Document:

<PAGE>
                                                                  Exhibit 10.151

                                 PROMISSORY NOTE

$7,900,000                                                   New York, New York
                                                        As of December 20, 2001

                  FOR VALUE RECEIVED BARREN RIVER PLAZA, LLC, a Delaware limited
liability company, as maker, having its principal place of business at 20 South
Third Street, Columbus, Ohio 43215 ("BORROWER"), hereby unconditionally promises
to pay to the order of LEHMAN BROTHERS BANK, FSB, a federal stock savings bank,
as lender, having an address at 1000 West Street, Suite 200, Wilmington,
Delaware 19801 ("LENDER"), or at such other place as the holder hereof may from
time to time designate in writing, the principal sum of Seven Million Nine
Hundred Thousand and 00/100 Dollars ($7,900,000), or so much thereof as may be
advanced by Lender to Borrower pursuant to that certain Loan Agreement of even
date herewith between Borrower and Lender (the "LOAN AGREEMENT") in lawful money
of the United States of America with interest thereon to be computed from the
date of this Note at the Applicable Interest Rate, and to be paid in accordance
with the terms of this Note and the Loan Agreement. All capitalized terms not
defined herein shall have the respective meanings set forth in the Loan
Agreement.

                         ARTICLE 1:       PAYMENT TERMS

                  Borrower agrees to pay the principal sum of this Note and
interest on the unpaid principal sum of this Note from time to time outstanding
at the rates and at the times specified in Article 2 of the Loan Agreement and
the outstanding balance of the principal sum of this Note and all accrued and
unpaid interest thereon shall be due and payable on the Maturity Date.

                   ARTICLE 2:       DEFAULT AND ACCELERATION

                  The Debt shall without notice become immediately due and
payable at the option of Lender if any payment required in this Note is not paid
on or prior to the date when due or on the happening of any other Event of
Default.

                        ARTICLE 3:        LOAN DOCUMENTS

                  This Note is secured by the Mortgage and the other Loan
Documents. All of the terms, covenants and conditions contained in the Loan
Agreement, the Mortgage and the other Loan Documents are hereby made part of
this Note to the same extent and with the same force as if they were fully set
forth herein. In the event of a conflict or inconsistency between the terms of
this Note and the Loan Agreement, the terms and provisions of the Loan Agreement
shall govern.

                        ARTICLE 4:       SAVINGS CLAUSE

                  Notwithstanding anything to the contrary, (a) all agreements
and communications between Borrower and Lender are hereby and shall
automatically be limited so that, after taking into account all amounts deemed
interest, the interest contracted for, charged or received by

<PAGE>

Lender shall never exceed the maximum lawful rate or amount, (b) in calculating
whether any interest exceeds the lawful maximum, all such interest shall be
amortized, prorated, allocated and spread over the full amount and term of all
principal indebtedness of Borrower to Lender, and (c) if through any contingency
or event, Lender receives or is deemed to receive interest in excess of the
lawful maximum, any such excess shall be deemed to have been applied toward
payment of the principal of any and all then outstanding indebtedness of
Borrower to Lender, or if there is no such indebtedness, shall immediately be
returned to Borrower.

                        ARTICLE 5:       NO ORAL CHANGE

                  This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.

                            ARTICLE 6:       WAIVERS

                  Borrower and all others who may become liable for the payment
of all or any part of the Debt do hereby severally waive presentment and demand
for payment, notice of dishonor, notice of intention to accelerate, notice of
acceleration, protest and notice of protest and non-payment and all other
notices of any kind. No release of any security for the Debt or extension of
time for payment of this Note or any installment hereof, and no alteration,
amendment or waiver of any provision of this Note, the Loan Agreement or the
other Loan Documents made by agreement between Lender or any other Person shall
release, modify, amend, waive, extend, change, discharge, terminate or affect
the liability of Borrower, and any other Person who may become liable for the
payment of all or any part of the Debt, under this Note, the Loan Agreement or
the other Loan Documents. No notice to or demand on Borrower shall be deemed to
be a waiver of the obligation of Borrower or of the right of Lender to take
further action without further notice or demand as provided for in this Note,
the Loan Agreement or the other Loan Documents. If Borrower is a partnership,
the agreements herein contained shall remain in force and applicable,
notwithstanding any changes in the individuals comprising the partnership, and
the term "Borrower," as used herein, shall include any alternate or successor
partnership, but any predecessor partnership and their partners shall not
thereby be released from any liability. If Borrower is a corporation, the
agreements contained herein shall remain in full force and applicable
notwithstanding any changes in the shareholders comprising, or the officers and
directors relating to, the corporation, and the term "Borrower" as used herein,
shall include any alternative or successor corporation, but any predecessor
corporation shall not be relieved of liability hereunder. (Nothing in the
foregoing sentence shall be construed as a consent to, or a waiver of, any
prohibition or restriction on transfers of interests in such partnership which
may be set forth in the Loan Agreement, the Mortgage or any other Loan
Document.)

                           ARTICLE 7:       TRANSFER

                  Upon the transfer of this Note, Borrower hereby waiving notice
of any such transfer, Lender may deliver all the collateral mortgaged, granted,
pledged or assigned pursuant to the Loan Documents, or any part thereof, to the
transferee who shall thereupon become vested

                                       2
<PAGE>

with all the rights herein or under applicable law given to Lender with respect
thereto, and Lender shall thereafter forever be relieved and fully discharged
from any liability or responsibility in the matter; but Lender shall retain all
rights hereby given to it with respect to any liabilities and the collateral not
so transferred.

                          ARTICLE 8:       EXCULPATION

                  The provisions of Section 9.4 of the Loan Agreement are hereby
incorporated by reference into this Note to the same extent and with the same
force as if fully set forth herein.

                         ARTICLE 9:       GOVERNING LAW

                  (A) THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND
MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THIS 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 EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS NOTE 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 SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS NOTE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.

                  (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS NOTE MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

                  CT CORPORATION SYSTEM, INC.
                  111 EIGHTH AVENUE, 13TH FLOOR

                                       3
<PAGE>

                  NEW YORK, NEW YORK 10011
                  ATTENTION: SERVICE OF PROCESS DEPARTMENT

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

                           ARTICLE 10:       NOTICES

                  All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.

                         [NO FURTHER TEXT ON THIS PAGE]

                                       4
<PAGE>

                  IN WITNESS WHEREOF, Borrower has duly executed this Note as of
the day and year first above written.

BARREN RIVER PLAZA, LLC,
a Delaware limited liability company

By:
GLIMCHER PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership, its sole member

By:
GLIMCHER PROPERTIES CORPORATION,
a Delaware corporation, its sole general partner

By: /s/ George A. Schmidt

Name:  George A. Schmidt
Title:  Executive Vice President

                                       5
<PAGE>

                                 ACKNOWLEDGMENT

State of Ohio                   )
                                )ss.
County of ________              )

         The foregoing instrument was acknowledged before me this 18th day of
December , 2001, by George A. Schmidt, the Executive Vice President of Glimcher
Properties Corporation, a Delaware corporation, the general partner of Glimcher
Properties Limited Partnership, a Delaware limited partnership, the sole member
of Barren River Plaza, LLC, a Delaware limited liability company, on behalf of
said corporation, partnership and company.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

                                  /s/ Barbara B. Howison
                                  ----------------------
                                                 Notary Public

Commission
Expiration:  7/2/05

                                       6<PAGE>
                                                                  Exhibit 10.152

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

                           GLIMCHER LLOYD CENTER, LLC
                a Delaware limited liability company, as grantor
                                                       (Borrower)
                                       to

                 TRANSNATION TITLE INSURANCE COMPANY, as trustee
                                                        (Trustee)
                               for the benefit of

                    LEHMAN BROTHERS BANK FSB, as beneficiary
                                                     (Lender)
                           --------------------------

                       FEE AND LEASEHOLD DEED OF TRUST AND
                               SECURITY AGREEMENT

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

                          Dated: As of October 12, 2001

                          Location: Lloyd Center
                                    Portland, Oregon

                          County:   Multnomah

                          PREPARED BY AND UPON
                          RECORDATION RETURN TO:

                          Cadwalader, Wickersham & Taft
                          100 Maiden Lane
                          New York, New York 10038

                          Attention: Fredric L. Altschuler, Esq.

================================================================================
STATUTORY NOTICE:

         A.       The address of the entity holding a lien or other interest by
                  this instrument is:
                           Lehman Brothers Bank FSB
                           921 North Orange Street
                           Wilmington, Delaware 19801

         B.       The tax account number(s) of the property subject to the lien
                  or in which the interest is created:

<TABLE>
<S>                                 <C>              <C>                        <C>              <C>
                    Account No.     R488239          R64979-5810
                                    R182315          R39621-3980                R182267          R39621-1710
                                    R182406          R39621-5790                R182266          R39621-1690
                                    R182407          R39621-5960                R182264          R39621-1500
                                    R182268          R39621-1760                R182251          R39620-7800
                                    R182269          R39621-1770                R182250          R39620-7780
                                    R182265          R39621-1610                R182316          R39621-4000
                                    R182260          R39621-0170                R182272          R39621-1880
</TABLE>

<PAGE>

             FEE AND LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT

                  THIS FEE AND LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT
(this "SECURITY INSTRUMENT") is made as of this 12th day of October, 2001, by
GLIMCHER LLOYD CENTER, LLC, a Delaware limited liability company, having its
principal place of business at 20 South Third Street, Columbus, Ohio 43215, as
grantor ("BORROWER") to TRANSNATION TITLE INSURANCE COMPANY, having an address
at 1515 SW 5th Avenue, Suite 850, Portland, Oregon 97201, as trustee ("TRUSTEE")
for the benefit of LEHMAN BROTHERS BANK FSB, a federal stock savings bank,
having an address at 921 North Orange Street, Wilmington, Delaware 19801, as
beneficiary ("LENDER").

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

                  WHEREAS, this Security Instrument is given to secure a loan
(the "LOAN") in the principal sum of ONE HUNDRED THIRTY MILLION AND NO/100
DOLLARS ($130,000,000) advanced pursuant to that certain Loan Agreement dated as
of the date hereof between Borrower and Lender (as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, the
"LOAN AGREEMENT") and evidenced by that certain Promissory Note dated the date
hereof made by Borrower to Lender (such Note, together with all extensions,
renewals, replacements, restatements or modifications thereof being hereinafter
referred to as the "NOTE");

                  WHEREAS, Borrower desires to secure the payment of the Debt
(as defined in the Loan Agreement) and the performance of all of its obligations
under the Note, the Loan Agreement and the other Loan Documents; and

                  WHEREAS, this Security Instrument is given pursuant to the
Loan Agreement, and payment, fulfillment, and performance by Borrower of its
obligations thereunder and under the other Loan Documents are secured hereby,
and each and every term and provision of the Loan Agreement and the Note,
including the rights, remedies, obligations, covenants, conditions, agreements,
indemnities, representations and warranties of the parties therein, are hereby
incorporated by reference herein as though set forth in full and shall be
considered a part of this Security Instrument (the Loan Agreement, the Note,
this Security Instrument, that certain Assignment of Leases and Rents of even
date herewith made by Borrower in favor of Lender (the "ASSIGNMENT OF LEASES")
and all other documents evidencing or securing the Debt are hereinafter referred
to collectively as the "LOAN DOCUMENTS").

