Document:

Record and return to:

Principal Commercial Funding, LLC
801 Grand Avenue
Des Moines, IA  50392-1360
ATTN: Jeff Holdorf
      Inv - CRE Closing

                        DEED OF TRUST, SECURITY AGREEMENT

                             AND ASSIGNMENT OF RENTS

                                     752672

A. THIS DEED OF TRUST (as the same may from time to time  hereafter be modified,
supplemented or amended,  this "Deed of Trust") is made as of  ________________,
2000, by and between ACI FINANCING L.L.C., a Missouri limited liability company,
having its  principal  place of business  and post office  address at 104 Armour
Road,  North Kansas City,  Missouri  64116,  as trustor  hereinafter  "Borrower"
("Borrower" to be construed as "Borrowers" if the context so requires),  RUSSELL
J.  KREIKEMEIER,  a Member  of the  Nebraska  State  Bar  Association,  having a
principal  place of business  and post office  address at 3427 North 128 Circle,
Omaha,  Nebraska 68164, as "Trustee",  and PRINCIPAL COMMERCIAL FUNDING,  LLC, a
Delaware  limited  liability  company,  having a principal place of business and
post office address c/o Principal Capital  Management,  LLC at 801 Grand Avenue,
Des Moines, Iowa 50392-1450, as beneficiary hereinafter "Lender".

   WITNESSETH:

B. Borrower is justly  indebted to Lender for money borrowed (the "Loan") in the
original principal sum of Four Million Three Hundred Thousand and 00/100 Dollars
($4,300,000.00)  (the "Loan Amount")  evidenced by Borrower's secured promissory
note of even date  herewith,  made payable and  delivered to Lender,  (as may be
modified,  amended,  supplemented,  extended or  consolidated in writing and any
note(s)  issued in exchange  therefor or  replacement  thereof)  (the "Note") in
which Note Borrower promises to pay to Lender the Loan Amount, together with all
accrued and unpaid interest  thereon,  interest  accrued at the Default Rate (if
any),  Late  Charges (if any),  the Make Whole  Premium (if any),  and all other
obligations  and liabilities due or to become due to Lender pursuant to the Loan
Documents and all other amounts,  sums and expenses paid by or payable to Lender
pursuant to the Loan Documents and the Environmental Indemnity (collectively the
"Indebtedness")  until the  Indebtedness  has been paid,  but in any event,  the
unpaid  balance (if any)  remaining  due on the Note shall be due and payable on
September 1, 2010 or such earlier date  resulting from the  acceleration  of the
Indebtedness by Lender (the "Maturity Date").  Capitalized terms used herein and
not otherwise  defined shall have those meanings given to them in the other Loan
Documents.

<PAGE>

C. NOW, THEREFORE,  to secure the payment of the Indebtedness in accordance with
the  terms  and  conditions  of  the  Loan   Documents,   and  all   extensions,
modifications,  and renewals  thereof and the  performance  of the covenants and
agreements  contained  therein,  and also to secure  the  payment of any and all
other Indebtedness, direct or contingent, that may now or hereafter become owing
from  Borrower  to  Lender  in  connection  with  the  Loan  Documents,  and  in
consideration  of the Loan  Amount  in hand  paid,  receipt  of which is  hereby
acknowledged,  Borrower does by these presents irrevocably convey to Trustee, in
Trust,  with POWER OF SALE exercisable  pursuant to the Nebraska Trust Deeds Act
ss. 76-1001 et seq., Nebr.  R.R.S.,  for the benefit and security of Lender, its
successors and assigns  forever,  that certain real estate and all of Borrower's
estate,  right,  title and interest  therein,  located in the county of Douglas,
state of Nebraska,  more particularly described in Exhibit A attached hereto and
made a part  hereof  (the  "Land"),  which  Land,  together  with the  following
described property,  rights and interests, is collectively referred to herein as
the "Premises".

D.  Together  with  Borrower's  interest  as lessor in and to all Leases and all
Rents,  which  are  pledged  primarily  and on a  parity  with  the Land and not
secondarily.

E.  Together  with all and singular  the  tenements,  hereditaments,  easements,
appurtenances,  passages,  waters, water courses, riparian rights, sewer rights,
rights in trade names,  licenses,  permits and  contracts  and all other rights,
liberties  and  privileges  of any kind or character in any way now or hereafter
appertaining to the Land,  including but not limited to, homestead and any other
claim at law or in  equity as well as any  after-acquired  title,  franchise  or
license and the reversion and reversions and remainder and remainders thereof.

F.  Together  with  the  right  in the  case  of  foreclosure  hereunder  of the
encumbered  property for Lender to take and use the name by which the  buildings
and all other  improvements  situated on the Premises are commonly known and the
right to manage and operate the said buildings  under any such name and variants
thereof.

G.  Together  with all right,  title and  interest  of  Borrower  in any and all
buildings  and  improvements  of every  kind and  description  now or  hereafter
erected or placed on the said Land and all materials  intended for construction,
reconstruction, alteration and repairs of such buildings and improvements now or
hereafter erected thereon, all of which materials shall be deemed to be included
within the Premises  immediately upon the delivery thereof to the Premises,  and
all fixtures now or hereafter  owned by Borrower and attached to or contained in
and used in  connection  with the  Premises  including,  but not limited to, all
machinery, motors, elevators, fittings, radiators, awnings, shades, screens, and
all  plumbing,  heating,  lighting,  ventilating,  refrigerating,  incinerating,
air-conditioning and sprinkler equipment and fixtures and appurtenances thereto;
and all items of furniture,  furnishings,  equipment and personal property owned
by Borrower used or useful in the operation of the Premises; and all renewals or
replacements  of all of the aforesaid  property owned by Borrower or articles in
substitution therefor,  whether or not the same are or shall be attached to said
buildings or improvements in any manner (collectively,  the "Improvements");  it
being  mutually  agreed,  intended and

                                       2
<PAGE>

declared that all the aforesaid  property  owned by Borrower and placed by it on
the Land or used in connection with the operation or maintenance of the Premises
shall,  so far as  permitted  by law, be deemed to form a part and parcel of the
Land and for the  purpose  of this Deed of Trust to be Land and  covered by this
Deed of Trust,  and as to any of the  property  aforesaid  which does not form a
part and parcel of the Land or does not  constitute a "fixture" (as such term is
defined in the Uniform  Commercial  Code) this Deed of Trust is hereby deemed to
be, as well,  a security  agreement  under the Uniform  Commercial  Code for the
purpose of creating  hereby a security  interest in such property which Borrower
hereby grants to Lender as secured party.

H.  Together  with all right,  title and interest of Borrower,  now or hereafter
acquired, in and to any and all strips and gores of land adjacent to and used in
connection with the Premises and all right, title and interest of Borrower,  now
owned or hereafter acquired, in, to, over and under the ways, streets, sidewalks
and alleys adjoining the Premises.

I.  Together  with all funds now or  hereafter  held by Lender  under any escrow
security  agreement or under any of the terms hereof,  including but not limited
to funds held under the  provisions of the Loan  Agreement,  insurance  proceeds
from all insurance policies required to be maintained by Borrower under the Loan
Documents and all awards,  decrees,  proceeds,  settlements or claims for damage
now or hereafter  made to or for the benefit of Borrower by reason of any damage
to,  destruction  of or taking of the Premises or any part thereof,  whether the
same shall be made by reason of the  exercise of the right of eminent  domain or
by condemnation or otherwise (a "Taking").

J. TO HAVE AND TO HOLD the same unto Trustee,  Trustee's successors and assigns,
upon the trusts, covenants and agreements herein expressed.

K. Borrower represents that it shall forever warrant and defend the title to the
Premises  against all claims and demands of all persons  whomsoever  and will on
demand execute any additional instrument which may be required to give Trustee a
valid first lien on all of the Premises, subject to the "Permitted Encumbrances"
set forth in Exhibit B.

L.  Borrower  further  represents  that (i) the  Premises  is not subject to any
casualty  damage;  (ii)  Borrower  has not  received  any written  notice of any
eminent domain or condemnation  proceeding affecting the Premises;  and (iii) to
the best of Borrower's  knowledge following due and diligent inquiry,  there are
no actions,  suits or proceedings  pending,  completed or threatened  against or
affecting  Borrower  or any person or entity  owning an  interest  (directly  or
indirectly) in Borrower ("Interest Owner(s)") or any property of Borrower or any
Interest Owner in any court or before any arbitrator of any kind or before or by
any  governmental  authority  (whether local,  state,  federal or foreign) that,
individually or in the aggregate,  could  reasonably be expected by Lender to be
material to the transaction contemplated hereby.

                                       3
<PAGE>

BORROWER COVENANTS AND AGREES AS FOLLOWS:

1. Borrower shall

    (a)  pay each item of  Indebtedness  secured  by this Deed of Trust when due
         according to the terms of the Loan Documents;

    (b)  pay a Late Charge on any  payment of  principal,  interest,  Make Whole
         Premium  or  Indebtedness  which is not paid on or before  the due date
         thereof to cover the expense involved in handling such late payment;

    (c)  pay on or before the due date thereof any Indebtedness  permitted to be
         incurred  by  Borrower  pursuant  to the Loan  Documents  and any other
         claims  which could  become a lien on the  Premises  (unless  otherwise
         specifically  addressed in paragraph 1(e) hereof),  and upon request of
         Lender exhibit satisfactory evidence of the discharge thereof;

    (d)  complete within a reasonable time, the construction of any Improvements
         now or at any time in process of construction upon the Land;

    (e)  manage,  operate  and  maintain  the  Premises  and keep the  Premises,
         including but not limited to, the  Improvements,  in good condition and
         repair  and free from  mechanics'  liens or other  liens or claims  for
         liens,  provided  however,  that  Borrower  may  in  good  faith,  with
         reasonable  diligence and upon written Notice to Lender within ten (10)
         days after  Borrower has  knowledge of such lien or claim,  contest the
         validity  or amount of any such  lien or claim  and defer  payment  and
         discharge  thereof  during the  pendency of such  contest in the manner
         provided by law, provided that (i) such contest may be made without the
         payment thereof; (ii) such contest shall prevent the sale or forfeiture
         of the  Premises  or any part  thereof,  or any  interest  therein,  to
         satisfy such lien or claim;  (iii)  Borrower shall have obtained a bond
         over such lien or claim  from a bonding  company  acceptable  to Lender
         which has the effect of removing  such lien or  collection of the claim
         or lien so  contested;  and  (iv)  Borrower  shall  pay all  costs  and
         expenses incidental to such contest; and further provided,  that in the
         event of a ruling or adjudication  adverse to Borrower,  Borrower shall
         promptly pay such claim or lien,  shall  indemnify  and hold Lender and
         the  Premises  harmless  from any loss for  damage  arising  from  such
         contest  and shall take  whatever  action  necessary  to prevent  sale,
         forfeiture  or any  other  loss or  damage  to the  Premises  or to the
         Lender.

                                       4
<PAGE>

    (f)  comply,  and cause each lessee or other user of the Premises to comply,
         with  all  requirements  of  law  and  ordinance,  and  all  rules  and
         regulations,   now  or  hereafter   enacted,   by  authorities   having
         jurisdiction  of the Premises and the use  thereof,  including  but not
         limited  to  all  covenants,  conditions  and  restrictions  of  record
         pertaining  to the  Premises,  the  Improvements,  and the use  thereof
         (collectively, "Legal Requirements");

    (g)  subject to the  provisions  of  paragraph  6 hereof,  promptly  repair,
         restore or rebuild  any  Improvements  now or  hereafter  a part of the
         Premises  which  may  become  damaged  or be  destroyed  by  any  cause
         whatsoever,  so that upon  completion  of the repair,  restoration  and
         rebuilding of such  Improvements,  there will be no liens of any nature
         arising  out  of  the   construction   and  the  Premises  will  be  of
         substantially  the same  character  and  quality as it was prior to the
         damage or destruction;

    (h)  if other than a natural person, do all things necessary to preserve and
         keep in full  force and effect its  existence,  franchises,  rights and
         privileges  under the laws of the state of its formation  and, if other
         than its state of formation, the state where the Premises is located;

    (i)  do all things  necessary  to preserve and keep in full force and effect
         Lender's  title  insurance  coverage  insuring the lien of this Deed of
         Trust  as a  first  and  prior  lien,  subject  only  to the  Permitted
         Encumbrances  stated in  Exhibit B and any other  exceptions  after the
         date of this Deed of Trust  approved  in writing  by Lender,  including
         without limitation, delivering to Lender not less than 30 days prior to
         the effective date of any rate adjustment, modification or extension of
         the Note or any other  Loan  Document,  any new  policy or  endorsement
         which may be required to assure Lender of such continuing coverage; and

    (j)  execute  any and all  documents  which may be  required  to perfect the
         security interest granted by this Deed of Trust.

2.   Borrower shall not:

    (a)  make  any  alteration  or  addition   (other  than  normal  repair  and
         maintenance)  to (i)  the  roof  or  any  structural  component  of any
         Improvements on the Premises,  or (ii) the building  operating systems,
         including  but not limited  to, the  mechanical,  electrical,  heating,
         cooling,  or ventilation  systems (other than replacement with equal or
         better  quality and  capacity),  without the prior  written  consent of
         Lender, except such as are required by applicable Legal Requirements;

                                       5
<PAGE>

    (b)  remove or demolish any material  Improvements,  or any portion thereof,
         which at any time constitutes a part of the Premises;

    (c)  cause  or  permit  any  change  to be  made in the  general  use of the
         Premises without Lender's prior written consent;

    (d)  initiate  any or  acquiesce  to a zoning  reclassification  or material
         change in zoning without Lender's prior written consent. Borrower shall
         use all reasonable efforts to contest any such zoning  reclassification
         or change;

    (e)  make or permit any use of the  Premises  that could with the passage of
         time  result  in the  creation  of any  right of use,  or any  claim of
         adverse  possession  or  easement  on,  to or  against  any part of the
         Premises in favor of any person or entity or the public;

    (f)  allow  any of the  following  to occur  (unless a  Permitted  Transfer)
         except as expressly permitted in accordance with the Loan Agreement:

         (i)   a Transfer of all or any portion of the  Premises or any interest
               in the Premises;

         (ii)  a Transfer  of any  ownership  interest in Borrower or any entity
               which owns,  directly or  indirectly,  an interest in Borrower at
               any level of the ownership structure; or

         (iii) in addition to (i) and (ii) above, if the Borrower is a trust, or
               if a trust owns an interest directly or indirectly, in any entity
               which owns an interest in Borrower at any level of the  ownership
               structure, the addition, deletion or substitution of a trustee of
               such trust.

         If any of such  events  occur,  it shall  be null  and  void and  shall
         constitute an Event of Default under the Loan Documents.

         It is understood and agreed that the Indebtedness evidenced by the Note
         is personal to Borrower and in reliance upon the ownership structure of
         Borrower  and in  accepting  the same  Lender has  relied  upon what it
         perceived  as the  willingness  and  ability of Borrower to perform its
         obligations  under the Loan Documents and the  Environmental  Indemnity
         and as lessor under the Leases of the Premises. Furthermore, Lender may
         consent  to  a  Transfer  and  expressly  waive  Borrower's   covenants
         contained in this paragraph  2(f), in writing to Borrower;  however any

                                       6
<PAGE>

         such consent and waiver shall not  constitute  any consent or waiver of
         such covenants as to any Transfer other than that for which the consent
         and waiver was expressly granted. Furthermore,  Lender's willingness to
         consent to any Transfer  and waive  Borrower's  covenants  contained in
         this  paragraph  2(f),   implies  no  standard  of   reasonableness  in
         determining  whether or not such consent  shall be granted and the same
         may be based upon what Lender solely deems to be in its best interest.

         For purposes of the Loan Documents,  the following terms shall have the
         respective meanings set forth below:

         "Transfer" or "Transferred" shall mean with respect to the Premises, an
         interest in the Premises, or an ownership interest or interest therein:

         (i)   a sale,  assignment,  transfer,  conveyance or other  disposition
               (whether voluntary, involuntary or by operation of law);

         (ii)  the creation,  sufferance  or granting of any lien,  encumbrance,
               security interest or collateral  assignment (whether voluntarily,
               involuntarily  or by  operation  of  law),  other  than  the lien
               hereof,  the  leases of the  Premises  assigned  to  Lender,  the
               Permitted   Encumbrances   and  those  liens  which  Borrower  is
               contesting in accordance with the provisions of paragraph 1(e);

         (iii) the  issuance or other  creation  of  ownership  interests  in an
               entity;

         (iv)  the  reconstitution or conversion from one entity to another type
               of entity; or

         (v)   a merger,  consolidation,  reorganization  or any other  business
               combination.

         "Permitted Transfer" shall mean:

         (i)   a minor (as  reasonably  determined  by Lender)  conveyance of an
               interest in the Premises by Borrower, such as a utility easement,
               and for which  Lender  has given its prior  written  consent  and
               imposed   such   conditions   as  Lender  deems   advisable   and
               appropriate;

         (ii)  a sale, assignment,  transfer or conveyance of all or any portion
               of the Premises or an interest in the Premises for which Borrower
               has  complied  with all of the  Property  Transfer  Requirements,
               provided however, in no event shall any such Transfers exceed two
               in number throughout the term of the Loan; or

         (iii) any of the following  Transfers  for which  Borrower has complied
               with all of the Ownership Transfer Requirements as applicable and
               Lender has given its prior  written  consent,  which shall not be

                                       7

<PAGE>
               unreasonably  withheld or delayed,  (and in connection  with such
               consent,  Lender may impose any  conditions it wishes in its sole
               discretion);

               (A)   a sale, assignment, transfer, or conveyance of an ownership
                     interest or interest therein;

               (B)   the issuance or other creation of ownership interests in an
                     entity;

               (C)   the reconstitution or conversion from one entity to another
                     type of entity; or a merger, consolidation,  reorganization
                     or any other business combination.

         (iv)  a Transfer of membership interest in Borrower to an entity formed
               by Maxus  Realty  Trust,  Inc.  as part of an up-REIT / down-REIT
               transaction  for  which  Borrower  has  complied  with all of the
               Specific Transfer Requirements as applicable and Lender has given
               its prior written consent.

         "Property Transfer Requirements" are all of the following:

         1.    Prior  review and  approval of the  proposed  purchaser  or other
               transferee  and the subject  transaction  by Lender,  at Lender's
               sole  discretion.  Review  of the  proposed  purchaser  or  other
               transferee and the subject  transaction  shall encompass  various
               factors,  including, but not limited to, the proposed purchaser's
               or other transferee's  creditworthiness,  financial strength, and
               real  estate  management  and  leasing  expertise  as well as the
               proposed  transaction's effect on the Premises, the Borrower, and
               other security for the Loan;

         2.    Payment to Lender of an  assumption  fee equal to the greater of:
               (a) one percent (1%) of the principal balance of the Note; or (b)
               $15,000.00;   provided,   however,   that  Lender  will   require
               $15,000.00  of such fee to be paid at the  beginning  of Lender's
               review process,  and such sum shall be  nonrefundable  and earned
               upon  receipt  by  Lender  whether  or  not  the  transaction  is
               ultimately  completed or Lender ultimately  approves the proposed
               purchaser or other transferee;

         3.    Receipt,   at   Borrower's   expense,   of  either  (at  Lender's
               discretion)  a new ALTA  standard  loan policy or an  endorsement
               updating

<PAGE>

               the Lender's existing loan policy in the full amount of the Loan,
               in form  and by an  issuer  satisfactory  to  Lender,  and  which
               insures  this Deed of Trust to be a first and prior lien  subject
               only to those exceptions which were previously approved by Lender
               and provides coverage against usury and mechanic's liens;

         4.    Receipt  by  Lender of copies  of all  relevant  information  and
               documentation  relating to or  required  by Lender in  connection
               with the proposed  transfer  including but not limited to (a) the
               organizational  documents  of  the  proposed  transferee  and  an
               opinion  of  counsel   satisfactory  to  Lender  as  to  its  due
               formation,  valid existence and authority to enter into and carry
               out the proposed transaction as well as the proposed transferee's
               compliance  with the  representations  and warranties in the Loan
               Agreement  regarding  the  proposed   transferee's  status  as  a
               Single-Purpose  Entity;  (b) the  deeds or other  instruments  of
               transfer and documents  relating to the assignment and assumption
               of  Leases;   (c)  evidence  of  compliance  with  the  insurance
               requirements contained in the Loan Documents;  and (d) compliance
               with such other closing  requirements as are customarily  imposed
               by Lender in connection with such transactions;

         5.    Execution,   delivery,   acknowledgment   and   recordation,   as
               applicable,   of  new,  revised  and/or  replacement   assumption
               agreements,   loan   modification   agreements,   indemnification
               agreements,  escrow security  agreements,  security  instruments,
               financing  statements,  UCCs,  new or  revised  letters of credit
               and/or guarantees in form and substance satisfactory to Lender;

         6.    Payment  of outside  counsel  fees and  costs,  other  applicable
               professional's  fees and  costs,  taxes,  recording  fees and the
               like, and any other fees and costs incurred; and

         7.    Receipt  by  Lender  of 60 days  advance  written  notice  of the
               proposed Transfer in question.

         "Ownership  Transfer  Requirements"  are all of the  Property  Transfer
         Requirements which Lender deems appropriate in its discretion,  as well
         as a reasonable  processing  fee to be determined by Lender;  provided,
         however,  that  (i) with  respect  to item 2 of the  Property  Transfer
         Requirements,  the 1% component of the fee shall be prorated  (subject,
         however,  to the $15,000 minimum) based on Lender's  calculation of the
         effective percentage interest in Borrower transferred,  and (ii) item 3
         of

                                       9

<PAGE>

         the  Property  Transfer  Requirements  shall be  required,  at Lender's
         discretion,  only  in  the  event  of  (A)  a  merger,   consolidation,
         reorganization   or  any   other   business   combination,   or  (B)  a
         reconstitution or conversion from one entity to another type of entity.

