Document:

EXHIBIT 10.7

                       DEED OF TRUST, ASSIGNMENT OF LEASES
                               AND RENTS, SECURITY
                          AGREEMENT AND FIXTURE FILING

         THIS DEED OF TRUST,  ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING (as the same may be amended, restated, extended, supplemented
or otherwise  modified from time to time,  this "Deed of Trust"),  is made as of
the 15th day of December,  2000, by CEDARS LA LLC, a Delaware limited  liability
company,  having its principal place of business c/o HRPT Properties  Trust, 400
Centre Street, Newton,  Massachusetts  02458-2076 ("Trustor"),  to LAWYERS TITLE
COMPANY, a California  corporation,  having its place of business at 251 S. Lake
Avenue, Pasadena,  California 91101 (the "Trustee"),  for the benefit of MERRILL
LYNCH  MORTGAGE  LENDING,  INC.,  a  Delaware  corporation,  having its place of
business at 100 Church Street,  18th Floor,  New York, New York 10080  (together
with its  successors and assigns,  the  "Beneficiary").  Capitalized  terms used
herein but not otherwise defined shall have the respective  meanings assigned to
such terms in the Loan Agreement (hereinafter defined).

         THIS DEED OF TRUST CONSTITUTES A FIXTURE FILING UNDER SECTIONS 9313 AND
9402 OF THE UNIFORM  COMMERCIAL  CODE AS ADOPTED BY THE STATE OF CALIFORNIA.  TO
THE EXTENT GOODS ARE  FIXTURES  UNDER THE LAWS OF THE STATE OF  CALIFORNIA,  THE
FIXTURES ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY  LOCATED IN THE CITY
OF LOS ANGELES,  COUNTY OF LOS ANGELES,  STATE OF CALIFORNIA,  MORE PARTICULARLY
DESCRIBED ON EXHIBIT A ATTACHED HERETO,  COMMONLY KNOWN BY THE STREET ADDRESS OF
8631 WEST THIRD STREET, LOS ANGELES, CALIFORNIA. THE NAME OF THE RECORD OWNER OF
THE REAL  PROPERTY IS CEDARS LA LLC.  THIS DEED OF TRUST SHALL ALSO BE EFFECTIVE
AS A FINANCING  STATEMENT  COVERING MINERALS OR THE LIKE (INCLUDING OIL AND GAS)
AND IS TO BE FILED FOR RECORD IN THE REAL ESTATE RECORDS OF THE COUNTY WHERE THE
PROPERTY  IS  SITUATED.  THE  MAILING  ADDRESS  OF  TRUSTOR  AND THE  ADDRESS OF
BENEFICIARY  FROM WHICH  INFORMATION  CONCERNING  THE SECURITY  INTERESTS MAY BE
OBTAINED ARE SET FORTH IN THE FIRST PARAGRAPH OF THIS DEED OF TRUST.

                              W I T N E S S E T H:

         To secure the payment of a loan (the "Loan") in the original  principal
sum of TWO HUNDRED SIXTY MILLION AND NO/100 DOLLARS ($260,000,000), lawful money
of the United  States of  America,  being made from  Beneficiary  to Trustor and
other  Borrowers  (as  defined on Exhibit B attached  hereto) on the date hereof
pursuant to the terms and  conditions of a certain Loan and Security  Agreement,
dated as of the date  hereof (as  amended or  modified,  the "Loan  Agreement"),
among Trustor,  the other Borrowers and Beneficiary,  which Loan is evidenced by
and is to be paid with interest according to a certain Promissory Note, dated as
of
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the date hereof (as amended,  modified, renewed or restated and together with
any substitutes or replacements  therefor,  the "Note"), made by Trustor and the
other  Borrowers to Beneficiary  and all other sums due hereunder,  or otherwise
due under the Loan Documents (as defined in the Loan  Agreement)  (the principal
amount of the Loan,  together with  interest  thereon and all sums due hereunder
and  under  the Loan  Agreement,  the Note and the other  Loan  Documents  being
collectively  called  the  "Debt"),  and  all  of  the  agreements,   covenants,
conditions,  warranties,  representations  and other obligations  (other than to
repay the Debt) made or  undertaken  by Trustor or any other person or entity to
Beneficiary  or  others as set forth in the Loan  Documents  (collectively,  the
"Obligations"),   Trustor  has  mortgaged,   given,  granted,  bargained,  sold,
alienated,  enfeoffed,  conveyed, confirmed, pledged, assigned, and hypothecated
and by these presents does hereby give, grant,  bargain,  sell, alien,  enfeoff,
convey,  confirm,  pledge and assign unto Trustee,  in trust, for the benefit of
Beneficiary  with  power of sale and  right of entry  and  possession,  and with
mortgage covenants, all of Trustor's right, title, interest and estate in and to
the real property  described on Exhibit A attached  hereto (the  "Premises") and
the  buildings,  structures,  fixtures,  additions,  enlargements,   extensions,
modifications,  repairs,  replacements and improvements now or hereafter located
thereon (the "Improvements");

         TOGETHER  WITH:  all right,  title,  interest and estate of Trustor now
owned,  or  hereafter  acquired,  in  and  to the  following  property,  rights,
interests  and  estates  (the  Premises,  the  Improvements  together  with  the
following property,  rights,  interests and estates being hereinafter  described
are collectively referred to herein as the "Mortgaged Property"):

         (a) all easements,  rights-of-way,  strips and gores of land,  streets,
ways, alleys,  passages,  sewer rights,  water, water courses,  water rights and
powers,  air rights and development  rights,  and all estates,  rights,  titles,
interests, privileges, liberties, tenements,  hereditaments and appurtenances of
any nature  whatsoever,  in any way  belonging,  relating or  pertaining  to the
Premises and the  Improvements  and the reversion and reversions,  remainder and
remainders,  and all land lying in the bed of any street, road or avenue, opened
or proposed,  in front of or adjoining the Premises,  to the center line thereof
and all the  estates,  rights,  titles,  interests,  dower and  rights of dower,
courtesy  and  rights  of  courtesy,  property,  possession,  claim  and  demand
whatsoever, both at law and in equity, of Trustor of, in and to the Premises and
the  Improvements  and every part and  parcel  thereof,  with the  appurtenances
thereto;

         (b) all machinery,  equipment, fixtures (including, but not limited to,
all heating, air conditioning,  plumbing, lighting,  communications and elevator
fixtures)  and other  property  of every kind and  nature,  whether  tangible or
intangible,  whatsoever owned by Trustor,  or in which Trustor has or shall have
an interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant  thereto,  and  usable  in  connection  with the  present  or future
operation  and occupancy of the Premises and the  Improvements  and all building
equipment,  materials and supplies of any nature whatsoever owned by Trustor, or
in which  Trustor has or shall have an interest,  now or hereafter  located upon
the  Premises  and the  Improvements,  or  appurtenant  thereto,  and  usable in
connection with the present or future operation,  enjoyment and occupancy of the
Premises and the Improvements (hereinafter collectively called the "Equipment"),
including the proceeds of any sale or transfer of the foregoing,  and the right,
title  and  interest  of  Trustor  in and to any of the  Equipment  which may be
subject to any security

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interests,  as defined in the Uniform Commercial Code, as adopted and enacted by
the state or states where any of the Mortgaged Property is located (the "Uniform
Commercial Code") superior in lien to the lien of this Deed of Trust;

         (c) all  awards or  payments,  including  interest  thereon,  which may
heretofore and hereafter be made with respect to the Mortgaged Property, whether
from the exercise of the right of eminent domain or condemnation (including, but
not limited to, any transfer made in lieu of or in  anticipation of the exercise
of said  rights),  or for a change  of  grade,  or for any  other  injury  to or
decrease in the value of the Mortgaged Property;

         (d) all leases,  tenancies,  licenses,  subleases,  assignments  and/or
other rental or occupancy agreements (including, without limitation, any and all
guarantees  of  any of the  foregoing)  heretofore  or  hereafter  entered  into
affecting the use,  enjoyment or occupancy of the Premises and the Improvements,
including  any  extensions,   renewals,   modifications  or  amendments  thereof
(collectively,  the "Leases") and all rents,  rent  equivalents  (including room
revenues,  if applicable),  moneys payable as damages or in lieu of rent or rent
equivalents,  royalties (including, without limitation, all oil and gas or other
mineral  royalties  and  bonuses),  income,  receivables,   receipts,  revenues,
deposits (including, without limitation,  security, utility and other deposits),
accounts,  cash,  issues,  profits,  charges for  services  rendered,  and other
consideration  of  whatever  form or  nature  received  by or paid to or for the
account of or benefit  of  Trustor or its agents or  employees  from any and all
sources arising from or attributable to the Premises and the  Improvements  (the
"Rents"),  together with all proceeds from the sale or other  disposition of the
Leases and the right to receive and apply the Rents to the payment of the Debt;

         (e) all proceeds of and any unearned premiums on any insurance policies
covering the Mortgaged Property,  including,  without  limitation,  the right to
receive and apply the proceeds of any insurance,  judgments, or settlements made
in lieu thereof, for damage to the Mortgaged Property or any part thereof;

         (f) the right,  following  an Event of Default  (as defined in the Loan
Agreement),  in the name and on behalf of  Trustor,  to appear in and defend any
action or  proceeding  brought  with  respect to the  Mortgaged  Property and to
commence any action or proceeding to protect the interest of the  Beneficiary in
the Mortgaged Property or any part thereof;

         (g) all accounts, escrows, reserves,  documents,  instruments,  chattel
paper,  claims,  deposits and general  intangibles,  as the foregoing  terms are
defined  in  the  Uniform  Commercial  Code,  and  all  books,  records,  plans,
specifications,  designs,  drawings,  permits, consents,  licenses,  franchises,
management   agreements,   contracts,   contract  rights   (including,   without
limitation,  any  contract  with any  architect  or  engineer  or with any other
provider  of goods  or  services  for or in  connection  with any  construction,
repair, or other work upon the Mortgaged Property),  approvals, actions, refunds
or real estate taxes and  assessments  (and any other  governmental  impositions
related to the Mortgaged  Property),  and causes of action that now or hereafter
relate  to,  are  derived  from or are used in  connection  with  the  Mortgaged
Property, or the use, operation,  management,  improvement,  alteration, repair,
maintenance,  occupancy or  enjoyment  thereof or the conduct of any business or
activities thereon;

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         (h) any and all proceeds and products of any of the  foregoing  and any
and all other security and collateral of any nature whatsoever, now or hereafter
given for the repayment of the Debt and the performance of Trustor's obligations
under the Loan  Documents,  including  (without  limitation) the Impositions and
Insurance Reserve, the Replacement Reserve, the Hazardous Materials  Remediation
Reserve,  the Loss Proceeds Account,  the Deposit Accounts,  the Central Account
and the Sub-Accounts thereof (each as defined in the Cash Management  Agreement,
dated as of the date  hereof  (as  amended  or  modified  the  "Cash  Management
Agreement"),  by and between Trustor,  the other Borrowers,  Beneficiary,  First
Union National Bank, and REIT Management & Research, Inc. ("Manager")),  and any
other escrows or reserves set forth in the Loan Documents;

         (i) all accounts  receivable,  contract  rights,  interests,  estate or
other claims, both in law and in equity,  which Trustor now has or may hereafter
acquire in the Mortgaged Property or any part thereof; and

         (j) all rights which  Trustor now has or may hereafter  acquire,  to be
indemnified  and/or held  harmless from any  liability,  loss,  damage,  cost or
expense  (including,  without  limitation,  attorneys'  fees and  disbursements)
relating to the Mortgaged Property or any part thereof.

         TO HAVE AND TO HOLD the above granted and described  Mortgaged Property
unto  and to the  Trustee,  for the  use and  benefit  of  Beneficiary,  and its
successors and assigns forever;

         PROVIDED,  HOWEVER, these presents are upon the express condition that,
if Trustor shall well and truly pay to  Beneficiary  the Debt at the time and in
the manner  provided in the Note and this Deed of Trust and shall well and truly
abide by and comply with each and every  covenant and condition set forth herein
and in the Note in a timely manner, these presents and the estate hereby granted
shall cease, terminate and be void;

         AND Trustor  represents  and warrants to and  covenants and agrees with
Beneficiary as follows:

         1.  Payment of Debt and  Incorporation  of  Covenants,  Conditions  and
Agreements. Trustor shall pay the Debt at the time and in the manner provided in
the Note,  the Loan  Agreement and in this Deed of Trust.  Trustor will duly and
punctually perform all of the covenants,  conditions and agreements contained in
the Note,  the Loan  Agreement,  this Deed of Trust and the other Loan Documents
all of which covenants, conditions and agreements are hereby made a part of this
Deed of Trust to the same  extent  and with the same force as if fully set forth
herein.

         2.  Warranty  of  Title.   Trustor  warrants  that  Trustor  has  good,
marketable  and insurable  title to the Mortgaged  Property and has the right to
give, grant, bargain, sell, alien, enfeoff,  convey, confirm, pledge, assign and
hypothecate the same and that Trustor possesses a fee estate in the Premises and
the Improvements  and that it owns the Mortgaged  Property free and clear of all
liens,   encumbrances   and  charges   whatsoever   except  for  the   Permitted
Encumbrances.  Trustor  represents  and  warrants  that  none  of the  Permitted
Encumbrances  will

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materially and adversely affect (i) Trustor's ability to pay in full in a timely
manner its obligations, including, without limitation, the Debt, (ii) the use of
the  Mortgaged  Property for the use  currently  being made  thereof,  (iii) the
operation  of the  Mortgaged  Property,  or  (iv)  the  value  of the  Mortgaged
Property.  Trustor shall forever warrant, defend and preserve such title and the
validity  and  priority  of the lien of this  Deed of Trust  and  shall  forever
warrant  and defend the same to  Beneficiary  against  the claims of all persons
whomsoever.

         3. Insurance. (a) Trustor, at its sole cost and expense, shall maintain
or cause to be maintained  insurance with respect to the Mortgaged  Property for
the mutual benefit of Trustor and  Beneficiary as required by Section 5.4 of the
Loan Agreement.

                  (b) If the Mortgaged  Property  shall be damaged or destroyed,
in whole or in part, by fire or other casualty (an "Insured Casualty"),  Trustor
shall give immediate notice thereof to Beneficiary and to the insurance carrier.
Subject  to the terms of the Loan  Agreement,  Trustor  shall  promptly  repair,
replace or rebuild the Mortgaged  Property in accordance  with,  and all amounts
paid  with  respect  to such  Insured  Casualty  under  all  insurance  policies
maintained by Trustor shall be governed by, the terms and  conditions of Section
5.5  of  the  Loan  Agreement.  The  expenses  incurred  by  Beneficiary  in the
adjustment  and  collection of insurance  proceeds shall become part of the Debt
and shall be secured  hereby and shall be reimbursed  by Trustor to  Beneficiary
upon demand.

         4. Payment of Impositions and Other Charges. Subject to Trustor's right
to contest set forth in Section 5.3 (B) of the Loan Agreement and the provisions
of  Section 5 below,  and  pursuant  to the  provisions  of the Cash  Management
Agreement,  Trustor  shall  cause to be paid all  Impositions  now or  hereafter
levied or assessed or imposed against the Mortgaged Property or any part thereof
as the same become due and payable.  Trustor shall  promptly pay for all utility
services  provided  to  the  Mortgaged   Property.   Trustor  shall  furnish  to
Beneficiary or its designee receipts for the payment of the Impositions prior to
the date the same shall become delinquent (provided, however, that Trustor shall
not be required to furnish such receipts for payment of Impositions in the event
that such  Impositions  have  been paid by  Beneficiary  pursuant  to  Section 5
hereof).

         5.  Impositions  and  Insurance  Reserve.  Trustor  shall make  monthly
deposits into the Impositions and Insurance Reserve of amounts sufficient to pay
Impositions and Insurance  Premiums (if and to the extent Insurance Premiums are
required to be escrowed under the Loan  Agreement) in accordance  with the terms
of Section 6.3 of the Loan Agreement and the Cash Management Agreement.

         6.  Condemnation.  (a) Trustor shall promptly give Beneficiary  written
notice of the actual or threatened  commencement of any  condemnation or eminent
domain  proceeding  affecting the Mortgaged  Property or any portion thereof and
shall deliver to  Beneficiary  copies of any and all papers served in connection
with such proceedings.  Subject to the terms of Section 6 (b) below, Beneficiary
is hereby irrevocably appointed as Trustor's  attorney-in-fact,  coupled with an
interest,  with  exclusive  power to  collect,  receive  and retain any award or
payment for said  condemnation  or eminent  domain and to make any compromise or
settlement in connection with

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such   proceeding,   subject   to  the   provisions   of  this  Deed  of  Trust.
Notwithstanding  any  taking by any  public or quasi  public  authority  through
eminent  domain or otherwise  (including but not limited to any transfer made in
lieu of or in  anticipation  of the  exercise  of such  taking),  Trustor  shall
continue to pay the Debt at the time and in the manner  provided for its payment
in the Note,  in this Deed of Trust and the other  Loan  Documents  and the Debt
shall not be  reduced  until  any  award or  payment  therefor  shall  have been
actually received after expenses of collection and applied by Beneficiary to the
discharge of the Debt in accordance  with the terms hereof.  In accordance  with
the  terms  hereof,  Trustor  shall  cause  the  award  or  payment  made in any
condemnation or eminent domain  proceeding,  which is payable to Trustor,  to be
paid directly to Beneficiary. Beneficiary may apply any such award or payment to
the reduction or discharge of the Debt whether or not then due and payable; such
application to be made without any Prepayment  Consideration  (as defined in the
Note),  provided that such payment is made within one hundred  twenty (120) days
following the date of receipt of such condemnation award except that if an Event
of Default  has  occurred  and is  continuing,  then such  application  shall be
subject to the Prepayment Consideration computed in accordance with the Note. If
the  Mortgaged  Property  is  sold  following  an  Event  of  Default,   through
foreclosure  or otherwise,  prior to the receipt by Beneficiary of such award or
payment,  Beneficiary shall have the right, whether or not a deficiency judgment
on the Note shall have been sought,  recovered or denied,  to receive said award
or payment, or a portion thereof sufficient to pay the Debt.

                  (b)  Notwithstanding  the  foregoing,  Beneficiary  shall  not
exercise  the  foregoing  rights and  Trustor  may  prosecute  any  condemnation
proceeding  and settle or  compromise  and collect any claim  involving an award
and/or  claim for damages of not more than the  Restoration  Threshold  provided
that:  (i) no Event of Default  shall have occurred and be  continuing,  (ii) in
Beneficiary's sole good faith judgment, such condemnation or taking does not and
will not materially  restrict access to the Mortgaged Property or otherwise have
a Material  Adverse  Effect,  and the Mortgaged  Property  remaining  after such
condemnation  or taking is capable of being restored to an  economically  viable
whole of the same type which existed prior to the  condemnation  or taking or in
compliance with all applicable  laws, (iii) Trustor applies the proceeds of such
award to any  reconstruction or repair of the Mortgaged  Property necessary as a
result of such  condemnation  or taking,  (iv) Trustor  promptly  commences  and
diligently  prosecutes such reconstruction or repair to completion in accordance
with all applicable laws and (v) at Beneficiary's  request,  such reconstruction
or repair shall be performed  under the  supervision of an architect or engineer
reasonably  acceptable to Beneficiary and the plans and  specifications for such
work shall be subject to Beneficiary's  reasonable approval.  Trustor authorizes
Beneficiary  to apply such  awards,  payments,  proceeds or  damages,  after the
deduction of  Beneficiary's  reasonable  expenses  incurred in the collection of
such amounts, at Beneficiary's option, to restoration or repair of the Mortgaged
Property or to payment of the sums secured by this Deed of Trust, whether or not
then due, in the order determined by Beneficiary,  with the balance,  if any, to
Trustor.  In the event that Beneficiary  shall apply any such awards,  payments,
proceeds or damages to the indebtedness secured hereby pursuant to the foregoing
sentence,  no Prepayment  Consideration or other  prepayment  premium or penalty
shall be due and payable under the Note in connection therewith.  Subject to the
provisions  of clauses (i) through (v) of this Section 6(b),  Beneficiary  shall
not exercise  Beneficiary's option to apply such awards or damages to payment of
the sums secured by this Deed of Trust  provided that each of the

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conditions (as applicable) to the release of insurance  proceeds for restoration
or repair of the Mortgaged Property under Section 5.5 of the Loan Agreement have
been  satisfied  with  respect  to such  condemnation  awards  or  damages.  Any
application  of proceeds to principal  shall not extend or postpone the due date
of the monthly  installments  due hereunder,  under the Note or under any of the
Loan  Documents  or change the amount of such  installments.  Trustor  agrees to
execute such further evidence of assignment of any awards, proceeds,  damages or
claims arising in connection with such condemnation or taking as Beneficiary may
reasonably require.

         7. Maintenance of Mortgaged Property. Trustor shall cause the Mortgaged
Property to be operated and  maintained in a good and safe  condition and repair
and in keeping with the  condition  and repair of  properties  of a similar use,
value, age, nature and construction.  Trustor shall not use, maintain or operate
the  Mortgaged  Property  in any manner  which  constitutes  a public or private
nuisance or which makes void, voidable, or cancelable,  or increases the premium
of, any insurance then in force with respect  thereto.  The Improvements and the
Equipment shall not be removed, or demolished and no Material  Alterations shall
be made thereto (except for normal  replacement or disposal of the Equipment and
except as  otherwise  expressly  permitted  in the Loan  Agreement ) without the
consent  of  Beneficiary,  which  consent  shall not be  unreasonably  withheld,
delayed or conditioned.  Trustor shall promptly comply in all material  respects
with all laws, orders and ordinances  affecting the Mortgaged  Property,  or the
use thereof.

         8. Use of Mortgaged  Property.  Trustor  shall not  initiate,  join in,
acquiesce  in, or  consent to any change in any  private  restrictive  covenant,
zoning law or other public or private restriction, limiting or defining the uses
which  may be made of the  Mortgaged  Property  or any part  thereof,  nor shall
Trustor  initiate,  join in,  acquiesce  in, or consent to any zoning  change or
zoning matter  affecting the Mortgaged  Property,  which in any of the foregoing
cases could  reasonably be expected to result in a Material  Adverse Effect.  If
under  applicable  zoning  provisions  the  use of all  or  any  portion  of the
Mortgaged  Property is or shall  become a  nonconforming  use,  Trustor will not
cause or permit such  nonconforming  use to be discontinued or abandoned without
the  express  written  consent  of  Beneficiary,  which  consent  shall  not  be
unreasonably withheld.  Trustor shall not permit or suffer to occur any waste on
or to the  Mortgaged  Property or to any portion  thereof and shall not take any
steps whatsoever to convert the Mortgaged Property, or any portion thereof, to a
condominium  or  cooperative  form of  management.  Trustor  will not install or
permit  to be  installed  on  the  Premises  any  underground  storage  tank  or
above-ground storage tank in violation of the Environmental Laws.

         9.  Transfer or  Encumbrance  of the  Mortgaged  Property.  (a) Trustor
acknowledges  that  Beneficiary has examined and relied on the  creditworthiness
and  experience  of  Trustor  in owning  and  operating  properties  such as the
Mortgaged  Property  in  agreeing to make the Loan,  and that  Beneficiary  will
continue to rely on Trustor's  ownership of the Mortgaged Property as a means of
maintaining the value of the Mortgaged Property as security for repayment of the
Debt. Except as expressly permitted under this Deed of Trust, the Loan Agreement
or under the other Loan Documents, Trustor shall not cause or suffer to occur or
exist, directly or indirectly, voluntarily or involuntarily, by operation of law
or otherwise, any sale, transfer,  mortgage,  pledge, lien or encumbrance (other
than Permitted Encumbrances) (collectively,  "Transfers") of

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(i) all or any part of the Mortgaged  Property or any interest therein,  or (ii)
any direct or indirect  beneficial  ownership  interest (in whole or in part) in
Trustor,  irrespective  of the number of tiers of  ownership,  without the prior
written consent of Beneficiary.

                  (b)  Notwithstanding  the foregoing,  Trustor may, without the
consent  of  Beneficiary,  (i) make  immaterial  transfers  of  portions  of the
Mortgaged  Property to any federal,  state or local  government or any political
subdivision thereof (collectively, "Governmental Authorities") for dedication or
public  use  (subject  to the  provisions  of  Section 6 hereof)  and (ii) grant
easements,  restrictions,  covenants,  reservations  and  rights  of  way in the
ordinary  course of  business  for  access,  water and sewer  lines,  telephone,
cellular, cable, internet and telegraph lines, electric lines or other utilities
or for other similar purposes,  provided that no such transfer or conveyance set
forth in the  foregoing  clauses  (i) and (ii)  shall  have a  Material  Adverse
Effect; provided, however, that Trustor shall give Beneficiary at least ten (10)
days' prior written notice of any such transfer or conveyance describing same in
reasonable detail and certifying that such transfer or conveyance  satisfies the
foregoing conditions.

                  (c)  The  occurrence  of any  Transfer  in  violation  of this
Section 9 shall constitute an Event of Default hereunder,  whereupon Beneficiary
at its option,  without being required to demonstrate  any actual  impairment of
its security or any increased  risk of default  hereunder,  may declare the Debt
immediately due and payable.

                  (d)  Beneficiary's  consent to any  Transfer of the  Mortgaged
Property  or any  interest  in  Trustor  shall  not be  deemed to be a waiver of
Beneficiary's  right to require such consent to any future  occurrence  of same.
Any attempted or purported  Transfer of the Mortgaged  Property or of any direct
or indirect  interest in Trustor,  if made in  contravention  of this Section 9,
shall be null and void and of no force and effect.

         10. Taxes on Security; Documentary Stamps; Intangibles Tax. (a) Trustor
shall pay all taxes, charges,  filing,  registration and recording fees, excises
and levies  payable  with  respect to the Note,  this Deed of Trust or the liens
created or secured by the Loan Documents, other than income, franchise and doing
business  taxes  imposed on  Beneficiary.  If there shall be enacted any law (i)
deducting the Loan from the value of the  Mortgaged  Property for the purpose of
taxation,  (ii) affecting any lien on the Mortgaged Property,  or (iii) changing
existing laws of taxation of mortgages, deeds of trust, security deeds, or debts
secured by real  property,  or changing the manner of collecting any such taxes,
Trustor  shall  promptly pay to  Beneficiary,  on demand,  all taxes,  costs and
charges for which Beneficiary is or may be liable as a result thereof;  however,
if such payment would be  prohibited  by law or would render the Loan  usurious,
then instead of  collecting  such payment,  Beneficiary  may declare all amounts
owing under the Loan Documents to be immediately due and payable.  No Prepayment
Consideration shall be imposed on any such payment.

