Document:

<PAGE>
                                                                  Exhibit 10.10

                                 PROMISSORY NOTE

$36,000,000.00                                            As of October 1, 1997

         FOR VALUE RECEIVED, the undersigned, CATALINA PARTNERS, L.P., a
Delaware limited partnership, with an address of 20 South Third Street,
Columbus, Ohio 43215, Attention: George A. Schmidt, Esquire, Senior Vice
President and General Counsel, Telefax Number (614) 621-9311 ("Maker"), promises
to pay to the order of NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation
(together with any subsequent holder of this Note, and their respective
successors and assigns, "Holder") at its office located at Two World Financial
Center, Building B, 21st Floor, New York, New York, 10281, Attention: Stuart
Silberberg, Vice President, Telefax Number (212) 667-1666, or at such other
address as Holder may from time to time designate in writing, the principal sum
of THIRTY-SIX MILLION DOLLARS ($36,000,000.00) together with interest thereon,
Default Rate interest, Yield Maintenance Premium, if any and all other sums due
under and secured by the Mortgage or by any other Loan Documents; such
principal, interest, Default Rate interest, Yield Maintenance Premium, if any,
and other sums to be calculated and payable as provided in that certain Loan
Agreement of even date herewith between Maker and Holder (as amended, modified
and supplemented and in effect from time to time, the "Loan Agreement").
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Loan Agreement.

         All payments made hereunder shall be applied as provided in Section 2.7
of the Loan Agreement.

         The Loan Agreement provides for, among other things:

         (1) a payment of interest only for the first Interest Accrual Period on
the date hereof;

         (2) a monthly constant payment of $257,411.04 (which payment is
calculated by using the Initial Interest Rate and an amortization schedule of
three hundred sixty (360) months) to be made beginning on November 11, 1997, and
on the eleventh (11th) day of each and every calendar month thereafter;
provided, however, that for purposes of making such payments hereunder, but not
for purposes of calculating interest accrual periods, if the eleventh (11th) day
of a given month is not a Business Day then the Payment Date for such month
shall be the next Business Day;

         (3) a maturity date of October 11, 2027;

         (4) an Initial Interest Rate of 7.73% per annum;

         (5) a Revised Interest Rate equal to the greater of (x) the sum of the
Initial Interest Rate plus four hundred (400) basis points, or (y) as of the
Optional Prepayment

<PAGE>

Date, the sum of the Twenty Year Treasury Rate plus five hundred fifty (550)
basis points, such Revised Interest Rate not to exceed the Maximum Amount;

         (6) an Optional Prepayment Date of October 11, 2007;

         (7) a Default Rate equal to the lesser of (i) the Maximum Amount or
(ii) the Interest Rate plus four percent (4%);

         (8) the Loan cannot be voluntarily prepaid prior to the Optional
Prepayment Date; on and after the Optional Prepayment Date, (a) the Loan may be
prepaid in whole or in part and (b) Section 2.6 of the Loan Agreement requires
mandatory prepayment of all Excess Cash Flow; and

         (9) interest shall accrue on the outstanding principal balance of the
Loan and all other amounts due to Holder under the Loan Documents commencing on
the Closing Date, and such interest shall accrue (a) before the Optional
Prepayment Date, at the Initial Interest Rate and (b) on and after the Optional
Prepayment Date, at the Revised Interest Rate. Interest shall be computed on the
actual number of days elapsed, based on a 360 day year, compounded monthly.

         The obligations of Maker under this Note are secured by, among other
things, the following:

         (1) the Mortgage; and

         (2) the other Loan Documents, and Liens granted in favor of Holder by
Maker and/or encumbering or affecting the Facility.

         The principal sum evidenced by this Note, together with accrued
interest, Default Rate Interest, and Yield Maintenance Premium, if any, and all
other sums due under and secured by the Mortgage or by any other Loan Document
shall become immediately due and payable at the option of the Holder upon the
occurrence of any Event of Default.

         If Maker fails to make (i) the payment due on the Maturity Date or (ii)
any other payment of principal or interest, the Yield Maintenance Premium, if
any, or other sum due on any date on which such payment is due, all amounts due
hereunder thereafter will bear interest at the Default Rate. Maker will also pay
to Holder, after the occurrence of an Event of Default, in addition to the
amount due, all reasonable costs of collecting, securing, or attempting to
collect or secure this Note or any other Loan Document, including, without
limitation, court costs and reasonable attorneys' fees (including reasonable
attorneys' fees on any appeal by either Maker or Holder and in any bankruptcy
proceedings).

         With respect to the amounts due pursuant to this Note, Maker waives the
following:

<PAGE>

         (1) All rights of exemption of property from levy or sale under
execution or other process for the collection of debts under the Constitution or
laws of the United States or any State thereof;

         (2) Demand, presentment, protest, notice of dishonor, notice of
nonpayment, notice of protest, notice of intent to accelerate, notice of
acceleration, suit against any party, diligence in collection of this Note and
in the handling of securities at any time existing in connection herewith, and
all other requirements necessary to enforce this Note except for notices
required by Governmental Authorities and notices required by the Loan Agreement;
and

         (3) Any further receipt by Holder or acknowledgement by Holder of any
collateral now or hereafter deposited as security for the Loan.

         It is the intention of Maker and Holder to conform strictly to
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law then, in that event, notwithstanding
anything to the contrary in any agreement entered into in connection with or as
security for this Note, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under applicable law that is taken,
reserved, contracted for, charged or received under this Note or under any of
the other aforesaid agreements or otherwise in connection with this Note shall
under no circumstances exceed the maximum amount of interest allowed by
applicable law, and any excess shall be credited on account of this Note by the
holder hereof (or if this Note shall have been paid in full, refunded to Maker)
in accordance with the Loan Agreement; and (ii) in the event that maturity of
this Note is accelerated by reason of an election by the Holder resulting from
any default hereunder or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the maximum amount of interest allowed by applicable law, and any
interest in excess of the maximum amount of interest allowed by applicable law,
if any, provided for in this Note or otherwise shall be cancelled automatically
as of the date of such acceleration or prepayment and, if theretofore prepaid,
shall be credited on account of this Note (or if this Note shall have been paid
in full, refunded to Maker).

         In determining whether or not the interest paid or payable under any
specific contingency exceeds the maximum amount allowed by applicable law, the
Holder shall, to the maximum extent permitted under applicable law (a) exclude
voluntary prepayments and the effects thereof, and (b) amortize, prorate,
allocate and spread, in equal parts, the total amount of interest throughout the
entire contemplated term of this Note so that the interest rate is uniform
throughout the entire term of this Note; provided, that if this Note is paid and
performed in full prior to the end of the full contemplated term hereof, and if
the interest received for the actual period of existence thereof exceeds the
maximum amount allowed by applicable law, Holder shall refund to Maker the
amount of such excess, and in such event, Holder shall not be subject to any
penalties provided by any laws for contracting for, charging or receiving
interest in excess of the maximum amount allowed by applicable law.

<PAGE>

         Holder shall not by any act, delay, omission or otherwise be deemed to
have modified, amended, waived, extended, discharged or terminated any of its
rights or remedies, and no modification, amendment, waiver, extension, discharge
or termination of any kind shall be valid unless in writing and signed by Holder
and Maker. All rights and remedies of Holder under the terms of this Note and
applicable statutes or rules of law shall be cumulative, and may be exercised
successively or concurrently. Maker agrees that there are no defenses, equities
or setoffs with respect to the obligations set forth herein, and to the extent
any such defenses, equities, or setoffs may exist, the same are hereby expressly
released, forgiven, waived and forever discharged.

         Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable Legal Requirements,
but if any provision of this Note shall be prohibited by or invalid under
applicable Legal Requirements, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.

         Holder may, at its option, release any Collateral given to secure the
indebtedness evidenced hereby, and no such release shall impair the obligations
of Maker to Holder.

         The proceeds of this Note were disbursed from the State of New York,
which State the parties agree has a substantial relationship to the parties and
to the underlying transaction embodied hereby, and in all respects, including,
without limitation, matters of construction, validity and performance, this Note
and the obligations arising hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
and performed in such State and any applicable law of the United States of
America. To the fullest extent permitted by law, Maker hereby unconditionally
and irrevocably waives any claim to assert that the law of any other
jurisdiction governs this Note, and this Note shall be governed by and construed
in accordance with the laws of the State of New York pursuant to Section 5-1401
of the New York General Obligations Law.

         Any legal suit, action or proceeding against Holder or Maker arising
out of or relating to this Note shall be instituted in any federal or state
court in New York, New York, pursuant to Section 5-1402 of the New York General
Obligations Law, or in any federal or state court in the jurisdiction in which
any Collateral is located, and Maker waives any objection which it may now or
hereafter have to the laying of venue or any such suit, action or proceeding,
and Maker hereby irrevocably submits to the jurisdiction of any such court in
any suit, action or proceeding. Maker does hereby designate and appoint CT
Corporation, 1633 Broadway, New York, NY 10019 as its authorized agent to accept
and acknowledge on its behalf service of any all process which may be served in
any such suit, action or proceeding in any such federal or state court, and
agrees that service of process upon said agent at said address (or at such other
office in New York, New York as may be designated by such agent in accordance
with the terms hereof) with copies to Maker at the address set forth in the
first paragraph of the Note and to Frost & Jacobs LLP, One Columbus, Suite 1000,
10 West Broad Street, Columbus Ohio 43215-

<PAGE>

3467, Attention: John I. Cadwallader, Esquire, and written notice of said
service of Maker mailed or delivered to Maker in the manner provided in the Loan
Agreement shall be deemed in every respect effective service of process upon
Maker, in any such suit, action or proceeding. Maker (i) shall give prompt
notice to Holder of any changed address of its authorized agent hereunder, (ii)
may at any time and from time to time designate a substitute authorized agent
(which office shall be designated as the address for service of process), and
(iii) shall promptly designate such a substitute if its authorized agent ceases
to have an office or is dissolved without leaving a successor.

         MAKER AND HOLDER TO THE FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO,
WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS NOTE OR THE
OTHER LOAN DOCUMENTS. EACH OF MAKER AND HOLDER AGREES THAT THE OTHER MAY FILE A
COPY OF THIS WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY
AND BARGAINED AGREEMENT OF THE OTHER IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY
JURY, AND THAT, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, ANY DISPUTE OR
CONTROVERSY WHATSOEVER BETWEEN MAKER AND HOLDER SHALL INSTEAD BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

         Holder may assign all or part of its right, title and interest in and
to this Note to another Person, including without limitation, to a trustee or
servicer before or after a Securitization, and such Person shall be entitled to
exercise all or any portion of Holder's rights hereunder.

         Without limiting the applicability of the terms of any Loan Document to
this Note, this Note is and shall be subject to the exculpation provisions of
Section 8.14 of the Loan Agreement.

                        [Signature on the following page]

<PAGE>

         IN WITNESS WHEREOF, intending to be legally bound, Maker has caused
this Promissory Note to be properly executed as of the date first above written
and has authorized this Promissory Note to be dated as of the day and year first
above written.

                                     MAKER:

                                     CATALINA PARTNERS, L.P.
                                     a Delaware limited partnership

                                     By:  Colonial Park Trust, a Delaware
                                          business trust, its general partner.

                                          By: Glimcher Colonial Park Mall, Inc.,
                                              a Delaware corporation, as Trustee

                                              By:  /s/ George A Schmidt
                                                   ----------------------------
                                                   George A. Schmidt
                                                   Senior Vice President

<PAGE>

Pay to the order of ________________________________________________________, a

_____________________________________________________, having an address of

______________________________________________________________________________

______________________________________________________________________________,
without recourse, representation or warranty.

                                     NOMURA ASSET CAPITAL CORPORATION, a
                                     Delaware corporation

Date:                                By:
      ------------------------          --------------------------------------
                                        Name:
                                        Title:<PAGE>
                                                                   Exhibit 10.11

THIS INSTRUMENT PREPARED BY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:

Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
Attention: Joseph B. Heil, Esquire

THIS IS AN OPEN-END MORTGAGE SECURING FUTURE ADVANCES US TO A MAXIMUM PRINCIPAL
AMOUNT OF $36,000,000 PLUS ACCRUED INTEREST AND OTHER INDEBTEDNESS AS DESCRIBED
IN 42 PA.C.S.A Section 8143

The undersigned certifies that the address of the Mortgagee is:
Two World Financial Center
Building B
New York, New York 10281

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

On behalf of Mortgagee

                                 Exhibit 10.11

    ------------------------------------------------------------------------
                    SPACE ABOVE THIS LINE FOR RECORDER'S USE

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

                                       by

                             CATALINA PARTNERS, L.P.
                         A Delaware limited partnership
                              Having an address of
                              20 South Third Street
                              Columbus, Ohio 43215
                                 (as Mortgagor)

                                       to

                        NOMURA ASSET CAPITAL CORPORATION
                              Having an address at
                           Two World Financial Center
                             Building B, 21st Floor
                            New York, New York 10281
                                 (as Mortgagee)

Property:         Colonial Park Mall
                  Lower Paxton Township,
                  Dauphin County, Pennsylvania

<PAGE>

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

          THIS OPEN-END FEE MORTGAGE, LEASEHOLD MORTGAGE, ASSIGNMENT OF RENTS,
 SECURITY AGREEMENT AND FIXTURE FILING (this "Mortgage") is made as of October
 1, 1997 by CATALINA PARTNERS, L.P., a Delaware limited partnership, having an
 address of 20 South Third Street, Columbus, Ohio 43215, Attention: George A.
 Schmidt, Esquire, Senior Vice President and General Counsel, Telefax Number
 (614) 621-9311 ("Mortgagor"), in favor of NOMURA ASSET CAPITAL CORPORATION, a
 Delaware corporation having an address at Two World Financial Center, Building
 B, 21st Floor, New York, New York, 10281, Attention: Stuart Silberberg, Vice
 President, Telefax Number (212) 667-1666 (together with its successors and
 assigns, "Mortgagee").