                  NOW THEREFORE, in consideration of the making of the Loan by
Lender and the covenants, agreements, representations and warranties set forth
in this Security Instrument:

Article 1 - GRANTS OF SECURITY

                  Section 1.1 PROPERTY CONVEYED. Borrower does hereby
irrevocably grant, bargain, sell, pledge, assign, warrant, transfer and convey
to Trustee and its successors and assigns, in trust, with Power of Sale for the
benefit of Lender, as beneficiary in trust, the

<PAGE>

following property, rights, interests and estates now owned, or hereafter
acquired by Borrower (collectively, the "PROPERTY"):

                  (a) LAND. The real property described in EXHIBIT A attached
hereto and made a part hereof (the "LAND") and all of Borrower's right, title,
interest, privileges and options created by that certain ground lease described
on EXHIBIT B hereto (as such ground lease may be amended, modified, extended or
supplemented from time to time, the "GROUND LEASE");

                  (b) ADDITIONAL LAND. All additional lands, estates and
development rights hereafter acquired by Borrower for use in connection with the
Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security Instrument;

                  (c) IMPROVEMENTS.  The buildings,  structures,  fixtures,
additions, enlargements,  extensions,  modifications, repairs, replacements
and improvements now or hereafter erected or located on the Land  (collectively,
the "IMPROVEMENTS");

                  (d) EASEMENTS. All easements, rights-of-way or use, rights,
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, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land 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 Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;

                  (e) EQUIPMENT. All "equipment," as such term is defined in
Article 9 of the Uniform Commercial Code, now owned or hereafter acquired by
Borrower, which is used at or in connection with the Improvements or the Land or
is located thereon or therein (including, but not limited to, all machinery,
equipment, furnishings, and electronic data-processing and other office
equipment now owned or hereafter acquired by Borrower and any and all additions,
substitutions and replacements of any of the foregoing), together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto (collectively, the "EQUIPMENT"). Notwithstanding the foregoing,
Equipment shall not include any property belonging to tenants under leases
except to the extent that Borrower shall have any right or interest therein;

                  (f) FIXTURES. All Equipment now owned, or the ownership of
which is hereafter acquired, by Borrower which is so related to the Land and
Improvements forming part of the Property that it is deemed fixtures or real
property under the law of the particular state in which the Equipment is
located, including, without limitation, all building or construction materials
intended for construction, reconstruction, alteration or repair of or
installation on the Property, construction equipment, appliances, machinery,
plant equipment, fittings, apparatuses, fixtures and other items now or
hereafter attached to, installed in or used in connection with

                                       -2-
<PAGE>

(temporarily or permanently) any of the Improvements or the Land, including, but
not limited to, engines, devices for the operation of pumps, pipes, plumbing,
cleaning, call and sprinkler systems, fire extinguishing apparatuses and
equipment, heating, ventilating, plumbing, laundry, incinerating, electrical,
air conditioning and air cooling equipment and systems, gas and electric
machinery, appurtenances and equipment, pollution control equipment, security
systems, disposals, dishwashers, refrigerators and ranges, recreational
equipment and facilities of all kinds, and water, gas, electrical, storm and
sanitary sewer facilities, utility lines and equipment (whether owned
individually or jointly with others, and, if owned jointly, to the extent of
Borrower's interest therein) and all other utilities whether or not situated in
easements, all water tanks, water supply, water power sites, fuel stations, fuel
tanks, fuel supply, and all other structures, together with all accessions,
appurtenances, additions, replacements, betterments and substitutions for any of
the foregoing and the proceeds thereof (collectively, the "FIXTURES").
Notwithstanding the foregoing, "Fixtures" shall not include any property which
tenants are entitled to remove pursuant to leases except to the extent that
Borrower shall have any right or interest therein;

                  (g) PERSONAL PROPERTY. All furniture, furnishings, objects of
art, machinery, goods, tools, supplies, appliances, general intangibles,
contract rights, accounts, accounts receivable, franchises, licenses,
certificates and permits, and all other personal property of any kind or
character whatsoever (as defined in and subject to the provisions of the Uniform
Commercial Code as hereinafter defined), other than Fixtures, which are now or
hereafter owned by Borrower and which are located within or about the Land and
the Improvements, together with all accessories, replacements and substitutions
thereto or therefor and the proceeds thereof (collectively, the "PERSONAL
PROPERTY"), and the right, title and interest of Borrower in and to any of the
Personal Property which may be subject to any security interests, as defined in
the Uniform Commercial Code, as adopted and enacted by the state or states where
any of the Property is located (the "UNIFORM COMMERCIAL CODE"), superior in lien
to the lien of this Security Instrument and all proceeds and products of the
above;

                  (h) LEASES AND RENTS. All leases and other agreements
affecting the use, enjoyment or occupancy of the Land and the Improvements
heretofore or hereafter entered into, whether before or after the filing by or
against Borrower of any petition for relief under 11 U.S.C. ss.101 et seq., as
the same may be amended from time to time (the "BANKRUPTCY CODE") (collectively,
the "LEASES") and all right, title and interest of Borrower, its successors and
assigns therein and thereunder, including, without limitation, cash or
securities deposited thereunder to secure the performance by the lessees of
their obligations thereunder and all rents, additional rents, revenues, issues
and profits (including all oil and gas or other mineral royalties and bonuses)
from the Land and the Improvements whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy
Code (collectively, the "RENTS") and 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;

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

                                       -3-

<PAGE>

                  (j) INSURANCE PROCEEDS.  All proceeds in respect of the
Property  under any insurance  policies  covering the 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
Property;

                  (k) TAX CERTIORARI. All refunds, rebates or credits in
connection  with  reduction  in real estate taxes and  assessments  charged
against  the  Property  as a result of tax  certiorari  or any  applications  or
proceedings  for  reduction;

                  (l)  CONVERSION.  All proceeds of the  conversion, voluntary
or  involuntary,  of any of the foregoing  including,  without  limitation,
proceeds of insurance and condemnation  awards, into cash or liquidation claims;

                  (m) RIGHTS.  The right, in the name and on behalf of Borrower,
to appear in and defend any action or  proceeding  brought  with respect to
the Property and to commence any action or proceeding to protect the interest of
Lender in the Property;

                  (n) AGREEMENTS. All agreements, contracts, certificates,
instruments, franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting
any business or activity conducted on the Land and any part thereof and all
right, title and interest of Borrower therein and thereunder, including, without
limitation, the right, upon the happening of any default hereunder, to receive
and collect any sums payable to Borrower thereunder;

                  (o)  TRADEMARKS.  All tradenames,  trademarks,  servicemarks,
logos,  copyrights,  goodwill,  books and  records  and all  other  general
intangibles  relating  to or  used  in  connection  with  the  operation  of the
Property;

                  (p) OTHER RIGHTS.  Any and all other rights of Borrower in and
to the items set forth in Subsections (a) through (o) above.

                  AND without limiting any of the other provisions of this
Security Instrument, to the extent permitted by applicable law, Borrower
expressly grants to Trustee, as secured party, a security interest in the
portion of the Property which is or may be subject to the provisions of the
Uniform Commercial Code which are applicable to secured transactions; it being
understood and agreed that the Improvements and Fixtures are part and parcel of
the Land (the Land, the Improvements and the Fixtures collectively referred to
as the "REAL PROPERTY") appropriated to the use thereof and, whether affixed or
annexed to the Real Property or not, shall for the purposes of this Security
Instrument be deemed conclusively to be real estate and conveyed hereby.

                  SECTION 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely
and unconditionally assigns to Lender and Trustee all of Borrower's right, title
and interest in and to all current and future Leases and Rents; it being
intended by Borrower that this assignment constitutes a present, absolute
assignment and not an assignment for additional security only. Nevertheless,
subject to the terms of the Assignment of Leases and Section 7.1(h) of this

                                       -4-

<PAGE>

Security Instrument, Lender grants to Borrower a revocable license to collect,
receive, use and enjoy the Rents. Borrower shall hold the Rents, or a portion
thereof sufficient to discharge all current sums due on the Debt, for use in the
payment of such sums.

                  Section 1.3 SECURITY AGREEMENT. This Security Instrument is
both a real property deed of trust and a "security agreement" within the meaning
of the Uniform Commercial Code. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Borrower in the Property. By executing and delivering this Security
Instrument, Borrower hereby grants to Lender, as security for the Obligations
(hereinafter defined), a security interest in the Fixtures, the Equipment and
the Personal Property to the full extent that the Fixtures, the Equipment and
the Personal Property may be subject to the Uniform Commercial Code (said
portion of the Property so subject to the Uniform Commercial Code being called
the "COLLATERAL"). If an Event of Default shall occur and be continuing, Lender,
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 Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender after the occurrence and
during the continuance of an Event of Default, Borrower shall, at its expense,
assemble the Collateral and make it available to Lender at a convenient place
(at the Land if tangible property) reasonably acceptable to Lender. Borrower
shall pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys' fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect to
the Collateral after the occurrence and during the continuance of an Event of
Default. Any notice of sale, disposition or other intended action by Lender with
respect to the Collateral sent to Borrower in accordance with the provisions
hereof at least ten (10) business days prior to such action, shall, except as
otherwise provided by applicable law, constitute reasonable notice to Borrower.
The proceeds of any disposition of the Collateral, or any part thereof, may,
except as otherwise required by applicable law, be applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion
shall deem proper. Borrower's (Debtor's) principal place of business is as set
forth on page one hereof and the address of Lender (Secured Party) is as set
forth on page one hereof.

                  Section 1.4 FIXTURE FILING. Certain of the Property is or will
become "fixtures" (as that term is defined in the Uniform Commercial Code) on
the Land, described or referred to in this Security Instrument, and this
Security Instrument, upon being filed for record in the real estate records of
the city or county wherein such fixtures are situated, shall operate also as a
financing statement naming Borrower as the Debtor and Lender as the Secured
Party filed as a fixture filing in accordance with the applicable provisions of
said Uniform Commercial Code upon such of the Property that is or may become
fixtures.

                  Section 1.5 PLEDGES OF MONIES HELD. Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender or on behalf of
Lender, including, without limitation, any sums deposited in the Clearing
Account, the Reserve Funds and Net Proceeds, as additional security for the
Obligations until expended or applied as provided in this Security Instrument.

                                       -5-

<PAGE>
                               CONDITIONS TO GRANT

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

                  IN TRUST, WITH POWER OF SALE, to secure payment to Lender of
the Obligations at the time and in the manner provided for its payment in the
Note and in this Security Instrument.

                  PROVIDED, HOWEVER, these presents are upon the express
condition that, if Borrower shall well and truly pay to Lender the Debt at the
time and in the manner provided in the Note, the Loan Agreement and this
Security Instrument, shall well and truly perform the Other Obligations as set
forth in this Security Instrument and shall well and truly abide by and comply
with each and every covenant and condition set forth herein and in the Note, the
Loan Agreement and the other Loan Documents, these presents and the estate
hereby granted shall cease, terminate and be void; provided, however, that
Borrower's obligation to indemnify and hold harmless Lender pursuant to the
provisions hereof shall survive any such payment or release.

                    Article 2 - DEBT AND OBLIGATIONS SECURED

                  Section 2.1 DEBT. This Security Instrument and the grants,
assignments and transfers made in Article 1 are given for the purpose of
securing the Debt.

                  Section 2.2 OTHER OBLIGATIONS. This Security Instrument and
the grants, assignments and transfers made in Article 1 are also given for the
purpose of securing the following (the "OTHER OBLIGATIONS"):

                  (a) the performance of all other obligations of Borrower
contained  herein;

                  (b) the  performance  of each  obligation  of  Borrower
contained  in the  Loan  Agreement  and any  other  Loan  Document;  and

                  (c) the performance of each obligation of Borrower contained
in any renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of the Note, the Loan Agreement
or any other Loan Document.

                  Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations
for the payment of the Debt and the performance of the Other Obligations shall
be referred to collectively herein as the "OBLIGATIONS."

                         Article 3 - BORROWER COVENANTS

                  Borrower covenants and agrees that:

                  Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the
time and in the manner provided in the Loan Agreement, the Note and this
Security Instrument.

                                       -6-
<PAGE>
                  Section 3.2 NCORPORATION BY REFERENCE. All the covenants,
conditions and agreements contained in (a) the Loan Agreement, (b) the Note and
(c) all and any of the other Loan Documents, are hereby made a part of this
Security Instrument to the same extent and with the same force as if fully set
forth herein.

                  Section 3.3 INSURANCE. Borrower shall obtain and maintain, or
cause to be maintained, in full force and effect at all times insurance with
respect to Borrower and the Property as required pursuant to the Loan Agreement.

                  Section 3.4 MAINTENANCE OF PROPERTY. Borrower shall cause the
Property to be maintained in a good and safe condition and repair. The
Improvements, the Fixtures, the Equipment and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the
Fixtures, the Equipment or the Personal Property, tenant finish and
refurbishment of the Improvements) without the consent of Lender. Borrower shall
promptly repair, replace or rebuild any part of the Property which may be
destroyed by any casualty, or become damaged, worn or dilapidated and shall
complete and pay for any structure at any time in the process of construction or
repair on the Land.

                  Section 3.5 WASTE. Borrower shall not commit or suffer any
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or allow
the cancellation of any Policy, or do or permit to be done thereon anything that
may in any way materially impair the value of the Property or the security of
this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.

                  Section 3.6 PAYMENT FOR LABOR AND MATERIALS. (a) Borrower will
promptly pay when due all bills and costs for labor, materials, and specifically
fabricated materials ("LABOR AND MATERIAL COSTS") incurred in connection with
the Property and never permit to exist beyond the due date thereof in respect of
the Property or any part thereof any lien or security interest, even though
inferior to the liens and the security interests hereof, and in any event never
permit to be created or exist in respect of the Property or any part thereof any
other or additional lien or security interest other than the liens or security
interests hereof except for the Permitted Encumbrances.

                  (b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Labor and Material Costs, provided
that (i) no Event of Default has occurred and is continuing under the Loan
Agreement, the Note, this Security Instrument or any of the other Loan
Documents, (ii) Borrower is permitted to do so under the provisions of any other
mortgage, deed of trust or deed to secure debt affecting the Property, (iii)
such proceeding shall suspend the collection of the Labor and Material Costs
from Borrower and from the Property or Borrower shall have paid all of the Labor
and Material Costs under protest, (iv) such proceeding shall be permitted under
and be conducted in accordance with the provisions of any other instrument to
which Borrower is

                                       -7-

<PAGE>

subject and shall not constitute a default thereunder, (v) neither the Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, canceled or lost, and (vi) Borrower shall have furnished
the security as may be required in the proceeding, or as may be reasonably
requested by Lender to insure the payment of any contested Labor and Material
Costs, together with all interest and penalties thereon.

                  Section 3.7 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall
observe and perform each and every term, covenant and provision to be observed
or performed by Borrower pursuant to the Loan Agreement, any other Loan Document
and any other agreement or recorded instrument affecting or pertaining to the
Property and any amendments, modifications or changes thereto.