                  (b) If at any time the  United  States of  America,  any State
thereof or any  subdivision  of any such State  shall  require  revenue or other
stamps to be affixed to the Note or this Deed of Trust,  or impose any other tax
or  charge  on the  same,  Trustor  will pay for the  same,  with  interest  and
penalties  thereon,  if any. Trustor hereby agrees that, in the event that it is

                                       8
<PAGE>

determined that additional documentary stamp tax or intangible tax is due hereon
or any  deed of  trust  or  promissory  note  executed  in  connection  herewith
(including,  without  limitation,  the Note),  Trustor shall  indemnify and hold
harmless  Beneficiary for all such documentary  stamp tax and/or intangible tax,
including  all  penalties  and  interest   assessed  or  charged  in  connection
therewith.  Trustor  shall pay same within ten (10) days after demand of payment
from  Beneficiary  and the payment of such sums shall be secured by this Deed of
Trust and such sums shall bear  interest at the Default  Rate (as defined in the
Note) from and after the eleventh (11th) day after demand until paid in full.

                  (c) Trustor shall hold harmless and indemnify Beneficiary, its
successors  and  assigns,  against  any  liability  incurred  by  reason  of the
imposition of any tax on the making and recording of this Deed of Trust.

         11. No Credits on Account of the Debt. Trustor will not claim or demand
or be  entitled  to any credit or credits on account of the Debt for any part of
the Impositions  assessed against the Mortgaged  Property,  or any part thereof,
and no deduction  shall  otherwise be made or claimed from the assessed value of
the Mortgaged  Property,  or any part  thereof,  for real estate tax purposes by
reason of this Deed of Trust or the Debt.  In the event  such  claim,  credit or
deduction  shall be  required  by law,  Beneficiary  shall have the  option,  by
written  notice  of not  less  than  ninety  (90)  days,  to  declare  the  Debt
immediately due and payable. No Prepayment Consideration shall be imposed on any
such payment.

         12. Performance of Other Agreements.  Trustor shall duly and punctually
observe and perform each and every  material  term,  provision,  condition,  and
covenant  to be observed or  performed  by Trustor  pursuant to the terms of any
agreement or recorded  instrument  (including  all  instruments  comprising  the
Permitted  Encumbrances)  affecting or pertaining to the Mortgaged Property, and
will not suffer or permit any default or event of default  (after  giving effect
to any applicable  notice  requirements  and cure periods) to exist under any of
the foregoing.

         13. Further Acts; Secondary Market  Transactions.  (a) Trustor will, at
its sole cost and expense,  and without  expense to  Beneficiary,  do,  execute,
acknowledge  and deliver all and every such further  acts,  deeds,  conveyances,
mortgages, assignments, notices of assignment, Uniform Commercial Code financing
statements or continuation  statements,  transfers and assurances as Beneficiary
shall,  from  time  to  time,  reasonably  require,  for  the  better  assuring,
conveying, assigning, transferring, and confirming unto Beneficiary the property
and  rights  hereby  given,  granted,  bargained,  sold,  alienated,  enfeoffed,
conveyed,  confirmed,  pledged,  assigned  and  hypothecated  or intended now or
hereafter  so to be, or which  Trustor may be or may  hereafter  become bound to
convey  or  assign  to  Beneficiary,  or  for  carrying  out  the  intention  or
facilitating  the  performance of the terms of this Deed of Trust or for filing,
registering or recording this Deed of Trust.  Trustor,  on demand,  will execute
and deliver and, upon  Trustor's  failure to do so within five (5) Business Days
after Beneficiary's request therefor,  hereby authorizes  Beneficiary to execute
in the name of  Trustor  or  without  the  signature  of  Trustor  to the extent
Beneficiary  may  lawfully  do so,  one or more  financing  statements,  chattel
mortgages  or other  instruments,  to evidence  more  effectively  the  security
interest of  Beneficiary  in the Mortgaged  Property.  Upon  foreclosure  or the
appointment of a receiver, Trustor will, at its sole cost and expense, cooperate

                                       9
<PAGE>

fully and  completely  to effect the  assignment  or  transfer  of any  license,
permit, agreement or any other right necessary or useful to the operation of the
Mortgaged  Property.  Trustor  grants to  Beneficiary  an  irrevocable  power of
attorney  coupled with an interest for the purpose of exercising  and perfecting
any and all rights and remedies  available to  Beneficiary at law and in equity,
including, without limitation, such rights and remedies available to Beneficiary
pursuant to this Section.

                  (b) Subject to the terms and  conditions set forth in the Loan
Agreement,  Beneficiary  shall have the right to engage in one or more Secondary
Market Transactions and, in connection  therewith,  Beneficiary may transfer its
obligations under this Deed of Trust, the Note, the Loan Agreement and under the
other Loan Documents (or may transfer the portion thereof  corresponding  to the
transferred  portion of the  Obligations),  and thereafter  Beneficiary shall be
relieved of any obligations hereunder and under the other Loan Documents arising
after the date of said transfer with respect to the transferred interest.

         14. Recording of Deed of Trust, Etc. Upon the execution and delivery of
this Deed of Trust and  thereafter,  from time to time,  Trustor will cause this
Deed of Trust, and any security  instrument creating a lien or security interest
or evidencing the lien hereof upon the Mortgaged Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be  required  by any  present  or future  law in order to  publish
notice of and fully to protect the lien or security  interest  hereof upon,  and
the interest of  Beneficiary  in, the Mortgaged  Property.  Trustor will pay all
filing,  registration  or  recording  fees,  and all  expenses  incident  to the
preparation,  execution and  acknowledgment  of this Deed of Trust,  any deed of
trust supplemental hereto, any security instrument with respect to the Mortgaged
Property and any instrument of further assurance, and all federal, state, county
and municipal, taxes, duties, imposts, assessments and charges arising out of or
in connection with the execution and delivery of this Deed of Trust, any deed of
trust supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance,  except where prohibited by law
so to do.

         15.  Reporting  Requirements.  Trustor  agrees to give prompt notice to
Beneficiary  of the  insolvency  or  bankruptcy  filing of Trustor or the death,
insolvency or bankruptcy filing of any Guarantor.

         16. Intentionally Deleted.

         17.  Remedies.  Upon the  occurrence  and during the  continuance of an
Event of Default,  Beneficiary may, at Beneficiary's  option,  and by or through
Trustee,  by  Beneficiary  itself,  or  otherwise,  do any  one or  more  of the
following:

                  (a) Right to  Perform  Trustor's  Covenants.  If  Trustor  has
failed to keep or perform  any  covenant  whatsoever  contained  in this Deed of
Trust or the other Loan Documents,  Beneficiary  may, but shall not be obligated
to do so, perform or attempt to perform said  covenant;  and any payment made or
expense  incurred  in the  performance  or  attempted  performance  of any  such
covenant,  together with any sum expended by  Beneficiary  that is chargeable to
Trustor or subject to reimbursement  by Trustor under the Loan Documents,  shall

                                       10
<PAGE>

be and become a part of the Debt, and Trustor  promises,  upon demand, to pay to
Beneficiary,  at the place where the Note is payable, all sums so incurred, paid
or expended by Beneficiary,  with interest from the date when paid,  incurred or
expended by Beneficiary at the Default Rate (as defined in the Note).

                  (b) Right of Entry.  Beneficiary  may,  prior or subsequent to
the  institution  of any  foreclosure  proceedings,  enter  upon  the  Mortgaged
Property,  or any part thereof,  and take exclusive  possession of the Mortgaged
Property  and of all  books,  records,  and  accounts  relating  thereto  and to
exercise without  interference from Trustor any and all rights which Trustor has
with  respect  to  the  management,   possession,   operation,   protection,  or
preservation of the Mortgaged Property, including, without limitation, the right
to rent the same for the  account of Trustor  and to deduct  from such Rents all
costs,  expenses, and liabilities of every character incurred by the Beneficiary
in collecting such Rents and in managing, operating, maintaining, protecting, or
preserving  the  Mortgaged  Property and to apply the remainder of such Rents on
the Debt in such manner as Beneficiary may elect. All such costs,  expenses, and
liabilities  incurred by Beneficiary  in collecting  such Rents and in managing,
operating, maintaining, protecting, or preserving the Mortgaged Property, if not
paid out of Rents as hereinabove provided,  shall constitute a demand obligation
owing by Trustor and shall bear interest from the date of expenditure until paid
at the Default Rate as specified  in the Note,  all of which shall  constitute a
portion of the Debt. If  Beneficiary  elects to enter the Mortgaged  Property as
provided  for  herein,  Beneficiary  may  invoke any and all legal  remedies  to
dispossess  Trustor,  including  specifically  one or more  actions for forcible
entry and detainer,  trespass to try title, and restitution.  In connection with
any action taken by the  Beneficiary  pursuant to this  subsection,  Beneficiary
shall not be liable for any loss sustained by Trustor resulting from any failure
to let the Mortgaged  Property,  or any part  thereof,  or from any other act or
omission of the Beneficiary in managing the Mortgaged  Property unless such loss
is caused by the willful  misconduct  or gross  negligence of  Beneficiary,  its
agents,  employees or officers, nor shall Beneficiary be obligated to perform or
discharge  any  obligation,  duty,  or liability  under any Lease or under or by
reason hereof or the exercise of rights or remedies hereunder. Trustor shall and
does hereby agree to indemnify, defend and hold harmless the Indemnified Parties
(as defined in Section 23 below) from and against, any and all liability, claim,
demand, loss, damage, cost or expense (including, without limitation, reasonable
attorneys' fees and disbursements) which may or might be suffered or incurred by
any  Indemnified  Party under any such Lease or under or by reason hereof or the
exercise  of  rights  or  remedies  hereunder,  or  by  reason  of  any  alleged
obligations  or  undertakings  on its part to  perform or  discharge  any of the
terms, covenants, or agreements contained in any such Lease as and to the extent
provided  under Section 23 below.  Nothing in this  subsection  shall impose any
duty, obligation,  or responsibility upon any Indemnified Party for the control,
care,  management,  leasing,  or repair of the Mortgaged  Property,  nor for the
carrying out of any of the terms and  conditions  of any such Lease prior to the
transfer  of  title  to the  Mortgaged  Property  to any  Indemnified  Party  by
foreclosure,  deed-in-lieu  thereof,  exercise  of power  of sale or  otherwise,
Trustor  hereby  assents to,  ratifies,  and confirms any and all actions of the
Beneficiary with respect to the Mortgaged Property taken under this subsection.

                  (c) Right to Accelerate.  Beneficiary  may,  without notice or
demand,  declare  the  entire  unpaid  balance of the Debt  immediately  due and
payable.

                                       11
<PAGE>

                  (d)  Foreclosure-Power  of  Sale.  To the  extent,  and in the
manner  permitted by law,  Beneficiary  may elect to exercise  the  non-judicial
power of sale  which is hereby  conferred  under the terms of this Deed of Trust
and as provided  for by the  statutes of the State of  California.  The power of
sale shall be  exercised  by notifying  Trustee  hereunder of that  election and
depositing with Trustee this Deed of Trust or the original Note and receipts and
evidence  of  expenditures  made and secured  hereby as Trustee  may  reasonably
require.  Upon receipt of any such notice from Beneficiary,  Trustee shall cause
to be recorded,  published  and  delivered to Trustor such Notice of Default and
Election to Sell as is then  required by applicable  California  law and by this
Deed  of  Trust,  which  notice  shall,  to the  extent  required  by the law of
California,  set forth,  among other  things,  the nature of the  breach(es)  or
default(s),  the action(s) required to effect a cure thereof and the time period
within  which  that cure may be  effected.  If no cure is  effected  within  the
statutory  time  limits  following  recordation  of the  Notice of  Default  and
Election  to Sell and after  Notice of Sale has been  given as  required  by the
above referenced statutes, Trustee may, at the direction of Beneficiary, without
further notice or demand,  sell and convey the Mortgaged  Property in accordance
with applicable California law. The Mortgaged Property may be sold as a whole or
in separate lots,  parcels or items and in such order as Beneficiary may direct,
at public  auction to the highest  bidder for cash in lawful money of the United
States payable at the time of sale.  Trustee shall deliver to such  purchaser(s)
good and  sufficient  deed or deeds  conveying the property so sold, but without
any  covenant or warranty  express or implied.  The recitals in such deed of any
matter  or fact  shall be  conclusive  proof of the  truthfulness  thereof.  Any
Person,  including  Trustor,  Trustee or  Beneficiary,  may purchase at any such
sale. To the extent permitted by applicable  statutes,  Trustee may postpone the
sale of all or any portion of the Mortgaged  Property by public  announcement at
the time and place of sale, and from time to time  thereafter may again postpone
the sale by public  announcement  at the time and place of sale or  subsequently
noticed sale, and without further notice may make such sale at the time fixed at
the last  postponement or may, in its  discretion,  give a new notice of sale. A
sale of less then all of the  Mortgaged  Property or any  defective or irregular
sale made hereunder shall not exhaust the power of sale provided for herein, and
subsequent sales may be made hereunder until all Obligations have been satisfied
or the entire Mortgaged Property sold, without defect or irregularity. No action
of  Beneficiary  or  Trustee  based  upon the  provisions  contained  herein  or
contained in the applicable statutes,  including, without limitation, the giving
of the  Notice of Default  and  Election  to Sell or the  Notice of Sale,  shall
constitute  an election  of  remedies  which  would  preclude  Beneficiary  from
pursuing judicial  foreclosure  before a completed sale pursuant to the power of
sale contained herein. Beneficiary,  with or without entry, personally or by its
agents or  attorneys,  insofar as  applicable,  and in addition to any and every
other  remedy,  may (i) sell to the extent  permitted by law and pursuant to the
power of sale granted herein, all and singular the Mortgaged  Property,  and all
estate,  right,  title and  interest,  claim and  demand  therein,  and right of
redemption thereof,  at one or more sales, as an entirety or in parcels,  and at
such times and places as required or  permitted  by law and as are  customary in
the county in which the  Mortgaged  Property  is located  and upon such terms as
Beneficiary  may fix and  specify  in the  notice of sale to be given to Trustor
(and on such other notice  published or otherwise  given as provided by law), or
as may be  required  by law;  (ii)  institute  proceedings  for the  complete or
partial  foreclosure  of this Deed of Trust under the  provisions of the laws of
the jurisdiction or  jurisdictions  in which the Mortgaged  Property or any part
thereof is located,  or under any other  applicable  provision  of law; or (iii)
take all steps to protect  and  enforce  the rights

                                       12
<PAGE>

of Beneficiary,  whether by action,  suit or proceeding in equity or at law (for
the specific  performance of any covenant,  condition or agreement  contained in
this Deed of Trust, or in aid of the execution of any power herein  granted,  or
for any foreclosure  hereunder,  or for the enforcement of any other appropriate
legal or equitable  remedy),  or  otherwise,  as  Beneficiary,  being advised by
counsel and its  financial  advisor,  shall deem most  advisable  to protect and
enforce any of their rights or duties hereunder.

                  (e) Rights Pertaining to Sales. Subject to the requirements of
applicable law and except as otherwise provided herein, the following provisions
shall apply to any sale or sales of all or any portion of the Mortgaged Property
under or by virtue of Subsection (d) above, whether made under the power of sale
herein  granted or by virtue of judicial  proceedings or of a judgment or decree
of foreclosure and sale:

                           (i) Trustee or Beneficiary  may conduct any number of
                  sales  from time to time.  The  power of sale set forth  above
                  shall not be exhausted by any one or more such sales as to any
                  part of the Mortgaged Property which shall not have been sold,
                  nor by any sale  which is not  completed  or is  defective  in
                  Beneficiary's  opinion, until the Debt shall have been paid in
                  full.

                           (ii) Any sale may be postponed or adjourned by public
                  announcement  at the time and place appointed for such sale or
                  for such postponed or adjourned sale without further notice.

                           (iii)  After each sale,  Trustee,  Beneficiary  or an
                  officer  of any court  empowered  to do so shall  execute  and
                  deliver to the purchaser or purchasers at such sale a good and
                  sufficient  instrument  or  instruments  granting,  conveying,
                  assigning and  transferring  all right,  title and interest of
                  Trustor  in and to the  property  and  rights  sold and  shall
                  receive the  proceeds of said sale or sales and apply the same
                  as  specified  in the  Loan  Agreement.  Each of  Trustee  and
                  Beneficiary   is  hereby   appointed   the  true  and   lawful
                  attorney-in-fact of Trustor,  which appointment is irrevocable
                  and  shall  be  deemed  to be  coupled  with an  interest,  in
                  Trustor's name and stead,  to make all necessary  conveyances,
                  assignments,  transfers  and  deliveries  of the  property and
                  rights so sold,  Trustor  hereby  ratifying and confirming all
                  that said  attorney or such  substitute or  substitutes  shall
                  lawfully  do by  virtue  thereof.  Nevertheless,  Trustor,  if
                  requested by Beneficiary or Trustee,  shall ratify and confirm
                  any  such  sale  or  sales  by  executing  and  delivering  to
                  Beneficiary,  Trustee or such purchaser or purchasers all such
                  instruments as may be advisable, in Beneficiary's or Trustee's
                  judgment,  for  the  purposes  as may be  designated  in  such
                  request.

                           (iv) Any and all statements of fact or other recitals
                  made  in any  of the  instruments  referred  to in  Subsection
                  (e)(iii)  above  given  by  Beneficiary   shall  be  taken  as
                  conclusive  and binding  against all persons as to evidence of
                  the truth of the facts so stated and recited.

                                       13
<PAGE>

                           (v) Any such sale or sales  shall  operate  to divest
                  all of the estate,  right, title,  interest,  claim and demand
                  whatsoever,  whether at law or in equity, of Trustor in and to
                  the  properties  and rights so sold,  and shall be a perpetual
                  bar both at law and in equity against  Trustor and any and all
                  persons  claiming  or who may  claim  the  same,  or any  part
                  thereof or any interest therein,  by, through or under Trustor
                  to the fullest extent permitted by applicable law.

                           (vi) Upon any such sale or sales, Beneficiary may bid
                  for and acquire the Mortgaged  Property and, in lieu of paying
                  cash therefor, may make a settlement for the purchase price by
                  crediting  against  the  Debt  the  amount  of  the  bid  made
                  therefor,  after deducting therefrom the expenses of the sale,
                  the  cost of any  enforcement  proceeding  hereunder,  and any
                  other sums which  Beneficiary  or  Trustee  is  authorized  to
                  deduct  under the terms  hereof,  to the extent  necessary  to
                  satisfy such bid.

                           (vii) Upon any such sale,  it shall not be  necessary
                  for  Beneficiary or any public officer acting under  execution
                  or order of court to have  present  or  constructively  in its
                  possession any of the Mortgaged Property.

                  (f) Beneficiary's Judicial Remedies.  Beneficiary,  or Trustee
upon written request of Beneficiary,  may proceed by suit or suits, at law or in
equity,  to enforce the payment of the Debt to foreclose  the liens and security
interests  of this  Deed of Trust as  against  all or any part of the  Mortgaged
Property,  and to have all or any part of the Mortgaged  Property sold under the
judgment or decree of a court of  competent  jurisdiction.  This remedy shall be
cumulative of any other nonjudicial  remedies available to the Beneficiary under
this Deed of Trust or the other  Loan  Documents.  Proceeding  with a request or
receiving  a  judgment  for  legal  relief  shall  not be or be  deemed to be an
election of remedies or bar any available nonjudicial remedy of the Beneficiary.

                  (g)   Beneficiary's   Right  to   Appointment   of   Receiver.
Beneficiary,  as a matter of right and (i) without regard to the  sufficiency of
the  security  for  repayment  of the Debt and without  notice to Trustor,  (ii)
without  any  showing of  insolvency,  fraud,  or  mismanagement  on the part of
Trustor,  (iii) without the necessity of filing any judicial or other proceeding
other than the proceeding for appointment of a receiver, and (iv) without regard
to  the  then  value  of  the  Mortgaged  Property,  shall  be  entitled  to the
appointment of a receiver or receivers for the protection,  possession, control,
management  and  operation  of  the  Mortgaged   Property,   including  (without
limitation),  the power to collect the Rents, enforce this Deed of Trust and, in
case of a sale and  deficiency,  during the full statutory  period of redemption
(if any),  whether  there be a redemption  or not, as well as during any further
times when  Trustor,  except for the  intervention  of such  receiver,  would be
entitled to collection of such Rents. Trustor hereby irrevocably consents to the
appointment of a receiver or receivers.  Any receiver  appointed pursuant to the
provisions  of this  subsection  shall  have the  usual  powers  and  duties  of
receivers in such matters.

                                       14
<PAGE>

                  (h)  Beneficiary's  Uniform  Commercial  Code  Remedies.   The
Beneficiary may exercise its rights of enforcement under the Uniform  Commercial
Code in effect in the state in which the Mortgaged Property is located.

                  (i) Other Rights.  Beneficiary (i) may surrender the insurance
policies maintained pursuant to the Loan Agreement or any part thereof, and upon
receipt of the proceeds shall apply the unearned  Insurance Premiums as a credit
on the Debt, and, in connection  therewith,  Trustor hereby appoints Beneficiary
as  agent  and  attorney-in-fact  (which  is  coupled  with an  interest  and is
therefore irrevocable) for Trustor to collect such Insurance Premiums;  (ii) may
apply the  Impositions  and  Insurance  Reserve  and/or any other  Reserves held
pursuant to this Deed of Trust or the other Loan Documents,  and any other funds
held by  Beneficiary  toward  payment of the Debt;  and (iii) shall have and may
exercise any and all other rights and remedies which Beneficiary may have at law
or in equity, or by virtue of any of the Loan Documents, or otherwise.

                  (j)  Discontinuance  of Remedies.  If  Beneficiary  shall have
proceeded  to invoke any right,  remedy,  or recourse  permitted  under the Loan
Documents  and shall  thereafter  elect to  discontinue  or abandon same for any
reason,  Beneficiary  shall  have the  unqualified  right so to do and,  in such
event,  Trustor and Beneficiary shall be restored to their former positions with
respect to the Debt, the Loan  Documents,  the Mortgaged  Property or otherwise,
and the rights, remedies,  recourses and powers of Beneficiary shall continue as
if same had never been invoked.

                  (k) Remedies Cumulative.  All rights,  remedies, and recourses
of  Beneficiary  granted  in the Note,  this  Deed of Trust  and the other  Loan
Documents,  any other pledge of  collateral,  or  otherwise  available at law or
equity: (i) shall be cumulative;  (ii) may be pursued separately,  successively,
or concurrently against Trustor,  the Mortgaged Property,  or any one or more of
them,  at such time and in such order as  Beneficiary  may determine in its sole
discretion; (iii) may be exercised as often as occasion therefor shall arise, it
being  agreed by Trustor  that the  exercise or failure to exercise  any of same
shall in no event be  construed  as a waiver or release  thereof or of any other
right, remedy, or recourse; (iv) shall be nonexclusive of any other right, power
or remedy which  Beneficiary may have against  Trustor  pursuant to this Deed of
Trust, the Loan Agreement or the other Loan Documents, or otherwise available at
law or in equity;  (v) shall not be conditioned upon  Beneficiary  exercising or
pursuing any remedy in relation to the Mortgaged  Property  prior to Beneficiary
bringing suit to recover the Debt; and (vi) in the event  Beneficiary  elects to
bring  suit on the  Debt  and  obtains  a  judgment  against  Trustor  prior  to
exercising  any remedies in relation to the  Mortgaged  Property,  all liens and
security  interests,  including the lien of this Deed of Trust,  shall remain in
full force and effect and may be exercised thereafter at Beneficiary's option.

                  (l) Election of Remedies.  Beneficiary may release, regardless
of  consideration,  any  part  of  the  Mortgaged  Property  without,  as to the
remainder, in any way impairing, affecting, subordinating, or releasing the lien
or  security  interests  evidenced  by this  Deed of  Trust  or the  other  Loan
Documents or affecting the  obligations of Trustor or any other party to pay the
Debt. For payment of the Debt, Beneficiary may resort to any collateral securing

                                       15
<PAGE>

the payment of the Debt in such order and manner as  Beneficiary  may elect.  No
collateral taken by Beneficiary shall in any manner impair or affect the lien or
security  interests  given  pursuant to the Loan  Documents,  and all collateral
shall be taken, considered, and held as cumulative.

                  (m) Bankruptcy  Acknowledgment.  If the Mortgaged  Property or
any portion thereof or any interest  therein becomes  property of any bankruptcy
estate or subject to any state or federal insolvency proceeding, or in the event
of the filing of any voluntary or involuntary petition under the Bankruptcy Code
by or against Trustor then Beneficiary  shall  immediately  become entitled,  in
addition to all other  relief to which  Beneficiary  may be entitled  under this
Deed of  Trust,  to  obtain  (i) an  order  from any  bankruptcy  court or other
appropriate court granting  immediate relief from the automatic stay pursuant to
ss. 362 of the Bankruptcy Code so as to permit  Beneficiary to pursue its rights
and remedies  against Trustor as provided under this Deed of Trust and all other
rights and remedies of Beneficiary at law and in equity under  applicable  state
law, and (ii) an order from any bankruptcy  court  prohibiting  Trustor's use of
all "cash  collateral" as defined under ss. 363 of the Bankruptcy Code.  Trustor
shall not assert or request any other party to assert,  that the automatic  stay
under  ss.  362 of the  Bankruptcy  Code  operate  or be  interpreted  to  stay,
interdict,  condition,  reduce or inhibit the ability of  Beneficiary to enforce
any  rights it has by virtue of this  Deed of Trust,  or any other  rights  that
Beneficiary has, whether now or hereafter acquired, against any guarantor of the
Debt.  Trustor shall not seek a supplemental  stay or any other relief,  whether
injunctive or otherwise, pursuant to ss. 105 of the Bankruptcy Code or any other
provision therein to stay, interdict,  condition,  reduce or inhibit the ability
of  Beneficiary  to  enforce  any  rights it has by virtue of this Deed of Trust
against any guarantor of the Debt. Any bankruptcy petition or other action taken
by the Trustor to stay,  condition,  or inhibit  Beneficiary from exercising its
remedies are hereby  admitted by Trustor to be in bad faith and Trustor  further
admits that Beneficiary would have just cause for relief from the automatic stay
in order to take such actions authorized under state law.