                                    RECITALS

          WHEREAS, Mortgagor and Mortgagee are parties to a Loan Agreement of
 even date herewith (said Loan Agreement, as modified and supplemented and in
 effect from time to time, the "Loan Agreement"), which Loan Agreement provides
 for a loan (the "Loan") to be made by Mortgagee to Mortgagor. The Loan is to be
 evidenced by, and repayable with interest thereon, Default Rate interest,
 together with the Yield Maintenance Premium, if any, in accordance with a
 promissory note executed and delivered to the order of Mortgagee (such note, as
 modified and supplemented and in effect from time to time, the "Note");

         WHEREAS, Mortgagor contemplates that Mortgagee's interest in and to,
inter alia, the Loan (or a portion thereof), the Note, this Mortgage and the
Loan Documents may be assigned by Mortgagee to another Person, including without
limitation to a trustee on behalf of security holders in connection with a
Securitization;

         WHEREAS, the Mortgagor is the owner of a leasehold interest in certain
land {the "Leased Land") located as more particularly described on Exhibit B
attached hereto and made a part hereof (such leasehold interest in the Leased
Land, the "Leasehold Estate" and any buildings and improvements constructed
thereon pursuant to the ground lease more particularly described on Exhibit C
attached hereto and made a part hereof (as amended, the "Ground Lease");

          WHEREAS, it is a condition to the obligation of Mortgagee to extend
 credit to Mortgagor pursuant to the Loan Agreement that Mortgagor execute and
 deliver this Mortgage;

          NOW, THEREFORE, in consideration of the making of the Loan by
Mortgagee to Mortgagor and the covenants, agreements, representations and
warranties set forth in the Loan Documents, and for the purpose of securing the
following (collectively, the "Loan Obligations"):

<PAGE>

         (a) all principal (including, without limitation, any advance to
Mortgagor now or hereafter made), interest, Default Rate interest, the Yield
Maintenance Premium, if any, owing from time to time under the Note, and all
obligations owing by Mortgagor under the Loan Documents and amendments,
modifications, extensions, substitutions, exchanges and renewals of the Loan
Documents (each of which amendment, modification, extension, substitution,
exchange and renewal shall enjoy the same priority as the advance made on the
Closing Date as evidenced by the Note) and all amounts from time to time owing
by Mortgagor under this Mortgage or any of the other Loan Documents; and

         (b) all covenants, agreements and other obligations of Mortgagor under
the Loan Documents;

Mortgagor hereby irrevocably grants, bargains, sells, releases, conveys,
warrants, assigns, transfers, mortgages, pledges, sets over and confirms unto
Mortgagee, its successors and assigns, to have and to hold forever with mortgage
covenants, subject to all of the terms, conditions, covenants and agreements
herein set forth, for the security and benefit of Mortgagee and its respective
successors and assigns, all Mortgagor's interest now owned or hereafter acquired
in the following described land, real estate, leasehold estate, buildings,
improvements, equipment, fixtures, furniture, and other personal property (which
together with the Security Interest Property (as hereinafter defined) and any
additional such property and interests hereafter acquired by Mortgagor and
subjected to the lien of this Mortgage, or intended to be so, as the same may be
from time to time constituted, is hereafter referred to as the "Mortgaged
Property") to-wit:

         (a) All the land located in the County and State identified in Exhibit
A attached hereto, as more particularly described in such Exhibit A (the
"Land"), subject, however, to the Permitted Encumbrances;

         (b) The Leasehold Estate and all right, title and interest of Mortgagor
in, to and under the Ground Lease, together with all rights of use, occupancy
and enjoyment and in and to all rents, income and profits arising from or
pursuant to the Ground Lease together with all amendments, extensions, renewals
or modifications thereof and all credits, deposits options, claims, rights and
privileges of Mortgagor as tenant under the Ground Lease, including, without
limitation, all rights, interests and claims to any and all insurance proceeds
and condemnation proceeds and the right to renew or extend the Ground Lease in
connection with any bankruptcy or insolvency proceeding of the Fee owner;

         (c) All Improvements and Equipment (the Land, Improvements and
Equipment collectively, the "Facility");

         (d) All Appurtenant Rights;

         (e) All Rents;

<PAGE>

         (f) All Collateral; and

         (g) All products and Proceeds of any of the foregoing.

         AND, as additional security, Mortgagor, as debtor, hereby grants to
Mortgagee a continuing security interest in the foregoing property and in the
Collateral, and in any Property as to which a security interest can be created
or perfected, now existing or hereafter coming into existence, and all
substitutions replacements, renewals and additions to and all products and
Proceeds of the foregoing (collectively, the "Security Interest Property"). This
Mortgage is intended to be and shall be effective as a security agreement
pursuant to the UCC.

         TO HAVE AND TO HOLD the Mortgaged Property and all parts thereof unto
Mortgagee, its successors and assigns forever, subject however to the Permitted
Encumbrances and the terms and conditions herein;

         PROVIDED, HOWEVER, that these presents are upon the express condition
that, if Mortgagor shall (i) pay or cause to be paid to Mortgagee the principal,
interest, Default Rate interest, and the Yield Maintenance Premium, if any,
payable in respect to the Note, at the times and in the manner stipulated
therein and herein, all without any deduction or credit for taxes or other
similar charges paid by Mortgagor, and shall keep, perform, and observe all and
singular the covenants and promises in each of the Loan Documents and in the
Loan Agreement expressed to be kept, performed, and observed by and on the part
of Mortgagor, all without fraud or delay or (ii) comply with the provisions of
Section 2.11 of the Loan Agreement, then this Mortgage, and all the properties,
interests, and rights hereby granted, bargained, and sold shall cease, terminate
and be void; otherwise the same shall remain in full force and effect.

         TO PROTECT THE SECURITY OF THE MORTGAGE, MORTGAGOR HEREBY COVENANTS AND
AGREES AS FOLLOWS:

                           [INTENTIONALLY LEFT BLANK]

<PAGE>

                                    ARTICLE I

                                   Definitions

         Section 1.1. Certain Defined Terms. For all purposes of this Mortgage
all capitalized terms shall have the meaning ascribed thereto in the Loan
Agreement unless defined herein, and:

         "Accounts" means all of Mortgagor's "accounts," as such term is defined
in the UCC, and, to the extent not included in such definition, all rights to
payment for goods sold or leased or for services rendered arising from the
ownership or operation of the Facility and not evidenced by an Instrument,
including, without limitation, all accounts and accounts receivable arising from
the ownership or operation of the Facility, now existing or hereafter coming
into existence, and all proceeds thereof (whether cash or non cash, movable or
immovable, tangible or intangible) received from the sale, exchange, transfer,
collection and other disposition or substitution thereof.

         "Appurtenant Rights" means all easements, rights-of-way, strips and
gores of land, vaults, streets, ways, alleys, passages, sewer rights, waters,
water courses, water rights, air rights, development rights and powers and, to
the extent now or hereafter owned by or hereafter appurtenant to, or used in
connection with, or located on, under or above the Land and Leasehold Estate or
any part of parcel thereof, and all ground leases, subleases, estates, rights,
titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances, reversions, and remainders whatsoever, in any way belonging,
relating or appertaining to the Land and Leasehold Estate or any part thereof.

         "Collateral" means, collectively, the Accounts, Account Collateral,
Appurtenant Rights, Equipment, General Intangibles, goods, Improvements,
Instruments, Inventory, Leases, Land, Money, Permitted Investments, Permits (to
the full extent assignable), Rents, investment properties, and letters of
credit, and all Proceeds and products of any of the foregoing, all whether now
owned or hereafter acquired, and all other property which is or hereafter may
become subject to a Lien in favor of Mortgagee.

         "Condemnation Proceeds" means any all awards, compensation
reimbursement and proceeds paid or to be paid in connection with a Taking.

         "Equipment" means all of Mortgagor's "equipment," as such term is
defined in the UCC, and, to the extent not included in such definition, all
fixtures, appliances, machinery, furniture, furnishings, decorations, tools and
supplies, now owned or hereafter acquired by Mortgagor, including without
limitation, all beds, linens, radios, televisions, carpeting, telephones, cash
registers, computers, lamps, glassware, restaurant and kitchen equipment, and
building equipment, including, without limitation, all heating, lighting,
incinerating, waste removal and power equipment, engines, pipes, tanks, motors,
conduits, switchboards, security and alarm systems, plumbing, lifting, cleaning,
fire prevention, fire extinguishing, refrigeration, washing machines, dryers,
stoves, refrigerators, ventilating, and communications apparatus, air

<PAGE>

cooling and air conditioning apparatus, escalators, elevators, ducts, and
compressors, materials and supplies, and all other machinery, apparatus,
equipment, fixtures and fittings now owned or hereafter acquired by Mortgagor
wherever located, any portion thereof or any appurtenances thereto, together
with all additions, replacements, parts, fittings, accessions, attachments,
accessories, modifications and alterations of any of the foregoing.

         "Event of Default" has the meaning provided in Section 5.1.

         "Facility" has the meaning provided in the Recitals of this Mortgage.

         "Fee Owner" has the meaning set forth in Exhibit C to this Mortgage.

         "General Intangibles" means all of Mortgagor's "general intangibles,"
as such term is defined in the UCC, and to the extent not included in such
definition, all intangible personal property of Mortgagor (other than Accounts,
Rents, Instruments, Inventory, Money and Permits), including, without
limitation, chooses in action, settlements, judgments, contract rights, rights
to performance (including, without limitation, rights under warranties) refunds
of real estate taxes and assessments and other rights to payment of Money,
copyrights, trademarks, trade names, service marks, trade secrets, and patents,
the goodwill associated with any of the foregoing, and all applications for any
of the foregoing, in each case whether now existing or hereafter in existence.

         "Ground Lease" has the meaning provided in the recitals of this
Mortgage.

         "Impositions" means all ground rents and all taxes (including, without
limitation, all real estate, ad valorem or value added, sales (including those
imposed on lease rentals), use, single business, gross receipts, value added,
intangible transaction privilege, privilege, license or similar taxes),
assessments (including, without limitation, to the extent not discharged prior
to the Closing Date, all assessments for public improvements or benefits,
whether or not commenced or completed within the term of this Mortgage), water,
sewer or other rents and charges, excises, levies, fees (including, without
limitation, license, permit, inspections, authorization and similar fees), and
all other governmental charges, in each case whether general or special,
ordinary or extraordinary, foreseen or unforeseen, of every character in respect
of the Facility, (including all interest and penalties thereon), which at any
time prior to, during or in respect of the term hereof may be assessed or
imposed on or in respect of or be a Lien upon (i) Mortgagor (including, without
limitation, all income, franchise, single business or other taxes imposed on
Mortgagor for the privilege of doing business in the jurisdiction in which the
Facility, or any other Security Interest Property is located) or Mortgagee, (ii)
the Facility, or any other Security Interest Property or any part thereof, or
(iii) any occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Facility or the leasing or use of the
Facility or any part thereof, or the acquisition or financing of the acquisition
of the Facility by Mortgagor.

<PAGE>

         "Improvements" means all buildings, structures and improvements of
every nature whatsoever situated on the Leasehold Estate and/or Land on the
Closing Date or thereafter, including, without limitation, to the extent of
Mortgagor's right, title or interest therein or thereto, all gas and electric
fixtures, radiators, heaters, washing machines, dryers, refrigerators, ovens,
engines and machinery, boilers, ranges, elevators and motors, plumbing and
heating fixtures, antennas, carpeting and other floor coverings, attached to the
Leasehold Estate and/or Land or said buildings, structures or improvements.

         "Instruments" means all of Mortgagor's "instruments," as such term is
defined in the UCC, and to the extent not included in such definition, all
instruments, chattel paper, documents or other writings obtained by Mortgagor
from or in connection with the ownership or operation of the Facility evidencing
a right to the payment of Money, including, without limitation, all notes,
drafts, acceptances, documents of title, and policies and certificates of
insurance, including but not limited to, liability, hazard, rental and credit
insurance, guarantees and securities, now or hereafter received by Mortgagor or
in which Mortgagor has or acquires an interest pertaining to the foregoing.

         "Insurance Proceeds" means any and all Proceeds of any policy of
insurance required by this Mortgage to be obtained and maintained by Mortgagor.

         "Insurance Requirements" means all material terms of any insurance
policy required pursuant to this Mortgage and all material regulations and any
use or condition thereof, which may, at any time, be recommended by the Board of
Fire Underwriters, if any, having jurisdiction over the Mortgaged Property, or
such other body exercising similar function.

         "Inventory" means all of Mortgagor's "inventory," as such term is
defined in the UCC, and, to the extent not included in such definition, all
goods now owned or hereafter acquired by Mortgagor intended for sale or lease,
or to be furnished under contracts of service by such Mortgagor in connection
with the Facility, including, without limitation, all inventories held by
Mortgagor for sale or use at of from the Facility, and all other such goods,
wares, merchandise, and materials and supplies of every nature owned by
Mortgagor and all such other goods returned to or repossessed by Mortgagor.