                  Section 3.8 CHANGE OF NAME, IDENTITY OR STRUCTURE.  Borrower
shall not change Borrower's name, identity (including its trade name or
names) or, if not an individual, Borrower's corporate, partnership or other
structure without notifying Lender of such change in writing at least thirty
(30) days prior to the effective date of such change and, in the case of a
change in Borrower's structure, without first obtaining the prior written
consent of Lender,. Borrower shall execute and deliver to Lender, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change required by Lender to establish or
maintain the validity, perfection and priority of the security interest granted
herein. At the request of Lender, Borrower shall execute a certificate in form
satisfactory to Lender listing the trade names under which Borrower intends to
operate the Property, and representing and warranting that Borrower does
business under no other trade name with respect to the Property.

                     Article 4 - OBLIGATIONS AND RELIANCES

                  Section 4.1 RELATIONSHIP OF BORROWER AND LENDER. The
relationship between Borrower and Lender is solely that of debtor and
creditor, and Lender has no fiduciary or other special relationship with
Borrower, and no term or condition of any of the Loan Agreement, the Note, this
Security Instrument and the other Loan Documents shall be construed so as to
deem the relationship between Borrower and Lender to be other than that of
debtor and creditor.

                  Section 4.2 NO RELIANCE ON LENDER. The general partners,
members, principals and (if Borrower is a trust) beneficial owners of Borrower
are experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.

                  Section 4.3 NO LENDER OBLIGATIONS. (a) Notwithstanding the
provisions of SUBSECTIONS 1.1(h) AND (n) or SECTION 1.2, Lender is not
undertaking the performance of (i) any obligations under the Leases; or (ii) any
obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.

                                      -8-
<PAGE>

                  (b) By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Lender pursuant to this
Security Instrument, the Loan Agreement, the Note or the other Loan Documents,
including, without limitation, any officer's certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal, or
insurance policy, Lender shall not be deemed to have warranted, consented to, or
affirmed the sufficiency, the legality or effectiveness of same, and such
acceptance or approval thereof shall not constitute any warranty or affirmation
with respect thereto by Lender.

                  Section 4.4 RELIANCE. Borrower recognizes and acknowledges
that in accepting the Loan Agreement, the Note, this Security Instrument
and the other Loan Documents, Lender is expressly and primarily relying on the
truth and accuracy of the warranties and representations set forth in
Section 4.1 of the Loan Agreement without any obligation to investigate the
Property and notwithstanding any investigation of the Property by Lender; that
such reliance existed on the part of Lender prior to the date hereof, that the
warranties and representations are a material inducement to Lender in making the
Loan; and that Lender would not be willing to make the Loan and accept this
Security Instrument in the absence of the warranties and representations as set
forth in Section 4.1 of the Loan Agreement.

                         Article 5 - FURTHER ASSURANCES

                  Section 5.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
forthwith upon the execution and delivery of this Security Instrument and
thereafter, from time to time, will cause this Security Instrument and any of
the other Loan Documents creating a lien or security interest or evidencing the
lien hereof upon the 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 and perfect the lien or security interest hereof upon, and the interest
of Lender in, the Property. Borrower will pay all taxes, filing, registration or
recording fees, and all expenses incident to the preparation, execution,
acknowledgment and/or recording of the Note, this Security Instrument, the other
Loan Documents, any note, deed of trust or mortgage supplemental hereto, any
security instrument with respect to the Property and any instrument of further
assurance, and any modification or amendment of the foregoing documents, 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
Security Instrument, any deed of trust or mortgage supplemental hereto, any
security instrument with respect to the Property or any instrument of further
assurance, and any modification or amendment of the foregoing documents, except
where prohibited by law so to do.

                  Section 5.2 FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, deeds of trust,
assignments, notices of assignments, transfers and assurances as Lender shall,
from time to time, reasonably require, for the better assuring, conveying,
assigning, transferring, and confirming unto Lender and Trustee the property and
rights hereby deeded, granted, bargained, sold, conveyed, confirmed, pledged,
assigned, warranted and transferred or intended now or hereafter so to be, or
which Borrower may be or may hereafter become bound to convey or assign to
Trustee or Lender, or for carrying out the intention or facilitating the
performance of the terms of this Security Instrument or for filing, registering
or

                                      -9-

<PAGE>

recording this Security Instrument, or for complying with all Legal
Requirements. Borrower, on demand, will execute and deliver, and in the event it
shall fail to so execute and deliver, hereby authorizes Lender to execute in the
name of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements to evidence more effectively
the security interest of Lender in the Property. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender at
law and in equity, including without limitation such rights and remedies
available to Lender pursuant to this Section 5.2. Nothing contained in this
Section 5.2 shall be deemed to create an obligation on the part of Borrower to
pay any costs and expenses incurred by Lender in connection with the
Securitization or other sale or transfer of the Loan.

                  Section 5.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP
LAWS. (a) If any law is enacted or adopted or amended after the date of
this Security Instrument which deducts the Debt from the value of the Property
for the purpose of taxation or which imposes a tax, either directly or
indirectly, on the Debt or Lender's interest in the Property, Borrower will pay
the tax, with interest and penalties thereon, if any. If Lender is advised by
counsel chosen by it that the payment of tax by Borrower would be unlawful or
taxable to Lender or unenforceable or provide the basis for a defense of usury
then Lender shall have the option by written notice of not less than one hundred
twenty (120) days to declare the Debt immediately due and payable.

                  (b) Borrower will not claim or demand or be entitled to any
credit or credits on account of the Debt for any part of the Taxes or Other
Charges assessed against the Property, or any part thereof, and no deduction
shall otherwise be made or claimed from the assessed value of the Property, or
any part thereof, for real estate tax purposes by reason of this Security
Instrument or the Debt. If such claim, credit or deduction shall be required by
law, Lender shall have the option, by written notice of not less than one
hundred twenty (120) days, to declare the Debt immediately due and payable.

                  (c) 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, this Security Instrument, or any of the other
Loan Documents or impose any other tax or charge on the same, Borrower will pay
for the same, with interest and penalties thereon, if any.

                  Section 5.4 SPLITTING OF DEED OF TRUST. This Security
Instrument and the Note shall, at any time until the same shall be fully
paid and satisfied, at the sole election of Lender, be split or divided into two
or more notes and two or more security instruments, each of which shall cover
all or a portion of the Property to be more particularly described therein. To
that end, Borrower, upon written request of Lender, shall execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered by the then
owner of the Property, to Lender and/or its designee or designees substitute
notes and security instruments in such principal amounts, aggregating not more
than the then unpaid principal amount of this Security Instrument, and
containing terms, provisions and clauses similar to those contained herein and
in the Note, and such other documents and instruments as may be required by
Lender.

                                      -10-
<PAGE>

                  Section 5.5 REPLACEMENT DOCUMENTS. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any other Loan Document which is not of public record,
and, in the case of any such mutilation, upon surrender and cancellation of such
Note or other Loan Document, Borrower will issue, in lieu thereof, a replacement
Note or other Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Loan Document in the same principal amount thereof and
otherwise of like tenor.

                      Article 6 - DUE ON SALE/ENCUMBRANCE

                  Section 6.1 LENDER RELIANCE. Borrower acknowledges that Lender
has examined and relied on the experience of Borrower and its general
partners, members, principals and (if Borrower is a trust) beneficial owners in
owning and operating properties such as the Property in agreeing to make the
Loan, and will continue to rely on Borrower's ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and the performance of the Other Obligations. Borrower acknowledges that
Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should Borrower default in the repayment of the Debt or the
performance of the Other Obligations, Lender can recover the Debt by a sale of
the Property.

                  Section 6.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower
shall not, without the prior written consent of Lender, sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or
any part thereof or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred, unless Lender shall consent thereto in accordance with
Section 6.4 hereof.

                  Section 6.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within
the meaning of this Article 6 shall be deemed to include, but not be limited to,
(a) an installment sales agreement wherein Borrower agrees to sell the Property
or any part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (c) the voluntary or involuntary sale,
conveyance, transfer or pledge of the stock of the general partner of Borrower
(or the stock of any corporation directly or indirectly controlling such general
partner by operation of law or otherwise) or the creation or issuance of new
stock by which an aggregate of more than ten percent (10%) of such general
partner's stock shall be vested in a party or parties who are not now
stockholders; (d) the voluntary or involuntary sale, conveyance, transfer or
pledge of any general or limited partnership interest in Borrower; (e) if
Borrower, any general partner of Borrower, any guarantor or any indemnitor is a
limited liability company, the change, removal or resignation of a member or
managing member or the transfer or pledge of the interest of any member or
managing member or any profits or proceeds relating to such interest; or (f) any
other transfer prohibited by the terms of the Loan Agreement.

                  Section 6.4 LENDER'S RIGHTS. Lender reserves the right to
condition the consent required hereunder upon (a) a modification of the
terms hereof and of the Loan

                                      -11-
<PAGE>

Agreement, the Note or the other Loan Documents; (b) an assumption of the
Loan Agreement, the Note, this Security Instrument and the other Loan Documents
as so modified by the proposed transferee, subject to the provisions of Section
9.4 of the Loan Agreement; (c) payment of all of Lender's reasonable expenses
incurred in connection with such transfer; (d) the confirmation in writing by
the applicable Rating Agencies that the proposed transfer will not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned in connection with any Securitization;
(e) the delivery of a nonconsolidation opinion reflecting the proposed transfer
satisfactory in form and substance to Lender; (f) the proposed transferee's
continued compliance with the representations and covenants set forth in
Section 4.1.30 and 5.2.12 of the Loan Agreement; (g) the delivery of
evidence satisfactory to Lender that the single purpose nature and bankruptcy
remoteness of Borrower, its shareholders, partners or members, as the case may
be, following such transfers are in accordance with the standards of the Rating
Agencies, or (h) such other conditions as Lender shall determine in its
reasonable discretion to be in the interest of Lender, including, without
limitation, the creditworthiness, reputation and qualifications of the
transferee with respect to the Loan and the Property. Lender shall not be
required to demonstrate any actual impairment of its security or any increased
risk of default hereunder in order to declare the Debt immediately due and
payable upon Borrower's sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Property without Lender's consent. This
provision shall apply to every sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property regardless of
whether voluntary or not, or whether or not Lender has consented to any previous
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Property.

                 Article 7 - RIGHTS AND REMEDIES UPON DEFAULT

                  Section 7.1 REMEDIES. Upon the occurrence and during the
continuance  of any Event of Default, Borrower agrees that Lender or Trustee,
or both, may take such action, without notice or demand, as it deems advisable
to protect and enforce its rights against Borrower and in and to the Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as Lender or
Trustee may determine, in their sole discretion, without impairing or otherwise
affecting the other rights and remedies of Lender or Trustee:

                  (a) declare the entire unpaid Debt to be immediately due and
payable;

                  (b) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Security Instrument under any applicable
provision of law, in which case the Property or any interest therein may be sold
for cash or upon credit in one or more parcels or in several interests or
portions and in any order or manner;

                  (c) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Security Instrument for the
portion of the Debt then due and payable, subject to the continuing lien and
security interest of this Security Instrument for the balance of the Debt not
then due, unimpaired and without loss of priority;

                                      -12-
<PAGE>

                  (d) sell for cash or upon credit the Property or any part
thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of sale or
otherwise, at one or more sales, as an entity or in parcels, at such time and
place, upon such terms and after such notice thereof, all as may be required or
permitted by law and, without limiting the foregoing;

              (i) In connection with any sale or sales hereunder, Lender or the
     Trustee shall be entitled to elect to treat any of the Property which
     consists of a right in action or which is property that can be severed from
     the Real Property covered hereby or any improvements without causing
     structural damage thereto as if the same were personal property, and
     dispose of the same in accordance with applicable law, separate and apart
     from the sale of Real Property. Where the Property consists of Real
     Property, Personal Property, Equipment or Fixtures, whether or not such
     Personal Property or Equipment is located on or within the Real Property,
     Lender and/or the Trustee shall be entitled to elect to exercise its rights
     and remedies against any or all of the Real Property, Personal Property,
     Equipment and Fixtures in such order and manner as is now or hereafter
     permitted by applicable law;

              (ii) Lender and/or the Trustee shall be entitled to elect to
     proceed against any or all of the Real Property, Personal Property,
     Equipment and Fixtures in any manner permitted under applicable law; and if
     Lender and/or the Trustee so elects pursuant to applicable law, the power
     of sale herein granted shall be exercisable with respect to all or any of
     the Real Property, Personal Property, Equipment and Fixtures covered
     hereby, as designated by Lender and/or the Trustee and Trustee is hereby
     authorized and empowered to conduct any such sale of any Real Property,
     Personal Property, Equipment and Fixtures in accordance with the procedures
     applicable to Real Property;

              (iii) Should Lender and/or the Trustee elect to sell any portion
     of the Property which is Real Property or which is Personal Property,
     Equipment or Fixtures that the Lender and/or the Trustee has elected under
     applicable law to sell together with Real Property in accordance with the
     laws governing a sale of Real Property, Lender and/or the Trustee shall
     give such notice of Event of Default, if any, and election to sell as may
     then be required by law. Thereafter, upon the expiration of such time and
     the giving of such notice of sale as may then be required by law, and
     without the necessity of any demand on Borrower, Lender and/or the Trustee
     at the time and place specified in the notice of sale, shall sell such Real
     Property or part thereof at public auction to the highest bidder for cash
     in lawful money of the United States. Lender or the Trustee may from time
     to time postpone any sale hereunder by public announcement thereof at the
     time and place noticed therefor;