                  (n)  Application  of  Proceeds.  The  proceeds  from any sale,
lease, or other disposition made pursuant to this Deed of Trust, or the proceeds
from the  surrender of any  insurance  policies  pursuant  hereto,  or any Rents
collected by  Beneficiary  from the Mortgaged  Property or the  Impositions  and
Insurance Reserve or other Reserves under the Cash Management  Agreement or sums
received  pursuant  to  Section 6  hereof,  or  proceeds  from  insurance  which
Beneficiary  elects to apply to the Debt pursuant to Section 3 hereof,  shall be
applied by  Beneficiary to the Debt in such order,  priority and  proportions as
Beneficiary in its sole discretion shall determine.

                  (o) Cross-Collateralization.  The mortgages and deeds of trust
(other than this Deed of Trust)  listed on Exhibit B attached  hereto and made a
part hereof,  as any of same may be amended,  modified or supplemented from time
to time, are collectively  referred to for purposes of this Section 17(o) as the
"Other  Mortgages."  This  Deed of  Trust,  as it may be  amended,  modified  or
supplemented  from  time  to  time,  together  with  the  Other  Mortgages,  are
collectively  referred to for purposes of this Section 17(o) as the "Mortgages."
The  Obligations  are  secured by,  among other  things,  the  Mortgages,  which
encumber real and personal  property in the States of California,  Pennsylvania,
Texas and the District of Columbia,  as more  particularly  described in each of
the  Mortgages.  The  Obligations  may be  accelerated  as  provided in the Loan

                                       16
<PAGE>

Documents.  Upon  the  occurrence  and  during  the  continuance  of an Event of
Default,  Beneficiary  may,  at  its  option,  accelerate  the  Obligations  and
foreclose  upon any one or more of the Mortgages or resort to any one or more of
its other rights and remedies  under any or all of the  Mortgages  and the other
Loan Documents in accordance  with the laws of the state in which the respective
premises is located.  Except as otherwise  provided herein,  all of the real and
personal  property  conveyed and/or  mortgaged by the Mortgages are security for
the Obligations without allocation of any one or more of the parcels or portions
thereof to any portion of the Obligations. Beneficiary may allocate the proceeds
that it  receives  upon the  exercise  of its  rights  and  remedies,  including
foreclosure, to payment of the Obligations as Beneficiary in its sole discretion
may  determine  to be  advisable  pursuant  to the terms of the Loan  Documents.
Beneficiary  may proceed,  at the same or  different  times,  to  foreclose  the
Mortgages  or any  one or  more  of  them,  by any  proceedings  appropriate  in
California as to the the Mortgaged Property,  and by proceedings  appropriate in
the state where any of the real property  encumbered by one or more of the Other
Mortgages  lies,  as to such  other real  property,  including  private  sale if
permitted, and no event of enforcement taking place in any state as to the Other
Mortgages,  including  without  limiting the  generality of the  foregoing,  any
pending foreclosure, judgment or decree of foreclosure,  foreclosure sale, rents
received, possession taken, deficiency judgment or decrees, or judgment taken on
the Obligations, shall in any way stay, preclude or bar enforcement of this Deed
of Trust,  except as may be limited by the laws of the State of California,  and
Beneficiary  may  pursue  any  or  all of its  remedies  to the  maximum  extent
permitted by applicable  law pursuant to the terms of the Loan  Documents  until
all of the Obligations and all other obligations now or hereafter secured by any
or all of the Mortgages have been paid or discharged in full. Additionally,  and
without limitation of any other provision of this Deed of Trust, if this Deed of
Trust is  foreclosed  and the  Mortgaged  Property is sold (or any part thereof)
pursuant to foreclosure or other  proceedings,  and if the proceeds of such sale
(after  application  of such  proceeds as provided in this Deed of Trust and the
other Loan Documents) are not sufficient to pay the total sum of the Obligations
then  outstanding  and any other  amounts  provided for by  applicable  law (the
"Balance Owed"), then, to the extent permitted by law, the Obligations shall not
be  satisfied  to the extent of the Balance  Owed,  but such  Obligations  shall
continue  in  existence  and  continue to be  evidenced  and secured by the Loan
Documents and the Other  Mortgages.  Subject to the  requirements  of applicable
law, if  Beneficiary  shall  acquire the  Mortgaged  Property as a result of any
foreclosure  or  other  sale  (whether  by  bidding  all or any  portion  of the
Obligations or otherwise), the proceeds of such sale, to the extent permitted by
law,  shall not be deemed to include (and  Trustor  shall not be entitled to any
benefit  or  credit  on  account  of)  proceeds  of any  subsequent  sale of the
Mortgaged  Property by  Beneficiary.  Without  limitation of any other provision
hereof, Trustor further agrees that if any of the Other Mortgages are foreclosed
and sale is made of any of the property subject to any Other  Mortgages,  and if
the proceeds of such sale (after  application  of such  proceeds as provided for
herein and after  deducting  all  accrued  and  general  and  special  taxes and
assessments)  are not  sufficient to pay the  Obligations  and any other amounts
provided  for by  applicable  law,  then,  to the extent  permitted  by law, the
Obligations then outstanding shall not be satisfied to the extent of the Balance
Owed,  but such  Obligations  shall  continue in  existence  and  continue to be
evidenced  and  secured  by  the  Loan  Documents  and  the  Mortgages  existing
immediately  prior to any such  foreclosure,  except such  Mortgages  foreclosed
upon. No release of personal  liability of any Person  whatsoever and no release
of any portion of the property  now or  hereafter  subject to

                                       17
<PAGE>

the lien of any of the  Mortgages  shall  have any effect  whatsoever  by way of
impairment or  disturbance of the lien or priority of any other of the Mortgages
or the unreleased properties  encumbered by any of the Mortgages,  to the extent
permitted by law. Any foreclosure or other appropriate  remedy brought in any of
the  states  aforesaid  may be  brought  and  prosecuted  as to any  part of the
security,  wherever  located,  without  regard  to  the  fact  that  foreclosure
proceedings or other remedies have or have not been instituted  elsewhere on any
other  property  subject to the lien of the Mortgages.  Neither  Trustor nor any
Person claiming by, through or under Trustor shall have any right to marshal the
assets,  all such rights  being  hereby  expressly  waived as to Trustor and all
Persons claiming by, through or under Trustor,  including,  without  limitation,
junior  lienors.  Each of Trustor and all endorsers,  guarantors and sureties of
the Obligations,  hereby waives any and all rights arising because of payment or
performance  by  Trustor of any  Obligations  (a)  against  any Person by way of
subrogation of the rights of Beneficiary or (b) against any Person  obligated to
pay or  perform  the  Obligations  or other  obligations  secured  by the  Other
Mortgages by way of contribution, reimbursement or otherwise.

         18. Security Agreement. This Deed of Trust is both a real property deed
of trust and a "security agreement" within the meaning of the Uniform Commercial
Code. The Mortgaged  Property  includes both real and personal  property and all
other rights and interests, whether tangible or intangible in nature, of Trustor
in the  Mortgaged  Property.  Trustor by executing and  delivering  this Deed of
Trust has granted and hereby grants to Beneficiary,  as security for the Debt, a
security  interest  in the  Mortgaged  Property  to the  full  extent  that  the
Mortgaged  Property may be subject to the Uniform  Commercial Code (said portion
of the Mortgaged Property so subject to the Uniform Commercial Code being called
in this  Section 18 the  "Collateral").  Trustor  hereby  agrees to execute  and
deliver  to  Beneficiary,  in form  and  substance  reasonably  satisfactory  to
Beneficiary,   such  financing   statements  and  such  further   assurances  as
Beneficiary  may from time to time  reasonably  consider  necessary  to  create,
perfect, and preserve  Beneficiary's security interest herein granted. This Deed
of Trust  shall also  constitute  a "fixture  filing"  for the  purposes  of the
Uniform  Commercial  Code as to all or any part of the Mortgaged  Property which
now or  hereafter  constitute  "fixtures"  under the  Uniform  Commercial  Code.
Information concerning the security interest herein granted may be obtained from
the parties at the addresses of the parties set forth in the first  paragraph of
this Deed of Trust. If an Event of Default shall occur, Beneficiary, in addition
to any other rights and remedies which it may have,  shall have and may exercise
immediately  and without  demand,  any and all rights and remedies  granted to a
secured party upon default under the Uniform Commercial Code, including, without
limiting the  generality of the foregoing,  the right to take  possession of the
Collateral or any part thereof,  and to take such other  measures as Beneficiary
may deem necessary for the care,  protection and preservation of the Collateral.
Upon request or demand of Beneficiary, Trustor shall at its expense assemble the
Collateral and make it available to Beneficiary at a convenient place acceptable
to Beneficiary. Trustor shall pay to Beneficiary on demand any and all expenses,
including legal expenses and attorneys' fees, incurred or paid by Beneficiary in
protecting the interest in the Collateral and in enforcing the rights  hereunder
with  respect  to the  Collateral.  Any  notice  of sale,  disposition  or other
intended action by Beneficiary with respect to the Collateral sent to Trustor in
accordance  with the  provisions  hereof  at least  five (5) days  prior to such
action, shall constitute commercially reasonable notice to Trustor. The proceeds
of any  disposition of the  Collateral,  or any part thereof,  may be applied by
Beneficiary  to the  payment

                                       18
<PAGE>

of the Debt in such priority and  proportions  as  Beneficiary in its discretion
shall deem proper. In the event of any change in name,  identity or structure of
any Trustor,  such Trustor shall notify  Beneficiary  thereof and promptly after
Beneficiary's  request shall  execute,  file and record such Uniform  Commercial
Code forms as are necessary to maintain the priority of Beneficiary's  lien upon
and security interest in the Collateral,  and shall pay all expenses and fees in
connection with the filing and recording  thereof.  If Beneficiary shall require
the  filing  or  recording  of  additional  Uniform  Commercial  Code  forms  or
continuation  statements,  Trustor shall, promptly after request,  execute, file
and record such Uniform  Commercial  Code forms or  continuation  statements  as
Beneficiary  shall  deem  necessary,  and  shall  pay all  expenses  and fees in
connection  with the filing  and  recording  thereof,  it being  understood  and
agreed,  however,  that no such additional  documents  shall increase  Trustor's
obligations  under the Note,  this Deed of Trust and the other  Loan  Documents.
Trustor hereby irrevocably appoints Beneficiary as its attorney-in-fact, coupled
with an interest upon  Trustor's  failure to do so within five (5) Business Days
after request by Beneficiary,  to file with the appropriate public office on its
behalf  any  financing  or  other  statements  signed  only by  Beneficiary,  as
Trustor's  attorney-in-fact,  in connection with the Collateral  covered by this
Deed of Trust. Notwithstanding the foregoing, Trustor shall appear and defend in
any action or  proceeding  which  affects or  purports  to affect the  Mortgaged
Property and any interest or right  therein,  whether  such  proceeding  affects
title  or any  other  rights  in the  Mortgaged  Property  (and  in  conjunction
therewith,   Trustor  shall  fully  cooperate  with  Beneficiary  in  the  event
Beneficiary is a party to such action or proceeding).

         19.  Actions  and  Proceedings.  Upon the  occurrence  and  during  the
continuance of an Event of Default,  Beneficiary  has the right to appear in and
defend any action or proceeding  brought with respect to the Mortgaged  Property
and to bring any  action or  proceeding,  in the name and on behalf of  Trustor,
which Beneficiary,  in its discretion,  decides should be brought to protect its
interest  in the  Mortgaged  Property.  Beneficiary  shall,  at its  option,  be
subrogated  to the  lien of any  deed of  trust  or  other  security  instrument
discharged  in whole or in part by the  Debt,  and any such  subrogation  rights
shall constitute additional security for the payment of the Debt.

         20.  Waiver  of  Setoff  and  Counterclaim,   Marshalling,  Statute  of
Limitations, Automatic or Supplemental Stay, Etc. (a) All amounts due under this
Deed of Trust,  the Note and the other Loan Documents  shall be payable  without
setoff,  counterclaim  or any deduction  whatsoever.  Trustor  hereby waives the
right to assert a setoff,  counterclaim or deduction in any action or proceeding
in which Beneficiary is a participant, or arising out of or in any way connected
with this Deed of Trust, the Note, any of the other Loan Documents, or the Debt.

                  (b) Trustor hereby expressly, irrevocably, and unconditionally
waives and  releases,  to the  extent  permitted  by law (i) the  benefit of all
appraisement,  valuation, stay, extension, reinstatement and redemption laws now
or hereafter in force and all rights of  marshalling,  sale in the inverse order
of  alienation,  or any other right to direct in any manner the order or sale of
any of the  Mortgaged  Property  in the  event  of  any  sale  hereunder  of the
Mortgaged Property or any part thereof or any interest therein; (ii) any and all
rights of redemption  from sale under any order or decree of foreclosure of this
Deed of Trust on behalf  of  Trustor,  and on  behalf  of each and every  person
acquiring any interest in or title to the

                                       19
<PAGE>

Mortgaged Property subsequent to the date of this Deed of Trust and on behalf of
all persons to the extent  permitted by  applicable  law; and (iii) all benefits
that might  accrue to Trustor by virtue of any  present or future law  exempting
the Mortgaged  Property from attachment,  levy or sale on execution or providing
for  any  appraisement,  valuation,  stay of  execution,  exemption  from  civil
process,  redemption, or extension of time for payment. Beneficiary shall not be
under any  obligation to marshal any assets in favor of any Person or against or
in payment of any or all of the Obligations.

                  (c) To the extent  permitted by applicable law,  Beneficiary's
rights hereunder shall continue even to the extent that a suit for collection of
the Debt, or part thereof, is barred by a statute of limitations. Trustor hereby
expressly  waives and  releases  to the fullest  extent  permitted  by law,  the
pleading of any statute of limitations as a defense to payment of the Debt.

         21.  Recovery of Sums Required to Be Paid.  Beneficiary  shall have the
right  from  time to  time  to take  action  to  recover  any sum or sums  which
constitute a part of the Debt as the same become due,  without regard to whether
or not the balance of the Debt shall be due, and without  prejudice to the right
of  Beneficiary  thereafter  to bring an  action  of  foreclosure,  or any other
action,  for a default or defaults by Trustor  existing at the time such earlier
action was commenced.

         22. Handicapped  Access. (a) Trustor agrees that the Mortgaged Property
shall at all times comply in all material respects with applicable  requirements
of the Americans with Disabilities Act of 1990, the Fair Housing  Amendments Act
of 1988, all state and local laws and ordinances  related to handicapped  access
and all  rules,  regulations,  and orders  issued  pursuant  thereto  including,
without limitation, the Americans with Disabilities Act Accessibility Guidelines
for Buildings and Facilities (collectively "Access Laws").

                  (b) Trustor agrees to give prompt notice to Beneficiary of the
receipt by Trustor of any complaints related to violation of any Access Laws and
of the  commencement  of any  proceedings  or  investigations  which  relate  to
compliance  with  applicable  Access  Laws  but  only to the  extent  that  such
complaints, proceedings or investigations, if adversely determined, could have a
Material Adverse Effect.

         23.  Indemnification;  Limitation  of  Liability.  In  addition  to the
payment  of  expenses  as  required  elsewhere  herein  and  in the  other  Loan
Documents,  Trustor agrees to indemnify,  defend,  protect, pay and hold Trustee
and Beneficiary,  and each of their successors and assigns  (including,  without
limitation,  the trustee and/or the trust under any trust agreement  executed in
connection  with any  Securitization  backed in whole or in part by the Loan and
any other person  which may  hereafter be the holder of the Note or any interest
therein),  and  the  officers,  directors,   stockholders,   partners,  members,
employees,  agents and Affiliates of Trustee and Beneficiary and such successors
and assigns (collectively,  the "Indemnified Parties") harmless from and against
any and all liabilities,  obligations,  claims,  damages,  penalties,  causes of
action, costs and expenses (including without limitation  reasonable  attorneys'
fees and expenses)  (collectively,  the "Indemnified  Claims"),  imposed upon or
incurred by or asserted  against any  Indemnified  Party by reason of any of the
following  (to  the  extent  that  insurance  proceeds  paid  to the  applicable

                                       20
<PAGE>

Indemnified Party on account of the following shall be inadequate: (i) ownership
of the Deed of Trust, the Mortgaged  Property or any interest therein or receipt
of any  rents;  (ii) any  accident,  injury to or death of persons or loss of or
damage to property  occurring in, on or about the Mortgaged Property or any part
thereof or on the  adjoining  sidewalks,  curbs,  adjacent  property or adjacent
parking  areas,  streets or ways;  (iii) any use,  nonuse or condition in, on or
about the Mortgaged Property or any part thereof or on the adjoining  sidewalks,
curbs,  adjacent  property  or adjacent  parking  areas,  streets or ways;  (iv)
performance of any labor or services or the furnishing of any materials or other
property  in respect of the  Mortgaged  Property  or any part  thereof;  (v) any
failure of the Premises or the  Improvements  to comply with any applicable law,
statute, code, ordinance, rule or regulation;  (vi) any default by Trustor under
this Deed of Trust,  the Loan Agreement or any other Loan  Documents;  (vii) any
actions taken by any Indemnified  Party in the enforcement of this Deed of Trust
and the other Loan Documents in accordance  with their  respective  terms (viii)
any  failure to act on the part of any  Indemnified  Party  hereunder;  (ix) the
payment or nonpayment of any  brokerage  commissions  to any party in connection
with the transaction contemplated hereby; and (x) the failure of Trustor to file
timely with the Internal Revenue Service an accurate Form 1099-B,  Statement for
Recipients   of  Proceeds   from  Real  Estate,   Broker  and  Barter   Exchange
Transactions,  which may be required in connection  with this  Agreement,  or to
supply a copy  thereof in a timely  fashion to the  recipient of the proceeds of
the transaction in connection with which this Agreement is made. Notwithstanding
the foregoing,  Trustor shall not be liable for any  Indemnified  Claims arising
(A) from the gross negligence or willful  misconduct of any Indemnified Party or
(B)  under  clauses  (i)  - (v)  above  to  the  extent  the  facts,  events  or
circumstances  giving rise to such  Indemnified  Claim arise after the date that
any  Indemnified  Party takes title to the  Mortgaged  Property by  foreclosure,
deed-in-lieu  thereof,  the  exercise  of any  power of sale or  otherwise.  Any
amounts  payable to an  Indemnified  Party by reason of the  application of this
Section shall become  immediately due and payable and shall bear interest at the
Default Rate from the date loss or damage is sustained by such Indemnified Party
until paid.

         24. Notices.  Any notice,  demand,  statement,  request or consent made
hereunder  shall be in  writing,  addressed  to the  intended  recipient  at its
address set forth in the Loan  Agreement,  and shall be made and deemed given in
accordance with the terms of the Loan Agreement.

         25.  Authority.  (a) Trustor  (and the  undersigned  representative  of
Trustor,  if any) has full power,  authority  and right to execute,  deliver and
perform  its  obligations  pursuant to this Deed of Trust,  and to give,  grant,
bargain, sell, alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and
assign  the  Mortgaged  Property  pursuant  to the terms  hereof and to keep and
observe  all of the  terms  of  this  Deed  of  Trust  on  Trustor's  part to be
performed;  and (b)  Trustor  represents  and  warrants  that  Trustor  is not a
"foreign  person"  within  the  meaning of Section  1445(f)(3)  of the  Internal
Revenue  Code  of  1986,  as  amended  and  the  related   Treasury   Department
regulations.

         26.  Waiver of Notice.  Trustor shall not be entitled to any notices of
any nature whatsoever from Beneficiary  except with respect to matters for which
this Deed of Trust  specifically and expressly provides for the giving of notice
by  Beneficiary  to  Trustor  and  except  with  respect  to  matters  for which
Beneficiary  is required by applicable  law to give notice,  and

                                       21
<PAGE>

Trustor hereby expressly waives the right to receive any notice from Beneficiary
with  respect to any  matter for which this Deed of Trust does not  specifically
and expressly provide for the giving of notice by Beneficiary to Trustor.

         27.  Remedies of Trustor.  In the event that a claim or adjudication is
made that Beneficiary has acted  unreasonably or unreasonably  delayed acting in
any case  where by law or under the Note,  this Deed of Trust or the other  Loan
Documents, it has an obligation to act reasonably or promptly, Beneficiary shall
not be liable for any monetary damages,  and Trustor's remedies shall be limited
to injunctive relief or declaratory judgment.

         28. Sole Discretion of Beneficiary.  Whenever  pursuant to this Deed of
Trust or the other Loan Documents,  Beneficiary  exercises any right given to it
to  consent,  approve  or  disapprove,  or  any  arrangement  or  term  is to be
satisfactory to Beneficiary,  the decision of Beneficiary to consent, approve or
disapprove,  or to decide that  arrangements  or terms are  satisfactory  or not
satisfactory  shall be in the sole  discretion of Beneficiary and shall be final
and conclusive,  except as may be otherwise expressly and specifically  provided
herein.  Notwithstanding  anything to the contrary contained herein, it shall be
understood and agreed that any such consent,  approval,  or  disapproval  may be
conditioned,  among other things, upon Beneficiary obtaining confirmation by the
Rating  Agencies  that the  action  or other  matter  subject  to  Beneficiary's
consent,  approval,  or disapproval shall not adversely affect the rating of any
securities  issued or to be  issued  in  connection  with any  Secondary  Market
Transaction,  notwithstanding that such condition may not be expressly set forth
in the  provision  or  provisions  of the  Loan  Documents  which  require  that
Beneficiary's consent be obtained.

         29.  Non-Waiver.  The  failure of  Beneficiary  to insist  upon  strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Deed of Trust.  Trustor  shall not be  relieved  of  Trustor's  obligations
hereunder by reason of (a) the failure of Beneficiary to comply with any request
of Trustor or Guarantor  to take any action to  foreclose  this Deed of Trust or
otherwise  enforce  any of the  provisions  hereof or of the Note or other  Loan
Documents,  (b) the release,  regardless of  consideration,  of the whole or any
part of the  Mortgaged  Property,  or of any  person  liable for the Debt or any
portion  thereof,  or (c) any agreement or stipulation by Beneficiary  extending
the time of payment or  otherwise  modifying or  supplementing  the terms of the
Note, this Deed of Trust,  or the other Loan  Documents.  Beneficiary may resort
for the payment of the Debt to any other  security held by  Beneficiary  in such
order and manner as Beneficiary,  in its discretion,  may elect. Beneficiary may
take  action to recover  the Debt,  or any  portion  thereof,  or to enforce any
covenant  hereof  without  prejudice to the right of  Beneficiary  thereafter to
foreclosure  this Deed of Trust.  The rights and remedies of  Beneficiary  under
this Deed of Trust shall be separate,  distinct and cumulative and none shall be
given effect to the  exclusion  of the others.  No act of  Beneficiary  shall be
construed  as an  election  to  proceed  under any one  provision  herein to the
exclusion of any other provision.  Beneficiary shall not be limited  exclusively
to the rights and  remedies  herein  stated but shall be entitled to every right
and remedy now or hereafter afforded at law or in equity.

         30.  Liability.  If  Trustor  consists  of more  than one  person,  the
obligations  and  liabilities of each such person  hereunder  shall be joint and
several. Subject to the provisions

                                       22
<PAGE>

hereof  requiring  Beneficiary's  consent  to  any  transfer  of  the  Mortgaged
Property,  this Deed of Trust shall be binding  upon and inure to the benefit of
Trustor and Beneficiary and their respective successors and assigns forever.

         31. Inapplicable Provisions. If any term, covenant or condition of this
Deed of Trust is held to be invalid,  illegal or  unenforceable  in any respect,
this Deed of Trust shall be construed without such provision.

         32.  Headings,  Etc. The  headings and captions of various  Sections of
this  Deed of Trust  are for  convenience  of  reference  only and are not to be
construed  as  defining  or  limiting,  in any way,  the  scope or intent of the
provisions hereof.

         33.  Counterparts.  This Deed of Trust may be executed in any number of
counterparts  each of which shall be deemed to be an  original  but all of which
when taken together shall constitute one agreement.

         34. Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise  specifically  provided  herein,  words used in this Deed of
Trust  may be used  interchangeably  in  singular  or  plural  form and the word
"Trustor"  shall mean "each  Trustor and any  subsequent  owner or owners of the
Mortgaged  Property  or any part  thereof  or any  interest  therein,"  the word
"Beneficiary"  shall mean  "Beneficiary and any subsequent  holder of the Note,"
the word  "Debt"  shall mean "the Note and any other  evidence  of  indebtedness
secured by this Deed of Trust," the word "person"  shall include an  individual,
corporation,   partnership,   trust,  unincorporated  association,   government,
governmental authority, and any other entity, and the words "Mortgaged Property"
shall include any portion of the Mortgaged Property and any interest therein and
the words "attorneys' fees" shall include any and all attorneys' fees, paralegal
and law clerk fees, including, but not limited to, fees at the pre-trial,  trial
and appellate  levels incurred or paid by Beneficiary in protecting its interest
in the Mortgaged  Property and  Collateral  and enforcing its rights  hereunder.
Whenever the context may require,  any  pronouns  used herein shall  include the
corresponding  masculine,  feminine or neuter  forms,  and the singular  form of
nouns and pronouns shall include the plural and vice versa.

         35.  Homestead.  Trustor  hereby waives and renounces all homestead and
exemption  rights provided by the constitution and the laws of the United States
and of any state,  in and to the Premises as against the collection of the Debt,
or any part hereof.

         36. Assignments. Beneficiary shall have the right to assign or transfer
its  rights  under  this  Deed of Trust  and the other  Loan  Documents  without
limitation,  including,  without limitation, the right to assign or transfer its
rights to a servicing agent. Any assignee or transferee shall be entitled to all
the benefits  afforded  Beneficiary  under this Deed of Trust and the other Loan
Documents.  Beneficiary  agrees  to  provide  Trustor  with  notice  of any such
assignment,  and in no event shall Trustor's monetary obligations  hereunder and
under the other  Loan  Documents  be  increased  as a result of such  assignment
(except  in  accordance  with  Section  10.2 of the Loan  Agreement);  provided,
however,  that  Trustor's  consent shall not be required in connection  with any
such  assignment  and no delay or failure by  Beneficiary to provide such notice
shall limit the effectiveness of such assignment.