         "Land" has the meaning provided in the Recitals to this Mortgage.

         "Leasehold Estate" has the meaning provided in the Recitals to this
Mortgage.

         "Leases" means all leases and other agreements or arrangements
affecting the use or occupancy of all or any portion of the Facility (other than
the Ground Lease) now in effect or hereafter entered into (including, without
limitation, all lettings, subleases, licenses, concessions, tenancies and other
occupancy agreements covering or

<PAGE>

encumbering all or any portion of the Facility), together with any guarantees,
supplements, amendments, modifications, extensions and renewals of the same, and
all additional remainders, reversions, and other rights and estates appurtenant
thereto.

         "Loan" has the meaning provided in the Recitals to this Mortgage.

         "Loan Agreement" has the meaning provided in the Recitals to this
Mortgage.

         "Loan Obligation" has the meaning provided in the Recitals to the
Mortgage.

         "Material Lease" means all Leases except Leases which provide for the
lease of less than twenty thousand (20,000) square feet of space in the
Facility; provided, however, any Lease not executed on Mortgagor's standard form
of lease agreement previously approved in writing by Mortgagee in Mortgagee's
discretion, shall be a Material Lease regardless of whether such Lease provides
for the lease of less than twenty thousand (20,000) square feet of space in the
Facility.

         "Money" means all moneys, cash, rights to deposit or savings accounts,
credit card receipts, rents or other items of legal tender obtained from or for
the use in connection with the ownership or operation of the Facility.

         "Mortgaged Property" has the meaning provided in the Recitals to this
Mortgage.

         "Mortgagee" has the meaning provided in the preamble to this Mortgage.

         "Mortgagor" has the meaning provided in the preamble to this Mortgage.

         "Note" has the meaning provided in the Recitals to this Mortgage.

         "Permitted Encumbrances" means, with respect to the Facility,
collectively, (i) the Lien created by this Mortgage or the other Loan Documents
of record; (ii) all Liens and other matters disclosed in the Title Insurance
Policy concerning the Facility, or any part thereof which have been approved by
Mortgagee in Mortgagee's sole discretion; (iii) Liens, if any, for Impositions
imposed by any Governmental Authority not yet due or delinquent or being
contested in good faith and by appropriate proceedings in accordance with this
Mortgage; and (iv) without limiting the foregoing, any and all governmental,
public utility and private restrictions, covenants, reservations, easements,
licenses or other agreements of an immaterial nature which may be granted by
Mortgagor after the Closing Date and which do not materially and aversely affect
(a) the ability of Mortgagor to pay any of its obligations to any Person as and
when due, (b) the marketability of title to the Facility, (c) the fair market
value of the Facility, or (d) the use or operation of the Facility as of the
Closing Date and thereafter.

         "Permitted Transfers" shall mean provided that no Event of Default has
occurred (i) Permitted Encumbrances; (ii) all transfers of worn out or obsolete

<PAGE>

furnishings, fixtures or equipment that are promptly replaced with property or
equivalent value and functionality; (iii) all Leases which are not Material
Leases; (iv) all Material Leases which have been approved by Mortgagee in
writing in Mortgagee's discretion; (v) transfers of Equity Interests in
Mortgagor which in the aggregate during the term of the Loan (a) do not exceed
forty-nine percent (49%) of the total interests in Mortgagor and (b) do not
result in any partner's, member's or other Person's interest in Mortgagor
exceeding forty-nine percent (49%) of the total interests in Mortgagor; and (vi)
any other transfer of Equity Interests provided that (a) prior to any
Securitization, Mortgagee shall have consented to such transfer or transfers,
(b) after any Securitization, (i) Mortgagee shall have consented to such
transfer or transfers, and (ii) the Rating Agencies shall have confirmed in
writing that such transfer or transfers shall not result in a downgrade,
withdrawal or qualification of any securities issued in connection with such
Securitization, (c) acceptable opinions relating to such transfer or transfers
shall have been delivered by Mortgagor to Mortgagee and the Rating Agencies
(including without limitation, tax and bankruptcy opinions) and (d) Mortgagor
pays all reasonable expenses incurred by Mortgagee in connection with such
transfer or transfers, limited to one percent (1.0%) of the outstanding
principal balance of the Loan, and (vii) a transfer of the Facility, provided
that prior to such transfer (a) prior to a Securitization, Mortgagee shall have
consented to such transfer, (b) after a Securitization, (i) Mortgagee shall have
consented to such transfer and (ii) the Rating Agencies shall have confirmed in
writing that such transfer shall not result in a downgrade, withdrawal or
qualification of any securities issued in connection with such Securitization,
(c) acceptable opinions relating to such transfer shall have been delivered by
Mortgagor to Mortgagee and to the Rating Agencies (including without limitation,
tax and bankruptcy opinions) then rating any securities issued in connection
with a Securitization, (d) the transferee assumes in writing all obligations of
the transferor under the Loan Documents and executes and delivers such other
documentation as may be required by Mortgagee or the Rating Agencies and (g)
Mortgagor pays all reasonable expenses incurred by Mortgagee in connection with
such transfer, limited to one percent (1.0%) of the outstanding principal
balance of the Loan.

         "Permits" means all licenses, registrations, permits, allocations,
filings, authorizations, approvals and certificates use din connection with the
ownership, operation, construction, renovation, use or occupancy of the
Facility, including, without limitation, building permits, business licenses,
state health department licenses, food service licenses, liquor licenses,
licenses to conduct business and all such other permits, licenses and rights,
obtained from any Governmental Authority or private Person concerning the
ownership, construction, operations, renovation, use or occupancy of the
Facility.

         "Proceeds" means all of Mortgagor's "proceeds" as such term is defined
in the UCC and, to the extent not included in such definition, all proceeds,
whether cash or non-cash, movable or immovable, tangible or intangible
(including Insurance Proceeds, Condemnation Proceeds, and proceeds of proceeds),
from the Security Interest Property, including, without limitation, those from
the sale, exchange, transfer, collections, loss, damage, disposition,
substitution or replacement of any of the Security

<PAGE>

Interest Property and all income, gain, credit, distributions and similar items
from or with respect to the Security Interest Property.

         "Rents" means, with respect to the Facility, all rents, (whether
denoted as advance rent, minimum rent, percentage rent, additional rent or
otherwise), receipts, issues, income, royalties, profits, revenues, proceeds,
bonuses, deposits (whether denoted as security deposits or otherwise), lease
termination fees or payments, rejection damages, buy-out fees and any other fees
made or to be made in lieu of rent, any award made hereafter to Mortgagor in any
court proceeding involving any tenant, lessee, licensee or concessionaire under
any of the Leases in any bankruptcy, insolvency or reorganization proceedings in
any state or federal court, and all other payments, rights and benefits of
whatever nature from time to time due under the Leases, including, without
limitation, (i) rights to payment earned under the Leases for space in the
Improvements for the operation of ongoing businesses, such as restaurants, news
stands, barber shops, beauty shops and pharmacies, and (ii) all other income,
consideration, issues, accounts, profits, or benefits of any nature arising from
the ownership, possession, use or operation of the Facility, including, without
limitation, all revenues, receipts, income, receivables and accounts relating to
or arising from rentals, rent equivalent income, income and profits from guest
rooms, meeting rooms, food and beverage facilities, vending machines, telephone
and television systems, guest laundry, and the provision or sale of other goods
and services, as well as all room rents, accounts, accounts receivable and hotel
receivables and all other payments and rights to payment or any nature
whatsoever made for or with respect to hotel room occupancy by any person, which
includes any payment or monies received or to be received in whole or in part,
whether actual or deemed to be, for the sale of services or products in
connection with such occupancy, advance registration fees by hotel guests, tour
or junket proceeds or deposits, deposits for convention and/or party
reservations, and other benefits, and all rights to payment with respect to
conference facilities, dining or bar facilities or other facilities in any way
connected with the Facility, all rights to payment from any consumer credit
charge card organization or entity including, without limitation, payments
arising from the use of the American Express Card, Discover Card, the Visa Card,
the Carte Blanche Card, the MasterCard or any other credit card, including those
now existing or hereafter created, substitutions therefor, and proceeds thereof
(whether cash or non-cash, movable or immovable, tangible or intangible)
received from the sale, exchange, transfer, collection or disposition or
substitution thereof, and any other items of revenue, receipts or other income
as identified in the Uniform System of Accounts for Hotels, 8th Edition,
International Association of Hospitality Accountants (1986), as amended from
time to time.

         "Taking" means a temporary or permanent taking or voluntary conveyance
of all or part of the Facility, or any interest therein or right accruing
thereto or use thereof, as the results of, or in settlement of, any condemnation
or other eminent domain proceeding by any Governmental Authority affecting the
Facility or any portion thereof whether or not the same shall have actually been
commenced.

<PAGE>

         "Transfer" means any conveyance, transfer (including, without
limitation, any transfer of any direct or indirect legal or beneficial interest
(including, without limitation, any profit interest) in Mortgagor or any SPE
Equity Owner), sale, Lease (including, without limitation, any amendment,
extension, modification, waiver or renewal thereof) or Lien, whether by law or
otherwise, of, on or affecting any Security Interest Property, Mortgagor or any
SPE Equity Owner, other than a Permitted Transfer.

         "UCC" means the Uniform Commercial Code in effect in the jurisdiction
in which the Facility or any of the Security Interest Property is located, as
applicable.

         Section 1.2. Interpretation of Defined Terms.

         Singular terms shall include the plural forms and vice versa, as
applicable, of the terms defined.

         All references to other documents or instruments shall be deemed to
refer to such documents or instruments as they may hereafter be extended,
renewed, modified or amended, and all replacements and substitutions therefor.

                                   ARTICLE II

                      Covenants and Agreements of Mortgagor

         Section 2.1. Payment of Secured Loan Obligations. Mortgagor shall pay
when due the principal, the interest, Default Rate interest, and the Yield
Maintenance Premium, if any, owing from time to time under the Note and all
charges, fees and other Loan obligations as provided in and strictly in
accordance with the Loan Agreement, this Mortgage and the other Loan Documents.

         Section 2.2 Title; etc.

         (a) Mortgagor represents and warrants that (i) Mortgagor owns and has
good, marketable and insurable fee simple title in and to the Facility, free and
clear of all covenants, liens, encumbrances, restrictions, easements and other
matters affecting title other than the Permitted Encumbrances, and (ii) there
are no outstanding options to purchase or rights of first refusal affecting the
Facility. Mortgagor represents and warrants that (i) Mortgagor owns and has good
marketable and insurable leasehold title in and to the Land and Improvements
thereon the Leasehold Estate, free and clear of all covenants, liens,
encumbrances, restrictions, easements and other matters affecting title other
than the Permitted Encumbrances, and (ii) there are no outstanding options to
purchase or rights of first refusal except those given to Mortgagor under the
express terms of the Ground Lease affecting the Leasehold Estate.

         (b) Mortgagor represents and warrants that Mortgagor owns and has good
and absolute title to all existing personal property and fixtures hereby
mortgaged, or in

<PAGE>

which Mortgagor is hereby granting to Mortgagee a security interest, subject
only to the Permitted Encumbrances. The personal property and fixtures, hereby
mortgaged or in which Mortgagor is hereby granting to Mortgagee a security
interest, are free and clear of all liens, charges and encumbrances whatsoever,
including, without limitation, conditional sales contracts, chattel mortgages,
security agreements, financing statements and everything of a similar nature
other than the Permitted Encumbrances.

         (c) Mortgagor represents and warrants that it has the full power and
lawful authority to grant, bargain, sell, release, convey, warrant, assign,
transfer, mortgage, pledge, set over and confirm unto Mortgagee the Mortgaged
Property as hereinabove provided, and (ii) that Mortgagor will forever defend
the title to the Mortgaged Property and the validity and priority of the lien or
estate hereof against the claims and demands of all Persons whomsoever.

         Section 2.3. Further Assurance; Filing; Re-Filing; etc.

         (a) Mortgagor shall execute, acknowledge and deliver, from time to
time, such further instruments as Mortgagee may reasonably require to accomplish
the purposes of this Mortgage.

         (b) Mortgagor, immediately upon the execution and delivery of this
Mortgage, and thereafter from time to time, shall cause this Mortgage, any
security agreements, mortgage, modification or amendment supplemental hereto
and each document, instrument and agreement of further assurance, to be filed,
registered or recorded and refilled, re-registered or re-recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of perfect the lien or estate of this Mortgage upon the
Mortgaged Property and to accomplish the purposes of this Mortgage.

         (c) Mortgagor shall pay all intangible taxes, recording taxes, filing,
registration and recording fees, all refiling, re-registration and re-recording
fees, and all expenses incident to the execution, filing, recording and
acknowledgment of this Mortgage, any security agreement, mortgage, modification
or amendment supplemental hereto and any document, instrument and agreement of
further assurance, and all federal, state, county and municipal stamp taxes and
other taxes, duties, imposts, assessments and charges arising out of the
execution, delivery, filing, registration and recording of the Note, this
Mortgage or any of the other Loan Documents, any security agreement or mortgage
supplemental hereto or any document instrument or agreement of further
assurance.

