A., a national banking association organized under the laws of the United
States of America, with its corporate trust offices at 4 New York Plaza, New
York, New York 10004 (hereinafter sometimes referred to as the "Trustee"), as
Trustee under the Indenture dated as of September 1, 1945 between Consumers
Power Company, a Maine corporation (hereinafter sometimes referred to as the
"Maine corporation"), and City Bank Farmers Trust Company (Citibank, N.A.,
successor, hereinafter sometimes referred to as the "Predecessor Trustee"),
securing bonds issued and to be issued as provided therein (hereinafter
sometimes referred to as the "Indenture"),

                  WHEREAS at the close of business on January 30, 1959, City
Bank Farmers Trust Company was converted into a national banking association
under the title "First National City Trust Company"; and

                  WHEREAS at the close of business on January 15, 1963, First
National City Trust Company was merged into First National City Bank; and

                  WHEREAS at the close of business on October 31, 1968, First
National City Bank was merged into The City Bank of New York, National
Association, the name of which was thereupon changed to First National City
Bank; and

                  WHEREAS effective March 1, 1976, the name of First National
City Bank was changed to Citibank, N.A.; and

                  WHEREAS effective July 16, 1984, Manufacturers Hanover Trust
Company succeeded Citibank, N.A. as Trustee under the Indenture; and

                  WHEREAS effective June 19, 1992, Chemical Bank succeeded by
merger to Manufacturers Hanover Trust Company as Trustee under the Indenture;
and

                  WHEREAS effective July 15, 1996, The Chase Manhattan Bank
(National Association), merged with and into Chemical Bank which thereafter was
renamed The Chase Manhattan Bank; and

                  WHEREAS effective November 11, 2001, The Chase Manhattan Bank
merged with Morgan Guaranty Trust Company of New York and the surviving
corporation was renamed JPMorgan Chase Bank; and

                  WHEREAS effective November 13, 2004, JPMorgan Chase Bank
converted to a national banking association and changed its name to JPMorgan
Chase Bank, N.A.; and

<PAGE>

                  WHEREAS the Indenture was executed and delivered for the
purpose of securing such bonds as may from time to time be issued under and in
accordance with the terms of the Indenture, the aggregate principal amount of
bonds to be secured thereby being limited to $5,000,000,000 at any one time
outstanding (except as provided in Section 2.01 of the Indenture), and the
Indenture describes and sets forth the property conveyed thereby and is filed in
the Office of the Secretary of State of the State of Michigan and is of record
in the Office of the Register of Deeds of each county in the State of Michigan
in which this Supplemental Indenture is to be recorded; and

                  WHEREAS the Indenture has been supplemented and amended by
various indentures supplemental thereto, each of which is filed in the Office of
the Secretary of State of the State of Michigan and is of record in the Office
of the Register of Deeds of each county in the State of Michigan in which this
Supplemental Indenture is to be recorded; and

                  WHEREAS the Company and the Maine corporation entered into an
Agreement of Merger and Consolidation, dated as of February 14, 1968, which
provided for the Maine corporation to merge into the Company; and

                  WHEREAS the effective date of such Agreement of Merger and
Consolidation was June 6, 1968, upon which date the Maine corporation was merged
into the Company and the name of the Company was changed from "Consumers Power
Company of Michigan" to "Consumers Power Company"; and

                  WHEREAS the Company and the Predecessor Trustee entered into a
Sixteenth Supplemental Indenture, dated as of June 4, 1968, which provided,
among other things, for the assumption of the Indenture by the Company; and

                  WHEREAS said Sixteenth Supplemental Indenture became effective
on the effective date of such Agreement of Merger and Consolidation; and

                  WHEREAS the Company has succeeded to and has been substituted
for the Maine corporation under the Indenture with the same effect as if it had
been named therein as the mortgagor corporation; and

                  WHEREAS effective March 11, 1997, the name of Consumers Power
Company was changed to Consumers Energy Company; and

                  WHEREAS, the Company has entered into a Third Amended and
Restated Credit Agreement dated as of May 18, 2005 (as amended or otherwise
modified from time to time, the "Credit Agreement") with various financial
institutions and JPMorgan Chase Bank, N.A., as administrative agent (in such
capacity, the "Agent") for the Banks (as such term is defined in the Credit
Agreement), providing for the making of certain financial accommodations
thereunder, and pursuant to such Credit Agreement the Company has agreed to
issue to the Agent, as evidence of and security for the Obligations (as such
term is defined in the Credit Agreement), a new series of bonds under the
Indenture; and

                  WHEREAS, for such purposes the Company desires to issue a new
series of bonds, to be designated First Mortgage Bonds, 2005-1 Collateral Series
(Interest Bearing), each of which

                                      -2-
<PAGE>

bonds shall also bear the descriptive title "First Mortgage Bond" (hereinafter
provided for and hereinafter sometimes referred to as the "2005-1 Collateral
Bonds"), the bonds of which series are to be issued as registered bonds without
coupons and are to bear interest at the rate per annum specified herein and are
to mature on the Termination Date (as such term is defined in the Credit
Agreement); and

                  WHEREAS, each of the registered bonds without coupons of the
2005-1 Collateral Bonds and the Trustee's Authentication Certificate thereon are
to be substantially in the following form, to wit:

                            [FORM OF REGISTERED BOND

                         OF THE 2005-1 COLLATERAL BONDS]

                                     [FACE]

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND
                   2005-1 COLLATERAL SERIES (INTEREST BEARING)

No. ___                                                             $500,000,000

                  CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter
called the "Company"), for value received, hereby promises to pay to JPMorgan
Chase Bank, N.A., as administrative agent (in such capacity, the "Agent") for
the Banks under and as defined in the Amended and Restated Credit Agreement
dated as of May 18, 2005 among the Company, the Banks and the Agent (as amended
or otherwise modified from time to time, the "Credit Agreement"), or registered
assigns, the principal sum of Five Hundred Million Dollars ($500,000,000) or
such lesser principal amount as shall be equal to the aggregate principal amount
of the Loans (as defined in the Credit Agreement) and Reimbursement Obligations
(as defined in the Credit Agreement) included in the Obligations (as defined in
the Credit Agreement) outstanding on the Termination Date (as defined in the
Credit Agreement) (the "Maturity Date"), but not in excess, however, of the
principal amount of this bond, and to pay interest thereon at the Interest Rate
(as defined below) until the principal hereof is paid or duly made available for
payment on the Maturity Date, or, in the event of redemption of this bond, until
the redemption date, or, in the event of default in the payment of the principal
hereof, until the Company's obligations with respect to the payment of such
principal shall be discharged as provided in the Indenture (as defined on the
reverse hereof). Interest on this bond shall be payable on each Interest Payment
Date (as defined below), commencing on the first Interest Payment Date next
succeeding May 18, 2005. If the Maturity Date falls on a day which is not a
Business Day, as defined below, principal and any interest and/or fees payable
with respect to the Maturity Date will be paid on the immediately preceding
Business Day. The interest payable, and punctually paid or duly provided for, on
any Interest Payment Date will, subject to certain exceptions, be paid to the
person in whose name this bond (or one or more predecessor bonds) is registered
at the close of business on the Record Date (as defined below); provided,

                                      -3-
<PAGE>

however, that interest payable on the Maturity Date will be payable to the
person to whom the principal hereof shall be payable. Should the Company default
in the payment of interest ("Defaulted Interest"), the Defaulted Interest shall
be paid to the person in whose name this bond (or one or more predecessor bonds)
is registered on a subsequent record date fixed by the Company, which subsequent
record date shall be fifteen (15) days prior to the payment of such Defaulted
Interest. As used herein, (A) "Business Day" shall mean any day, other than a
Saturday or Sunday, on which banks generally are open in New York, New York for
the conduct of substantially all of their commercial lending activities and on
which interbank wire transfers can be made on the Fedwire system; (B) "Interest
Payment Date" shall mean each date on which Obligations constituting interest
and/or fees are due and payable from time to time pursuant to the Credit
Agreement; (C) "Interest Rate" shall mean a rate of interest per annum, adjusted
as necessary, to result in an interest payment equal to the aggregate amount of
Obligations constituting interest and fees due under the Credit Agreement on the
applicable Interest Payment Date; and (D) "Record Date" with respect to any
Interest Payment Date shall mean the day (whether or not a Business Day)
immediately next preceding such Interest Payment Date.

                  Payment of the principal of and interest on this bond will be
made in immediately available funds at the office or agency of the Company
maintained for that purpose in the City of Jackson, Michigan, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

                  The provisions of this bond are continued on the reverse
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.

                  This bond shall not be valid or become obligatory for any
purpose unless and until it shall have been authenticated by the execution by
the Trustee or its successor in trust under the Indenture of the certificate
hereon.

                  IN WITNESS WHEREOF, Consumers Energy Company has caused this
bond to be executed in its name by its Chairman of the Board, its President or
one of its Vice Presidents by his or her signature or a facsimile thereof, and
its corporate seal or a facsimile thereof to be affixed hereto or imprinted
hereon and attested by its Secretary or one of its Assistant Secretaries by his
or her signature or a facsimile thereof.

                                              CONSUMERS ENERGY COMPANY

Dated:
                                              By
                                                 -------------------------------
                                              Printed
                                                       -------------------------
                                              Title
                                                    ----------------------------

Attest:
        ----------------------

                                      -4-
<PAGE>
                      TRUSTEE'S AUTHENTICATION CERTIFICATE

                  This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.

                                              JPMORGAN CHASE BANK, N.A., Trustee

                                              By
                                                 -------------------------------
                                                 Authorized Officer

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                   2005-1 COLLATERAL SERIES (INTEREST BEARING)

                  This bond is one of the bonds of a series designated as First
Mortgage Bonds, 2005-1 Collateral Series (Interest Bearing) (sometimes herein
referred to as the "2005-1 Collateral Bonds") issued under and in accordance
with and secured by an Indenture dated as of September 1, 1945, given by the
Company (or its predecessor, Consumers Power Company, a Maine corporation) to
City Bank Farmers Trust Company (JPMorgan Chase Bank, N.A., successor)
(hereinafter sometimes referred to as the "Trustee"), together with indentures
supplemental thereto, heretofore or hereafter executed, to which indenture and
indentures supplemental thereto (hereinafter referred to collectively as the
"Indenture") reference is hereby made for a description of the property
mortgaged and pledged, the nature and extent of the security and the rights,
duties and immunities thereunder of the Trustee and the rights of the holders of
said bonds and of the Trustee and of the Company in respect of such security,
and the limitations on such rights. By the terms of the Indenture, the bonds to
be secured thereby are issuable in series which may vary as to date, amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture.

                  The 2005-1 Collateral Bonds are to be issued and delivered to
the Agent in order to evidence and secure the obligation of the Company under
the Credit Agreement to make payments to the Banks under the Credit Agreement
and to provide the Banks the benefit of the lien of the Indenture with respect
to the 2005-1 Collateral Bonds.

                                      -5-
<PAGE>

                  The obligation of the Company to make payments with respect to
the principal of 2005-1 Collateral Bonds shall be fully or partially, as the
case may be, satisfied and discharged to the extent that, at the time that any
such payment shall be due, the then due principal of the Loans and/or the
Reimbursement Obligations included in the Obligations shall have been fully or
partially paid. Satisfaction of any obligation to the extent that payment is
made with respect to the Loans and/or the Reimbursement Obligations means that
if any payment is made on the principal of the Loans and/or the Reimbursement
Obligations, a corresponding payment obligation with respect to the principal of
the 2005-1 Collateral Bonds shall be deemed discharged in the same amount as the
payment with respect to the Loans and/or the Reimbursement Obligations
discharges the outstanding obligation with respect to such Loans and/or
Reimbursement Obligations. No such payment of principal shall reduce the
principal amount of the 2005-1 Collateral Bonds.

                  The obligation of the Company to make payments with respect to
the interest on 2005-1 Collateral Bonds shall be fully or partially, as the case
may be, satisfied and discharged to the extent that, at the time that any such
payment shall be due, the then due interest and/or fees under the Credit
Agreement shall have been fully or partially paid. Satisfaction of any
obligation to the extent that payment is made with respect to the interest
and/or fees under the Credit Agreement means that if any payment is made on the
interest and/or fees under the Credit Agreement, a corresponding payment
obligation with respect to the interest on the 2005-1 Collateral Bonds shall be
deemed discharged in the same amount as the payment with respect to the Loans
and/or the Reimbursement Obligations discharges the outstanding obligation with
respect to such Loans and/or Reimbursement Obligations.

                  The Trustee may at any time and all times conclusively assume
that the obligation of the Company to make payments with respect to the
principal of and interest on this bond, so far as such payments at the time have
become due, has been fully satisfied and discharged unless and until the Trustee
shall have received a written notice from the Agent stating (i) that timely
payment of principal and interest on the 2005-1 Collateral Bonds has not been
made, (ii) that the Company is in arrears as to the payments required to be made
by it to the Agent in connection with the Obligations pursuant to the Credit
Agreement, and (iii) the amount of the arrearage.

                  If an Event of Default (as defined in the Credit Agreement)
with respect to the payment of the principal of the Loans and/or the
Reimbursement Obligations shall have occurred, it shall be deemed to be a
default for purposes of Section 11.01 of the Indenture in the payment of the
principal of the 2005-1 Collateral Bonds equal to the amount of such unpaid
principal or Reimbursement Obligations (but in no event in excess of the
principal amount of the 2005-1 Collateral Bonds). If an Event of Default (as
defined in the Credit Agreement) with respect to the payment of interest on the
Loans and/or the Reimbursement Obligations or any fees shall have occurred, it
shall be deemed to be a default for purposes of Section 11.01 of the Indenture
in the payment of the interest on the 2005-1 Collateral Bonds equal to the
amount of such unpaid interest or fees.

                  This bond is not redeemable except upon written demand of the
Agent following the occurrence of an Event of Default under the Credit Agreement
and the acceleration of the Obligations, as provided in Section 9.2 of the
Credit Agreement. This bond is not redeemable by

                                      -6-
<PAGE>

the operation of the improvement fund or the maintenance and replacement
provisions of the Indenture or with the proceeds of released property.

                  In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.

                  The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or extend the time of payment of interest hereon or reduce the amount of the
principal hereof, or (b) permit the creation of any lien, not otherwise
permitted, prior to or on a parity with the lien of the Indenture, or (c) reduce
the percentage of the principal amount of the bonds the holders of which are
required to approve any such supplemental indenture.

                  The Company reserves the right, without any consent, vote or
other action by holders of the 2005-1 Collateral Bonds or any other series
created after the Sixty-eighth Supplemental Indenture, to amend the Indenture to
reduce the percentage of the principal amount of bonds the holders of which are
required to approve any supplemental indenture (other than any supplemental
indenture which is subject to the proviso contained in the immediately preceding
sentence) (a) from not less than seventy-five per centum (including sixty per
centum of each series affected) to not less than a majority in principal amount
of the bonds at the time outstanding or (b) in case fewer than all series are
affected, not less than a majority in principal amount of the bonds of all
affected series, voting together.

                  No recourse shall be had for the payment of the principal of
or interest on this bond, or for any claim based hereon, or otherwise in respect
hereof or of the Indenture, to or against any incorporator, stockholder,
director or officer, past, present or future, as such, of the Company, or of any
predecessor or successor company, either directly or through the Company, or
such predecessor or successor company, or otherwise, under any constitution or
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers, as such, being waived and released by the holder and owner hereof by
the acceptance of this bond and being likewise waived and released by the terms
of the Indenture.

                  This bond shall be exchangeable for other registered bonds of
the same series, in the manner and upon the conditions prescribed in the
Indenture, upon the surrender of such bonds at the Investor Services Department
of the Company, as transfer agent. However, notwithstanding

                                      -7-
<PAGE>

the provisions of Section 2.05 of the Indenture, no charge shall be made upon
any registration of transfer or exchange of bonds of said series other than for
any tax or taxes or other governmental charge required to be paid by the
Company.

                  The Agent shall surrender this bond to the Trustee when all of
the principal of and interest on the Loans and Reimbursement Obligations arising
under the Credit Agreement, and all of the fees payable pursuant to the Credit
Agreement with respect to the Obligations shall have been duly paid, and the
Credit Agreement shall have been terminated.