                                       23
<PAGE>

         37.   Survival   of    Obligations;    Survival   of   Warranties   and
Representations. Each and all of the covenants, obligations, representations and
warranties  of Trustor  shall  survive the  execution  and  delivery of the Loan
Documents  and the  transfer  or  assignment  of this Deed of Trust  (including,
without  limitation,  any transfer of the Deed of Trust by Beneficiary of any of
its rights,  title and interest in and to the  Mortgaged  Property to any party,
whether or not affiliated with Beneficiary).

         38.  Covenants  Running  with  the  Land.  All  covenants,  conditions,
warranties,  representations  and other  obligations  contained  in this Deed of
Trust and the other Loan  Documents are intended by Trustor and  Beneficiary  to
be, and shall be construed as,  covenants  running with the  Mortgaged  Property
until the lien of this Deed of Trust has been fully released by Beneficiary.

         39. Governing Law;  Jurisdiction.  THIS DEED OF TRUST WAS NEGOTIATED IN
THE STATE OF NEW YORK AND WAS MADE BY TRUSTOR AND ACCEPTED BY BENEFICIARY IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM THE STATE OF
NEW YORK,  WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL  RELATIONSHIP  TO THE
PARTIES  AND TO THE  UNDERLYING  TRANSACTION,  AND  IN ALL  RESPECTS  INCLUDING,
WITHOUT  LIMITING THE  GENERALITY  OF THE  FOREGOING,  MATTERS OF  CONSTRUCTION,
VALIDITY  AND  PERFORMANCE.  THIS  DEED OF  TRUST  AND THE  OBLIGATIONS  ARISING
HEREUNDER  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW
YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL
TIMES THE PROVISIONS FOR THE CREATION,  PERFECTION AND  ENFORCEMENT OF THE LIENS
AND SECURITY  INTERESTS CREATED PURSUANT TO THIS DEED OF TRUST SHALL BE GOVERNED
BY THE LAWS OF THE STATE WHERE THE MORTGAGED PROPERTY IS LOCATED.

         40.  Time of  Essence.  Time is of the  essence as to all of the terms,
covenants and condition of this Deed of Trust and the other Loan Documents.

         41. No Third-Party Beneficiaries.  The provisions of this Deed of Trust
and the other Loan Documents are for the benefit of Trustor and  Beneficiary and
shall not inure to the benefit of any third party  (other than any  successor or
assignee of  Beneficiary or permitted  assignee of Trustor).  This Deed of Trust
and the other Loan  Documents  shall not be  construed  as creating  any rights,
claims  or  causes  of  action  against  Beneficiary  or any  of  its  officers,
directors,  agents  or  employees  in  favor of any  party  other  than  Trustor
including but not limited to any claims to any sums held in the  Impositions and
Insurance Reserve or any other Reserve.

         42.  Relationship  of Parties.  The  relationship  of  Beneficiary  and
Trustor is solely that of debtor and creditor,  and Beneficiary has no fiduciary
or other special  relationship with the Trustor, and no term or condition of any
of the Loan  Documents  shall be  construed  to be other than that of debtor and
creditor.  Trustor  represents and acknowledges  that neither the Loan

                                       24
<PAGE>

Documents nor any course of dealing  between the parties creates any partnership
or joint venture between  Trustor and Beneficiary or any other person,  nor does
it provide  for any shared  appreciation  rights or other  equity  participation
interest.

         43.  Successors  and Assigns.  This Deed of Trust shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and  assigns,  except  that  Trustor  may not assign  its rights or  obligations
hereunder except as expressly provided in Section 9 hereof or as permitted under
the Loan Agreement.

         44. Investigations. Any and all representations,  warranties, covenants
and agreements made in this Deed of Trust (and/or in other Loan Documents) shall
survive any investigation or inspection made by or on behalf of Beneficiary.

         45.  Assignment  of Leases  and Rents.  (a)  Trustor  acknowledges  and
confirms that it has executed and  delivered to  Beneficiary  the  Assignment of
Leases intending that such instrument create a present,  absolute  assignment to
Beneficiary of the Leases and Rents.  Without limiting the intended  benefits or
the remedies provided under the Assignment of Leases,  Trustor hereby assigns to
Beneficiary,  as further security for the Debt and the  Obligations,  the Leases
and Rents.  While any Event of Default exists,  Beneficiary shall be entitled to
exercise any or all of the remedies  provided in the Assignment of Leases and in
Section 17 hereof, including,  without limitation,  the right to have a receiver
appointed. If any conflict or inconsistency exists between the Assignment of the
Leases and this Deed of Trust and the absolute  assignment of the Leases and the
Rents in the  Assignment of Leases,  the terms of the Assignment of Leases shall
control.

                  (b) So  long  as any  part of the  Debt  and  the  Obligations
secured hereby remain unpaid and undischarged,  the fee and leasehold estates to
the Mortgaged  Property shall not merge, but shall remain separate and distinct,
notwithstanding  the union of such estates either in Trustor,  Beneficiary,  any
lessee or any third party by purchase or otherwise.

         46. Waiver of Right to Trial by Jury.  EACH OF BENEFICIARY  AND TRUSTOR
HEREBY  AGREES  NOT TO ELECT A TRIAL BY JURY OF ANY  ISSUE  TRIABLE  OF RIGHT BY
JURY,  AND WAIVES  ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT  THAT ANY SUCH
RIGHT  SHALL NOW OR  HEREAFTER  EXIST  WITH  REGARD TO THIS DEED OF TRUST OR THE
OTHER LOAN  DOCUMENTS,  OR ANY CLAIM,  COUNTERCLAIM  OR OTHER ACTION  ARISING IN
CONNECTION  THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY EACH OF TRUSTOR AND BENEFICIARY, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY  EACH  INSTANCE  AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE.  BENEFICIARY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY TRUSTOR.

         47.  Expenses and Attorneys'  Fees.  Trustor agrees to promptly pay all
reasonable fees,  costs and expenses  incurred by Beneficiary in connection with
any matters  contemplated  by or arising out of this Deed of Trust and the other
Loan  Documents,  including,  without  limitation,  reasonable  fees,  costs and
expenses (including  reasonable  attorneys' fees and fees of other

                                       25
<PAGE>

professionals  retained by  Beneficiary)  incurred in any action to enforce this
Deed of Trust or the other Loan  Documents  or to collect any  payments due from
Trustor  under  this  Deed of  Trust,  the Note or any other  Loan  Document  or
incurred in  connection  with any  refinancing  or  restructuring  of the credit
arrangements  provided  under this Deed of Trust  incurred in connection  with a
"workout" or in connection  with any insolvency or bankruptcy  proceedings  with
respect to Trustor,  and all such fees,  costs and expenses shall be part of the
Obligations, payable on demand.

         48.  Amendments and Waivers.  Except as otherwise  provided herein,  no
amendment, modification,  termination or waiver of any provision of this Deed of
Trust,  the  Note or any  other  Loan  Document,  or  consent  to any  departure
therefrom,  shall in any event be effective  unless the same shall be in writing
and signed by  Beneficiary  and any other party to be charged.  Each  amendment,
modification,  termination  or waiver  shall be  effective  only in the specific
instance  and for the specific  purpose for which it was given.  No notice to or
demand on  Trustor  in any case  shall  entitle  Trustor to any other or further
notice or demand in similar or other circumstances.

         49. Servicer.  Beneficiary  shall have the right at any time throughout
the term of the Loan to designate or appoint one or more  Servicers  (as defined
in the Loan  Agreement)  to  administer  this Deed of Trust  and the other  Loan
Documents,  and to change or replace any Servicer.  All of Beneficiary's  rights
under this Deed of Trust and the Loan  Documents  may be  exercised  by any such
Servicer  designated by Beneficiary.  Any such Servicer shall be entitled to the
benefit of all obligations of Trustor in favor of Beneficiary.

         50. Intentionally Deleted.

         51.  Trustee.  Trustee  may  resign  by the  giving  of  notice of such
resignation in writing or verbally to Beneficiary. If Trustee shall die, resign,
or become  disqualified  from acting in the execution of this trust,  or if, for
any reason, Beneficiary shall prefer to appoint a substitute trustee or multiple
substitute  trustees,  or successive  substitute trustees or successive multiple
substitute trustees, to act instead of the aforenamed Trustee, Beneficiary shall
have full power to appoint a  substitute  trustee  (or, if  preferred,  multiple
substitute trustees) in succession who shall succeed (and if multiple substitute
trustees are appointed, each of such multiple substitute trustees shall succeed)
to all the estates,  rights,  powers, and duties of the aforenamed Trustee. Such
appointment may be executed by any authorized agent of Beneficiary,  and if such
Beneficiary be a corporation  and such  appointment be executed in its behalf by
any officer of such corporation, such appointment shall be conclusively presumed
to be executed with authority and shall be valid and sufficient without proof of
any action by the board of directors or any superior officer of the corporation.
Trustor  hereby  ratifies  and  confirms  any and all acts which the  aforenamed
Trustee,  or his  successor or  successors  in this trust,  shall do lawfully by
virtue  hereof.  If multiple  substitute  Trustees are  appointed,  each of such
multiple  substitute  Trustees  shall be empowered  and  authorized to act alone
without the necessity of the joinder of the other multiple substitute  trustees,
whenever any action or undertaking of such  substitute  trustees is requested or
required  under  or  pursuant  to this  Deed of  Trust or  applicable  law.  Any
substitute  Trustee  appointed  pursuant to any of the provisions  hereof shall,
without  any  further  act,  deed,  or  conveyance,

                                       26
<PAGE>

become vested with all the estates,  properties,  rights,  powers, and trusts of
its or his predecessor in the rights hereunder with like effect as if originally
named  as  Trustee  herein;  but  nevertheless,  upon  the  written  request  of
Beneficiary  or of the  substitute  Trustee,  the  Trustee  ceasing to act shall
execute and deliver any instrument transferring to such substitute Trustee, upon
the trusts herein expressed,  all the estates,  properties,  rights, powers, and
trusts of the Trustee so ceasing to act,  and shall duly  assign,  transfer  and
deliver any of the property  and moneys held by such  Trustee to the  substitute
Trustee so  appointed  in the  Trustee's  place.  No fees or  expenses  shall be
payable to Trustee,  except in connection  with a  foreclosure  of the Mortgaged
Property or any part thereof or in connection  with the release of the Mortgaged
Property following payment in full of the Debt.

         52. Liability of Trustee.  Trustee shall not be liable for any error of
judgment or act done by Trustee in good faith,  or be otherwise  responsible  or
accountable  under any  circumstances  whatsoever,  except for  Trustee's  gross
negligence  or willful  misconduct.  Trustee shall have the right to rely on any
instrument,  document or signature authorizing or supporting any action taken or
proposed  to be  taken by him  hereunder,  believed  by him in good  faith to be
genuine.  All monies received by Trustee shall,  until used or applied as herein
provided,  be held in trust for the purposes for which they were  received,  and
shall be  segregated  from  all  other  monies,  and  Trustee  shall be under no
liability  for interest on any monies  received by him  hereunder.  Trustor will
reimburse Trustee for, and indemnify and save him harmless against,  any and all
liability and expenses  which may be incurred by him in the  performance  of his
duties hereunder.

         53. Beneficiary and Trustee.  Trustee accepts the trusts hereby created
and  agrees to  perform  the duties  herein  required  of him upon the terms and
conditions hereof. The duties and obligations of Trustee in respect of this Deed
of Trust shall be as set forth in this Section or other applicable provisions of
this Deed of Trust, or under the law of California.

         (a) Upon the  occurrence  and  during  the  continuance  of an Event of
Default, at the direction of Beneficiary.

                           (i) Trustee  shall  undertake  to perform such duties
                  and  obligations  and only such duties and  obligations as are
                  specifically  set  forth in this  Deed of Trust  and the other
                  Loan  Documents  or  as  otherwise  directed  by a  letter  of
                  direction  from  Beneficiary,  and  no  implied  covenants  or
                  obligations shall be read into this Deed of Trust or the other
                  Loan Documents against the Trustee; and

                           (ii)  In  the  absence  of  bad  faith,  Trustee  may
                  conclusively  rely, as to the truth of the  statements and the
                  correctness   of  the   opinions   expressed   therein,   upon
                  certificates  or opinions  furnished to Trustee and conforming
                  to the  requirements  of this Deed of Trust and the other Loan
                  Documents;  but  in  the  case  of any  such  certificates  or
                  opinions  which  by  any  provision   hereof  or  thereof  are
                  specifically required to be furnished to Beneficiary,  Trustee
                  shall be under a duty to examine the same to determine whether
                  or not they conform to the  requirements of this Deed of Trust
                  and the other Loan Documents.

                                       27
<PAGE>

                           (iii)  In  case  an  Event   of   Default   known  to
                  Beneficiary  has occurred  and is  continuing,  Trustee  shall
                  exercise the rights and powers  vested in Trustee by this Deed
                  of Trust and the other Loan Documents, with reasonable care.

                           (iv) No  provision  of this  Deed of  Trust  shall be
                  construed  to  relieve  Trustee  from  liability  for  his own
                  negligence or willful misconduct, except that:

                                    (A)  Trustee  shall  not be  liable  for any
                           error of  judgment  made in good  faith  by  Trustee,
                           unless it shall be proved that Trustee was  negligent
                           in ascertaining the pertinent facts; and

                                    (B) Trustee shall not be liable with respect
                           to any  action  taken or  omitted to be taken in good
                           faith in accordance with the direction of Beneficiary
                           relating to the time,  method and place of conducting
                           any proceeding  for any remedy  available to Trustee,
                           or  exercising  any  trust  or power  conferred  upon
                           Trustee under this Deed of Trust.

                                    (C)  Whether  or  not  herein  expressly  so
                           provided,  every  provision  of this  Deed  of  Trust
                           relating to the conduct or affecting the liability of
                           or affording  protection  to Trustee shall be subject
                           to the provisions of this Section 53.

                                    (D) No provision of this Deed of Trust shall
                           require  Trustee  to  expend or risk his own funds or
                           otherwise incur any personal  financial  liability in
                           the performance of any of his duties hereunder, or in
                           the  exercise  of any of his rights or powers,  if he
                           shall have  reasonable  grounds  for  believing  that
                           repayment of such funds or adequate indemnity against
                           such risk or liability is not  reasonably  assured to
                           him.

         (b) Trustor covenants and agrees:

                           (i) to pay to  Trustee  from time to time  reasonable
                  compensation for all services rendered by him hereunder;

                           (ii) to reimburse each of Beneficiary  (except to the
                  extent  set  forth  to the  contrary  herein  or in  the  Loan
                  Documents)   and  Trustee  upon  request  for  all  reasonable
                  expenses, disbursements and advances incurred or made by it or
                  them in  accordance  with any  provision of this Deed of Trust
                  (including reasonable compensation, expenses and disbursements
                  of agents and counsel), except any such expense,  disbursement
                  or advance as may be  attributable  to its  negligence  or bad
                  faith; and

                           (iii)  to  indemnify  Trustee  for,  and to hold  him
                  harmless  against,  any loss,  liability  or expense  incurred
                  without  negligence,  willful  misconduct  or bad faith on his
                  part,  arising out of or in connection  with the acceptance or
                  administration  of  the  trust  or  trusts  hereunder  or  the
                  enforcement  of  remedies

                                       28
<PAGE>

                  hereunder  including  the  costs  and  expenses  of  defending
                  against any claim or liability in connection with the exercise
                  or  performance  of any of the powers or duties  hereunder  or
                  thereunder  (except any  liability  incurred  by Trustee  with
                  negligence,  willful  misconduct  or bad faith on his or their
                  part).

         The  obligations  of Trustor  under this  Section 53 to  compensate  or
indemnify  Trustee and to pay or reimburse  Trustee for expenses,  disbursements
and advances shall  constitute  additional  Debt hereunder and shall survive the
satisfaction  and discharge of this Deed of Trust.  When Trustee or  Beneficiary
incurs  expenses or render  services  after an occurrence of an Event of Default
hereunder, the expenses and compensation for services are intended to constitute
expenses of administration under any bankruptcy law.

         54.  Limitation on Recourse.  The obligations of Trustor  hereunder are
subject to  limitations  on  recourse  as  provided  in Article  XII of the Loan
Agreement.

         55.  Satisfaction of Deed of Trust. Upon payment of the Debt in full or
upon  satisfaction  of the conditions to release of the Mortgaged  Property from
the Lien hereof pursuant to a partial defeasance in accordance with the terms of
the Note and Section 11.4 of the Loan Agreement,  Beneficiary, at Trustor's sole
cost and upon  Trustor's  request,  shall  execute  and  deliver  to  Trustor  a
satisfaction  or reconveyance of this Deed of Trust,  duly  acknowledged  and in
recordable  form,  UCC-3  financing  statements  terminating any UCC-1 financing
statements  filed by Beneficiary  relating to the Mortgaged  Property,  and such
other  documents  or  instruments  as may be required to release the Lien of the
Loan Documents from the Mortgaged Property.

                            [SIGNATURE PAGE FOLLOWS]

                                       29
<PAGE>

         IN WITNESS WHEREOF,  Trustor has executed this instrument as of the day
and year first above written.

WITNESS:                                  TRUSTOR:

                                          CEDARS LA LLC,
                                          a Delaware limited liability company

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

<PAGE>

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

On the 13th day of December,  2000,  before me, Mary  Caliendo,  Notary  Public,
personally  appeared John A. Mannix,  personally known to me (or proved to me on
the basis of  satisfactory  evidence) to be the person(s)  whose name(s)  is/are
subscribed to the within  instrument and acknowledged to me all that he/she/they
executed  the  same  in  his/her/their  authorized  capacity(ies),  and  that by
his/her/their  signature(s) on the instrument the person(s),  or the entity upon
behalf of which the person(s)  acted,  executed the instrument.  WITNESS my hand
and official seal.

Signature         /s/ Mary Caliendo

                  Mary Caliendo
                  Notary Public, State of New York
                           No. 4951918
                  Qualified in Nassau County
                  Commission Expires June 5, 2001

<PAGE>

                                    EXHIBIT B

                                    Mortgages

1.       Open-End Leasehold Mortgage,  Assignment of Leases and Rents,  Security
         Agreement and Fixture Filing dated of even date herewith,  made by 1600
         Market Street Property Trust, a Maryland real estate  investment  trust
         ("1600 Market  Street"),  in favor of Merrill Lynch  Mortgage  Lending,
         Inc.

2.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture  Filing  dated  of even  date  herewith,  made  by  Bridgepoint
         Property   Trust,   a   Maryland   real   estate    investment    trust
         ("Bridgepoint"), in favor of Merrill Lynch Mortgage Lending, Inc.

3.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith,  made by Lakewood  Property
         Trust, a Maryland real estate investment trust  ("Lakewood"),  in favor
         of Merrill Lynch Mortgage Lending, Inc.

4.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith,  made by Herald Square LLC,
         a Delaware limited  liability  company ("Herald  Square"),  in favor of
         Merrill Lynch Mortgage Lending, Inc.

5.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith, made by Indiana Avenue LLC,
         a Delaware limited liability company  ("Indiana  Avenue"),  in favor of
         Merrill Lynch Mortgage Lending, Inc.

6.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture  Filing dated of even date  herewith,  made by Cedars LA LLC, a
         Delaware limited  liability  company ("Cedars LA"), in favor of Merrill
         Lynch Mortgage Lending, Inc.

*        1600 Market  Street,  Bridgepoint,  Lakewood,  Herald  Square,  Indiana
         Avenue and Cedars LA shall be  collectively  referred  to herein as the
         "Borrowers".

<PAGE>

                                Omitted Exhibits

         The  following  exhibit to the Deed of Trust,  Assignment of Leases and
Rents, Security Agreement and Fixture Filing has been omitted:

         Exhibit Letter                                       Exhibit Title

         A                                                    Premises

         The Registrant agrees to furnish supplementally a copy of the foregoing
omitted exhibit to the Securities and Exchange Commission upon request.EXHIBIT 10.8

                                               This instrument is intended
                                               to be recorded in Philadelphia
                                               County, Pennsylvania

RETURN TO:

Sidley & Austin
875 Third Avenue
New York, New York 10022
Attn:  Robert L. Boyd, Esq.

                          OPEN-END LEASEHOLD MORTGAGE,
                              ASSIGNMENT OF LEASES
                               AND RENTS, SECURITY
                          AGREEMENT AND FIXTURE FILING

         THIS  OPEN-END  LEASEHOLD  MORTGAGE,  ASSIGNMENT  OF LEASES  AND RENTS,
SECURITY  AGREEMENT  AND FIXTURE  FILING (as the same may be amended,  restated,
extended,   supplemented   or  otherwise   modified  from  time  to  time,  this
"Mortgage"), is made as of the 15th day of December, 2000, by 1600 MARKET STREET
PROPERTY TRUST, a Maryland real estate  investment  trust,  having its principal
place  of  business  c/o HRPT  Properties  Trust,  400  Centre  Street,  Newton,
Massachusetts 02458-2076 ("Mortgagor"),  to and for the benefit of MERRILL LYNCH
MORTGAGE LENDING, INC., a Delaware corporation,  having its place of business at
100 Church  Street,  18th Floor,  New York,  New York 10080  (together  with its
successors and assigns, the "Mortgagee").  Capitalized terms used herein but not
otherwise  defined shall have the respective  meanings assigned to such terms in
the Loan Agreement (hereinafter defined).

         This  Mortgage  is  an  open-end  mortgage  as  set  forth  in  42  Pa.
C.S.A.ss.8143 and secures future advances.

                              W I T N E S S E T H:

         To secure the payment of a loan (the "Loan") in the original  principal
sum of TWO HUNDRED SIXTY MILLION AND NO/100 DOLLARS ($260,000,000), lawful money
of the United  States of America,  being made from  Mortgagee to  Mortgagor  and
other  Borrowers  (as  defined on Exhibit B attached  hereto) on the date hereof
pursuant to the terms and  conditions of a certain Loan and Security  Agreement,
dated as of the date  hereof (as  amended or  modified,  the "Loan  Agreement"),
among Mortgagor,  the other Borrowers and Mortgagee,  which Loan is evidenced by
and is to be paid with interest according to a certain Promissory Note, dated as
of the date hereof (as amended,  modified, renewed or restated and together with
any substitutes or replacements therefor, the "Note"), made by Mortgagor and the
other Borrowers to Mortgagee and all other sums due hereunder,  or otherwise due
under the Loan  Documents  (as  defined in the

<PAGE>

Loan  Agreement)  (the  principal  amount of the Loan,  together  with  interest
thereon and all sums due  hereunder and under the Loan  Agreement,  the Note and
the other Loan Documents being collectively  called the "Debt"),  and all of the
agreements,  covenants,  conditions,   warranties,   representations  and  other
obligations  (other than to repay the Debt) made or  undertaken  by Mortgagor or
any  other  person or  entity  to  Mortgagee  or others as set forth in the Loan
Documents  (collectively,  the "Obligations"),  Mortgagor has mortgaged,  given,
granted, bargained, sold, alienated,  enfeoffed,  conveyed,  confirmed, pledged,
assigned,  and hypothecated  and by these presents does hereby  mortgage,  give,
grant,  bargain,  sell, alien,  enfeoff,  convey,  confirm,  pledge,  assign and
hypothecate  unto  Mortgagee all of  Mortgagor's  leasehold  interest in, to and
under the Ground  Lease (as  hereinafter  defined)  covering  the real  property
described  on Exhibit A attached  hereto  (the  "Premises")  and the  buildings,
structures,  fixtures,  additions,  enlargements,   extensions,   modifications,
repairs,  replacements and  improvements  now or hereafter  located thereon (the
"Improvements");

         TOGETHER WITH: all right,  title,  interest and estate of Mortgagor now
owned,  or  hereafter  acquired,  in  and  to the  following  property,  rights,
interests and estates (the Ground Lease, the Premises, the Improvements together
with the following  property,  rights,  interests and estates being  hereinafter
described are collectively referred to herein as the "Mortgaged Property"):

               (a) all  easements,  rights-of-way,  strips  and  gores  of land,
streets,  ways, alleys,  passages,  sewer rights,  water,  water courses,  water
rights and powers, air rights and development  rights, and all estates,  rights,
titles,  interests,   privileges,   liberties,   tenements,   hereditaments  and
appurtenances  of any  nature  whatsoever,  in any way  belonging,  relating  or
pertaining  to  the  Premises  and  the   Improvements  and  the  reversion  and
reversions,  remainder  and  remainders,  and all  land  lying in the bed of any
street,  road or  avenue,  opened  or  proposed,  in front of or  adjoining  the
Premises,  to the center  line  thereof  and all the  estates,  rights,  titles,
interests, dower and rights of dower, courtesy and rights of courtesy, property,
possession, claim and demand whatsoever, both at law and in equity, of Mortgagor
of,  in and to the  Premises  and the  Improvements  and every  part and  parcel
thereof, with the appurtenances thereto;

               (b)  all  machinery,  equipment,  fixtures  (including,  but  not
limited to, all heating, air conditioning,  plumbing,  lighting,  communications
and  elevator  fixtures)  and other  property of every kind and nature,  whether
tangible or intangible, whatsoever owned by Mortgagor, or in which Mortgagor has
or shall have an interest,  now or  hereafter  located upon the Premises and the
Improvements,  or appurtenant thereto, and usable in connection with the present
or future  operation and occupancy of the Premises and the  Improvements and all
building  equipment,  materials and supplies of any nature  whatsoever  owned by
Mortgagor, or in which Mortgagor has or shall have an interest, now or hereafter
located upon the Premises and the  Improvements,  or  appurtenant  thereto,  and
usable in  connection  with the  present  or  future  operation,  enjoyment  and
occupancy of the Premises and the Improvements  (hereinafter collectively called
the  "Equipment"),  including  the  proceeds  of any  sale  or  transfer  of the
foregoing,  and the right,  title and interest of Mortgagor in and to any of the
Equipment  which may be subject  to any  security  interests,  as defined in the
Uniform Commercial Code, as adopted