         (d) In the event of the passage of any state, federal, municipal or
other governmental law, order, rule or regulation, subsequent to the date
hereof, in any manner changing or modifying the laws now in force governing the
taxation of mortgages or security agreements or debts secured thereby or the
manner of collecting such taxes so as to adversely affect Mortgagee, this
Mortgage or the lien hereof, Mortgagor will pay any such tax on or before the
due date thereof. If Mortgagor fails to make such prompt payment or if, in the
reasonable opinion of Mortgagee, any such state, federal, municipal, or other
governmental law, order, rule or regulation prohibits

<PAGE>

Mortgagor from making such payment or would penalize Mortgagee if Mortgagor
makes such payment or if, in the opinion of Mortgagee, the making of such
payment might result in the imposition of interest beyond the Maximum Amount,
then the entire balance of the Loan Obligations shall, at the option of
Mortgagee, become due and payable on the date that is one hundred twenty (120)
days after the passage of such law, order, rule or regulation.

         (e) Mortgagor hereby indemnifies and holds Mortgagee harmless from any
sales or use tax that may be imposed on Mortgagee by virtue of the Loan from
Mortgagee to Mortgagor other than taxes imposed on the income, stock or assets
of Mortgagee.

         Section 2.4. Liens. Without limiting the obligations of Mortgagor under
Section 2.6, Mortgagor shall not create or suffer to be created any mortgage,
deed of trust, lien, security interest, charge or encumbrance upon the Mortgaged
Property or any portion thereof, prior to, on a parity with, or subordinate to
the lien of this Mortgage other than a Permitted Encumbrance. Mortgagor shall
pay and promptly discharge at Mortgagor's cost and expense, any such mortgages,
deeds of trust, liens, security interests, charges or encumbrances upon the
Mortgaged Property or any portion thereof or interest therein.

         Section 2.5. Insurance; Casualty Events.

         (a) At all times while Mortgagor is indebted to Mortgagee, Mortgagor
shall maintained the following insurance:

                  (i) During any period of repair or restoration including,
         without limitation, during any period or repair or restoration
         necessitated by a casualty loss or a Taking, builder's "all risk"
         insurance in an amount equal to not less than the full insurable value
         of the Facility against such risks (including, without limitation, fire
         and extended coverage and collapse of the Improvements to agreed
         limits) as Mortgagee may request, in form and substance acceptable to
         Mortgagee.

                  (ii) Insurance with respect to the Improvements, Equipment and
         Inventory against peril included within the classification "All Risks
         of Physical Loss" with extended coverage in amounts at all times
         sufficient to prevent Mortgagor from becoming a co-insurer within the
         terms of the applicable policies, but in any event such insurance shall
         be maintained in an amount equal to the full insurable value of the
         Improvements, Equipment and Inventory located on the Facility. As used
         herein, "full insurable value" means the actual replacement cost of the
         Improvements, Equipment and Inventory (without taking into account any
         depreciation), determined annually by an insurer or by Mortgagor or, at
         the request of Mortgagee, by an Independent insurance broker (subject
         to Mortgagee's reasonable approval) including an endorsement covering
         acts of municipal authorities including increase cost of construction
         and demolition;

                  (iii) Comprehensive general liability insurance, including
         contractual injury, bodily injury, broad form death and property damage
         liability, and umbrella liability insurance against any all claims,
         including all legal liability to the extent insurable imposed upon
         Mortgagor and all court costs and attorneys' fees and expenses, arising
         out of or connected with the possession, use, leasing,

<PAGE>

         operation, maintenance or condition of the Facility in such
         amounts as are generally required by institutional lenders for
         properties comparable to the Facility but in no event with limits for
         the Facility of less than $1,000,000 per occurrence with combined
         single limit coverage for bodily injury or property damage and excess
         (umbrella) liability coverage for the Facility of no less than
         $30,000,000 per occurrence;

                  (iv) Statutory workers' compensation insurance;

                  (v) Business interruption and/or loss of "rental value"
         insurance for the Facility in an amount equal to twelve (12) months
         estimated Gross Revenue attributable to the Facility and based on the
         Gross Revenue for the immediately preceding year and otherwise
         sufficient to avoid any co-insurance penalty;

                  (vi) If all or any portion of the Improvements, or any portion
         of the Land and Leasehold Estate is located within a federally
         designated flood hazard zone, flood insurance in an amount equal to the
         lesser of the full insurable value of the Facility or the maximum
         amount of flood insurance available;

                  (vii) Insurance against loss or damage from (A) leakage or
         sprinkler systems and (B) explosion of steam boilers, air conditioning
         equipment, pressure vessels or similar apparatus now or hereafter
         installed at the Facility, in such amounts as Mortgagee may from time
         to time require and which are customarily required by institutional
         mortgages with respect to similar properties similarly situated; and

                  (viii) Such other insurance with respect to the Improvements,
         Equipment and Inventory located on the Facility against loss or damage
         as requested by Mortgagee (including, without limitation,
         liquor/dramshop, hurricane and earthquake insurance) provided such
         insurance is of the kind for risks from time to time customarily
         insured against and in such amounts as are generally required by
         institutional lenders for properties comparable to the Facility or
         which Mortgagee may deem necessary in its reasonable discretion.

         (b) Mortgagor will maintain the insurance coverage described in Section
2.5 with companies acceptable to Mortgagee and with a claims paying ability of
not less than "AA" by S&P and AA or its equivalent by any one of the other
Rating Agencies. All insurers providing insurance required by this Mortgage
shall be authorized to issue insurance in the state where the Facility is
located.

         The insurance coverage required under Section 2.5(a) may be effected
under a blanket policy or policies covering the Mortgaged Property and other
property and assets not constituting a part of the Mortgaged Property; provided
that any such blanket policy shall specify, except in the case of public
liability insurance, the portion of the total coverage of such policy that is
allocated to the Facility and the Inventory located thereon, and any sublimits
in such blanket policy applicable to the Mortgaged Property, which amounts shall
not be less than the amounts required pursuant to Section 2.5(a) and which shall
in any case comply in all other respects with the requirements of this Section
2.5.

         (c) All insurance policies shall be in such form and with such
endorsements and in such amounts as shall be satisfactory to Mortgagee (and
Mortgagee shall be entitled to approve amounts, form, risk coverage, loss payees
and insureds). The policy referred to in Section 2.5(a)(ii) shall contain a
replacement cost endorsement and a waiver of depreciation. Certified copies of
all of the above-mentioned insurance policies have been

<PAGE>

delivered to and shall be held by Mortgagee. All such policies shall name
Mortgagee as an additional insured/loss payee, shall provide that all Insurance
Proceeds be payable to Mortgagee as set forth in Section 2.5(d), and shall
contain: (i) "Non Contributory Standard Lender Clause" and a Lender's Loss
Payable Endorsement (From 438 BFUNS) or their equivalents naming Mortgagee as
the person to whom all payments shall be paid and a provision that payment of
Insurance Proceeds in excess of Five Hundred Thousand Dollars ($500,000) shall
be made by check payable only to Mortgagee; (ii) a waiver of subrogation
endorsement as to Mortgagee and its assigns providing that no policy shall be
impaired or invalidated by virtue of any act, failure to act, negligence of, or
violation of declarations, warranties or conditions contained in such policy by
Mortgagor, Mortgagee or any other named insured, additional insured or loss
payee, except for the willful misconduct of Mortgagee knowingly in violation of
the conditions of such policy; (iii) an endorsement indicating that neither
Mortgagee nor Mortgagor shall be or be deemed to be a co-insurer with respect to
any risk insured by such policies and shall provide for an aggregate deductible
per loss for all policies of an amount not more than that which is customarily
maintained by prudent owners of property of the same type and quality as the
Facility, but in no event in excess of five percent (5%) of Adjusted Net
Operating Income; (iv) a provision that such policies shall not be canceled or
amended, including, without limitation, any amendment reducing the scope or
limits of coverage, without at least thirty (30) days prior written notice to
Mortgagee in each instance; and (v) effective waivers by the insurer of all
claims for insurance premiums against any loss payees, additional insured and
named insureds (other than Mortgagor). Certificates of insurance with respect to
all renewal and replacement policies shall be delivered to Mortgagee not less
than ten (10) days prior to the expiration date of any of the insurance policies
required to be maintained hereunder which certificates shall bear notations
evidencing payment of applicable premiums and certified copes of such insurance
policies shall be delivered to Mortgagee promptly after Mortgagor's receipt
thereof. If Mortgagor fails to maintain and deliver to Mortgagee the certified
copies of the original policies or certificates of insurance required by this
Mortgage, Mortgagee may, at is option, after written notice to Mortgagor,
procure such insurance, and Mortgagor shall reimburse Mortgagee for the amount
of all premiums paid by Mortgagee thereon promptly, after demand by Mortgagee,
with interest thereon at the Default Rate from the date paid by Mortgagee to the
date of repayment, and such sum shall be a part of the Loan Obligations secured
by this Mortgage.

         Mortgagee shall not be the fact of approving, disapproving, accepting,
preventing, obtaining or failing to obtain any insurance, incur any liability
for or with respect to the amount of insurance carried, the form or legal
sufficiency of insurance contracts, solvency of insurance companies, or the
carriers' or Mortgagor's payment or defense of lawsuits, and Mortgagor hereby
expressly assumes full responsibility therefor and all liability, if any, with
respect thereto.

         Mortgagor shall instruct and cause the issuer of each policy of
insurance described herein to deliver to Mortgage all Insurance Proceeds.

         (d) Mortgagee shall be entitled to receive and collect all Insurance
Proceeds in excess of Five Hundred Thousand Dollars ($500,000) and all of the
Insurance Proceeds are hereby assigned to Mortgagee, and Mortgagor shall
instruct and cause the issuer of each policy of insurance described herein to
deliver to Mortgagee all Insurance Proceeds. Mortgagor shall execute such
further assignments of the Insurance Proceeds as Mortgagee may from time to time
reasonably require. Without limiting the generality of the foregoing, following
the occurrence of any casualty or damage involving the Mortgaged Property or any
part thereof, Mortgagor shall give prompt notice thereof to Mortgagee and shall
cause all Insurance Proceeds payable as a result of such casualty or

<PAGE>

damage to be paid to Mortgagee as additional collateral security hereunder
subject to the lien of this Mortgage, to be applied by Mortgagee to the Loan
Obligations.

         (e) In the event of damage, destruction or a casualty with respect to
the Facility, except as provided in Section 2.5(f) below, Mortgagor shall cause
all Insurance Proceeds to be paid to the Mortgagee, which shall apply such
Insurance Proceeds to reduce the Indebtedness in accordance with Section 2.7 and
Section 2.8 of the Loan Agreement. All Insurance Proceeds received by Mortgagor
or Mortgagee in respect of business interruption coverage shall be deposited and
maintained in the Cash Collateral Account, to be applied by Mortgagee in the
same manner as Rents (other than security deposits); provided, however, that if
the Insurance Proceeds of any such business interruption insurance policy are
paid in a lump sum in advance, Mortgagee shall hold such Insurance Proceeds or
Condemnation Proceeds in a segregated interest-bearing escrow account at the
Cash Collateral Account Bank, and Mortgagee shall estimate the number of months
required for Mortgagor to restore the damage caused by the casualty to the
Facility, shall divide the aggregate business interruption Insurance Proceeds in
connection with such casualty by such number of months, and shall disburse from
such escrow account into the Cash Collateral Account each month during the
performance of such restoration such monthly installment of said Insurance
Proceeds. Any Insurance Proceeds made available to Mortgagor for restoration or
repair in accordance herewith, to the extent not used by Mortgagor in connection
with, or to the extent they exceed the cost of, such restoration, shall be paid
to Mortgagor.

         (f) Notwithstanding anything to the contrary set forth in Section
2.5(e) above, Mortgagee agrees that Mortgagee shall make the Insurance Proceeds
(other than business interruption insurance proceeds, which shall be held and
disbursed as provided in Section 2.5(e)), available to Mortgagor for Mortgagor's
repair, restoration or replacement of the Improvements, Equipment and Inventory
damaged or taken, on the following conditions:

                  (i) At the time of such loss or damage and at all times
         thereafter there shall exist no Default or Event of Default;

                  (ii) The Improvements, Equipment and Inventory for which loss
         or damage has resulted shall be capable of being restored (including
         replacements) to their pre-existing condition and utility, as existed
         immediately prior to the occurrence of the loss or damage then in
         question, in all material respects with a value equal to or greater
         than prior to such loss or damage and shall be capable of being
         completed six (6) months prior to the Maturity Date and prior to the
         expiration of business interruption insurance;

                  (iii) Mortgagor shall demonstrate to Mortgagee's reasonable
         satisfaction Mortgagor's ability to pay the Loan Obligations coming due
         during such repair or restoration period;

                  (iv) Within thirty (30) days from the date of such loss or
         damage Mortgagor shall have given Mortgagee a written notice electing
         to have the Insurance Proceeds applied for repair, restoration or
         replacement of the Improvements, Equipment or Inventory, as applicable;

                  (v) Within sixty (60) days following the date of notice under
         the preceding subparagraph (iv) and prior to any Insurance Proceeds
         being disbursed to Mortgagor, Mortgagor shall have provided to
         Mortgagee all of the following:

<PAGE>

                           (1) if loss or damage exceeds Five Hundred Thousand
                  Dollars ($500,000), complete plans and specifications for
                  restoration, repair and replacement of the Improvement,
                  Equipment and Inventory lost or damaged to the condition,
                  utility and value required by the preceding subparagraph (ii),

                           (2) if loss or damage exceeds Five Hundred Thousand
                  Dollars ($500,000), fixed-price or guaranteed maximum costs
                  construction contracts for completion of the repair,
                  restoration and replacement work in accordance with the
                  aforementioned plans and specifications;

                           (3) such additional funds (if any) as in Mortgagee's
                  reasonable opinion are necessary to complete the repair,
                  restoration and replacement; and

                           (4) if loss or damage exceeds Five Hundred Thousand
                  Dollars ($500,000), copies of all permits and licenses
                  necessary to complete the work in accordance with the plans
                  and specifications and applicable law;

                  (vi) If loss or damage exceeds Five Hundred Thousand Dollars
         ($500,000), Mortgagee may, at Mortgagor's expense, retain an
         independent inspector to review and approve plans and specifications
         and completed construction and to approve all requests for
         disbursement, which approvals shall be conditions precedent to release
         of the Insurance Proceeds as work progresses;

                  (vii) Mortgagor shall commence such work within one hundred
         eighty (180) days after such loss or damage (assuming the Insurance
         Proceeds have been made available to the Mortgagor within such period
         of time) and shall diligently pursue such work to completion;

                  (viii) If loss or damage exceeds Five Hundred Thousand Dollars
         ($150,000), each disbursement by Mortgagee of such Insurance Proceeds
         shall be funded subject to conditions and in accordance with
         disbursement procedures which a commercial construction lender would
         typically establish in the exercise of sound banking practices and
         shall be made only upon receipt of disbursement requests on an AIA
         G702/703 form (or similar form approved by Mortgagee) signed and
         certified by Mortgagor and its architect and general contractor with
         appropriate invoices, lien waivers and any other documents, instruments
         or items which may be required by Mortgagee in Mortgagee's discretion;
         and

                  (ix) Mortgagee shall have a first lien and security interest
         in all building materials and completed repair and restoration work and
         in all fixtures and equipment acquired with such Insurance Proceeds,
         and Mortgagor shall execute and deliver such mortgages, deeds of trust,
         security agreements, financing statements and other instruments as
         Mortgagee shall request to create, evidence, or perfect such lien and
         security interest.