        [END OF FORM OF REGISTERED BOND OF THE 2005-1 COLLATERAL BONDS]

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

                  AND WHEREAS all acts and things necessary to make the 2005-1
Collateral Bonds (the "Collateral Bonds"), when duly executed by the Company and
authenticated by the Trustee or its agent and issued as prescribed in the
Indenture, as heretofore supplemented and amended, and this Supplemental
Indenture provided, the valid, binding and legal obligations of the Company, and
to constitute the Indenture, as supplemented and amended as aforesaid, as well
as by this Supplemental Indenture, a valid, binding and legal instrument for the
security thereof, have been done and performed, and the creation, execution and
delivery of this Supplemental Indenture and the creation, execution and issuance
of bonds subject to the terms hereof and of the Indenture, as so supplemented
and amended, have in all respects been duly authorized;

                  NOW, THEREFORE, in consideration of the premises, of the
acceptance and purchase by the holders thereof of the bonds issued and to be
issued under the Indenture, as supplemented and amended as above set forth, and
of the sum of One Dollar duly paid by the Trustee to the Company, and of other
good and valuable considerations, the receipt whereof is hereby acknowledged,
and for the purpose of securing the due and punctual payment of the principal of
and premium, if any, and interest on all bonds now outstanding under the
Indenture and the $500,000,000 principal amount of the Collateral Bonds and all
other bonds which shall be issued under the Indenture, as supplemented and
amended from time to time, and for the purpose of securing the faithful
performance and observance of all covenants and conditions therein, and in any
indenture supplemental thereto, set forth, the Company has given, granted,
bargained, sold, released, transferred, assigned, hypothecated, pledged,
mortgaged, confirmed, set over, warranted, alienated and conveyed and by these
presents does give, grant, bargain, sell, release, transfer, assign,
hypothecate, pledge, mortgage, confirm, set over, warrant, alien and convey unto
JPMorgan Chase Bank, N.A., as Trustee, as provided in the Indenture, and its
successor or successors in the trust thereby and hereby created and to its or
their assigns forever, all the right, title and interest of the Company in and
to all the property, described in Section 11 hereof, together (subject to the
provisions of Article X of the Indenture) with the tolls, rents, revenues,
issues, earnings, income, products and profits thereof, excepting, however, the
property, interests and rights specifically excepted from the lien of the
Indenture as set forth in the Indenture.

                  TOGETHER WITH all and singular the tenements, hereditaments
and appurtenances belonging or in any wise appertaining to the premises,
property, franchises and rights, or any thereof, referred to in the foregoing
granting clause, with the reversion and reversions, remainder

                                      -8-
<PAGE>

and remainders and (subject to the provisions of Article X of the Indenture) the
tolls, rents, revenues, issues, earnings, income, products and profits thereof,
and all the estate, right, title and interest and claim whatsoever, at law as
well as in equity, which the Company now has or may hereafter acquire in and to
the aforesaid premises, property, franchises and rights and every part and
parcel thereof.

                  SUBJECT, HOWEVER, with respect to such premises, property,
franchises and rights, to excepted encumbrances as said term is defined in
Section 1.02 of the Indenture, and subject also to all defects and limitations
of title and to all encumbrances existing at the time of acquisition. TO HAVE
AND TO HOLD all said premises, property, franchises and rights hereby conveyed,
assigned, pledged or mortgaged, or intended so to be, unto the Trustee, its
successor or successors in trust and their assigns forever;

                  BUT IN TRUST, NEVERTHELESS, with power of sale for the equal
and proportionate benefit and security of the holders of all bonds now or
hereafter authenticated and delivered under and secured by the Indenture and
interest coupons appurtenant thereto, pursuant to the provisions of the
Indenture and of any supplemental indenture, and for the enforcement of the
payment of said bonds and coupons when payable and the performance of and
compliance with the covenants and conditions of the Indenture and of any
supplemental indenture, without any preference, distinction or priority as to
lien or otherwise of any bond or bonds over others by reason of the difference
in time of the actual authentication, delivery, issue, sale or negotiation
thereof or for any other reason whatsoever, except as otherwise expressly
provided in the Indenture; and so that each and every bond now or hereafter
authenticated and delivered thereunder shall have the same lien, and so that the
principal of and premium, if any, and interest on every such bond shall, subject
to the terms thereof, be equally and proportionately secured, as if it had been
made, executed, authenticated, delivered, sold and negotiated simultaneously
with the execution and delivery thereof.

                  AND IT IS EXPRESSLY DECLARED by the Company that all bonds
authenticated and delivered under and secured by the Indenture, as supplemented
and amended as above set forth, are to be issued, authenticated and delivered,
and all said premises, property, franchises and rights hereby and by the
Indenture and indentures supplemental thereto conveyed, assigned, pledged or
mortgaged, or intended so to be, are to be dealt with and disposed of under,
upon and subject to the terms, conditions, stipulations, covenants, agreements,
trusts, uses and purposes expressed in the Indenture, as supplemented and
amended as above set forth, and the parties hereto mutually agree as follows:

                  SECTION 1. There is hereby created a series of bonds (the
"2005-1 Interest Bearing Collateral Bonds") designated as hereinabove provided,
which shall also bear the descriptive title "First Mortgage Bond", and the form
thereof shall be substantially as hereinbefore set forth (the "Sample Bond").
The 2005-1 Interest Bearing Collateral Bonds shall be issued in the aggregate
principal amount of $500,000,000, shall mature on the Termination Date (as such
term is defined in the Credit Agreement) and shall be issued only as registered
bonds without coupons in denominations of $1,000 and any multiple thereof. The
serial numbers of the Collateral Bonds shall be such as may be approved by any
officer of the Company, the execution thereof by any such officer either
manually or by facsimile signature to be conclusive evidence of such approval.
The Collateral Bonds are to be issued to and registered in the name of the Agent
under

                                      -9-
<PAGE>

the Credit Agreement (as such terms are defined in the Sample Bond) to evidence
and secure any and all Obligations (as such term is defined in the Credit
Agreement) of the Company under the Credit Agreement.

                  The 2005-1 Collateral Bonds shall bear interest as set forth
in the Sample Bond. The principal of and the interest on said bonds shall be
payable as set forth in the Sample Bond.

                  The obligation of the Company to make payments with respect to
the principal of 2005-1 Interest Bearing Collateral Bonds shall be fully or
partially, as the case may be, satisfied and discharged to the extent that, at
the time that any such payment shall be due, the then due principal of the Loans
and/or the Reimbursement Obligations included in the the Obligations shall have
been fully or partially paid. Satisfaction of any obligation to the extent that
payment is made with respect to the Loans and/or the Reimbursement Obligations
means that if any payment is made on the principal of the Loans and/or the
Reimbursement Obligations, a corresponding payment obligation with respect to
the principal of the 2005-1 Collateral Bonds shall be deemed discharged in the
same amount as the payment with respect to the Loans and/or the Reimbursement
Obligations discharges the outstanding obligation with respect to such Loans
and/or Reimbursement Obligations. No such payment of principal shall reduce the
principal amount of the 2005-1 Collateral Bonds.

                  The obligation of the Company to make payments with respect to
the interest on 2005-1 Collateral Bonds shall be fully or partially, as the case
may be, satisfied and discharged to the extent that, at the time that any such
payment shall be due, the then due interest and/or fees under the Credit
Agreement, shall have been fully or partially paid. Satisfaction of any
obligation to the extent that payment is made with respect to the interest
and/or fees under the Credit Agreement means that if any payment is made on the
interest and/or fees under the Credit Agreement, a corresponding payment
obligation with respect to the interest on the 2005-1 Collateral Bonds shall be
deemed discharged in the same amount as the payment with respect to the interest
and/or fees discharges the outstanding obligation with respect to such interest
and/or fees.

                  The Trustee may at any time and all times conclusively assume
that the obligation of the Company to make payments with respect to the
principal of and interest on the Collateral Bonds, so far as such payments at
the time have become due, has been fully satisfied and discharged unless and
until the Trustee shall have received a written notice from the Agent stating
(i) that timely payment of principal and interest on the 2005-1 Collateral Bonds
has not been made, (ii) that the Company is in arrears as to the payments
required to be made by it to the Agent pursuant to the Credit Agreement, and
(iii) the amount of the arrearage.

                  The Collateral Bonds shall be exchangeable for other
registered bonds of the same series, in the manner and upon the conditions
prescribed in the Indenture, upon the surrender of such bonds at the Investor
Services Department of the Company, as transfer agent. However, notwithstanding
the provisions of Section 2.05 of the Indenture, no charge shall be made upon
any registration of transfer or exchange of bonds of said series other than for
any tax or taxes or other governmental charge required to be paid by the
Company.

                                      -10-
<PAGE>

                  SECTION 2. The Collateral Bonds are not redeemable by the
operation of the maintenance and replacement provisions of this Indenture or
with the proceeds of released property.

                  SECTION 3. Upon the occurrence of an Event of Default under
the Credit Agreement and the acceleration of the Obligations, the Collateral
Bonds shall be redeemable in whole upon receipt by the Trustee of a written
demand from the Agent stating that there has occurred under the Credit Agreement
both an Event of Default and a declaration of acceleration of the Obligations
and demanding redemption of the Collateral Bonds (including a description of the
amount of principal, interest and fees which comprise such Obligations). The
Company waives any right it may have to prior notice of such redemption under
the Indenture. Upon surrender of the Collateral Bonds by the Agent to the
Trustee, the Collateral Bonds shall be redeemed at a redemption price equal to
the aggregate amount of the Obligations.

                  SECTION 4. The Company reserves the right, without any
consent, vote or other action by the holder of the Collateral Bonds or of any
subsequent series of bonds issued under the Indenture, to make such amendments
to the Indenture, as supplemented, as shall be necessary in order to amend
Section 17.02 to read as follows:

                  SECTION 17.02. With the consent of the holders of not less
                  than a majority in principal amount of the bonds at the time
                  outstanding or their attorneys-in-fact duly authorized, or, if
                  fewer than all series are affected, not less than a majority
                  in principal amount of the bonds at the time outstanding of
                  each series the rights of the holders of which are affected,
                  voting together, the Company, when authorized by a resolution,
                  and the Trustee may from time to time and at any time enter
                  into an indenture or indentures supplemental hereto for the
                  purpose of adding any provisions to or changing in any manner
                  or eliminating any of the provisions of this Indenture or of
                  any supplemental indenture or modifying the rights and
                  obligations of the Company and the rights of the holders of
                  any of the bonds and coupons; provided, however, that no such
                  supplemental indenture shall (1) extend the maturity of any of
                  the bonds or reduce the rate or extend the time of payment of
                  interest thereon, or reduce the amount of the principal
                  thereof, or reduce any premium payable on the redemption
                  thereof, without the consent of the holder of each bond so
                  affected, or (2) permit the creation of any lien, not
                  otherwise permitted, prior to or on a parity with the lien of
                  this Indenture, without the consent of the holders of all the
                  bonds then outstanding, or (3) reduce the aforesaid percentage
                  of the principal amount of bonds the holders of which are
                  required to approve any such supplemental indenture, without
                  the consent of the holders of all the bonds then outstanding.
                  For the purposes of this Section, bonds shall be deemed to be
                  affected by a supplemental indenture if such supplemental
                  indenture adversely affects or diminishes the rights of
                  holders thereof against the Company or against its property.
                  The Trustee may in its discretion determine whether or not, in
                  accordance with the foregoing, bonds of any particular series
                  would be affected by any supplemental indenture and any such
                  determination shall be conclusive upon the holders of bonds of
                  such series and all other series. Subject to the

                                      -11-
<PAGE>

                  provisions of Sections 16.02 and 16.03 hereof, the Trustee
                  shall not be liable for any determination made in good faith
                  in connection herewith.

                           Upon the written request of the Company, accompanied
                  by a resolution authorizing the execution of any such
                  supplemental indenture, and upon the filing with the Trustee
                  of evidence of the consent of bondholders as aforesaid (the
                  instrument or instruments evidencing such consent to be dated
                  within one year of such request), the Trustee shall join with
                  the Company in the execution of such supplemental indenture
                  unless such supplemental indenture affects the Trustee's own
                  rights, duties or immunities under this Indenture or
                  otherwise, in which case the Trustee may in its discretion but
                  shall not be obligated to enter into such supplemental
                  indenture.

                           It shall not be necessary for the consent of the
                  bondholders under this Section to approve the particular form
                  of any proposed supplemental indenture, but it shall be
                  sufficient if such consent shall approve the substance
                  thereof.

                           The Company and the Trustee, if they so elect, and
                  either before or after such consent has been obtained, may
                  require the holder of any bond consenting to the execution of
                  any such supplemental indenture to submit his bond to the
                  Trustee or to ask such bank, banker or trust company as may be
                  designated by the Trustee for the purpose, for the notation
                  thereon of the fact that the holder of such bond has consented
                  to the execution of such supplemental indenture, and in such
                  case such notation, in form satisfactory to the Trustee, shall
                  be made upon all bonds so submitted, and such bonds bearing
                  such notation shall forthwith be returned to the persons
                  entitled thereto.

                           Prior to the execution by the Company and the Trustee
                  of any supplemental indenture pursuant to the provisions of
                  this Section, the Company shall publish a notice, setting
                  forth in general terms the substance of such supplemental
                  indenture, at least once in one daily newspaper of general
                  circulation in each city in which the principal of any of the
                  bonds shall be payable, or, if all bonds outstanding shall be
                  registered bonds without coupons or coupon bonds registered as
                  to principal, such notice shall be sufficiently given if
                  mailed, first class, postage prepaid, and registered if the
                  Company so elects, to each registered holder of bonds at the
                  last address of such holder appearing on the registry books,
                  such publication or mailing, as the case may be, to be made
                  not less than thirty days prior to such execution. Any failure
                  of the Company to give such notice, or any defect therein,
                  shall not, however, in any way impair or affect the validity
                  of any such supplemental indenture.

                  SECTION 5. As supplemented and amended as above set forth, the
Indenture is in all respects ratified and confirmed, and the Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.

                  SECTION 6. Nothing contained in this Supplemental Indenture
shall, or shall be construed to, confer upon any person other than a holder of
bonds issued under the Indenture, as supplemented and amended as above set
forth, the Company, the Trustee and the Agent, for the

                                      -12-
<PAGE>

benefit of the Banks (as such term is defined in the Credit Agreement), any
right or interest to avail himself of any benefit under any provision of the
Indenture, as so supplemented and amended.

                  SECTION 7. The Trustee assumes no responsibility for or in
respect of the validity or sufficiency of this Supplemental Indenture or of the
Indenture as hereby supplemented or the due execution hereof by the Company or
for or in respect of the recitals and statements contained herein (other than
those contained in the sixth, seventh, eighth and ninth recitals hereof), all of
which recitals and statements are made solely by the Company.

                  SECTION 8. This Supplemental Indenture may be simultaneously
executed in several counterparts and all such counterparts executed and
delivered, each as an original, shall constitute but one and the same
instrument.

                  SECTION 9. In the event the date of any notice required or
permitted hereunder shall not be a Business Day (as defined below), then
(notwithstanding any other provision of the Indenture or of any supplemental
indenture thereto) such notice need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date fixed for such notice. "Business Day" means, with respect to this
Section 9, any day, other than a Saturday or Sunday, on which banks generally
are open in New York, New York for the conduct of substantially all of their
commercial lending activities and on which interbank wire transfers can be made
on the Fedwire system.

                  SECTION 10. This Supplemental Indenture and the Collateral
Bonds shall be governed by and deemed to be a contract under, and construed in
accordance with, the laws of the State of Michigan, and for all purposes shall
be construed in accordance with the laws of such state, except as may otherwise
be required by mandatory provisions of law.

                  SECTION 11. Detailed Description of Property Mortgaged:

                                       I.

                       ELECTRIC GENERATING PLANTS AND DAMS

                  All the electric generating plants and stations of the
Company, constructed or otherwise acquired by it and not heretofore described in
the Indenture or any supplement thereto and not heretofore released from the
lien of the Indenture, including all powerhouses, buildings, reservoirs, dams,
pipelines, flumes, structures and works and the land on which the same are
situated and all water rights and all other lands and easements, rights of way,
permits, privileges, towers, poles, wires, machinery, equipment, appliances,
appurtenances and supplies and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with such
plants and stations or any of them, or adjacent thereto.

                                       II.

                           ELECTRIC TRANSMISSION LINES

                                      -13-
<PAGE>

                  All the electric transmission lines of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, including towers, poles, pole lines, wires, switches, switch
racks, switchboards, insulators and other appliances and equipment, and all
other property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such transmission lines or any of them or
adjacent thereto; together with all real property, rights of way, easements,
permits, privileges, franchises and rights for or relating to the construction,
maintenance or operation thereof, through, over, under or upon any private
property or any public streets or highways, within as well as without the
corporate limits of any municipal corporation. Also all the real property,
rights of way, easements, permits, privileges and rights for or relating to the
construction, maintenance or operation of certain transmission lines, the land
and rights for which are owned by the Company, which are either not built or now
being constructed.

                                      III.

                          ELECTRIC DISTRIBUTION SYSTEMS

                  All the electric distribution systems of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, including substations, transformers, switchboards, towers, poles,
wires, insulators, subways, trenches, conduits, manholes, cables, meters and
other appliances and equipment, and all other property, real or personal,
forming a part of or appertaining to or used, occupied or enjoyed in connection
with such distribution systems or any of them or adjacent thereto; together with
all real property, rights of way, easements, permits, privileges, franchises,
grants and rights, for or relating to the construction, maintenance or operation
thereof, through, over, under or upon any private property or any public streets
or highways within as well as without the corporate limits of any municipal
corporation.

                                       IV.