                                       2
<PAGE>

and  enacted  by the state or  states  where any of the  Mortgaged  Property  is
located (the  "Uniform  Commercial  Code")  superior in lien to the lien of this
Mortgage;

               (c) all awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Mortgaged Property, whether
from the exercise of the right of eminent domain or condemnation (including, but
not limited to, any transfer made in lieu of or in  anticipation of the exercise
of said  rights),  or for a change  of  grade,  or for any  other  injury  to or
decrease in the value of the Mortgaged Property;

               (d)  all  leases,  tenancies,  licenses,  subleases,  assignments
and/or other rental or occupancy agreements (including,  without limitation, any
and all guarantees of any of the foregoing) heretofore or hereafter entered into
affecting the use,  enjoyment or occupancy of the Premises and the Improvements,
including  any  extensions,   renewals,   modifications  or  amendments  thereof
(collectively,  the "Leases") and all rents,  rent  equivalents  (including room
revenues,  if applicable),  moneys payable as damages or in lieu of rent or rent
equivalents,  royalties (including, without limitation, all oil and gas or other
mineral  royalties  and  bonuses),  income,  receivables,   receipts,  revenues,
deposits (including, without limitation,  security, utility and other deposits),
accounts,  cash,  issues,  profits,  charges for  services  rendered,  and other
consideration  of  whatever  form or  nature  received  by or paid to or for the
account of or benefit of Mortgagor  or its agents or employees  from any and all
sources arising from or attributable to the Premises and the  Improvements  (the
"Rents"),  together with all proceeds from the sale or other  disposition of the
Leases and the right to receive and apply the Rents to the payment of the Debt;

               (e) all  proceeds of and any unearned  premiums on any  insurance
policies covering the Mortgaged Property,  including,  without  limitation,  the
right to  receive  and  apply  the  proceeds  of any  insurance,  judgments,  or
settlements  made in lieu thereof,  for damage to the Mortgaged  Property or any
part thereof;

               (f) the right,  following an Event of Default, in the name and on
behalf of Mortgagor,  to appear in and defend any action or  proceeding  brought
with respect to the Mortgaged  Property and to commence any action or proceeding
to protect the interest of the Mortgagee in the  Mortgaged  Property or any part
thereof;

               (g) all  accounts,  escrows,  reserves,  documents,  instruments,
chattel paper, claims, deposits and general intangibles,  as the foregoing terms
are defined in the  Uniform  Commercial  Code,  and all books,  records,  plans,
specifications,  designs,  drawings,  permits, consents,  licenses,  franchises,
management   agreements,   contracts,   contract  rights   (including,   without
limitation,  any  contract  with any  architect  or  engineer  or with any other
provider  of goods  or  services  for or in  connection  with any  construction,
repair, or other work upon the Mortgaged Property),  approvals, actions, refunds
or real estate taxes and  assessments  (and any other  governmental  impositions
related to the Mortgaged  Property),  and causes of action that now or hereafter
relate  to,  are  derived  from or are used in  connection  with  the  Mortgaged
Property, or the use, operation,  management,  improvement,  alteration, repair,
maintenance,  occupancy or  enjoyment  thereof or the conduct of any business or
activities thereon;

                                       3
<PAGE>

               (h) any and all proceeds and products of any of the foregoing and
any and all other  security  and  collateral  of any nature  whatsoever,  now or
hereafter given for the repayment of the Debt and the performance of Mortgagor's
obligations  under  the  Loan  Documents,  including  (without  limitation)  the
Impositions  and  Insurance  Reserve,  the  Replacement  Reserve,  the Hazardous
Materials  Remediation Reserve, the Loss Proceeds Account, the Deposit Accounts,
the Central  Account and the  Sub-Accounts  thereof (each as defined in the Cash
Management  Agreement,  dated as of the date hereof (as amended or modified  the
"Cash Management Agreement"),  by and between Mortgagor,  Mortgagee, First Union
National Bank, and REIT Management & Research, Inc. ("Manager")),  and any other
escrows or reserves set forth in the Loan Documents;

               (i) all accounts receivable,  contract rights, interests,  estate
or other  claims,  both in law and in  equity,  which  Mortgagor  now has or may
hereafter acquire in the Mortgaged Property or any part thereof; and

               (j) all rights which Mortgagor now has or may hereafter  acquire,
to be indemnified and/or held harmless from any liability, loss, damage, cost or
expense  (including,  without  limitation,  attorneys'  fees and  disbursements)
relating to the Mortgaged Property or any part thereof.

         TO HAVE AND TO HOLD the above granted and described  Mortgaged Property
unto and to the use and benefit of Mortgagee,  and the successors and assigns of
Mortgagee, forever;

         PROVIDED,  HOWEVER, these presents are upon the express condition that,
if Mortgagor  shall well and truly pay to Mortgagee  the Debt at the time and in
the manner provided in the Note and this Mortgage and shall well and truly abide
by and comply with each and every covenant and condition set forth herein and in
the Note in a timely manner,  these presents and the estate hereby granted shall
cease, terminate and be void;

         AND Mortgagor  represents and warrants to and covenants and agrees with
Mortgagee as follows:

         1.  Payment of Debt and  Incorporation  of  Covenants,  Conditions  and
Agreements.  Mortgagor shall pay the Debt at the time and in the manner provided
in the Note, the Loan  Agreement and in this  Mortgage.  Mortgagor will duly and
punctually perform all of the covenants,  conditions and agreements contained in
the Note, the Loan Agreement,  this Mortgage and the other Loan Documents all of
which  covenants,  conditions  and  agreements  are  hereby  made a part of this
Mortgage  to the same  extent  and with the  same  force as if fully  set  forth
herein.

         2. Warranty of Title.  Mortgagor  warrants  that  Mortgagor has a good,
marketable and insurable  leasehold  interest in the Mortgaged  Property and has
the right to mortgage,  give,  grant,  bargain,  sell, alien,  enfeoff,  convey,
confirm,  pledge, assign and hypothecate the same and that Mortgagor possesses a
leasehold  estate  in the  Premises  and the  Improvements  and that it owns the
Mortgaged  Property  free  and  clear of all  liens,  encumbrances  and  charges
whatsoever  except for the  Permitted  Encumbrances.  Mortgagor  represents  and
warrants that none of the

                                       4
<PAGE>

Permitted  Encumbrances  will  materially and adversely  affect (i)  Mortgagor's
ability to pay in full in a timely manner its  obligations,  including,  without
limitation,  the  Debt,  (ii)  the  use of the  Mortgaged  Property  for the use
currently being made thereof,  (iii) the operation of the Mortgaged Property, or
(iv) the value of the  Mortgaged  Property.  Mortgagor  shall  forever  warrant,
defend and preserve such title and the validity and priority of the lien of this
Mortgage and shall forever warrant and defend the same to Mortgagee  against the
claims of all persons whomsoever.

         3.  Insurance.  (a)  Mortgagor,  at its sole  cost and  expense,  shall
maintain  or cause to be  maintained  insurance  with  respect to the  Mortgaged
Property  for the mutual  benefit of  Mortgagor  and  Mortgagee  as  required by
Section 5.4 of the Loan Agreement.

               (b) If the Mortgaged  Property shall be damaged or destroyed,  in
whole or in part, by fire or other casualty (an "Insured  Casualty"),  Mortgagor
shall give immediate  notice thereof to Mortgagee and to the insurance  carrier.
Subject to the terms of the Loan  Agreement,  Mortgagor  shall promptly  repair,
replace or rebuild the Mortgaged  Property in accordance  with,  and all amounts
paid  with  respect  to such  Insured  Casualty  under  all  insurance  policies
maintained  by  Mortgagor  shall be  governed  by, the terms and  conditions  of
Section 5.5 of the Loan  Agreement.  The  expenses  incurred by Mortgagee in the
adjustment  and  collection of insurance  proceeds shall become part of the Debt
and shall be secured  hereby and shall be  reimbursed  by Mortgagor to Mortgagee
upon demand.

         4. Payment of  Impositions  and Other  Charges.  Subject to Mortgagor's
right to  contest  set forth in  Section  5.3(B) of the Loan  Agreement  and the
provisions  of  Section 5 below,  and  pursuant  to the  provisions  of the Cash
Management  Agreement,  Mortgagor  shall cause to be paid all Impositions now or
hereafter  levied or assessed or imposed  against the Mortgaged  Property or any
part thereof as the same become due and payable.  Mortgagor  shall  promptly pay
for all utility  services  provided to the Mortgaged  Property.  Mortgagor shall
furnish to Mortgagee or its designee receipts for the payment of the Impositions
prior to the date the same shall  become  delinquent  (provided,  however,  that
Mortgagor  shall not be  required  to  furnish  such  receipts  for  payment  of
Impositions  in the event  that  such  Impositions  have been paid by  Mortgagee
pursuant to Section 5 hereof).

         5.  Impositions  and Insurance  Reserve.  Mortgagor  shall make monthly
deposits into the Impositions and Insurance Reserve of amounts sufficient to pay
Impositions and Insurance  Premiums (if and to the extent Insurance Premiums are
required to be escrowed under the Loan  Agreement) in accordance  with the terms
of Section 6.3 of the Loan Agreement and the Cash Management Agreement.

         6.  Condemnation.  (a) Mortgagor shall promptly give Mortgagee  written
notice of the actual or threatened  commencement of any  condemnation or eminent
domain  proceeding  affecting the Mortgaged  Property or any portion thereof and
shall  deliver to Mortgagee  copies of any and all papers  served in  connection
with such proceedings.  Subject to the terms of Section 6(b) below, Mortgagee is
hereby irrevocably  appointed as Mortgagor's  attorney-in-fact,  coupled with an
interest,  with  exclusive  power to  collect,  receive  and retain any award or
payment for said  condemnation  or eminent  domain and to make any compromise or
settlement in connection

                                       5
<PAGE>

with  such   proceeding,   subject   to  the   provisions   of  this   Mortgage.
Notwithstanding  any  taking by any  public or quasi  public  authority  through
eminent  domain or otherwise  (including but not limited to any transfer made in
lieu of or in  anticipation  of the exercise of such  taking),  Mortgagor  shall
continue to pay the Debt at the time and in the manner  provided for its payment
in the Note,  in this  Mortgage and the other Loan  Documents and the Debt shall
not be reduced  until any award or  payment  therefor  shall have been  actually
received  after expenses of collection and applied by Mortgagee to the discharge
of the Debt in accordance  with the terms hereof.  In accordance  with the terms
hereof,  Mortgagor shall cause the award or payment made in any  condemnation or
eminent domain proceeding, which is payable to Mortgagor, to be paid directly to
Mortgagee.  Mortgagee  may apply any such award or payment to the  reduction  or
discharge of the Debt whether or not then due and payable;  such  application to
be without any Prepayment  Consideration (as defined in the Note), provided that
such payment is made within one hundred  twenty (120) days following the date of
receipt  of such  condemnation  award  except  that if an Event of  Default  has
occurred  and is  continuing,  then such  application  shall be  subject  to the
Prepayment  Consideration computed in accordance with the Note. If the Mortgaged
Property  is  sold  following  an  Event  of  Default,  through  foreclosure  or
otherwise, prior to the receipt by Mortgagee of such award or payment, Mortgagee
shall have the right,  whether or not a  deficiency  judgment  on the Note shall
have been sought,  recovered or denied,  to receive said award or payment,  or a
portion thereof sufficient to pay the Debt.

               (b) Notwithstanding  the foregoing,  Mortgagee shall not exercise
the foregoing rights and Mortgagor may prosecute any condemnation proceeding and
settle or compromise  and collect any claim  involving an award and/or claim for
damages of not more than the Restoration  Threshold  provided that: (i) no Event
of Default shall have occurred and be continuing,  (ii) in Mortgagee's sole good
faith  judgment,  such  condemnation  or taking does not and will not materially
restrict access to the Mortgaged  Property or otherwise have a Material  Adverse
Effect,  and the Mortgaged  Property remaining after such condemnation or taking
is capable of being  restored to an  economically  viable whole of the same type
which existed  prior to the  condemnation  or taking and in compliance  with all
applicable  laws,  (iii)  Mortgagor  applies  the  proceeds of such award to any
reconstruction or repair of the Mortgaged Property necessary as a result of such
condemnation  or  taking,  (iv)  Mortgagor  promptly  commences  and  diligently
prosecutes  such  reconstruction  or repair to completion in accordance with all
applicable laws and (v) at Mortgagee's  request,  such  reconstruction or repair
shall be performed under the supervision of an architect or engineer  reasonably
acceptable to Mortgagee and the plans and  specifications for such work shall be
subject to Mortgagee's  reasonable  approval.  Mortgagor authorizes Mortgagee to
apply such  awards,  payments,  proceeds  or  damages,  after the  deduction  of
Mortgagee's  reasonable  expenses incurred in the collection of such amounts, at
Mortgagee's  option,  to restoration  or repair of the Mortgaged  Property or to
payment of the sums  secured by this  Mortgage,  whether or not then due, in the
order determined by Mortgagee,  with the balance,  if any, to Mortgagor.  In the
event that Mortgagee shall apply any such awards, payments,  proceeds or damages
to the  indebtedness  secured  hereby  pursuant to the  foregoing  sentence,  no
Prepayment Consideration or other prepayment premium or penalty shall be due and
payable under the Note in  connection  therewith.  Subject to the  provisions of
clauses (i) through  (v) of this  Section  6(b),  Mortgagee  shall not  exercise
Mortgagee's  option to apply  such  awards or  damages  to  payment  of the sums
secured by this Mortgage provided that each of the conditions

                                       6
<PAGE>

(as  applicable) to the release of insurance  proceeds for restoration or repair
of the  Mortgaged  Property  under Section 5.5 of the Loan  Agreement  have been
satisfied with respect to such condemnation  awards or damages.  Any application
of  proceeds  to  principal  shall not  extend or  postpone  the due date of the
monthly  installments  due  hereunder,  under  the Note or under any of the Loan
Documents or change the amount of such installments. Mortgagor agrees to execute
such further evidence of assignment of any awards,  proceeds,  damages or claims
arising  in  connection  with  such  condemnation  or taking  as  Mortgagee  may
reasonably require.

         7.  Maintenance  of  Mortgaged  Property.  Mortgagor  shall  cause  the
Mortgaged  Property to be operated and  maintained in a good and safe  condition
and repair and in  keeping  with the  condition  and repair of  properties  of a
similar use,  value,  age,  nature and  construction.  Mortgagor  shall not use,
maintain or operate the  Mortgaged  Property in any manner which  constitutes  a
public or private  nuisance or which makes void,  voidable,  or  cancelable,  or
increases the premium of, any insurance then in force with respect thereto.  The
Improvements  and the  Equipment  shall  not be  removed  or  demolished  and no
Material  Alterations  shall be made thereto  (except for normal  replacement or
disposal of the  Equipment  and except as otherwise  expressly  permitted in the
Loan  Agreement)  without the consent of  Mortgagee,  which consent shall not be
unreasonably withheld,  delayed or conditioned.  Mortgagor shall promptly comply
in all material  respects  with all laws,  orders and  ordinances  affecting the
Mortgaged Property, or the use thereof.

         8. Use of Mortgaged  Property.  Mortgagor shall not initiate,  join in,
acquiesce  in, or  consent to any change in any  private  restrictive  covenant,
zoning law or other public or private restriction, limiting or defining the uses
which  may be made of the  Mortgaged  Property  or any part  thereof,  nor shall
Mortgagor  initiate,  join in,  acquiesce in, or consent to any zoning change or
zoning matter  affecting the Mortgaged  Property,  which in any of the foregoing
cases could  reasonably be expected to result in a Material  Adverse Effect.  If
under  applicable  zoning  provisions  the  use of all  or  any  portion  of the
Mortgaged  Property is or shall become a nonconforming  use,  Mortgagor will not
cause or permit such  nonconforming  use to be discontinued or abandoned without
the  express  written   consent  of  Mortgagee,   which  consent  shall  not  be
unreasonably  withheld.  Mortgagor shall not permit or suffer to occur any waste
on or to the Mortgaged Property or to any portion thereof and shall not take any
steps whatsoever to convert the Mortgaged Property, or any portion thereof, to a
condominium  or cooperative  form of  management.  Mortgagor will not install or
permit  to be  installed  on  the  Premises  any  underground  storage  tank  or
above-ground storage tank in violation of the Environmental Laws.

         9. Transfer or  Encumbrance  of the Mortgaged  Property.  (a) Mortgagor
acknowledges that Mortgagee has examined and relied on the  creditworthiness and
experience of Mortgagor in owning and operating properties such as the Mortgaged
Property in agreeing to make the Loan,  and that Mortgagee will continue to rely
on Mortgagor's ownership of the Mortgaged Property as a means of maintaining the
value of the Mortgaged Property as security for repayment of the Debt. Except as
expressly  permitted under this Mortgage,  the Loan Agreement or under the other
Loan Documents,  Mortgagor shall not cause or suffer to occur or exist, directly
or indirectly,  voluntarily or involuntarily,  by operation of law or otherwise,
any sale, transfer,  mortgage, pledge, lien or encumbrance (other than Permitted
Encumbrances)

                                       7
<PAGE>

(collectively,  "Transfers") of (i) all or any part of the Mortgaged Property or
any  interest  therein,  or (ii) any  direct or  indirect  beneficial  ownership
interest (in whole or in part) in Mortgagor, irrespective of the number of tiers
of ownership, without the prior written consent of Mortgagee.

               (b)  Notwithstanding  the foregoing,  Mortgagor may,  without the
consent of Mortgagee, (i) make immaterial transfers of portions of the Mortgaged
Property to any federal,  state or local government or any political subdivision
thereof (collectively,  "Governmental Authorities") for dedication or public use
(subject  to the  provisions  of  Section 6 hereof)  and (ii)  grant  easements,
restrictions,  covenants,  reservations and rights of way in the ordinary course
of business  for access,  water and sewer  lines,  telephone,  cellular,  cable,
internet and telegraph  lines,  electric  lines or other  utilities or for other
similar purposes,  provided that no such transfer or conveyance set forth in the
foregoing  clauses (i) and (ii) shall have a Material Adverse Effect;  provided,
however,  that  Mortgagor  shall give  Mortgagee  at least ten (10) days'  prior
written notice of any such transfer or conveyance  describing same in reasonable
detail and certifying  that such transfer or conveyance  satisfies the foregoing
conditions.

               (c) The occurrence of any Transfer in violation of this Section 9
shall  constitute  an Event of Default  hereunder,  whereupon  Mortgagee  at its
option,  without  being  required to  demonstrate  any actual  impairment of its
security  or any  increased  risk of default  hereunder,  may  declare  the Debt
immediately due and payable.

               (d) Mortgagee's consent to any Transfer of the Mortgaged Property
or any interest in Mortgagor  shall not be deemed to be a waiver of  Mortgagee's
right to require such consent to any future occurrence of same. Any attempted or
purported  Transfer  of the  Mortgaged  Property  or of any  direct or  indirect
interest in Mortgagor, if made in contravention of this Section 9, shall be null
and void and of no force and effect.

         10.  Taxes  on  Security;  Documentary  Stamps;  Intangibles  Tax.  (a)
Mortgagor shall pay all taxes, charges, filing, registration and recording fees,
excises and levies payable with respect to the Note,  this Mortgage or the liens
created or secured by the Loan Documents, other than income, franchise and doing
business  taxes  imposed on  Mortgagee.  If there  shall be enacted  any law (i)
deducting the Loan from the value of the  Mortgaged  Property for the purpose of
taxation,  (ii) affecting any lien on the Mortgaged Property,  or (iii) changing
existing laws of taxation of mortgages, deeds of trust, security deeds, or debts
secured by real  property,  or changing the manner of collecting any such taxes,
Mortgagor  shall  promptly pay to  Mortgagee,  on demand,  all taxes,  costs and
charges for which Mortgagee is or may be liable as a result thereof; however, if
such payment would be prohibited by law or would render the Loan usurious,  then
instead of  collecting  such  payment,  Mortgagee  may declare all amounts owing
under the Loan  Documents  to be  immediately  due and  payable.  No  Prepayment
Consideration shall be imposed on any such payment.

               (b) If at any  time the  United  States  of  America,  any  State
thereof or any  subdivision  of any such State  shall  require  revenue or other
stamps to be  affixed to the Note or this  Mortgage,  or impose any other tax or
charge on the same, Mortgagor will pay for the same,

                                       8
<PAGE>

with interest and penalties  thereon,  if any.  Mortgagor hereby agrees that, in
the  event  that it is  determined  that  additional  documentary  stamp  tax or
intangible  tax is due hereon or any  mortgage or  promissory  note  executed in
connection herewith (including,  without limitation,  the Note), Mortgagor shall
indemnify and hold harmless  Mortgagee for all such documentary stamp tax and/or
intangible  tax,  including all  penalties  and interest  assessed or charged in
connection therewith. Mortgagor shall pay same within ten (10) days after demand
of payment from  Mortgagee and the payment of such sums shall be secured by this
Mortgage  and such sums shall bear  interest at the Default  Rate (as defined in
the Note)  from and after the  eleventh  (11th) day after  demand  until paid in
full.

               (c) Mortgagor  shall hold harmless and indemnify  Mortgagee,  its
successors  and  assigns,  against  any  liability  incurred  by  reason  of the
imposition of any tax on the making and recording of this Mortgage.

         11. No  Credits on  Account  of the Debt.  Mortgagor  will not claim or
demand or be  entitled  to any  credit or credits on account of the Debt for any
part of the Impositions  assessed  against the Mortgaged  Property,  or any part
thereof,  and no deduction  shall otherwise be made or claimed from the assessed
value of the  Mortgaged  Property,  or any part  thereof,  for real  estate  tax
purposes by reason of this Mortgage or the Debt. In the event such claim, credit
or  deduction  shall be required  by law,  Mortgagee  shall have the option,  by
written  notice  of not  less  than  ninety  (90)  days,  to  declare  the  Debt
immediately due and payable. No Prepayment Consideration shall be imposed on any
such payment.

         12.   Performance  of  Other  Agreements.   Mortgagor  shall  duly  and
punctually  observe  and  perform  each  and  every  material  term,  provision,
condition, and covenant to be observed or performed by Mortgagor pursuant to the
terms  of any  agreement  or  recorded  instrument  (including  all  instruments
comprising the Permitted  Encumbrances) affecting or pertaining to the Mortgaged
Property,  and will not suffer or permit any default or event of default  (after
giving effect to any applicable  notice  requirements and cure periods) to exist
under any of the foregoing.

         13. Further Acts; Secondary Market Transactions. (a) Mortgagor will, at
its sole cost and  expense,  and  without  expense to  Mortgagee,  do,  execute,
acknowledge  and deliver all and every such further  acts,  deeds,  conveyances,
mortgages, assignments, notices of assignment, Uniform Commercial Code financing
statements or  continuation  statements,  transfers and  assurances as Mortgagee
shall,  from  time  to  time,  reasonably  require,  for  the  better  assuring,
conveying,  assigning,  transferring, and confirming unto Mortgagee the property
and  rights  hereby  mortgaged,  given,  granted,  bargained,  sold,  alienated,
enfeoffed,  conveyed,  confirmed, pledged, assigned and hypothecated or intended
now or hereafter so to be, or which  Mortgagor  may be or may  hereafter  become
bound to convey or assign to  Mortgagee,  or for carrying  out the  intention or
facilitating  the  performance  of the  terms of this  Mortgage  or for  filing,
registering or recording this Mortgage.  Mortgagor,  on demand, will execute and
deliver and,  upon  Mortgagor's  failure to do so within five (5) Business  Days
after Mortgagee's  request therefor,  hereby authorizes  Mortgagee to execute in
the name of  Mortgagor  or without  the  signature  of  Mortgagor  to the extent
Mortgagee  may  lawfully  do  so,  one or  more  financing  statements,  chattel
mortgages  or other  instruments,  to evidence  more  effectively  the  security
interest  of  Mortgagee

                                       9
<PAGE>

in the Mortgaged  Property.  Upon  foreclosure or the appointment of a receiver,
Mortgagor will, at its sole cost and expense,  cooperate fully and completely to
effect the assignment or transfer of any license, permit, agreement or any other
right necessary or useful to the operation of the Mortgaged Property.  Mortgagor
grants to Mortgagee an  irrevocable  power of attorney  coupled with an interest
for the purpose of  exercising  and  perfecting  any and all rights and remedies
available to Mortgagee at law and in equity, including, without limitation, such
rights and remedies available to Mortgagee pursuant to this Section.

               (b)  Subject  to the terms and  conditions  set forth in the Loan
Agreement,  Mortgagee  shall  have the right to engage in one or more  Secondary
Market  Transactions  and, in connection  therewith,  Mortgagee may transfer its
obligations  under this  Mortgage,  the Note,  the Loan  Agreement and under the
other Loan Documents (or may transfer the portion thereof  corresponding  to the
transferred  portion of the  Obligations),  and  thereafter  Mortgagee  shall be
relieved of any obligations hereunder and under the other Loan Documents arising
after the date of said transfer with respect to the transferred interest.

         14. Recording of Mortgage, Etc. Upon the execution and delivery of this
Mortgage and thereafter,  from time to time, Mortgagor will cause this Mortgage,
and any security  instrument  creating a lien or security interest or evidencing
the lien hereof  upon the  Mortgaged  Property  and each  instrument  of further
assurance to be filed,  registered or recorded in such manner and in such places
as may be required  by any  present or future law in order to publish  notice of
and fully to protect the lien or security interest hereof upon, and the interest
of  Mortgagee  in,  the  Mortgaged  Property.  Mortgagor  will  pay all  filing,
registration  or recording fees, and all expenses  incident to the  preparation,
execution and acknowledgment of this Mortgage, any mortgage supplemental hereto,
any  security  instrument  with  respect  to  the  Mortgaged  Property  and  any
instrument of further assurance,  and all federal,  state, county and municipal,
taxes, duties, imposts,  assessments and charges arising out of or in connection
with the  execution  and delivery of this  Mortgage,  any mortgage  supplemental
hereto,  any security  instrument with respect to the Mortgaged  Property or any
instrument of further assurance, except where prohibited by law so to do.

         15. Reporting  Requirements.  Mortgagor agrees to give prompt notice to
Mortgagee  of the  insolvency  or  bankruptcy  filing of Mortgagor or the death,
insolvency or bankruptcy filing of any Guarantor.