         (g) If and to the extent such Insurance Proceeds are not required to be
made available to mortgagor to be used for the repair, restoration and
replacement of the Improvements, Equipment and Inventory for which a loss or
damage has occurred, or if Mortgagor fails to timely make such election or
having made such election fails to timely comply with or is otherwise unable to
satisfy the terms and conditions set forth herein, upon five (5) Business Days
prior notice to Mortgagor, Mortgagee shall be entitled, without Mortgagor's
consent, to apply such Insurance Proceeds, or the balance thereof, at

<PAGE>

Mortgagee's option either (x) to the full or partial payment or prepayment of
the Loan Obligations in accordance with Section 2.7 and Section 2.8 of the Loan
Agreement, or (y) to the repair, restoration and/or replacement of all or any
part of such Improvements, Equipment and Inventory for which a loss or damage
has occurred.

         (h) Subject to Mortgagee's rights under Section 2.5(f), provided no
Default or Event of Default has occurred and the replacement, restoration or
repair has been completed in accordance with this Mortgage, any Insurance
Proceeds available to Mortgagor for replacement, restoration or repair, to the
extent not used by Mortgagor in connection with, or to the extent they exceed
the cost of such replacement, restoration or repair shall be paid to Mortgagor.

         (i) Mortgagor appoints Mortgagee to act after the occurrence of an
Event of Default as Mortgagor's attorney-in-fact, coupled with an interest, to
cause the issuance of or an endorsement of any policy to bring Mortgagor into
compliance herewith and, as limited above, at Mortgagee's sole option, to make
any claim for, receive payment for, and execute and endorse any documents,
checks or other instruments in payment for loss, theft, or damage covered under
any such insurance policy; however, in no event will Mortgagee be liable for
failure to collect any amounts payable under any insurance policy.

         (j) Mortgagee shall be entitled at its option to participate in any
compromise, adjustment or settlement in connection with any claims for loss,
damage or destruction under any policy or policies of insurance, in excess of
Five Hundred Thousand Dollars ($500,000), and Mortgagor shall within ten (10)
Business Days after request therefor reimburse Mortgagee for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and disbursements)
incurred by Mortgagee in connection with such participation. Mortgagor shall not
make any compromise, adjustment or settlement in connection with any such claim
in excess of Five Hundred Thousand Dollars ($500,000), without the prior written
approval of Mortgagee.

         (k) In the event of foreclosure of the lien of this Mortgage or other
transfer of title or assignment of the Mortgage Property in extinguishment, in
whole or in part, of the Loan Obligations, all right, title and interest of
Mortgagor in and to all policies of casualty insurance covering all or any part
of the Mortgaged Property shall inure to the benefit of and pass to the
successors in interest to Mortgagee or the purchaser or grantee of the Mortgaged
Property or any part thereof.

         (l) Mortgagor shall not obtain or maintain any policy of insurance with
respect to Mortgagor, the Mortgaged Property or any part thereof which does not
satisfy each of the requirements of this Section.

         Section 2.6. Impositions.

         (a) Mortgagor shall pay or cause to paid, before any fine, penalty,
interest or cost attaches thereto, all of the Ground Rents and Impositions,
including, without limitation, any sales tax due in connection with the Ground
Rents, as well as all claims for labor, materials or supplies that, if unpaid,
might by law become lien on the Mortgaged Property, and shall submit to
Mortgagee such evidence of the due and punctual payment of all such Impositions
and claims as may be required by law; provided, however, that if by law any such
Imposition may be paid in installments (whether or not interest shall accrue on
the unpaid balance thereof), Mortgagor may pay the same installments (together
with accrued interest on the unpaid balance thereof) as the same respectively
become due, before any fine, penalty, interest or cost attaches thereto.

<PAGE>

         (b) Mortgagor at its expense may, after prior notice to Mortgagee,
contest by appropriate legal, administrative or other proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Imposition or lien therefor or any claims or mechanics,
materialmen, suppliers or vendor or liens thereof, and may withhold payment of
the same pending such proceedings if permitted by law, as long as (i) in the
case of any Impositions or lien therefor or any claims of mechanics,
materialmen, suppliers or vendors or liens thereof, such proceedings shall
suspend the collection thereof from the Mortgaged Property, (ii) neither the
Mortgage Property nor any part thereof or interest therein will be sold,
forfeited or lost if Mortgagor pays the amount or satisfies the condition being
contested, and Mortgagor would have the opportunity to do so, in the event of
Mortgagor's failure to prevail in the contest, (iii) Mortgagee would not, by
virtue of such permitted contest, be exposed to any risk of any civil liability
for which Mortgagor has not furnished additional security as provided in clause
(iv) below, or to any risk of criminal liability, and neither the Mortgaged
Property nor any interest therein would be subject to the imposition of any lien
for which Mortgagor has not furnished additional security as provided in clause
(iv) below, as a result of the failure to comply with such law or of such
proceeding and (iv) Mortgagor shall have furnished to Mortgagee additional
security in respect of the claim being contested or the loss or damage that may
result from Mortgagor's failure to prevail in such contest in such amount as may
be reasonably requested by Mortgagee, but in no event less than one hundred
twenty-five percent (125%) of the amount of such claim.

         Section 2.7. Maintenance of the Improvements and Equipment. Mortgagor
shall not permit the Improvements or Equipment to be removed or demolished or
otherwise altered (provided, however, Mortgagor may remove, demolish or alter
such Improvements and Equipment that become obsolete in the usual conduct of
Mortgagor's business and the removal or alteration of which do not materially
detract from the operation of Mortgagor's business and Mortgagor promptly
replaces the same with Improvements or Equipment, as applicable, of equivalent
value and functionality); shall maintain the Mortgaged Property in good repair,
working order and condition, except for reasonable wear and use; shall not
commit or suffer any waste; shall not do or suffer to be done anything which
would or could increase the risk of fire or other hazard to the Mortgaged
Property or which would or could result in the cancellation of any insurance
policy carried with respect to the Mortgaged Property; and shall restore and
repair the Improvements and Equipment or any part thereof now or hereafter
damaged or destroyed by any fire or other casualty or affected by any Taking.

         Section 2.8. Compliance With Laws.

         (a) Mortgagor represent and warrants that the Facility and Mortgagor's
operations at and use of the Facility currently comply in all material respects
with all Legal Requirements, including, without limitation, the Americans with
Disabilities Act, and the orders, rules and regulations of the American
Insurance Association or any other body now or hereafter constituted exercising
similar functions. Mortgagor shall maintain the Facility in compliance with all
future Legal Requirements.

         (b) Mortgagor hereby confirms the representation, warranties and
covenants set forth in Section 4.1(V) and Sections 5.1(D) through (I),
inclusive, of the Loan Agreement (relating to liabilities of Mortgagor under
applicable Environmental Laws) insofar as such representations, warranties and
covenants apply to the Mortgaged Property.

         (c) Mortgagor shall notify Mortgagee promptly of any written notice or
order that Mortgagor receives from any Government Authority with respect to
Mortgagor's compliance with any Legal Requirements, including, without
limitation, the Americans

<PAGE>

with Disabilities Acts and the Environmental Laws, relating to the Facility and
promptly take any and all actions necessary to bring its operations at the
Facility into compliance with such Legal Requirements, including, without
limitation, the Americans with Disabilities Act and the Environmental Laws, that
at any time are applicable to Mortgagor's operations at the Facility, all to the
extent required under the applicable provisions of the Loan Agreement; provided,
that, subject to Section 5.1(D) of the Loan Agreement, Mortgagor at its expense
may, after prior notice to Mortgagee, contest by appropriate legal,
administrative or other proceedings conducted in good faith and with due
diligence, the validity or application, in whole or in part, of any such Legal
Requirements, including, without limitation, Environmental Laws, as long as (i)
neither the Mortgaged Property nor any part thereof or any interest therein,
will be sold, forfeited or lost if Mortgagor pays the amount or satisfies the
condition being contested, and Mortgagor would have the opportunity to do so, in
the event of Mortgagor's failure to prevail in the contest, (ii) Mortgagee
would, by virtue of such permitted contest, be exposed to any risk of any civil
liability for which Mortgagor has not furnished additional security as provided
in clause (iii) below, or to any risk of criminal liability, and neither the
Mortgaged Property nor any interest therein would be subject to the imposition
of any lien for which Mortgagor has not furnished additional security as
provided in clause (iii) below as a result of the failure to comply with such
Legal Requirement or Environmental Law or the Americans with Disabilities Act or
of such proceeding and (iii) Mortgagor shall have furnished to Mortgagee
additional security in respect of the claim being contested or the loss or
damage that may result from Mortgagors' failure to prevail in such contest in
such amount as may be reasonably requested by Mortgagee in light of the risk
attendant to such contest, but in no event less than one hundred twenty-five
percent (125%) of the amount of such claim.

         (d) After thirty (30) days prior written notice (except in the case of
a bona fide emergency in which no such prior written notice shall be required,
but in which event notice shall be given as soon as practicable) and Mortgagor's
failure to so comply, but subject to subparagraph (c) above, Mortgagee, at its
election and in its sole discretion may (but shall not be obligated to ) cure
any failure on the part of Mortgagor to comply with any Legal Requirements,
including Environmental Laws, and without limitation, may take any of the
following actions:

                  (i) arrange for the prevention of any Release or threat of
         Release of Hazardous Substances at the Facility in violation of, or
         potentially requiring clean-up, removal or remediation under,
         Environmental Laws, and pay any costs associated with such prevention;

                  (ii) arrange for the removal or remediation of Hazardous
         Substances that may be Released or result from a Release at the
         Facility in violation of, or potentially requiring clean-up, removal or
         remediation under, Environment Laws, and pay any costs associated with
         such removal and/or remediation;

                  (iii) pay, on behalf of Mortgagor, any costs, fines or
         penalties imposed on Mortgagor by any Governmental Authority in
         connection with such Release or threat of Release of Hazardous
         Substances in violation of, or potentially requiring clean-up, removal
         or remediation under, Environmental Laws; or

                  (iv) make any other payment or perform any other act intended
         to prevent a lien in favor of any Governmental Authority from attaching
         to the Mortgaged Property.

<PAGE>

Any partial exercise by Mortgagee of the remedies hereinafter set forth, or any
partial undertaking on the part of Mortgagee to cure Mortgagor's failure to
comply with such Legal Requirements, including Environmental Laws, shall not
obligate Mortgagee to complete the actions taken or require Mortgagee to expend
further sums to cure Mortgagor's noncompliance; nor shall the exercise of any
such remedies operate to place upon Mortgagee any responsibility for the
operation, control, care, management or repair of the Facility or make Mortgagee
the "operator" of the Facility within the meaning of any Environmental Laws. Any
amount paid or costs incurred by Mortgagee as a result of the exercise by
Mortgagee of any of the rights hereinabove set forth, together with interest
thereon at the Default Rate from the date paid by Mortgagee, shall be due and
payable by Mortgagor to Mortgagee within ten (10) days after demand therefor,
and until paid shall be added to and become a part of the Loan Obligations
secured hereby; and Mortgagee, by making any such payment or incurring any such
costs, shall be subrogated to any rights of Mortgagor to seek reimbursement from
any third parties, including, without limitation, a predecessor-in-interest to
Mortgagor's title who may be a "responsible party" or otherwise liable under any
Environmental Law in connection with any such Release or threat of Release of
Hazardous Substances.