              (iv) If the Property consists of several lots, parcels or items
     of property, Lender or the Trustee shall, subject to applicable law, (A)
     designate the order in which such lots, parcels or items shall be offered
     for sale or sold, or (B) elect to sell such lots, parcels or items through
     a single sale, or through two or more successive sales, or in any other
     manner Lender or the Trustee designates. Any Person, other than the
     Trustee, including Borrower or Lender, may purchase at any sale hereunder.
     Should Lender or the Trustee desire that more than one sale or other
     disposition of the Property be conducted, Lender

                                      -13-

<PAGE>

     or the Trustee shall, subject to applicable law, cause such sales or
     dispositions to be conducted simultaneously, or successively, on the same
     day, or at such different days or times and in such order as Lender or the
     Trustee may designate, and no such sale shall terminate or otherwise affect
     the lien of this Security Instrument on any part of the Property not sold
     until all the Debt has been paid in full. In the event Lender or the
     Trustee elects to dispose of the Property through more than one sale,
     except as otherwise provided by applicable law, Borrower agrees to pay the
     costs and expenses of each such sale and of any judicial proceedings
     wherein such sale may be made;

                  (e) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, in the Note, the Loan Agreement or in the other Loan Documents;

                  (f) recover judgment on the Note either before, during or
after any proceedings for the enforcement of this Security Instrument or
the other Loan Documents;

                  (g) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without notice and without
regard for the adequacy of the security for the Debt and without regard for the
solvency of Borrower, any guarantor, indemnitor with respect to the Loan or of
any Person, liable for the payment of the Debt;

                  (h) the license granted to Borrower under SECTION 1.2 hereof
shall automatically be revoked and Lender may enter into or upon the
Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, without liability for
trespass, damages or otherwise and exclude Borrower and its agents or servants
wholly therefrom, and take possession of all books, records and accounts
relating thereto and Borrower agrees to surrender possession of the Property and
of such books, records and accounts to Lender upon demand, and thereupon Lender
may (i) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the business
thereat; (ii) complete any construction on the Property in such manner and form
as Lender deems advisable; (iii) make alterations, additions, renewals,
replacements and improvements to or on the Property; (iv) exercise all rights
and powers of Borrower with respect to the Property, whether in the name of
Borrower or otherwise, including, without limitation, the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect
and receive all Rents of the Property and every part thereof; (v) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi)
require Borrower to vacate and surrender possession of the Property to Lender or
to such receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the Property to the
payment of the Debt, in such order, priority and proportions as Lender shall
deem appropriate in its sole discretion after deducting therefrom all expenses
(including reasonable attorneys' fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the Taxes, Other Charges, insurance
and other expenses in connection with the Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents and
employees;

                                      -14-

<PAGE>
                  (i) exercise 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: (i) the right to take
possession of the Fixtures, the Equipment, the Personal Property or any part
thereof, and to take such other measures as Lender may deem necessary for the
care, protection and preservation of the Fixtures, the Equipment, the Personal
Property, and (ii) request Borrower at its expense to assemble the Fixtures, the
Equipment, the Personal Property and make it available to Lender at a convenient
place acceptable to Lender. Any notice of sale, disposition or other intended
action by Lender with respect to the Fixtures, the Equipment, the Personal
Property sent to Borrower in accordance with the provisions hereof at least ten
(10) days prior to such action, shall constitute commercially reasonable notice
to Borrower;

                  (j) apply any sums then deposited or held in escrow or
otherwise by or on behalf of Lender in accordance with the terms of the
Loan Agreement, this Security Instrument or any other Loan Document to the
payment of the following items in any order in its uncontrolled discretion:

                  (i) Taxes and Other Charges;

                 (ii) Insurance Premiums;

                (iii) Interest on the unpaid principal balance of the Note;

                 (iv) Amortization of the unpaid principal balance of the Note;

                  (v) All other sums payable pursuant to the Note, the Loan
                      Agreement, this Security Instrument and the other Loan
                      Documents, including without limitation advances made by
                      Lender pursuant to the terms of this Security Instrument;

                  (k) pursue such other remedies as Lender may have under
applicable law; or

                  (1) apply the undisbursed  balance of any Net Proceeds
Deficiency deposit, together with interest thereon, to the payment of the
Debt in such order, priority and proportions as Lender shall deem to be
appropriate in its discretion.

In the event of a sale, by foreclosure, power of sale or otherwise, of less
than all of Property, this Security Instrument shall continue as a lien and
security interest on the remaining portion of the Property unimpaired and
without loss of priority.

                  Section 7.2 APPLICATION OF PROCEEDS. The purchase money,
proceeds and avails of any disposition of the Property, and or any part
thereof, or any other sums collected by Lender pursuant to the Note, this
Security Instrument or the other Loan Documents, may be applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion
shall deem proper, to the extent consistent with law.

                  Section 7.3 RIGHT TO CURE DEFAULTS. Upon the occurrence and
during the continuance of any Event of Default, Lender may, but without any
obligation to do so and without notice to or demand on Borrower, and without
releasing Borrower from any obligation

                                      -15-
<PAGE>

hereunder, make or do the same in such manner and to such extent as Lender
may deem necessary to protect the security hereof. Lender is authorized to enter
upon the Property for such purposes, or appear in, defend, or bring any action
or proceeding to protect its interest in the Property or to foreclose this
Security Instrument or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this Section 7.3, shall constitute a portion of the Debt
and shall be due and payable to Lender upon demand. All such costs and expenses
incurred by Lender in remedying such Event of Default or such failed payment or
act or in appearing in, defending, or bringing any such action or proceeding
shall bear interest at the Default Rate, for the period after notice from Lender
that such cost or expense was incurred to the date of payment to Lender. All
such costs and expenses incurred by Lender together with interest thereon
calculated at the Default Rate shall be deemed to constitute a portion of the
Debt and be secured by this Security Instrument and the other Loan Documents and
shall be immediately due and payable upon demand by Lender therefor.

                  Section 7.4 ACTIONS AND PROCEEDINGS. Lender or Trustee has the
right to appear in and defend any action or proceeding brought with respect
to the Property and to bring any action or proceeding, in the name and on behalf
of Borrower, which Lender, in its discretion, decides should be brought to
protect its interest in the Property.

                  Section 7.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender or
Trustee 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 Lender thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Borrower existing
at the time such earlier action was commenced.

                  Section 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable
times and upon reasonable notice, Lender, its agents, accountants and
attorneys shall have the right to examine the records, books, management and
other papers of Borrower which reflect upon their financial condition, at the
Property or at any office regularly maintained by Borrower where the books and
records are located. Lender and its agents shall have the right to make copies
and extracts from the foregoing records and other papers. In addition, at
reasonable times and upon reasonable notice, Lender, its agents, accountants and
attorneys shall have the right to examine and audit the books and records of
Borrower pertaining to the income, expenses and operation of the Property during
reasonable business hours at any office of Borrower where the books and records
are located. This Section 7.6 shall apply throughout the term of the Note and
without regard to whether an Event of Default has occurred or is continuing.

                  Section 7.7 OTHER RIGHTS, ETC. (a) The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be
a waiver of any term of this Security Instrument. Borrower shall not be relieved
of Borrower's obligations hereunder by reason of (i) the failure of Lender or
Trustee to comply with any request of Borrower or any guarantor or indemnitor
with respect to the Loan to take any action to foreclose this Security
Instrument or otherwise enforce any of the provisions hereof or of the Note or
the other Loan Documents, (ii) the release, regardless of consideration, of the
whole or any part of the Property, or of any person liable for the Debt or any
portion thereof, or (iii) any agreement or stipulation by Lender

                                      -16-
<PAGE>

extending the time of payment or otherwise modifying or supplementing the
terms of the Note, this Security Instrument or the other Loan Documents.

                  (b) It is agreed that the risk of loss or damage to the
Property is on Borrower, and Lender shall have no liability whatsoever for
decline in value of the Property, for failure to maintain the Policies, or for
failure to determine whether insurance in force is adequate as to the amount of
risks insured. Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.

                  (c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender or Trustee may take action to recover the Debt, or
any portion thereof, or to enforce any covenant hereof without prejudice to the
right of Lender or Trustee thereafter to foreclose this Security Instrument. The
rights of Lender or Trustee under this Security Instrument shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Lender or Trustee shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision. Neither
Lender nor Trustee shall 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.

                  Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.
Lender may release any portion of the Property for such consideration as
Lender may require without, as to the remainder of the Property, in any way
impairing or affecting the lien or priority of this Security Instrument, or
improving the position of any subordinate lienholder with respect thereto,
except to the extent that the obligations hereunder shall have been reduced by
the actual monetary consideration, if any, received by Lender for such release,
and may accept by assignment, pledge or otherwise any other property in place
thereof as Lender may require without being accountable for so doing to any
other lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.

                  Section 7.9 VIOLATION OF LAWS. If the Property is not in
material compliance with Legal Requirements, Lender may impose additional
requirements upon Borrower in connection herewith including, without limitation,
monetary reserves or financial equivalents.

                  Section 7.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other provision of this Security Instrument or the Loan Agreement,
including, without limitation, Section 9.4 of the Loan Agreement, Lender and
other Indemnified Parties (as hereinafter defined) are entitled to enforce the
obligations of Borrower, any guarantor and indemnitor contained in Sections 9.2,
9.3 and 9.4 herein and Section 9.2 of the Loan Agreement without first resorting
to or exhausting any security or collateral and without first having recourse to
the Note or any of the Property, through foreclosure, exercise of a power of
sale or acceptance of a deed in lieu of foreclosure or otherwise, and in the
event Lender commences a foreclosure action against the Property or otherwise
causes Trustee to exercise the power of sale pursuant to this Security
Instrument, Lender is entitled to pursue a deficiency judgment with respect to
such obligations against Borrower and any guarantor or indemnitor with respect
to the Loan. The provisions of Sections 9.2, 9.3 and 9.4 herein and Section 9.2
of the Loan Agreement are exceptions to any

                                      -17-

<PAGE>

non-recourse or exculpation provisions in the Loan Agreement, the Note,
this Security Instrument or the other Loan Documents, and Borrower and any
guarantor or indemnitor with respect to the Loan are fully and personally liable
for the obligations pursuant to Sections 9.2, 9.3 and 9.4 herein and Section 9.2
of the Loan Agreement. The liability of Borrower and any guarantor or indemnitor
with respect to the Loan pursuant to Sections 9.2, 9.3 and 9.4 herein and
Section 9.2 of the Loan Agreement is not limited to the original principal
amount of the Note. Notwithstanding the foregoing, nothing herein shall inhibit
or prevent Lender or Trustee from foreclosing or exercising a power of sale
pursuant to this Security Instrument or exercising any other rights and remedies
pursuant to the Loan Agreement, the Note, this Security Instrument and the other
Loan Documents, whether simultaneously with foreclosure proceedings or in any
other sequence. A separate action or actions may be brought and prosecuted
against Borrower pursuant to Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of
the Loan Agreement, whether or not action is brought against any other Person or
whether or not any other Person is joined in the action or actions. In addition,
Lender shall have the right but not the obligation to join and participate in,
as a party if it so elects, any administrative or judicial proceedings or
actions initiated in connection with any matter addressed in Article 8 or
Section 9.4 herein.

                  Section 7.11 RIGHT OF ENTRY. Upon reasonable notice to
Borrower, Lender and its agents shall have the right to enter and inspect the
Property at all reasonable times.

                       Article 8 - ENVIRONMENTAL HAZARDS

                  Section 8.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Based upon an environmental assessment of the Property and information that
Borrower knows after due inquiry of the Manager, and except as otherwise
disclosed by that certain Environmental Site Assessment of the Property
delivered to Lender (such report is referred to below as the "ENVIRONMENTAL
REPORT"), (a) there are no Hazardous Substances (defined below) or underground
storage tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws (defined below) and with permits issued
pursuant thereto and (ii) fully disclosed to Lender in writing pursuant the
Environmental Report; (b) there are no past, present or threatened Releases
(defined below) of Hazardous Substances in, on, under or from the Property which
has not been fully remediated in accordance with Environmental Law; (c) there is
no threat of any Release of Hazardous Substances migrating to the Property; (d)
there is no past or present non-compliance with Environmental Laws, or with
permits issued pursuant thereto, in connection with the Property which has not
been fully remediated in accordance with Environmental Law; (e) Borrower does
not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a governmental
entity) relating to Hazardous Substances or Remediation (defined below) thereof,
of possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with any of the
foregoing; and (f) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's files
and records, including but not limited to any reports relating to Hazardous
Substances in, on, under or from the Property and/or to the environmental
condition of the Property.