         16. Intentionally Deleted.

         17.  Remedies.  Upon the  occurrence  and during the  continuance of an
Event of Default,  Mortgagee may, at Mortgagee's option, by Mortgagee itself, or
otherwise, do any one or more of the following:

               (a) Right to Perform  Mortgagor's  Covenants.  If  Mortgagor  has
failed to keep or perform any covenant whatsoever  contained in this Mortgage or
the other Loan  Documents,  Mortgagee  may, but shall not be obligated to do so,
perform or attempt to perform  said  covenant;  and any payment  made or expense
incurred in the  performance  or  attempted  performance  of any such  covenant,
together  with any sum expended by Mortgagee  that is chargeable to Mortgagor or

                                       10
<PAGE>

subject to  reimbursement  by Mortgagor under the Loan  Documents,  shall be and
become a part of the  Debt,  and  Mortgagor  promises,  upon  demand,  to pay to
Mortgagee, at the place where the Note is payable, all sums so incurred, paid or
expended  by  Mortgagee,  with  interest  from the date when paid,  incurred  or
expended by Mortgagee at the Default Rate (as defined in the Note).

               (b) Right of Entry.  Mortgagee  may,  prior or  subsequent to the
institution of any foreclosure  proceedings,  enter upon the Mortgaged Property,
or any part thereof, and take exclusive possession of the Mortgaged Property and
of all books,  records,  and accounts  relating  thereto and to exercise without
interference  from Mortgagor any and all rights which Mortgagor has with respect
to the management,  possession,  operation,  protection,  or preservation of the
Mortgaged Property,  including,  without limitation,  the right to rent the same
for the account of Mortgagor and to deduct from such Rents all costs,  expenses,
and liabilities of every character  incurred by the Mortgagee in collecting such
Rents and in managing,  operating,  maintaining,  protecting,  or preserving the
Mortgaged  Property and to apply the remainder of such Rents on the Debt in such
manner as  Mortgagee  may  elect.  All such  costs,  expenses,  and  liabilities
incurred by  Mortgagee  in  collecting  such Rents and in  managing,  operating,
maintaining,  protecting,  or preserving the Mortgaged Property, if not paid out
of Rents as hereinabove provided,  shall constitute a demand obligation owing by
Mortgagor and shall bear interest from the date of expenditure until paid at the
Default Rate as specified in the Note,  all of which shall  constitute a portion
of the Debt. If Mortgagee elects to enter the Mortgaged Property as provided for
herein, Mortgagee may invoke any and all legal remedies to dispossess Mortgagor,
including  specifically  one or more  actions for forcible  entry and  detainer,
trespass to try title, and  restitution.  In connection with any action taken by
the Mortgagee pursuant to this subsection, Mortgagee shall not be liable for any
loss  sustained by  Mortgagor  resulting  from any failure to let the  Mortgaged
Property,  or any  part  thereof,  or from  any  other  act or  omission  of the
Mortgagee in managing the Mortgaged  Property  unless such loss is caused by the
willful  misconduct or gross negligence of Mortgagee,  its agents,  employees or
officers,  nor  shall  Mortgagee  be  obligated  to  perform  or  discharge  any
obligation,  duty, or liability  under any Lease or under or by reason hereof or
the exercise of rights or remedies  hereunder.  Mortgagor  shall and does hereby
agree to indemnify, defend and hold harmless the Indemnified Parties (as defined
in Section 23 below) from and against,  any and all  liability,  claim,  demand,
loss,  damage,  cost  or  expense  (including,  without  limitation,  reasonable
attorneys' fees and disbursements) which may or might be suffered or incurred by
any  Indemnified  Party under any such Lease or under or by reason hereof or the
exercise  of  rights  or  remedies  hereunder,  or  by  reason  of  any  alleged
obligations  or  undertakings  on its part to  perform or  discharge  any of the
terms, covenants, or agreements contained in any such Lease as and to the extent
provided  under Section 23 below.  Nothing in this  subsection  shall impose any
duty, obligation,  or responsibility upon any Indemnified Party for the control,
care,  management,  leasing,  or repair of the Mortgaged  Property,  nor for the
carrying out of any of the terms and  conditions  of any such Lease prior to the
transfer  of  title  to the  Mortgaged  Property  to any  Indemnified  Party  by
foreclosure,  deed-in-lieu  thereof,  exercise  of power  of sale or  otherwise.
Mortgagor hereby assents to,  ratifies,  and confirms any and all actions of the
Mortgagee with respect to the Mortgaged Property taken under this subsection.

                                       11
<PAGE>

               (c) Right to Accelerate. Mortgagee may, without notice or demand,
declare the entire unpaid balance of the Debt immediately due and payable.

               (d)  Foreclosure-Power  of Sale.  Mortgagee may from time to time
institute  a  proceeding  or   proceedings,   judicial,   or   nonjudicial,   by
advertisement  or  otherwise,  for the complete or partial  foreclosure  of this
Mortgage or the complete or partial  sale of the  Mortgaged  Property  under the
power  of sale  contained  herein  or under  any  applicable  provision  of law.
Mortgagee  may  sell the  Mortgaged  Property,  and all  estate,  right,  title,
interest,  claim and demand of Mortgagor  therein,  and all rights of redemption
thereof, at one or more sales, as an entirety or in parcels,  with such elements
of real and/or personal property, and at such time and place and upon such terms
as it may deem  expedient,  or as may be required by applicable  law, and in the
event of a sale, by foreclosure or otherwise,  of less than all of the Mortgaged
Property,  this Mortgage shall  continue as a lien and security  interest on the
remaining portion of the Mortgaged Property.

               (e) Rights  Pertaining to Sales.  Subject to the  requirements of
applicable law and except as otherwise provided herein, the following provisions
shall apply to any sale or sales of all or any portion of the Mortgaged Property
under or by virtue of Subsection (d) above, whether made under the power of sale
herein  granted or by virtue of judicial  proceedings or of a judgment or decree
of foreclosure and sale:

                           (i)  Mortgagee  may  conduct any number of sales from
                  time to time.  The power of sale set forth  above shall not be
                  exhausted  by any one or more such sales as to any part of the
                  Mortgaged  Property which shall not have been sold, nor by any
                  sale which is not  completed or is  defective  in  Mortgagee's
                  opinion, until the Debt shall have been paid in full.

                           (ii) Any sale may be postponed or adjourned by public
                  announcement  at the time and place appointed for such sale or
                  for such postponed or adjourned sale without further notice.

                           (iii) After each sale, Mortgagee or an officer of any
                  court  empowered  to do so shall  execute  and  deliver to the
                  purchaser  or  purchasers  at such sale a good and  sufficient
                  instrument or instruments granting,  conveying,  assigning and
                  transferring all right, title and interest of Mortgagor in and
                  to the property and rights sold and shall receive the proceeds
                  of said sale or sales and apply the same as  specified  in the
                  Loan  Agreement.  Mortgagee is hereby  appointed  the true and
                  lawful  attorney-in-fact  of Mortgagor,  which  appointment is
                  irrevocable  and  shall  be  deemed  to  be  coupled  with  an
                  interest, in Mortgagor's name and stead, to make all necessary
                  conveyances,  assignments,  transfers  and  deliveries  of the
                  property and rights so sold,  Mortgagor  hereby  ratifying and
                  confirming  all  that  said  attorney  or such  substitute  or
                  substitutes shall lawfully do by virtue thereof. Nevertheless,
                  Mortgagor, if requested by Mortgagee, shall ratify and confirm
                  any  such  sale  or  sales  by  executing  and  delivering  to
                  Mortgagee or such purchaser or

                                       12
<PAGE>

                  purchasers  all  such  instruments  as  may be  advisable,  in
                  Mortgagee's judgment, for the purposes as may be designated in
                  such request.

                           (iv) Any and all statements of fact or other recitals
                  made  in any  of the  instruments  referred  to in  Subsection
                  (e)(iii) above given by Mortgagee shall be taken as conclusive
                  and binding against all persons as to evidence of the truth of
                  the facts so stated and recited.

                           (v) Any such sale or sales  shall  operate  to divest
                  all of the estate,  right, title,  interest,  claim and demand
                  whatsoever,  whether at law or in equity,  of Mortgagor in and
                  to the properties and rights so sold, and shall be a perpetual
                  bar both at law and in equity  against  Mortgagor  and any and
                  all persons  claiming  or who may claim the same,  or any part
                  thereof  or  any  interest  therein,   by,  through  or  under
                  Mortgagor to the fullest extent permitted by applicable law.

                           (vi) Upon any such sale or sales,  Mortgagee  may bid
                  for and acquire the Mortgaged  Property and, in lieu of paying
                  cash therefor, may make a settlement for the purchase price by
                  crediting  against  the  Debt  the  amount  of  the  bid  made
                  therefor,  after deducting therefrom the expenses of the sale,
                  the  cost of any  enforcement  proceeding  hereunder,  and any
                  other sums which  Mortgagee is  authorized to deduct under the
                  terms hereof, to the extent necessary to satisfy such bid.

                           (vii) Upon any such sale,  it shall not be  necessary
                  for Mortgagee or any public officer acting under  execution or
                  order  of  court  to have  present  or  constructively  in its
                  possession any of the Mortgaged Property.

               (f) Mortgagee's Judicial Remedies.  Mortgagee may proceed by suit
or suits,  at law or in equity,  to enforce the payment of the Debt to foreclose
the liens and security  interests of this Mortgage as against all or any part of
the Mortgaged  Property,  and to have all or any part of the Mortgaged  Property
sold under the  judgment or decree of a court of  competent  jurisdiction.  This
remedy shall be cumulative of any other  nonjudicial  remedies  available to the
Mortgagee  under this Mortgage or the other Loan  Documents.  Proceeding  with a
request or receiving a judgment for legal relief shall not be or be deemed to be
an  election  of  remedies  or  bar  any  available  nonjudicial  remedy  of the
Mortgagee.

               (g) Mortgagee's Right to Appointment of Receiver. Mortgagee, as a
matter of right and (i) without  regard to the  sufficiency  of the security for
repayment of the Debt and without notice to Mortgagor,  (ii) without any showing
of insolvency,  fraud, or mismanagement on the part of Mortgagor,  (iii) without
the  necessity  of  filing  any  judicial  or other  proceeding  other  than the
proceeding for  appointment  of a receiver,  and (iv) without regard to the then
value of the  Mortgaged  Property,  shall be  entitled to the  appointment  of a
receiver or receivers for the protection,  possession,  control,  management and
operation of the Mortgaged Property,  including (without limitation),  the power
to  collect  the  Rents,  enforce  this  Mortgage  and,  in case  of a sale  and
deficiency,  during the full statutory  period of redemption  (if any),  whether
there  be a  redemption  or not,  as well  as  during  any  further  times  when
Mortgagor,  except for the

                                       13
<PAGE>

intervention  of such  receiver,  would be entitled to collection of such Rents.
Mortgagor  hereby  irrevocably  consents  to the  appointment  of a receiver  or
receivers.  Any receiver appointed pursuant to the provisions of this subsection
shall have the usual powers and duties of receivers in such matters.

               (h) Mortgagee's  Uniform Commercial Code Remedies.  Mortgagee may
exercise its rights of enforcement  under the Uniform  Commercial Code in effect
in the state in which the Mortgaged Property is located.

               (i) Other  Rights.  Mortgagee  (i) may  surrender  the  insurance
policies maintained pursuant to the Loan Agreement or any part thereof, and upon
receipt of the proceeds shall apply the unearned  Insurance Premiums as a credit
on the Debt, and, in connection  therewith,  Mortgagor hereby appoints Mortgagee
as  agent  and  attorney-in-fact  (which  is  coupled  with an  interest  and is
therefore  irrevocable) for Mortgagor to collect such Insurance  Premiums;  (ii)
may apply the Impositions  and Insurance  Reserve and/or any other Reserves held
pursuant to this Mortgage or the other Loan Documents,  and any other funds held
by Mortgagee  toward  payment of the Debt; and (iii) shall have and may exercise
any and all other  rights and  remedies  which  Mortgagee  may have at law or in
equity, or by virtue of any of the Loan Documents, or otherwise.

               (j) Discontinuance of Remedies. If Mortgagee shall have proceeded
to invoke any right,  remedy, or recourse permitted under the Loan Documents and
shall thereafter elect to discontinue or abandon same for any reason,  Mortgagee
shall have the  unqualified  right so to do and,  in such event,  Mortgagor  and
Mortgagee shall be restored to their former  positions with respect to the Debt,
the Loan  Documents,  the  Mortgaged  Property  or  otherwise,  and the  rights,
remedies,  recourses and powers of Mortgagee shall continue as if same had never
been invoked.

               (k) Remedies Cumulative.  All rights,  remedies, and recourses of
Mortgagee  granted in the Note, this Mortgage and the other Loan Documents,  any
other pledge of collateral,  or otherwise  available at law or equity: (i) shall
be cumulative;  (ii) may be pursued  separately,  successively,  or concurrently
against Mortgagor,  the Mortgaged Property,  or any one or more of them, at such
time and in such order as Mortgagee may determine in its sole discretion;  (iii)
may be exercised as often as occasion  therefor shall arise,  it being agreed by
Mortgagor that the exercise or failure to exercise any of same shall in no event
be construed as a waiver or release  thereof or of any other right,  remedy,  or
recourse;  (iv) shall be nonexclusive of any other right,  power or remedy which
Mortgagee  may  have  against  Mortgagor  pursuant  to this  Mortgage,  the Loan
Agreement  or the other Loan  Documents,  or  otherwise  available  at law or in
equity;  (v) shall not be conditioned upon Mortgagee  exercising or pursuing any
remedy in relation to the Mortgaged Property prior to Mortgagee bringing suit to
recover the Debt;  and (vi) in the event  Mortgagee  elects to bring suit on the
Debt and obtains a judgment  against  Mortgagor prior to exercising any remedies
in  relation  to the  Mortgaged  Property,  all  liens and  security  interests,
including the lien of this  Mortgage,  shall remain in full force and effect and
may be exercised thereafter at Mortgagee's option.

                                       14
<PAGE>

               (l) Election of Remedies.  Mortgagee  may release,  regardless of
consideration,  any part of the Mortgaged Property without, as to the remainder,
in any  way  impairing,  affecting,  subordinating,  or  releasing  the  lien or
security  interests  evidenced by this  Mortgage or the other Loan  Documents or
affecting the  obligations  of Mortgagor or any other party to pay the Debt. For
payment of the Debt, Mortgagee may resort to any collateral securing the payment
of the Debt in such order and manner as Mortgagee may elect. No collateral taken
by Mortgagee shall in any manner impair or affect the lien or security interests
given  pursuant  to the Loan  Documents,  and all  collateral  shall  be  taken,
considered, and held as cumulative.

               (m) Bankruptcy  Acknowledgment.  If the Mortgaged Property or any
portion  thereof or any  interest  therein  becomes  property of any  bankruptcy
estate or subject to any state or federal insolvency proceeding, or in the event
of the filing of any voluntary or involuntary petition under the Bankruptcy Code
by or against  Mortgagor then Mortgagee shall  immediately  become entitled,  in
addition  to all other  relief to which  Mortgagee  may be  entitled  under this
Mortgage,  to obtain (i) an order from any bankruptcy court or other appropriate
court granting  immediate  relief from the automatic stay pursuant to ss. 362 of
the Bankruptcy Code so as to permit  Mortgagee to pursue its rights and remedies
against  Mortgagor  as provided  under this  Mortgage  and all other  rights and
remedies of Mortgagee at law and in equity under  applicable state law, and (ii)
an order from the  Bankruptcy  Court  prohibiting  Mortgagor's  use of all "cash
collateral" as defined under ss. 363 of the Bankruptcy Code. Mortgagor shall not
assert or request any other party to assert,  that the automatic  stay under ss.
362 of the  Bankruptcy  Code  operate  or be  interpreted  to  stay,  interdict,
condition,  reduce or inhibit the ability of  Mortgagee to enforce any rights it
has by virtue of this Mortgage,  or any other rights that Mortgagee has, whether
now or hereafter  acquired,  against any guarantor of the Debt.  Mortgagor shall
not  seek a  supplemental  stay  or any  other  relief,  whether  injunctive  or
otherwise,  pursuant to ss. 105 of the  Bankruptcy  Code or any other  provision
therein  to stay,  interdict,  condition,  reduce  or  inhibit  the  ability  of
Mortgagee  to enforce any rights it has by virtue of this  Mortgage  against any
guarantor  of the Debt.  Any  bankruptcy  petition or other  action taken by the
Mortgagor to stay, condition,  or inhibit Mortgagee from exercising its remedies
are hereby admitted by Mortgagor to be in bad faith and Mortgagor further admits
that Mortgagee would have just cause for relief from the automatic stay in order
to take such actions authorized under state law.

               (n) Application of Proceeds.  The proceeds from any sale,  lease,
or other  disposition  made pursuant to this Mortgage,  or the proceeds from the
surrender of any insurance  policies  pursuant hereto, or any Rents collected by
Mortgagee from the Mortgaged  Property or the Impositions and Insurance  Reserve
or other Reserves under the Cash Management  Agreement or sums received pursuant
to Section 6 hereof,  or proceeds from insurance which Mortgagee elects to apply
to the Debt  pursuant to Section 3 hereof,  shall be applied by Mortgagee to the
Debt in such order, priority and proportions as Mortgagee in its sole discretion
shall determine.

               (o)  Cross-Collateralization.  The  mortgages  and deeds of trust
(other than this Mortgage)  listed on Exhibit B attached  hereto and made a part
hereof,  as any of same may be amended,  modified or  supplemented  from time to
time,  are  collectively  referred to for purposes of this Section  17(o) as the
"Other Mortgages." This Mortgage, as it may be amended, modified

                                       15
<PAGE>

or  supplemented  from  time to time,  together  with the Other  Mortgages,  are
collectively  referred to for purposes of this Section 17(o) as the "Mortgages."
The  Obligations  are  secured by,  among other  things,  the  Mortgages,  which
encumber real and personal  property in the States of California,  Pennsylvania,
Texas and the District of Columbia,  as more  particularly  described in each of
the  Mortgages.  The  Obligations  may be  accelerated  as  provided in the Loan
Documents.  Upon  the  occurrence  and  during  the  continuance  of an Event of
Default,  Mortgagee may, at its option, accelerate the Obligations and foreclose
upon any one or more of the  Mortgages or resort to any one or more of its other
rights  and  remedies  under  any or all of the  Mortgages  and the  other  Loan
Documents.  Except as otherwise  provided  herein,  all of the real and personal
property  conveyed  and/or  mortgaged  by the  Mortgages  are  security  for the
Obligations  without  allocation  of any one or more of the  parcels or portions
thereof to any portion of the  Obligations.  Mortgagee may allocate the proceeds
that it  receives  upon the  exercise  of its  rights  and  remedies,  including
foreclosure,  to payment of the  Obligations as Mortgagee in its sole discretion
may  determine  to be  advisable  pursuant  to the terms of the Loan  Documents.
Mortgagee  may  proceed,  at the  same or  different  times,  to  foreclose  the
Mortgages  or any one or more of them,  by any  proceedings  appropriate  in the
state where any of the real property  encumbered by one or more of the Mortgages
lies,  including private sale if permitted,  and no event of enforcement  taking
place in any state,  including without limiting the generality of the foregoing,
any pending  foreclosure,  judgment or decree of foreclosure,  foreclosure sale,
rents received,  possession taken,  deficiency  judgment or decrees, or judgment
taken on the Obligations,  shall in any way stay, preclude or bar enforcement of
the Mortgages or any of them in any other state, and Mortgagee may pursue any or
all of its remedies to the maximum  extent  permitted by applicable law pursuant
to the terms of the Loan Documents  until all of the  Obligations  and all other
obligations  now or hereafter  secured by any or all of the Mortgages  have been
paid or discharged in full.  Additionally,  and without  limitation of any other
provision of this  Mortgage,  if this Mortgage is  foreclosed  and the Mortgaged
Property  (or any  part  thereof)  is sold  pursuant  to  foreclosure  or  other
proceedings,  and if the  proceeds  of  such  sale  (after  application  of such
proceeds as  provided in this  Mortgage  and the other Loan  Documents)  are not
sufficient  to pay the total sum of the  Obligations  then  outstanding  and any
other amounts provided for by applicable law (the "Balance Owed"),  then, to the
extent permitted by law, the Obligations shall not be satisfied to the extent of
the Balance Owed, but such Obligations  shall continue in existence and continue
to be evidenced and secured by the Loan Documents and the Mortgages.  Subject to
the  requirements  of applicable  law, if Mortgagee  shall acquire the Mortgaged
Property as a result of any foreclosure or other sale (whether by bidding all or
any portion of the Obligations or otherwise),  the proceeds of such sale, to the
extent permitted by law, shall not be deemed to include (and Mortgagor shall not
be entitled to any benefit or credit on account of)  proceeds of any  subsequent
sale of the  Mortgaged  Property by Mortgagee.  Without  limitation of any other
provision  hereof,  Mortgagor  further agrees that if any of the Other Mortgages
are  foreclosed  and sale is made of any of the  property  subject  to any Other
Mortgages,  and if the proceeds of such sale (after application of such proceeds
as provided for herein and after  deducting  all accrued and general and special
taxes and  assessments)  are not sufficient to pay the Obligations and any other
amounts  provided for by applicable  law, then, to the extent  permitted by law,
the  Obligations  then  outstanding  shall not be satisfied to the extent of the
Balance Owed, but such  Obligations  shall continue in existence and continue to
be  evidenced  and  secured by the Loan  Documents  and the  Mortgages  existing
immediately prior to any such foreclosure, except such Mortgages

                                       16
<PAGE>

foreclosed upon. No release of personal  liability of any Person  whatsoever and
no release of any portion of the property  now or hereafter  subject to the lien
of any of the Mortgages shall have any effect whatsoever by way of impairment or
disturbance  of the  lien or  priority  of any  other  of the  Mortgages  or the
unreleased  properties  encumbered  by  any  of the  Mortgages,  to  the  extent
permitted by law. Any foreclosure or other appropriate  remedy brought in any of
the  states  aforesaid  may be  brought  and  prosecuted  as to any  part of the
security,  wherever  located,  without  regard  to  the  fact  that  foreclosure
proceedings or other remedies have or have not been instituted  elsewhere on any
other property subject to the lien of the Mortgages.  Neither  Mortgagor nor any
Person  claiming by, through or under  Mortgagor shall have any right to marshal
the assets,  all such rights being hereby  expressly  waived as to Mortgagor and
all  Persons  claiming  by,  through  or  under  Mortgagor,  including,  without
limitation, junior lienors. Each of Mortgagor and all endorsers,  guarantors and
sureties of the Obligations, hereby waives any and all rights arising because of
payment or performance by Mortgagor of any Obligations (a) against any Person by
way of  subrogation  of the  rights  of  Mortgagee  or (b)  against  any  Person
obligated to pay or perform the Obligations or other obligations  secured by the
Other Mortgages by way of contribution, reimbursement or otherwise.

               (p) Confession of Judgment.

                              (i)  MORTGAGEE   MAY  HAVE  JUDGMENT   ENTERED  BY
               CONFESSION PURSUANT TO ANY POWER TO CONFESS JUDGMENT CONTAINED IN
               THIS MORTGAGE OR IN ANY OF THE LOAN DOCUMENTS.

                              (ii) MORTGAGOR HEREBY  AUTHORIZES AND EMPOWERS ANY
               ATTORNEY  OR  ATTORNEYS  OF  ANY  COURT  OF THE  COMMONWEALTH  OF
               PENNSYLVANIA  TO  APPEAR  FOR  MORTGAGOR  AND,  AS  ATTORNEY  FOR
               MORTGAGOR,  TO CONFESS  JUDGMENT IN EJECTMENT  AGAINST  MORTGAGOR
               (AND, AT THE ELECTION OF SAID ATTORNEY OR ATTORNEYS,  AGAINST ANY
               PERSON CLAIMING UNDER,  BY OR THROUGH  MORTGAGOR,  SUBJECT TO THE
               RIGHTS  OF  TENANTS  UNDER  LEASES  EXISTING  ON THE DATE  HEREOF
               (PROVIDED THAT SUCH LEASES ARE EXPRESSLY  IDENTIFIED AS PERMITTED
               ENCUMBRANCES) OR SUBSEQUENTLY ENTERED INTO WITH MORTGAGEE'S PRIOR
               WRITTEN   CONSENT,   AND  FURTHER   SUBJECT  TO   NON-DISTURBANCE
               AGREEMENTS ENTERED INTO BETWEEN MORTGAGEE AND ANY SUCH TENANT) IN
               FAVOR OF MORTGAGEE FOR THE  POSSESSION OF THE MORTGAGED  PROPERTY
               OF MORTGAGOR  OR, AT THE ELECTION OF SAID  ATTORNEY OR ATTORNEYS,
               ANY PORTION OR PORTIONS OF SUCH MORTGAGED PROPERTY. THE FOREGOING
               AUTHORITY  TO  CONFESS  JUDGMENT  IS  GRANTED   INDEPENDENTLY  BY
               MORTGAGOR,  AND SHALL BE EXERCISABLE  AGAINST MORTGAGOR,  AND THE
               EXERCISE AGAINST MORTGAGOR SHALL NOT EXHAUST THE EXERCISE THEREOF
               AGAINST  MORTGAGOR,  BUT SHALL CONTINUE UNTIL  MORTGAGEE

                                       17
<PAGE>

               IS FULLY AND FINALLY  VESTED  WITH  POSSESSION  OF THE  MORTGAGED
               PROPERTY.  MORTGAGOR  EXPRESSLY  AGREES THAT ANY JUDGMENT ENTERED
               AGAINST IT PURSUANT  TO THE  FOREGOING  AUTHORITY  SHALL BE FINAL
               WITH RESPECT TO MORTGAGOR AND RELEASES TO  MORTGAGEE,  AND TO ANY
               ATTORNEY APPEARING FOR MORTGAGEE,  ALL ERRORS IN SAID PROCEEDINGS
               AND ALL  LIABILITY  THEREFOR.  UPON  CONFESSION  OF  JUDGMENT  IN
               EJECTMENT  PURSUANT  TO  THE  FOREGOING  AUTHORITY,   A  WRIT  OF
               POSSESSION (OR LIKE WRIT  APPROPRIATE  UNDER THEN APPLICABLE LAW)
               MAY ISSUE FORTHWITH WITHOUT ANY PRIOR PROCEEDINGS AND MAY INCLUDE
               THE COSTS OF MORTGAGEE.  JUDGMENT MAY BE ENTERED  PURSUANT TO THE
               FOREGOING  AUTHORITY  ON THE  BASIS  OF  ANY  AFFIDAVIT  MADE  ON
               MORTGAGEE'S BEHALF AND SETTING FORTH THE RELEVANT FACTS, AND IF A
               TRUE  COPY OF THIS  MORTGAGE  IS  FILED  IN ANY  ACTION  FOR SUCH
               JUDGMENT,  IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS
               MORTGAGE.  MORTGAGEE MAY CONFESS  JUDGMENT IN EJECTMENT BEFORE OR
               AFTER: (A) THE INSTITUTION OF FORECLOSURE  PROCEEDINGS UNDER THIS
               MORTGAGE,  (B) THE ENTRY OF JUDGMENT  HEREUNDER OR UNDER ANY NOTE
               OR OTHER LOAN DOCUMENT,  OR (C) A SHERIFF'S SALE OF THE MORTGAGED
               PROPERTY.