         (e) If Mortgagee suspects that Remedial Work may be required, Mortgagee
may request that an environmental survey and risk assessment with respect to the
Mortgaged Property be prepared and Mortgagor agrees to supply, at its cost, such
a survey and risk assessment by an Independent Engineer selected by Mortgagor
and satisfactory to Mortgagee, in form and detail satisfactory to Mortgagee
(including, if Mortgagee reasonably suspects that Remedial Work may be required,
test borings of the ground and chemical analyses of air, water and waste
discharges), estimating current liabilities and assessing potential sources of
future liabilities of Mortgagor or any other owner or operator of the Facility
under applicable Environmental Laws.

         (f) Mortgagor agrees to indemnify, reimburse, defend (with counsel
satisfactory to Mortgagee at Mortgagee's election), and hold harmless Mortgagee
for, from, and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses, including,
without limitation, interest, penalties, consequential damages, attorneys' fees,
disbursements and expenses, and consultants fees, disbursement and expenses,
including costs of Remedial Work, asserted against, resulting to, imposed on, or
incurred by Mortgagee, directly or indirectly, in connection with any of the
following:

                  (i) events, circumstances, or conditions which are alleged to,
         or do, form the basis of an Environmental Claim;

                  (ii) the presence, Use or Release of Hazardous Substances at,
         on, in, under or from any Facility which presence, Use or Release
         requires or could require Remedial Work;

                  (iii) any Environmental Claim against Mortgagor, Mortgagee or
         any Person whose liability for such Environmental Claim Mortgagor has
         or may have assumed or retained either contractually or by operation of
         law;

                  (iv) the breach of any representation, warranty or covenant
         set forth in Section 4.1(V) and Sections 5.1(D) through 5.1(I),
         inclusive, of the Loan Agreement; or

                  (v) any failure by Mortgagor to fulfill each and every
         obligation undertaken pursuant to this Section 2.8(f).

<PAGE>

         The indemnity provided in this Section 2.8(f) shall not be included in
any exculpation of Mortgagor or its partners, members, shareholders or any other
Person from personal liability provided in this Mortgage or if any of the other
Loan Documents. Further, Mortgagor's obligations under this Section 2.8(f) shall
survive (in perpetuity) the closing and disbursement of the funds evidenced by
the Note, payment of the Note, or foreclosure of this Mortgage, conveyance by
deed in lieu of foreclosure, and any subsequent conveyance of the Mortgaged
Property. Nothing in this Section 2.8(f) shall be deemed to deprive Mortgagee of
any rights or remedies provided to it elsewhere in this Mortgage or the other
Loan Documents or otherwise available to it under law. Mortgagor waives and
releases Mortgagee from any rights or defenses Mortgagor may have under common
law or Environmental Laws for liability arising or resulting from the presence,
Use or Release of Hazardous Substances except to the extent directly and solely
caused by the fraud or willful misconduct of Mortgagee.

         Section 2.9. Limitations of Use. The Facility is and shall be used
exclusively set forth in Section 3.1(R) of the Loan Agreement. Mortgagor shall
not, without the prior written consent of Mortgagee (a) materially change the
use of the Facility or (b) initiate, join in or consent to any change in any
private restrictive covenant, zoning ordinance or other public or private
restrictions limiting or defining the uses that may be made of the Facility or
any part thereof, except as may be necessary in connection with the uses
permitted pursuant to the first sentence of this Section 2.9. Mortgagor shall
comply with the provisions of all Leases, Licenses, agreements and private
covenants, conditions and restrictions that at any time are applicable to the
Facility.

         Section 2.10. Inspection of the Property. Mortgagor shall keep adequate
records, accounts and books in accordance with GAAP and shall permit Mortgagee
and its authorized representatives to enter the Facility and inspect the
Mortgaged Property and examine the records, accounts and books of Mortgagor with
respect thereto and make copies or extracts thereof, at Mortgagee's costs and
expense, all upon reasonable advance notice and at such reasonable times as may
be requested by Mortgagee, subject, however, to the rights of the tenants or
occupants of the Facility. Notwithstanding the foregoing, after the occurrence
and continuation of an Event of Default, Mortgagor shall pay any costs and
expenses incurred by Mortgagee to examine Mortgagor's records, and accounts
relating to the Mortgaged Property as Mortgagee shall determine to be necessary
or appropriate in the protection of Mortgagee's interest.

         Section 2.11. Actions to Protect Mortgaged Property. If Mortgagor shall
fail to (a) effect the insurance required by Section 2.5, or (b) make the
payments required by Section 2.6, Mortgagee may, without obligation to do so,
and upon notice to Mortgagor (except in an emergency) effect or pay the same. If
Mortgagor shall fail to perform or observe any of its other covenants or
agreements hereunder, Mortgagee may, without obligation to do so, and upon
thirty (30) days prior written notice to Mortgagor (except in an emergency)
effect the same. To the maximum extent permitted by law, all sums, including
reasonable attorneys' fees and disbursements, so expended or expended to sustain
the lien or estate of this Mortgage or its priority, or to protect or enforce
any of the rights hereunder, or to recover any of the Loan Obligations, shall be
a lien on the Mortgaged Property, shall be deemed to be added to the Loan
Obligations secured hereby, and shall be paid by Mortgagor within ten days after
demand therefor, together with interest thereon at the Default Rate.

         Section 2.12. Condemnation.

<PAGE>

         (a) Mortgagee shall be entitled to receive and collect all Condemnation
Proceeds, and all such compensation, awards, damages and other payments or
relief, together with all rights and causes of action relating thereto or
arising out of any Taking, are hereby assigned to Mortgagee. Mortgagor shall
execute such further assignments of the Condemnation Proceeds as Mortgagee may
from time to time require. Without limiting the generality of the foregoing,
following the occurrence of any Taking involving the Mortgaged Property or any
part thereof, Mortgagor shall give prompt notice thereof to Mortgagee and shall
cause all Condemnation Proceeds payable as a result of such Taking to be paid to
Mortgagee as additional collateral security hereunder subject to the lien of
this Mortgage and applied in accordance with Section 2.12(b) below.

         (b) In the event of a Taking, Mortgagor shall cause of the Condemnation
Proceeds in respect of such Taking to be paid to Mortgagee which shall, except
as provided in Section 2.12(c) below, apply such Condemnation Proceeds to reduce
the Indebtedness in accordance with Section 2.7 and Section 2.8 of the Loan
Agreement. All Condemnation Proceeds received in respect of a temporary Taking
shall be deposited and maintained in the Cash Collateral Account, to be applied
by Mortgagee in the same manner as Rents (other than security deposits) received
from Mortgagor with respect to the operation of the Facility; provided, however,
that if the Condemnation Proceeds of such temporary Taking are paid in a lump
sum in advance, Mortgagee shall hold such Condemnation Proceeds in a segregated
interest-bearing escrow account at the Cash Collateral Account Bank, and
Mortgagee shall estimate the number of months required for Mortgagor to restore
the damage caused by the casualty to the Facility or that the Facility will be
affected by such temporary Taking, as the case may be, shall divide the
aggregate Condemnation Proceeds in connection with such casualty or temporary
Taking by such number of months, and shall disburse from such escrow account
into the Cash Collateral Account each month during the performance of such
restoration or pendency of such temporary Taking such monthly installment of
Condemnation Proceeds. Any Condemnation Proceeds made available to Mortgagor for
restoration or repair in accordance herewith, to the extent not used by
Mortgagor in connection with, or to the extent they exceed the cost of, such
restoration, shall be paid to Mortgagor.

         (c) Notwithstanding anything to the contrary in Section 2.12(b) above,
Mortgagee agrees that Mortgagee shall make the Condemnation Proceeds (other than
Condemnations Proceeds in respect of a temporary Taking, which shall be held and
disbursed in accordance with Section 2.12(b) above,) available to Mortgagor for
Mortgagor's repair, restoration or replacement of the Improvements, Equipment or
Inventory affected by the Taking on the following terms and subject to
Mortgagor's satisfaction of the following conditions:

                  (i) At the time of such Taking and at all times thereafter
         there shall exist no Default or Event of Default;

                  (ii) The Improvements, Equipment and Inventory affected by the
         Taking shall be capable of being restored to their pre-existing
         condition and utility as existed immediately prior to the Taking, in
         all material respects with a value equal to or greater than prior to
         such Taking and shall be capable of being completed six (6) months
         prior to the Maturity Date and prior to the expiration of business
         interruption insurance;

                  (iii) Mortgagor shall demonstrate to Mortgagee's reasonable
         satisfaction Mortgagor's ability to pay the Loan Obligations coming due
         during such restoration period;

<PAGE>

                  (iv) Within thirty (30) days from the date of such Taking
         Mortgagor shall have given Mortgagee a written notice electing to have
         the Condemnation Proceeds applied for such repair, restoration or
         replacement of the Improvements, Equipment or Inventory, as applicable;

                  (v) Within sixty (60) days following the date of notice under
         the preceding subparagraph (iv) and prior to any Condemnation Proceeds
         being disbursed to Mortgagor, Mortgagor shall have provided to
         Mortgagee all of the following:

                           (1) if loss or damage exceeds Five Hundred Thousand
                  Dollars ($500,000), complete plans and specifications for
                  restoration, repair and replacement of the Improvements,
                  Equipment and Inventory lost or damaged to the condition,
                  utility and value required by the preceding subparagraph (ii).

                           (2) if loss or damage exceed Five Hundred Thousand
                  Dollars ($500,000), fixed-price or guaranteed maximum cost
                  construction contracts for completion of the repair,
                  restoration and replacement work in accordance with
                  aforementioned plans and specifications,

                           (3) such additional funds (if any) as in Mortgagee's
                  reasonable opinion are necessary to complete the repair,
                  restoration and replacement, and

                           (4) if loss or damage exceeds Five Hundred Thousand
                  Dollars ($500,000), copies of all permits and licenses (if
                  any) necessary to complete the work in accordance with the
                  plans and specifications and applicable law;

                  (vi) If loss or damage exceeds Five Hundred Thousand Dollars
         ($500,000), Mortgagee may, at Mortgagor's expense, retain an
         independent inspector to review and approve plans and specifications
         and completed construction and to approve all requests for
         disbursement, which approvals shall be conditions precedent to release
         of the Condemnation Proceeds as work progresses;

                  (vii) Mortgagor shall commence such work within one hundred
         eighty (180) days after such Taking (assuming the Insurance Proceeds
         have been made available to the Mortgagor within such period of time)
         and shall diligently pursue such work to completion;

                  (viii) If loss or damage exceeds Five Hundred Thousand Dollars
         ($500,000), each disbursement by Mortgagee of such Condemnation
         Proceeds shall be funded subject to conditions and in accordance with
         disbursement procedures which a commercial construction lender would
         typically establish in the exercise of sound banking practices and
         shall be made only upon receipt of disbursement requests on an AIA
         G702/703 form (or similar form reasonably approved by Mortgagee) signed
         and certified by Mortgagor and its architect and general contractor
         with appropriate invoices, lien waivers, notice of commencement and any
         other documents, instruments and items as may be required by Mortgagee
         in Mortgagee's discretion; and

<PAGE>

                  (ix) Mortgagee shall have a first lien and security interest
         in all building materials and completed repair and restoration work and
         in all fixtures and equipment acquired with such Condemnation Proceeds,
         and Mortgagor shall execute and deliver such mortgages, deeds of trust,
         security agreements, financing statements and other instruments as
         Mortgagee shall reasonably request to create, evidence, or perfect such
         lien and security interest.

         (d) If and to the extent such Condemnation Proceeds are not required to
be made available to Mortgagor to be used for the repair, restoration and
replacement of the Improvements, Equipment and Inventory affected by the Taking
or if Mortgagor fails to timely make such election or having made such election
fails to timely comply with or is otherwise unable to satisfy the terms and
conditions set forth herein, upon five Business Days prior notice to Mortgagor,
Mortgagee shall be entitled, without Mortgagor's consent, to apply such
Condemnation Proceeds, or the balance thereof, at Mortgagee's option either (x)
to the full or partial payment or prepayment of the Loan Obligations in
accordance with Section 2.7 of the Loan Agreement, or (y) to the repair,
restoration and/or replacement of all or any part of such Improvements,
Equipment and Inventory affected by the Taking.

         (e) Subject to Mortgagee's rights under Section 2.12(d), provided no
Default or Event of Default has occurred and the replacement, restoration or
repair has been completed in accordance with this Mortgage, any Condemnation
Proceeds, available to Mortgagor for replacement, restoration or repair, to the
extent not used by Mortgagor in connection with, or to the extent they exceed
the cost of, such replacement, restoration or repair, shall be paid to
Mortgagor.

         (f) Mortgagee shall be entitled at its option to participate in any
compromise, adjustment or settlement in connection with any Taking involving an
amount in controversy in excess of Five Hundred Thousand Dollars ($500,000), and
Mortgagor shall within ten (10) Business Days after request therefor reimburse
Mortgagee for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and disbursements) incurred by Mortgagee in connection with such
participation. Mortgagor shall not make any compromise, adjustment or settlement
in connection with any such claim in excess of Five Hundred Thousand Dollars
($500,000), without the prior written approval of Mortgagee.

         Section 2.13. Leases; Management Agreements; Agreements Affecting Real
Estate.

         (a) Mortgagor represent that there are no Leases or agreements to lease
all or any part of the Mortgaged Property now in effect except those
specifically assigned to Mortgagee by the Assignment of Leases. There is no
assignment or pledge of any Rents now in effect, except pursuant to the
Assignment of Leases. Mortgagor shall not make any assignment or pledge thereof
to anyone other than Mortgagee until the Loan Obligations are paid in full.