               ELECTRIC SUBSTATIONS, SWITCHING STATIONS AND SITES

                  All the substations, switching stations and sites of the
Company, constructed or otherwise acquired by it and not heretofore described in
the Indenture or any supplement thereto and not heretofore released from the
lien of the Indenture, for transforming, regulating, converting or distributing
or otherwise controlling electric current at any of its plants and elsewhere,
together with all buildings, transformers, wires, insulators and other
appliances and equipment, and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with any
of such substations and switching stations, or adjacent thereto, with sites to
be used for such purposes.

                                       V.

        GAS COMPRESSOR STATIONS, GAS PROCESSING PLANTS, DESULPHURIZATION
        STATIONS, METERING STATIONS, ODORIZING STATIONS, REGULATORS AND
                                     SITES

                                      -14-
<PAGE>

                  All the compressor stations, processing plants,
desulphurization stations, metering stations, odorizing stations, regulators and
sites of the Company, constructed or otherwise acquired by it and not heretofore
described in the Indenture or any supplement thereto and not heretofore released
from the lien of the Indenture, for compressing, processing, desulphurizing,
metering, odorizing and regulating manufactured or natural gas at any of its
plants and elsewhere, together with all buildings, meters and other appliances
and equipment, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with any of such
purposes, with sites to be used for such purposes.

                                       VI.

                               GAS STORAGE FIELDS

                  The natural gas rights and interests of the Company, including
wells and well lines (but not including natural gas, oil and minerals), the gas
gathering system, the underground gas storage rights, the underground gas
storage wells and injection and withdrawal system used in connection therewith,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture: In the Overisel Gas Storage Field, located in the Township of
Overisel, Allegan County, and in the Township of Zeeland, Ottawa County,
Michigan; in the Northville Gas Storage Field located in the Township of Salem,
Washtenaw County, Township of Lyon, Oakland County, and the Townships of
Northville and Plymouth and City of Plymouth, Wayne County, Michigan; in the
Salem Gas Storage Field, located in the Township of Salem, Allegan County, and
in the Township of Jamestown, Ottawa County, Michigan; in the Ray Gas Storage
Field, located in the Townships of Ray and Armada, Macomb County, Michigan; in
the Lenox Gas Storage Field, located in the Townships of Lenox and Chesterfield,
Macomb County, Michigan; in the Ira Gas Storage Field, located in the Township
of Ira, St. Clair County, Michigan; in the Puttygut Gas Storage Field, located
in the Township of Casco, St. Clair County, Michigan; in the Four Corners Gas
Storage Field, located in the Townships of Casco, China, Cottrellville and Ira,
St. Clair County, Michigan; in the Swan Creek Gas Storage Field, located in the
Township of Casco and Ira, St. Clair County, Michigan; and in the Hessen Gas
Storage Field, located in the Townships of Casco and Columbus, St. Clair,
Michigan.

                                      VII.

                             GAS TRANSMISSION LINES

                  All the gas transmission lines of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including gas mains, pipes, pipelines, gates, valves, meters and other
appliances and equipment, and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with such
transmission lines or any of them or adjacent thereto; together with all real
property, right of way, easements, permits, privileges, franchises and rights
for or relating to the construction, maintenance or operation thereof, through,
over, under or upon any private property or any public streets or highways,
within as well as without the corporate limits of any municipal corporation.

                                      VIII.

                                      -15-
<PAGE>

                            GAS DISTRIBUTION SYSTEMS

                  All the gas distribution systems of the Company, constructed
or otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including tunnels, conduits, gas mains and pipes, service pipes, fittings,
gates, valves, connections, meters and other appliances and equipment, and all
other property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such distribution systems or any of them
or adjacent thereto; together with all real property, rights of way, easements,
permits, privileges, franchises, grants and rights, for or relating to the
construction, maintenance or operation thereof, through, over, under or upon any
private property or any public streets or highways within as well as without the
corporate limits of any municipal corporation.

                                       IX.

               OFFICE BUILDINGS, SERVICE BUILDINGS, GARAGES, ETC.

                  All office, garage, service and other buildings of the
Company, wherever located, in the State of Michigan, constructed or otherwise
acquired by it and not heretofore described in the Indenture or any supplement
thereto and not heretofore released from the lien of the Indenture, together
with the land on which the same are situated and all easements, rights of way
and appurtenances to said lands, together with all furniture and fixtures
located in said buildings.

                                       X.

                            TELEPHONE PROPERTIES AND
                          RADIO COMMUNICATION EQUIPMENT

                  All telephone lines, switchboards, systems and equipment of
the Company, constructed or otherwise acquired by it and not heretofore
described in the Indenture or any supplement thereto and not heretofore released
from the lien of the Indenture, used or available for use in the operation of
its properties, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such telephone
properties or any of them or adjacent thereto; together with all real estate,
rights of way, easements, permits, privileges, franchises, property, devices or
rights related to the dispatch, transmission, reception or reproduction of
messages, communications, intelligence, signals, light, vision or sound by
electricity, wire or otherwise, including all telephone equipment installed in
buildings used as general and regional offices, substations and generating
stations and all telephone lines erected on towers and poles; and all radio
communication equipment of the Company, together with all property, real or
personal (except any in the Indenture expressly excepted), fixed stations,
towers, auxiliary radio buildings and equipment, and all appurtenances used in
connection therewith, wherever located, in the State of Michigan.

                                       XI.

                               OTHER REAL PROPERTY

                                      -16-
<PAGE>

                  All other real property of the Company and all interests
therein, of every nature and description (except any in the Indenture expressly
excepted) wherever located, in the State of Michigan, acquired by it and not
heretofore described in the Indenture or any supplement thereto and not
heretofore released from the lien of the Indenture. Such real property includes
but is not limited to the following described property, such property is subject
to any interests that were excepted or reserved in the conveyance to the
Company:

                                  ALCONA COUNTY

         Certain land in Caledonia Township, Alcona County, Michigan described
         as:

                  The East 330 feet of the South 660 feet of the SW 1/4 of the
         SW 1/4 of Section 8, T28N, R8E, except the West 264 feet of the South
         330 feet thereof; said land being more particularly described as
         follows: To find the place of beginning of this description, commence
         at the Southwest corner of said section, run thence East along the
         South line of said section 1243 feet to the place of beginning of this
         description, thence continuing East along said South line of said
         section 66 feet to the West 1/8 line of said section, thence N 02
         degrees 09' 30" E along the said West 1/8 line of said section 660
         feet, thence West 330 feet, thence S 02 degrees 09' 30" W, 330 feet,
         thence East 264 feet, thence S 02 degrees 09' 30" W, 330 feet to the
         place of beginning.

                                 ALLEGAN COUNTY

         Certain land in Lee Township, Allegan County, Michigan described as:

                  The NE 1/4 of the NW 1/4 of Section 16, T1N, R15W.

                                  ALPENA COUNTY

         Certain land in Wilson and Green Townships, Alpena County, Michigan
         described as:

                  All that part of the S'ly 1/2 of the former Boyne City-Gaylord
         and Alpena Railroad right of way, being the Southerly 50 feet of a 100
         foot strip of land formerly occupied by said Railroad, running from the
         East line of Section 31, T31N, R7E, Southwesterly across said Section
         31 and Sections 5 and 6 of T30N, R7E and Sections 10, 11 and the E 1/2
         of Section 9, except the West 1646 feet thereof, all in T30N, R6E.

                                  ANTRIM COUNTY

         Certain land in Mancelona Township, Antrim County, Michigan described
         as:

                  The S 1/2 of the NE 1/4 of Section 33, T29N, R6W, excepting
         therefrom all mineral, coal, oil and gas and such other rights as were
         reserved unto the State of Michigan in that certain deed running from
         the State of Michigan to August W.

                                      -17-
<PAGE>

         Schack and Emma H. Schack, his wife, dated April 15, 1946 and recorded
         May 20, 1946 in Liber 97 of Deeds on page 682 of Antrim County Records.

                                  ARENAC COUNTY

         Certain land in Standish Township, Arenac County, Michigan described
         as:

                  A parcel of land in the SW 1/4 of the NW 1/4 of Section 12,
         T18N, R4E, described as follows: To find the place of beginning of said
         parcel of land, commence at the Northwest corner of Section 12, T18N,
         R4E; run thence South along the West line of said section, said West
         line of said section being also the center line of East City Limits
         Road 2642.15 feet to the W 1/4 post of said section and the place of
         beginning of said parcel of land; running thence N 88 degrees 26' 00" E
         along the East and West 1/4 line of said section, 660.0 feet; thence
         North parallel with the West line of said section, 310.0 feet; thence S
         88 degrees 26' 00" W, 330.0 feet; thence South parallel with the West
         line of said section, 260.0 feet; thence S 88 degrees 26' 00" W, 330.0
         feet to the West line of said section and the center line of East City
         Limits Road; thence South along the said West line of said section,
         50.0 feet to the place of beginning.

                                  BARRY COUNTY

         Certain land in Johnstown Township, Barry County, Michigan described
         as:

                  A strip of land 311 feet in width across the SW 1/4 of the NE
         1/4 of Section 31, T1N, R8W, described as follows: To find the place of
         beginning of this description, commence at the E 1/4 post of said
         section; run thence N 00 degrees 55' 00" E along the East line of said
         section, 555.84 feet; thence N 59 degrees 36' 20" W, 1375.64 feet;
         thence N 88 degrees 30' 00" W, 130 feet to a point on the East 1/8 line
         of said section and the place of beginning of this description; thence
         continuing N 88 degrees 30' 00" W, 1327.46 feet to the North and South
         1/4 line of said section; thence S 00 degrees 39' 35" W along said
         North and South 1/4 line of said section, 311.03 feet to a point, which
         said point is 952.72 feet distant N'ly from the East and West 1/4 line
         of said section as measured along said North and South 1/4 line of said
         section; thence S 88 degrees 30' 00" E, 1326.76 feet to the East 1/8
         line of said section; thence N 00 degrees 47' 20" E along said East 1/8
         line of said section, 311.02 feet to the place of beginning.

                                   BAY COUNTY

         Certain land in Frankenlust Township, Bay County, Michigan described
         as:

                  The South 250 feet of the N 1/2 of the W 1/2 of the W 1/2 of
         the SE 1/4 of Section 9, T13N, R4E.

                                      -18-
<PAGE>

                                  BENZIE COUNTY

         Certain land in Benzonia Township, Benzie County, Michigan described
         as:

                  A parcel of land in the Northeast 1/4 of Section 7, Township
         26 North, Range 14 West, described as beginning at a point on the East
         line of said Section 7, said point being 320 feet North measured along
         the East line of said section from the East 1/4 post; running thence
         West 165 feet; thence North parallel with the East line of said section
         165 feet; thence East 165 feet to the East line of said section; thence
         South 165 feet to the place of beginning.

                                  BRANCH COUNTY

         Certain land in Girard Township, Branch County, Michigan described as:

                  A parcel of land in the NE 1/4 of Section 23 T5S, R6W,
         described as beginning at a point on the North and South quarter line
         of said section at a point 1278.27 feet distant South of the North
         quarter post of said section, said distance being measured along the
         North and South quarter line of said section, running thence S 89
         degrees 21' E 250 feet, thence North along a line parallel with the
         said North and South quarter line of said section 200 feet, thence N 89
         degrees 21' W 250 feet to the North and South quarter line of said
         section, thence South along said North and South quarter line of said
         section 200 feet to the place of beginning.

                                 CALHOUN COUNTY

         Certain land in Convis Township, Calhoun County, Michigan described as:

                  A parcel of land in the SE 1/4 of the SE 1/4 of Section 32,
         T1S, R6W, described as follows: To find the place of beginning of this
         description, commence at the Southeast corner of said section; run
         thence North along the East line of said section 1034.32 feet to the
         place of beginning of this description; running thence N 89 degrees 39'
         52" W, 333.0 feet; thence North 290.0 feet to the South 1/8 line of
         said section; thence S 89 degrees 39' 52" E along said South 1/8 line
         of said section 333.0 feet to the East line of said section; thence
         South along said East line of said section 290.0 feet to the place of
         beginning. (Bearings are based on the East line of Section 32, T1S,
         R6W, from the Southeast corner of said section to the Northeast corner
         of said section assumed as North.)

                                   CASS COUNTY

         Certain easement rights located across land in Marcellus Township, Cass
         County, Michigan described as:

                  The East 6 rods of the SW 1/4 of the SE 1/4 of Section 4, T5S,
         R13W.

                                      -19-
<PAGE>

                                CHARLEVOIX COUNTY

         Certain land in South Arm Township, Charlevoix County, Michigan
         described as:

                  A parcel of land in the SW 1/4 of Section 29, T32N, R7W,
         described as follows: Beginning at the Southwest corner of said section
         and running thence North along the West line of said section 788.25
         feet to a point which is 528 feet distant South of the South 1/8 line
         of said section as measured along the said West line of said section;
         thence N 89 degrees 30' 19" E, parallel with said South 1/8 line of
         said section 442.1 feet; thence South 788.15 feet to the South line of
         said section; thence S 89 degrees 29' 30" W, along said South line of
         said section 442.1 feet to the place of beginning.

                                CHEBOYGAN COUNTY

         Certain land in Inverness Township, Cheboygan County, Michigan
         described as:

                  A parcel of land in the SW frl 1/4 of Section 31, T37N, R2W,
         described as beginning at the Northwest corner of the SW frl 1/4,
         running thence East on the East and West quarter line of said Section,
         40 rods, thence South parallel to the West line of said Section 40
         rods, thence West 40 rods to the West line of said Section, thence
         North 40 rods to the place of beginning.

                                  CLARE COUNTY

         Certain land in Frost Township, Clare County, Michigan described as:

                  The East 150 feet of the North 225 feet of the NW 1/4 of the
         NW 1/4 of Section 15, T20N, R4W.

                                 CLINTON COUNTY

         Certain land in Watertown Township, Clinton County, Michigan described
         as:

                  The NE 1/4 of the NE 1/4 of the SE 1/4 of Section 22, and the
         North 165 feet of the NW 1/4 of the NE 1/4 of the SE 1/4 of Section 22,
         T5N, R3W.

                                 CRAWFORD COUNTY

         Certain land in Lovells Township, Crawford County, Michigan described
         as:

                  A parcel of land in Section 1, T28N, R1W, described as:
         Commencing at NW corner said section; thence South 89 degrees 53' 30"
         East along North section line 105.78 feet to point of beginning; thence
         South 89 degrees 53' 30" East along North section line 649.64 feet;
         thence South 55 degrees 42' 30" East 340.24 feet; thence South 55
         degrees 44' 37"" East 5,061.81 feet to the East section line; thence
         South 00 degrees 00' 08"" West along East section line 441.59 feet;
         thence North 55 degrees 44' 37" West 5,310.48 feet; thence North 55
         degrees 42' 30" West 877.76 feet to point of beginning.

                                      -20-
<PAGE>

                                  EATON COUNTY

         Certain land in Eaton Township, Eaton County, Michigan described as:

                  A parcel of land in the SW 1/4 of Section 6, T2N, R4W,
         described as follows: To find the place of beginning of this
         description commence at the Southwest corner of said section; run
         thence N 89 degrees 51' 30" E along the South line of said section 400
         feet to the place of beginning of this description; thence continuing N
         89 degrees 51' 30" E, 500 feet; thence N 00 degrees 50' 00" W, 600
         feet; thence S 89 degrees 51' 30" W parallel with the South line of
         said section 500 feet; thence S 00 degrees 50' 00" E, 600 feet to the
         place of beginning.

                                  EMMET COUNTY

         Certain land in Wawatam Township, Emmet County, Michigan described as:

                  The West 1/2 of the Northeast 1/4 of the Northeast 1/4 of
         Section 23, T39N, R4W.

                                 GENESEE COUNTY

         Certain land in Argentine Township, Genesee County, Michigan described
         as:

                  A parcel of land of part of the SW 1/4 of Section 8, T5N, R5E,
         being more particularly described as follows:

                  Beginning at a point of the West line of Duffield Road, 100
         feet wide, (as now established) distant 829.46 feet measured N 01
         degrees 42' 56" W and 50 feet measured S 88 degrees 14' 04" W from the
         South quarter corner, Section 8, T5N, R5E; thence S 88 degrees 14' 04"
         W a distance of 550 feet; thence N 01 degrees 42' 56" W a distance of
         500 feet to a point on the North line of the South half of the
         Southwest quarter of said Section 8; thence N 88 degrees 14' 04" E
         along the North line of South half of the Southwest quarter of said
         Section 8 a distance 550 feet to a point on the West line of Duffield
         Road, 100 feet wide (as now established); thence S 01 degrees 42' 56" E
         along the West line of said Duffield Road a distance of 500 feet to the
         point of beginning.

                                 GLADWIN COUNTY

         Certain land in Secord Township, Gladwin County, Michigan described as:

                  The East 400 feet of the South 450 feet of Section 2, T19N,
         R1E.

                                      -21-
<PAGE>

                              GRAND TRAVERSE COUNTY

         Certain land in Mayfield Township, Grand Traverse County, Michigan
         described as:

                  A parcel of land in the Northwest 1/4 of Section 3, T25N,
         R11W, described as follows: Commencing at the Northwest corner of said
         section, running thence S 89 degrees 19' 15" E along the North line of
         said section and the center line of Clouss Road 225 feet, thence South
         400 feet, thence N 89 degrees 19' 15" W 225 feet to the West line of
         said section and the center line of Hannah Road, thence North along the
         West line of said section and the center line of Hannah Road 400 feet
         to the place of beginning for this description.