         18. Security Agreement.  This Mortgage is both a real property mortgage
and a "security  agreement"  within the meaning of the Uniform  Commercial Code.
The Mortgaged  Property  includes both real and personal  property and all other
rights and interests,  whether tangible or intangible in nature, of Mortgagor in
the Mortgaged Property.  Mortgagor by executing and delivering this Mortgage has
granted and hereby  grants to  Mortgagee,  as security  for the Debt, a security
interest  in the  Mortgaged  Property  to the full  extent  that  the  Mortgaged
Property  may be subject to the  Uniform  Commercial  Code (said  portion of the
Mortgaged  Property so subject to the Uniform  Commercial  Code being  called in
this  Section 18 the  "Collateral").  Mortgagor  hereby  agrees to  execute  and
deliver  to  Mortgagee,   in  form  and  substance  reasonably  satisfactory  to
Mortgagee,  such financing  statements and such further  assurances as Mortgagee
may from time to time  reasonably  consider  necessary to create,  perfect,  and
preserve Mortgagee's security interest herein granted.  This Mortgage shall also
constitute a "fixture filing" for the purposes of the Uniform Commercial Code as
to all or any part of the Mortgaged  Property which now or hereafter  constitute
"fixtures"  under  the  Uniform  Commercial  Code.  Information  concerning  the
security  interest  herein  granted  may be  obtained  from the  parties  at the
addresses of the parties set forth in the first  paragraph of this Mortgage.  If
an Event of Default shall occur,  Mortgagee, in addition to any other rights and
remedies which it may have, shall have and may exercise  immediately and without
demand,  any and all rights and remedies granted to a secured party upon default
under the Uniform Commercial Code, including, without limiting the generality of
the  foregoing,  the  right to take  possession  of the  Collateral  or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the
care,  protection and preservation of the Collateral.  Upon request or demand of

                                       18
<PAGE>

Mortgagee,  Mortgagor  shall at its expense  assemble the Collateral and make it
available to Mortgagee at a convenient place acceptable to Mortgagee.  Mortgagor
shall pay to Mortgagee on demand any and all expenses,  including legal expenses
and attorneys' fees, incurred or paid by Mortgagee in protecting the interest in
the  Collateral  and in  enforcing  the  rights  hereunder  with  respect to the
Collateral.  Any  notice  of sale,  disposition  or  other  intended  action  by
Mortgagee  with respect to the Collateral  sent to Mortgagor in accordance  with
the  provisions  hereof  at  least  five (5) days  prior to such  action,  shall
constitute  commercially  reasonable  notice to  Mortgagor.  The proceeds of any
disposition of the Collateral,  or any part thereof, may be applied by Mortgagee
to the payment of the Debt in such priority and  proportions as Mortgagee in its
discretion  shall deem proper.  In the event of any change in name,  identity or
structure of any Mortgagor,  such Mortgagor shall notify  Mortgagee  thereof and
promptly after Mortgagee's  request shall execute,  file and record such Uniform
Commercial  Code forms as are necessary to maintain the priority of  Mortgagee's
lien upon and security  interest in the  Collateral,  and shall pay all expenses
and fees in connection with the filing and recording thereof. If Mortgagee shall
require the filing or recording of additional  Uniform  Commercial Code forms or
continuation statements,  Mortgagor shall, promptly after request, execute, file
and record such Uniform  Commercial  Code forms or  continuation  statements  as
Mortgagee  shall  deem  necessary,  and  shall  pay  all  expenses  and  fees in
connection  with the filing  and  recording  thereof,  it being  understood  and
agreed,  however,  that no such additional  documents shall increase Mortgagor's
obligations  under  the  Note,  this  Mortgage  and the  other  Loan  Documents.
Mortgagor hereby irrevocably appoints Mortgagee as its attorney-in-fact, coupled
with an interest upon Mortgagor's failure to do so within five (5) Business Days
after request by Mortgagee,  to file with the  appropriate  public office on its
behalf  any  financing  or  other  statements  signed  only  by  Mortgagee,   as
Mortgagor's attorney-in-fact,  in connection with the Collateral covered by this
Mortgage.  Notwithstanding  the foregoing,  Mortgagor shall appear and defend in
any action or  proceeding  which  affects or  purports  to affect the  Mortgaged
Property and any interest or right  therein,  whether  such  proceeding  affects
title  or any  other  rights  in the  Mortgaged  Property  (and  in  conjunction
therewith, Mortgagor shall fully cooperate with Mortgagee in the event Mortgagee
is a party to such action or proceeding).

         19.  Actions  and  Proceedings.  Upon the  occurrence  and  during  the
continuance  of an Event of  Default,  Mortgagee  has the right to appear in and
defend any action or proceeding  brought with respect to the Mortgaged  Property
and to bring any action or  proceeding,  in the name and on behalf of Mortgagor,
which  Mortgagee,  in its  discretion,  decides should be brought to protect its
interest  in  the  Mortgaged  Property.  Mortgagee  shall,  at  its  option,  be
subrogated to the lien of any mortgage or other security  instrument  discharged
in  whole  or in part  by the  Debt,  and  any  such  subrogation  rights  shall
constitute additional security for the payment of the Debt.

         20.  Waiver  of  Setoff  and  Counterclaim,   Marshalling,  Statute  of
Limitations, Automatic or Supplemental Stay, Etc. (a) All amounts due under this
Mortgage, the Note and the other Loan Documents shall be payable without setoff,
counterclaim or any deduction  whatsoever.  Mortgagor hereby waives the right to
assert a setoff,  counterclaim or deduction in any action or proceeding in which
Mortgagee is a participant,  or arising out of or in any way connected with this
Mortgage, the Note, any of the other Loan Documents, or the Debt.

                                       19
<PAGE>

               (b) Mortgagor hereby expressly,  irrevocably, and unconditionally
waives and  releases,  to the  extent  permitted  by law (i) the  benefit of all
appraisement,  valuation, stay, extension, reinstatement and redemption laws now
or hereafter in force and all rights of  marshalling,  sale in the inverse order
of  alienation,  or any other right to direct in any manner the order or sale of
any of the  Mortgaged  Property  in the  event  of  any  sale  hereunder  of the
Mortgaged Property or any part thereof or any interest therein; (ii) any and all
rights of redemption  from sale under any order or decree of foreclosure of this
Mortgage  on  behalf  of  Mortgagor,  and on  behalf  of each and  every  person
acquiring any interest in or title to the Mortgaged  Property  subsequent to the
date of this  Mortgage  and on behalf of all persons to the extent  permitted by
applicable  law; and (iii) all benefits that might accrue to Mortgagor by virtue
of any present or future law exempting the Mortgaged  Property from  attachment,
levy or sale on execution or providing for any appraisement,  valuation, stay of
execution,  exemption from civil process,  redemption,  or extension of time for
payment.  Mortgagee  shall not be under any  obligation to marshal any assets in
favor of any Person or against or in payment of any or all of the Obligations.

               (c) To the extent permitted by applicable law, Mortgagee's rights
hereunder  shall  continue even to the extent that a suit for  collection of the
Debt, or part thereof,  is barred by a statute of limitations.  Mortgagor hereby
expressly  waives and  releases  to the fullest  extent  permitted  by law,  the
pleading of any statute of limitations as a defense to payment of the Debt.

         21.  Recovery  of Sums  Required to Be Paid.  Mortgagee  shall have the
right  from  time to  time  to take  action  to  recover  any sum or sums  which
constitute a part of the Debt as the same become due,  without regard to whether
or not the balance of the Debt shall be due, and without  prejudice to the right
of Mortgagee thereafter to bring an action of foreclosure,  or any other action,
for a default or defaults by Mortgagor  existing at the time such earlier action
was commenced.

         22.  Handicapped  Access.  (a)  Mortgagor  agrees  that  the  Mortgaged
Property  shall at all times comply in all  material  respects  with  applicable
requirements  of the Americans with  Disabilities  Act of 1990, the Fair Housing
Amendments  Act of 1988,  all state and local  laws and  ordinances  related  to
handicapped  access  and all rules,  regulations,  and  orders  issued  pursuant
thereto  including,  without  limitation,  the Americans with  Disabilities  Act
Accessibility  Guidelines  for Buildings and  Facilities  (collectively  "Access
Laws").

               (b)  Mortgagor  agrees to give prompt  notice to Mortgagee of the
receipt by Mortgagor of any  complaints  related to violation of any Access Laws
and of the  commencement  of any proceedings or  investigations  which relate to
compliance  with  applicable  Access  Laws  but  only to the  extent  that  such
complaints, proceedings or investigations, if adversely determined, could have a
Material Adverse Effect.

         23.  Indemnification;  Limitation  of  Liability.  In  addition  to the
payment  of  expenses  as  required  elsewhere  herein  and  in the  other  Loan
Documents,  Mortgagor  agrees  to  indemnify,  defend,  protect,  pay  and  hold
Mortgagee,  its  successors  and assigns  (including,  without  limitation,  the
trustee and/or the trust under any trust  agreement  executed in connection with
any

                                       20
<PAGE>

Securitization backed in whole or in part by the Loan and any other person which
may  hereafter  be the  holder  of the Note or any  interest  therein),  and the
officers,  directors,  stockholders,  partners, members, employees,  agents, and
Affiliates  of Mortgagee  and such  successors  and assigns  (collectively,  the
"Indemnified  Parties")  harmless  from  and  against  any and all  liabilities,
obligations,  claims, damages,  penalties,  causes of action, costs and expenses
(including   without  limitation   reasonable   attorneys'  fees  and  expenses)
(collectively,  the  "Indemnified  Claims"),  imposed  upon  or  incurred  by or
asserted against any Indemnified Party by reason of any of the following (to the
extent that  insurance  proceeds  paid to the  applicable  Indemnified  Party on
account of the following  shall be  inadequate):  (i) ownership of the Mortgage,
the Mortgaged Property or any interest therein or receipt of any rents; (ii) any
accident,  injury  to or death  of  persons  or loss of or  damage  to  property
occurring in, on or about the  Mortgaged  Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways;  (iii) any use,  nonuse  or  condition  in,  on or about the  Mortgaged
Property or any part  thereof or on the  adjoining  sidewalks,  curbs,  adjacent
property or adjacent  parking areas,  streets or ways;  (iv)  performance of any
labor or  services  or the  furnishing  of any  materials  or other  property in
respect of the Mortgaged  Property or any part  thereof;  (v) any failure of the
Premises or the Improvements to comply with any applicable law,  statute,  code,
ordinance,  rule or  regulation;  (vi)  any  default  by  Mortgagor  under  this
Mortgage,  the Loan  Agreement  or any other Loan  Documents;  (vii) any actions
taken by any Indemnified Party in the enforcement of this Mortgage and the other
Loan Documents in accordance with their respective terms;  (viii) any failure to
act on the  part  of any  Indemnified  Party  hereunder;  (ix)  the  payment  or
nonpayment of any  brokerage  commissions  to any party in  connection  with the
transaction contemplated hereby; and (x) the failure of Mortgagor to file timely
with the  Internal  Revenue  Service an  accurate  Form  1099-B,  Statement  for
Recipients   of  Proceeds   from  Real  Estate,   Broker  and  Barter   Exchange
Transactions,  which may be required in connection  with this  Agreement,  or to
supply a copy  thereof in a timely  fashion to the  recipient of the proceeds of
the transaction in connection with which this Agreement is made. Notwithstanding
the foregoing,  Mortgagor shall not be liable for any Indemnified Claims arising
(A) from the gross negligence or willful  misconduct of any Indemnified Party or
(B)  under  clauses  (i)  - (v)  above  to  the  extent  the  facts,  events  or
circumstances  giving rise to such  Indemnified  Claim arise after the date that
any  Indemnified  Party takes title to the  Mortgaged  Property by  foreclosure,
deed-in-lieu  thereof,  the  exercise  of any  power of sale or  otherwise.  Any
amounts  payable to an  Indemnified  Party by reason of the  application of this
Section shall become  immediately due and payable and shall bear interest at the
Default Rate from the date loss or damage is sustained by such Indemnified Party
until paid.

         24. Notices.  Any notice,  demand,  statement,  request or consent made
hereunder  shall be in  writing,  addressed  to the  intended  recipient  at its
address set forth in the Loan  Agreement,  and shall be made and deemed given in
accordance  with the  terms of the Loan  Agreement.  All  notices  to  Mortgagee
pursuant to 42 Pa. C.S.A.ss. 8143 shall be given as follows:

                  c/o Merrill Lynch & Co.
                  100 Church Street
                  18th Floor
                  New York, New York 10080
                  Attn:  Andrea Balkan

                                       21
<PAGE>

                  With a copy to:

                  Sidley & Austin
                  875 Third Avenue
                  New York, New York 10022
                  Attn:  Robert L. Boyd, Esq.

         25.  Authority.  (a) Mortgagor (and the undersigned  representative  of
Mortgagor,  if any) has full power, authority and right to execute,  deliver and
perform its obligations pursuant to this Mortgage, and to mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and
assign  the  Mortgaged  Property  pursuant  to the terms  hereof and to keep and
observe all of the terms of this Mortgage on  Mortgagor's  part to be performed;
and (b)  Mortgagor  represents  and  warrants  that  Mortgagor is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986, as amended and the related Treasury Department regulations.

         26. Waiver of Notice. Mortgagor shall not be entitled to any notices of
any nature  whatsoever  from Mortgagee  except with respect to matters for which
this Mortgage  specifically  and expressly  provides for the giving of notice by
Mortgagee to Mortgagor and except with respect to matters for which Mortgagee is
required by applicable law to give notice, and Mortgagor hereby expressly waives
the right to receive any notice from  Mortgagee  with  respect to any matter for
which this Mortgage does not specifically  and expressly  provide for the giving
of notice by Mortgagee to Mortgagor.

         27. Remedies of Mortgagor. In the event that a claim or adjudication is
made that Mortgagee has acted unreasonably or unreasonably delayed acting in any
case where by law or under the Note,  this Mortgage or the other Loan Documents,
it has an  obligation  to act  reasonably  or promptly,  Mortgagee  shall not be
liable for any monetary  damages,  and Mortgagor's  remedies shall be limited to
injunctive relief or declaratory judgment.

         28. Sole Discretion of Mortgagee. Whenever pursuant to this Mortgage or
the other Loan Documents,  Mortgagee exercises any right given to it to consent,
approve or  disapprove,  or any  arrangement  or term is to be  satisfactory  to
Mortgagee,  the decision of Mortgagee to consent,  approve or disapprove,  or to
decide that arrangements or terms are satisfactory or not satisfactory  shall be
in the sole discretion of Mortgagee and shall be final and conclusive, except as
may be otherwise  expressly and specifically  provided  herein.  Notwithstanding
anything to the contrary  contained  herein,  it shall be understood  and agreed
that any such consent, approval, or disapproval may be conditioned,  among other
things,  upon Mortgagee  obtaining  confirmation by the Rating Agencies that the
action or other matter subject to Mortgagee's consent,  approval, or disapproval
shall not adversely  affect the rating of any securities  issued or to be issued
in connection with any Secondary Market Transaction,  notwithstanding  that such
condition  may not be expressly  set forth in the provision or provisions of the
Loan Documents which require that Mortgagee's consent be obtained.

                                       22
<PAGE>

         29.  Non-Waiver.  The  failure  of  Mortgagee  to  insist  upon  strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this  Mortgage.  Mortgagor  shall not be  relieved  of  Mortgagor's  obligations
hereunder  by reason of (a) the failure of  Mortgagee to comply with any request
of  Mortgagor or  Guarantor  to take any action to  foreclose  this  Mortgage or
otherwise  enforce  any of the  provisions  hereof or of the Note or other  Loan
Documents,  (b) the release,  regardless of  consideration,  of the whole or any
part of the  Mortgaged  Property,  or of any  person  liable for the Debt or any
portion thereof,  or (c) any agreement or stipulation by Mortgagee extending the
time of payment or otherwise  modifying or supplementing  the terms of the Note,
this Mortgage, or the other Loan Documents. Mortgagee may resort for the payment
of the Debt to any other  security held by Mortgagee in such order and manner as
Mortgagee,  in its discretion,  may elect.  Mortgagee may take action to recover
the Debt,  or any portion  thereof,  or to enforce any covenant  hereof  without
prejudice to the right of Mortgagee thereafter to foreclosure this Mortgage. The
rights and remedies of Mortgagee under this Mortgage shall be separate, distinct
and cumulative and none shall be given effect to the exclusion of the others. No
act of  Mortgagee  shall be  construed  as an election to proceed  under any one
provision herein to the exclusion of any other provision. Mortgagee shall not be
limited  exclusively  to the  rights  and  remedies  herein  stated but shall be
entitled  to every  right and  remedy  now or  hereafter  afforded  at law or in
equity.

         30.  Liability.  If  Mortgagor  consists of more than one  person,  the
obligations  and  liabilities of each such person  hereunder  shall be joint and
several.  Subject to the provisions hereof requiring  Mortgagee's consent to any
transfer of the  Mortgaged  Property,  this  Mortgage  shall be binding upon and
inure to the benefit of Mortgagor and Mortgagee and their respective  successors
and assigns forever.

         31. Inapplicable Provisions. If any term, covenant or condition of this
Mortgage is held to be invalid,  illegal or unenforceable  in any respect,  this
Mortgage shall be construed without such provision.

         32.  Headings,  Etc. The  headings and captions of various  Sections of
this Mortgage are for  convenience of reference only and are not to be construed
as  defining  or  limiting,  in any way,  the scope or intent of the  provisions
hereof.

         33.  Counterparts.  This  Mortgage  may be  executed  in any  number of
counterparts  each of which shall be deemed to be an  original  but all of which
when taken together shall constitute one agreement.

         34. Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise  specifically  provided herein,  words used in this Mortgage
may be used  interchangeably in singular or plural form and the word "Mortgagor"
shall mean "each  Mortgagor and any subsequent  owner or owners of the Mortgaged
Property or any part  thereof or any  interest  therein,"  the word  "Mortgagee"
shall mean  "Mortgagee and any  subsequent  holder of the Note," the word "Debt"
shall  mean "the Note and any other  evidence  of  indebtedness  secured by this
Mortgage,"  the  word  "person"   shall  include  an  individual,   corporation,
partnership,   trust,  unincorporated  association,   government,   governmental
authority,  and any

                                       23
<PAGE>

other entity,  and the words  "Mortgaged  Property" shall include any portion of
the Mortgaged  Property and any interest therein and the words "attorneys' fees"
shall include any and all reasonable  attorneys'  fees,  paralegal and law clerk
fees, including, but not limited to, fees at the pre-trial,  trial and appellate
levels incurred or paid by Mortgagee in protecting its interest in the Mortgaged
Property and Collateral and enforcing its rights hereunder. Whenever the context
may require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter  forms,  and the singular  form of nouns and  pronouns  shall
include the plural and vice versa.

         35. Homestead.  Mortgagor hereby waives and renounces all homestead and
exemption  rights provided by the constitution and the laws of the United States
and of any state,  in and to the Premises as against the collection of the Debt,
or any part hereof.

         36.  Assignments.  Mortgagee shall have the right to assign or transfer
its rights under this Mortgage and the other Loan Documents without  limitation,
including,  without limitation,  the right to assign or transfer its rights to a
servicing  agent.  Any  assignee  or  transferee  shall be  entitled  to all the
benefits  afforded  Mortgagee  under this Mortgage and the other Loan Documents.
Mortgagee agrees to provide Mortgagor with notice of any such assignment, and in
no event shall Mortgagor's  monetary  obligations  hereunder and under the other
Loan Documents be increased as a result of such assignment (except in accordance
with Section 10.2 of the Loan Agreement);  provided,  however,  that Mortgagor's
consent  shall not be required in  connection  with any such  assignment  and no
delay  or  failure  by   Mortgagee  to  provide  such  notice  shall  limit  the
effectiveness of such assignment.

         37.   Survival   of    Obligations;    Survival   of   Warranties   and
Representations. Each and all of the covenants, obligations, representations and
warranties  of Mortgagor  shall  survive the  execution and delivery of the Loan
Documents and the transfer or assignment  of this Mortgage  (including,  without
limitation,  any  transfer of the  Mortgage by  Mortgagee  of any of its rights,
title and interest in and to the Mortgaged Property to any party, whether or not
affiliated with Mortgagee).

         38.  Covenants  Running  with  the  Land.  All  covenants,  conditions,
warranties, representations and other obligations contained in this Mortgage and
the other Loan  Documents  are  intended by Mortgagor  and  Mortgagee to be, and
shall be construed as, covenants  running with the Mortgaged  Property until the
lien of this Mortgage has been fully released by Mortgagee.

         39.  Governing Law;  Jurisdiction.  THIS MORTGAGE WAS NEGOTIATED IN THE
STATE OF NEW YORK AND WAS MADE BY  MORTGAGOR  AND  ACCEPTED BY  MORTGAGEE IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM THE STATE OF
NEW YORK,  WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL  RELATIONSHIP  TO THE
PARTIES  AND TO THE  UNDERLYING  TRANSACTION,  AND  IN ALL  RESPECTS  INCLUDING,
WITHOUT  LIMITING THE  GENERALITY  OF THE  FOREGOING,  MATTERS OF  CONSTRUCTION,
VALIDITY AND PERFORMANCE.  THIS MORTGAGE AND THE OBLIGATIONS

                                       24
<PAGE>

ARISING HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE
OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT
AT ALL TIMES THE PROVISIONS FOR THE CREATION,  PERFECTION AND ENFORCEMENT OF THE
LIENS AND SECURITY INTERESTS CREATED PURSUANT TO THIS MORTGAGE SHALL BE GOVERNED
BY THE LAWS OF THE STATE WHERE THE MORTGAGED PROPERTY IS LOCATED.

         40.  Time of  Essence.  Time is of the  essence as to all of the terms,
covenants and condition of this Mortgage and the other Loan Documents.

         41. No Third-Party  Beneficiaries.  The provisions of this Mortgage and
the other Loan  Documents  are for the benefit of Mortgagor  and  Mortgagee  and
shall not inure to the benefit of any third party  (other than any  successor or
assignee of Mortgagee or permitted assignee of Mortgagor). This Mortgage and the
other Loan  Documents  shall not be construed as creating any rights,  claims or
causes of action against Mortgagee or any of its officers,  directors, agents or
employees in favor of any party other than  Mortgagor  including but not limited
to any claims to any sums held in the Impositions  and Insurance  Reserve or any
other Reserve.

         42.  Relationship  of  Parties.   The  relationship  of  Mortgagee  and
Mortgagor is solely that of debtor and creditor,  and Mortgagee has no fiduciary
or other special  relationship  with the Mortgagor,  and no term or condition of
any of the Loan Documents shall be construed to be other than that of debtor and
creditor.  Mortgagor represents and acknowledges that neither the Loan Documents
nor any course of dealing  between the parties  creates any partnership or joint
venture between Mortgagor and Mortgagee or any other person, nor does it provide
for any shared appreciation rights or other equity participation interest.

         43.  Successors  and Assigns.  This Mortgage  shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
assigns,  except  that  Mortgagor  may not  assign  its  rights  or  obligations
hereunder except as expressly provided in Section 9 hereof or as permitted under
the Loan Agreement.

         44. Investigations. Any and all representations,  warranties, covenants
and  agreements  made in this Mortgage  (and/or in other Loan  Documents)  shall
survive any investigation or inspection made by or on behalf of Mortgagee.

         45.  Assignment  of Leases and Rents.  (a) Mortgagor  acknowledges  and
confirms  that it has executed and  delivered to  Mortgagee  the  Assignment  of
Leases intending that such instrument create a present,  absolute  assignment to
Mortgagee of the Leases and Rents. Without limiting the intended benefits or the
remedies  provided under the Assignment of Leases,  Mortgagor  hereby assigns to
Mortgagee, as further security for the Debt and the Obligations,  the Leases and
Rents.  While  any Event of  Default  exists,  Mortgagee  shall be  entitled  to
exercise any or all of the remedies  provided in the Assignment of Leases and in
Section 17 hereof, including,  without limitation,  the right to have a receiver
appointed. If any conflict or inconsistency exists between the Assignment of the
Leases and this Mortgage and the absolute assignment of the

                                       25
<PAGE>

Leases and the Rents in the Assignment of Leases, the terms of the Assignment of
Leases shall control.

               (b) So long as any part of the Debt and the  Obligations  secured
hereby remain  unpaid and  undischarged,  the fee and  leasehold  estates to the
Mortgaged  Property  shall not merge,  but shall remain  separate and  distinct,
notwithstanding  the union of such estates either in Mortgagor,  Mortgagee,  any
lessee or any third party by purchase or otherwise.