                                      -18-

<PAGE>

                  "ENVIRONMENTAL  LAW" means any  present  and future  federal,
state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability for or
costs of Remediation or prevention of Releases of Hazardous Substances or
relating to liability for or costs of other actual or threatened danger to human
health or the environment. Environmental Law includes, but is not limited to,
the following statutes, as amended, any successor thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Substances Transportation Act;
the Resource Conservation and Recovery Act (including but not limited to
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the
Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal
Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the
River and Harbors Appropriation Act. Environmental Law also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of the Property; requiring
notification or disclosure of Releases of Hazardous Substances or other
environmental condition of the Property to any governmental authority or other
Person, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property.

                  "HAZARDOUS  SUBSTANCES" include but are not limited to any
and all substances (whether solid, liquid or gas) defined, listed, or
otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment, including but not
limited to petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives, but excluding substances of kinds and in amounts
ordinarily and customarily used or stored in similar properties for the purpose
of cleaning or other maintenance or operations or as inventory of tenants and
otherwise in compliance with all Environmental Laws.

                  "RELEASE"  of any  Hazardous  Substance  includes but is not
limited to any release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,
disposing or other movement of Hazardous Substances.

                  "REMEDIATION" includes but is not limited to any response,
remedial, removal, or corrective action, any activity to cleanup, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance, any
action to comply with any Environmental Laws or with any permits issued pursuant
thereto, any inspection, investigation, study, monitoring, assessment, audit,

                                      -19-

<PAGE>

sampling and testing, laboratory or other analysis, or evaluation relating to
any Hazardous Substances or to anything referred to in Article 8.

                  Section 8.2 ENVIRONMENTAL COVENANTS. Borrower covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Borrower or any other Person, shall be in compliance with all Environmental Laws
and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous
Substances in, on, under or from the Property; (c) there shall be no Hazardous
Substances in, on, or under the Property, except those that are both (i) in
compliance with all Environmental Laws and with permits issued pursuant thereto
and (ii) fully disclosed to Lender in writing; (d) Borrower shall keep the
Property free and clear of all liens and other encumbrances imposed pursuant to
any Environmental Law, whether due to any act or omission of Borrower or any
other Person (the "ENVIRONMENTAL LIENS"); (e) Borrower shall, at its sole cost
and expense, fully and expeditiously cooperate in all activities pursuant to
Section 8.3 below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (f)
Borrower shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
the Property, pursuant to any reasonable written request of Lender made in the
event that Lender has reason to believe that an environmental hazard exists on
the Property (including but not limited to sampling, testing and analysis of
soil, water, air, building materials and other materials and substances whether
solid, liquid or gas), and share with Lender the reports and other results
thereof, and Lender and other Indemnified Parties shall be entitled to rely on
such reports and other results thereof; (g) Borrower shall, at its sole cost and
expense, comply with all reasonable written requests of Lender to made in the
event that Lender has reason to believe that an environmental hazard exists on
the Property (i) reasonably effectuate Remediation of any condition (including
but not limited to a Release of a Hazardous Substance) in, on, under or from the
Property; (ii) comply with any Environmental Law; (iii) comply with any
directive from any governmental authority; and (iv) take any other reasonable
action necessary or appropriate for protection of human health or the
environment; (h) Borrower shall not do or allow any tenant or other user of the
Property to do any act that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any Person (whether on or
off the Property), impairs or may impair the value of the Property, is contrary
to any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Borrower shall immediately notify Lender in
writing of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property; (B) any
non-compliance with any Environmental Laws related in any way to the Property;
(C) any actual or potential Environmental Lien; (D) any required or proposed
Remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication of which Borrower becomes aware
from any source whatsoever (including but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation thereof, possible
liability of any Person pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with anything referred to
in this Article 8.

                  Section 8.3 LENDER'S RIGHTS. In the event that Lender has
reason to believe that an environmental hazard exists on the Property, upon
reasonable notice from Lender, Borrower shall, at Borrower's expense, promptly
cause an engineer or consultant satisfactory to

                                      -20-

<PAGE>

Lender to conduct any environmental assessment or audit (the scope of which
shall be determined in Lender's sole and absolute discretion) and take any
samples of soil, groundwater or other water, air, or building materials or any
other invasive testing requested by Lender and promptly deliver the results of
any such assessment, audit, sampling or other testing; provided, however, if
such results are not delivered to Lender within a reasonable period, upon
reasonable notice to Borrower, Lender and any other Person designated by Lender,
including but not limited to any receiver, any representative of a governmental
entity, and any environmental consultant, shall have the right, but not the
obligation, to enter upon the Property at all reasonable times to assess any and
all aspects of the environmental condition of the Property and its use,
including but not limited to conducting any environmental assessment or audit
(the scope of which shall be determined in Lender's sole and absolute
discretion) and taking samples of soil, groundwater or other water, air, or
building materials, and reasonably conducting other invasive testing. Borrower
shall cooperate with and provide access to Lender and any such Person designated
by Lender.

                          Article 9 - INDEMNIFICATION

                  Section 9.1 GENERAL INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all claims, suits,
liabilities (including, without limitation, strict liabilities), actions,
proceedings, obligations, debts, damages, losses, costs, expenses, diminutions
in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts
paid in settlement, punitive damages, foreseeable and unforeseeable
consequential damages, of whatever kind or nature (including but not limited to
reasonable attorneys' fees and other costs of defense) (collectively, the
"LOSSES") imposed upon or incurred by or asserted against any Indemnified
Parties and directly or indirectly arising out of or in any way relating to any
one or more of the following: (a) ownership of this Security Instrument, the
Property or any interest therein or receipt of any Rents; (b) any amendment to,
or restructuring of, the Debt, and the Note, the Loan Agreement, this Security
Instrument, or any other Loan Documents; (c) any and all lawful action that may
be taken by Lender in connection with the enforcement of the provisions of this
Security Instrument or the Loan Agreement or the Note or any of the other Loan
Documents, whether or not suit is filed in connection with same, or in
connection with Borrower, any guarantor or indemnitor and/or any partner, joint
venturer or shareholder thereof becoming a party to a voluntary or involuntary
federal or state bankruptcy, insolvency or similar proceeding; (d) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (e) any use,
nonuse or condition in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (f) any failure on the part of Borrower to perform or be in compliance
with any of the terms of this Security Instrument; (g) performance of any labor
or services or the furnishing of any materials or other property in respect of
the Property or any part thereof; (h) the failure of any person 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 Security Instrument,
or to supply a copy thereof in a timely fashion to the recipient of the proceeds
of the transaction in connection with which this Security Instrument is made;
(i) any failure of the Property to be in compliance

                                      -21-
<PAGE>

with any Legal Requirements; (j) the enforcement by any Indemnified Party
of the provisions of this Article 9; (k) any and all claims and demands
whatsoever which may be asserted against Lender 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 Lease; (1) the payment of any
commission, charge or brokerage fee to anyone claiming through Borrower which
may be payable in connection with the funding of the Loan; or (m) any
misrepresentation made by Borrower in this Security Instrument or any other Loan
Document. Notwithstanding the foregoing, Borrower shall not be liable to the
Indemnified Parties under this SECTION 9.1 for any Losses to which the
Indemnified Parties may become subject to the extent such Losses arise by reason
of the gross negligence, illegal acts, fraud or willful misconduct of the
Indemnified Parties. Any amounts payable to Lender by reason of the application
of this SECTION 9.1 shall become immediately due and payable and shall bear
interest at the Default Rate from the date loss or damage is sustained by Lender
until paid. For purposes of this Article 9, the term "INDEMNIFIED PARTIES" means
Lender and any Person who is or will have been involved in the origination of
the Loan, any Person who is or will have been involved in the servicing of the
Loan secured hereby, any Person in whose name the encumbrance created by this
Security Instrument is or will have been recorded, persons and entities who may
hold or acquire or will have held a full or partial interest in the Loan secured
hereby (including, but not limited to, investors or prospective investors in the
Securities, as well as custodians, trustees and other fiduciaries who hold or
have held a full or partial interest in the Loan secured hereby for the benefit
of third parties) as well as the respective directors, officers, shareholders,
partners, employees, agents, servants, representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and assigns
of any and all of the foregoing (including but not limited to any other Person
who holds or acquires or will have held a participation or other full or partial
interest in the Loan, whether during the term of the Loan or as a part of or
following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Lender's assets and business).

                  Section 9.2 SECURITY INSTRUMENT AND/OR INTANGIBLE TAX.
Borrower shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and against any and all
Losses imposed upon or incurred by or asserted against any Indemnified Parties
and directly or indirectly arising out of or in any way relating to any tax on
the making and/or recording of this Security Instrument, the Note or any of the
other Loan Documents, but excluding any income, franchise or other similar
taxes.

                  Section 9.3 ERISA INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.1.9 or 5.2.12 of the Loan Agreement.

                  Section 9.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all Losses and costs
of Remediation (whether or not performed

                                      -22-
<PAGE>
voluntarily), engineers' fees, environmental consultants' fees, and costs
of investigation (including but not limited to sampling, testing, and analysis
of soil, water, air, building materials and other materials and substances
whether solid, liquid or gas) imposed upon or incurred by or asserted against
any Indemnified Parties, and directly or indirectly arising out of or in any way
relating to any one or more of the following: (a) any presence of any Hazardous
Substances in, on, above, or under the Property; (b) any past, present or
threatened Release of Hazardous Substances in, on, above, under or from the
Property; (c) any activity by Borrower, any Person affiliated with Borrower or
any tenant or other user of the Property in connection with any actual, proposed
or threatened use, treatment, storage, holding, existence, disposition or other
Release, generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any tine located in, under, on or
above the Property; (d) any activity by Borrower, any Person affiliated with
Borrower or any tenant or other user of the Property in connection with any
actual or proposed Remediation of any Hazardous Substances at any time located
in, under, on or above the Property, whether or not such Remediation is
voluntary or pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (e) any past or present
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Property or operations
thereon, including but not limited to any failure by Borrower, any Affiliate of
Borrower or any tenant or other user of the Property to comply with any order of
any Governmental Authority in connection with any Environmental Laws; (f) the
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 8 and this
Section 9.4; (h) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Property, including but
not limited to costs to investigate and assess such injury, destruction or loss;
(i) any acts of Borrower or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Borrower or other users, at any facility or incineration vessel owned or
operated by another Person and containing such or any similar Hazardous
Substance; (j) any acts of Borrower or other users of the Property, in accepting
any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites selected by Borrower or such other users, from
which there is a Release, or a threatened Release of any Hazardous Substance
which causes the incurrence of costs for Remediation; (k) any personal injury,
wrongful death, or property damage arising under any statutory or common law or
tort law theory, including but not limited to damages assessed for the
maintenance of a private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Property; and (1) any
misrepresentation or inaccuracy in any representation or warranty or material
breach or failure to perform any covenants or other obligations pursuant to
Article 8. Notwithstanding the foregoing, Borrower shall not be liable under
this Section 9.4 for any Losses or costs of Remediation to which the Indemnified
Parties may become subject to the extent such Losses or costs of Remediation
arise by reason of the gross negligence, illegal acts, fraud of willful
misconduct of the Indemnified Parties. This indemnity shall survive any
termination, satisfaction or foreclosure of this Security Instrument, subject to
the provisions of Section 10.5.

                  Section 9.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall
defend such

                                      -23-
<PAGE>

Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, if the defendants in any
such claim or proceeding include both Borrower and any Indemnified Party and
Borrower and such Indemnified Party shall have reasonably concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those available to Borrower, such Indemnified
Party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party, provided that no compromise or settlement shall be
entered without Borrower's consent, which consent shall not be unreasonably
withheld. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.

                              Article 10 - WAIVERS

                  Section 10.1 WAIVER OF COUNTERCLAIM. To the extent permitted
by applicable law, Borrower hereby waives the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against it by Lender arising out of or in any way
connected with this Security Instrument, the Loan Agreement, the Note, any of
the other Loan Documents, or the Obligations.

                  Section 10.2 MARSHALLING AND OTHER MATTERS. To the extent
permitted by applicable law, Borrower hereby waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Property or any part
thereof or any interest therein. Further, Borrower hereby expressly waives any
and all rights of redemption from sale under any order or decree of foreclosure
of this Security Instrument on behalf of Borrower, and on behalf of each and
every person acquiring any interest in or title to the Property subsequent to
the date of this Security Instrument and on behalf of all persons to the extent
permitted by applicable law.

                  Section 10.3 WAIVER OF NOTICE. To the extent permitted by
applicable law, Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Security
Instrument or the Loan Documents specifically and expressly provide for the
giving of notice by Lender or Trustee to Borrower and except with respect to
matters for which Lender or Trustee is required by applicable law to give
notice, and Borrower hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Security Instrument does
not specifically and expressly provide for the giving of notice by Lender or
Trustee to Borrower.

                  Section 10.4 WAIVER OF STATUTE OF LIMITATIONS. To the extent
permitted by applicable law, Borrower 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 or performance of its Other
Obligations.