         "Specific  Transfer  Requirements" are all of the following:  (i) Maxus
         Realty  Trust,  Inc.  retains a minimum 50%  ownership  interest in and
         retains management and control of Borrower; (ii) Lender receives notice
         of such transfer  within thirty (30) days of the  consummation  of such
         transfer  along  with  appropriate   documentation  thereof  (including
         organizational  documentation evidencing the formation and existence of
         any entity to which an interest is transferred);  (iii) Lender receives
         a  reaffirmation  of the  obligations  of the  Guarantor(s)  under  the
         Guaranty or an assumption of the obligations of the  guarantor(s) by an
         individual(s)   or  entity(ies)   acceptable  to  Lender  in  its  sole
         discretion;  (iv)  transfers of  membership  interest in Borrower to an
         entity  formed by Maxus  Realty  Trust,  Inc.  as part of an  up-REIT /
         down-REIT  transaction,  shall not exceed two in number  throughout the
         term of the Loan; and (v) Lender receives a reasonable fee for handling
         each such transfer not to exceed $1,000.00 per Transfer.

         3.    (a)  Borrower shall pay or cause to be paid  when due and  before
                    any penalty  attaches or interest accrues all general taxes,
                    special  taxes,   assessments   (including  assessments  for
                    benefits from public works or improvements whenever begun or
                    completed),  utility charges,  water charges,  sewer service
                    charges,  common area maintenance  charges, if any, vault or
                    space  charges  and  all  other  like  charges   against  or
                    affecting  the Premises or against any property or equipment
                    located on the Premises, or which might become a lien on the
                    Premises,  and  shall,  within  10 days  following  Lender's
                    request,  furnish  to  Lender a  duplicate  receipt  of such
                    payment.  If any such tax,  assessment or charge may legally
                    be paid in  installments,  Borrower may, at its option,  pay
                    such tax, assessment or charge in installments.

               (b)  If Borrower desires to contest any tax, assessment or charge
                    relating to the  Premises,  Borrower may do so by paying the
                    same in full, under protest,  in the manner provided by law;
                    provided, however, that

                    (i)  if contest of any tax, assessment or charge may be made
                         without the payment thereof, and

                                       10
<PAGE>

                    (ii) such contest  shall have the effect of  preventing  the
                         collection   of  the  tax,   assessment  or  charge  so
                         contested and the sale or forfeiture of the Premises or
                         any part thereof or any interest therein to satisfy the
                         same,

                    then Borrower may in its  discretion  and upon the giving of
                    written notice to Lender of its intended action and upon the
                    furnishing  to Lender of such security or bond as Lender may
                    require,  contest any such tax, assessment or charge in good
                    faith  and in the  manner  provided  by law.  All  costs and
                    expenses  incidental  to  such  contest  shall  be  paid  by
                    Borrower.  In the event of a ruling or adjudication  adverse
                    to  Borrower,   Borrower   shall   promptly  pay  such  tax,
                    assessment  or charge.  Borrower  shall  indemnify  and save
                    harmless the Lender and the Premises from any loss or damage
                    arising  from any such  contest and shall,  if  necessary to
                    prevent sale,  forfeiture or any other loss or damage to the
                    Premises or to Lender, pay such tax, assessment or charge or
                    take  whatever  action is  necessary  to  prevent  any sale,
                    forfeiture or loss.

         4.    (a)  Borrower  shall  at  all times  keep  in  force (i) property
                    insurance   insuring  all  Improvements  which  now  are  or
                    hereafter  become a part of the Premises for perils  covered
                    by a causes of  loss-special  form insurance  policy with an
                    ordinance  or  law  coverage  endorsement   containing  both
                    replacement cost and agreed amount  endorsements or options;
                    (ii) commercial general liability insurance naming Lender as
                    an additional insured protecting Borrower and Lender against
                    liability for bodily injury or property damage occurring in,
                    on or adjacent to the  Premises in  commercially  reasonable
                    amounts;   (iii)  boiler  and  machinery  insurance  if  the
                    property has a boiler or is an office building;  (iv) rental
                    value  insurance  for the  perils  specified  herein for one
                    hundred  percent  (100%) of the Rents  (including  operating
                    expenses, real estate taxes, assessments and insurance costs
                    which are  lessee's  liability)  for a period of twelve (12)
                    months;  (v) builders risk  insurance  during all periods of
                    construction;  and (vi) insurance  against all other hazards
                    as may be reasonably required by Lender, including,  without
                    limitation,  insurance  against  loss or damage by flood and
                    earthquake.

                (b) All insurance shall be in form, content and amounts approved
                    by Lender and written by an  insurance  company or companies
                    rated A-,  class  size  VIII or  better in the most  current
                    issue of Best's  Insurance  Reports and which is licensed to
                    do business in the state in which the  Premises  are located
                    and domiciled in the United States or a governmental  agency
                    or instrumentality approved by Lender. The policies for such
                    insurance  shall have attached  thereto  standard  mortgagee
                    clauses in favor of and

                                       11
<PAGE>

                    permitting  Lender to collect any and all  proceeds  payable
                    thereunder and shall include a 30 day (except for nonpayment
                    of premium,  in which case, a 10 day) notice of cancellation
                    clause in favor of Lender.  All policies or  certificates of
                    insurance  shall  be  delivered  to and  held by  Lender  as
                    further  security  for the payment of the Note and any other
                    obligations arising under the Loan Documents,  with evidence
                    of  renewal  coverage  delivered  to Lender at least 30 days
                    before the expiration date of any policy. Borrower shall not
                    carry  separate  insurance,  concurrent  in kind or form and
                    contributing  in the  event  of  loss,  with  any  insurance
                    required in the Loan Documents.

         5.    Borrower shall deposit with and pay to Lender the estimated taxes
               and  assessments  assessed or levied  against and next due on the
               Premises and the estimated  premiums for the  insurance  required
               pursuant  to the  Loan  Documents,  all in  accordance  with  the
               requirements of the Loan Agreement.

         6.    In the event of any damage to or destruction of the Premises,  or
               any part thereof:

               (a)  Borrower  will  immediately  notify  Lender  thereof  in the
                    manner  provided  in this  Deed of Trust  for the  giving of
                    notices. Lender shall have the right (which may be waived by
                    Lender in writing) to settle and adjust any claim under such
                    insurance policies required to be maintained by Borrower. In
                    all  circumstances,  the proceeds  thereof  shall be paid to
                    Lender  and  Lender is  authorized  to  collect  and to give
                    receipts  therefor.  Borrower agrees and  acknowledges  that
                    such proceeds  shall be held by Lender without any allowance
                    of  interest  and  that  in  any  bankruptcy  proceeding  of
                    Borrower,  all such  proceeds  shall be  deemed  to be "Cash
                    Collateral"  as that term is defined  in Section  363 of the
                    Bankruptcy  Code.  Provided that no Event of Default exists,
                    Borrower   shall  have  the  right  to  participate  in  any
                    settlement  or  adjustment;   provided,  however,  that  any
                    settlement  or  adjustment  shall be subject to the  written
                    approval of Lender, not to be unreasonably withheld.

               (b)  Such  proceeds,   after  deducting  therefrom  any  expenses
                    incurred by Lender in the collection  thereof (including but
                    not limited to reasonable  attorneys' fees and costs), shall
                    be applied by Lender to pay the Indebtedness  secured hereby
                    including,  but  not  limited  to the  Make  Whole  Premium,
                    whether or not then due and payable, provided, however, that
                    if  no  Event  of  Default   exists  at  the  time  of  such
                    application, no Make Whole Premium shall be due.

                    Notwithstanding anything hereinabove to the contrary,

                                       12
<PAGE>

                    (i)  in the  event  the  casualty  occurs  more than six (6)
                         months  prior  to the  Maturity  Date  and no  Event of
                         Default  exists,  Lender  shall apply such  proceeds as
                         follows:

                         (A)  If the  aggregate  amount of such proceeds is less
                              than  $50,000,  Lender  shall  pay  such  proceeds
                              directly  to  Borrower,  to be held in  trust  for
                              Lender and applied to the cost of  rebuilding  and
                              restoring the Premises.

                         (B)  If the aggregate amount of such proceeds equals or
                              exceeds $50,000 Lender shall disburse such amounts
                              of  the  proceeds  as  Lender   reasonably   deems
                              necessary  for the  repair or  replacement  of the
                              Premises,  subject to the  conditions set forth in
                              paragraph 6(c) below.

                    (ii) in the event (x) an Event of Default exists, or (y) the
                         casualty occurs during the last six (6) months prior to
                         the Maturity Date and Lender determines that the repair
                         and  restoration  of such casualty  cannot be completed
                         prior to the Maturity  Date, or (z) the  conditions set
                         forth in 6(c) are not met, then Lender, in its sole and
                         absolute discretion may either:

                         (A)  declare the entire  Indebtedness to be immediately
                              due and payable and apply all such proceeds to pay
                              the   Indebtedness  in  such  priority  as  Lender
                              elects,  provided,  however,  that if no  Event of
                              Default exists at the time of such application, no
                              Make Whole Premium shall be due; or

                         (B)  disburse such proceeds as Lender  reasonably deems
                              necessary  for the  repair or  replacement  of the
                              Premises  subject to those conditions set forth in
                              paragraph  6(c)  which  Lender  in  its  sole  and
                              absolute discretion may require.

               (c)  (i)  In the event that  Borrower is  to be reimbursed out of
                         the  insurance  proceeds or out of any award or payment
                         received  with  respect to a Taking,  Lender shall from
                         time to time make available  such proceeds,  subject to
                         the following conditions:  (a) there continues to exist
                         no Event of  Default;  (b) the  delivery  to  Lender of
                         satisfactory   evidence  of  the   estimated   cost  of
                         completion of such repair and restoration  work and any

                                       13

<PAGE>

                         architect's certificates, waivers of lien, contractor's
                         sworn  statements,  and other  evidence  of cost and of
                         payment  and  of the  continued  priority  of the  lien
                         hereof  over  any  potential  liens  of  mechanics  and
                         materialmen  (including,   without  limitation,   title
                         policy endorsements) as Lender may require and approve;
                         (c) the  time  required  to  complete  the  repair  and
                         restoration  work and for the income from the  Premises
                         to  return  to the  level it was prior to the loss will
                         not exceed  the  coverage  period of the  rental  value
                         insurance  required  hereunder;   (d)  the  annual  net
                         operating  income from all  approved  executed  Leases,
                         having  at  least  3  years   remaining  prior  to  the
                         expiration  of their  term,  with no uncured  defaults,
                         shall  equal or  exceed  1.25  times  the  annual  debt
                         service on the Note,  and Applied  Communication,  Inc.
                         confirms  in writing to Lender  that it will occupy the
                         Premises after the restoration is completed,  its lease
                         is in full  force  and  effect,  and no  defaults  have
                         occurred  and are  continuing  thereunder;  (e)  Lender
                         approves  the  plans  and  specifications  of such work
                         before such work is commenced if the estimated  cost of
                         rebuilding   and   restoration   exceeds   25%  of  the
                         Indebtedness  or  involves  any  structural  changes or
                         modifications.   If  said   plans  and   specifications
                         substantially  comply with those previously approved by
                         Lender,  Lender's  approval  shall not be  unreasonably
                         withheld;  (f) if the amount of any insurance proceeds,
                         award or other  payment  is  insufficient  to cover the
                         cost of restoring and rebuilding the Premises, Borrower
                         shall pay such cost in excess of such  proceeds,  award
                         or other payment before being entitled to reimbursement
                         out of  such  funds;  (g)  Borrower  pays to  Lender  a
                         non-refundable  processing  fee equal to the greater of
                         $5,000.00 or .25% of the amount of such proceeds within
                         sixty (60) days of the occurrence of any such damage or
                         destruction  and before Lender  disburses any proceeds;
                         and (h) such other conditions to such disbursements, in
                         Lender's  discretion,  as would be customarily required
                         by a  construction  lender  doing  business in the area
                         where the  Premises  is located or which are  otherwise
                         required by any rating agency  rating a  securitization
                         transaction with respect to the Loan.

                    (ii) No payment made by Lender prior to the final completion
                         of the repair or restoration work shall,  together with
                         all payments  theretofore  made, exceed 90% of the cost
                         of such work  performed to the time of payment,  and at
                         all  times the  undisbursed  balance  of said  proceeds
                         shall  be at  least  sufficient  to pay for the cost of
                         completion  of such work  free and clear of all

                                       14
<PAGE>

                         liens. Any proceeds remaining after payment of the cost
                         of rebuilding and  restoration  shall, at the option of
                         Lender,  either  be (a)  applied  in  reduction  of the
                         Indebtedness secured hereby, provided, however, that if
                         no  Event  of  Default  exists  at  the  time  of  such
                         application, no Make Whole Premium shall be due, or (b)
                         paid to Borrower.

                    (iii)Repair  and   restoration  of  the  Premises  shall  be
                         commenced promptly after the occurrence of the loss and
                         shall be prosecuted to completion  diligently,  and the
                         Premises   shall  be  so   restored   and   rebuilt  to
                         substantially  the same  character and quality as prior
                         to such damage and  destruction  and shall  comply with
                         all building codes and zoning requirements.

         (d)   Should such damage or destruction occur after foreclosure or sale
               proceedings  have  been  instituted,  the  proceeds  of any  such
               insurance  policy or policies,  if not applied in  rebuilding  or
               restoration  of the  Improvements,  shall  be used to pay (i) the
               Indebtedness  then due and owing in the  event of a  non-judicial
               sale in such priority as Lender elects, or (ii) the amount due in
               accordance with any decree of foreclosure or deficiency  judgment
               that may be entered in connection with such proceedings,  and the
               balance,  if any,  shall be paid to the  owner of the  equity  of
               redemption if he shall then be entitled to the same, or otherwise
               as any court having jurisdiction may direct.

7.   In the event of the commencement of a Taking affecting the Premises:

     (a)  Borrower  shall notify Lender  thereof in the manner  provided in this
          Deed of Trust for the giving of  notices.  Lender may  participate  in
          such  proceeding,  and Borrower  shall deliver to Lender all documents
          requested by it to permit such participation.

     (b)  Borrower  shall cause the proceeds of any award or other  payment made
          relating to a Taking,  to be paid directly to Lender.  Lender,  in its
          sole and absolute  discretion:  (i) may apply all such proceeds to pay
          the Indebtedness in such priority as Lender elects,  provided however,
          that if no Event of Default exists at the time of such  application no
          Make Whole  Premium shall be due; or (ii) subject to and in accordance
          with the provisions  set forth in paragraph  6(c) above,  may disburse
          such amounts of the proceeds as Lender  reasonably deems necessary for
          the repair or replacement of the Premises.

                                       15

<PAGE>

8.   If by the  laws  of the  United  States  of  America  or of  any  state  or
     governmental  subdivision  having  jurisdiction  over  Borrower  or of  the
     Premises or of the Loan  evidenced by the Loan  Documents or any amendments
     or  modifications  thereof,  any  tax or fee  is due or  becomes  due or is
     imposed upon Lender in respect of the  issuance of the Note hereby  secured
     or the  making,  recording  and  registration  of  this  Deed of  Trust  or
     otherwise  in  connection  with  the  Loan  Documents,   the  Environmental
     Indemnity  or the  Loan,  except  for  Lender's  income or  franchise  tax,
     Borrower covenants and agrees to pay such tax or fee in the manner required
     by such law and to hold  harmless and indemnify  Trustee and Lender,  their
     successors  and assigns,  against any  liability  incurred by reason of the
     imposition of any such tax or fee.

9.   (a) Upon the occurrence of any Event of Default,  Lender may, but need not,
         make any payment or perform any act herein required of Borrower, in any
         form and manner  deemed  expedient  and may, but need not, make full or
         partial  payments of  principal or interest on prior  encumbrances,  if
         any,  and  purchase,  discharge,  compromise  or settle any tax lien or
         other prior lien or title or claim thereof, or redeem from any tax sale
         or  forfeiture   affecting  said  Premises,   or  contest  any  tax  or
         assessment.  All moneys paid for any of the purposes herein  authorized
         and all reasonable  expenses paid or incurred in connection  therewith,
         including but not limited to, reasonable  attorneys' fees and costs and
         reasonable  attorneys'  fees and costs on appeal,  and any other  money
         advanced by Lender to protect the Premises  and the lien hereof,  shall
         be so much  additional  Indebtedness  secured  hereby and shall  become
         immediately due and payable without notice and with interest thereon at
         the Default Rate from the date of expenditure or advance until paid.

     (b) In  making  any  payment  hereby   authorized   relating  to  taxes  or
         assessments or for the purchase, discharge, compromise or settlement of
         any prior lien,  Lender may make such  payment  according  to any bill,
         statement  or  estimate  secured  from the  appropriate  public  office
         without  inquiry into the accuracy  thereof or into the validity of any
         tax, assessment,  sale, forfeiture,  tax lien or title or claim thereof
         or without  inquiry as to the  validity or amount of any claim for lien
         which may be asserted.

10.  If  one or  more  of the  following  events  (herein  called  "Event(s)  of
     Default") shall have occurred:

     (a) failure to pay when due any principal,  interest, Make Whole Premium or
         other  Indebtedness,  utilities,  taxes  or  assessments  or  insurance
         premiums

                                       16
<PAGE>

         required pursuant to the Loan Documents or the Environmental Indemnity,
         and such failure shall have continued for 10 days; or

     (b) Borrower,  Interest  Owner  or  any  guarantor  voluntarily  brings  or
         acquiesces to any of the following: (A) any action for dissolution, act
         of dissolution  or dissolution or the like of Borrower,  Interest Owner
         or any guarantor under the Federal  Bankruptcy Code as now or hereafter
         constituted;  (B) the  filing of a  petition  or answer  proposing  the
         adjudication of Borrower, Interest Owner or any guarantor as a bankrupt
         or its reorganization or arrangement, or any composition, readjustment,
         liquidation,  dissolution or similar relief with respect to it pursuant
         to any present or future federal or state bankruptcy or similar law; or
         (C) the appointment by order of a court of competent  jurisdiction of a
         receiver,  trustee or liquidator of the Premises or any part thereof or
         of Borrower, Interest Owner or any guarantor or of substantially all of
         the assets of Borrower, Interest Owner or any guarantor; or

     (c) one or more of the items set forth in paragraph 10(b) above occur which
         were either not (i) voluntarily brought by Borrower,  Interest Owner or
         any guarantor or (ii) acquiesced in by Borrower,  Interest Owner or any
         guarantor,  and which are not  discharged  or dismissed  within 90 days
         after the action, filing or appointment, as the case may be; or

         With respect to the matters in (b) and (c) above for an Interest  Owner
         only,  no Event of Default  shall  occur until an  interested  party or
         Interest  Owner  asserts  a claim  or  right  against  Borrower  or the
         Premises which in any manner may affect Lender's rights,  remedies,  or
         interests  granted  under  the  Loan  Documents  (whether  or not  such
         assertion is successful).

     (d) with respect to the matters not described in the other subparagraphs of
         this  paragraph  10,  failure to duly observe or perform any  covenant,
         condition or agreement  of the Borrower or any  guarantor  contained in
         this Deed of Trust, the Loan Agreement,  the Guaranty,  the Note or the
         Assignment of Leases from Borrower to Lender or in any other instrument
         or   agreement   which   evidences  or  secures  the  Loan  (the  "Loan
         Documents"),  or in the Environmental  Indemnity and such failure shall
         have  continued  for 30 days  after Notice specifying such  failure  is
         given by Lender to Borrower; or

         If any  failure to observe or perform  under (d) above shall be of such
         nature  that it cannot be cured or  remedied  within 30 days,  Borrower
         shall be entitled to a reasonable period of time to cure or remedy such
         failure  (not to  exceed  90 days  following  the  giving  of  Notice),
         provided

                                       17

<PAGE>

         Borrower  commences the cure or remedy thereof within the 30 day period
         following the giving of Notice and thereafter  proceeds with diligence,
         as determined by Lender, to complete such cure or remedy.

     (e) the  failure  of  Borrower  to  duly  observe  or  perform  any  of the
         covenants,  conditions  and  agreements  of the  Borrower  contained in
         paragraph 2(f) of this Deed of Trust; or

     (f) any representation made by or on behalf of Borrower,  Interest Owner or
         any guarantor regarding the Premises,  the making or delivery of any of
         the Loan  Documents or the  Environmental  Indemnity or in any material
         written  information  provided  by or on behalf of  Borrower,  Interest
         Owner or any  guarantor in  connection  with the Loan shall prove to be
         untrue or inaccurate in any material respect; or

     (g) the failure of  Borrower to give Notice to Lender  within 60 days after
         the death of any individual who is personally liable for any obligation
         under the Loan Documents or the Environmental  Indemnity,  as Borrower,
         indemnitor or guarantor,  whether or not such  individual  had executed
         the Note or this Deed of Trust; or

     (h) subject to the provisions of paragraph 2(f), the failure of Borrower to
         provide  Lender with an assumption  agreement in form and substance and
         executed by a person(s) or entity(ies) acceptable to Lender in its sole
         discretion to assume the obligations of any deceased  individual who is
         personally  liable for any  obligation  under the Loan Documents or the
         Environmental Indemnity, as Borrower,  indemnitor or guarantor, whether
         or not such individual had executed the Note or this Deed of Trust, and
         such failure  shall have  continued for 60 days after the death of such
         individual; or

     (i) the failure of Borrower to remain a Single-Purpose Entity;

     then, in each and every such case,  the whole of said  principal sum hereby
     secured  shall,  at the option of the Lender and without  further notice to
     Borrower, become immediately due and payable together with accrued interest
     thereon,  a Make Whole Premium calculated in accordance with the provisions
     of the Loan Documents and all other Indebtedness, and whether or not Lender
     has exercised said option,  interest  shall accrue on the entire  principal
     balance and any interest or Make Whole Premium or other  Indebtedness  then
     due,  at the Default  Rate until fully paid or if Lender has not  exercised
     said option, for the duration of any Event of Default.