         46.  Waiver of Right to Trial by Jury.  EACH OF MORTGAGOR AND MORTGAGEE
HEREBY  AGREES  NOT TO ELECT A TRIAL BY JURY OF ANY  ISSUE  TRIABLE  OF RIGHT BY
JURY,  AND WAIVES  ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT  THAT ANY SUCH
RIGHT SHALL NOW OR  HEREAFTER  EXIST WITH  REGARD TO THIS  MORTGAGE OR THE OTHER
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH.  THIS  WAIVER  OF  RIGHT TO  TRIAL  BY JURY IS  GIVEN  KNOWINGLY  AND
VOLUNTARILY  BY EACH OF MORTGAGOR  AND  MORTGAGEE,  AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY  EACH  INSTANCE  AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE  ACCRUE.  MORTGAGEE IS HEREBY  AUTHORIZED TO FILE A COPY OF
THIS  SECTION  IN ANY  PROCEEDING  AS  CONCLUSIVE  EVIDENCE  OF THIS  WAIVER  BY
MORTGAGOR.

         47. Expenses and Attorneys' Fees.  Mortgagor agrees to promptly pay all
reasonable fees, costs and expenses incurred by Mortgagee in connection with any
matters  contemplated  by or  arising  out of this  Mortgage  and the other Loan
Documents,  including,  without limitation,  reasonable fees, costs and expenses
(including reasonable  attorneys' fees and fees of other professionals  retained
by Mortgagee)  incurred in any action to enforce this Mortgage or the other Loan
Documents or to collect any payments due from Mortgagor under this Mortgage, the
Note or any other Loan Document or incurred in connection  with any  refinancing
or  restructuring  of the  credit  arrangements  provided  under  this  Mortgage
incurred in connection  with a "workout" or in connection with any insolvency or
bankruptcy  proceedings with respect to Mortgagor,  and all such fees, costs and
expenses shall be part of the Obligations, payable on demand.

         48.  Amendments and Waivers.  Except as otherwise  provided herein,  no
amendment,  modification,  termination  or  waiver  of  any  provision  of  this
Mortgage,  the Note or any other Loan  Document,  or  consent  to any  departure
therefrom,  shall in any event be effective  unless the same shall be in writing
and signed by  Mortgagee  and any other  party to be  charged.  Each  amendment,
modification,  termination  or waiver  shall be  effective  only in the specific
instance  and for the specific  purpose for which it was given.  No notice to or
demand on Mortgagor in any case shall entitle  Mortgagor to any other or further
notice or demand in similar or other circumstances.

         49. Servicer. Mortgagee shall have the right at any time throughout the
term of the Loan to  designate or appoint one or more  Servicers  (as defined in
the Loan  Agreement) to administer  this Mortgage and the other Loan  Documents,
and to change or replace any  Servicer.  All of  Mortgagee's  rights  under this
Mortgage and the other Loan  Documents  may be  exercised

                                       26
<PAGE>

by any  such  Servicer  designated  by  Mortgagee.  Any such  Servicer  shall be
entitled to the benefit of all obligations of Mortgagor in favor of Mortgagee.

         50. Special State Provisions.  This Mortgage is an "OPEN-END  MORTGAGE"
as set forth in 42 Pa.  C.S.A.  ss. 8143,  and this  Mortgage is given to secure
Mortgagor's and the other  Borrowers'  obligations  under, or in respect of, the
Loan Documents, up to the principal amount of $260,000,000, and shall secure not
only  obligations  with respect to  presently  existing  indebtedness  under the
foregoing documents and agreements,  but also any and all other indebtedness now
owing or  which  may  hereafter  be owing by  Mortgagor  to  Mortgagee,  however
incurred, whether interest, discount or otherwise, and whether the same shall be
deferred,  accrued or capitalized,  including  future advances and  re-advances,
pursuant to this Mortgage and the other Loan Documents, advances for the payment
of taxes and assessments and municipal claims,  maintenance  charges,  insurance
premiums,  costs  incurred for the  protection of the Mortgaged  Property or the
lien of this  Mortgage,  expenses  incurred by Mortgagee by reason of default by
Mortgagor under this Mortgage,  or for any other  permissible  purpose,  whether
such  advances  are  obligatory  or to be made at the  option of  Mortgagee,  or
otherwise,  to the same extent as if such future  advances were made on the date
of the execution of this  Mortgage.  The lien of this Mortgage shall be valid as
to all indebtedness secured hereby,  including future advances, from the time of
its  filing  for  record in the  recorder's  office  of the  county in which the
Mortgaged  Property is located;  and the lien of all present and future advances
shall relate back to the date of this Mortgage. This Mortgage is intended to and
shall be valid and have priority  over all  subsequent  liens and  encumbrances,
including statutory liens,  excepting solely taxes and assessments levied on the
real estate,  to the extent of the maximum amount secured hereby,  and Permitted
Encumbrances existing on the date hereof.

         All notices to be given to Mortgagee  pursuant to 42 Pa.  C.S.A.ss.8143
shall be given as set forth in Section 24 of this Mortgage.

         51. Limitation on Recourse.  The obligations of Mortgagor hereunder are
subject to  limitations  on  recourse  as  provided  in Article  XII of the Loan
Agreement.

         52. Satisfaction of Mortgage.  Upon payment of the Debt in full or upon
satisfaction  of the  conditions to release of the  Mortgaged  Property from the
Lien hereof pursuant to a partial defeasance in accordance with the terms of the
Note and Section 11.4 of the Loan Agreement, Mortgagee, at Mortgagor's sole cost
and  upon  Mortgagor's  request,  shall  execute  and  deliver  to  Mortgagor  a
satisfaction or reconveyance of Mortgage,  duly  acknowledged  and in recordable
form,  UCC-3 financing  statements  terminating  any UCC-1 financing  statements
filed by Mortgagee relating to the Mortgaged Property,  and such other documents
or instruments as may be required to release the Lien of the Loan Documents from
the Mortgaged Property.

         53. Ground Lease.

               (a) As used  herein,  the term  "Ground  Lease"  shall  mean that
certain Ground Lease dated as of December __, 2000 between HUB Properties Trust,
a Maryland real estate investment trust, as ground lessor (the "Ground Lessor"),
and  Mortgagor,  as the ground  lessee,  which  relates to the  Premises and the
Improvements  and  any  modifications,   amendments,

                                       27
<PAGE>

extensions, renewals and restatements thereof that hereafter may be executed and
approved in writing in advance by Mortgagee.

               (b)  Representations  and  Warranties   Regarding  Ground  Lease.
Mortgagor represents and warrants in favor of Mortgagee as follows:

                           (i) The Ground Lease contains the entire agreement of
                  Ground  Lessor  and  Mortgagor  pertaining  to  the  Mortgaged
                  Property. Mortgagor has no estate, right, or interest in or to
                  the Mortgaged Property except under and pursuant to the Ground
                  Lease.  No  modifications  or amendments  have occurred to the
                  Ground Lease,  and no such  modifications  or  amendments  are
                  contemplated.  Ground Lessor and Mortgagor  have no agreements
                  pertaining to any real property or improvements other than the
                  agreements set forth in the Ground Lease.

                           (ii) To the knowledge of Mortgagor,  Ground Lessor is
                  the  exclusive  fee simple  owner of the  Mortgaged  Property,
                  subject   only  to  the   Ground   Lease  and  the   Permitted
                  Encumbrances,  and  Ground  Lessor  is the  sole  owner of the
                  lessor's interest in the Ground Lease.

                           (iii) The Ground  Lease is in full force and  effect.
                  All conditions and  contingencies to the  effectiveness of the
                  Ground Lease and the  commencement of the regular term thereof
                  (the  "Ground  Lease  Term") have been  satisfied.  The Ground
                  Lease Term has  commenced,  is in effect,  and is scheduled to
                  expire on October 31, 2030. There are no options to extend the
                  Ground  Lease Term  except  for two (2)  options to extend the
                  Term each for a period of 29 years,  11  months.  There are no
                  rights  to  terminate  the  Ground  Lease  other  than  Ground
                  Lessor's   right  to   terminate   by  reason  of  default  or
                  condemnation,  in each  case as  expressly  set  forth  in the
                  Ground Lease.  Mortgagor has no right to purchase any interest
                  in the Mortgaged Property.

                           (iv) No  breach  or  default  or event  that with the
                  giving of notice or passage of time would  constitute a breach
                  or  default  of or under the  Ground  Lease (a  "Ground  Lease
                  Default")  exists  or  has  occurred  (A)  as  to  Mortgagor's
                  obligations  under the Ground  Lease,  nor (B) to  Mortgagor's
                  knowledge,  as to Ground Lessor's obligations under the Ground
                  Lease.  Mortgagor has not received any notice,  communication,
                  or  information  that a Ground  Lease  Default has occurred or
                  exists,  or that Ground  Lessor or any third party alleges the
                  same to have occurred or exist.

                           (v) Mortgagor is the exclusive  owner of the lessee's
                  interest under and pursuant to the Ground Lease. Mortgagor has
                  not assigned,  transferred, or encumbered its interest in, to,
                  or under  the  Ground  Lease,  except  in  favor of  Mortgagee
                  pursuant to this  Mortgage and the other Loan  Documents,  and
                  also  except  for  subleases  as to  which  Mortgagor  is  the
                  sublessor.

               (c)  Grant  of  After-Acquired  Interest.  As  security  for  all
obligations  secured by this  Mortgage,  Mortgagor  hereby  irrevocably  grants,
conveys,  transfers  and assigns to  Mortgagee,  with power of sale and right of
entry and  possession,  all right,  title,  and interest in and to the Mortgaged
Property that may hereafter be acquired by Mortgagor.  Without limitation of the
foregoing,  if Mortgagor should acquire the fee estate in the Mortgaged Property
or in any

                                       28
<PAGE>

land or  improvements  comprising  the same,  or should  acquire any interest or
estate in the Mortgaged  Property or any component  thereof that  Mortgagor does
not presently hold, then this Mortgage shall encumber and constitute a lien upon
any and all of such  interest or estate,  without  further act or  instrument by
Mortgagor or any third party.  Mortgagor  immediately  shall notify Mortgagee of
any such  acquisition.  Upon request of Mortgagee and without cost or expense to
Mortgagee,  Mortgagor  will  execute,  acknowledge  and deliver all such further
instruments  and  assurances as Mortgagee  shall  reasonably  require to ratify,
confirm, or perfect Mortgagee's lien on any right, title,  interest or estate in
or to the Mortgaged Property acquired at any time hereafter.

               (d)   Non-Merger.   No  merger  shall  occur  by  reason  of  any
acquisition by Mortgagor of any additional right,  title,  interest or estate in
or to the Mortgaged Property or any component thereof. Without limitation of the
foregoing,  unless Mortgagee shall otherwise expressly consent in writing, which
consent may be withheld by Mortgagee in its sole and  absolute  discretion,  the
leasehold  estate under the Ground Lease and any other interest or estate in the
Mortgaged  Property  shall  not  merge  but shall  always  remain  separate  and
distinct,  notwithstanding  any common ownership of the leasehold estate and any
other interest or estate.

               (e) No  Modification.  Mortgagor  shall  not  cause,  join in, or
suffer to occur any actual or purported modification,  amendment,  surrender, or
termination of the Ground Lease,  and Mortgagor  shall have no right or power to
modify,  amend,  terminate,  or surrender the Ground Lease, in each case without
the prior  written  consent of  Mortgagee,  which  consent  may be  withheld  by
Mortgagee  in its sole and  absolute  discretion.  Any  attempted  or  purported
modification,  amendment,  surrender or  termination of the Ground Lease without
Mortgagee's  prior  written  consent  shall  be null and void and of no force or
effect.

               (f) Performance of Ground Lease. Mortgagor shall fully perform as
and  when  due  each  and all of its  obligations  under  the  Ground  Lease  in
accordance with the terms of the Ground Lease,  and shall not cause or suffer to
occur any breach or default in any of such obligations. Mortgagor shall keep and
maintain the Ground Lease in full force and effect.  If Mortgagor  shall receive
forbearance  from  Ground  Lessor or  otherwise  shall be excused  from full and
timely  performance of any of its obligations  under the Ground Lease,  the same
shall not postpone,  excuse,  diminish,  or otherwise  affect the obligations of
Mortgagor under this Section 53. Mortgagor shall exercise any option to renew or
extend the Ground Lease and give written  confirmation  thereof to Lender within
thirty (30) days after such option becomes exercisable.

               Notwithstanding  that certain of  Mortgagor's  obligations  under
this Mortgage may be similar or identical to certain of Mortgagor's  obligations
under the Ground Lease, all of Mortgagor's  obligations  under this Mortgage are
and shall be separate from and in addition to its  obligations  under the Ground
Lease.

               If Mortgagor  shall have or receive  notice or  information  that
compliance with any of Mortgagor's obligations under either this Mortgage or the
Ground Lease may  constitute or give rise to a breach or default under the other
of them,  then Mortgagor  immediately  shall notify  Mortgagee in writing of the
same. If Mortgagee  shall have or receive any such notice or  information,  then

                                       29
<PAGE>

Mortgagee  may (but shall not be  obligated  to) give  written  instructions  to
Mortgagor, in which case Mortgagor shall comply with such instructions.

               (g) Notice of  Default.  If  Mortgagor  shall have or receive any
notice or information that any Ground Lease Default has occurred, then Mortgagor
immediately  shall notify Mortgagee in writing of the same and immediately shall
deliver to  Mortgagee a true and  complete  copy of each such  notice.  Further,
Mortgagor  immediately shall provide such documents and information as Mortgagee
shall request concerning the Ground Lease Default.

               (h) Mortgagee's  Right to Cure. If any Ground Lease Default shall
occur,  or if Mortgagee  reasonably  believes  that a Ground  Lease  Default has
occurred,  or if Ground Lessor  asserts that a Ground Lease Default has occurred
(whether or not Mortgagor  questions or denies such  assertion),  then Mortgagee
may (but  shall  not be  obligated  to) take any  action  that  Mortgagee  deems
necessary or  desirable,  including,  without  limitation,  (i)  performance  or
attempted performance of any of Mortgagor's  obligations under the Ground Lease,
(ii) curing or attempting to cure any actual or purported  Ground Lease Default,
(iii)  mitigating or attempting to mitigate any damages or  consequences  of the
same,  and  (iv)  entry  upon  the  Mortgaged  Property  for  any or all of such
purposes. Upon Mortgagee's request, Mortgagor shall submit satisfactory evidence
of payment or  performance  of any of its  obligations  under the Ground  Lease.
Mortgagee  may pay and  expend  such  sums of  money  as  Mortgagee  in its sole
discretion  deems  necessary or desirable  for any such  purpose,  and Mortgagor
shall pay to Mortgagee immediately upon demand all such sums so paid or expended
by Mortgagee, together with interest thereon from the date of expenditure at the
Default Rate (as defined in the Note).

               (i) Intentionally Omitted.

               (j)  Acquisition of New  Interests.  If the Ground Lease shall be
rejected, canceled, or terminated, and if Mortgagee or its nominee thereafter or
in connection therewith shall acquire any right, title, interest or estate in or
to the Mortgaged Property (which may include without limitation any new lease of
the Mortgaged Property) then Mortgagor shall have no right,  title,  interest or
estate in or to such new  lease,  or the  leasehold  estate  created by such new
lease,  or any other  interest  of  Mortgagee  or its  nominee in the  Mortgaged
Property.

               (k) Legal  Action.  Mortgagor  shall not  commence  any action or
proceeding  against  Ground  Lessor or affecting or  potentially  affecting  the
Ground Lease or Mortgagor's or Mortgagee's  interest  therein  without the prior
written  consent of  Mortgagee,  which  Mortgagee  may  withhold in its sole and
absolute discretion.  Mortgagor shall notify Mortgagee immediately if any action
or  proceeding  shall be  commenced  between  Ground  Lessor and  Mortgagor,  or
affecting  or   potentially   affecting  the  Ground  Lease  or  Mortgagor's  or
Mortgagee's interest therein (including,  without limitation, any case commenced
by or against Ground Lessor under the Bankruptcy Code). Mortgagee shall have the
option,  exercisable  upon notice from  Mortgagee to  Mortgagor,  to conduct and
control  any such  action or  proceeding  with  counsel of  Mortgagee's  choice.
Mortgagee may proceed in its own name or in the name of Mortgagor in such action
or proceeding,  and Mortgagor shall  cooperate with  Mortgagee,  comply with the
instructions  of  Mortgagee  (which  may  include  withdrawal  or  exclusion  of
Mortgagor  from such

                                       30
<PAGE>

action or proceeding), and execute any and all powers, authorizations,  consents
or other documents reasonably required by Mortgagee in connection therewith.

               (l) Estoppel  Certificate.  Mortgagor shall obtain and deliver to
Mortgagee  within  twenty  (20) days  after  written  request by  Mortgagee,  an
estoppel  certificate from Ground Lessor setting forth (i) the identities of the
original  lessor and lessee under the Ground Lease and each of their  respective
successors,  (ii) that the Ground Lease has not been modified or, if it has been
modified,  the date of each  modification  (together  with  copies  of each such
modification),  (iii) the rent payable under the Ground Lease, (iv) the dates to
which all rent and other  charges  have been  paid,  (v)  whether  there are any
alleged  Ground Lease  Defaults and, if so,  setting forth the nature thereof in
reasonable  detail,  and (vi) such other  matters as  Mortgagee  may  reasonably
request.

               (m) No  Assignment.  Notwithstanding  anything  to  the  contrary
contained herein, this Mortgage shall not constitute an assignment of the Ground
Lease, and Mortgagee shall have no liability or obligation  thereunder by reason
of its acceptance of this Mortgage.

               (n) Bankruptcy.

                           (i) If Ground  Lessor  shall  reject the Ground Lease
                  under or pursuant to Section 365 of Title 11 of the Bankruptcy
                  Code,  Mortgagor  shall not elect to treat the Ground Lease as
                  terminated  but shall  elect to remain  in  possession  of the
                  Mortgaged  Property and the leasehold  estate under the Ground
                  Lease.  The lien of this Mortgage does and shall  encumber and
                  attach to all of  Mortgagor's  rights and remedies at any time
                  arising  under or pursuant  to Section  365 of the  Bankruptcy
                  Code, including without limitation,  all of Mortgagor's rights
                  to remain in  possession  of the  Mortgaged  Property  and the
                  leasehold estate.

                           (ii)  Mortgagor  acknowledges  and agrees that in any
                  case  commenced by or against  Mortgagor  under the Bankruptcy
                  Code,  Mortgagee  by reason of the  liens and  rights  granted
                  under  this  Mortgage  and the  Loan  Documents  shall  have a
                  substantial  and  material   interest  in  the  treatment  and
                  preservation of Mortgagor's  rights and obligations  under the
                  Ground Lease, and that Mortgagor shall, in any such bankruptcy
                  case, provide to Mortgagee  immediate and continuous  adequate
                  protection of such  interests.  Mortgagor and Mortgagee  agree
                  that such  adequate  protection  shall  include  but shall not
                  necessarily be limited to the following:

                                    A. Mortgagee  shall be deemed a party to the
                  Ground Lease (but shall not have any  obligations  thereunder)
                  for purposes of Section 365 of the Bankruptcy  Code, and shall
                  have  standing  to appear  and act as a party in  interest  in
                  relation to any matter arising out of or related to the Ground
                  Lease or the Mortgaged Property.

                                    B.  Mortgagor  shall  serve  Mortgagee  with
                  copies of all notices,  pleadings and other documents relating
                  to or affecting  the Ground Lease or the

                                       31
<PAGE>

                  Mortgaged Property. Any notice, pleading or document served by
                  Mortgagor on any other party in the  bankruptcy  case shall be
                  contemporaneously  served by Mortgagor on  Mortgagee,  and any
                  notice,  pleading  or  document  served  upon or  received  by
                  Mortgagor from any other party in the bankruptcy case shall be
                  served by Mortgagor on Mortgagee  immediately  upon receipt by
                  Mortgagor.

                                    C.  Upon  written   request  of   Mortgagee,
                  Mortgagor  shall assume the Ground Lease,  and shall take such
                  steps as are necessary to preserve Mortgagor's right to assume
                  the  Ground  Lease,  including  without  limitation  obtaining
                  extensions  of time to assume or reject the Ground Lease under
                  Subsection  365(d) of the Bankruptcy  Code to the extent it is
                  applicable.

                                    D. If  Mortgagor  or Ground  Lessor seeks to
                  reject  the  Ground  Lease or have  the  Ground  Lease  deemed
                  rejected,   then  prior  to  the  hearing  on  such  rejection
                  Mortgagee shall be given no less than twenty (20) days' notice
                  and  opportunity  to  elect in lieu of  rejection  to have the
                  Ground Lease  assumed and assigned to a nominee of  Mortgagee.
                  If  Mortgagee  shall so elect to assume  and assign the Ground
                  Lease, then Mortgagor shall continue any request to reject the
                  Ground  Lease  until after the motion to assume and assign has
                  been heard.  If Mortgagee shall not elect to assume and assign
                  the Ground Lease, then Mortgagee may obtain in connection with
                  the rejection of the Ground Lease a determination  that Ground
                  Lessor,  at Mortgagee's  option,  shall (1) agree to terminate
                  the Ground Lease and enter into a new lease with  Mortgagee on
                  the same terms and  conditions  as the Ground  Lease,  for the
                  remaining  term of the Ground  Lease,  or (2) treat the Ground
                  Lease as  breached  and provide  Mortgagee  with the rights to
                  cure defaults  under the Ground Lease and to assume the rights
                  and benefits of the Ground Lease.

               Mortgagor shall join with and support any request by Mortgagee to
grant and  approve  the  foregoing  as  necessary  for  adequate  protection  of
Mortgagee's  interests.   Notwithstanding  the  foregoing,  Mortgagee  may  seek
additional   terms  and   conditions,   including  such  economic  and  monetary
protections as it deems appropriate to adequately protect its interests, and any
request  for  such  additional  terms or  conditions  shall  not  delay or limit
Mortgagee's  right to receive the specific  elements of adequate  protection set
forth herein.

               Mortgagor  hereby  appoints  Mortgagee as its attorney in fact to
act on behalf of Mortgagor in connection with all matters relating to or arising
out of the assumption or rejection of the Ground Lease, in which the other party
to the lease is a debtor in a case  under the  Bankruptcy  Code.  This  grant of
power of attorney is present,  unconditional,  irrevocable,  durable and coupled
with an interest.

         Where  reference  is made to any code  section or other  law,  the same
shall  include  any  successor  statute  or  provisions  of law to the  same  or
substantially the same effect.

                                       32
<PAGE>

               (o) Predecessors,  Successors.  Where reference herein is made to
the rights or  obligations of Mortgagor or Ground Lessor under the Ground Lease,
the same shall  include  the  rights and  obligations  of their  successors  and
assigns.

         54. Non-liability of Trustees. The Declaration of Trust of Mortgagor, a
copy of which is duly filed with the Department of  Assessments  and Taxation of
the  State  of  Maryland,  provides  that the name of  Mortgagor  refers  to the
trustees  under such  Declaration  of Trust  collectively  as trustees,  but not
individually or personally, and that no trustee, officer, shareholder,  employee
or agent  of  Mortgagor  shall be held to any  personal  liability,  jointly  or
severally,  for any  obligation  of,  or claim  against,  Mortgagor.  Except  as
otherwise  expressly  provided in the Loan  Agreement,  all persons dealing with
Mortgagor in any way shall look only to the assets of Mortgagor  for the payment
of any sum or the performance of any obligation hereunder.

                            [SIGNATURE PAGE FOLLOWS]

                                       33
<PAGE>

         IN WITNESS  WHEREOF,  and intending to be legally bound,  Mortgagor has
executed this instrument as of the day and year first above written.

         WITNESS:                       MORTGAGOR:

                                        1600 MARKET STREET PROPERTY TRUST,
                                        a Maryland real estate investment trust

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

CERTIFICATION OF MORTGAGEE'S ADDRESS:

The undersigned certifies that a current business address of Mortgagee as of the
date of this Mortgage is:

                  c/o Merrill Lynch & Co.
                  100 Church Street
                  18th Floor
                  New York, New York 10080

MERRILL LYNCH MORTGAGE LENDING, INC.

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

<PAGE>

STATE OF NEW YORK                   )
SS
COUNTY OF  NEW YORK                 )

On  this,  the 14th day of  December,  2000,  before  me,  a notary  public  the
undersigned  officer,  personally  appeared  John  A.  Mannix  who  acknowledged
himself/herself  to be the President of 1600 Market  Street  Property  Trust,  a
Maryland  real estate  investment  trust,  and that he/she as such officer being
authorized to do so, executed the foregoing  instrument for the purposes therein
contained  by  signing  the  name  of  such  real  estate  investment  trust  by
himself/herself in such capacity.

In Witness Whereof, I hereunto set my hand and official seal.

                                         /s/ Mary Caliendo
                                        Notary Public

                                        My Commission Expires:   June 5, 2001

<PAGE>

                                    EXHIBIT B

                                    Mortgages

1.       Open-End Leasehold Mortgage,  Assignment of Leases and Rents,  Security
         Agreement and Fixture Filing dated of even date herewith,  made by 1600
         Market Street Property Trust, a Maryland real estate  investment  trust
         ("1600 Market  Street"),  in favor of Merrill Lynch  Mortgage  Lending,
         Inc.

2.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture  Filing  dated  of even  date  herewith,  made  by  Bridgepoint
         Property   Trust,   a   Maryland   real   estate    investment    trust
         ("Bridgepoint"), in favor of Merrill Lynch Mortgage Lending, Inc.

3.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith,  made by Lakewood  Property
         Trust, a Maryland real estate investment trust  ("Lakewood"),  in favor
         of Merrill Lynch Mortgage Lending, Inc.

4.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith,  made by Herald Square LLC,
         a Delaware limited  liability  company ("Herald  Square"),  in favor of
         Merrill Lynch Mortgage Lending, Inc.

5.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith, made by Indiana Avenue LLC,
         a Delaware limited liability company  ("Indiana  Avenue"),  in favor of
         Merrill Lynch Mortgage Lending, Inc.

6.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture  Filing dated of even date  herewith,  made by Cedars LA LLC, a
         Delaware limited  liability  company ("Cedars LA"), in favor of Merrill
         Lynch Mortgage Lending, Inc.

*        1600 Market  Street,  Bridgepoint,  Lakewood,  Herald  Square,  Indiana
         Avenue and Cedars LA shall be  collectively  referred  to herein as the
         "Borrowers".
<PAGE>
                                Omitted Exhibits

         The following exhibit to the Open-End Leasehold Mortgage, Assignemnt of
Leases and Rents, Security Agreement and Fixture Filing has been omitted:

          Exhibit Letter                        Exhibit Title

          A                                     Premises

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

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