                                 GRATIOT COUNTY

         Certain land in Fulton Township, Gratiot County, Michigan described as:

                  A parcel of land in the NE 1/4 of Section 7, Township 9 North,
         Range 3 West, described as beginning at a point on the North line of
         George Street in the Village of Middleton, which is 542 feet East of
         the North and South one-quarter (1/4) line of said Section 7; thence
         North 100 feet; thence East 100 feet; thence South 100 feet to the
         North line of George Street; thence West along the North line of George
         Street 100 feet to place of beginning.

                                HILLSDALE COUNTY

         Certain land in Litchfield Village, Hillsdale County, Michigan
         described as:

                  Lot 238 of Assessors Plat of the Village of Litchfield.

                                  HURON COUNTY

         Certain easement rights located across land in Sebewaing Township,
         Huron County, Michigan described as:

                  The North 1/2 of the Northwest 1/4 of Section 15, T15N, R9E.

                                  INGHAM COUNTY

         Certain land in Vevay Township, Ingham County, Michigan described as:

                  A parcel of land 660 feet wide in the Southwest 1/4 of Section
         7 lying South of the centerline of Sitts Road as extended to the
         North-South 1/4 line of said Section 7, T2N, R1W, more particularly
         described as follows: Commence at the Southwest corner of said Section
         7, thence North along the West line of said Section 2502.71 feet to the
         centerline of Sitts Road; thence South 89 degrees 54' 45" East along
         said centerline 2282.38 feet to the place of beginning of this
         description; thence continuing South 89 degrees 54' 45" East along said
         centerline and said centerline extended 660.00 feet to the North-South
         1/4 line of

                                      -22-
<PAGE>

         said section; thence South 00 degrees 07' 20" West 1461.71 feet; thence
         North 89 degrees 34' 58" West 660.00 feet; thence North 00 degrees 07'
         20" East 1457.91 feet to the centerline of Sitts Road and the place of
         beginning.

                                  IONIA COUNTY

         Certain land in Sebewa Township, Ionia County, Michigan described as:

                  A strip of land 280 feet wide across that part of the SW 1/4
         of the NE 1/4 of Section 15, T5N, R6W, described as follows:

                  To find the place of beginning of this description commence at
         the E 1/4 corner of said section; run thence N 00 degrees 05' 38" W
         along the East line of said section, 1218.43 feet; thence S 67 degrees
         18' 24" W, 1424.45 feet to the East 1/8 line of said section and the
         place of beginning of this description; thence continuing S 67 degrees
         18' 24" W, 1426.28 feet to the North and South 1/4 line of said section
         at a point which said point is 105.82 feet distant N'ly of the center
         of said section as measured along said North and South 1/4 line of said
         section; thence N 00 degrees 04' 47" E along said North and South 1/4
         line of said section, 303.67 feet; thence N 67 degrees 18' 24" E,
         1425.78 feet to the East 1/8 line of said section; thence S 00 degrees
         00' 26" E along said East 1/8 line of said section, 303.48 feet to the
         place of beginning. (Bearings are based on the East line of Section 15,
         T5N, R6W, from the E 1/4 corner of said section to the Northeast corner
         of said section assumed as N 00 degrees 05' 38" W.)

                                  IOSCO COUNTY

         Certain land in Alabaster Township, Iosco County, Michigan described
         as:

                  A parcel of land in the NW 1/4 of Section 34, T21N, R7E,
         described as follows: To find the place of beginning of this
         description commence at the N 1/4 post of said section; run thence
         South along the North and South 1/4 line of said section, 1354.40 feet
         to the place of beginning of this description; thence continuing South
         along the said North and South 1/4 line of said section, 165.00 feet to
         a point on the said North and South 1/4 line of said section which said
         point is 1089.00 feet distant North of the center of said section;
         thence West 440.00 feet; thence North 165.00 feet; thence East 440.00
         feet to the said North and South 1/4 line of said section and the place
         of beginning.

                                 ISABELLA COUNTY

         Certain land in Chippewa Township, Isabella County, Michigan described
         as:

                  The North 8 rods of the NE 1/4 of the SE 1/4 of Section 29,
         T14N, R3W.

                                      -23-
<PAGE>

                                 JACKSON COUNTY

         Certain land in Waterloo Township, Jackson County, Michigan described
         as:

                  A parcel of land in the North fractional part of the N
         fractional 1/2 of Section 2, T1S, R2E, described as follows: To find
         the place of beginning of this description commence at the E 1/4 post
         of said section; run thence N 01 degrees 03' 40" E along the East line
         of said section 1335.45 feet to the North 1/8 line of said section and
         the place of beginning of this description; thence N 89 degrees 32' 00"
         W, 2677.7 feet to the North and South 1/4 line of said section; thence
         S 00 degrees 59' 25" W along the North and South 1/4 line of said
         section 22.38 feet to the North 1/8 line of said section; thence S 89
         degrees 59' 10" W along the North 1/8 line of said section 2339.4 feet
         to the center line of State Trunkline Highway M-52; thence N 53 degrees
         46' 00" W along the center line of said State Trunkline Highway 414.22
         feet to the West line of said section; thence N 00 degrees 55' 10" E
         along the West line of said section 74.35 feet; thence S 89 degrees 32'
         00" E, 5356.02 feet to the East line of said section; thence S 01
         degrees 03' 40" W along the East line of said section 250 feet to the
         place of beginning.

                                KALAMAZOO COUNTY

         Certain land in Alamo Township, Kalamazoo County, Michigan described
         as:

                  The South 350 feet of the NW 1/4 of the NW 1/4 of Section 16,
         T1S, R12W, being more particularly described as follows: To find the
         place of beginning of this description, commence at the Northwest
         corner of said section; run thence S 00 degrees 36' 55" W along the
         West line of said section 971.02 feet to the place of beginning of this
         description; thence continuing S 00 degrees 36' 55" W along said West
         line of said section 350.18 feet to the North 1/8 line of said section;
         thence S 87 degrees 33' 40" E along the said North 1/8 line of said
         section 1325.1 feet to the West 1/8 line of said section; thence N 00
         degrees 38' 25" E along the said West 1/8 line of said section 350.17
         feet; thence N 87 degrees 33' 40" W, 1325.25 feet to the place of
         beginning.

                                 KALKASKA COUNTY

         Certain land in Kalkaska Township, Kalkaska County, Michigan described
         as:

                  The NW 1/4 of the SW 1/4 of Section 4, T27N, R7W, excepting
         therefrom all mineral, coal, oil and gas and such other rights as were
         reserved unto the State of Michigan in that certain deed running from
         the Department of Conservation for the State of Michigan to George
         Welker and Mary Welker, his wife, dated October 9, 1934 and recorded
         December 28, 1934 in Liber 39 on page 291 of Kalkaska County Records,
         and subject to easement for pipeline purposes as granted to Michigan
         Consolidated Gas Company by first party herein on April 4, 1963 and
         recorded June 21, 1963 in Liber 91 on page 631 of Kalkaska County
         Records.

                                      -24-
<PAGE>

                                   KENT COUNTY

         Certain land in Caledonia Township, Kent County, Michigan described as:

                  A parcel of land in the Northwest fractional 1/4 of Section
         15, T5N, R10W, described as follows: To find the place of beginning of
         this description commence at the North 1/4 corner of said section, run
         thence S 0 degrees 59' 26" E along the North and South 1/4 line of said
         section 2046.25 feet to the place of beginning of this description,
         thence continuing S 0 degrees 59' 26" E along said North and South 1/4
         line of said section 332.88 feet, thence S 88 degrees 58' 30" W 2510.90
         feet to a point herein designated "Point A" on the East bank of the
         Thornapple River, thence continuing S 88 degrees 53' 30" W to the
         center thread of the Thornapple River, thence NW'ly along the center
         thread of said Thornapple River to a point which said point is S 88
         degrees 58' 30" W of a point on the East bank of the Thornapple River
         herein designated "Point B", said "Point B" being N 23 degrees 41' 35"
         W 360.75 feet from said above-described "Point A", thence N 88 degrees
         58' 30" E to said "Point B", thence continuing N 88 degrees 58' 30" E
         2650.13 feet to the place of beginning. (Bearings are based on the East
         line of Section 15, T5N, R10W between the East 1/4 corner of said
         section and the Northeast corner of said section assumed as N 0 degrees
         59' 55" W.)

                                   LAKE COUNTY

         Certain land in Pinora and Cherry Valley Townships, Lake County,
         Michigan described as:

                  A strip of land 50 feet wide East and West along and adjoining
         the West line of highway on the East side of the North 1/2 of Section
         13 T18N, R12W. Also a strip of land 100 feet wide East and West along
         and adjoining the East line of the highway on the West side of
         following described land: The South 1/2 of NW 1/4, and the South 1/2 of
         the NW 1/4 of the SW 1/4, all in Section 6, T18N, R11W.

                                  LAPEER COUNTY

         Certain land in Hadley Township, Lapeer County, Michigan described as:

                  The South 825 feet of the W 1/2 of the SW 1/4 of Section 24,
         T6N, R9E, except the West 1064 feet thereof.

                                 LEELANAU COUNTY

         Certain land in Cleveland Township, Leelanau County, Michigan described
         as:

                  The North 200 feet of the West 180 feet of the SW 1/4 of the
         SE 1/4 of Section 35, T29N, R13W.

                                      -25-
<PAGE>

                                 LENAWEE COUNTY

         Certain land in Madison Township, Lenawee County, Michigan described
         as:

                  A strip of land 165 feet wide off the West side of the
         following described premises: The E 1/2 of the SE 1/4 of Section 12.
         The E 1/2 of the NE 1/4 and the NE 1/4 of the SE 1/4 of Section 13,
         being all in T7S, R3E, excepting therefrom a parcel of land in the E
         1/2 of the SE 1/4 of Section 12, T7S, R3E, beginning at the Northwest
         corner of said E 1/2 of the SE 1/4 of Section 12, running thence East 4
         rods, thence South 6 rods, thence West 4 rods, thence North 6 rods to
         the place of beginning.

                                LIVINGSTON COUNTY

         Certain land in Cohoctah Township, Livingston County, Michigan
         described as:

                  Parcel 1

                  The East 390 feet of the East 50 rods of the SW 1/4 of Section
         30, T4N, R4E.

                  Parcel 2

                  A parcel of land in the NW 1/4 of Section 31, T4N, R4E,
         described as follows: To find the place of beginning of this
         description commence at the N 1/4 post of said section; run thence N 89
         degrees 13' 06" W along the North line of said section, 330 feet to the
         place of beginning of this description; running thence S 00 degrees 52'
         49" W, 2167.87 feet; thence N 88 degrees 59' 49" W, 60 feet; thence N
         00 degrees 52' 49" E, 2167.66 feet to the North line of said section;
         thence S 89 degrees 13' 06" E along said North line of said section, 60
         feet to the place of beginning.

                                  MACOMB COUNTY

         Certain land in Macomb Township, Macomb County, Michigan described as:

                  A parcel of land commencing on the West line of the E 1/2 of
         the NW 1/4 of fractional Section 6, 20 chains South of the NW corner of
         said E 1/2 of the NW 1/4 of Section 6; thence South on said West line
         and the East line of A. Henry Kotner's Hayes Road Subdivision #15,
         according to the recorded plat thereof, as recorded in Liber 24 of
         Plats, on page 7, 24.36 chains to the East and West 1/4 line of said
         Section 6; thence East on said East and West 1/4 line 8.93 chains;
         thence North parallel with the said West line of the E 1/2 of the NW
         1/4 of Section 6, 24.36 chains; thence West 8.93 chains to the place of
         beginning, all in T3N, R13E.

                                      -26-
<PAGE>

                                 MANISTEE COUNTY

         Certain land in Manistee Township, Manistee County, Michigan described
         as:

                  A parcel of land in the SW 1/4 of Section 20, T22N, R16W,
         described as follows: To find the place of beginning of this
         description, commence at the Southwest corner of said section; run
         thence East along the South line of said section 832.2 feet to the
         place of beginning of this description; thence continuing East along
         said South line of said section 132 feet; thence North 198 feet; thence
         West 132 feet; thence South 198 feet to the place of beginning,
         excepting therefrom the South 2 rods thereof which was conveyed to
         Manistee Township for highway purposes by a Quitclaim Deed dated June
         13, 1919 and recorded July 11, 1919 in Liber 88 of Deeds on page 638 of
         Manistee County Records.

                                  MASON COUNTY

         Certain land in Riverton Township, Mason County, Michigan described as:

                  Parcel 1

                  The South 10 acres of the West 20 acres of the S 1/2 of the NE
         1/4 of Section 22, T17N, R17W.

                  Parcel 2

                  A parcel of land containing 4 acres of the West side of
         highway, said parcel of land being described as commencing 16 rods
         South of the Northwest corner of the NW 1/4 of the SW 1/4 of Section
         22, T17N, R17W, running thence South 64 rods, thence NE'ly and N'ly and
         NW'ly along the W'ly line of said highway to the place of beginning,
         together with any and all right, title, and interest of Howard C.
         Wicklund and Katherine E. Wicklund in and to that portion of the
         hereinbefore mentioned highway lying adjacent to the E'ly line of said
         above described land.

                                 MECOSTA COUNTY

                  Certain land in Wheatland Township, Mecosta County, Michigan
         described as:

                  A parcel of land in the SW 1/4 of the SW 1/4 of Section 16,
         T14N, R7W, described as beginning at the Southwest corner of said
         section; thence East along the South line of Section 133 feet; thence
         North parallel to the West section line 133 feet; thence West 133 feet
         to the West line of said Section; thence South 133 feet to the place of
         beginning.

                                 MIDLAND COUNTY

                  Certain land in Ingersoll Township, Midland County, Michigan
         described as:

                  The West 200 feet of the W 1/2 of the NE 1/4 of Section 4,
         T13N, R2E.

                                      -27-
<PAGE>

                                MISSAUKEE COUNTY

         Certain land in Norwich Township, Missaukee County, Michigan described
         as:

                  A parcel of land in the NW 1/4 of the NW 1/4 of Section 16,
         T24N, R6W, described as follows: Commencing at the Northwest corner of
         said section, running thence N 89 degrees 01' 45" E along the North
         line of said section 233.00 feet; thence South 233.00 feet; thence S 89
         degrees 01' 45" W, 233.00 feet to the West line of said section; thence
         North along said West line of said section 233.00 feet to the place of
         beginning. (Bearings are based on the West line of Section 16, T24N,
         R6W, between the Southwest and Northwest corners of said section
         assumed as North.)

                                  MONROE COUNTY

         Certain land in Whiteford Township, Monroe County, Michigan described
         as:

                  A parcel of land in the SW1/4 of Section 20, T8S, R6E,
         described as follows: To find the place of beginning of this
         description commence at the S 1/4 post of said section; run thence West
         along the South line of said section 1269.89 feet to the place of
         beginning of this description; thence continuing West along said South
         line of said section 100 feet; thence N 00 degrees 50' 35" E, 250 feet;
         thence East 100 feet; thence S 00 degrees 50' 35" W parallel with and
         16.5 feet distant W'ly of as measured perpendicular to the West 1/8
         line of said section, as occupied, a distance of 250 feet to the place
         of beginning.

                                 MONTCALM COUNTY

         Certain land in Crystal Township, Montcalm County, Michigan described
         as:

                  The N 1/2 of the S 1/2 of the SE 1/4 of Section 35, T10N, R5W.

                               MONTMORENCY COUNTY

         Certain land in the Village of Hillman, Montmorency County, Michigan
         described as:

                  Lot 14 of Hillman Industrial Park, being a subdivision in the
         South 1/2 of the Northwest 1/4 of Section 24, T31N, R4E, according to
         the plat thereof recorded in Liber 4 of Plats on Pages 32-34,
         Montmorency County Records.

                                 MUSKEGON COUNTY

         Certain land in Casnovia Township, Muskegon County, Michigan described
         as:

                  The West 433 feet of the North 180 feet of the South 425 feet
         of the SW 1/4 of Section 3, T10N, R13W.

                                      -28-
<PAGE>
                                 NEWAYGO COUNTY

         Certain land in Ashland Township, Newaygo County, Michigan described
         as:

                  The West 250 feet of the NE 1/4 of Section 23, T11N, R13W.

                                 OAKLAND COUNTY

         Certain land in Wixcom City, Oakland County, Michigan described as:

                  The E 75 feet of the N 160 feet of the N 330 feet of the W
         526.84 feet of the NW 1/4 of the NW 1/4 of Section 8, T1N, R8E, more
         particularly described as follows: Commence at the NW corner of said
         Section 8, thence N 87 degrees 14' 29" E along the North line of said
         Section 8 a distance of 451.84 feet to the place of beginning for this
         description; thence continuing N 87 degrees 14' 29" E along said North
         section line a distance of 75.0 feet to the East line of the West
         526.84 feet of the NW 1/4 of the NW 1/4 of said Section 8; thence S 02
         degrees 37' 09" E along said East line a distance of 160.0 feet; thence
         S 87 degrees 14' 29" W a distance of 75.0 feet; thence N 02 degrees 37'
         09" W a distance of 160.0 feet to the place of beginning.