                                       18
<PAGE>

11.  Borrower  agrees  that if Lender  accelerates  the whole or any part of the
     principal  sum hereby  secured,  or applies  any  proceeds  pursuant to the
     provisions  hereof,  Borrower  waives any right to prepay the principal sum
     hereby  secured in whole or in part  without  premium and agrees to pay, as
     yield maintenance  protection and not as a penalty, a "Make Whole Premium".
     However,  in the  event  any  proceeds  from a  casualty  or  Taking of the
     Premises   are   applied   to   reduce   the   principal    balance   under
     the Note, no Make Whole Premium shall be due so long as no Event of Default
     exists at the time of such application.

12.  (a) Upon the  occurrence of any Event of Default,  in addition to any other
         rights or remedies provided in the Loan Documents, at law, in equity or
         otherwise,  Lender  shall have the right to cause the  Premises  or any
         part thereof to be sold  pursuant to the POWER OF SALE granted  herein,
         in order to  accomplish  the object of these  trusts and upon demand by
         Lender, Trustee, without demand on Borrower, shall sell the Premises or
         such part thereof as Trustee in its sole  discretion may deem necessary
         to  accomplish  the  objects of these  trusts  having  first  given all
         statutory  notices (of default or otherwise)  and  thereafter,  if such
         Event of Default has not been cured, of the time and place of such sale
         as  required  by law  pursuant to the  Nebraska  Trust  Deeds Act.  For
         purposes of all notices required  hereunder or pursuant to the Nebraska
         Trustees Act, Borrower  designates the address as set forth in preamble
         to this agreement as the address for all such notices.

     (b) Trustee may  postpone  such sale from time to time by giving  notice of
         such  postponement  in the same manner in which any original  notice of
         sale  was  given  or by an  announcement  or  proclamation  made to the
         persons  assembled  at the  time and  place  previously  appointed  and
         noticed for such sale or postponed  sale,  and on the date of such sale
         or the date to which such sale may have been postponed Trustee may sell
         the  Premises to the highest  bidder.  Lender or its agents may bid and
         purchase at such sale.  Trustee in conducting  said sale may act either
         in person or through the agency of an  auctioneer  and may establish as
         one of the  conditions of such sale that all bids and payments for said
         Premises be made in cash.

13.  Upon such sale, Trustee shall make, execute, and after due payment is made,
     deliver to the  purchaser or purchasers a deed or deeds for the Premises or
     part thereof sold and shall apply the proceeds of the sale, at the election
     of  Lender  first,  to all of the  expenses  of  such  sale  including  the
     reasonable  expenses of this trust or the Trustee and the fees and costs of
     any attorneys for this trust,  environmental audits, the Trustee or Lender,
     all of which  shall  accrue  and  become  due from and  after  any Event of
     Default, together with any sums which

                                       19

<PAGE>

     Trustee or Lender shall have paid for procuring  any abstract,  certificate
     or report of title to the Premises and, second, to principal,  interest and
     any other  Indebtedness and all other sums or amounts due under the Note or
     agreed or  provided  to be paid by  Borrower  herein  or in any other  Loan
     Documents, all in such order as Lender may determine. The remainder of such
     proceeds,  if any,  shall be paid to Borrower or  Borrower's  successors or
     assigns, as their rights may appear.

14.  In the event of such a sale of the  Premises  or any part  thereof  and the
     execution  of a deed or deeds  therefor  under  these  trusts,  any recital
     therein  of the  occurrence  of an Event of  Default  or of the  giving  or
     recording of any notice or demand by Trustee or Lender  regarding such sale
     shall be conclusive  proof  thereof,  and the receipt of the purchase money
     recited therein shall fully discharge the purchaser from any obligation for
     the proper  application  of the proceeds of sale in  accordance  with these
     trusts.

15.  Following the  occurrence of an Event of Default,  unless the same has been
     specifically  waived in writing,  Borrower  shall  forthwith upon demand of
     Trustee or Lender  surrender  to Lender  possession  of the  Premises,  and
     Lender shall be entitled to take actual  possession  of the Premises or any
     part thereof  personally or by its agents or  attorneys,  and Lender in its
     discretion  may, with or without force and with or without  process of law,
     enter  upon  and  take and  maintain  possession  of all or any part of the
     Premises together with all documents,  books, records,  papers and accounts
     of the Borrower or the then owner of the Premises relating thereto, and may
     exclude  Borrower,  its  agents or  assigns  wholly  therefrom,  and may as
     attorney-in-fact or agent of the Borrower, or in its own name as Lender and
     under the powers herein granted:

     (a) hold, operate,  maintain,  repair,  rebuild,  replace,  alter, improve,
         manage or  control  the  Premises  as it deems  judicious,  insure  and
         reinsure  the  same  and any  risks  related  to  Lender's  possession,
         operation  and  management  thereof  and  receive  all  Rents,   either
         personally or by its agents,  and with full power to use such measures,
         legal or equitable,  as in its  discretion it deems proper or necessary
         to enforce the payment or security of the Rents,  including actions for
         the  recovery  of Rent,  actions in  forcible  detainer  and actions in
         distress  for  Rents,  hereby  granting  full  power and  authority  to
         exercise  each and every of the rights,  privileges  and powers  herein
         granted at any and all times hereafter, without notice to Borrower; and

     (b) conduct leasing  activity  pursuant to the provisions of the Assignment
         of Leases.

                                       21

<PAGE>

     Neither Trustee nor Lender shall be obligated to perform or discharge,  nor
     does either hereby undertake to perform or discharge, any obligation,  duty
     or liability under any Lease. Should Trustee or Lender incur any liability,
     loss or damage under any Leases, or under or by reason of the Assignment of
     Leases, or in the defense of any claims or demands  whatsoever which may be
     asserted against Lender or Trustee by reason of any alleged  obligations or
     undertakings  on its  part  to  perform  or  discharge  any  of the  terms,
     covenants or agreements in any Lease, the amount thereof,  including costs,
     expenses and reasonable  attorneys'  fees and costs,  including  reasonable
     attorneys' fees and costs on appeal, shall be added to the Indebtedness and
     secured hereby.

16.  Trustee and Lender in the exercise of the rights and powers  conferred upon
     them shall  have the full power to use and apply the Rents,  less costs and
     expenses of  collection to the payment of or on account of the items listed
     in (a) - (c) below,  at the  election of Lender and in such order as Lender
     may determine.  The manner of the application of Rents, the  reasonableness
     of the costs and  charges to which such Rents are  applied  and the item or
     items  which  shall  be  credited  thereby  shall  be  within  the sole and
     unlimited discretion of Lender.

     (a) to the payment of (i) the expenses of  operating  and  maintaining  the
         Premises, including, but not limited to the cost of management, leasing
         (which shall include  reasonable  compensation  to Trustee,  Lender and
         their  respective  agent or  agents if  management  and/or  leasing  is
         delegated  to an agent or agents),  repairing,  rebuilding,  replacing,
         altering and  improving  the  Premises,  (ii)  premiums on insurance as
         hereinabove authorized,  (iii) taxes and special assessments now due or
         which may hereafter  become due on the  Premises,  and (iv) expenses of
         placing the Premises in such condition as will, in the sole judgment of
         Lender, make it readily rentable;

     (b) to the payment of any  principal,  interest  or any other  Indebtedness
         secured hereby or any deficiency  which may result from any foreclosure
         sale;

     (c) to the payment of established  claims for damages,  if any,  reasonable
         attorneys'  fees and costs and reasonable  attorneys' fees and costs on
         appeal.

     To the extent  that the costs and  expenses  in (a) - (c) above  exceed the
     amounts  collected,  the  excess  shall be added  to the  Indebtedness  and
     secured hereby.

17.  Upon the  occurrence  of any  Event of  Default,  unless  the same has been
     specifically  waived in  writing,  Lender  may  apply to any  court  having

                                       21

<PAGE>

     jurisdiction  for the  appointment  of a  receiver  of the  Premises.  Such
     appointment  may be made  either  before  or after  sale,  without  notice,
     without  regard to the  solvency or  insolvency  of Borrower at the time of
     application  for such receiver and without  regard to the then value of the
     Premises or the adequacy of Lender's  security.  Lender may be appointed as
     such  receiver.  The receiver  shall have power to collect the Rents during
     the pendency of any foreclosure  proceedings and, in case of a sale, during
     the full  statutory  period of  redemption,  if any,  as well as during any
     further times when Borrower,  except for the intervention of such receiver,
     would be entitled to collect such Rents.  In addition,  the receiver  shall
     have all other  powers  which shall be necessary or are usual in such cases
     for the protection,  possession,  control,  management and operation of the
     Premises  during the whole of said period.  The court from time to time may
     authorize  the  receiver  to apply  the net  income  in its  possession  at
     Lender's  election and in such order as Lender may  determine in payment in
     full or in part of those items listed in paragraph 16.

18.  (a) Borrower  agrees  that all  reasonable  costs,  charges  and  expenses,
         including  but not limited to,  reasonable  attorneys'  fees and costs,
         incurred  or  expended  by  Trustee  or  Lender  arising  out  of or in
         connection with any action,  proceeding or hearing, legal, equitable or
         quasi-legal,   including  the  preparation   therefor  and  any  appeal
         therefrom,  in any way affecting or  pertaining to the Loan  Documents,
         the Environmental Indemnity, or the Premises, shall be promptly paid by
         Borrower. All such sums not promptly paid by Borrower shall be added to
         the Indebtedness  secured hereby and shall bear interest at the Default
         Rate  from the date of such  advance  and shall be due and  payable  on
         demand.

     (b) Borrower  hereby agrees that upon the occurrence of an Event of Default
         and the  acceleration  of the principal sum secured hereby  pursuant to
         this Deed of Trust, to the full extent that such rights can be lawfully
         waived, Borrower hereby waives and agrees not to insist upon, plead, or
         in any manner take advantage of, any notice of acceleration,  any stay,
         extension,  exemption,  homestead,  marshaling or moratorium law or any
         law providing for the valuation or  appraisement  of all or any part of
         the Premises  prior to any sale or sales thereof under any provision of
         this Deed of Trust or before or after any decree,  judgment or order of
         any court or  confirmation  thereof,  or claim or exercise any right to
         redeem all or any part of the  Premises  so sold and  hereby  expressly
         waives to the full  extent  permitted  by  applicable  law on behalf of
         itself and each and every person or entity  acquiring any right,  title
         or interest in or to all or any part of the  Premises,  all benefit and
         advantage  of any such laws  which  would  otherwise  be  available  to
         Borrower or any such

                                       22

<PAGE>

     person or entity,  and agrees that neither  Borrower nor any such person or
     entity will invoke or utilize any such law to  otherwise  hinder,  delay or
     impede the exercise of any remedy granted or delegated to Lender herein but
     will  permit the  exercise  of such  remedy as though any such laws had not
     been enacted.  Borrower hereby further  expressly waives to the full extent
     permitted by  applicable  law on behalf of itself and each and every person
     or entity  acquiring any right,  title or interest in or to all or any part
     of the Premises any and all rights of redemption from any sale or any order
     or decree of  foreclosure  obtained  pursuant to provisions of this Deed of
     Trust.

19.  Borrower hereby assigns to Lender  directly and absolutely,  and not merely
     collaterally,  the  interest of Borrower as lessor  under the Leases of the
     Premises and the Rents  payable  under any Lease and/or with respect to the
     use of the Premises, or portion thereof,  including any oil, gas or mineral
     lease, or any  installments  of money payable  pursuant to any agreement or
     any sale of the Premises or any part thereof, subject only to a license, if
     any,  granted  by Lender to  Borrower  with  respect  thereto  prior to the
     occurrence of an Event of Default.  Borrower has executed and delivered the
     Assignment of Leases which grants to Lender specific rights and remedies in
     respect of said Leases and governs the  collection of Rents  thereunder and
     from the use of the Premises, and such rights and remedies so granted shall
     be cumulative of those granted herein.

     The collection of such Rents and the application thereof as aforesaid shall
     not cure or waive any Event of Default or notice of  default  hereunder  or
     invalidate  any act done pursuant to such notice,  except to the extent any
     such Event of Default is fully cured.  Failure or  discontinuance of Lender
     at any time,  or from time to time,  to collect any such  moneys  shall not
     impair in any manner  the  subsequent  enforcement  by Lender of the right,
     power and authority herein conferred on Lender.  Nothing  contained herein,
     including the exercise of any right,  power or authority  herein granted to
     Lender,  shall be, or be construed to be, an  affirmation  by Lender of any
     tenancy,  Lease or option,  or an  assumption  of liability  under,  or the
     subordination  of the  lien or  charge  of this  Deed of  Trust to any such
     tenancy, Lease or option.  Borrower hereby agrees that, in the event Lender
     exercises its rights as provided for in this paragraph or in the Assignment
     of  Leases,  Borrower  waives  any  right  to  compensation  for the use of
     Borrower's  furniture,  furnishings  or  equipment  in the Premises for the
     period such  assignment  of rents or  receivership  is in effect,  it being
     understood  that the Rents  derived from the use of any such items shall be
     applied to Borrower's obligations hereunder as above provided.

                                       23

<PAGE>

20.  All rights and remedies  granted to Trustee or Lender in the Loan Documents
     shall be in addition to and not in limitation of any rights and remedies to
     which it is entitled in equity, at law or by statute, and the invalidity of
     any  right or  remedy  herein  provided  by  reason  of its  conflict  with
     applicable  law or statute shall not affect any other valid right or remedy
     afforded to Trustee or Lender. No waiver of any default or Event of Default
     under any of the Loan Documents  shall at any time thereafter be held to be
     a waiver of any rights of the  Trustee or Lender  hereunder,  nor shall any
     waiver  of a prior  Event of  Default  or  default  operate  to  waive  any
     subsequent  Event of Default or default.  All remedies  provided for in the
     Loan  Documents  are  cumulative  and may, at the  election  of Lender,  be
     exercised alternatively,  successively,  or concurrently. No act of Trustee
     or Lender  shall be  construed  as an  election  to  proceed  under any one
     provision  herein to the  exclusion  of any other  provision  or to proceed
     against one portion of the Premises to the exclusion of any other  portion.
     Time is of the essence under this Deed of Trust and the Loan Documents.

21.  By accepting  payment of any sum secured hereby after its due date,  Lender
     does not waive its right either to require  prompt  payment when due of all
     other sums or  installments  so secured or to declare a default for failure
     to pay such other sums or installments.

22.  The usury  provisions  of  paragraph  6 of the Note and the  limitation  of
     recourse  liability  provisions  of  paragraph  9 of  the  Note  are  fully
     incorporated  herein by reference as if the same were  specifically  stated
     here.

23.  In the event one or more  provisions of the Loan Documents shall be held to
     be invalid,  illegal or  unenforceable  in any  respect,  such  invalidity,
     illegality or unenforceability shall not affect any other provision hereof,
     and the Loan  Documents  shall be  construed as if any such  provision  had
     never been contained herein.

24.  If the payment of the  Indebtedness  secured  hereby or of any part thereof
     shall be extended or varied,  or if any part of the  security be  released,
     all persons now or at any time hereafter liable therefor,  or interested in
     said  Premises,  shall be held to assent to such  extension,  variation  or
     release,  and their liability and the lien and all provisions  hereof shall
     continue in full  force,  the right of  recourse  against all such  persons
     being  expressly  reserved  by Lender  notwithstanding  such  variation  or
     release.

25.  Upon payment in full of the principal sum, interest and other  Indebtedness
     secured by the Loan  Documents,  these presents shall be null and void, and
     Trustee  shall  release  this Deed of Trust  and the lien  hereof by proper
     instrument executed in recordable form.

                                       24

<PAGE>

26.  (a) Borrower hereby grants to Lender and its respective agents,  attorneys,
         employees, consultants,  contractors and assigns an irrevocable license
         and  authorization  to enter  upon and  inspect  the  Premises  and all
         facilities  located  thereon at  reasonable  times.  Lender  shall make
         reasonable  efforts  to  ensure  that the  business  operations  of the
         tenants are not disrupted.

     (b) In  connection  with  any sale or  conveyance  of this  Deed of  Trust,
         Borrower  grants  to  Lender  and  its  respective  agents,  attorneys,
         employees, consultants,  contractors and assigns an irrevocable license
         and  authorization  to  conduct,   at  Lender's  expense,   a  Phase  I
         environmental audit of the Premises.

     (c) In the event there has been an Event of Default or in the event  Lender
         has formed a reasonable belief, based on its inspection of the Premises
         or other factors known to it, that  Hazardous  Materials may be present
         on the  Premises,  then  Borrower  grants to Lender and its  respective
         agents, attorneys, employees,  consultants,  contractors and assigns an
         irrevocable   license  and  authorization  to  conduct,  at  Borrower's
         expense,   environmental  tests  of  the  Premises,  including  without
         limitation, a Phase I environmental audit, subsurface testing, soil and
         ground water testing,  and other tests which may physically  invade the
         Premises or facilities  (the "Tests").  The scope of the Tests shall be
         such as Lender, in its sole discretion,  determines is necessary to (i)
         investigate  the condition of the  Premises,  (ii) protect the security
         interests  created  under  this  Deed  of  Trust,  or  (iii)  determine
         compliance  with  Environmental   Laws,  the  provisions  of  the  Loan
         Documents and the  Environmental  Indemnity and other matters  relating
         thereto.

     (d) The foregoing licenses and authorizations are intended to be a means of
         protection  of Lender's  security  interest in the  Premises and not as
         participation in the management of the Premises.

27.  Within  15 days  after  any  written  request  by any party to this Deed of
     Trust,  the requested  party shall  certify,  by a written  statement  duly
     acknowledged, the amount of principal, interest and other Indebtedness then
     owing on the Note,  the  terms of  payment,  Maturity  Date and the date to
     which interest has been paid.  Borrower shall further  certify  whether any
     defaults,  offsets or  defenses  exist  against  the  Indebtedness  secured
     hereby.  Borrower  shall  also use its best  efforts  to furnish to Lender,
     within 30 days of its request  therefor,  tenant estoppel letters from such
     tenants of the  Premises  as Lender may  require; which

                                       25
<PAGE>

     Lender  shall not  request more  than one (1) time per annum, nor more than
     one (1) time prior to the date of the Securitization Transaction.

28.  Each notice,  consent,  request,  report or other  communication under this
     Deed of Trust or any other Loan  Document  (each,  a  "Notice"),  which any
     party hereto may desire or be required to give to the other shall be deemed
     to be an adequate and sufficient  notice if given in writing and service is
     made by either (i) registered or certified mail, postage prepaid,  in which
     case notice shall be deemed to have been  received  three (3) business days
     following deposit to U.S. mail; or (ii) nationally recognized overnight air
     courier,  next day  delivery,  prepaid,  in which case such notice shall be
     deemed to have been  received one (1) business  day  following  delivery to
     such  nationally  recognized  overnight  air courier.  All Notices shall be
     addressed to Borrower at its address given on the first page hereof,  or to
     Lender at c/o Principal  Capital  Management,  LLC, 801 Grand  Avenue,  Des
     Moines, Iowa 50392-1450,  Attn: Commercial Real Estate Servicing,  Loan No.
     752672,  or to such other  place as any party may by written  notice to the
     other parties designate as a place for service of notice.

29.  Lender,  from time to time, may substitute  another Trustee in place of the
     Trustee named herein,  to execute the trusts hereby created;  and upon such
     appointment, and without conveyance to the successor trustee, the successor
     trustee shall be vested with all the title,  interest,  powers,  duties and
     trusts in the Premises  hereby vested in or conferred  upon Trustee  herein
     named.  Each such  appointment  and  substitution  shall be made by written
     instrument  executed  by the Lender  containing  reference  to this Deed of
     Trust  sufficient  to identify it, which  instrument,  when recorded in the
     office  of the  County  Recorder  of the  county or  counties  in which the
     Premises is situated,  shall be conclusive  proof of proper  appointment of
     the successor trustee. The recital or statement, in any instrument executed
     by Trustee in pursuance of any of said trusts,  of the due authorization of
     any agent of the  Trustee  executing  the same  shall for all  purposes  be
     conclusive proof of such authorization.

30.  Trustee at any time, at Trustee's option, may commence and maintain suit in
     any court of  competent  jurisdiction  and obtain the aid and  direction of
     said  court in the  execution  by it of the  trusts or any of them,  herein
     expressed  or  contained,  and,  in such  suit,  may  obtain  the orders or
     decrees,  interlocutory  or final of said court  directing the execution of
     said trusts,  and confirming and approving  Trustee's acts, or any of them,
     or any sales or  conveyances  made by Trustee,  and  adjudging the validity
     thereof,  and  directing  that  the  purchasers  of the  property  sold and
     conveyed be let into immediate possession thereof, and providing for orders
     of court or other process requiring the Sheriff of the county in which said
     property is situated to place and  maintain  said  purchasers

                                       26
<PAGE>

     in quiet and peaceable possession of the property so purchased by them, and
     the whole thereof.

31.  Borrower has had the  opportunity  to fully  negotiate the terms hereof and
     modify the  draftsmanship  of this Deed of Trust.  Therefore,  the terms of
     this  Deed  of  Trust  shall  be  construed  and  interpreted  without  any
     presumption, inference, or rule requiring construction or interpretation of
     any  provision  of this Deed of Trust  against  the  interest  of the party
     causing this Deed of Trust or any portion of it to be drafted.  Borrower is
     entering into this Deed of Trust freely and voluntarily without any duress,
     economic or otherwise.

32.  Borrower,  forthwith upon request,  at any and all times hereafter,  at the
     expense of  Borrower,  will cause to be made,  executed,  acknowledged  and
     delivered to Trustee,  any and every deed or assurance in law which Trustee
     or counsel of Trustee shall reasonably advise or require for the more sure,
     effectual and  satisfactory  granting and  confirming of said Premises unto
     Trustee.