         (b) Mortgagor shall not enter into any Lease after the date hereof that
does not contain terms to the effect as follows:

                  (i) such Lease and the rights of the tenant thereunder
         (including, without limitation, any options to purchase or rights of
         first offer or refusal) shall be subject and subordinate to the rights
         of Mortgagee under and the Lien of this

<PAGE>

         Mortgage and Mortgagee's rights under all Loan Documents, and
         any renewals, modifications and amendments thereto and thereof;

                  (ii) such Lease has been assigned as collateral security by
         Mortgagor as landlord thereunder to Mortgagee under this Mortgage;

                  (iii) in the case of any foreclosure hereunder or the giving
         or granting of a deed in lieu thereof, the rights and remedies of the
         tenant in respect of any obligations or any successor landlord in the
         Mortgaged Property and any successor landlord shall in no event and to
         no extent (a) be liable for any act, omission or default of any prior
         landlord under the Lease or (2) be required to make or complete any
         tenant improvements or capital improvements or repair, restore, rebuild
         or replace the demised premises or any part thereof in the event of
         damage, casualty or condemnation or (3) be required to pay any amounts
         to tenant arising under the Lease prior to such successor landlord
         taking possession;

                  (iv) the tenants' obligation to pay rent and any additional
         rent shall not be subject to any abatement, deduction, counterclaim or
         setoff as against any mortgagee or purchaser upon the foreclosure of
         any of the Mortgaged Property or the giving or granting of a deed in
         lieu thereof by reason of a landlord default occurring prior to such
         foreclosure and such mortgagee or purchaser will not be bound by any
         advance payments of rent in excess of one month or any security deposit
         unless such security deposit was actually received (or in the case of a
         letter of credit, was properly transferred in negotiable form);

                  (v) the tenant agrees to attorn to Mortgagee or any purchaser
         of the Mortgaged Property upon a foreclosure of the Mortgaged Property
         or the giving or granting of a deed in lieu thereof, at the option of
         the Mortgagee or such purchaser;

                  (vi) the tenant agrees to give notice to Mortgagee of any
         default by landlord under the Lease and Mortgagee shall have a
         reasonable time to cure, should Mortgagee so elect, any default of
         landlord prior to tenant exercising any rights of tenant to terminate
         or cancel such Lease; and

                  (vii) all lease payments shall be due on or before the fifth
         (5th) day of each calendar month.

         (c) Mortgagor shall not enter into, amend or terminate any management
agreements or franchise agreements. Mortgagor shall diligently perform all terms
and covenants of any and all Management Agreements.

         (d) Mortgagor shall not create, or permit the Mortgaged Property or any
part thereof to become subject to, any easement, license or restrictive
covenant, other than a Permitted Encumbrance. Without limiting the generality of
the immediately preceding sentence, Mortgagor shall not enter into, consent to,
grant, amend, modify, restate or supplement any document, instrument or
agreement affecting, related to or impacting upon the Mortgaged Property, the
title thereto or any portion or aspect thereof, including, without limitation,
any easement, reciprocal easement agreement, or any declaration of easements or
covenants.

         Section 2.14. Mortgagee Reliance. Mortgagor acknowledges that Mortgagee
has examined and relied on the experience of Mortgagor and its partners,
shareholders and members (including, without limitation, the direct and indirect
legal and beneficial

<PAGE>

owners of Mortgagor), in owning and operating properties such as the Facility in
agreeing to make the Loan, and will continue to rely on Mortgagor and such
experience of such persons as a means of maintaining the value of the Facility
as security for repayment of the Loan and performance of all of Mortgagor's
obligations under the Loan Documents. Mortgagor acknowledges that Mortgagee has
a valid interest in maintaining the value of the Facility so as to insure that,
should Mortgagor allow a Transfer to occur without Mortgagee's prior written
consent, Mortgagee may exercise all of its rights hereunder.

         Section 2.15 No Transfer. Mortgagor shall not and shall not cause,
allow, or permit, and shall prevent from occurring, a Transfer, without the
prior written consent of Mortgagee, which consent may be withheld or conditioned
in Mortgagee's discretion. Consent to any such Transfer by Mortgagee shall not
be deemed a waiver of Mortgagee's right to require such consent to any further
or future Transfers. In the event of any violation of this Section, Mortgagee
may, at its option, accelerate and declare the outstanding principal amount,
unpaid interest, Default Rate interest, Yield Maintenance Premium and any other
amounts owing by Mortgagor to be immediately due and payable, without notice or
demand, and whether or not Mortgagee shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to any Facility or all or any portion of
the Security Interest Property.

                                   ARTICLE III

                     Assignment of Rents, Issues and Profits

         Section 3.1. Assignment of Rents, Issues, and Profits. Mortgagor does
hereby absolutely and unconditionally assign to Mortgagee Mortgagor's right,
title and interest in all current and future Leases and Rents, it being intended
by Mortgagor that this assignment constitutes a present, absolute assignment and
not an assignment for additional security only. This Section presently gives
Mortgagee the right to collect the Rents and to apply the Rents in partial
payment of the Note and Loan Obligations and otherwise in accordance with the
terms of the Loan Agreement. Mortgagor intends that the Rents and Leases be
absolutely assigned as provided in this Section and that they no longer be,
during the term of this Section, property of Mortgagor or property of the estate
of Mortgagor, as defined by 11 U.S.C. ss.541. If any law exists requiring
Mortgagee to take actual possession of the Mortgaged Property (or some action
equivalent to taking possession of the Mortgaged Property, such as securing the
appointment of a receiver) in order for Mortgagee to "perfect" or "activate" the
rights and remedies of Mortgagee as provided in this Section, Mortgagor waives
the benefit of such law. Such assignment to Mortgagee shall not be construed to
bind Mortgagee to the performance of any of the covenants, conditions or
provisions contained in any such Leases or otherwise impose any obligation upon
Mortgagee and notwithstanding the assignment, Mortgagor shall remain liable for
any obligations undertaken by Mortgagor pursuant to any Lease. Mortgagor agrees
that, further to evidence and reflect the assignment granted herein, Mortgagor
shall execute, acknowledge and deliver to Mortgagee such additional instruments
in form and substance reasonably satisfactory to Mortgagee as may hereafter be
requested by Mortgagee and shall record such leases or memoranda thereof, and
all assignments thereof, all at Mortgagor's expense. Subject to the terms of
this Section and the Loan Agreement, Mortgagee grants to Mortgagor a license,
revocable as hereinafter provided, to operate and manage the Mortgaged Property
and to collect and use the Rents subject to the requirements of the Loan
Agreement. Upon the occurrence of an Event of Default (except an Event of
Default set forth in Section 7.1(xi) of the Loan Agreement, in which event the
revocation hereinafter described shall be automatic and simultaneous with the
occurrence of such Event of Default), the license granted to Mortgagor herein

<PAGE>

shall, at Mortgagee's election, be revoked by Mortgagee, and Mortgagee shall
immediately be entitled to possession of all Rents then or thereafter in the
Collection Account and in the Cash Collateral Account or wherever they may be
and all Rents collected thereafter (including Rents past due and unpaid),
whether or not Mortgagee enters upon or takes control of the Mortgaged Property.
Upon such a revocation of the License granted herein, Mortgagee shall provide
Mortgagor with written notice of same. Any Rents collected by Mortgagor from and
after the date on which an Event of Default occurred shall be held by Mortgagor
in trust for Mortgagee. Mortgagee is hereby granted and assigned by Mortgagor
the right, at its option, upon revocation of the license granted herein, to
enter upon the Mortgaged Property in person, by agent or by court appointed
receiver to collect Rents with or without taking the actual possession of the
Mortgaged Property or any equivalent action. Any Rents collected after the
revocation of the license may be applied by Mortgagee in its sole and absolute
discretion toward payment of the Loan Obligations in accordance with Section 2.8
of the Loan Agreement.

                                   ARTICLE IV

                               Security Agreement

         Section 4.1. Security Agreement. This Mortgage creates a lien on and a
security interest in the Security Interest Property, and shall constitute a
security agreement and "fixture filing" under the UCC or other law applicable to
the creation of liens on and security interest in personal property and
fixtures. As further security for the payment and performance of the Loan
Obligations, this Mortgage shall constitute a financing statement under the UCC
with Mortgagor as the "debtor" and Mortgagee as the "secured party". To the
extent permitted by law, Mortgagor hereby authorizes Mortgagee to file financing
and continuation statements necessary to continue the lien of and security
interest evidenced by this Mortgage with respect to the Security Interest
Property without the signature of Mortgagor, and Mortgagor hereby irrevocably
appoints Mortgagee as attorney-in-fact (which appointment shall be deemed
coupled with an interest) for the purposes of executing and filing such
financing and continuation statements.

         Section 4.2. Rights Upon Default. If an Event of Default occurs,
Mortgagee, in addition to the rights and remedies granted to Mortgagee by
applicable law and this Mortgage, shall have all rights and remedies of a
secured party under the UCC. Any notice of sale, disposition or other intended
action by Mortgagee with respect to Mortgagee's rights under the UCC sent to
Mortgagor in accordance with the notice provision hereof at least ten (10) days
prior to such action shall constitute commercially reasonable notice to
Mortgagor. The proceeds of any such sale or disposition, or any part thereof,
may be applied by Mortgagee to the payment of the Loan Obligations in accordance
with Section 2.7 of the Loan Agreement.

         Section 4.3. Warranties, Representations and Covenants. Mortgagor
hereby warrants, represents and covenants that: (a) the Equipment and Inventory
will be kept on or at the Facility and Mortgagor will not remove any Equipment
or Inventory from the Facility, except such portions or items of the Equipment
or Inventory that are consumed or worn out in ordinary usage, all of which shall
be promptly replaced by Mortgagor with Equipment or Inventory, as applicable, of
equivalent value and functionality, except as otherwise expressly provided in
Section 2.7 with respect to Equipment (b) all covenants and obligations of
Mortgagor contained herein relating to the Mortgaged Property shall be deemed to
apply to the Equipment and Inventory whether or not expressly referred to herein
and (c) this Mortgage constitutes a security agreement and "fixture filing" as
those terms are used in the UCC. Information relative to the security interest
created hereby

<PAGE>

may be obtained by application to Mortgagee (secured party). The mailing
addresses of Mortgagor and Mortgagee are set forth on Page 1.

                                    ARTICLE V

                           Events of Default; Remedies

         Section 5.1. Events of Default. The term "Event of Default" wherever
used in this Mortgage, shall mean any one of the following events: (a) if
Mortgagor fails to pay any amount payable hereunder when due and payable; (b) if
any representation or warranty made herein shall be false in material respect as
of the date such representation or warranty was made or remade; (c) the
occurrence of a default on the part of Mortgagor under any Lease (subject,
however, to any applicable notice and cure periods required under the applicable
Lease ) provided that such default adversely affects the value of the Mortgaged
Property or in any way impairs Mortgagor's ability to perform its obligations
under the Loan Documents; (d) the failure of Mortgagor to maintain the insurance
required in this Mortgage; (e) if a Transfer shall occur without Mortgagee's
prior written consent, which consent may be withheld in Mortgagee's discretion;
(f) the occurrence of any "Event of Default" under any of the Loan Documents,
including, without limitation, the Loan Agreement; or (g) if Mortgagor shall be
in default under any of the other obligations, agreements, undertakings, terms,
covenants, provisions or conditions or this Mortgage, not otherwise referred to
in this Section 5.1, for ten (10) days after written notice to Mortgagor from
Mortgagee, in the case of any default which can be cured by the payment of a sum
of money or for thirty (30) days after written notice from Mortgagee, in the
case of any other default (unless otherwise provided herein); provided, however,
that is such non-monetary default is susceptible of cure but cannot reasonably
be cured within such thirty (30) day period and provided further that Mortgagor
shall have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for such time as is reasonably necessary for
Mortgagor in the exercise of due diligence to cure such default, but in no event
shall such period exceed ninety (90) days after the original notice from
Mortgagee.

         Section 5.2. Acceleration of Maturity. If an Event of Default shall
have occurred, then the entire principal amount of the indebtedness secured
hereby with interest accrued thereon and all other Loan Obligations shall, at
the option of Mortgagee, become due and payable without notice or demand, time
being of the essence; and any omission on the part of Mortgagee to exercise such
option when entitled to do so shall not be considered as a waiver of such right.
Mortgagor hereby expressly waives presentment, demand for payment, notice of
protest, notice of dishonor, notice of intent to accelerate the maturity of the
indebtedness secured hereby and notice of acceleration of the maturity of the
indebtedness secured hereby. Notwithstanding interest, Default Rate interest,
Yield Maintenance Premium and any other amounts owing by Mortgagor shall be
accelerated and immediately due and payable, without any election by Mortgagee,
upon the occurrence of an Event of Default described in Section 7.1(x) or
Section 7.1 (xi) of the Loan Agreement.

         Section 5.3. Default Remedies.