                                  OCEANA COUNTY

         Certain land in Crystal Township, Oceana County, Michigan described as:

                  The East 290 feet of the SE 1/4 of the NW 1/4 and the East 290
         feet of the NE 1/4 of the SW 1/4, all in Section 20, T16N, R16W.

                                  OGEMAW COUNTY

         Certain land in West Branch Township, Ogemaw County, Michigan described
         as:

                  The South 660 feet of the East 660 feet of the NE 1/4 of the
         NE 1/4 of Section 33, T22N, R2E.

                                 OSCEOLA COUNTY

         Certain land in Hersey Township, Osceola County, Michigan described as:

                  A parcel of land in the North 1/2 of the Northeast 1/4 of
         Section 13, T17N, R9W, described as commencing at the Northeast corner
         of said Section; thence West along the North Section line 999 feet to
         the point of beginning of this description; thence S 01 degrees 54' 20"
         E 1327.12 feet to the North 1/8 line; thence S 89 degrees 17' 05" W
         along the North 1/8 line 330.89 feet; thence N 01 degrees 54' 20" W
         1331.26 feet to the North Section line; thence East along the North
         Section line 331 feet to the point of beginning.

                                      -29-
<PAGE>

                                  OSCODA COUNTY

         Certain land in Comins Township, Oscoda County, Michigan described as:

                  The East 400 feet of the South 580 feet of the W 1/2 of the SW
         1/4 of Section 15, T27N, R3E.

                                  OTSEGO COUNTY

         Certain land in Corwith Township, Otsego County, Michigan described as:

                  Part of the NW 1/4 of the NE 1/4 of Section 28, T32N, R3W,
         described as: Beginning at the N 1/4 corner of said section; running
         thence S 89 degrees 04' 06" E along the North line of said section,
         330.00 feet; thence S 00 degrees 28' 43" E, 400.00 feet; thence N 89
         degrees 04' 06" W, 330.00 feet to the North and South 1/4 line of said
         section; thence N 00 degrees 28' 43" W along the said North and South
         1/4 line of said section, 400.00 feet to the point of beginning;
         subject to the use of the N'ly 33.00 feet thereof for highway purposes.

                                  OTTAWA COUNTY

         Certain land in Robinson Township, Ottawa County, Michigan described
         as:

                  The North 660 feet of the West 660 feet of the NE 1/4 of the
         NW 1/4 of Section 26, T7N, R15W.

                               PRESQUE ISLE COUNTY

         Certain land in Belknap and Pulawski Townships, Presque Isle County,
         Michigan described as:

                  Part of the South half of the Northeast quarter, Section 24,
         T34N, R5E, and part of the Northwest quarter, Section 19, T34N, R6E,
         more fully described as: Commencing at the East 1/4 corner of said
         Section 24; thence N 00 degrees 15' 47" E, 507.42 feet, along the East
         line of said Section 24 to the point of beginning; thence S 88 degrees
         15' 36" W, 400.00 feet, parallel with the North 1/8 line of said
         Section 24; thence N 00 degrees 15' 47" E, 800.00 feet, parallel with
         said East line of Section 24; thence N 88 degrees 15' 36" E, 800.00
         feet, along said North 1/8 line of Section 24 and said line extended;
         thence S 00 degrees 15' 47" W, 800.00 feet, parallel with said East
         line of Section 24; thence S 88 degrees 15' 36" W, 400.00 feet,
         parallel with said North 1/8 line of Section 24 to the point of
         beginning.

                  Together with a 33 foot easement along the West 33 feet of the
         Northwest quarter lying North of the North 1/8 line of Section 24,
         Belknap Township, extended, in Section 19, T34N, R6E.

                                      -30-
<PAGE>

                                ROSCOMMON COUNTY

         Certain land in Gerrish Township, Roscommon County, Michigan described
         as:

                  A parcel of land in the NW 1/4 of Section 19, T24N, R3W,
         described as follows: To find the place of beginning of this
         description commence at the Northwest corner of said section, run
         thence East along the North line of said section 1,163.2 feet to the
         place of beginning of this description (said point also being the place
         of intersection of the West 1/8 line of said section with the North
         line of said section), thence S 01 degrees 01' E along said West 1/8
         line 132 feet, thence West parallel with the North line of said section
         132 feet, thence N 01 degrees 01' W parallel with said West 1/8 line of
         said section 132 feet to the North line of said section, thence East
         along the North line of said section 132 feet to the place of
         beginning.

                                 SAGINAW COUNTY

         Certain land in Chapin Township, Saginaw County, Michigan described as:

                  A parcel of land in the SW 1/4 of Section 13, T9N, R1E,
         described as follows: To find the place of beginning of this
         description commence at the Southwest corner of said section; run
         thence North along the West line of said section 1581.4 feet to the
         place of beginning of this description; thence continuing North along
         said West line of said section 230 feet to the center line of a creek;
         thence S 70 degrees 07' 00" E along said center line of said creek
         196.78 feet; thence South 163.13 feet; thence West 185 feet to the West
         line of said section and the place of beginning.

                                 SANILAC COUNTY

         Certain easement rights located across land in Minden Township, Sanilac
         County, Michigan described as:

                  The Southeast 1/4 of the Southeast 1/4 of Section 1, T14N,
         R14E, excepting therefrom the South 83 feet of the East 83 feet
         thereof.

                                SHIAWASSEE COUNTY

         Certain land in Burns Township, Shiawassee County, Michigan described
         as:

                  The South 330 feet of the E 1/2 of the NE 1/4 of Section 36,
         T5N, R4E.

                                ST. CLAIR COUNTY

         Certain land in Ira Township, St. Clair County, Michigan described as:

                  The N 1/2 of the NW 1/4 of the NE 1/4 of Section 6, T3N, R15E.

                                      -31-
<PAGE>

                                ST. JOSEPH COUNTY

         Certain land in Mendon Township, St. Joseph County, Michigan described
         as:

                  The North 660 feet of the West 660 feet of the NW 1/4 of SW
         1/4, Section 35, T5S, R10W.

                                 TUSCOLA COUNTY

         Certain land in Millington Township, Tuscola County, Michigan described
         as:

                  A strip of land 280 feet wide across the East 96 rods of the
         South 20 rods of the N 1/2 of the SE 1/4 of Section 34, T10N, R8E, more
         particularly described as commencing at the Northeast corner of Section
         3, T9N, R8E, thence S 89 degrees 55' 35" W along the South line of said
         Section 34 a distance of 329.65 feet, thence N 18 degrees 11' 50" W a
         distance of 1398.67 feet to the South 1/8 line of said Section 34 and
         the place of beginning for this description; thence continuing N 18
         degrees 11' 50" W a distance of 349.91 feet; thence N 89 degrees 57'
         01" W a distance of 294.80 feet; thence S 18 degrees 11' 50" E a
         distance of 350.04 feet to the South 1/8 line of said Section 34;
         thence S 89 degrees 58' 29" E along the South 1/8 line of said section
         a distance of 294.76 feet to the place of beginning.

                                VAN BUREN COUNTY

         Certain land in Covert Township, Van Buren County, Michigan described
         as:

                  All that part of the West 20 acres of the N 1/2 of the NE
         fractional 1/4 of Section 1, T2S, R17W, except the West 17 rods of the
         North 80 rods, being more particularly described as follows: To find
         the place of beginning of this description commence at the N 1/4 post
         of said section; run thence N 89 degrees 29' 20" E along the North line
         of said section 280.5 feet to the place of beginning of this
         description; thence continuing N 89 degrees 29' 20" E along said North
         line of said section 288.29 feet; thence S 00 degrees 44' 00" E,
         1531.92 feet; thence S 89 degrees 33' 30" W, 568.79 feet to the North
         and South 1/4 line of said section; thence N 00 degrees 44' 00" W along
         said North and South 1/4 line of said section 211.4 feet; thence N 89
         degrees 29' 20" E, 280.5 feet; thence N 00 degrees 44' 00" W, 1320 feet
         to the North line of said section and the place of beginning.

                                WASHTENAW COUNTY

         Certain land in Manchester Township, Washtenaw County, Michigan
         described as:

                  A parcel of land in the NE 1/4 of the NW 1/4 of Section 1,
         T4S, R3E, described as follows: To find the place of beginning of this
         description commence at the Northwest corner of said section; run
         thence East along the North line of said section 1355.07 feet to the
         West 1/8 line of said section; thence S 00 degrees

                                      -32-
<PAGE>

         22' 20" E along said West 1/8 line of said section 927.66 feet to the
         place of beginning of this description; thence continuing S 00 degrees
         22' 20" E along said West 1/8 line of said section 660 feet to the
         North 1/8 line of said section; thence N 86 degrees 36' 57" E along
         said North 1/8 line of said section 660.91 feet; thence N 00 degrees
         22' 20" W, 660 feet; thence S 86 degrees 36' 57" W, 660.91 feet to the
         place of beginning.

                                  WAYNE COUNTY

         Certain land in Livonia City, Wayne County, Michigan described as:

                  Commencing at the Southeast corner of Section 6, T1S, R9E;
         thence North along the East line of Section 6 a distance of 253 feet to
         the point of beginning; thence continuing North along the East line of
         Section 6 a distance of 50 feet; thence Westerly parallel to the South
         line of Section 6, a distance of 215 feet; thence Southerly parallel to
         the East line of Section 6 a distance of 50 feet; thence easterly
         parallel with the South line of Section 6 a distance of 215 feet to the
         point of beginning.

                                 WEXFORD COUNTY

         Certain land in Selma Township, Wexford County, Michigan described as:

                  A parcel of land in the NW 1/4 of Section 7, T22N, R10W,
         described as beginning on the North line of said section at a point 200
         feet East of the West line of said section, running thence East along
         said North section line 450 feet, thence South parallel with said West
         section line 350 feet, thence West parallel with said North section
         line 450 feet, thence North parallel with said West section line 350
         feet to the place of beginning.

                  SECTION 12. The Company is a transmitting utility under
Section 9501(2) of the Michigan Uniform Commercial Code (M.C.L. 440.9501(2)) as
defined in M.C.L. 440.9102(1)(aaaa).

                  IN WITNESS WHEREOF, said Consumers Energy Company has caused
this Supplemental Indenture to be executed in its corporate name by its Chairman
of the Board, President, a Vice President or its Treasurer and its corporate
seal to be hereunto affixed and to be attested by its Secretary or an Assistant
Secretary, and said JPMorgan Chase Bank, N.A.,as Trustee as aforesaid, to
evidence its acceptance hereof, has caused this Supplemental Indenture to be
executed in its corporate name by a Vice President and its corporate seal to be
hereunto affixed and to be attested by a Trust Officer, in several counterparts,
all as of the day and year first above written.

                                      -33-
<PAGE>

                                                CONSUMERS ENERGY COMPANY

(SEAL)                                          By /s/ Laura L. Mountcastle
                                                   -----------------------------
                                                   Laura L. Mountcastle
                                                   Vice President and Treasurer

/s/ Joyce H. Norkey
-----------------------------------
Joyce H. Norkey
Assistant Secretary

Signed, sealed and delivered
by CONSUMERS ENERGY COMPANY
in the presence of

/s/ Kimberly C. Wilson
-----------------------------------
Kimberly C. Wilson

/s/ Beverly S. Burger
-----------------------------------
Beverly S. Burger

STATE OF MICHIGAN )
                                      ss.
COUNTY OF JACKSON )

                  The foregoing instrument was acknowledged before me this 18th
day of May, 2005, by Laura L. Mountcastle, Vice President and Treasurer of
CONSUMERS ENERGY COMPANY, a Michigan corporation, on behalf of the corporation.

                                           /s/ Sammie B. Dalton
                                           -------------------------------------
                                           Sammie B.Dalton, Notary Public
[Seal]                                     State of Michigan, County of Jackson
                                           My Commission Expires:  01/04/08
                                           Acting in the County of Jackson

                                      S-1
<PAGE>

                                           JPMORGAN CHASE BANK, N.A., AS TRUSTEE

(SEAL)                                     By /s/ L. O'Brien
                                              ----------------------------------
                                              L. O'Brien
Attest:                                       Vice President

/s/ Lena Aminova
---------------------------------
Lena Aminova
Trust Officer

Signed, sealed and delivered
by JPMORGAN CHASE BANK, N.A.
in the presence of

/s/ Paul J. Schmalzel
---------------------------------
Paul J. Schmalzel

/s/ Albert P. Mari, Jr.
---------------------------------
Albert P. Mari, Jr.

STATE OF NEW YORK          )
                                      ss.
COUNTY OF NEW YORK         )

                  The foregoing instrument was acknowledged before me this 18th
of May, 2005, by L. O'Brien, a Vice President of JPMORGAN CHASE BANK, N.A., a
national banking association,, on behalf of the bank.

                                        /s/ James M. Foley
                                        ----------------------------------------
                                        JAMES M. FOLEY NO. 01FO6348400
                                        Notary Public, State of New York
[Seal]                                  Qualified in New York County
                                        My Commission Expires Aug. 31, 2006

Prepared by:                            When recorded, return to:
Kimberly C. Wilson                      Consumers Energy Company
One Energy Plaza, EP11-219              Business Services Real Estate Dept.
Jackson, MI 49201                       Attn:  Nancy Fisher EP7-439
                                        One Energy Plaza
                                        Jackson, MI 49201

                                      S-2<PAGE>
                                                                   EXHIBIT 10.20

Recording Requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC AO194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention: CMO Loan Admin.
Loan No.: 31-0901388

Commonly Known Address:
Devonshire Corporate Center II Office Complex,
2301, 2215, 2201, 2109 and 2101 Fox Drive
Champaign, Illinois 61820
Parcel Identification No.: 45-20-24-326-020;
45-20-24-326-011; 45-20-24-326-012;
45-20-24-326-013; 45-20-24-326-016

                                    MORTGAGE
                                       AND
                          ABSOLUTE ASSIGNMENT OF RENTS
                                   AND LEASES
                                      AND
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Mortgage"), dated as of November 21,
2003 are STONEWATER DOX FUNDING LLC, a Delaware limited liability company
("Mortgagor"), whose principal place of business is located at c/o Stonewater
Partners, 22 Deer Creek Lane, Mt. Kisco, New York 10549, and WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Mortgagee"), with a mailing address at 1320 Willow Pass
Road, Suite 205, Concord, California 94520.

                                    RECITALS

A.   Mortgagor proposes to borrow from Mortgagee, and Mortgagee proposes to lend
     to Mortgagor the principal sum of TEN MILLION AND NO/100THS DOLLARS
     ($10,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
     ("Note") executed by Mortgagor, 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 December 1, 2013.

                                        1

<PAGE>

B.   The loan documents include this Mortgage, the Note and the other documents
     described in the Note as Loan Documents ("Loan Documents").

                              ARTICLE 1. MORTGAGE

1.1. GRANT. For the purposes of and upon the terms and conditions of this
     Mortgage, Mortgagor irrevocably grants, conveys, mortgages, warrants and
     assigns to Mortgagee, all estate, right, title and interest which Mortgagor
     now has or may hereafter acquire in, to, under or derived from any or all
     of the following:

     a.   That real property ("Land") located in Champaign, county of Champaign,
          state of Illinois, 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 and which are
          not owned by any tenant, 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;

     h.   All Accounts (as defined in the Cash Management Agreement) and the
          Letters of Credit (as defined in the Note); and

     i.   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.

                                        2

<PAGE>

                         ARTICLE 2. 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
          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, if
          any;

     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; and

     h.   Payment and performance of any other obligations which are defined as
          "Secured Obligations" in the Note.

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, if
     any, at any time accruing or assessed on any of the Secured Obligations.
     The maximum amount secured by this Mortgage (excluding interest, costs,
     expenses, charges, fees, protective advances and indemnification
     obligations, all of any type or nature) is $10,000,000.00.

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

                                        3

<PAGE>

     the Secured Obligations and to have notice that the rate of interest on one
     or more Secured Obligation may vary from time to time.

                   ARTICLE 3. 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. Mortgagee confers upon Mortgagor a revocable license
     ("License") to collect and retain the Payments as they become due and
     payable, until the occurrence and during the continuance of a Default (as
     hereinafter defined). Upon and during the continuance of a Default, the
     License shall be automatically revoked and Mortgagee 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 Mortgagor
     shall be held by Mortgagor as trustee under a constructive trust for the
     benefit of Mortgagee. Subject to the terms and conditions of the Cash
     Management Agreement dated the date hereof, Mortgagor hereby irrevocably
     authorizes and directs the tenants under the Leases to rely upon and comply
     with any notice or demand given by Mortgagee during the continuance of a
     Default 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 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.
     If and when no Default exists, Mortgagee shall re-confer the License upon
     Mortgagor until the occurrence of another Default.