33.  Trustee  shall  not be  liable  or  responsible  for its acts or  omissions
     hereunder, except for Trustee's own gross negligence or willful default, or
     be liable or responsible for any acts or omissions of any agent,  attorneys
     or employee by him employed hereunder, if selected with reasonable care.

34.  Trustee   accepts  this  trust  when  this  Deed  of  Trust   executed  and
     acknowledged  is made a public  record as provided  by law.  Trustee is not
     obligated  to notify any party  hereto of pending sale under any other deed
     of trust or of any  action or  proceeding  in which  Borrower,  Lender,  or
     Trustee shall be a party unless brought by Trustee.

35.  This Deed of Trust and all provisions  hereof shall inure to the benefit of
     the heirs,  successors  and  assigns of Lender and shall bind the heirs and
     permitted successors and assigns of Borrower.

36.  This Deed of Trust shall be governed by, and construed in accordance  with,
     the laws of the state of Nebraska,  without  regard to its conflicts of law
     principles.

37.  As used herein, the term "Default Rate" means a rate equal to the lesser of
     (i) four percent  (4%) per annum above the then  applicable  interest  rate
     payable under the Note or (ii) the maximum rate allowed by applicable  law.

38.  BORROWER AND LENDER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO
     THE  EXTENT  PERMITTED  BY LAW,  TRIAL BY JURY IN ANY  ACTIONS  BROUGHT  BY
     BORROWER,  TRUSTEE OR LENDER IN CONNECTION WITH THIS DEED OF TRUST,

                                       27
<PAGE>

     ANY OF THE LOAN DOCUMENTS,  THE INDEBTEDNESS  SECURED HEREBY,  OR ANY OTHER
     STATEMENTS OR ACTIONS OF LENDER.

39.  This  Deed of Trust  and the  Indebtedness  secured  hereby is for the sole
     purpose of  conducting  or  acquiring a lawful  business,  professional  or
     commercial  activity  or for  the  acquisition  or  management  of  real or
     personal  property as a  commercial  investment,  and all  proceeds of such
     Indebtedness  shall be used  for said  business  or  commercial  investment
     purpose.  Such  proceeds  will not be used for the purchase of any security
     within the meaning of the Securities  Exchange Act of 1934, as amended,  or
     any regulation  issued  pursuant  thereto,  including  without  limitation,
     Regulations  U, T and X of the Board of  Governors  of the Federal  Reserve
     System.  This is not a  purchase  money  deed of trust  where a  seller  is
     providing financing to a buyer for the payment of all or any portion of the
     purchase  price  and the  Premises  secured  hereby is not a  residence  or
     homestead  or used for  mining,  grazing,  agriculture,  timber or  farming
     purposes.

40.  Unless Lender shall otherwise  direct in writing,  Borrower shall appear in
     and defend all actions or  proceedings  purporting  to affect the  security
     hereunder,  or any right or power of the Lender.  The Lender shall have the
     right to appear in such actions or proceedings.  Borrower shall save Lender
     harmless  from all  costs  and  expenses,  including  but not  limited  to,
     reasonable  attorneys'  fees  and  costs  and  costs  of  a  title  search,
     continuation  of abstract and  preparation of survey  incurred by reason of
     any action,  suit,  proceeding,  hearing,  motion or application before any
     court or  administrative  body in and to which  Lender  may be or  become a
     party by reason hereof.  Such proceedings  shall include but not be limited
     to condemnation,  bankruptcy,  probate and administration  proceedings,  as
     well as any other action,  suit,  proceeding,  right, motion or application
     wherein  proof  of  claim  is by law  required  to be  filed or in which it
     becomes  necessary  to defend or uphold  the terms of this Deed of Trust or
     the Loan Documents or otherwise purporting to affect the security hereof or
     the rights or powers of Lender.  All money  paid or  expended  by Lender in
     that regard,  together with  interest  thereon from date of such payment at
     the Default Rate shall be additional  Indebtedness secured hereby and shall
     be immediately due and payable by Borrower without notice.

41.  Upon  the  occurrence  of an  Event of  Default,  unless  the same has been
     specifically waived in writing, all Rents collected or received by Borrower
     shall be accepted and held for Lender in trust and shall not be  commingled
     with the funds and property of Borrower, but shall be promptly paid over to
     Lender.

42.  If more than one, all  obligations  and  agreements  of Borrower and of any
     general partner of Borrower are joint and several.

                                       28

<PAGE>

43.  This Deed of Trust may be executed in counterparts,  each of which shall be
     deemed  an  original;  and such  counterparts  when  taken  together  shall
     constitute but one agreement.

     IN  WITNESS  WHEREOF,  Borrower  has  caused  this Deed of Trust to be duly
executed and delivered as of the date first above written.

                                       ACI FINANCING, L.L.C.,
                                       a Missouri limited liability company

                                       By: MAXUS REALTY TRUST, INC.,
                                           a Missouri corporation,
                                           its sole member

                                           By /s/ Daniel W. Pishny

                                       29
<PAGE>

STATE OF MISSOURI       )
                        ) ss
COUNTY OF CLAY          )

   On this, the 25th of July,  2000,  before me, the undersigned  Notary Public,
personally  appeared,  Dan Pishny,  President  of MAXUS  REALTY  TRUST,  INC., a
Missouri  corporation,  and sole  member of ACI  FINANCING  L.L.C.,  a  Missouri
limited liability company, who after first being placed upon his oath, did swear
that he executed the  foregoing  instrument,  and that he  acknowledged  that he
executed  the same as his free act and deed on  behalf  of the  corporation  and
limited liability company in his capacity as President of the Corporation.

   In witness whereof I hereunto set my hand and official seal.

                                    /s/ Catherine Whorton
                                    Notary Public Notary Seal
                                    State of Missouri
                                    Platte County

My Commission Expires: Oct. 5, 2002

<PAGE>

                                   EXHIBIT A

                                (TO BE ATTACHED)

<PAGE>
                                   EXHIBIT B
                                (TO BE ATTACHED)MULTIFAMILY DEED OF TRUST,
                             ASSIGNMENT OF RENTS AND
                               SECURITY AGREEMENT

         THIS  MULTIFAMILY  DEED OF  TRUST,  ASSIGNMENT  OF RENTS  AND  SECURITY
AGREEMENT (the "Instrument") is dated as of the 10th day of August,  2000, among
the  trustor,  NORTH  WINN  ACQUISITION,  L.L.C.,  a limited  liability  company
organized and existing under the laws of Missouri,  whose address is 104 Armour,
North Kansas City, Missouri 64116,  ("Borrower"),  ASSURED QUALITY TITLE COMPANY
("Trustee"),  and the  beneficiary,  PRUDENTIAL  MUTLIFAMILY  MORTGAGE,  INC., a
corporation organized and existing under the laws of Delaware,  whose address is
1593 Spring Hill Road, Suite 400, Vienna, Virginia 22182 ("Lender").

         Borrower, in consideration of the Indebtedness and the trust created by
this Instrument  irrevocably  grants,  conveys and assigns to Trustee, in trust,
with power of sale,  the  Mortgaged  Property,  including but not limited to the
Land located in the County of Clay, State of Missouri and described in Exhibit A
attached to this Instrument.

         TO SECURE TO LENDER the  repayment  of the  Indebtedness  evidenced  by
Borrower's  Multifamily  Note payable to Lender dated as of August 10, 2000, and
maturing  on  September  1,  2007  (the  "Note")  in  the  principal  amount  of
$1,986,000.00,   and  all  renewals,   extensions  and   modifications   of  the
Indebtedness,  and the  performance  of the covenants and agreements of Borrower
contained in the Loan Documents.

         Borrower  covenants  that Borrower is lawfully  seized of the Mortgaged
Property and has the right, power and authority to grant,  convey and assign the
Mortgaged  Property,  that the  Mortgaged  Property  is  unencumbered,  and that
Borrower will warrant and defend  generally the title to the Mortgaged  Property
against all claims and demands, subject to any easements and restrictions listed
in a schedule of exceptions to coverage in any title insurance  policy issued to
Lender  contemporaneously  with the execution and recordation of this Instrument
and insuring Lender's interest in the Mortgaged Property.

Covenants.  Borrower and Lender covenant and agree as follows:

         1.       DEFINITIONS. The following terms, when used in this Instrument
(including when used in the above recitals), shall have the following meanings:

         (a) "Borrower"  means all persons or entities  identified as "Borrower"
in the first paragraph of this  Instrument,  together with their  successors and
assigns.

         (b)  "Collateral   Agreement"  means  any  separate  agreement  between
Borrower and Lender for the purpose of establishing replacement reserves for the
Mortgaged  Property,  establishing  a fund to assure  completion  of  repairs or
improvements  specified  in  that  agreement,   or  assuring  reduction  of  the
outstanding  principal balance of the Indebtedness if the occupancy of or income
from the Mortgage Property does not increase to a level

                                        1

<PAGE>
specified  in that  agreement,  or any other  agreement  or  agreements  between
Borrower  and Lender  which  provide  for the  establishment  of any other fund,
reserve or account.

         (c)  "Environmental  Permit"  means  any  permit,   license,  or  other
authorization  issued  under and  Hazardous  Materials  Law with  respect to any
activities or businesses conducted on or in relation to the Mortgaged Property.

         (d) "Event of  Default"  means the  occurrence  of any event  listed in
Section 22.

         (e)  "Fixtures"  means all property which is so attached to the Land or
the  Improvements as to constitute a fixture under  applicable  law,  including:
machinery,   equipment,  engines,  boilers,  incinerators,   installed  building
materials;  systems and equipment  for the purpose of supplying or  distributing
heating,  cooling,  electricity,  gas, water,  air, or light;  antennas,  cable,
wiring and conduits used in connection with radio,  television,  security,  fire
prevention,  or fire  detection or otherwise used to carry  electronic  signals;
telephone systems and equipment;  elevators and related machinery and equipment;
fire detection, prevention and extinguishing systems and apparatus; security and
access control systems and apparatus;  plumbing systems; water heaters,  ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers,
dryers and other appliances;  light fixtures,  awnings,  storm windows and storm
doors; pictures,  screens,  blinds, shades,  curtains and curtain rods; mirrors;
cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants;
swimming pools; and exercise equipment.

         (f) "Governmental Authority" means any board, commission, department or
body  of any  municipal,  county,  state  or  federal  government  unit,  or any
subdivision of any of them, that has or acquires  jurisdiction over the Mortgage
Property or the use, operation or improvement of the Mortgaged Property.

         (g) "Hazardous  Materials"  means petroleum and petroleum  products and
compounds containing them, including gasoline,  diesel fuel and oil; explosives;
flammable materials;  radioactive materials;  polychlorinated biphenyls ("PCBs")
and  compounds   containing  them;  lead  and  lead-based  paint;   asbestos  or
asbestos-containing  materials  in any  form  that is or could  become  friable;
underground  or  above-ground  storage  tanks,  whether empty or containing  any
substance;  any  substance  the presence of which on the  Mortgaged  Property is
prohibited by any federal, state or local authority; any substance that requires
special  handling;  and any other  material  or  substance  now or in the future
defined as a "hazardous  substance,"  "hazardous  material,"  "hazardous waste,"
"toxic substance,"  "toxic pollutant,"  "contaminant," or "pollutant" within the
meaning of any Hazardous Materials Law.

         (h)  "Hazardous  Materials  Laws" means all federal,  state,  and local
laws,  ordinances  and  regulations  and  standards,  rules,  policies and other
governmental  requirements,  administrative  rulings  and  court  judgments  and
decrees in effect now or in the future and including all amendments, that relate
to  Hazardous  Materials  and apply to  Borrower or to the  Mortgaged  Property.
Hazardous Materials Laws include, but are not

                                        2

<PAGE>
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C.  Section 9601, et seq.,  the Resource  Conservation  and Recovery
Act, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C.
Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and
the Hazardous Materials Transportation Act, 49 U.S.C. Section 5105, et seq., and
their state analogs.

         (i)  "Impositions"  and  "Impositions  Deposits" are defined in Section
7(a).

         (j) "Improvements" means the buildings,  structures,  improvements, and
alterations now  constructed or at any time in the future  constructed or placed
upon the Land, including any future replacements and additions.

         (k)  "Indebtedness"  means the principal of, interest on, and all other
amounts  due at any time  under,  the Note,  this  Instrument  or any other Loan
Document,  including prepayment premiums,  late charges,  default interest,  and
advances as provided in Section 12 to protect the security of this Instrument.

         (l)      [Intentionally omitted]

         (m) "Key Principal" means the natural person(s) or entity identified as
such at the foot of this Instrument,  and any person or entity who becomes a Key
Principal  after the date of this  Instrument  and is  identified  as such in an
amendment or supplement to this Instrument.

         (n) "Land" means the land described in Exhibit A.

         (o) "Leases" means all present and future leases, subleases,  licenses,
concessions or grants or other  possessory  interests now or hereafter in force,
whether oral or written,  covering or affecting the Mortgaged  Property,  or any
portion of the Mortgaged  Property  (including  proprietary  leases or occupancy
agreements  if  Borrower  is  a  cooperative  housing   corporation),   and  all
modifications, extensions or renewals.

         (p)  "Lender"  means the entity  identified  as  "Lender"  in the first
paragraph of this  Instrument and its successors and assigns,  or any subsequent
holder of the Note.

         (q) "Loan Documents"  means the Note, this Instrument,  all guaranties,
all indemnity agreements, all Collateral Agreements, O&M Programs, and any other
documents  now or in  the  future  executed  by  Borrower,  Key  Principal,  any
guarantor or any other person in connection with the loan evidenced by the Note,
as such documents may be amended from time to time.

         (r)  "Loan  Servicer"  means  the  entity  that  from  time  to time is
designated  by Lender to Lender to collect  payments  and  deposits  and receive
notices  under the  Note,  this  Instrument  and any other  Loan  Document,  and
otherwise to service the loan evidenced by

                                        3

<PAGE>
the Note for the  benefit  of Lender.  Unless  Borrower  receives  notice to the
contrary,  the Loan  Servicer is the entity  identified as "Lender" in the first
paragraph of this Instrument.

         (s)  "Mortgaged  Property"  means all of Borrower's  present and future
right, title and interest in and to all of the following:

                  (1)      the Land;

                  (2)      the Improvements;

                  (3)      the Fixtures;

                  (4)      the Personalty;

                  (5)      all current and future rights,  including air rights,
                           development  rights,  zoning rights and other similar
                           rights   or    interests,    easements,    tenements,
                           rights-of-way,  strips  and  gores of land,  streets,
                           alleys,  roads, sewer rights,  waters,  watercourses,
                           and appurtenances  related to or benefitting the Land
                           or the Improvements,  or both, and all rights-of-way,
                           streets, alleys and roads, which may have been or may
                           in the future be vacated;

                  (6)      all proceeds paid or to be paid by any insurer of the
                           Land, the Improvements,  the Fixtures, the Personalty
                           or any other part of the Mortgage  Property,  whether
                           or not Borrower  obtained  the  insurance to Lender's
                           requirement;

                  (7)      all awards,  payments and other  compensation made or
                           to  be  made  by  any  municipal   state  or  federal
                           authority with respect to the Land, the Improvements,
                           the Fixtures, the Personalty or any other part of the
                           Mortgaged   Property,   including   any   awards   or
                           settlements  resulting from condemnation  proceedings
                           or the  total or  partial  taking  of the  Land,  the
                           Improvements,  the  Fixtures,  the  Personalty or any
                           other part of the Mortgaged  Property under the power
                           of eminent  domain or  otherwise  and  including  any
                           conveyance in lieu thereof;

                  (8)      all contracts,  options and other  agreements for the
                           sale of the Land, the Improvements, the Fixtures, the
                           Personalty   or  any  other  part  of  the  Mortgaged
                           Property  entered  into  by  Borrower  now  or in the
                           future,  including  cash or  securities  deposited to
                           secure performance by parties of their obligations;

                  (9)      all  proceeds  from  the  conversion,   voluntary  or
                           involuntary,  of  any  of  the  above  into  cash  or
                           liquidated  claims,  and the  right to  collect  such
                           proceeds;

                                        4

<PAGE>
                  (10)     all Rents and Leases;

                  (11)     all earnings,  royalties, accounts receivable, issues
                           and profits from the Land,  the  Improvements  or any
                           other  part  of  the  Mortgaged  Property,   and  all
                           undisbursed  proceeds  of the  loan  secured  by this
                           Instrument  and, if Borrower is a cooperative  hosing
                           corporation,   maintenance   charges  or  assessments
                           payable by shareholders or residents;

                  (12)     all Imposition Deposits;

                  (13)     all  refunds  or  rebates  of   Impositions   by  any
                           municipal,  state or federal  authority  or insurance
                           company  (other than  refunds  applicable  to periods
                           before  the real  property  tax  year in  which  this
                           Instrument is dated);

                  (14)     all  tenant  security  deposits  which  have not been
                           forfeited by any tenant under any Lease; and

                  (15)     all  names  under  or  by  which  any  of  the  above
                           Mortgaged  Property may be operated or known, and all
                           trademarks, trade names, and goodwill relating to any
                           of the Mortgaged Property.

         (t)  "Note"  means the  Multifamily  Note  described  on page 1 of this
Instrument,  including  the  Acknowledgment  and  Agreement of Key  Principal to
Personal  Liability for Exceptions to  Non-Recourse  Liability (if any), and all
schedules, riders, allonges and addenda, as such Multifamily Note may be amended
from time to time.

         (u) "O&M Program" is defined in Section 18(a).

         (v)   "Personalty"   means  all  furniture,   furnishings,   equipment,
machinery,  building  materials,  appliances,  goods,  supplies,  tools,  books,
records (whether in written or electronic form),  computer  equipment  (hardware
and software) and other tangible  personal  property (other than Fixtures) which
are used now or in the future in connection  with the  ownership,  management or
operation of the Land or the  Improvements  or are located on the Land or in the
Improvements,  and  any  operating  agreements  relating  to  the  Land  or  the
Improvements,  and any  surveys,  plans and  specifications  and  contracts  for
architectural, engineering and construction services relating to the Land or the
Improvements  and all other  intangible  property  and  rights  relating  to the
operation  of,  or used  in  connection  with,  the  Land  or the  Improvements,
including all governmental permits relating to any activities on the Land.

         (w) "Property Jurisdiction" is defined in Section 30(a).

         (x)   "Rents"   means   all  rents   (whether   from   residential   or
non-residential   space),   revenues  and  other  income  of  the  Land  or  the
Improvements, including packing fees, laundry

                                        5

<PAGE>
and vending machine income and fees and charges for food,  health care and other
services  provided at the Mortgaged  Property,  whether now due, past due, or to
become due, and deposits forfeited by tenants.

         (y)  "Taxes"  means all taxes,  assessments,  vault  rentals  and other
charges,  if any, general,  special or otherwise,  including all assessments for
schools, public betterments and general or local improvements, which are levied,
assessed  or imposed by any public  authority  or  quasi-public  authority,  and
which, if not paid, will become a lien, on the Land or the Improvements.

         (z)  "Transfer"  means  (A)  a  sale,  assignment,  transfer  or  other
disposition  (whether  voluntary,  involuntary  or by operation of law); (B) the
granting,  creating or attachment of a lien,  encumbrance  or security  interest
(whether  voluntary,  involuntary  or by operation of law);  (C) the issuance or
other  creation  of  an  ownership  interest  in a  legal  entity,  including  a
partnership  interest,  interest  in a limited  liability  company or  corporate
stock; (D) the withdrawal,  retirement,  removal or involuntary resignation of a
partner in a partnership or a member or manager in a limited liability  company;
or (E) the merger, dissolution, liquidation, or consolidation of a legal entity.
"Transfer"  does not include (i) a  conveyance  of the  Mortgaged  Property at a
judicial or  non-judicial  foreclosure  sale under this  Instrument  or (ii) the
Mortgaged  Property  becoming  part of a  bankruptcy  estate by operation of law
under the United  States  Bankruptcy  Code.  For  purposes of defining  the term
"Transfer," the term "partnership" shall mean a general  partnership,  a limited
partnership,  a joint venture and a limited liability partnership,  and the term
"partner" shall mean a general partner, a limited partner and a joint venturer.

         2.       UNIFORM COMMERCIAL CODE SECURITY AGREEMENT.  This
Instrument is also a security  agreement  under the Uniform  Commercial Code for
any of the Mortgaged  Property which,  under applicable law, may be subject to a
security interest under the Uniform  Commercial Code, whether acquired now or in
the  future,   and  all  products  and  cash  and  non-cash   proceeds   thereof
(collectively,  "UCC  Collateral"),  and  Borrower  hereby  grants  to  Lender a
security  interest in the UCC Collateral.  Borrower shall execute and deliver to
Lender, upon Lender's request, financing statements, continuation statements and
amendments,  in such form as Lender  may  require to  perfect  or  continue  the
perfection of this security  interest.  Borrower  shall pay all filing costs and
all costs and expenses of any record  searches  for  financing  statements  that
Lender may require.  Without the prior written consent of Lender, Borrower shall
not create or permit to exist any other lien or security  interest in any of the
UCC  Collateral.  If an Event of Default has occurred and is continuing,  Lender
shall have the remedies of a secured party under the Uniform Commercial Code, in
addition  to  all  remedies  provided  by  this  Instrument  or  existing  under
applicable  law. In exercising  any  remedies,  Lender may exercise its remedies
against the UCC Collateral separately or together,  and in any order, without in
any way affecting the  availability of Lender's other remedies.  This Instrument
constitutes  a financing  statement  with  respect to any part of the  Mortgaged
Property which is or may become a Fixture.

                                        6

<PAGE>
         3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.