                                      -24-
<PAGE>

                  Section 10.5 SURVIVAL. The indemnifications made pursuant to
SECTIONS 9.3 and 9.4 herein and the representations and warranties, covenants,
and other obligations arising under Article 8, shall continue indefinitely in
full force and effect and shall survive and shall in no way be impaired by: any
satisfaction or other termination of this Security Instrument, any assignment or
other transfer of all or any portion of this Security Instrument or Lender's
interest in the Property (but, in such case, shall benefit both Indemnified
Parties and any assignee or transferee), any exercise of Lender's rights and
remedies pursuant hereto including but not limited to foreclosure or acceptance
of a deed in lieu of foreclosure, any exercise of any rights and remedies
pursuant to the Loan Agreement, the Note or any of the other Loan Documents, any
transfer of all or any portion of the Property (whether by Borrower or by Lender
following foreclosure or acceptance of a deed in lieu of foreclosure or at any
other time), any amendment to this Security Instrument, the Loan Agreement, the
Note or the other Loan Documents, and any act or omission that might otherwise
be construed as a release or discharge of Borrower from the obligations pursuant
hereto. Notwithstanding anything to the contrary contained in this Security
Instrument or the other Loan Documents, Borrower shall not have any obligations
or liabilities under the indemnification under SECTION 9.4 herein or other
indemnifications with respect to Hazardous Substances contained in the other
Loan Documents with respect to those obligations and liabilities that Borrower
can prove arose solely from Hazardous Substances that (i) were not present on or
a threat to the Property prior to the date that Lender or its nominee acquired
title to the Property, whether by foreclosure, exercise by power of sale,
acceptance of a deed-in-lieu of foreclosure or otherwise and (ii) were not the
result of any act or negligence of Borrower or any of Borrower's affiliates,
agents or contractors.

                            Article 11 - EXCULPATION

                  The  provisions  of SECTION  9.4 of the Loan  Agreement  are
hereby incorporated by reference into this Security Instrument to the same
extent and with the same force as if fully set forth herein.

                              Article 12 - NOTICES

                  All notices or other written communications  hereunder shall
be delivered in accordance with SECTION 10.6 of the Loan Agreement.

                      Article 13 - APPLICABLE LAW

                  Section 13.1 GOVERNING LAW. (A) THIS SECURITY INSTRUMENT WAS
NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER
IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY 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
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE

                                      -25-
<PAGE>

GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS WITH RESPECT TO THE PROPERTY SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY
LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT
THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS SECURITY INSTRUMENT AND THE
OTHER LOAN DOCUMENTS, AND THIS SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

                  (B) ANY LEGAL SUIT, ACTION OR PROCEEDING  AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT MAY AT
LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW
YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT

                  CORPORATION SERVICE COMPANY
                  80 STATE STREET
                  ALBANY, NEW YORK 12207-2543

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF
ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF

                                      -26-
<PAGE>

ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME
AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN
NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE
PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE
SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK,
NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

                  Section 13.2 USURY LAWS. Notwithstanding anything to the
contrary, (a) all agreements and communications between Borrower and Lender
are hereby and shall automatically be limited so that, after taking into account
all amounts deemed interest, the interest contracted for, charged or received by
Lender shall never exceed the maximum lawful rate or amount, (b) in calculating
whether any interest exceeds the lawful maximum, all such interest shall be
amortized, prorated, allocated and spread over the full amount and term of all
principal indebtedness of Borrower to Lender, and (c) if through any contingency
or event, Lender receives or is deemed to receive interest in excess of the
lawful maximum, any such excess shall be deemed to have been applied toward
payment of the principal of any and all then outstanding indebtedness of
Borrower to Lender, or if there is no such indebtedness, shall immediately be
returned to Borrower.

                  Section 13.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights,
powers and remedies provided in this Security Instrument may be exercised
only to the extent that the exercise thereof does not violate any applicable
provisions of law and are intended to be limited to the extent necessary so that
they will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any
applicable law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security
Instrument and any other application of the term shall not be affected thereby.

                            Article 14 - DEFINITIONS

                  All capitalized  terms not defined herein shall the respective
meanings set forth in the Loan Agreement. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Security Instrument may be used interchangeably in singular
or plural form and the word "BORROWER" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest
therein," the word "LENDER" shall mean "Lender and any subsequent holder of the
Note," the word "NOTE" shall mean "the Note and any other evidence of
indebtedness secured by this Security Instrument," the word "PROPERTY" shall
include any portion of the Property and any interest therein, and the phrases
"ATTORNEYS' FEES", "LEGAL FEES" and "COUNSEL FEES" shall include any and all
attorneys', paralegal and law clerk fees and disbursements, including, but not
limited to, fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender in protecting its interest in the Property, the
Leases and the Rents and enforcing its rights hereunder.

                                      -27-

<PAGE>

                     Article 15 - MISCELLANEOUS PROVISIONS

                  Section 15.1 NO ORAL CHANGE. This Security Instrument,
and any provisions hereof, may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on the
part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.

                  Section 15.2 SUCCESSORS AND ASSIGNS. This Security Instrument
shall be binding upon and inure to the benefit of Borrower and Lender and
their respective successors and assigns forever.

                  Section 15.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Loan Agreement, the Note or this Security Instrument is
held to be invalid, illegal or unenforceable in any respect, the Loan Agreement,
the Note and this Security Instrument shall be construed without such provision.

                  Section 15.4 HEADINGS, ETC. The headings and captions of
various Sections of this Security Instrument 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.

                  Section 15.5 NUMBER AND GENDER. 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.

                  Section 15.6 SUBROGATION. If any or all of the proceeds of
the Note have been used to extinguish, extend or renew any indebtedness
heretofore existing against the Property, then, to the extent of the funds so
used, Lender shall be subrogated to all of the rights, claims, liens, titles,
and interests existing against the Property heretofore held by, or in favor of,
the holder of such indebtedness and such former rights, claims, liens, titles,
and interests, if any, are not waived but rather are continued in full force and
effect in favor of Lender and are merged with the lien and security interest
created herein as cumulative security for the repayment of the Debt, the
performance and discharge of Borrower's obligations hereunder, under the Loan
Agreement, the Note and the other Loan Documents and the performance and
discharge of the Other Obligations.

                  Section 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement,
this Security Instrument and the other Loan Documents constitute the entire
understanding and agreement between Borrower and Lender with respect to the
transactions arising in connection with the Debt and supersede all prior written
or oral understandings and agreements between Borrower and Lender with respect
thereto. Borrower hereby acknowledges that, except as incorporated in writing in
the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which is the subject
of the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents.

                                      -28-

<PAGE>

                  Section 15.8 LIMITATION ON LENDER'S RESPONSIBILITY. No
provision of this Security Instrument shall operate to place any obligation
or liability for the control, care, management or repair of the Property upon
Lender, nor shall it operate to make Lender responsible or liable for any waste
committed on the Property by the tenants or any other Person, or for any
dangerous or defective condition of the Property, or for any negligence in the
management, upkeep, repair or control of the Property resulting in loss or
injury or death to any tenant, licensee, employee or stranger. Nothing herein
contained shall be construed as constituting Lender a "mortgagee in possession."

                     Article 16 - DEED OF TRUST PROVISIONS

                  Section 16.1 CONCERNING THE TRUSTEE. Trustee shall be under
no duty to take any action hereunder except as expressly required hereunder
or by law, or to perform any act which would involve Trustee in any expense or
liability or to institute or defend any suit in respect hereof, unless properly
indemnified to Trustee's reasonable satisfaction. Trustee, by acceptance of this
Security Instrument, covenants to perform and fulfill the trusts herein created,
being liable, however, only for willful negligence or misconduct, and hereby
waives any statutory fee and agrees to accept reasonable compensation, in lieu
thereof, for any services rendered by Trustee in accordance with the terms
hereof. Trustee may resign at any time upon giving thirty (30) days' notice to
Borrower and to Lender. Lender may remove Trustee at any time or from time to
time and select a successor trustee. In the event of the death, removal,
resignation, refusal to act, or inability to act of Trustee, or in its sole
discretion for any reason whatsoever Lender may, without notice and without
specifying any reason therefor and without applying to any court, select and
appoint a successor trustee, by an instrument recorded wherever this Security
Instrument is recorded and all powers, rights, duties and authority of Trustee,
as aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of the
duties of Trustee hereunder unless required by Lender. The procedure provided
for in this paragraph for substitution of Trustee shall be in addition to and
not in exclusion of any other provisions for substitution, by law or otherwise.

                  Section 16.2 TRUSTEE'S FEES. Borrower shall pay all reasonable
costs, fees and expenses incurred by Trustee and Trustee's agents and
counsel in connection with the performance by Trustee of Trustee's duties
hereunder and all such costs, fees and expenses shall be secured by this
Security Instrument.

                  Section 16.3 CERTAIN RIGHTS. With the approval of Lender,
Trustee shall have the right to take any and all of the following actions: (i)
to select, employ, and advise with counsel (who may be, but need not be, counsel
for Lender) upon any matters arising hereunder, including the preparation,
execution, and interpretation of the Loan Agreement, the Note, this Security
Instrument or the other Loan Documents, and shall be fully protected in relying
as to legal matters on the advice of counsel, (ii) to execute any of the trusts
and powers hereof and to perform any duty hereunder either directly or through
his agents or attorneys, (iii) to select and employ, in and about the execution
of his duties hereunder, suitable accountants, engineers and other experts,
agents and attorneys-in-fact, either corporate or individual, not regularly in
the employ of Trustee, and Trustee shall not be answerable for any act, default,
negligence, or misconduct of any such accountant, engineer or other expert,
agent or attorney-in-fact, if selected

                                      -29-
<PAGE>

with reasonable care, or 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 bad faith,
and (iv) any and all other lawful action as Lender may instruct Trustee to take
to protect or enforce Lender's rights hereunder. Trustee shall not be personally
liable in case of entry by Trustee, or anyone entering by virtue of the powers
herein granted to Trustee, upon the Property for debts contracted for or
liability or damages incurred in the management or operation of the Property.
Trustee shall have the right to rely on any instrument, document, or signature
authorizing or supporting an action taken or proposed to be taken by Trustee
hereunder, believed by Trustee in good faith to be genuine. Trustee shall be
entitled to reimbursement for actual expenses incurred by Trustee in the
performance of Trustee's duties hereunder and to reasonable compensation for
such of Trustee's services hereunder as shall be rendered.

                  Section 16.4 RETENTION OF MONEY. All moneys received by
Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated in any
manner from any other moneys (except to the extent required by applicable law)
and Trustee shall be under no liability for interest on any moneys received by
Trustee hereunder.

                  Section 16.5 PERFECTION OF APPOINTMENT. Should any deed,
conveyance, or instrument of any nature be required from Borrower by any Trustee
or substitute trustee to more fully and certainly vest in and confirm to the
Trustee or substitute trustee such estates rights, powers, and duties, then,
upon request by the Trustee or substitute trustee, any and all such deeds,
conveyances and instruments shall be made, executed, acknowledged, and delivered
and shall be caused to be recorded and/or filed by Borrower.

                  Section 16.6 SUCCESSION INSTRUMENTS. Any substitute trustee
appointed pursuant to any of the provisions hereof shall, without any
further act, deed, or conveyance, 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 Lender 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.

                     Article 17 - STATE-SPECIFIC PROVISIONS

                  Section 17.1 PRINCIPLES OF CONSTRUCTION. In the event of any
inconsistencies between the terms and conditions of this Article 17 and the
terms and conditions of this Security Instrument, the terms and conditions of
this Article 17 shall control and be binding.

                  Section 17.2 STATUTORY WARNING: INSURANCE. The following
warning is included pursuant to Oregon Revised Statutes 746.201:

                  Unless Borrower  provides  Lender with evidence of the
insurance  coverage  required under this Security  Instrument, Lender may
purchase  insurance at Borrower's  expense

                                      -30-
<PAGE>

to protect Lender's interest. This insurance may, but need not, also
protect Borrower's interest. If the collateral becomes damaged, the coverage
Lender purchases may not pay any claim Borrower makes or any claim made against
Borrower. Borrower may later cancel this coverage by providing evidence that it
has obtained property coverage elsewhere.

                  Borrower is responsible  for the cost of any insurance
purchased by Lender. The cost of this insurance may be added to Borrower's
contract or loan balance. If the cost is added to Borrower's contract or loan
balance, the interest rate on the underlying contract or loan will apply to this
added amount. The effective date of coverage may be the date Borrower's prior
coverage lapsed or the date Borrower failed to provide proof of coverage.

                  The coverage Lender  purchases may be considerably  more
expensive than insurance Borrower can obtain on its own and may not satisfy
any need for property damage coverage or any mandatory liability insurance
requirements imposed by applicable law.

                  Section 17.3 FORECLOSURE. If this Security Instrument is
foreclosed by judicial procedure, Lender will be entitled to a judgment
that will provide that if the foreclosure sale proceeds are insufficient to
satisfy the judgment, execution may issue for any amount by which the unpaid
balance of the Debt and Obligations secured hereby exceeds the sale proceeds
payable to Lender, except as otherwise expressly provided in the Note.

                  Section 17.4 NOT RESIDENTIAL TRUST DEED. Borrower warrants
that this Security Instrument is not and will at all times continue not to
be a "residential trust deed" as defined in ORS 86.705(3).

                  Section 17.5 FORECLOSURE. Legal expenses and attorneys' fees
payable by Borrower under any provisions of this Security Instrument shall
include, without limitation, such expenses, disbursements and fees incurred or
paid by Lender at the pretrial, trial and appellate levels in all judicial and
administrative proceedings.