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,

                                        4

<PAGE>

     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. Unless such
     liability arises from the gross negligence or willful misconduct of
     Mortgagee, its agents, contractors and employees, Mortgagee shall not
     directly or indirectly be liable to Mortgagor or any other person as a
     consequence of: (e) the exercise 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-LONG TERM LEASES.

     a.   ALL LEASES. Mortgagor shall, at Mortgagor's sole cost and expense:

          (i)  perform all material obligations of the landlord under the Leases
               and use reasonable efforts to enforce performance by the tenants
               of all material obligations of the tenants under the Leases;

          (ii) use reasonable efforts to keep the Property leased at all times
               to tenants which 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 (not previously delivered to Mortgagee)
               and all amendments thereto and waivers thereof; and

          (iv) promptly upon Mortgagee's request, execute and record any
               additional assignments of landlord's interest under any Lease to
               Mortgagee and use reasonable efforts to cause any tenant to
               execute specific subordinations of any Lease to this Mortgage, in
               form and substance reasonably 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;

                                        5

<PAGE>

          (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 (other than rental escalations required by the terms
               of any existing lease to be paid in advance, provided no fixed or
               base rent should be paid more than one (1) month in advance.

          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 (including, without limitation, the
          termination fee payable pursuant to the terms of that certain lease
          dated February 25, 1999 (the "Parking Lease")) 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(b)) and shall be
          deposited by Mortgagee into a pledged account in accordance with
          Section 6.12(b). 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 proposed 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 completed
          as of the date of the request have been completed lien-free and in a
          workmanlike manner, other than liens being contested in good faith in
          accordance with Section 8.4 hereof; (3) a fully executed Lease, or
          extension or renewal of the- current Lease; (4) prior to the last
          release of Impounds for each space, 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 reasonably
          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
          Impounds relating to the affected space to Mortgagor. Mortgagor shall
          construct or cause to be constructed all tenant improvements in a
          workmanlike manner and in accordance with all applicable laws,
          ordinances, rules and regulations.

                                        6

<PAGE>

     (b)  MAJOR LEASES. Mortgagor shall, at Mortgagor's sole cost and expense,
          give Mortgagee written notice of any material default by landlord or
          tenant under any Major Lease (as defined below) promptly after
          becoming aware of same. Unless consented to in writing by Mortgagee
          within 30 days after written notice or otherwise permitted under any
          other provision of the Loan Documents, Mortgagor shall not:

          (i)  enter into any Major Lease after the date hereof which (aa) is
               not on then prevailing 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 reasonably satisfactory to the landlord promptly upon
               the landlord's request; or (cc) allows the tenant to assign or
               sublet the demised premises without the landlord's consent, not
               to be unreasonably withheld, conditioned or delayed; provided,
               however, the Major Lease may allow tenant to assign or sublet the
               demised premises to tenant's affiliates or a merged entity
               resulting from a merger involving tenant, provided the tenant's
               affiliate or the surviving merged entity (A) has a rating of at
               least BBB- or better by the rating agencies which have assigned a
               rating to the Loan in connection with a securitization, (B)
               occupies and uses the demised premises, (C) has a net worth equal
               to or greater than existing tenant's net worth as reported on
               tenant's most recently filed financial statements with the SEC
               prior to the date hereof, (D) has not been, within the last ten
               (10) years, (I) subject to any material, uncured event of default
               in connection with a loan financing which resulted in litigation
               or an acceleration of an indebtedness held by Mortgagee or any
               other secondary market or institutional lender or (II) the
               subject of any action or proceeding under Creditor's Rights Laws,
               and (E) has not ever been convicted of a felony;

          (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 (except
               in connection with the release of the Parking Parcel (as defined
               in the Note) as long as Borrower complies with the provisions
               contained in Section 6 of Exhibit A of the Note); or

          (iv) release or discharge the tenant or any guarantor, under any Major
               Lease from any material obligation thereunder except in
               connection with a permitted termination, cancellation or
               surrender of the applicable Major Lease, approved by Mortgagee or
               not requiring Mortgagor approval.

          Any such attempted action in violation of the provisions of this
          Section shall be null and void.

          Notwithstanding anything to the contrary contained herein, to the
          extent Mortgagee's prior approval is required for any leasing matters
          set forth in this

                                        7

<PAGE>

          Section 3, Mortgagee shall have thirty (30) days from receipt of
          written request and all required information and documentation
          relating thereto in which to approve or disapprove such matter,
          provided that such request to Lender is marked in bold lettering with
          the following language: "MORTGAGEE'S RESPONSE IS REQUIRED WITHIN
          THIRTY (30) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A
          MORTGAGE BETWEEN THE UNDERSIGNED AND MORTGAGEE" and the envelope
          containing the request must be marked "PRIORITY". In the event that
          Mortgagee fails to respond to the leasing matter in question within
          such time, Mortgagee's approval shall be deemed given for all
          purposes. Mortgagor shall provide Mortgagee with such information and
          documentation as may be reasonably required by Mortgagee.

          "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; 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). Mortgagor's obligations with respect to Major Leases shall
          be governed by the provisions of Section 3.4a 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 3.4a or 3.4b 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. ESTOPPEL CERTIFICATES. Within 30 days after request by Mortgagee, Mortgagor
shall deliver to Mortgagee and to any party designated by Mortgagee, estoppel
certificates relating to the Leases executed by Mortgagor and by each of the
tenants, in the form required by the Lease, or if none provided for in the
applicable Lease, form and substance reasonably acceptable to Mortgagee;
provided, however, if any tenant shall fail or refuse to so execute and deliver
any such estoppel certificate upon request, Mortgagor shall use reasonable
efforts to cause such tenant to execute and deliver such estoppel certificate
but such tenant's continued failure or refusal to do so, despite Mortgagor's
reasonable efforts, shall not constitute a default by Mortgagor under this
Mortgage.

3.6. 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 4. SECURITY AGREEMENT AND FIXTURE FILING

                                        8

<PAGE>

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 all of the
     following described personal property in which Mortgagor 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 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" a's defined
          herein; together with all replacements and proceeds of, and additions
          ancf 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 Mortgage
     constitutes a fixture filing under the Illinois Uniform Commercial Code, as
     amended or recodified from time to time ("UCC").

4.2. COVENANTS. Mortgagor agrees: (a) to execute and deliver such documents as
     Mortgagee deems reasonably 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 reasonably cooperate with
     Mortgagee in perfecting all security interests granted herein and in
     obtaining such agreements from third parties as Mortgagee deems reasonably
     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

                                        9

<PAGE>

     and at the expense of Mortgagor upon the occurrence and continuance of a
     Default: (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
     preserve the Collateral or any rights or interests of Mortgagee therein;
     and (c) inspect the Collateral; 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. 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 any or all of the Collateral and make it
          available to Mortgagee at a place designated by Mortgagee; (ii)
          without prior notice, to the extent permitted by applicable law, enter
          upon the Property, subject to the rights of tenants under the
          applicable Leases, 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 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 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 10 days' prior notice of the time
     and place of any public sale or other intended 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
     limitations, 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,

                                       10

<PAGE>

     perfect or preserve any of Mortgagee's security interests and rights in or
     to the Collateral, and during the continuance of a Default, take any other
     action required of Mortgagor; provided, however, that Mortgagee as such
     attorney-in-fact shall (i) be accountable only for such funds as are
     actually received by Mortgagee, and (ii) only be exercised after
     Mortgagor's failure to take required action within ten (10) business days
     after request.

                   ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1. REPRESENTATIONS AND WARRANTIES. Mortgagor represents and warrants to
     Mortgagee that, to Mortgagor's current actual knowledge ("actual knowledge"
     means, with respect to all representations and warranties based solely on
     the representations, warranties and other information set forth in the
     purchase and sale agreement, dated October 3, 2003 between Par 3
     Development, L.L.C., as seller, and Mortgagor, as purchaser, and/or
     conveyance documents delivered pursuant thereto and Mortgagor's good faith
     due diligence investigation in connection with the acquisition of the
     Property), the following statements are true and correct as of the
     Effective Date:

     a.   Legal Status. Mortgagor is duly organized and existing and in good
          standing under the laws of the state(s) in which Mortgagor is
          organized. Mortgagor is qualified or licensed to do business in all
          jurisdictions in which such qualification or licensing is required.

     b.   PERMITS. Mortgagor possesses all permits, franchises and licenses and
          all rights to all trademarks, trade names, patents and fictitious
          names, if any, necessary to enable Mortgagor to conduct the
          business(es) in which Mortgagor is 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 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 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 is a
          party or by which Mortgagor is bound.

     e.   LITIGATION. There are no pending or threatened (in writing) actions,
          claims, investigations, suits or proceedings before any governmental
          authority, court or administrative agency which are reasonably likely
          to materially adversely affect the financial condition or operations
          of Mortgagor other than those previously disclosed in writing by
          Mortgagor to Mortgagee.

     f.   FINANCIAL STATEMENTS. The financial statements of Mortgagor, of each
          general partner (if Mortgagor is a partnership), of each member (if
          Mortgagor is a limited liability company) and of each guarantor, if
          any, previously delivered by

                                       11

<PAGE>

          Mortgagor to Mortgagee are: (i) 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 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, pledged or encumbered except as previously
          disclosed in writing by Mortgagor 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 pending assessments or adjustments of
          Mortgagor's income tax payable with respect to any year.

     i.   SUBORDINATION. There is no agreement or instrument to which Mortgagor
          is a party or by which Mortgagor is bound that would require the
          subordination in right of payment of any of Mortgagor'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)
          exceptions shown in the title insurance policy insuring the lien of
          this Mortgage accepted by Mortgagee; 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 to Mortgagor's
          actual knowledge without investigation (other than its review of the
          title policy) 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.

     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.

                                       12

<PAGE>

     m.   LEASES. All existing Leases are in full force and effect and are
          enforceable in accordance with their respective terms. Except as may
          be disclosed in the tenant estoppel certificates delivered to
          Mortgagee in connection with the Loan, 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 to Mortgagee in connection with this Loan. 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 the prior lien of this
          Mortgage and those, if any, previously disclosed to Mortgagee by
          Mortgagor in writing specifically referring to this representation and
          warranty. Mortgagor's chief 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. Mortgagor has delivered to Mortgagee correct
          and complete copies of its organizational documents. 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) except as otherwise previously disclosed in
          writing by Mortgagor to Mortgagee.

     q.   HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
          Materials Laws (as hereinafter defined).

     r.   HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
          Hazardous Materials Claims (as hereinafter defined).

     s.   WETLANDS. Except as may be shown on the survey or property condition
          report, if any, previously delivered to Mortgagee, no part of the
          Property consists of or is classified as wetlands, tidelands or swamp
          and overflow lands.

     t.   COMPLIANCE WITH LAWS. The Property complies in all material respects
          with all federal, state and local laws, rules and regulations
          applicable to the Property, including, without limitation, all zoning
          and building requirements and all

                                       13

<PAGE>

          requirements of the Americans With Disabilities Act of 1990, as
          amended from time to time (42 U. S. C. Section 12101 et seq.).
          Mortgagor is in possession of all certificates of occupancy and all
          other material 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 (in
          writing) 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 at a trustee's sale or the right to foreclose this Mortgage.

     x.   IRPTA. The execution and delivery of the Loan Documents is not a
          transfer of "real property", as "real property" is defined in the
          Illinois Responsible Property Transfer Act of 1988 (765 ILCS 90/1 et
          seq.), as amended from time to time.

     y.   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 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. On the Effective Date, Mortgagor
          is able to pay its debts as generally they become due.

     z.   SEPARATE TAX PARCEL(S). Except as may be disclosed in the title
          insurance policy approved by Mortgagee, 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.

     aa.  UTILITIES; WATER; SEWER. The Property is served by all utilities
          required for the current or contemplated use thereof. All utility
          service is provided by public utilities and the Property has accepted
          or is equipped to accept such utility service. The Property is served
          by public water and sewer systems.

     bb.  ERISA MATTERS. Mortgagor is not an employee benefit plan as defined in
          Section 3.(3) of the Employee Retirement Income Security Act of 1974,
          as amended ("ERISA"), which is subject to Title I of ERISA, nor a plan
          as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986,
          as amended (each of the foregoing hereinafter referred to collectively
          as "Plan"). Mortgagor's assets

                                       14

<PAGE>

          do not constitute "plan assets" of one or more such Plans within the
          meaning of Department of Labor Regulation Section 2510.3-101.
          Mortgagor will not transfer or convey the Property to a Plan or to a
          person or entity whose assets constitute such "plan assets", and
          Mortgagor will not be reconstituted as a Plan or as an entity whose
          assets constitute "plan assets". No Tenant under any Lease is a Plan
          or an entity whose assets constitute such "plan assets", and Mortgagor
          will not knowingly enter into any Lease where the tenant thereunder is
          a Plan or an entity whose assets constitute such "plan assets." With
          respect to the Loan, Mortgagor is acting on its own behalf and not on
          account of or for the benefit of any Plan.

5.2  REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL II SPE).

     Mortgagor hereby represents, warrants and covenants to Mortgagee as
     follows:

     (a)  such entity was organized solely for the purpose of owning the
          Property;

     (b)  such entity has not and will not engage in any business unrelated to
          the ownership of the Property;

     (c)  such entity has not and will not have any assets other than the
          Property (and personal property incidental to the ownership and
          operation of the Property);

     (d)  such entity has not and will not engage in, seek or consent to any
          dissolution, winding up, liquidation, consolidation, merger, asset
          sale, or amendment of its articles of incorporation, articles of
          organization, certificate of formation, operating agreement or
          partnership agreement, as applicable, relating to the representations,
          warranties and covenants set forth in this Section 5.2;

     (e)  such entity, without the unanimous consent of all of its directors,
          general partners or members, as applicable, shall not file or consent
          to the filing of any bankruptcy or insolvency petition or otherwise
          institute insolvency proceedings;

     (f)  such entity has no indebtedness (and will have no indebtedness) other
          than (i) the Loan; and (ii) unsecured trade debt not to exceed
          $400,000.00 in the aggregate, 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 and is paid within 60
          days from the date incurred;

     (g)  such entity has not and will not fail to correct any known
          misunderstanding regarding the separate identity of such entity;

     (h)  such entity has maintained and will maintain its accounts, books and
          records separate from any other person or entity;

     (i)  such entity has maintained and will maintain its books, records,
          resolutions and agreements as official records;

                                       15

<PAGE>

     (j)  such entity (i) has not 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;

     (k)  such entity has conducted and will conduct its business in its own
          name;

     (l)  such entity has maintained and will maintain its accounting records
          and other entity documents separate from any other person or entity;

     (m)  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;

     (n)  such entity has paid and will pay its own liabilities and expenses out
          of its own funds and assets;

     (o)  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;

     (p)  such entity has not 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;

     (q)  such entity has not and will not acquire obligations or securities of
          its shareholders, partners or members, as applicable;

     (r)  such entity has allocated and will allocate fairly and reasonably the
          costs associated with common employees and any overhead for shared
          office space and such entity has used and will use separate
          stationery, invoices and checks;

     (s)  such entity has not and will not pledge its assets for the benefit of
          any other person or entity;

     (t)  such entity has held and identified itself and will hold itself out
          and identify itself as a separate and distinct entity under its own
          name and not as a division or part of any other person or entity;

     (u)  such entity has not made and will not make loans to any person or
          entity;

     (v)  such entity has not and will not identify its shareholders, partners
          or members, as applicable, or any affiliates of any of the foregoing,
          as a division or part of it;

     (w)  such entity has not entered into and will not enter into or be a party
          to, any transaction with its shareholders, partners or members, as
          applicable, 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;

                                       16

<PAGE>

     (x)  if 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;

     (y)  such entity has paid and will pay the salaries of its own employees
          out of its own funds and has maintained and will maintain a sufficient
          number of employees in light of its contemplated business operations;

     (z)  such entity has maintained and will maintain adequate capital in light
          of its contemplated business operations;

     (aa) if such entity is a partnership with more than one general partner,
          its partnership agreement requires the remaining partners to continue
          the partnership as long as one solvent general partner exists; and

     (bb) if such entity is a limited liability company, its operating
          agreement, if any such entity is a partnership, its partnership
          agreement and if such entity is a corporation, to the fullest extent
          permitted by applicable law, its articles of incorporation, contain
          the provisions set forth in this Section 5.2 and such entity shall
          conduct its business and operations in strict compliance with the
          terms contained therein.

                ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1. MAINTENANCE AND PRESERVATION OF THE PROPERTY. Mortgagor shall: (a) keep or
     cause the Property to be kept in good condition and repair; (b) restore
     promptly and in workmanlike manner the Property or any part thereof which
     may be damaged or destroyed by fire or other casualty, whether or not
     Mortgagee makes any Proceeds (defined below) available pursuant to Section
     6.11, unless all of the conditions for releasing Proceeds set forth in
     Section 6.1l(b)(iii) (other than the conditions set forth in subsections
     (b)(iii)(aa), (cc)(5), (6) and (7) thereof) have been satisfied and
     Mortgagee fails to make Proceeds available to Mortgagor, in which case
     Mortgagor shall have no obligation to restore of such Property, provided,
     however, Mortgagor shall be obligated to repair the applicable Property to
     the extent necessary (i) to protect life and safety at such Property and
     (ii) return such Property to a condition where the subject Property is
     deemed an architectural whole whereby access to any portion of such
     Property is not impaired and the shell of the applicable Improvements is
     fully complete and closed; (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, in each case, to the extent such 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 or cause the
     Property to be operated and managed 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

                                       17

<PAGE>

     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
     outstanding principal balance of the Loan amount and statements of no
     offset. Mortgagor shall not: (g) remove or demolish all or any material
     part of the Property; (h) alter either (i) the exterior of the Improvements
     in a manner which materially and adversely affects the value of the
     Property or (ii) the roof or other structural elements of the Improvements
     in a manner which requires a building permit except for tenant improvements
     required under the Leases or as Mortgagor is required to in accordance with
     the casualty and condemnation provisions hereof, (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 material 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") in violation of Hazardous Materials Laws.

          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; (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) 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 in similar lines of business on properties
          similar to the Property; and (iii) the tenant under the 2301 Fox Drive
          Lease (defined below) may use and maintain the storage tank in
          accordance with the 2301 Fox Drive Lease, provided such use is in
          accordance with Hazardous Materials Laws. "2301 Fox Drive Lease" shall
          mean that certain lease, dated December 22, 2000, as amended, by and
          between Par 3 Development, L.L.C. and Amdocs Champaign, Inc. f/k/a
          ITDS Intellicom Services, Inc.

                                       18

<PAGE>

     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 promptly upon obtaining knowledge thereof
          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 6.2a); (ii) any knowledge by
          Mortgagor 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 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 immediate vicinity of the
          Property that reasonably could be expected to cause the Property or
          any part thereof to become contaminated with Hazardous Materials.

     d.   REMEDIAL ACTION. In response to the presence of any Hazardous
          Materials on, under or about the Property in violation of Hazardous
          Materials Laws, Mortgagor shall promptly take or cause to be taken, at
          Mortgagor'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 MORTGAGEE. Upon reasonable prior notice to Mortgagor,
          Mortgagee, its employees and agents (using reasonable efforts not to
          disturb tenants with Leases at the Property), may from time to time
          during normal business hours (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.   INTENTIONALLY DELETED.

                                       19

<PAGE>

6.3. COMPLIANCE WITH LAWS. Mortgagor shall comply or cause the tenants under
     Leases relating to the Property to comply in all material respects 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 in full force and effect at all times
     (a) all certificates of occupancy and other material 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 to conduct the business(es) in which Mortgagor
     is now engaged.

6.4. LITIGATION. Mortgagor shall promptly after obtaining knowledge of same
     notify Mortgagee in writing of any litigation pending or threatened (in
     writing) against Mortgagor claiming damages in excess of $50,000 and of all
     pending or threatened (in writing) litigation against Mortgagor if the
     aggregate damage claims against Mortgagor exceed $100,000.

6.5. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Mortgagor shall not: (a) merge
     or consolidate with any other entity; (b) make any substantial change in
     the nature of Mortgagor's business or structure; (c) 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 business.

6.6. ACCOUNTING RECORDS. Mortgagor shall maintain adequate books and records in
     accordance with the same accounting standard used by Mortgagor to prepare
     the financial statements delivered to and approved by Mortgagee in
     connection with the making of the Loan or other accounting standards
     reasonably approved by Mortgagee. Mortgagor shall permit any representative
     of Mortgagee, upon reasonable prior notice, at any reasonable time and from
     time to time, to inspect, audit and examine such books and records and make
     copies of same; provided, however, unless subsequent to a Default,
     Mortgagor's right to audit the same may be exercised no more than two times
     per year.

6.7. COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor shall pay to Mortgagee the
     full amount of all reasonable out of pocket costs and expenses, including,
     without limitation, reasonable attorneys' fees and expenses of Mortgagee's
     in-house or outside counsel, actually incurred by Mortgagee in connection
     with: (a) appraisals and inspections of the Property or Collateral
     reasonably 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 required by the Mortgage or other Loan Documents, Mortgagor
     specifically (but not by way of limitation) acknowledges that: (aa) a
     formal written appraisal of the Property by a state

                                       20

<PAGE>

     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 reasonable out-of-pocket costs arising under this Section
     within ten (10) business days of demand by Mortgagee together with interest
     thereon if not paid within ten (10) business days following such demand at
     the rate of interest then applicable to the principal balance of the Note
     as specified therein.

6.8. LIENS, ENCUMBRANCES AND CHARGES. Mortgagor shall within thirty (30) days of
     notice (from any source whatsoever) discharge or bond 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
     reasonable satisfaction of Mortgagee for eventual payment thereof in the
     event that Mortgagor is obligated to make such payment and that any
     recorded claim of lien, charge or other encumbrance against the Property is
     discharged or bonded within thirty (30) days as provided for herein).

6.9. TAXES AND OTHER LIABILITIES. Mortgagor shall pay and discharge prior to
     delinquency 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 other than those being
     contested in good faith in accordance with Section 8.4 hereof. 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 obtain and maintain all insurance
     coverage required pursuant to that certain Agreement Regarding Required
     Insurance dated as of the date hereof by and between Mortgagor and
     Mortgagee.

6.11. CONDEMNATION AND INSURANCE PROCEEDS.

     a.   ASSIGNMENT OF CLAIMS. Subject to the terms of this Section 6.11 (a),
          Mortgagor absolutely and irrevocably assigns to Mortgagee all of
          Mortgagee's right, title and interest in 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

                                       21

<PAGE>

          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, if any, 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, in each case, promptly after detaining knowledge of same. So
          long as no Default has occurred and is continuing at the time, (i)
          Mortgagor shall have the right to adjust, compromise and settle any
          Claim or group of related Claims of $500,000 or less without the
          participation or consent of Mortgagee, (ii) Mortgagee shall have the
          right to participate in and consent to any adjustment, compromise or
          settlement of any Claim or group of related Claims exceeding $500,000
          and (iii) if the Proceeds shall be less than $500,000 and the costs of
          completing the restoration shall be less than $500,000, the Proceeds
          will be disbursed by Mortgagee to Mortgagor upon receipt, provided
          that all of the conditions set forth in Section 6.11(b) are met and
          Mortgagor delivers to Mortgagee a written undertaking to expeditiously
          commence and to satisfactorily complete with due diligence the
          restoration in accordance with the terms of this Agreement. If a
          Default has occurred and is continuing at the time, Mortgagor hereby
          irrevocably empowers Mortgagee, in the name of Mortgagor, as
          Mortgagor's true and lawful attorney in fact, to commence, appear in,
          defend, prosecute, adjust, compromise and settle all Claims; provided,
          however, Mortgagee shall not be responsible for any failure to
          undertake any or all of such actions regardless of the cause of the
          failure. All awards, proceeds and other sums described herein shall,
          in all cases, be payable to Mortgagee. All proceeds payable to
          Mortgagee under a business interruption insurance policy or loss of
          rents shall be held by Mortgagee and shall be applied to the
          obligations secured by the Loan Documents from time to time due and
          payable hereunder and under the Note; provided, however, that nothing
          herein contained shall be deemed to relieve Mortgagor of its
          obligations to pay the obligations secured by the Loan Documents on
          the respective dates of payment provided for in the Note, this
          Mortgage and the other Loan Documents except to the extent such
          amounts are actually paid out of the proceeds of such loss of rents or
          business income insurance, as applicable;

     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 and
          continues thereafter, the following provisions shall apply:

          (i)  Condemnation. If the Proceeds are the result of Claims described
               in clauses 6.11.a (i) or (ii) above, or interest accrued thereon,
               Mortgagee shall apply the Proceeds in the following order of
               priority: First, to Mortgagee's reasonable expenses in settling,
               prosecuting or defending the Claims; Second, to the repair or
               restoration of the portion of the Property, if any, not condemned
               or proposed for condemnation and not otherwise the subject of a
               claim or award; and Third, to the Secured Obligations in

                                       22

<PAGE>

               any order without suspending, extending or reducing any
               obligation of Mortgagor to make installment payments.

          (ii) Insurance. If the Proceeds are the result of Claims described in
               clause 6.11.a (iii) above or interest accrued thereon, 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, (aa) if the repair or restoration of the
               Property has been completed and all costs incurred in connection
               with the repair or restoration have been paid in full, to
               Mortgagor or (bb) in all other circumstances, to the Secured
               Obligations in any order without suspending, extending or
               reducing any obligation of Mortgagor to make installment
               payments.

          (iii) Restoration. Notwithstanding the foregoing Sections 6.11.b (i)
               and (ii), Mortgagee shall have no obligation to make any Proceeds
               available for the repair or restoration of all or any portion of
               the Property unless and until all the following conditions have
               been satisfied: (aa) 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);
               (bb) establishment of an arrangement for lien releases and
               disbursement of funds acceptable to Mortgagee; (cc) delivery to
               Mortgagee in form and content reasonably acceptable to Mortgagee
               of all of the following: (1) plans and specifications for the
               work; (2) a contract for the work, signed by a contractor
               reasonably acceptable to Mortgagee, provided the amount of
               contract exceeds $250,000; (3) a cost breakdown for the work; (4)
               if required by Mortgagee, a payment and performance bond for the
               work; (5) unless consented to in writing by Mortgagee in the
               event the Proceeds are insurance proceeds, less than thirty-five
               percent (35%) of each of (i) fair market value of the Property as
               reasonably determined by Mortgagee, and (ii) the rentable area of
               the Improvements on the applicable Property has been damaged,
               destroyed or rendered unusable as a result of a casualty and
               Leases covering in the aggregate at least sixty-five percent
               (65%) of the total rentable space in the applicable Property
               which has been demised under executed and delivered Leases inr
               effect as of the date of the occurrence of such casualty shall
               remain in full force and effect during and after the completion
               of restoration; (6) evidence that, upon completion of the work,
               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; (7) evidence that the work can
               reasonably be completed on or before that date which is 6 months
               prior to the Maturity Date; and (8) 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.

                                       23

<PAGE>

     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 reasonable 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 is continuing, 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 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 within 10 days after
          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 Mortgagor 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. Such account(s) shall bear interest as provided for
          in the Note. 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 30 days following full repayment
          of the Secured Obligations (other than as a consequence of foreclosure

                                       24

<PAGE>

          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 (excluding federal and state income
          taxes), (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. Promptly upon obtaining
     knowledge, Mortgagor shall give Mortgagee 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 upon prior written
     notice during normal business hours at any reasonable time 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.

6.15. DUE ON SALE/ENCUMBRANCE.

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

          "Restricted Party" shall mean each of (i) Mortgagor, (ii) any entity
          obligated under any guaranty or indemnity made in favor of Mortgagee
          in connection with the Loan and (iii) any shareholder, partner, member
          or non-member manager, or any direct or indirect legal or beneficial
          owner of Mortgagor or any entity obligated under a guaranty or
          indemnity made in favor of Mortgagee in connection with the Loan.

          "Transfer" shall mean any sale, installment sale, exchange, mortgage,
          pledge, hypothecation, assignment, encumbrance or other transfer,
          conveyance or disposition, whether voluntarily, involuntarily or by
          operation of law or otherwise.

     b.   PROPERTY TRANSFERS.

                                       25

<PAGE>

          (i)  Prohibited Property Transfers. Except as hereinafter provided,
               Mortgagor shall not, without Mortgagee's prior written consent,
               cause or permit any Transfer of all or any part of or any direct
               or indirect legal or beneficial interest in the Property or the
               Collateral (collectively, a "Prohibited Property Transfer"),
               including, without limitation, (A) a Lease of all or a material
               part of the Property for any purpose other than actual occupancy
               by a space tenant; and (B) the Transfer of all or any part of
               Mortgagor's right, title and interest in and to any Leases or
               Payments.

          (ii) Permitted Property Transfers. Except as hereinafter provided,
               notwithstanding the foregoing, none of the following Transfers
               shall be deemed to be a Prohibited Property Transfer: (A) a
               Transfer which is expressly permitted under the Note; (B) a Lease
               which is permitted under Article 3; (C) the sale of inventory in
               the ordinary course of business; and (D) the replacement of
               obsolete equipment in accordance with this Mortgage. No transfer
               fee will be required for such Permitted Property Transfers.

     c.   EQUITY TRANSFERS.

          (i)  Prohibited Equity Transfers. Mortgagor shall not cause or permit
               any Transfer of any direct or indirect legal or beneficial
               interest in a Restricted Party (collectively, a "Prohibited
               Equity Transfer"), including without limitation, (A) if a
               Restricted Party is a corporation, any merger, consolidation or
               other Transfer of such corporation's stock or the creation or
               issuance of new stock in one or a series of transactions; (B) if
               a Restricted Party is a limited partnership, limited liability
               partnership, general partnership or joint venture, any merger or
               consolidation or the change, removal, resignation or addition of
               a general partner or the Transfer of the partnership interest of
               any general or limited partner or any profits or proceeds
               relating to such partnership interests or the creation or
               issuance of new limited partnership interests; (C) if a
               Restricted Party is a limited liability" company, any merger or
               consolidation or the change, removal, resignation or addition of
               a managing member or non-member manager (or if no managing
               member, any member) or any profits or proceeds relating to such
               membership interest, or the Transfer of a non-managing
               membership interest or the creation or issuance of new
               nonmanaging membership interests; or (D) if a Restricted Party is
               a trust, any merger, consolidation or other Transfer of any legal
               or beneficial interest in such Restricted Party or the creation
               or issuance of new legal or beneficial interests.

          (ii) Permitted Equity Transfers. Notwithstanding the foregoing, none
               of the following Transfers shall be deemed to be a Prohibited
               Equity Transfer: (A) a Transfer by a natural person who is a
               member, partner or shareholder of a Restricted Party to a
               revocable inter vivos trust having such natural person as trustor
               of such trust and one or more immediate

                                       26

<PAGE>

               family members of such natural person as the sole beneficiaries
               of such trust ("Revocable Family Trust"); (B) a Transfer by
               devise or descent or by operation of law upon the death of a
               member, partner or shareholder of a Restricted Party where such
               Transfer does not result in a Default under Section 7.1(a)(vi)
               below; and (C) a Transfer, in one or a series of transactions, of
               not more than 49% of the stock, limited partnership interests or
               non-managing membership interests (as the case may be) in a
               Restricted Party; provided, however, no such Transfers result in
               a change of control in the Mortgagor. Notwithstanding anything to
               the contrary contained in this Section 6.15, Lender and rating
               agency prior consent shall not be required (provided Mortgagor
               pays all the reasonable out-of-pocket costs in connection with
               such transfer) with respect to transfers of direct and/or
               indirect interests in the Mortgagor to third parties or to other
               direct or indirect equity owners of Mortgagor, so long as (1) a
               qualified institutional investment fund managed by Fortress
               Investment Group LLC, with assets in excess of six hundred
               million and 00/100 dollars ($600,000,000.00) (the "Fortress
               Fund") or a Qualified Transferee, continues to own at all times,
               directly or indirectly, at least a fifty-one percent (51%)
               interest in Mortgagor, (2) the Fortress Fund or a Qualified
               Transferee (defined below) shall control Mortgagor and the
               day-to-day operations of the Property, (3) the Property shall be
               managed by a Qualified Manager (defined below) and (4) Mortgagor
               and its general partner or managing member, as applicable,
               continue to comply with the provisions set forth in Section 5.2
               of this Mortgage.

          (iii) No transfer fee will be required for (1) any Permitted Equity
               Transfers in clause (ii) (A), (B) or (C) above or (2) a transfer
               in accordance with the last sentence of clause (ii) (other than a
               transfer or a series of transfers by Drawbridge Special
               Opportunities Fund LP to a Qualified Transferee which results in
               such Qualified Transferee owning more than a 88% membership
               interest in the Borrower, in which case a transfer fee equal to
               1% of the outstanding principal amount of the Loan is due and
               payable but in no event less than $15,000).