         (a) As  part  of  the  consideration  for  the  Indebtedness,  Borrower
absolutely and unconditionally  assigns and transfers to Lender all Rents. It is
the  intention  of Borrower to  establish a present,  absolute  and  irrevocable
transfer  and  assignment  to Lender of all Rents and to  authorize  and empower
Lender to collect and receive all Rents without the necessity of further  action
on the part of Borrower.  Promptly  upon request by Lender,  Borrower  agrees to
execute and deliver  such  further  assignments  as Lender may from time to time
require.  Borrower and Lender intend this  assignment of Rents to be immediately
effective and to constitute an absolute present assignment and not an assignment
for  additional  security  only.  For purposes of giving effect to this absolute
assignment of Rents, and for no other purpose, Rents shall not be deemed to be a
part of the  "Mortgaged  Property,"  as that term is defined  in  Section  1(s).
However, if this present,  absolute and unconditional assignment of Rents is not
enforceable by its terms under the laws of the Property  Jurisdiction,  then the
Rents  shall  be  included  as a part of the  Mortgaged  Property  and it is the
intention of the Borrower that in this  circumstance  this Instrument create and
perfect a lien on Rents in favor of Lender,  which lien shall be effective as of
the date of this Instrument.

         (b) After the  occurrence of an Event of Default,  Borrower  authorizes
Lender to collect,  sue for and compromise  Rents and directs each tenant of the
Mortgaged  Property to pay all Rents to, or as  directed  by,  Lender.  However,
until the occurrence of an Event of Default,  Lender hereby grants to Borrower a
revocable  license to collect and receive all Rents,  to hold all Rents in trust
for the  benefit  of Lender  and to apply all Rents to pay the  installments  of
interest and principal then due and payable under the Note and the other amounts
then due and  payable  under  the other  Loan  Documents,  including  Imposition
Deposits,  and to pay the current costs and expenses of managing,  operating and
maintaining the Mortgaged  Property,  including  utilities,  Taxes and insurance
premiums  (to  the  extent  not  included  in   Imposition   Deposits),   tenant
improvements and other capital expenditures.  So long as no Event of Default has
occurred and is continuing,  the Rents remaining after  application  pursuant to
the  preceding  sentence  may be  retained  by  Borrower  free and clear of, and
released from, Lender's rights with respect to Rents under this Instrument. From
and after the  occurrence  of an Event of Default,  and without the necessity of
Lender  entering  upon and  taking  and  maintaining  control  of the  Mortgaged
Property directly,  or by a receiver,  Borrower's license to collect Rents shall
automatically terminate and Lender shall without notice be entitled to all Rents
as they become due and payable,  including  Rents then due and unpaid.  Borrower
shall pay to Lender upon demand all Rents to which  Lender is  entitled.  At any
time on or after the date of  Lender's  demand for Rents,  Lender may give,  and
Borrower hereby irrevocably  authorizes Lender to give, notice to all tenants of
the Mortgaged  Property  instructing them to pay all Rents to Lender,  no tenant
shall be obligated to inquire  further as to the occurrence or continuance of an
Event of  Default,  and no tenant  shall be  obligated  to pay to  Borrower  any
amounts which are actually paid to Lender in response to such a notice. Any such
notice by Lender shall be delivered to each tenant

                                        7

<PAGE>
personally,  by mail or by delivering such demand to each rental unit.  Borrower
shall not interfere with and shall  cooperate  with Lender's  collection of such
Rents.

         (c) Borrower  represents  and warrants to Lender that  Borrower has not
executed  any prior  assignment  of Rents  (other  than an  assignment  of Rents
securing  indebtedness that will be paid off and discharged with the proceeds of
the loan evidenced by the Note),  that Borrower has not performed,  and Borrower
covenants  and agrees that it will not perform,  any acts and has not  executed,
and shall not execute, any instrument which would prevent Lender from exercising
its rights  under  this  Section  3, and that at the time of  execution  of this
Instrument  there has been no  anticipation  or prepayment of any Rents for more
than two months prior to the due dates of such Rents. Borrower shall not collect
or accept  payment of any Rents  more than two months  prior to the due dates of
such Rents.

         (d) If an Event of Default has occurred and is continuing,  Lender may,
regardless of the adequacy of Lender's  security or the solvency of Borrower and
even in the absence of waste,  enter upon and take and maintain  full control of
the  Mortgaged  Property  in  order  to  perform  all acts  that  Lender  in its
discretion  determines  to be  necessary  or  desirable  for the  operation  and
maintenance of the Mortgaged Property, including the execution,  cancellation or
modification  of Leases,  the collection of all Rents,  the making of repairs to
the Mortgaged  Property and the execution or termination of contracts  providing
for the management,  operation or maintenance of the Mortgaged Property, for the
purposes  of  enforcing  the  assignment  of Rents  pursuant  to  Section  3(a),
protecting  the Mortgaged  Property or the security of this  Instrument,  or for
such other purposes as Lender in its discretion may deem necessary or desirable.
Alternatively, if an Event of Default has occurred and is continuing, regardless
of the adequacy of Lender's security,  without regard to Borrower's solvency and
without the  necessity  of giving  prior  notice  (oral or written) to Borrower,
Lender  may apply to any court  having  jurisdiction  for the  appointment  of a
receiver for the Mortgaged  Property to take any or all of the actions set forth
in the  preceding  sentence.  If  Lender  elects  to seek the  appointment  of a
receiver  for the  Mortgaged  Property at any time after an Event of Default has
occurred and is  continuing,  Borrower,  by its  execution  of this  Instrument,
expressly   consents  to  the  appointment  of  such  receiver,   including  the
appointment of a receiver ex parte if permitted by applicable law. Lender or the
receiver,  as the case may be, shall be entitled to receive a reasonable fee for
managing the Mortgaged  Property.  Immediately upon appointment of a receiver or
immediately upon the Lender's entering upon and taking possession and control of
the Mortgaged  Property,  Borrower shall  surrender  possession of the Mortgaged
Property  to Lender or the  receiver,  as the case may be, and shall  deliver to
Lender or the receiver,  as the case may be, all documents,  records  (including
records  on  electronic  or  magnetic  media),  accounts,  surveys,  plans,  and
specifications  relating to the Mortgaged Property and all security deposits and
prepaid Rents. In the event Lender takes possession and control of the Mortgaged
Property, Lender may exclude Borrower and its representatives from the Mortgaged
Property. Borrower acknowledges and agrees that the exercise by Lender of any of
the rights  conferred under this Section 3 shall not be construed to make Lender
a  mortgagee-in-possession  of the Mortgaged  Property so long as Lender has not
itself entered into actual possession of the Land and Improvements.

                                        8

<PAGE>
         (e) If Lender enters the Mortgaged Property,  Lender shall be liable to
account  only to Borrower  and only for those Rents  actually  received.  Lender
shall not be liable to Borrower,  anyone  claiming under or through  Borrower or
anyone  having an interest in the  Mortgaged  Property,  by reason of any act or
omission  of Lender  under this  Section 3, and  Borrower  hereby  releases  and
discharges  Lender from any such  liability to the fullest  extent  permitted by
law.

         (f) If the Rents are not sufficient to meet the costs of taking control
of and  managing the  Mortgaged  Property and  collecting  the Rents,  any funds
expended by Lender for such  purposes  shall  become an  additional  part of the
Indebtedness as provided in Section 12.

         (g) Any entering upon and taking of control of the  Mortgaged  Property
by Lender or the receiver,  as the case may be, and any  application of Rents as
provided  in this  Instrument  shall not cure or waive any Event of  Default  or
invalidate any other right or remedy of Lender under  applicable law or provided
for in this Instrument.

         4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.

         (a) As  part  of  the  consideration  for  the  Indebtedness,  Borrower
absolutely and unconditionally assigns and transfers to Lender all of Borrower's
right,  title and  interest  in, to and under the Leases,  including  Borrower's
right,  power and authority to modify the terms of any such Lease,  or extend or
terminate  any such  Lease.  It is the  intention  of  Borrower  to  establish a
present,  absolute and  irrevocable  transfer and assignment to Lender of all of
Borrower's right,  title and interest in, to and under the Leases.  Borrower and
Lender intend this  assignment of the Leases to be immediately  effective and to
constitute an absolute  present  assignment and not an assignment for additional
security only. For purposes of giving effect to this absolute  assignment of the
Leases, and for no other purpose, the Leases shall not be deemed to be a part of
the "Mortgaged  Property," as that term is defined in Section 1(s).  However, if
this  present,  absolute  and  unconditional  assignment  of the  Leases  is not
enforceable by its terms under the laws of the Property  Jurisdiction,  then the
Leases  shall be  included  as a part of the  Mortgaged  Property  and it is the
intention of the Borrower that in this  circumstance  this Instrument create and
perfect a lien on the Leases in favor of Lender,  which lien shall be  effective
as of the date of this Instrument.

         (b) Until Lender  gives notice to Borrower of Lender's  exercise of its
rights under this Section 4, Borrower shall have all rights, power and authority
granted to Borrower under any Lease (except as otherwise limited by this Section
or any other  provision  of this  Instrument),  including  the right,  power and
authority  to modify  the terms of any Lease or extend or  terminate  any Lease.
Upon the  occurrence of an Event of Default,  the  permission  given to Borrower
pursuant to the preceding  sentence to exercise all rights,  power and authority
under  Leases  shall  automatically  terminate.  Borrower  shall comply with and
observe   Borrower's   obligations  under  all  Leases,   including   Borrower's
obligations  pertaining to the  maintenance  and  disposition of tenant security
deposits.

                                        9

<PAGE>
         (c)  Borrower  acknowledges  and agrees  that the  exercise  by Lender,
either  directly or by a  receiver,  of any of the rights  conferred  under this
Section 4 shall not be construed to make Lender a mortgagee-in-possession of the
Mortgaged  Property  so long  as  Lender  has not  itself  entered  into  actual
possession  of the Land and the  Improvements.  The  acceptance by Lender of the
assignment  of the Leases  pursuant to Section  4(a) shall not at any time or in
any event obligate  Lender to take any action under this Instrument or to expend
any money or to incur any  expenses.  Lender  shall not be liable in any way for
any injury or damage to person or property  sustained  by any person or persons,
firm or corporation in or about the Mortgaged Property. Prior to Lender's actual
entry into and taking possession of the Mortgaged Property, Lender shall not (i)
be obligated to perform any of the terms,  covenants and conditions contained in
any Lease (or otherwise have any obligation with respect to any Lease);  (ii) be
obligated to appear in or defend any action or proceeding  relating to the Lease
or the Mortgaged Property;  or (iii) be responsible for the operation,  control,
care,  management  or repair of the  Mortgaged  Property  or any  portion of the
Mortgaged  Property.   The  execution  of  this  Instrument  by  Borrower  shall
constitute  conclusive  evidence  that  all  responsibility  for the  operation,
control,  care,  management and repair of the Mortgaged Property is and shall be
that of Borrower, prior to such actual entry and taking of possession.

         (d) Upon delivery of notice by Lender to Borrower of Lender's  exercise
of Lender's  rights under this Section 4 at any time after the  occurrence of an
Event of Default,  and without the necessity of Lender  entering upon and taking
and maintaining control of the Mortgaged Property directly, by a receiver, or by
any  other  manner  or  proceeding   permitted  by  the  laws  of  the  Property
Jurisdiction,  Lender  immediately  shall have all rights,  powers and authority
granted to Borrower under any Lease, including the right, power and authority to
modify the terms of any such Lease, or extend or terminate any such Lease.

         (e) Borrower shall,  promptly upon Lender's request,  deliver to Lender
an  executed  copy of each  residential  Lease  then in  effect.  All Leases for
residential  dwelling units shall be on forms  approved by Lender,  shall be for
initial terms of at least six months and not more than two years,  and shall not
include options to purchase. If customary in the applicable market,  residential
Leases with terms of less than six months may be permitted  with Lender's  prior
written consent.

         (f) Borrower shall not lease any portion of the Mortgaged  Property for
non residential use except with the prior written consent of Lender and Lender's
prior written  approval of the Lease  agreement.  Borrower  shall not modify the
terms of, or extend or terminate,  any Lease for  non-residential use (including
any Lease in existence on the date of this Instrument) without the prior written
consent of  Lender.  Borrower  shall,  without  request  by  Lender,  deliver an
executed copy of each non-residential  Lease to Lender promptly after such Lease
is signed.  All  non-residential  Leases,  including  renewals or  extensions of
existing Leases, shall specifically provide that (1) such Leases are subordinate
to the lien of this Instrument  (unless waived in writing,  by Lender);  (2) the
tenant shall  attorn to Lender and any  purchaser at a  Foreclosure  sale,  such
attornment to be  self-executing  and effective upon acquisition of title to the
Mortgaged Property by any purchaser at a foreclosure sale or

                                       10

<PAGE>
by Lender in any manner; (3) the tenant agrees to execute such further evidences
of attornment as Lender or any purchaser at a foreclosure  sale may from time to
time request;  (4) the Lease shall not be terminated by foreclosure or any other
transfer  of the  Mortgaged  Property;  (5)  after  a  foreclosure  sale  of the
Mortgaged Property,  Lender or any other purchaser at such foreclosure sale may,
at Lender's or such purchaser's option,  accept or terminate such Lease; and (6)
the tenant shall,  upon receipt after the occurrence of an Event of Default of a
written request from Lender, pay all Rents payable under the Lease to Lender.

         (g) Borrower  shall not receive or accept Rent under any Lease (whether
residential or non-residential) for more than two months in advance.

         5.  PAYMENT  OF   INDEBTEDNESS;   PERFORMANCE   UNDER  LOAN  DOCUMENTS;
PREPAYMENT  PREMIUM.  Borrower shall pay the Indebtedness when due in accordance
with the  terms of the Note and the other  Loan  Documents  and  shall  perform,
observe  and  comply  with all other  provisions  of the Note and the other Loan
Documents.  Borrower shall pay a prepayment  premium in connection  with certain
prepayments  of the  Indebtedness,  including  a  payment  made  after  Lender's
exercise of any right of  acceleration of the  Indebtedness,  as provided in the
Note.

         6.  EXCULPATION.  Borrower's  personal  liability  for  payment  of the
Indebtedness and for performance of the other  obligations to be performed by it
under this Instrument is limited in the manner,  and to the extent,  provided in
the, Note.

          7.      DEPOSITS FOR TAXES INSURANCE AND OTHER CHARGES.

         (a) Borrower shall deposit with Lender on the day monthly  installments
of  principal or  interest,  or both,  are due under the Note (or on another day
designated  in writing by Lender),  until the  Indebtedness  is paid in full, an
additional  amount  sufficient to accumulate with Lender the entire sum required
to pay, when due (1) any water and sewer charges which,  if not paid, may result
in a lien on all or any part of the  Mortgaged  Property,  (2) the  premiums for
fire and other hazard insurance, rent loss insurance and such other insurance as
Lender may  require  under  Section  19, (3) Taxes,  and (4)  amounts  for other
charges and expenses  which  Lender at any time  reasonably  deems  necessary to
protect  the  Mortgaged  Property,  to prevent  the  imposition  of liens on the
Mortgaged  Property,  or  otherwise  to  protect  Lender's  interests,   all  as
reasonably  estimated from time to time by Lender.  The amounts  deposited under
the preceding  sentence are  collectively  referred to in this Instrument as the
"Imposition  Deposits".  The  obligations  of Borrower for which the  Imposition
Deposits  are  required  are  collectively  referred  to in this  Instrument  as
"Impositions".  The amount of the  Imposition  Deposits  shall be  sufficient to
enable  Lender to pay each  Imposition  before  the last date  upon  which  such
payment may be made without any penalty or interest  charge being added.  Lender
shall maintain records  indicating how much of the monthly  Imposition  Deposits
and how much of the  aggregate  Imposition  Deposits held by Lender are held for
the purpose of paying  Taxes,  insurance  premiums and each other  obligation of
Borrower for which Imposition Deposits are required. Any waiver

                                       11

<PAGE>
by Lender of the requirement that Borrower remit  Imposition  Deposits to Lender
may be revoked by Lender,  in  Lender's  discretion,  at any time upon notice to
Borrower.

         (b) Imposition  Deposits shall be held in an institution  (which may be
Lender, if Lender is such an institution) whose deposits or accounts are insured
or  guaranteed  by a  federal  agency.  Lender  shall not be  obligated  to open
additional  accounts or deposit Imposition  Deposits in additional  institutions
when the amount of the  Imposition  Deposits  exceeds the maximum  amount of the
federal  deposit  insurance  or  guaranty.  Lender  shall  apply the  Imposition
Deposits to pay  Impositions  so long as no Event of Default has occurred and is
continuing.  Unless applicable law requires, Lender shall not be required to pay
Borrower any interest,  earnings or profits on the Imposition Deposits. Borrower
hereby  pledges  and  grants to Lender a  security  interest  in the  Imposition
Deposits as  additional  security for all of Borrower's  obligations  under this
Instrument and the other Loan Documents. Any amounts deposited with Lender under
this  Section 7 shall not be trust  funds,  nor shall they operate to reduce the
Indebtedness, unless applied by Leader for that purpose under Section 7(e).

         (c) If Lender  receives a bill or  invoice  for an  Imposition,  Lender
shall pay the  Imposition  from the Imposition  Deposits held by Lender.  Lender
shall  have no  obligation  to pay  any  Imposition  to the  extent  it  exceeds
Imposition Deposits then held by Lender.  Lender may pay an Imposition according
to any  bill,  statement  or  estimate  from the  appropriate  public  office or
insurance company without inquiring into the accuracy of the bill,  statement or
estimate or into the validity of the Imposition.

         (d) If at any time the amount of the Imposition Deposits held by Lender
for  payment of a specific  Imposition  exceeds  the  amount  reasonably  deemed
necessary by Lender, the excess shall be credited against future installments of
Imposition  Deposits.  If at any time the amount of the Imposition Deposits held
by  Lender  for  payment  of a  specific  Imposition  is less  than  the  amount
reasonably estimated by Lender to be necessary, Borrower shall pay to Lender the
amount of the deficiency within 15 days after notice from Lender.

         (e) If an Event of Default has occurred and is  continuing,  Lender may
apply  any  Imposition  Deposits,  in any  amounts  and in any  order as  Lender
determines,  in  Lender's  discretion,  to pay any  Impositions  or as a  credit
against the Indebtedness. Upon payment in full of the Indebtedness, Lender shall
refund to Borrower any Imposition Deposits held by Lender.

         8.  COLLATERAL  AGREEMENTS.  Borrower  shall  deposit  with Lender such
amounts as may be required by any  Collateral  Agreement  and shall  perform all
other obligations of Borrower under each Collateral Agreement.

         9.  APPLICATION  OF  PAYMENTS.  If at any time  Lender  receives,  from
Borrower or otherwise,  any amount applicable to the Indebtedness  which is less
than all  amounts  due and  payable  at such  time,  then  Lender may apply that
payment  to  amounts  then  due  and  payable  in any  manner  and in any  order
determined by Lender, in Lender's

                                       12

<PAGE>
discretion.  Neither  Lender's  acceptance  of an amount  which is less than all
amounts  then due and payable nor  Lender's  application  of such payment in the
manner authorized shall constitute or be deemed to constitute either a waiver of
the  unpaid  amounts  or  an  accord  and  satisfaction.   Notwithstanding   the
application of any such amount to the Indebtedness, Borrower's obligations under
this Instrument and the Note shall remain unchanged.

         10.  COMPLIANCE  WITH  LAWS.  Borrower  shall  comply  with  all  laws,
ordinances,  regulations and requirements of any Governmental  Authority and all
recorded lawful covenants and agreements  relating to or affecting the Mortgaged
Property,  including  all  laws,  ordinances,   regulations,   requirements  and
covenants  pertaining to health and safety,  construction of improvements on the
Mortgaged Property, fair housing, zoning and land use, and Leases. Borrower also
shall  comply  with all  applicable  laws that  pertain to the  maintenance  and
disposition  of tenant  security  deposits.  Borrower  shall all times  maintain
records sufficient to demonstrate compliance with the provisions of this Section
10. Borrower shall take appropriate measures to prevent, and shall not engage in
or knowingly permit, any illegal activities at the Mortgaged Property that could
endanger tenants or visitors, result in damage to the Mortgaged Property, result
in forfeiture of the Mortgaged Property, or otherwise materially impair the lien
created by this  Instrument  or  Lender's  interest in the  Mortgaged  Property.
Borrower  represents  and  warrants to Lender  that no portion of the  Mortgaged
Property  has  been  or will be  purchased  with  the  proceeds  of any  illegal
activity.

         11. USE OF PROPERTY.  Unless required by applicable law, Borrower shall
not (a) except for any change in use  approved by Lender,  allow  changes in the
use for which all or any part of the  Mortgaged  Property  is being  used at the
time this  Instrument was executed (b) convert any individual  dwelling units or
common  areas to  commercial  use,  (c) initiate or acquiesce in a change in the
zoning   classification  of  the  Mortgaged  Property,   or  (d)  establish  any
condominium or cooperative regime with respect to the Mortgaged Property.

         12.      PROTECTION OF LENDER'S SECURITY.

         (a) If  Borrower  fails to perform  any of its  obligations  under this
Instrument  or any  other  Loan  Document,  or if any  action or  proceeding  is
commenced which purports to affect the Mortgaged Property,  Lender's security or
Lender's rights under this  Instrument,  including  eminent domain,  insolvency,
code  enforcement,  civil  or  criminal  forfeiture,  enforcement  of  Hazardous
Materials  Laws,   fraudulent   conveyance  or  reorganizations  or  proceedings
involving a bankrupt or decedent,  then Lender at Lender's  option may make such
appearances, disburse such sums and take such actions as Lender reasonably deems
necessary  to perform  such  obligations  of  Borrower  and to protect  Lender's
interest, including (1) payment of fees and out-of-pocket expenses of attorneys,
accountants,  inspectors and consultants,  (2) entry upon the Mortgaged Property
to make  repairs or secure  the,  Mortgaged  Property,  (3)  procurement  of the
insurance  required by Section 19, and (4) payment of amounts which Borrower has
failed to pay under Sections 15 and 17.