                  Section 17.6 STATUTE OF FRAUDS NOTICE. The following notice
is made pursuant to ORS 41.580(1)(h), (2) and (3):

                  UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
                  MADE BY LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND
                  OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR
                  HUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
                  RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE
                  SIGNED BY LENDER TO BE ENFORCEABLE.

                  Section 17.7 MATURITY DATE. The maturity date of the Note is
November 10, 2004.

                  Section 17.8 GRANTOR; BENEFICIARY. Borrower herein is and
shall be deemed a "Grantor" and Lender herein is and shall be deemed a
"Beneficiary's," as the terms "Grantor" and "Beneficiary" are defined and used
in Oregon Revised Statutes Chapter 86.

                                      -31-
<PAGE>

                  Section 17.9 ORS 93.040 WARNING. THIS INSTRUMENT WILL NOT
ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF
APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNGING OR ACCEPTING THIS
INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE
APPROPRIRATE CITY OR COUNTY PLANNING DEPARTMENT OT VERIFY APPROVED USES AND TO
DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED
IN ORS 30.930.

                  Section 17.10 RIGHTS UNDER ORS 86.705 TO 86.795. Lender shall
specifically have the rights granted under ORS 86.705 to 86.795, including the
right to foreclose by advertisement and sale and right to foreclose this
Security Instrument as a mortgage.

                      Article 18 - GROUND LEASE PROVISIONS

                  Section 18.1 THE GROUND LEASE. The provisions of Section 9.3
of the Loan Agreement are hereby incorporated by reference into this
Security Instrument to the same extent and with the same force as if fully set
forth herein.

                                      -32-
<PAGE>

                  IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed
by Borrower as of the day and year first above written.

                                       GLIMCHER LLOYD CENTER, LLC
                                       a Delaware limited liability company

WITNESS:                               By:      Glimcher Properties Limited
                                                Partnership, a Delaware limited
                                                partnership, its sole member

/s/ Laura E. Bordeau                   By:      Glimcher Properties Corporation,
--------------------                            a Delaware corporation, its sole
Name: Laura E. Bordeau                          general partner

/s/ Faith Stubbs                       By: /s/ George A. Schmidt
----------------                           ---------------------
Name:  Faith Stubbs                        Name:  George A. Schmidt
                                           Title: Executive Vice
                                                  President

<PAGE>

STATE OF                            )
                                    )   ss.:
COUNTY OF                           )

         On this 10th day of October,  2001 before me,  Notary  Public in and
for said state, personally appeared George A. Schmidt personally known to
me or proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity and that by his signature on the
instrument, the person or the entity on behalf of which the person acted,
executed the instrument.

         WITNESS my hand and official seal.

                                 /s/ Barbara B. Howison
                                 ----------------------------
                                 Notary Public
                                 Print Name: Barbara B. Howison
                                 [SEAL]

                                       Commission
                                    Expiration: 7/02/05
                                                -------

<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

PARCEL 1:

Parcel 1 of PARTITION PLAT 1999-146, in the City of Portland, County of
Multnomah and State of Oregon.

PARCEL2:

A tract of land situated in the Southwest one-quarter of Section 26, and
the Northwest one-quarter of Section 35, Township 1 North, Range 1 East of the
Willamette Meridian, in the City of Portland, County of Multnomah and State of
Oregon, said tract being all of Blocks 201,202, 203, and Lots 3, 4, 5, 6, 7 and
8, Block 204, HOLLADAY'S ADDITION TO EAST PORTLAND, in the City of Portland,
County of Multnomah and State of Oregon.

TOGETHER WITH those portions of vacated NE 11th Street, NE 12th Street and
NE 13th Street, which inured thereto by reason of vacation thereof.

EXCEPTING THEREFROM those portions lying within NE Halsey Street and NE
Weidler Street, being those portions conveyed to the City of Portland for street
purposes by Deed recorded September 20, 1957, in Book 1863, Page 141, and by
Deed recorded April 4, 1958, in Book 1891, Page 374, and by Ordinance No. 56365,
May 21, 1929, and Resolution No. 20159, June 1931. Said Parcel 2 being more
particularly described as follows:

Beginning at a point that bears North along the West line of said Block
204, a distance of 10.00 feet from the Southwest corner thereof; thence North
along the West line of said Block 204, a distance of 90.00 feet to the Northwest
corner of Lot 3, Block 204; thence East along the North line of said Lot 3, a
distance of 99.99 feet to the Northeast corner thereof; thence North along the
West line of Lots 7 and 8, said Block 204, a distance of 90.00 feet to a point
10.00 feet South of the North line of Block 204; thence East on a line parallel
with the North line of Blocks 204, 203, 202 and 201, a distance of 879.93 feet
to a point that bears South 10.00 feet from the Northeast corner of said Block
201; thence South along the East line of said Block 201, a distance of 180.00
feet to a point 10.00 feet North of the Southeast corner thereof; thence West
parallel with the South line of Blocks 201,202, 203 and 204, a distance of
979.92 feet to the point of beginning.

PARCEL 3:

A tract of land situated in the Southwest one-quarter of Section 26,
Township 1 North, Range 1 East of the Willamette Meridian, in the City of
Portland, County of Multnomah and State of Oregon, said tract being all of
Blocks 223, 224, 225 and Lots 1, 2, 3, 4, 5 and 6 of Block 226, HOLLADAY'S
ADDITION TO EAST PORTLAND, in the City of Portland, County of Multnomah and
State of Oregon.

                                       1

<PAGE>

TOGETHER WITH those portions of vacated NE 11th Street, NE 12th Street and
NE 13th Street which inured thereto by reason of vacation thereof.

EXCEPTING THEREFROM those portions lying within NE Weidler Street as
conveyed to the City of Portland for street purposes by Deed recorded September
20, 1957, in Book 1863, Page 141, and those portions lying within NE Broadway as
taken by the City of Portland for street purposes by Ordinance No. 57721,
December 11, 1929 and Resolution No. 19786 and the Plat thereof, August 6, 1930
and Ordinance No. 56365, May 21, 1929 and Resolution 20159, June, 1931. Said
Parcel 3 being more particularly described as follows:

Beginning at a point on the West line of said Block 223, said point being
North 10.00 feet from the Southwest corner thereof; thence North along the West
line of said Block 223, a distance of 180.01 feet to a point that bears South
10.00 feet from the Northwest corner thereof; thence East parallel with the
North line of said Blocks 223, 224, 225 and 226, a distance of 879.93 feet to a
point on the East line of Lot 1, Block 226, said point being South 10.00 feet
from the Northeast corner thereof; thence South along the East line of Lots 1
and 2, said Block 226, a distance of 90.00 feet to the Northwest corner of Lot
6, said Block 226; thence East along the North line of said Lot 6, a distance of
99.99 feet to the Northeast corner thereof; thence South along the East line of
Lot 6 and Lot 5, said Block 226, a distance of 90.00 feet to a point that bears
North 10.00 feet from the Southeast corner of said Block 226; thence West,
parallel with the South line of said Blocks 226, 225, 224 and 223, a distance of
979.92 feet to the point of beginning.

PARCEL 33:

A tract of land situated in the Northeast quarter of Section 35, Township 1
North, Range 1 East of the Willamette Meridian, in the City of Portland, County
of Multnomah and State of Oregon, and being a portion of Blocks 174 and 175,
HOLLADAY'S ADDITION TO EAST PORTLAND, City of Portland, EXCEPT the East 10 feet
of Block 175, and the East 10 feet and the South 10 feet of Block 174, as
dedicated for public right of way pursuant to instrument recorded on April 4,
1958, in Book 1891, Page 374 and recorded on July 23, 1951, in Book 1488, Page
216, Multnomah County Deed Records, and TOGETHER WITH those portions of NE
Clackamas Street, NE Wasco Street and NE 15th Avenue, inuring thereto as vacated
pursuant to Ordinance No. 166704, recorded on December 23, 1993, in Book 2806,
Page 281, as amended by instrument recorded on December 23, 1993, in Book 2806,
Page 306, Multnomah County Deed Records, and subject to the rights of the public
in and to those portions of Blocks 174 and 175 dedicated for public right of way
pursuant to Ordinance No. 166704 and as further described in Dedication Deeds
recorded on December 23, 1993, in Book 2806, Page 262, and Book 2806, Page 277,
which instrument was re-recorded on July 15, 1994, in Recorder's Fee No.
94108110, and further re-recorded on August 1, 1994, as Recorder's Fee No.
94116499. Said Parcel 33 of land being described as follows:

Beginning at a point on the center line of NE 15th Avenue and being located
North 00E00'00" East, a distance of 40.00 feet from the center line of NE
Multnomah Street and NE 15th Avenue and running thence North 00E00'00" East on
the center line of NE 15th Avenue, a distance of 535.79 feet to the Westerly
line of relocated NE 16th Avenue, the
                                       2
<PAGE>

beginning of a non-tangent 293.00 foot radius curve left (radius point
bears North 58E09'05" East); thence on said Westerly line, also being the
Northeasterly line of Parcels 4708-1e-V1 and 4708-1d-V2 and the Southwesterly
line of Parcel 4708-1d-D and the Easterly line of Parcel 4708-1d-V2, Parcel
4708-2a-V and the West line of Parcels 708-2a-D and -1c-D, the following
courses: on said curve through a central angle of 29E28'01" (the long chord of
which bears South 46E34'52" East, a distance of 149.03 feet), an arc distance of
150.69 feet to the beginning of a tangent 207.00 foot radius curve right; thence
on said curve through a central angle of 61E18' 52" (the long chord of which
bears South 30E39'26" East, a distance of 211.10 feet), an arc distance of
221.52 feet to the end thereof; thence South 00E00'00" West, a distance of
251.76 feet to a point located North 00E00'00" East, a distance of 10.00 feet
and South 90E00'00" West, a distance of 14.08 feet from the Southeast corner of
Block 174; thence North 90E00'00" West on the North line of property conveyed to
the City of Portland for street purposes recorded on July 23, 1951, in Book
1488, Page 216, and recorded on April 4, 1958, in Book 1891, Page 374, a
distance of 215.89 feet to the point of beginning.

PARCEL 38:

A tract of land situated in the Northeast one-quarter of Section 35,
Township 1 North, Range 1 East of the Willamette Meridian, in the City of
Portland, County of Multnomah and State of Oregon, said tract being part of
Blocks 161,172 and 173, HOLLADAY'S ADDITION TO EAST PORTLAND.

TOGETHER WITH that portion of NE Hassalo Street, vacated by Ordinance No.
59118, and that portion of NE Holladay Way, vacated by Ordinance No. 156681, and
a portion of NE 15th Avenue, vacated by Ordinance No. 59118, and a portion of NE
16th Avenue and all of Tax Lot 1, vacated by Ordinance Nos. 156681, and 157954.

EXCEPTING that parcel conveyed to the City of Portland for widening of NE
Multnomah Street as recorded in Book 1488, Page 216, and subject to the rights
of the public in and to those portions of Block 173 dedicated for public right
of way pursuant to Ordinance No. 166704 and as further described in Dedication
Deed recorded December 23, 1993, Book 2806, Page 262, Deed Records of Multnomah
County. The said Parcel 38 herein described being more particularly described as
follows:

Beginning at a point that bears South 10.00 feet and East 5.00 feet from
the Northeast corner of Block 160, said HOLLADAY'S ADDITION; thence East along
the South line tracts of land conveyed to the City of Portland for street
purposes by Deed recorded in said Book 1488, Page 216 and parallel with the
North line of said Block 173, a distance of 268.43 feet to the Northwest corner
of Parcel R/W 5223-D described in a Deed for right of way purposes in document
Number 95-36947, recorded March 29, 1995 (correcting a description labeled R/W
4708-1b-D in Ordinance No. 166704, recorded December 23, 1993, recorded in Book
2806, Page 281), said point being South 10.00 feet and East 13.45 feet of the
Northeast corner of Block 173; thence along the Westerly line of said Document
95-36947, along the arc of a non tangent 13.00 foot radius curve to the right
through a central angle of 17E17'28" , an arc distance of 3.92 feet to a point
of tangency (chord bears South 13E02'51" East 3.91 feet); thence South 4E24'08"
East 65.14 feet to the end of said Westerly line; thence South 3E04'54" West, a
distance of 20.19 feet; thence along the arc
                                       3
<PAGE>

of a 270.00 foot radius curve to the right through a central angle of
48E09'07" (the long chord of which bears South 27E09'28" West, 220.29 feet), a
distance of 226.91 feet to a point of non tangency; thence South 50E43'48" West,
a distance of 37.52 feet; thence South 57E06'35" West a distance of 112.62 feet
to the most Westerly corner of said Tax Lot 1 as described in Ordinance No.
157954; thence along the Southerly and Westerly lines of the tract described in
Ordinance No. 156681 the following courses: North 52E07'22" West, a distance of
30.47 feet to an intersection with a 214.00 foot radius curve; thence along the
arc of a 214.00 foot radius curve to the right through a central angle of
34E01'27" (the long chord of which bears South 37E50'53" West 125.22 feet), a
distance of 127.08 feet to a point on the Westerly extension of the North line
of NE Holladay Street; thence West along said Westerly extension a distance of
123.16 feet to a point that bears East 30.00 feet from the Southwest corner of
Lot 4, said Block 161; thence along the arc of a 174.98 foot radius curve to the
left through a central angle of 90E00'00" (the long chord of which bears North
45E00'00" East 247.46 feet), a distance of 274.86 feet to a point of tangency,
said point being South 25.02 feet and East 5.00 feet from the Northeast corner
of Lot 8, said Block 161; thence North a distance of 275.02 feet to the point of
beginning.