               "Qualified Transferee" means one or more of the following:

               (A) a real estate investment trust, bank, saving and loan
               association, investment bank, insurance company, trust company,
               commercial credit corporation, pension plan, pension fund or
               pension advisory firm, mutual fund, government entity or plan,
               provided that any such Person referred to in this clause (A)
               satisfies the Eligibility Requirements;

               (B) an investment company, money management firm or "qualified
               institutional buyer" within the meaning of Rule 144A under the
               Securities Act of 1933, as amended, or an institutional
               "accredited investor" within the meaning of Regulation D under
               the Securities Act of 1933, as

                                       27

<PAGE>

               amended, provided that any such Person referred to in this clause
               (B) satisfies the Eligibility Requirements;

               (C) an institution substantially similar to any of the foregoing
               entities described in clauses (A) or (B) that satisfies the
               Eligibility Requirements;

               (D) any entity Controlled by any of the entities described in
               clause (i) or clauses (A) or (C) above;

               (E) a Qualified Trustee in connection with a securitization of,
               the creation of collateralized debt obligations ("CDO") secured
               by or financing through an "owner trust" of, the Loan
               (collectively, "Securitization Vehicles"), so long as (A) the
               special servicer or manager of such Securitization Vehicle has
               the Required Special Servicer Rating (defined below) and (B) the
               entire "controlling class" of such Securitization Vehicle, other
               than with respect to a CDO Securitization Vehicle, is held by one
               or more entities that are otherwise Qualified Transferees under
               clauses (A), (B), (C) or (D) of this definition; provided that
               the operative documents of the related Securitization Vehicle
               require that (1) in the case of a CDO Securitization Vehicle, the
               "equity interest" in such Securitization Vehicle is owned by one
               or more entities that are Qualified Transferees under clauses
               (A), (B), (C) or (D) of this definition and (2) if any of the
               relevant trustee, special servicer, manager fails to meet the
               requirements of this clause (E), such Person must be replaced by
               a Person meeting the requirements of this clause (E) within
               thirty (30) days;

               (F) an investment fund, limited liability company, limited
               partnership or general partnership where an entity that is
               otherwise a Qualified Transferee under clauses (A), (B), (C) or
               (D) of this definition acts as the general partner, managing
               member or fund manager and at least 50% of the equity interests
               in such investment vehicle are owned, directly or indirectly, by
               one or more entities that are otherwise Qualified Transferees
               under clauses (A), (B), (C) or (D) of this definition; or

               (G) Stonewater Partners Inc., provided it has total assets (in
               name or under management) in excess of $300,000,000.00 and
               capital/statutory surplus or shareholder's equity of
               $125,000,000.00.

               "Eligibility Requirements" means, with respect to any Person,
               that such Person (i) has total assets (in name or under
               management) in excess of $600,000,000.00 and (except with respect
               to a pension advisory firm or similar fiduciary)
               capital/statutory surplus or shareholder's equity of
               $250,000,000.00 and (ii) is regularly engaged in the business of
               making or owning commercial real estate loans or operating
               commercial mortgage properties.

                                       28

<PAGE>

               "Qualified Manager" shall mean Fox Development Corporation,
               Stonewater Management LLC or a reputable and experienced
               professional management organization (a) which manages, together
               with its affiliates, at least five (5) first class office
               buildings totaling at least 1,000,000 square feet of gross
               leasable area, exclusive of the Property and (b) approved by
               Lender, which approval shall not be unreasonably withheld or
               delayed and for which Lender shall have received written
               confirmation from the Rating Agencies that the employment of such
               manager will not result in a downgrade, withdrawal or
               qualification of the initial, or if higher, then current ratings
               issued in connection with a Securitization, or if a
               Securitization has not occurred, any ratings to be assigned in
               connection with a Securitization.

               "Required Special Servicer Rating" means (i) a rating of "CSS1"
               in the case of Fitch, (ii) on the S&P list of approved special
               servicers in the case of S&P and (iii) in the case of Moody's,
               such special servicer is acting as special servicer in a
               commercial mortgage loan Securitization that was rated by Moody's
               within the twelve (12) month period prior to the date of
               determination, and Moody's has not downgraded or withdrawn the
               thencurrent rating on any class of commercial mortgage securities
               or placed any class of commercial mortgage securities on watch
               citing the continuation of such special servicer as special
               servicer of such commercial mortgage securities.

          (iv) SPE Status. Nothing contained in this Section 6.15(c) shall be
               construed to permit any Transfer which would result in a breach
               of any representation, warranty or covenant of Mortgagor under
               Section 5.2 above. Notwithstanding anything to the contrary
               contained in this Section 6.15(c), if a nonconsolidation opinion
               was required as a condition to closing of the Loan, (A) Mortgagor
               shall deliver to Mortgagee at least 60 days' prior written notice
               of any Transfer under Section 6.15(c) above (other than the
               Transfer referenced in 6.15(c)(ii)(B)), (B) if required by
               Mortgagee, it shall be a condition precedent to any Transfer
               under Section 6.15(c) above (other than the Transfer referenced
               in 6.15(c)(ii)(B)) that Mortgagor deliver to Mortgagee a current
               nonconsolidation opinion in form and content and rendered by
               counsel reasonably satisfactory to Mortgagee in its sole and
               absolute discretion and (C) such a nonconsolidation opinion shall
               be delivered to Mortgagee, not more than 60 days' following any
               Transfer under Section 6.15c(ii)(B) above.

     D.   CERTIFICATES OF OWNERSHIP. Mortgagor shall deliver to Mortgagee, at
          any time and from time to time, not more than 5 days after Mortgagee's
          written request therefor, a certificate, in form acceptable to
          Mortgagee, signed and dated by Mortgagor, listing the names of all
          persons and entities (except the partners that make up Drawbridge
          Special Opportunities Fund LP) holding direct or indirect legal or
          beneficial interests in the Mortgagor or the Property and the type and
          amount of each such interest.

                                       29

<PAGE>

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
     (hereafter defined) or from any other act or omission of Mortgagee in
     managing the Property after a Default unless the loss is caused by the
     gross negligence, willful misconduct and/or 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
     Mortgagee and the Mortgagee Group from and against any claim, any actual
     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 performaace 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 in violation of applicable
     Hazardous Materials Laws); or (ii) the breach of any covenant,
     representation or warranty of Mortgagor under Sections 5.1.p, 5.l.q,
     5.l.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 Mortgagee Group or Mortgagee, or
     any claim, loss, damage, cost, expense or liability incurred by the
     Mortgagee Group or Mortgagee 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 Mortgagee or
     the Mortgagee Group); (bb) all court costs and reasonable

                                       30

<PAGE>

     attorneys' fees (including, without limitation, reasonable expert witness
     fees) paid or incurred by Mortgagee or the Mortgagee Group (Mortgagor shall
     not be liable for the counsel of more than one separate counsel unless one
     of the members of the Mortgagee Group shall have reasonably concluded that
     there may be legal defenses available to it that are different from or
     additional to those available to other members of 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 and (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
     within ten (10) days after Mortgagee's demand any amounts owing under this
     indemnity together with interest if not paid within such ten (10) day
     period 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 and the Mortgagee Group in any action or proceeding arising under
     this indemnity. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE 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
     Mortgagor 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.

6.22. SALE OR PARTICIPATION OF LOAN. 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, 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) (and to any investment banking
     firms, rating agencies, accounting firms, law firms and other third party
     advisory firms and investors involved with the Loan and

                                       31

<PAGE>

     the Loan Documents or the applicable sale, assignment, participation or
     securitization) all documents and financial and other information
     heretofore or hereafter provided to Mortgagee in connection with the Loan
     with respect to: (a) the Property and its operation; (b) any party
     connected with the Loan (including, without limitation, Mortgagor or
     Mortgagee, any partner or member of Mortgagor or Mortgagee, any constituent
     partner or member of Mortgagor or Mortgagee, 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 30 days after request
     by Mortgagee; (c) deliver to Mortgagee such information and documents
     relating to Mortgagor, the Property and its operation and any party
     connected with the Loan as Mortgagee may reasonably request or any rating
     agency may request; (d) deliver to Mortgagee an estoppel certificate for
     the benefit of Mortgagee and any other party designated by Mortgagee
     verifying the status and terms of the Loan, in form and content reasonably
     satisfactory to Mortgagee; (e) enter into such amendments to the Loan
     Documents as may be reasonably requested by Lender or as requested by any
     rating agency in order to facilitate any such sale, assignment,
     participation or securitization without impairing Mortgagor's rights or
     increasing Mortgagor's obligations under the Loan Documents as in effect on
     the date hereof; (f) if, as a condition to the closing of the Loan,
     Mortgagor was required to be a special-purpose bankruptcy-remote entity,
     enter into such amendments to the organizational documents of Mortgagor as
     any rating agency may request to preserve or enhance Mortgagor's
     specialpurpose bankruptcy-remote status; (g) if, as a condition to the
     closing of the Loan, Mortgagor was required to provide Mortgagee with any
     nonconsolidation opinions, provide Mortgagee with such amendments and
     restatements of such opinions as any rating agency may request; and (h)
     deliver to Mortgagee such Delaware springing member limited liability
     company opinions acceptable to Mortgagee as any rating agency may request.
     The indemnity obligations of Mortgagor under the Loan Documents shall also
     apply with respect to any purchaser, assignee or participant.
     Notwithstanding the foregoing, in connection with this Section 6.22,
     Mortgagor shall not be obligated to pay its own attorneys' fees in excess
     of $2,500 and Mortgagee will reimburse Mortgagor for all actual out of
     pocket costs, including reasonable attorneys' fees, over $2,500.

6.23. RELEASE. Upon payment in full of the Secured Obligations, Mortgagee shall
     release, without warranty, the lien of this Mortgage. 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 any grantee named therein as "the person or persons
     legally entitled thereto". Mortgagee shall have no duty to determine the
     rights of persons claiming to be rightful grantees under any such release.

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.

                                       32

<PAGE>

                               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 Mortgagee's
          option, upon the occurrence of any of the following events:

          (i)  MONETARY. Provided failure to pay when due is not as a result of
               Lender's failure to deposit the sums in a timely manner pursuant
               to the Cash Management Agreement, Mortgagor shall fail to (aa)
               pay when due any sums 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. Mortgagor shall fail to observe, perform or
               discharge any of Mortgagor's obligations, covenants, conditions
               or agreements, other than 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 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, 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 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 (excluding statements made in third party
               reports accepted by Mortgagee in connection with this Loan).

          (iv) ATTACHMENT. The sequestration or attachment of, or levy or
               execution upon any of the Property, the Collateral or any other
               collateral provided by Mortgagor under any of the Loan Documents,
               or any material portion of the other assets of Mortgagor, which
               sequestration, attachment, levy or execution is not released or
               dismissed within 60 days after its occurrence; or the sale of any
               assets affected by any of the foregoing.

          (v)  INTENTIONALLY DELETED.

          (vi) KEY PERSON OR ENTITY. The retirement, death, incapacity or
               material reduction in current management authority or duties, if
               any, of Jeffrey

                                       33

<PAGE>

               Toporek and David Stade and Mortgagor's failure to provide a
               substitute or replacement reasonably acceptable to Mortgagee
               within 45 days after the occurrence of any such event.

     b.   AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
          upon the occurrence of any of the following events:

          (i)  VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Mortgagor'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) Mortgagor'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 Mortgagor or the Property or the petition's
               material allegations regarding Mortgagor's insolvency; or (cc)
               Mortgagor's making a general assignment for the benefit of
               creditors; or (dd) Mortgagor's applying for, or consenting to the
               appointment of, a receiver, trustee, custodian or liquidator of
               Mortgagor or any of its property; or (ee) the filing by Mortgagor
               of a petition seeking the liquidation or dissolution of Mortgagor
               or the commencement of any other procedure to liquidate or
               dissolve Mortgagor.

          (ii) INVOLUNTARY BANKRUPTCY. Mortgagor's failure to obtain a stay or a
               full dismissal of any involuntary petition under the Bankruptcy
               Code or other Debtor Relief Law that is filed against Mortgagor
               or in any way restrains or limits Mortgagor 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 60 days after the date of filing of the petition.

          (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
               Sections (i) or (ii) as to Mortgagor, any general partner or
               managing member of Mortgagor, 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,

                                       34

<PAGE>

          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 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
          sole 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 or under any other Loan Document; (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 or any other
          guarantor or other person or entity in any manner obligated to
          Mortgagee 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
          Mortgage or 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 to the extent permitted by law;

          Upon sale of the Property, 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

                                       35

<PAGE>

          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 reasonable 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. reasonable 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 in the area of 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 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 tune 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;

     d.   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 or lawfully taken nonjudicial
          proceedings, or both, and to apply the proceeds received upon the
          Secured Obligations all in such order and manner as Mortgagee
          determines in its sole discretion;

     e.   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

     f.   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,

                                       36

<PAGE>

     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, Mortgagee shall apply the proceeds of such sale in the following
     order of priority: First, to the costs, fees and expenses of such sale;
     Second, to the payment of the Secured Obligations which are secured by this
     Mortgage, in such order as Mortgagee shall determine in its sole
     discretion; and Third, to the Mortgagor or the Mortgagor'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 sale.

7.5. WAIVER OF MARSHALING RIGHTS, RIGHTS OF REDEMPTION AND REINSTATEMENT.
     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. Mortgagor further waives, for itself and
     for all parties claiming through or under Mortgagor, any and all rights of
     redemption and reinstatement.

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 within 5 business days demand all actual out-of-pocket costs and
     expenses incurred by Mortgagee in the enforcement of the terms and
     conditions of this Mortgage (including, without limitation, court costs and
     reasonable 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 if not paid within 5 business days of demand.

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 a Default, provided, however,
     that: (a) Mortgagee as such attorney-in-fact shall only be accountable for
     such funds as are actually received by

                                       37

<PAGE>

     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 under this
     Mortgage and the other Loan Documents are cumulative and are in addition to
     all rights and remedies provided by applicable law. Mortgagee 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 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 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 AND APPROVALS. 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.

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;

                                       38

<PAGE>

     provided that (a) Mortgagor pursues the contest diligently, in a manner
     which Mortgagee reasonably 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) reasonably 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 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 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 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, reasonable 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, pledges 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; and (ii)
          Mortgagee shall not be deemed responsible for or a participant in any
          acts, omissions or decisions of Mortgagor.

                                       39

<PAGE>

     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, unless caused by gross negligence or willful misconduct
          of Mortgagee, its agents or contractors, 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 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 Mortgage 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 Mortgage 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 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.

                                       40

<PAGE>

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 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 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 New
     York, 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
     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 New York 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 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, 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 New
     York 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 New York 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 exercise its rights of foreclosure under this

                                       41

<PAGE>

     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 notices and other communications that
     are required or permitted to be given to a party under this Mortgage 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 address or facsimile number below. All
     such notices and communications shall be effective upon receipt of such
     delivery or 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.
1320 Willow Pass Road, Suite 205
Concord, California 94520
FAX No.: (925) 691-5947

Mortgagor:

STONEWATER DOX FUNDING LLC
c/o Stonewater Partners
22 Deer Creek Lane
Mt. Kisco, NY 10549
FAX No.: (914) 470-4011

DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LLP
1251 Avenue of the Americas, 16th Floor
New York, New York 10020
Attention: Kevin Treacy
FAX No.: (212) 798-6099

and a copy to:

Solomon and Weinberg LLP
Attention: Craig H. Solomon, Esq.
FAX No.: (212) 605-1001

Mortgagor's principal place of business is at the address set forth on page 1 of
this Mortgage.

                                       42

<PAGE>

     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 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.

                         [NO FURTHER TEXT ON THIS PAGE]

                                       43

<PAGE>

IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the day and year
set forth above.

                                        "MORTGAGOR"

                                        STONEWATER DOX FUNDING LLC,
                                        a Delaware limited liability company

                                        By: /s/ Marc K. Furstein
                                            ------------------------------------
                                        Name: Marc K. Furstein
                                        Title: Chief Operating Officer

<PAGE>

STATE OF New York  )
                   ) SS.
COUNTY OF New York )

          I, Nichole Atkinson a Notary Public, in and for the County and State
aforesaid, DO HEREBY CERTIFY that Marc Furstein, as COO of Stonewater Dox
Funding LLC, a Delaware limited liability company, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person and acknowledged to me that (he/she), being
thereunto duly authorized, signed and delivered said instrument as the free and
voluntary act of said corporation, each of said limited partnerships and said
limited liability company and as (his/her) own free and voluntary act, for the
uses and purposes set forth therein.

          GIVEN under my hand and notarial seal this 19 day of Nov., 2003.

                                        Notary Public

My Commission expires:                  /s/ Nikhole Atkinson
                       --------------   ----------------------------------------
                                        NIKHOLE ATKINSON
                                        Notary Public, State of New York
                                        No. 01AT6095553
                                        Qualified in New York Country
                                        Commission Expires July 14, 2007

<PAGE>

                                                             Loan No. 31-0901388

                                    EXHIBIT A

                               DESCRIPTION OF LAND

Exhibit A to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") among STONEWATER DOX FUNDING LLC, 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 Champaign, state of Illinois and is described as follows:

Tract 1:

Lot 4 in Final Plat of Lot 4 of Par 3 Development Subdivision, as per Plat
recorded as Document 98R 28668, situated in Champaign County, Illinois.

Tract 2:

Lots 5 and 6 of Final Plat of Lots 5, 6 and 7 of Par 3 Development Subdivision,
a Subdivision in the City of Champaign, Champaign County, Illinois, as per plat
recorded July 10,1996 in Plat Book "CC" at page 185 as Document 96R 17100.

Tract 3:

Lot 7 of Final Plat of Lots 5, 6 and 7 of Par 3 Development Subdivision, a
subdivision in the City of Champaign, Champaign County, Illinois, as per plat
recorded July 10, 1996 in Plat Book "CC" at page 185 as Document 96R 17100.

Tract 4:

Lot 3 of Final Plat of Lot 3 Par 3 Development Subdivision recorded as Document
98R 14068, situated in Champaign County, Illinois.

                                    EXHIBIT A
                                        1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}]]