                                       13

<PAGE>
         (b) Any amounts disbursed by Lender under this Section 12, or under any
other provision of this  Instrument that treats such  disbursement as being made
under this  Section  12,  shall be added to, and become  part of, the  principal
component of the  Indebtedness,  shall be immediately  due and payable and shall
bear interest from the date of disbursement until paid at the "Default Rate", as
defined in the Note.

         (c) Nothing  in  this  Section  12  shall  require Lender to incur  any
expense or take any action.

         13. INSPECTION. Lender, its agents, representatives,  and designees may
make or cause to be made entries upon and inspections of the Mortgaged  Property
(including environmental inspections and tests) during normal business hours, or
at any other reasonable time.

         14.      BOOKS AND RECORDS; FINANCIAL REPORTING.

         (a)  Borrower  shall keep and  maintain  at all times at the  Mortgaged
Property or the,  management  agent's  offices,  and upon Lender's request shall
make available at the Mortgaged Property, complete and accurate books of account
and records  (including  copies of supporting  bills and  invoices)  adequate to
reflect  correctly the operation of the  Mortgaged  Property,  and copies of all
written  contracts,  Leases,  and other  instruments  which affect the Mortgaged
Property. The books, records,  contracts,  Leases and other instruments shall be
subject to examination and inspection at any reasonable time by Lender.

          (b) Borrower shall furnish to Lender all of the following:

                  (1)      within 120 days after the end of each  fiscal year of
                           Borrower,  a  statement  of income and  expenses  for
                           Borrower's  operation of the  Mortgaged  Property for
                           that fiscal year, a statement of changes in financial
                           position  of  Borrower   relating  to  the  Mortgaged
                           Property for that fiscal year and, when  requested by
                           Lender,  a  balance  sheet  showing  all  assets  and
                           liabilities  of Borrower  relating  to the  Mortgaged
                           Property as of the end of that fiscal year;

                  (2)      within 120 days after the end of each  fiscal year of
                           Borrower,   and  at  any  other  tune  upon  Lender's
                           request,  a rent schedule for the Mortgaged  Property
                           showing the name of each tenant, and for each tenant,
                           the space occupied,  the lease  expiration  date, the
                           rent payable for the current month,  the date through
                           which rent has been paid, and any related information
                           requested by Lender;

                  (3)      within 120 days after the end of each  fiscal year of
                           Borrower,   and  at  any  other  time  upon  Lender's
                           request,  an accounting of all security deposits held
                           pursuant  to all  Leases,  including  the name of the
                           institution (if any) and the names and identification
                           numbers of the

                                       14

<PAGE>
                           accounts (if any) in which such security deposits are
                           held and the name of the  person to  contact  at such
                           financial  institution,  along with any  authority or
                           release  necessary  for Lender to access  information
                           regarding such accounts;

                  (4)      within 120 days after the end of each  fiscal year of
                           Borrower,   and  at  any  other  time  upon  Lender's
                           request,  a statement  that  identifies all owners of
                           any  interest in Borrower  and the  interest  held by
                           each, if Borrower is a corporation,  all officers and
                           directors of  Borrower,  and if Borrower is a limited
                           liability company, all managers who are not members;

                  (5)      upon Lender's request, a monthly property  management
                           report for the Mortgaged Property, showing the number
                           of inquiries  made and rental  applications  received
                           from  tenants or  prospective  tenants  and  deposits
                           received  from  tenants  and  any  other  information
                           requested by Lender;

                  (6)      upon Lender's  request,  a balance sheet, a statement
                           of income and  expenses  for Borrower and a statement
                           of changes in  financial  position  of  Borrower  for
                           Borrower's most recent fiscal year; and

                  (7)      if  required  by Lender,  a  statement  of income and
                           expense  for the  Mortgaged  Property  for the  prior
                           month or quarter.

         (c) Each of the statements,  schedules and reports  required by Section
14(b) shall be certified to be complete  and  accurate by an  individual  having
authority to bind Borrower, and shall be in such form and contain such detail as
Lender may  reasonably  require.  Lender also may require  that any  statements,
schedules or reports be audited at Borrower's  expense by independent  certified
public accountants acceptable to Lender.

         (d) If  Borrower  fails to provide in a timely  manner the  statements,
schedules and reports required by Section 14(b),  Lender shall have the right to
have Borrower's books and records audited, at Borrower's expense, by independent
certified  public  accountants  selected  by  Lender  in  order to  obtain  such
statements,  schedules and reports, and all related costs and expenses of Lender
shall become  immediately due and payable and shall become an additional part of
the Indebtedness as provided in Section 12.

         (e) If an Event of Default has  occurred  and is  continuing,  Borrower
shall  deliver to Lender upon written  demand all books and records  relating to
the Mortgaged Property or its operation.

         (f) Borrower authorizes Lender to obtain a credit report on Borrower at
any time.

                                       15

<PAGE>
         (g) If an Event of Default has occurred  and Lender has not  previously
required Borrower to furnish a quarterly statement of income and expense for the
Mortgaged  Property,  Lender may require  Borrower  to furnish  such a statement
within 45 days after the end of each fiscal  quarter of Borrower  following such
Event of Default.

         15.      TAXES; OPERATING EXPENSES.

         (a)  Subject to the  provisions  of Section  15(c) and  Section  15(d),
Borrower  shall  pay,  or cause to be paid,  all Taxes  when due and  before the
addition of any interest, fine, penalty or cost for nonpayment.

         (b) Subject to the Provisions of Section 15(c),  Borrower shall pay the
expenses  of  operating,  managing,  maintaining  and  repairing  the  Mortgaged
Property  (including  insurance premiums,  utilities,  repairs and replacements)
before  the last date upon  which  each such  payment  may be made  without  any
penalty or interest charge being added.

         (c) As long as no Event of  Default  exists  and  Borrower  has  timely
delivered to Lender any bills or premium notices that it has received,  Borrower
shall not be obligated to pay Taxes,  insurance premiums or any other individual
Imposition to the extent that sufficient  Imposition Deposits are held by Lender
for the  purpose  of paying  that  specific  Imposition.  If an Event of Default
exists,  Lender  may  exercise  any  rights  Lender  may have  with  respect  to
Imposition  Deposits  without  regard to  whether  Impositions  are then due and
payable.  Lender  shall have no  liability  to  Borrower  for failing to pay any
Impositions  to the  extent  that  any  Event of  Default  has  occurred  and is
continuing,  insufficient  Imposition Deposits are held by Lender at the time an
Imposition becomes due and payable or Borrower has failed to provide Lender with
bills and premium notices as provided above.

         (d)  Borrower,  at its own expense,  may contest by  appropriate  legal
proceedings,  conducted  diligently and in good faith, the amount or validity of
any Imposition other than insurance premiums, if (1) Borrower notifies Lender of
the commencement or expected commencement of such proceedings, (2) the Mortgaged
Property is not in danger of being sold or forfeited, (3) Borrower deposits with
Lender  reserves  sufficient  to pay the contested  Imposition,  if requested by
Lender, and (4) Borrower furnishes whatever  additional  security is required in
the  proceedings  or is  reasonably  requested by Lender,  which may include the
delivery to Lender of the reserves  established by Borrower to pay the contested
imposition.

         (e) Borrower shall promptly deliver to Lender a copy of all notices of,
and invoices for,  Impositions,  and if Borrower pays any  Imposition  directly,
Borrower shall promptly furnish to Lender receipts evidencing such payments.

         16.  LIENS;  ENCUMBRANCES.  Borrower  acknowledges  that, to the extent
provided in Section 21, the grant,  creation or existence of any mortgage,  deed
of trust, deed to secure debt, security interest or other lien or encumbrance (a
"Lien") on the Mortgaged Property (other than the lien of this Instrument) or on
certain ownership  interests in Borrower,  whether voluntary,  involuntary or by
operation of law, and whether or not such

                                       16

<PAGE>
Lien has  priority  over  the lien of this  Instrument,  is a  "Transfer"  which
constitutes an Event of Default.

         17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.

         (a)  Borrower  (l)  shall not  commit  waste or  permit  impairment  or
deterioration  of the  Mortgaged  Property,  (2) shall not abandon the Mortgaged
Property,  (3) shall  restore  or  repair  promptly,  in a good and  workmanlike
manner,  any damaged part of the  Mortgaged  Property to the  equivalent  of its
original  condition,  or such other  condition as Lender may approve in writing,
whether or not insurance proceeds or condemnation  awards are available to cover
any costs of such restoration or repair,  (4) shall keep the Mortgaged  Property
in good repair, including, the replacement of Personalty and Fixtures with items
of equal or better  function and  quality,  (5) shall  provide for  professional
management of the Mortgaged  Property by a residential  rental property  manager
satisfactory to Lender under a contract  approved by Lender in writing,  and (6)
shall give  notice to Lender of and,  unless  otherwise  directed  in writing by
Lender, shall appear in and defend any action or proceeding purporting to affect
the  Mortgaged  Property,  Lender's  security  or  Lender's  rights  under  this
Instrument.  Borrower shall not (and shall not permit any tenant or other person
to)  remove,  demolish  or  alter  the  Mortgaged  Property  or any  part of the
Mortgaged  Property  except  in  connection  with the  replacement  of  tangible
Personalty.

         (b) If, in connection with the making of the loan evidenced by the Note
or at any later  date,  Lender  waives in  writing  the  requirement  of Section
17(a)(5) above that Borrower enter into a written contract for management of the
Mortgaged  Property and if, after the date of this Instrument,  Borrower intends
to change the management of the Mortgaged Property,  Lender shall have the right
to approve such new property manager and the written contract for the management
of the  Mortgaged  Property  and require  that  Borrower  and such new  property
manager enter into an  Assignment of Management  Agreement on a form approved by
Under.  If required  by Lender  (whether  before or after an Event of  Default),
Borrower  will cause any  Affiliate of Borrower to whom fees are payable for the
management of the Mortgaged  Property to enter into an agreement with Lender, in
a form approved by Lender,  providing for  subordination  of those fees and such
other  provisions  as Lender may  require.  "Affiliate  of  Borrower"  means any
corporation,  partnership,  joint venture,  limited liability  company,  limited
liability  partnership,  trust or individual controlled by, under common control
with, or which  controls  Borrower (the term  "control" for these purposes shall
mean the ability,  whether by the ownership of shares or other equity interests,
by contract or otherwise, to elect a majority of the directors of a corporation,
to make  management  decisions  on behalf  of, or  independently  to select  the
managing partner of, a partnership, or otherwise to have the power independently
to remove and then select a majority of those individuals  exercising managerial
authority over an entity, and control shall be conclusively presumed in the case
of the ownership of 50% or more of the equity interests).

                                       17

<PAGE>
         18.      ENVIRONMENTAL HAZARDS.

         (a) Except for matters  covered by a written  program of operations and
maintenance  approved  in  writing  by  Lender  (an "O&M  Program")  or  matters
described  in  Section  18(b),  Borrower  shall not  cause or permit  any of the
following:

                  (1)      the presence,  use, generation,  release,  treatment,
                           processing,   storage  (including  storage  in  above
                           ground and underground storage tanks),  handling,  or
                           disposal of any  Hazardous  Materials on or under the
                           Mortgaged  Property or any other property of Borrower
                           that is adjacent to the Mortgage Property;

                  (2)      the  transportation  of  any Hazardous  Materials to,
                           from, or across the Mortgaged Property;

                  (3)      any occurrence or condition on the Mortgaged Property
                           or any other property of Borrower that is adjacent to
                           the Mortgaged Property, which occurrence or condition
                           is or  may be in  violation  of  Hazardous  Materials
                           Laws; or

                  (4)      any violation of or  noncompliance  with the terms of
                           any   Environmental   Permit  with   respect  to  the
                           Mortgaged  Property or any property of Borrower  that
                           is adjacent to the Mortgaged Property.

The  matters  described  in  clauses  (1)  through  (4)  above are  referred  to
collectively in this Section 18 as "Prohibited Activities or Conditions".

         (b) Prohibited Activities and Conditions shall not include the safe and
lawful use and  storage of  quantities  of (1)  prepackaged  supplies,  cleaning
materials  and  petroleum  products   customarily  used  in  the  operation  and
maintenance  of  comparable  multifamily  properties,  (2)  cleaning  materials,
personal  grooming  items and other items sold in pre- packaged  containers  for
consumer use and used by tenants and occupants of residential  dwelling units in
the Mortgaged  Property;  and (3)  petroleum  products used in the operation and
maintenance  of  motor  vehicles  from  time to time  located  on the  Mortgaged
Property's  parking  areas,  so long as all of the foregoing  are used,  stored,
handled,  transported  and disposed of in compliance  with  Hazardous  Materials
Laws.

         (c) Borrower shall take all commercially  reasonable actions (including
the inclusion of appropriate provisions in any Leases executed after the date of
this  Instrument) to prevent its employees,  agents,  and  contractors,  and all
tenants and other occupants from causing or permitting any Prohibited Activities
or  Conditions.  Borrower shall not lease or allow the sublease or use of all or
any  portion  of  the  Mortgaged   Property  to  any  tenant  or  subtenant  for
nonresidential  use by any user that,  in the ordinary  course of its  business,
would cause or permit any Prohibited Activity or Condition.

                                       18

<PAGE>
         (d) If an O&M Program has been  established  with  respect to Hazardous
Materials,  Borrower  shall  comply  in a timely  manner  with,  and  cause  all
employees,  agents, and contractors of Borrower and any other persons present on
the Mortgaged Property to comply with the O&M Program.  All costs of performance
of Borrower's  obligations under any O&M Program shall be paid by Borrower,  and
Lender's  out-of-pocket  costs  incurred in connection  with the  monitoring and
review of the O&M Program and Borrower's  performance  shall be paid by Borrower
upon demand by Lender.  Any such  out-of-pocket  costs of Lender which  Borrower
fails to pay promptly  shall become an additional  part of the  Indebtedness  as
provided in Section 12.

         (e)  Borrower  represents  and  warrants  to  Lender  that,  except  as
previously disclosed by Borrower to Lender in writing:

                  (1)      Borrower has  not at  any  time engaged in, caused or
                           permitted any Prohibited Activities or Conditions;

                  (2)      to the best of Borrower's  knowledge after reasonable
                           and diligent  inquiry,  no  Prohibited  Activities or
                           Conditions exist or have existed;

                  (3)      except to the extent previously disclosed by Borrower
                           to Lender in writing, the Mortgaged Property does not
                           now contain any  underground  storage tanks,  and, to
                           the best of Borrower's knowledge after reasonable and
                           diligent  inquiry,  the  Mortgaged  Property  has not
                           contained any underground  storage tanks in the past.
                           If there is an  underground  storage  tank located on
                           the Property which has been  previously  disclosed by
                           Borrower  to Lender in  writing,  that tank  complies
                           with all requirements of Hazardous Materials Laws;

                  (4)      Borrower has complied  with all  Hazardous  Materials
                           Laws,  including all  requirements  for  notification
                           regarding  releases of Hazardous  Materials.  Without
                           limiting the  generality of the  foregoing,  Borrower
                           has obtained all  Environmental  Permits required for
                           the operation of the Mortgaged Property in accordance
                           with  Hazardous  Materials Laws now in effect and all
                           such  Environmental  Permits  are in full  force  and
                           effect;

                  (5)      no event has occurred  with respect to the  Mortgaged
                           Property  that  constitutes,  or with the  passing of
                           time  or  the  giving  of  notice  would  constitute,
                           noncompliance  with the  terms  of any  Environmental
                           Permit;

                  (6)      there are no actions,  suits,  claims or  proceedings
                           pending or, to the best of Borrower's knowledge after
                           reasonable  and  diligent  inquiry,  threatened  that
                           involve the Mortgaged Property and allege,  arise out
                           of,  or  relate  to  any   Prohibited   Activity   or
                           Condition; and

                                       19

<PAGE>
                  (7)      Borrower  has  not  received  any  complaint,  order,
                           notice of violation or other  communication  from any
                           Governmental  Authority with regard to air emissions,
                           water   discharges,   noise  emissions  or  Hazardous
                           Materials,  or any  other  environmental,  health  or
                           safety  matters  affecting the Mortgaged  Property or
                           any other  property of  Borrower  that is adjacent to
                           the Mortgaged Property.

The  representations  and  warranties  in this  Section  18 shall be  continuing
representations  and  warranties  that  shall be deemed  to be made by  Borrower
throughout  the term of the loan evidenced by the Note,  until the  Indebtedness
has been paid in full.

         (f)  Borrower  shall  promptly   notify  Lender  in  writing  upon  the
occurrence of any of the following events:

                  (1)      Borrower's  discovery  of any  Prohibited Activity or
                           Condition;

                  (2)      Borrower's  receipt of or knowledge of any complaint,
                           order,  notice of  violation  or other  communication
                           from any Governmental  Authority or other person with
                           regard  to  present  or  future  alleged   Prohibited
                           Activities or Conditions or any other  environmental,
                           health  or safety  matters  affecting  the  Mortgaged
                           Property or any other  property  of Borrower  that is
                           adjacent to the Mortgaged Property; and

                  (3)      any representation or warranty  in  this  Section  18
                           becomes untrue after the date of this Agreement.

Any such notice given by Borrower shall not relieve  Borrower of, or result in a
waiver of, any  obligation  under this  Instrument,  the Note, or any other Loan
Document.

         (g)  Borrower  shall  pay  promptly  the  costs  of  any  environmental
inspections, tests or audits ("Environmental Inspections") required by Lender in
connection  with  any  foreclosure  or  deed in  lieu  of  foreclosure,  or as a
condition of Lender's  consent to any Transfer  under Section 21, or required by
Lender following a reasonable determination by Lender that Prohibited Activities
or Conditions may exist.  Any such costs incurred by Lender  (including the fees
and out-of-pocket costs of attorneys and technical  consultants whether incurred
in connection with any judicial or  administrative  process or otherwise)  which
Borrower  fails  to  pay  promptly  shall  become  an  additional  part  of  the
Indebtedness  as  provided  in  Section  12. The  results  of all  Environmental
Inspections  made by Lender shall at all times remain the property of Lender and
Lender  shall have no  obligation  to disclose or  otherwise  make  available to
Borrower or any other party such  results or any other  information  obtained by
Lender in connection with its Environmental Inspections.  Lender hereby reserves
the right, and Borrower hereby expressly authorizes Lender, to make available to
any  party,  including  any  prospective  bidder  at a  foreclosure  sale of the
Mortgaged Property, the results of any Environmental  Inspections made by Lender
with respect to the Mortgaged  Property.  Borrower  consents to Lender notifying
any party (either

                                       20

<PAGE>
as part of a notice of sale or  otherwise)  of the  results  of any of  Lender's
Environmental  Inspections.  Borrower acknowledges that Lender cannot control or
otherwise  assure the  truthfulness  or  accuracy  of the  results of any of its
Environmental  Inspections  and that the release of such results to  prospective
bidders at a foreclosure sale of the Mortgaged  Property may have a material and
adverse  effect  upon the amount  which a party may bid at such  sale.  Borrower
agrees that Lender shall have no liability  whatsoever as a result of delivering
the results of any of its  Environmental  Inspections  to any third  party,  and
Borrower hereby releases and forever  discharges Lender from any and all claims,
damages,  or causes of action,  arising out of,  connected with or incidental to
the results of, the delivery of any of Lender's Environmental Inspections.

         (h) If  any  investigation,  site  monitoring,  containment,  clean-up,
restoration or other remedial work ("Remedial Work") is necessary to comply with
any Hazardous  Materials Law or order of any Governmental  Authority that has or
acquires  jurisdiction  over the  Mortgaged  Property or the use,  operation  or
improvement  of the  Mortgaged  Property  under  any  Hazardous  Materials  Law,
Borrower  shall,  by the  earlier of (1) the  applicable  deadline  required  by
Hazardous  Materials Law or (2) 30 days after notice from Lender  demanding such
action, begin performing the Remedial Work, and thereafter  diligently prosecute
it to completion,  and shall in any event complete the work by the time required
by applicable  Hazardous  Materials  Law. If Borrower fails to begin on a timely
basis or diligently  prosecute any required  Remedial  Work,  Lender may, at its
option,  cause the Remedial Work to be completed,  in which case Borrower  shall
reimburse Lender on demand for the cost of doing so. Any  reimbursement due from
Borrower to Lender shall become part of the  Indebtedness as provided in Section
12.

         (i)  Borrower  shall  cooperate  with any  inquiry by any  Governmental
Authority and shall comply with any  governmental or judicial order which arises
from any alleged Prohibited Activity or Condition.

         (j) Borrower shall indemnify, hold harmless and defend (i) Lender, (ii)
any prior owner or holder of the Note,  (iii) the Loan Servicer,  (iv) any prior
Loan Servicer, (v) the officers,  directors,  shareholders,  partners, employees
and trustees of any of the foregoing, and (vi) the heirs, legal representatives,
successors   and   assigns  of  each  of  the   foregoing   (collectively,   the
"Indemnitees") from and against all proceedings,  claims, damages, penalties and
costs  (whether  initiated  or sought by  Governmental  Authorities  or  private
parties),  including  fees and  out-of-pocket  expenses of attorneys  and expert
witnesses,  investigatory  fees,  and  remediation  costs,  whether  incurred in
connection  with any judicial or  administrative  process or otherwise,  arising
directly or indirectly from any of the following:

                  (1)      any breach of any representation or warranty of
                           Borrower in this Section 18;

                  (2)      any  failure  by  Borrower  to  perform  any  of  its
                           obligations under this Section 18;

                                       21

<PAGE>
                  (3)      the existence or  alleged existence of any Prohibited
                           Activity or Condition;

                  (4)      the   presence  or  alleged   presence  of  Hazardous
                           Materials on or under the  Mortgaged  Property or any
                           property  of   Borrower   that  is  adjacent  to  the
                           Mortgaged Property; and

                  (5)      the actual  or  alleged  violation  of  any Hazardous
                           Materials Law.