PARCEL 44:

A tract of land situated in the North one-half of Section 35, Township 1
North, Range 1 East of the Willamette Meridian, in the City of Portland, County
of Multnomah and State of Oregon, said tract being all of Blocks 152, 153, 160
and a portion of Block 161, HOLLADAY'S ADDITION TO EAST PORTLAND.

TOGETHER WITH that portion of vacated NE Hassalo Street and NE 14th Avenue
and NE Holladay Way, being those vacated portions which inured to said blocks by
reason of vacation thereof.

EXCEPTING those parcels conveyed to the City of Portland by Deeds recorded
in Book 1177, Page 22 and Book 1488, Page 214, Deed Records of Multnomah County.
Said Parcel 44 being more particularly described as follows:

Beginning at a point that bears South 10.00 feet and East 10.00 feet from
the Northwest corner of said Block 153; thence East on a line 10.00 feet South
of and parallel with the North line of said Blocks 153 and 160, a distance of
454.96 feet to the Northwest corner of that tract described in Ordinance No.
156681, recorded in Book 1887, Page 1818, said point being South 10.00 feet and
East 5.00 feet from the Northeast corner of said Block 160; thence South
parallel with the East line of said Blocks 160 and 161, a distance of 275.02
feet to a point of curve; thence along the arc of a 174.98 foot radius curve to
the right, through a central angle of 90E00'00" (the long chord of which bears
South 45E00'00" West 247.46 feet), a distance of 274.86 feet to a point that
bears East 30.00 feet from the Southwest corner of Lot 4, Block 161; thence West
along the South line of Blocks 161 and 152, a distance of 279.98 feet to a point
that bears East 10.00 feet from the Southwest corner of Block 152; thence North
parallel with the West line of said Blocks 152 and 153, a distance of 450.00
feet to the point of beginning.

                                       4
<PAGE>

PARCEL E-I (OVERHEAD BRIDGE)
A LEASEHOLD INTEREST

In a 50.00 foot wide air space tract as set forth in that certain
Air-Rights Lease dated July 20, 1989, recorded on August 28, 1989, in Book 2232
at Page 464, by and between the City of Portland, as lessor, and Si-Lloyd
Associates Limited Partnership, as lessee, for an existing elevated vehicular
bridge across NE Halsey Street, the tract being adjacent to Blocks 136 and 203,
HOLLADAY'S ADDITION TO EAST PORTLAND, said tract being situated in the Southwest
one-quarter of Section 26 and the Northwest one-quarter of Section 35, Township
1 North, Range 1 East of the Willamette Meridian, in the City of Portland,
County of Multnomah and State of Oregon, and more particularly described as
follows:

Beginning at a point on the East line of said Block 203 at the North line
of NE Halsey Street as established 40.00 feet from the center line thereof by
deed recorded in Book 1891, Page 374, Deed Records of Multnomah County, said
point being North 10.00 feet from the Southeast corner thereof; thence East
along said established North line of NE Halsey Street, a distance of 50.00 feet;
thence South a distance of 80.00 feet to the South line of said established NE
Halsey Street; thence West along the South line a distance of 50.00 feet to a
point on the East line of said Block 136; thence North a distance of 80.00 feet
to the point of beginning.

PARCEL E-2 (TUNNEL)

A leasehold interest as set forth in that certain Subsurface Lease dated
July 20, 1989, recorded on August 28, 1989, in Book 2232 at Page 494, by and
between the City of Portland, as lessor, and Si-Lloyd Associates Limited
Partnership, as lessee, in the following described property:

A tract of land situated in the Southwest one-quarter of Section 26, and
the Northwest one-quarter of Section 35, Township 1 North, Range 1 East of the
Willamette Meridian, in the City of Portland, County of Multnomah and State of
Oregon, said tract being a portion of NE Halsey Street as widened to an 80.00
feet width of deed recorded April 4, 1958, in Book 1891, Page 374, Deed Records
of said Multnomah County, said tract being a part of Blocks 136, 137, 202 and
203 and the adjacent street thereto as shown on the plat of HOLLADAY'S ADDITION
TO EAST PORTLAND, said tract being more particularly described as follows:

Beginning at a point that bears East along the center line of said NE
Halsey 410.00 feet from the center line of NE 10th Street, said beginning point
being West 80.00 feet and South 30.00 feet from the Southeast corner of said
Block 203; thence North a distance of 40.00 feet to the North line of NE Halsey
Street as now established by said deed; thence East along said line of NE Halsey
Street, a distance of 325.00 feet to a point that bears North 10.00 feet and
West 15.00 feet from the Southeast corner of said Block 202; thence South
5E11'40" East a distance of 55.23 feet to a point thence South 53E14'28" East a
distance of 41.77 feet to a point on the South line of NE Halsey Street as now
established, said point being South 10.00 feet and East 23.46 feet from the
Northeast corner of Block 137; thence West along said South line of NE Halsey
Street, a distance of 363.46 feet to a point that bears South 10.00 feet and
West 80.00 feet from the Northeast corner of said Block 136: thence North a
distance of 40.00 feet to the point of beginning.
                                       5
<PAGE>

PARCEL E-4 (TUNNEL)

A leasehold interest as set forth in that certain Subsurface Lease dated
July 20, 1989, recorded on August 28, 1989, in Book 2232 at Page 494, by and
between the City of Portland, as lessor, and Si-Lloyd Associates Limited
Partnership, as lessee, in the following described property:

A tract of land situated in the Southwest one-quarter of Section 26,
Township 1 North, Range 1 East of the Willamette Meridian, in the City of
Portland, County of Multnomah and State of Oregon, said tract being a portion of
Block 203, 224 and 225 and the adjoining streets as shown on the plat of
HOLLADAY'S ADDITION TO EAST PORTLAND, and more particularly described as
follows:

Beginning at the Southeast corner of said Block 224 and running thence West
along the South line thereof, a distance of48.11 feet; thence North 64E42'00"
West a distance of 23.40 feet to a point on the North line of NE Weidler Street
as widened by deed to the City of Portland, recorded in Book 1863, Page 141,
Deed Records of said Multnomah County; thence East along said line of NE Weidler
Street, a distance of 236.83 feet; thence South 44E46'30" West, a distance of
14.09 feet to a point on the South line of said Block 225, said point being East
97.64 feet from the Southwest corner thereof; thence West along said South line
of Block 225, a distance of 63.36 feet; thence South 36E53'00" West, a distance
of 87.52 feet to a point on the South line of NE Weidler Street as widened by
said Book 1863, Page 141; thence West along said South line a distance of 61.14
feet to a point that bears South 10.00 feet and West 19.38 feet from the
Northeast corner of said Block 203; thence North 36E53'00" East a distance of
87.52 feet to a point that bears East 33.14 feet from the Southeast corner of
said Block 224; thence West a distance of 33.14 feet to the point of beginning.

PARCEL E-5 (SKYBRIDGE EASEMENT)

A tract of land situated in the Northwest one-quarter, Section 35, Township
I North, Range I East of the Willamette Meridian, in the City of Portland,
County of Multnomah and State of Oregon, said tract being an easement for an
enclosed overhead pedestrian bridge between Block 115 and 98, HOLLADAY'S
ADDITION TO EAST PORTLAND, and as contained in the Second Amendment and
Restatement of Easement Agreement recorded October 23, 1990, Book 2355, Page
1856, and more particularly described as follows:

Commencing at a point which bears North 20.00 feet and East 10.00 feet from
the Southwest corner of Block 114 of said HOLLADAY'S ADDITION, said point being
on the East line of NE 9th Avenue as widened to an 80.00 foot width by deed
recorded in Book 1865, Page 292, Deed Records of Multnomah County; thence North
along the East line of said NE 9th Avenue 250.50 feet to the point of beginning
of the tract herein to be described; thence West at 90E to said East line of NE
9th Avenue 80.00 feet to the West line of said NE 9th Avenue; thence North along
said West line 33.00 feet; thence East at 90E to said West line 80.00 feet to
the East line of said NE 9th Avenue; thence South along said East line 33.00
feet to the point of beginning.

                                       6

<PAGE>

PARCEL E-6

Together with those rights and easements constituting rights in real
property created defined and limited by that certain Construction, Operation and
Reciprocal Easement Agreement, dated July 19, 1990, recorded September 5, 1990,
Book 2340, Page 1635, amended December 23, 1993, Book 2806, Page 272, and
recorded April 29, 1994, as Recorder's Fee No. 94068247, between Si-Lloyd
Associates Limited Partnership, an Indiana limited partnership and Nordstroms,
Inc., a Washington corporation; and that certain Second Amendment to
Construction, Operation and Reciprocal Easement Agreement, recorded January 6,
2000, Recorder's Fee No. 2000-001863 over the following described property:

A tract of land situated in the Northwest one-quarter of Section 35,
Township 1 North, Range 1 East of the Willamette Meridian, in the City of
Portland, County of Multnomah and State of Oregon, said tract being a portion of
Blocks 114 and 115 of HOLLADAY'S ADDITION TO EAST PORTLAND, and being more
particularly described as follows:

Commencing at the Southwest corner of said Block 114, HOLLADAY'S ADDITION;
thence North along the West line of said Block 114 and the West line of a tract
dedicated for street purposes by deed recorded in Book 1865, Page 292, Multnomah
County Deed Records, a distance of 140.00 feet; thence East parallel with the
South line of said Block 114, a distance of 10.00 feet to a point in the East
line of said dedicated tract and the point of beginning of the tract herein to
be described; thence North along the East line of said dedicated tract and
parallel with the West line of said Blocks 114 and 115 a distance of 324.67
feet; thence East 15.67 feet; thence South 15.00 feet; thence East 17.33 feet to
a point of curve; thence along the arc of a 5.17 foot radius curve to the right
through a central angle of 90E00'00" an are length of 8.12 feet, said curve is
subtended by a chord which bears South 45E00'00" East 7.31 feet; thence East
116.83 feet; thence South 20.42 feet; thence East 23.25 feet; thence South
251.08 feet; thence South 45E00'00" West 46.67 feet; thence West 145.25 feet to
the point of beginning.

PARCEL E-7

Rights and benefits of those certain easements created pursuant to that
certain Memorandum of Lease dated August 29, 1990, recorded on September 5,
1990, in Book 2340 at Page 1384, by and between Si-Lloyd Associates Limited
Partnership, as Lessor, and The May Department Stores Company, as Lessee, for
maintenance and repair of existing footings which support the Southeast deck of
the basement level and a non exclusive irrevocable easement to attach and
maintain the pedestrian bridges from the Southeast parking deck and Southwest
parking deck to the Meier and Frank building.

PARCEL E-8

Together with those rights and easements constituting rights in real
property created, defined and limited by that certain Easement Agreement by and
between Glimcher Lloyd Venture, LLC, a Delaware limited liability company and
Sears, Roebuck and Co., a New York corporation. recorded January 6, 2000 in
Recorder's Fee No. 2000-001862, in the Clerk's Office of Multnomah County, State
of Oregon.

                                       7
<PAGE>

                                    EXHIBIT B

                                  GROUND LEASE

Air-Rights Lease by and between Si-Lloyd Associates Limited Partnership, an
Indiana limited partnership and the City of Portland, a municipal corporation of
the State of Oregon, dated July 20, 1989 and recorded August 28, 1989 in Book
2232, Page 464, as amended by Amendment to Lease Agreement by and between City
of Portland, a municipal corporation of the State of Oregon, the lessor and
Si-Lloyd Associates Limited Partnership, a Delaware limited partnership, the
lessee, dated September 14, 1998 and recorded September 25, 1998 as Instrument
No 98172463, and assigned to Glimcher Lloyd Venture, LLC, a Delaware limited
liability company by Assignment of Lease from Si-Lloyd Associates Limited
Partnership, a Delaware limited partnership, all in the Clerk's Office of
Multnomah County, Oregon.

Subsurface Lease by and between the City of Portland, a municipal
corporation of the State of Oregon and Si-Lloyd Associates Limited Partnership,
an Indiana limited partnership, dated July 20, 1989 and recorded August 28, 1989
in Book 2232, Page 494, as amended by Amendment to Lease Agreement by and
between City of Portland, a municipal corporation of the State of Oregon, the
lessor and Si-Lloyd Associates Limited Partnership, a Delaware limited
partnership, the lessee, dated September 14, 1998 and recorded September 25,
1998 as Instrument No 98172464, and assigned to Glimcher Lloyd Venture, LLC, a
Delaware limited liability company by Assignment of Lease from Si-Lloyd
Associates Limited Partnership, a Delaware limited partnership, in the Clerk's
Office of Multnomah county, Oregon.

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