         (k) Counsel selected by Borrower to defend Indemnities shall be subject
to the  approval of those  Indemnities.  However,  any  Indemnitee  may elect to
defend  any  claim or  legal  or  administrative  proceeding  at the  Borrower's
expense.

         (l)  Borrower  shall not,  without the prior  written  consent of those
Indemnities  who are  named as  parties  to a claim  or legal or  administrative
proceeding (a "Claim"),  settle or compromise  the Claim if the  settlement  (1)
results in the entry of any judgment  that does not include as an  unconditional
term the delivery by the claimant or plaintiff to Lender of a written release of
those  Indemnities,  satisfactory  in form and  substance to Lender,  or (2) may
materially  and  adversely  affect  Lender,  as  determined  by  Lender  in  its
discretion.

         (m) Lender  agrees that the  indemnity  under this  Section 18 shall be
limited  to the assets of  Borrower  and  Lender  shall not seek to recover  any
deficiency from any natural persons who are general partners of Borrower.

         (n)  Borrower  shall,  at  its  own  cost  and  expense,  do all of the
following:

                  (1)      pay or satisfy  any  judgment  or decree  that may be
                           entered  against any Indemnitee or Indemnities in any
                           legal or  administrative  proceeding  incident to any
                           matters against which  Indemnities are entitled to be
                           indemnified under this Section 18;

                  (2)      reimburse   Indemnities  for  any  expenses  paid  or
                           incurred in connection with any matters against which
                           Indemnities are entitled to be indemnified under this
                           Section 18; and

                  (3)      reimburse  Indemnities  for  any  and  all  expenses,
                           including   fees  and   out-of-pocket   expenses   of
                           attorneys and expert  witnesses,  paid or incurred in
                           connection  with the  enforcement  by  Indemnities of
                           their rights under this Section 18, or in  monitoring
                           and  participating  in any  legal  or  administrative
                           proceeding.

         (o) In any  circumstances  in which the indemnity under this Section 18
applies,  Lender may employ its own legal counsel and  consultants to prosecute,
defend or negotiate any claim or legal or administrative  proceeding and Lender,
with the prior  written  consent of Borrower  (which  shall not be  unreasonably
withheld, delayed or conditioned), may settle

                                       22

<PAGE>
or compromise any action or legal or administrative  proceeding.  Borrower shall
reimburse  Lender  upon  demand for all costs and  expenses  incurred by Lender,
including all costs of settlements  entered into in good faith, and the fees and
out-of-pocket expenses of such attorneys and consultants.

         (p) The  provisions  of this Section 18 shall be in addition to any and
all other  obligations and liabilities  that Borrower may have under  applicable
law or under  other Loan  Documents,  and each  Indemnitee  shall be entitled to
indemnification  under this Section 18 without  regard to whether Lender or that
Indemnitee has exercised any rights against the Mortgaged  Property or any other
security,  pursued any rights against any guarantor, or pursued any other rights
available  under the Loan Documents or applicable  law. If Borrower  consists of
more than one person or entity,  the  obligation of those persons or entities to
indemnify the Indemnities under this Section 18 shall be joint and several.  The
obligation of Borrower to indemnify the Indemnities  under this Section 18 shall
survive  any  repayment  or  discharge  of  the  Indebtedness,  any  foreclosure
proceeding,  any  foreclosure  sale,  any  delivery  of  any  deed  in  lieu  of
foreclosure, and any release of record of the lien of this Instrument.

         19.      PROPERTY AND LIABILITY INSURANCE.

         (a) Borrower shall keep the  Improvements  insured at all times against
such  hazards as Lender may from time to time  require,  which  insurance  shall
include but not be limited to coverage  against loss by fire and allied  perils,
general boiler and machinery  coverage,  and business income coverage.  Lender's
insurance  requirements  may change from time to time throughout the term of the
Indebtedness.  If Lender so requires, such insurance shall also include sinkhole
insurance,  mine  subsidence  insurance,   earthquake  insurance,  and,  if  the
Mortgaged  Property  does not  conform  to  applicable  zoning or land use laws,
building ordinance or law coverage.  If any of the Improvements is located in an
area identified by the Federal Emergency  Management Agency (or any successor to
that agency) as an area having special flood hazards,  and if flood insurance is
available in that area, Borrower shall insure such Improvements  against loss by
flood.

         (b) All premiums on insurance  policies  required  under  Section 19(a)
shall be paid in the manner  provided in Section 7, unless Lender has designated
in writing another method of payment.  All such policies shall also be in a form
approved by Lender.  All policies of property  damage  insurance shall include a
non-contributing,  non-reporting  mortgage  clause  in favor  of,  and in a form
approved by, Lender.  Lender shall have the right to hold the original  policies
or  duplicate  original  policies of all  insurance  required by Section  19(a).
Borrower  shall  promptly  deliver  to  Lender a copy of all  renewal  and other
notices  received by Borrower  with respect to the policies and all receipts for
paid  premiums.  At least  30 days  prior to the  expiration  date of a  policy,
Borrower  shall  deliver to Lender the original  (or a duplicate  original) of a
renewal policy in form satisfactory to Lender.

                                       23

<PAGE>
         (c) Borrower shall maintain at all times commercial  general  liability
insurance,  workers' compensation insurance and such other liability, errors and
omissions  and  fidelity  insurance  coverages  as Lender  may from time to time
require.

         (d) All insurance  policies and renewals of insurance policies required
by this  Section 19 shall be in such  amounts and for such periods as Lender may
from  time  to  time  require,  and  shall  be  issued  by  insurance  companies
satisfactory to Lender.

         (e) Borrower shall comply with all insurance requirements and shall not
permit any  condition to exist on the Mortgaged  Property that would  invalidate
any part of any insurance  coverage that this  Instrument  requires  Borrower to
maintain.

         (f) In the event of loss,  Borrower shall give immediate written notice
to the insurance carrier and to Lender.  Borrower hereby authorizes and appoints
Lender as  attorney-in-fact  for  Borrower to make proof of loss,  to adjust and
compromise any claims under policies of property damage insurance,  to appear in
and prosecute any action arising from such property damage  insurance  policies,
to collect and receive the proceeds of property damage insurance,  and to deduct
from  such  proceeds  Lender's  expenses  incurred  in the  collection  of  such
proceeds.  This power of attorney is coupled with an interest  and  therefore is
irrevocable.  However, nothing contained in this Section 19 shall require Lender
to incur any expense or take any action.  Lender  may, at Lender's  option,  (1)
hold the balance of such proceeds to be used to reimburse  Borrower for the cost
of restoring  and  repairing  the  Mortgaged  Property to the  equivalent of its
original condition or to a condition approved by Lender (the "Restoration"),  or
(2) apply the  balance of such  proceeds  to the  payment  of the  Indebtedness,
whether or not then due.  To the extent  Lender  determines  to apply  insurance
proceeds  to  Restoration,  Lender  shall  do so  in  accordance  with  Lender's
then-current  policies relating to the restoration of casualty damage on similar
multifamily properties.

         (g) Lender shall not exercise its option to apply insurance proceeds to
the payment of the Indebtedness if all of the following  conditions are met: (1)
no Event of  Default  (or any  event  which,  with the  giving  of notice or the
passage of time, or both, would constitute an Event of Default) has occurred and
is continuing;  (2) Lender  determines,  in its  discretion,  that there will be
sufficient  funds to complete the  Restoration;  (3) Lender  determines,  in its
discretion,  that the rental income from the Mortgaged Property after completion
of the  Restoration  will be sufficient  to meet all  operating  costs and other
expenses,   Imposition  Deposits,   deposits  to  reserves  and  loan  repayment
obligations  relating to the Mortgaged Property;  (4) Lender determines,  in its
discretion, that the Restoration will be completed before the earlier of (A) one
year before the maturity  date of the Note or (B) one year after the date of the
loss or  casualty;  and (5) upon  Lender's  request,  Borrower  provides  Lender
evidence of the  availability  during and after the Restoration of the insurance
required to be maintained by Borrower pursuant to this Section 19.

         (h) If the Mortgaged  Property is sold at a foreclosure  sale or Lender
acquires title to the Mortgaged Property,  Lender shall automatically succeed to
all rights of Borrower in

                                       24

<PAGE>
and to any insurance  policies and unearned insurance premiums and in and to the
proceeds  resulting from any damage to the Mortgaged Property prior to such sale
or acquisition.

         20.      CONDEMNATION.

         (a) Borrower shall  promptly  notify Lender of any action or proceeding
relating to any condemnation or other taking, or conveyance in lieu thereof,  of
all or any  part of the  Mortgaged  Property,  whether  direct  or  indirect  (a
"Condemnation").  Borrower shall appear in and prosecute or defend any action or
proceeding  relating to any Condemnation  unless otherwise directed by Lender in
writing.  Borrower  authorizes  and  appoints  Lender  as  attorney-in-fact  for
Borrower to commence,  appear in and prosecute,  in Lender's or Borrower's name,
any  action  or  proceeding  relating  to  any  Condemnation  and to  settle  or
compromise any claim in connection with any Condemnation. This power of attorney
is coupled  with an interest  and  therefore is  irrevocable.  However,  nothing
contained in this Section 20 shall  require  Lender to incur any expense or take
any action. Borrower hereby transfers and assigns to Lender all right, title and
interest  of  Borrower  in and to any award or payment  with  respect to (i) any
Condemnation, or any conveyance in lieu of Condemnation,  and (ii) any damage to
the Mortgaged  Property caused by governmental  action that does not result in a
Condemnation.

         (b) Lender may apply such awards or  proceeds,  after the  deduction of
Lender's  expenses  incurred  in the  collection  of such  amounts,  at Lender's
option, to the restoration or repair of the Mortgaged Property or to the payment
of the  Indebtedness,  with the  balance,  if any, to  Borrower.  Unless  Lender
otherwise  agrees in writing,  any  application of any awards or proceeds to the
Indebtedness  shall  not  extend  or  postpone  the  due  date  of  any  monthly
installments  referred  to in the  Note,  Section  7 of this  Instrument  or any
Collateral Agreement, or change the amount of such installments. Borrower agrees
to execute  such  further  evidence of  assignment  of any awards or proceeds as
Lender may require.

         21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.

         (a) The occurrence of any of the following  events shall  constitute an
Event of Default under this Instrument:

                  (1)      a  Transfer  of  all  or any part  of  the  Mortgaged
                           Property or any interest in the Mortgaged Property;

                  (2)      a Transfer of a Controlling Interest in Borrower;

                  (3)      a Transfer  of a  Controlling  Interest in any entity
                           which  owns,  directly or  indirectly  through one or
                           more intermediate entities, a Controlling Interest in
                           Borrower;

                                       25

<PAGE>
                  (4)      a  Transfer  of all or any  part  of Key  Principal's
                           ownership  interests (other than limited  partnership
                           interests) in Borrower,  or in any other entity which
                           owns,  directly  or  indirectly  through  one or more
                           intermediate   entities,  an  ownership  interest  in
                           Borrower;

                  (5)      if Key  Principal  is an entity,  (A) a Transfer of a
                           Controlling  Interest  in  Key  Principal,  or  (B) a
                           Transfer  of a  Controlling  Interest  in any  entity
                           which  owns,  directly or  indirectly  through one or
                           more intermediate entities, a Controlling Interest in
                           Key Principal;

                  (6)      if  Borrower  or  Key  Principal  is  a  trust,   the
                           termination or revocation of such trust; and

                  (7)      a  conversion  of  Borrower  from  one  type of legal
                           entity into another type of legal entity,  whether or
                           not there is a Transfer.

         Lender shall not be required to  demonstrate  any actual  impairment of
its  security or any  increased  risk of default in order to exercise any of its
remedies with respect to an Event of Default under this Section 21.

         (b) The occurrence of any of the following  events shall not constitute
an Event of Default  under this  Instrument,  notwithstanding  any  provision of
Section 21(a) to the contrary:

                  (1)      a Transfer to which Lender has consented;

                  (2)      a  Transfer  that  occurs by devise,  descent,  or by
                           operation of law upon the death of a natural person;

                  (3)      the grant of a leasehold  interest  in an  individual
                           dwelling  unit  for a term of two  years  or less not
                           containing an option to purchase;

                  (4)      a Transfer  of  obsolete  or worn out  Personalty  or
                           Fixtures that are contemporaneously replaced by items
                           of equal or better  function and  quality,  which are
                           free of liens,  encumbrances  and security  interests
                           other than those  created  by the Loan  Documents  or
                           consented to by Lender;

                  (5)      the grant of an easement,  if before the grant Lender
                           determines  that the  easement  will  not  materially
                           affect  the  operation  or  value  of  the  Mortgaged
                           Property  or  Lender's   interest  in  the  Mortgaged
                           Property,  and Borrower pays to Lender,  upon demand,
                           all  costs  and   expenses   incurred  by  Lender  in
                           connection with reviewing Borrower's request; and

                                       26

<PAGE>
                  (6)      the   creation  of  a  tax  lien  or  a   mechanic's,
                           materialman's  or judgment lien against the Mortgaged
                           Property  which is bonded off,  released of record or
                           otherwise remedied to Lender's satisfaction within 30
                           days of the date of creation.

         (c) Lender shall  consent,  without any adjustment to the rate at which
the  Indebtedness  secured by this  Instrument  bears  interest  or to any other
economic terms of the  Indebtedness,  to a Transfer that would otherwise violate
this Section 21 if, prior to the Transfer,  Borrower has  satisfied  each of the
following requirements:

                  (1)      the  submission to Lender of all information required
                           by Lender to make  the determination required by this
                           Section 21(c);

                  (2)      the absence of any Event of Default;

                  (3)      the transferee meets all of the eligibility,  credit,
                           management   and  other   standards   (including  any
                           standards  with  respect  to  previous  relationships
                           between   Lender   and   the   transferee   and   the
                           organization of the transferee)  customarily  applied
                           by Lender at the time of the proposed Transfer to the
                           approval  of   borrowers  in   connection   with  the
                           origination or purchase of similar  mortgages,  deeds
                           of  trust  or deeds  to  secure  debt on  multifamily
                           properties;

                  (4)      the Mortgaged  Property,  at the time of the proposed
                           Transfer,  meets  all  standards  as to its  physical
                           condition that are  customarily  applied by Lender at
                           the time of the proposed  Transfer to the approval of
                           properties  in  connection  with the  origination  or
                           purchase   of  similar   mortgages   on   multifamily
                           properties;

                  (5)      in the case of a  Transfer  of all or any part of the
                           Mortgaged  Property,  or direct or indirect ownership
                           interests  in  Borrower  or  Key   Principal  (if  an
                           entity),  if  transferor  or  any  other  person  has
                           obligations under any Loan Document, the execution by
                           the transferee or one or more individuals or entities
                           acceptable  to  Lender  of  an  assumption  agreement
                           (including,  if  applicable,  an  Acknowledgment  and
                           Agreement of Key Principal to Personal  Liability for
                           Exceptions  to   Non-Recourse   Liability)   that  is
                           acceptable  to Lender and that,  among other  things,
                           requires the transferee to perform all obligations of
                           transferor  or such  person  set  forth in such  Loan
                           Document,  and may require that the transferee comply
                           with any  provisions of this  Instrument or any other
                           Loan Document  which  previously may have been waived
                           by Lender;

                  (6)      if a guaranty  has been  executed  and  delivered  in
                           connection  with the Note,  this Instrument or any of
                           the other Loan Documents, the

                                       27

<PAGE>
                           Borrower  causes one or more  individuals or entities
                           acceptable to Lender to execute and deliver to Lender
                           a guaranty in a form acceptable to Lender; and

                  (7)      Lender's receipt of all of the following:

                           (A)      a non-refundable review fee in the amount of
                                    $3,000 and a transfer fee equal to 1 percent
                                    of the outstanding  Indebtedness immediately
                                    prior to the Transfer.

                           (B)      In addition,  Borrower  shall be required to
                                    reimburse   Lender   for  all  of   Lender's
                                    out-of-pocket  costs  (including  reasonable
                                    attorneys'  fees)  incurred in reviewing the
                                    Transfer   request,   to  the  extent   such
                                    expenses exceed $3,000.

         (d) For purposes of this  Section,  the  following  term shall have the
meanings set forth below:

                  (1)      "Initial  Owners" means,  with respect to Borrower or
                           any other entity,  the persons or entities who on the
                           date of the  Note  own in the  aggregate  100% of the
                           ownership interests in Borrower or that entity.

                  (2)      A Transfer of a  "Controlling  Interest"  shall mean,
                           with respect to any entity, the following:

                           (i)      if such entity is a general partnership or a
                                    joint  venture,  a Transfer  of any  general
                                    partnership   interest   or  joint   venture
                                    interest   which  would  cause  the  Initial
                                    Owners to own less  than 51% of all  general
                                    partnership  or joint  venture  interests in
                                    such entity;

                           (ii)     if such entity is a limited  partnership,  a
                                    Transfer   of   any   general    partnership
                                    interest;

                           (iii)    if  such  entity  is  a  limited   liability
                                    company or a limited liability  partnership,
                                    a  Transfer  of  any   membership  or  other
                                    ownership  interest  which  would  cause the
                                    Initial  Owners  to own less than 51% of all
                                    membership or other  ownership  interests in
                                    such entity;

                           (iv)     if such entity is a corporation  (other than
                                    a Publicly-Held  Corporation)  with only one
                                    class of voting  stock,  a  Transfer  of any
                                    voting  stock  which would cause the Initial
                                    Owners to own less than 51% of voting  stock
                                    in such corporation;

                                       28

<PAGE>
                           (v)      if such entity is a corporation  (other than
                                    a Publicly-Held  Corporation) with more than
                                    one class of voting stock, a Transfer of any
                                    voting  stock  which would cause the Initial
                                    Owners to own less than a sufficient  number
                                    of shares of voting  stock  having the power
                                    to elect the  majority of  directors of such
                                    corporation; and

                           (vi)     if such  entity  is a  trust,  the  removal,
                                    appointment or  substitution of a trustee of
                                    such  trust  other than (A) in the case of a
                                    land  trust,  or (B) if the  trustee of such
                                    trust  after such  removal,  appointment  or
                                    substitution is a trustee  identified in the
                                    trust agreement approved by Lender.

                  (3)      "Publicly-Held  Corporation" shall mean a corporation
                           the  outstanding  voting stock of which is registered
                           under  Section 12(b) or 12(g) of the  Securities  and
                           Exchange Act of 1934, as amended.

         22.  EVENTS  OF  DEFAULT.  The  occurrence  of any  one or  more of the
following shall constitute an Event of Default under this Instrument:

         (a)      any failure by Borrower to pay or deposit when due any  amount
required by the Note, this Instrument or any other Loan Document;

         (b)      any  failure  by  Borrower  to maintain the insurance coverage
required by Section 19;

         (c)      any  failure  by Borrower to comply  with  the  provisions  of
                  Section 33;

         (d)  fraud  or  material  misrepresentation  or  material  omission  by
Borrower,  or any of its  officers,  directors,  trustees,  general  partners or
managers,  Key Principal or any guarantor in connection with (A) the application
for or creation of the Indebtedness,  (B) any financial statement, rent roll, or
other  report  or  information  provided  to  Lender  during  the  term  of  the
Indebtedness,  or (C) any request for Lender's  consent to any proposed  action,
including a request for disbursement of funds under any Collateral Agreement;

         (e)      any Event of Default under Section 21;

         (f) the  commencement  of a forfeiture  action or  proceeding,  whether
civil or criminal,  which, in Lender's  reasonable  judgment,  could result in a
forfeiture,  of the Mortgaged  Property or otherwise  materially impair the lien
created by this Instrument or Lender's interest in the Mortgaged Property;

         (g) any failure by Borrower  to perform  any of its  obligations  under
this  Instrument  (other than those specified in Sections 22(a) through (f)), as
and when required,  which continues for a period of 30 days after notice of such
failure by Lender to Borrower,

                                       29

<PAGE>
but no such notice or grace  period  shall apply in the case of any such failure
which could,  in Lender's  judgment,  absent  immediate  exercise by Lender of a
right or remedy under this Instrument,  result in harm to Lender,  impairment of
the Note or this  Instrument  or any other  security  given under any other Loan
Document;

         (h) any failure by Borrower  to perform any of its  obligations  as and
when required under any Loan Document other than this Instrument which continues
beyond the applicable cure period, if any, specified in that Loan Document; and

         (i) any exercise by the holder of any other debt instrument  secured by
a mortgage,  deed of trust or deed to secure debt on the Mortgaged Property of a
right to declare all amounts due under that debt instrument  immediately due and
payable.

         23.  REMEDIES  CUMULATIVE.  Each  right  and  remedy  provided  in this
Instrument is distinct from all other rights or remedies  under this  Instrument
or any other Loan  Document  or afforded by  applicable  law,  and each shall be
cumulative and may be exercised concurrently, independently, or successively, in
any order.

         24.      FORBEARANCE.

         (a)  Lender may (but shall not be  obligated  to) agree with  Borrower,
from time to time, and without giving notice to, or obtaining the consent of, or
having any effect upon the  obligations  of, any  guarantor or other third party
obligor,  to take any of the following  actions:  extend the time for payment of
all or any  part  of the  Indebtedness;  reduce  the  payments  due  under  this
Instrument,  the Note, or any other Loan Document; release anyone liable for the
payment  of any  amounts  under  this  Instrument,  the Note,  or any other Loan
Document;  accept a renewal of the Note; modify the terms and time of payment of
the Indebtedness;  join in any extension or subordination agreement; release any
Mortgaged  Property;  take or release other or additional  security;  modify the
rate of interest or period of  amortization  of the Note or change the amount of
the monthly  installments  payable  under the Note;  and  otherwise  modify this
Instrument, the Note, or any other Loan Document.

         (b) Any  forbearance  by Lender in exercising any right or remedy under
the Note, this Instrument,  or any other Loan Document or otherwise  afforded by
applicable  law,  shall not be a waiver of or preclude the exercise of any other
right or remedy.  The  acceptance by Lender of payment of all or any part of the
Indebtedness  after the due date of such payment,  or in an amount which is less
than the required  payment,  shall not be a waiver of Lender's  right to require
prompt payment when due of all other payments on account of the  Indebtedness or
to exercise any remedies for any failure to make prompt payment.  Enforcement by
Lender of any security for the Indebtedness  shall not constitute an election by
Lender of remedies so as to preclude the  exercise of any other right  available
to Lender.  Lender's  receipt of any awards or proceeds under Sections 19 and 20
shall not operate to cure or waive any Event of Default.

                                       30

<PAGE>
         25. LOAN CHARGES. If any applicable law limiting the amount of interest
or other charges  permitted to be collected from Borrower is interpreted so that
any charge provided for in any Loan Document,  whether considered  separately or
together with other charges  levied in connection  with any other Loan Document,
violates  that law,  and  Borrower is entitled to the benefit of that law,  that
charge is hereby reduced to the extent  necessary to eliminate  that  violation.
The  amounts,  if any,  previously  paid to Lender  in  excess of the  permitted
amounts shall be applied by Lender to reduce the principal of the  Indebtedness.
For the purpose of determining whether any applicable law limiting the amount of
interest or other  charges  permitted  to be  collected  from  Borrower has been
violated,  all Indebtedness  which  constitutes  interest,  as well as all other
charges levied in connection with the Indebtedness  which  constitute  interest,
shall be deemed to be  allocated  and spread  over the stated  term of the Note.
Unless otherwise required by applicable law, such allocation and spreading shall
be  effected  in such a manner  that the rate of interest so computed is uniform
throughout the stated term of the Note.

         26. WAIVER OF STATUTE OF LIMITATIONS.  Borrower hereby waives the right
to assert any statute of limitations as a bar to the  enforcement of the lien of
this Instrument or to any action brought to enforce any Loan Document.

         27. WAIVER OF MARSHALLING.  Notwithstanding  the existence of any other
security  interests  in the  Mortgaged  Property  held by Lender or by any other
party, Lender shall have the right to determine the order in which any or all of
the  Mortgaged  Property  shall be subjected  to the  remedies  provided in this
Instrument,  the Note, any other Loan Document or applicable  law.  Lender shall
have the  right to  determine  the  order in which  any or all  portions  of the
Indebtedness are satisfied from the proceeds  realized upon the exercise of such
remedies.  Borrower  and any party who now or in the future  acquires a security
interest in the Mortgaged Property and who has actual or constructive  notice of
this Instrument waives any and all right to require the marshalling of assets or
to require that any of the  Mortgaged  Property be sold in the inverse  order of
alienation  or that any of the  Mortgaged  Property  be sold in parcels or as an
entirety in  connection  with the exercise of any of the  remedies  permitted by
applicable law or provided in this Instrument.

         28.  FURTHER  ASSURANCES.  Borrower  shall  execute,  acknowledge,  and
deliver,  at its sole cost and expense,  all further acts,  deeds,  conveyances,
assignments,   estoppel  certificates,   financing  statements,   transfers  and
assurances  as Lender may require  from time to time in order to better  assure,
grant,  and convey to Lender the rights  intended to be  granted,  now or in the
future, to Lender under this Instrument and the Loan Documents.

         29. ESTOPPEL  CERTIFICATE.  Within 10 days after a request from Lender,
Borrower shall deliver to Lender a written statement, signed and acknowledged by
Borrower,  certifying to Lender or any person  designated  by Lender,  as of the
date of such  statement,  (i) that the Loan Documents are unmodified and in full
force and effect (or, if there have been modifications,  that the Loan Documents
are in full force and effect as modified and setting forth such  modifications);
(ii) the unpaid principal  balance of the Note; (iii) the date to which interest
under the Note has been paid; (iv) that Borrower is not in default in paying

                                       31

<PAGE>
the  Indebtedness  or in  performing  or  observing  any  of  the  covenants  or
agreements  contained in this Instrument or any of the other Loan Documents (or,
if the Borrower is in default,  describing  such default in reasonable  detail);
(v) whether or not there are then  existing  any  setoffs or  defenses  known to
Borrower against the enforcement of any right or remedy of Lender under the Loan
Documents; and (vi) any additional facts requested by Lender.

         30.      GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.

         (a)  This  Instrument,  and any Loan  Document  which  does not  itself
expressly identify the law that is to apply to it, shall be governed by the laws
of the jurisdiction in which the Land is located (the "Property Jurisdiction").

         (b) Borrower agrees that any  controversy  arising under or in relation
to the Note,  this  Instrument,  or any other Loan  Document  shall be litigated
exclusively  in the  Property  Jurisdiction.  The state and  federal  courts and
authorities with jurisdiction in the Property  Jurisdiction shall have exclusive
jurisdiction  over all  controversies  which shall arise under or in relation to
the  Note,  any  security  for the  Indebtedness,  or any other  Loan  Document.
Borrower irrevocably consents to service, jurisdiction, and venue of such courts
for any such litigation and waives any other venue to which it might be entitled
by virtue of domicile, habitual residence or otherwise.

         31.      NOTICE.

         (a) All notices,  demands and other communications  ("notice") under or
concerning this Instrument  shall be in writing.  Each notice shall be addressed
to the intended recipient at its address set forth in this Instrument, and shall
be deemed  given on the  earliest  to occur of (1) the date  when the  notice is
received  by the  addressee;  (2) the first  Business  Day  after the  notice is
delivered to a recognized overnight courier service,  with arrangements made for
payment of charges for next Business Day delivery; or (3) the third Business Day
after the notice is  deposited in the United  States mail with postage  prepaid,
certified mail, return receipt  requested.  As used in this Section 31, the term
"Business Day" means any day other than a Saturday, a Sunday or any other day on
which Lender is not open for business.

         (b) Any  party to this  Instrument  may  change  the  address  to which
notices intended for it are to be directed by means of notice given to the other
party in  accordance  with this  Section 31. Each party  agrees that it will not
refuse or reject  delivery of any notice given in  accordance  with this Section
31, that it will acknowledge, in writing, the receipt of any notice upon request
by the other party and that any notice rejected or refused by it shall be deemed
for purposes of this Section 31 to have been received by the rejecting  party on
the date so refused or rejected,  as conclusively  established by the records of
the U.S. Postal Service or the courier service.

         (c) Any notice  under the Note and any other Loan  Document  which does
not specify how notices are to be given shall be given in  accordance  with this
Section 31.

                                       32

<PAGE>
         32. SALE OF NOTE; CHANGE IN SERVICER. The Note or a partial interest in
the Note  (together with this  Instrument  and the other Loan  Documents) may be
sold one or more times without prior notice to Borrower.  A sale may result in a
change of the Loan  Servicer.  There also may be one or more changes of the Loan
Servicer  unrelated  to a sale of the  Note.  If there  is a change  of the Loan
Servicer, Borrower will be given notice of the change.

         33.  SINGLE ASSET  BORROWER.  Until the  Indebtedness  is paid in full,
Borrower  (a) shall not  acquire any real or  personal  property  other than the
Mortgaged   Property  and  personal   property  related  to  the  operation  and
maintenance of the Mortgaged Property;  (b) shall not operate any business other
than the management and operation of the Mortgaged  Property;  and (c) shall not
maintain its assets in a way difficult to segregate and identify.

         34.  SUCCESSORS AND ASSIGNS BOUND.  This Instrument shall bind, and the
rights granted by this Instrument shall inure to, the respective  successors and
assigns of Lender and Borrower.  However, a Transfer not permitted by Section 21
shall be an Event of Default.

         35.  JOINT AND  SEVERAL  LIABILITY.  If more than one  person or entity
signs this Instrument as Borrower,  the obligations of such persons and entities
shall be joint and several.

         36.      RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.

         (a) The  relationship  between Lender and Borrower shall be solely that
of creditor and debtor,  respectively,  and nothing contained in this Instrument
shall create any other relationship between Lender and Borrower.

         (b) No creditor  of any party to this  Instrument  and no other  person
shall  be a  third  party  beneficiary  of this  Instrument  or any  other  Loan
Document.  Without  limiting the generality of the preceding  sentence,  (1) any
arrangement (a "Servicing Arrangement") between the Lender and any Loan Servicer
for loss sharing or interim  advancement of funds shall constitute a contractual
obligation  of such Loan  Servicer  that is  independent  of the  obligation  of
Borrower for the payment of the Indebtedness,  (2) Borrower shall not be a third
party beneficiary of any Servicing  Arrangement,  and (3) no payment by the Loan
Servicer  under  any  Servicing  Arrangement  will  reduce  the  amount  of  the
Indebtedness.

         37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any
provision of this Instrument shall not affect the validity or  enforceability of
any other  provision,  and all other  provisions  shall remain in full force and
effect.  This Instrument  contains the entire  agreement among the parties as to
the  rights  granted  and  the  obligations  assumed  in this  Instrument.  This
Instrument  may not be amended  or  modified  except by a writing  signed by the
party against whom enforcement is sought.

                                       33

<PAGE>
         38.  CONSTRUCTION.  The  captions  and headings of the sections of this
Instrument are for convenience  only and shall be disregarded in construing this
Instrument.  Any  reference  in this  Instrument  to an "Exhibit" or a "Section"
shall,  unless  otherwise  explicitly  provided,   be  construed  as  referring,
respectively,  to an Exhibit attached to this Instrument or to a Section of this
Instrument.  All  Exhibits  attached to or referred  to in this  Instrument  are
incorporated by reference into this Instrument. Any reference in this Instrument
to a statute or  regulation  shall be  construed as referring to that statute or
regulation as amended from time to time.  Use of the singular in this  Agreement
includes the plural and use of the plural includes the singular. As used in this
Instrument, the term "including" means "including, but not limited to."

         39. LOAN  SERVICING.  All actions  regarding  the servicing of the loan
evidenced by the Note,  including  the  collection  of payments,  the giving and
receipt  of  notice,  inspections  of the  Property,  inspections  of books  and
records,  and the granting of consents and  approvals,  may be taken by the Loan
Servicer unless Borrower  receives notice to the contrary.  If Borrower receives
conflicting  notices  regarding  the identity of the Loan  Servicer or any other
subject, any such notice from Lender shall govern.

         40. DISCLOSURE OF INFORMATION. Lender may furnish information regarding
Borrower  or the  Mortgaged  Property  to  third  parties  with an  existing  or
prospective  interest in the servicing,  enforcement,  evaluation,  performance,
purchase or  securitization  of the  Indebtedness,  including  trustees,  master
servicers,  special servicers,  rating agencies,  and organizations  maintaining
databases on the  underwriting  and  performance of multifamily  mortgage loans.
Borrower  irrevocably waives any and all rights it may have under applicable law
to prohibit such disclosure, including any right of privacy.

         41.  NO  CHANGE  IN  FACTS OR  CIRCUMSTANCES.  All  information  in the
application for the loan submitted to Lender (the "Loan Application") and in all
financial  statements,  rent rolls,  reports,  certificates  and other documents
submitted in connection  with the Loan  Application are complete and accurate in
all material respects.  There has been no material adverse change in any fact or
circumstance that would make any such information incomplete or inaccurate.

         42.  SUBROGATION.  If, and to the extent that, the proceeds of the loan
evidenced by the Note are used to pay,  satisfy or discharge  any  obligation of
Borrower  for the payment of money that is secured by a  pre-existing  mortgage,
deed of trust or other lien encumbering the Mortgaged Property (a "Prior Lien"),
such loan proceeds shall be deemed to have been advanced by Lender at Borrower's
request, and Lender shall automatically, and without further action on its part,
be subrogated to the rights,  including lien priority, of the owner or holder of
the  obligation  secured  by the Prior  Lien,  whether  or not the Prior Lien is
released.

Additional Covenants. Borrower and Lender further covenant and agree as follows:

                                       34

<PAGE>
         43.  ACCELERATION;  REMEDIES.  At any time during the  existence  of an
Event of Default, Lender, at Lender's option, may declare the Indebtedness to be
immediately due and payable without further demand,  and may invoke the power of
sale and any one or more other remedies  permitted by applicable law or provided
in this Instrument or in any other Loan Document. Borrower acknowledges that the
power of sale granted in this  Instrument  may be  exercised  by Lender  without
prior judicial hearing.  Borrower has the right to bring an action to assert the
non-existence  of an Event of  Default  or any  other  defense  of  Borrower  to
acceleration  and  sale.  Lender  shall be  entitled  to  collect  all costs and
expenses  incurred  in  pursuing  such  remedies,  including  but not limited to
attorneys' fees, costs of documentary evidence, abstracts and title reports.

         If Lender  invokes  the power of sale,  Lender or  Trustee  shall  mail
copies of the notice of sale to  Borrower  and to other  persons  prescribed  by
applicable law in the manner  provided by applicable  law.  Trustee may sell the
Mortgaged  Property at the time and place and under the terms  designated in the
notice  of  sale  in one or  more  parcels  and in such  order  as  Trustee  may
determine.  Trustee  may  postpone  sale of all or any  parcel of the  Mortgaged
Property to any later time on the same date by public  announcement  at the time
and place of any  previously  scheduled  sale.  Lender or Lender's  designee may
purchase the Mortgaged Property at any sale.

         Trustee  shall deliver to the purchaser  Trustee's  deed  conveying the
Mortgaged Property so sold without any covenant or warranty, express or implied.
The recitals in Trustee's deed shall be prima facie evidence of the truth of the
statements contained in those recitals.  Trustee shall apply the proceeds of the
sale  in the  following  order:  (a) to all  costs  and  expenses  of the  sale,
including, but not limited to, reasonable Trustee's fees and attorneys' fees and
costs of title evidence;  (b) to the  Indebtedness  in such order as Lender,  in
Lender's sole discretion,  directs; and (c) the excess, if any, to the person or
persons legally entitled to it.

         44. RELEASE. Upon payment of the Indebtedness, Lender shall release the
lien of this Instrument.

         45.  SUBSTITUTE  TRUSTEE.  Lender at Lender's  option,  with or without
cause,  may from time to time remove Trustee and appoint a successor  trustee by
an  instrument  recorded  in the city or  county  in which  this  Instrument  is
recorded.  Without conveyance of the Mortgaged  Property,  the successor trustee
shall succeed to all the title,  power and duties  conferred upon the Trustee in
this Instrument and by applicable law.

         46. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) COVENANTS AND
AGREES  NOT TO ELECT A TRIAL BY JURY WITH  RESPECT TO ANY ISSUE  ARISING  OUT OF
THIS INSTRUMENT OR THE  RELATIONSHIP  BETWEEN THE PARTIES AS BORROWER AND LENDER
THAT IS  TRIABLE  OF RIGHT BY A JURY AND (B)  WAIVES  ANY RIGHT TO TRIAL BY JURY
WITH  RESPECT TO SUCH ISSUE TO THE EXTENT  THAT ANY SUCH RIGHT  EXISTS NOW OR IN
THE FUTURE. THIS WAIVER OF

                                       35

<PAGE>
RIGHT  TO  TRIAL  BY JURY IS  SEPARATELY  GIVEN  BY EACH  PARTY,  KNOWINGLY  AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

         ATTACHED  EXHIBITS.   The  following  Exhibits  are  attached  to  this
Instrument:

                  |X|      Exhibit A        Description of the Land (required)

                  |X|      Exhibit B        Modifications to Instrument

         IN WITNESS  WHEREOF,  Borrower has signed and delivered this Instrument
or has caused this  Instrument to be signed and delivered by its duly authorized
representative.

                            NORTH WINN ACQUISITION, L.L.C., a
                                     Missouri limited liability company

                            By:      Maxus Realty Trust, Inc., a Missouri
                                     corporation, Manager

                                     By: /s/ Daniel W. Pishny
                                              Daniel W. Pishny
                                              President

                                       36

<PAGE>
STATE OF Missouri

CITY/COUNTY OF Clay, ss:

         On this  10th  day  of  August,  2000,  before me, the  undersigned,  a
Notary  Public  in and for  the  City/County  and  State  aforesaid,  personally
appeared  Daniel  W.  Pishny,  personally  known to me and known to me to be the
President of Maxus Realty Trust, Inc., a Missouri corporation,  Manager of North
Winn  Acquisition,  L.L.C., a Missouri limited liability  company,  and the same
person  who  executed  the  foregoing  instrument,  and duly  acknowledged  said
execution  to be for and on  behalf  of and as the act and deed of said  limited
liability company.

         IN WITNESS  WHEREOF,  I have  hereunto set my hand and notarial seal on
the day and year last above written.

                                                      /s/ Grace E. Bales
                                                      Notary Public

My Commission Expires:  Aug. 24, 2000

[Notarial Seal]

                                       37

<PAGE>
                                  KEY PRINCIPAL

Key Principal

Name:             Maxus Realty Trust, Inc., a Missouri corporation

Address:          104 Armour Road
                  North Kansas City, Missouri 64116

                                       38

<PAGE>
                                    EXHIBIT A

All that part of the Northeast Quarter of Section 6 and the Northwest Quarter of
Section 5, both in Township 50, Range 32, in Clay County, Missouri,  including a
portion  of  Block  "A" in  LAKESIDE,  an  addition  in  said  County  all  more
particularly  described as follows:  Beginning at a point that is 87.5 feet East
of the West  line and  201.63  feet  South of the  North  line of the  Northwest
Quarter of said Section 5; thence South 0 degrees 32 minutes 02 seconds West and
parallel  to the West line of said  Quarter a distance  of 255.46  feet;  thence
South 89 degrees 43 minutes 32 seconds  East and  parallel  to the North line of
said  Northwest  Quarter a distance of 362.50  feet;  thence  North 0 degrees 32
minutes 02 seconds East and parallel to the West line of said Quarter a distance
of 98.13  feet to a point  that is 358.90  feet  South of the North line of said
Northwest Quarter; thence North 74 degrees 09 minutes 31 seconds East a distance
of 322.85 feet;  thence South 22 degrees 26 minutes 34 seconds  East, a distance
of 53.88 feet to a point in the North Right-of-Way line of the Mid-Town Freeway;
thence South 49 degrees 07 minutes 34 seconds West along said  Right-of-Way line
a distance of 523.84  feet;  thence  South 56 degrees 43 minutes 14 seconds West
along said  Right-of-Way  a distance of 75.67 feet;  thence  South 49 degrees 07
minutes 34 seconds West along said  Right-of-Way a distance of 25.0 feet; thence
South 37 degrees 48 minutes 54 seconds West along said  Right-of-Way  a distance
of 50.99  feet;  thence  South 49 degrees 07 minutes 34 seconds  West along said
Right-of-Way  a distance of 272.85 feet to a point in the  centerline  of Barnes
Avenue as shown on the  recorded  plat of  LAKESIDE;  thence North 89 degrees 45
minutes 33 seconds  West along  said  centerline  a distance  of 70.73 feet to a
point in the West line of the Northwest  Quarter of said Section 5; thence South
0 degrees 32 minutes  02 seconds  West along said West line a distance  of 62.01
feet to a point in the North Right-of-Way line of said Mid-Town Freeway;  thence
South 49 degrees 07 minutes 34 seconds West along said  Right-of-Way  a distance
of 152.94 feet to a point in the East Right-  of-Way line of State  Highway #10;
thence  Northerly along said Highway #10  Right-of-Way  line which is a curve to
the left having a radius of 184.30 feet a distance of 13.76 feet to its point of
tangency;  thence  North 3  degrees  21  minutes  02  seconds  West  along  said
Right-of-  Way line and  tangent to said curve a distance  of 448.30 feet to the
point  of a  curve  to  the  right  having  a  radius  of  691.80  feet;  thence
Northeasterly  along  said  curve a  distance  of  234.75  feet to its  point of
tangency;  thence  North 16  degrees  05  minutes  31  seconds  East  along said
Right-of-Way  tangent a  distance  of 91.63  feet to the point of a curve to the
right  having  a  radius  of  166.0  feet;  thence   Northeasterly   along  said
Right-of-Way  curve a distance  of 210.96  feet to the point of tangency of said
curve;  thence  North 88 degrees 54 minutes 23 seconds East along said tangent a
distance  of 29.44  feet to the point of  beginning,  all in Kansas  City,  Clay
County, Missouri.

                                       39

<PAGE>
                                    EXHIBIT B

                           MODIFICATIONS TO INSTRUMENT
                            (Key Principal Transfers)

         The following modifications are made to the text of the Instrument that
precedes this Exhibit:

         1.       Section  21(b) is  modified to delete the period at the end of
                  Section 21(b)(6) and substitute "; and" therefore and to add a
                  new Section 21(b)(7):

                  "(7)     a Transfer by Key  Principal of  ownership  interests
                           held  by  the  Key   Principal   in   Borrower  to  a
                           partnership (the "Operating  Partnership")  that will
                           be the sole member of  Borrower;  provided,  however,
                           that (A) after such Transfer, Key Principal shall own
                           no less than 51% of the  partnership  interest in the
                           Operating  Partnership  and shall  maintain  the same
                           right and  ability  to manage  and  control  Borrower
                           (through the Operating Partnership as an intermediate
                           entity)  as  existed  prior to the  Transfer  and (B)
                           Lender shall be provided  with written  notice of all
                           such Transfers  permitted under this section 21(b)(7)
                           no  later  than  5 days  prior  to  the  date  of any
                           Transfer."

         2.       All  capitalized  terms used in this Exhibit not  specifically
                  defined  herein  shall have the meanings set forth in the text
                  of the Instrument that precedes this Exhibit.

                                                    /s/ DWP
                                                     INITIALS

                                       40

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]