         (a) If an Event of Default shall have occurred and be continuing, this
Mortgage may, to the maximum extent permitted by law, be enforced, and Mortgagee
may exercise any right, power or remedy of Mortgagee hereunder, under the Loan
Agreement or under any of the other Loan Documents or at law or in equity, and,
without

<PAGE>

limiting the generality of the foregoing, Mortgagee may, personally or by its
agents, to the maximum extent permitted by law:

                  (i) enter into and take possession of the Mortgaged Property
         or any part thereof, exclude Mortgagor and all Persons claiming under
         Mortgagor whose claims are junior to this Mortgage, wholly or partly
         therefrom, and use, operate, manage and control the Mortgaged Property
         or any part thereof either in the name of Mortgagor or otherwise as
         Mortgagee shall deem best, and upon such entry, from time to time at
         the expense of Mortgagor and the Mortgaged Property, make all such
         repairs, replacements, alterations, additions or improvements to the
         Facility or any part thereof as Mortgagee may deem proper and, whether
         or not Mortgagee has so entered and taken possession of the Mortgaged
         Property or any part thereof, collect and receive all Rents and apply
         the same to the payment of all expenses that Mortgagee may be
         authorized to make under this Mortgage, the remainder to be applied to
         the payment of the Loan Obligations until the same shall have been
         repaid in full; if Mortgagee demands or attempts to take possession of
         the Mortgaged Property or any part thereof in the exercise of any
         rights hereunder, Mortgagor shall promptly turn over and deliver
         complete possession thereof to Mortgagee; and

                  (ii) personally or by agents, with or without entry:

                     (x) sell the Mortgaged Property at a sale or sales held at
                  such place or places and time or times and upon such notice
                  and otherwise in such manner and in such order as may be
                  required by law, or, in the absence of any such requirements,
                  as Mortgagee may deem appropriate and from time to time
                  adjourn any such sale by announcement at the time and place
                  specified for such sale or for such adjourned sale without
                  further notice, except such as may be required by law;

                     (y) proceed to protect and enforce Mortgagee's rights under
                  this Mortgage, by suit for specific performance of any
                  covenant contained herein or in the Loan Documents or in aid
                  of the execution of any power granted herein or in the Loan
                  Documents, or for the foreclosure of this Mortgage (as a
                  mortgage or otherwise) and the sale of the Mortgaged Property
                  or any part thereof under the judgment or decree of a court of
                  competent jurisdiction, or for the enforcement of any other
                  right as Mortgagee shall elect, provided, that in the event of
                  a sale, by foreclosure or otherwise, of less than all of the
                  Mortgaged Property, this Mortgage shall continue as a lien on,
                  and security interest in, the remaining portion of the
                  Mortgaged Property; or

                     (z) exercise any or all of the remedies available to a
                  secured party under the UCC, including, without limitation:

                           (1) either personally or by means of a court
                  appointed receiver, take possession of all or any of the
                  Security Interest Property and exclude therefrom Mortgagor and
                  all Persons claiming under Mortgagor, and thereafter hold,
                  store, use, operate, manage, maintain and control, make
                  repairs, replacements, alterations, additions and improvements
                  to and exercise all rights and powers of Mortgagor in respect
                  of the Security Interest Property, or any part thereof; if
                  Mortgagee demands or attempts to take possession of the
                  Security Interest Property in the exercise of any rights
                  hereunder, Mortgagor

<PAGE>

                  shall promptly turn over and deliver complete possession
                  thereof to Mortgagee;

                           (2) without further notice to or demand upon
                  Mortgagor (except those otherwise required hereby or by the
                  Loan Agreement), make such payments and do such acts as
                  Mortgagee may deem necessary to protect its security interest
                  in the Security Interest Property, including, without
                  limitation, paying, purchasing, contesting or compromising any
                  encumbrance that is prior to or superior to the security
                  interest granted hereunder, and in exercising any such powers
                  or authority paying all expenses incurred in connection
                  therewith, which expenses shall thereafter become part of the
                  Loan Obligations secured by the lien of this Mortgage;

                           (3) require Mortgagor to assemble the Security
                  Interest Property or any portion thereof, at a place
                  designated by Mortgagee and reasonably convenient to both
                  parties, and promptly to deliver the Security Interest
                  Property to Mortgagee, or an agent or representative
                  designated by Mortgagee, and its agents and representatives,
                  shall have the right to enter upon the premises and property
                  of Mortgagor to exercise Mortgagee's rights hereunder;

                           (4) sell, lease or otherwise dispose of the Security
                  Interest Property, with or without having the Security
                  Interest Property at the place of sale, and upon such terms
                  and in such manner as Mortgagee may determine (and Mortgagee
                  may be a purchaser at any such sale, provided, however, that
                  Mortgagee may dispose of the Security Interest Property in
                  accordance with Mortgagee's rights and remedies in respect of
                  the Mortgaged Property pursuant to the provisions of this
                  Mortgage in lieu of proceeding under the UCC; and (5) unless
                  the Security Interest Property is perishable or threatens to
                  decline speedily in value or is of a type customarily sold on
                  a recognized market, Mortgagee, as the case may be, shall give
                  Mortgagor at least ten (10) days prior notice of the time and
                  place of any sale of the Security Interest Property or other
                  intended disposition thereof, which notice Mortgagor agrees is
                  commercially reasonable.

         (b) If an Event of Default shall have occurred, Mortgagee, to the
maximum extent permitted by law, shall be entitled, as a matter of right, to the
appointment of a receiver of the Mortgaged Property, without notice or demand,
and without regard to the adequacy of the security for the Loan Obligations or
the solvency of Mortgagor. Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor. Any such receiver or
receivers shall have all the usual powers and duties of receivers in like or
similar cases and exercise all such powers until the date of confirmation of
sale of the Mortgaged Property, unless such receivership is sooner terminated.

         (c) In any sale under any provision of this Mortgage or pursuant to any
judgment or decree of court, the Mortgaged Property, to the maximum extent
permitted by law, may be sold in one or more parcels or as an entirety and in
such order as Mortgagee may elect, without regard to the right of Mortgagor or
any Person claiming under Mortgagor to the marshalling of assets. The purchaser
at any such sale shall take title to the Mortgaged Property or the part thereof
so sold free and discharged of the estate of Mortgagor therein, the purchaser
being hereby discharged from all liability to

<PAGE>

see to the application of the purchase money. If permitted by applicable law,
upon the completion of any such sale by virtue of this Section 5.3(c) Mortgagee
shall execute and deliver to the purchaser an appropriate instrument that shall
effectively transfer all of Mortgagor's estate, right, title, interest,
property, claim and demand in and to the Mortgaged Property or portion thereof
so sold, but without any covenant or warranty, express or implied. Mortgagee is
hereby irrevocably appointed the attorney-in-fact of Mortgagor, couple with an
interest, in its name and stead to make all appropriate transfers and deliveries
of the Mortgaged Property or any portions thereof so sold and, for that purpose,
Mortgagee may execute all appropriate documents, instruments and agreements of
transfer, and may substitute one or more Persons with like power, Mortgagor
hereby ratifying and confirming all that said attorneys or such substitute or
substitutes shall lawfully do by virtue hereof. Nevertheless, Mortgagor shall
ratify and confirm, or cause to be ratified and confirmed, any such sale or
sales by executing and delivering, or by causing to be executed and delivered to
Mortgagee or to such purchaser or purchasers all such instruments as may be
advisable, in the judgment of Mortgagee, for such purpose, and as may be
designated in such request. Any sale or sales made under or by virtue of this
Mortgage, to the extent not prohibited by law, shall operate to divest all the
estate, right, title, interest, property, claim and demand whatsoever, whether
at law or in equity, of Mortgagor in, to and under the Mortgaged Property, or
any portions thereof so sold, and shall be a perpetual bar both at law and in
equity against Mortgagor and against any and all Persons claiming or who may
claim the same, or any part thereof, by, through or under Mortgagor. The powers
and agency herein granted are coupled with an interest and are irrevocable.
Mortgagee may be a purchaser at any such sale, and if Mortgagee is the highest
bidder, Mortgagee may credit the portion of the purchase price that would be
distributed to Mortgagee against all amounts due it by Mortgagor in lieu of
paying cash.

         (d) All rights of action under the Loan Documents and this Mortgage may
be enforced by Mortgagee without the possession of the original Loan Documents
and without the production thereof at any trial or other proceeding relative
thereto.

         Section 5.4. Application of Proceeds.

         (a) Prior to the occurrence and continuance of a Default or an Event of
Default, any amounts received or collected by Mortgagee under this Mortgage
shall be applied in accordance with Section 2.8 of the Loan Agreement. After the
occurrence of a Default or an Event of Default, any amounts received or
collected by Mortgagee under this Mortgage or any other Loan Document may be
applied to any one or more of the following in such order and in such amounts as
Mortgagee may elect in its discretion:

                  (i) To the payment of all costs, expenses and advances
         incurred by Mortgagee, or made by Mortgagee, in the enforcement of this
         Mortgage or any of the other Loan Documents, the protection of the lien
         and security afforded thereby, and the preservation of the Mortgaged
         Property, including, without limitation, all expenses of managing the
         Facility, including, without limitation, the salaries, fees and wages
         of any managing agent and such other employees as Mortgagee may deem
         necessary and all expenses of operating and maintaining the Facility,
         including, without limitation, all taxes, charges, claims, assessments,
         water rents, sewer rents and any other liens, and premiums for all
         insurance which are due and payable and the cost of all alterations,
         renovations, repairs or replacements, and all costs and expenses
         incident to taking and retaining possession of the Facility and the
         enforcement of any of Mortgagee's rights and remedies hereunder; and

<PAGE>

                  (ii) To the payment of the Loan Obligations in accordance with
         the Loan Agreement, this Mortgage and the other Loan Documents.

         (b) No sale or other disposition of all or any part of the Mortgaged
Property pursuant to Section 5.3 shall be deemed to relieve Mortgagor of its
obligations under the Loan Agreement or any other Loan Document except to the
extent the proceeds thereof are applied to the payment of such obligations. If
the proceeds of sale, collection or other realization of or upon the Mortgaged
Property are insufficient to cover the costs and expenses of such realization
and the payment in full of the Loan Obligations, Mortgagor shall remain liable
for any deficiency subject to Section 6.14 hereof.

         (c) Upon any sale made under the powers of sale herein granted and
conferred, the receipt given by Mortgagee will be sufficient discharge to the
purchaser or purchasers at any sale for the purchase money, and such purchaser
or purchasers and their heirs, devisees, personal representatives, successors
and assigns thereof will not, after paying such purchase money and receiving
such receipt of Mortgagee, be obligated to see to the application thereof or be
in any way answerable for any loss, misapplication or non-application thereof.

         Section 5.5. Right to Sue. Subject to Section 6.14 below, Mortgagee
shall have the right from time to time to sue for any sums required to be paid
by Mortgagor under the terms of this Mortgage as the same become due, without
regard to whether or not the entire Loan Obligations shall be, or have become,
due and without prejudice to the right of Mortgagee thereafter to bring action
or proceeding of foreclosure or any other action upon the occurrence and
continuance of any Event of Default existing at the time such earlier action was
commenced.

         Section 5.6. Powers of Mortgagee. Mortgagee may at any time or from
time to time renew or extend this Mortgage or (with the agreement of Mortgagor)
alter or modify the same in any way, or waive any of the terms, covenants or
conditions hereof or thereof, in whole or in part, and may release or reconvey
any portion of the Mortgaged Property or any other security, and grant such
extension and indulgences in relation to the Loan Obligations, or release any
Person liable therefor as Mortgagee may determine without the consent of any
junior lienor or encumbrancer, without any obligation to give notice of any kind
thereto, without in any manner affecting the priority of the lien and estate of
this Mortgage on or in any part of the Mortgaged Property, and without affecting
the liability of any other Person liable for any of the Loan Obligations.

         Section 5.7. Remedies Cumulative.

         (a) No right or remedy herein conferred upon or reserved to Mortgagee
is intended to be exclusive of any other right or remedy, and each and every
right and remedy shall be cumulative and in addition to any other right or
remedy under this Mortgage, or under applicable law, whether now or hereafter
existing; the failure of Mortgagee to insist at any time upon the strict
observance or performance of any of the provisions of this Mortgage or to
exercise any right or remedy provided for herein or under applicable law, shall
not impair any such right or remedy nor be construed as a waiver or
relinquishment thereof.

         (b) To the fullest extent permitted by applicable law, Mortgagee shall
each be entitled to enforce payment and performance of any of the obligations of
Mortgagor and to exercise all rights and powers under this Mortgage or under any
Loan Document or any laws now or hereafter in force, notwithstanding that some
or all of the Loan Obligations may now or hereafter be otherwise secured,
whether by mortgage, deed of

<PAGE>

trust, pledge, lien, assignment or otherwise; neither the acceptance of this
Mortgage nor its enforcement, whether by court action or pursuant to the power
of sale or other powers herein contained, shall prejudice or in any manner
affect Mortgagee's right to realize upon or enforce any other security now or
hereafter held by Mortgagee, it being stipulated that Mortgagee shall be
entitled to enforce this Mortgage and any other security now or hereafter held
by Mortgagee in such order and manner as Mortgagee, in its discretion, may
determine; every power or remedy give by the Loan Agreement, this Mortgage or
any of the other Loan Documents to Mortgagee, or to which Mortgagee is otherwise
entitled, may be exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by Mortgagee, and Mortgagee may pursue
inconsistent remedies.

         Section 5.8. Waiver of Stay, Extension, Moratorium Laws; Equity of
Redemption. To the maximum extent permitted by law, Mortgagor shall not at any
time insist upon, or plead, or in any manner whatever claim or take any benefit
or advantage of any applicable present or future stay, extension or moratorium
law, that may affect observance or performance of the provisions of this
Mortgage; nor claim, take or insist upon any benefit or advantage of any present
or future law providing for the valuation or appraisal of the Mortgaged Property
or any portion thereof prior to any sale or sales thereof that may be made under
or by virtue of Section 5.3; and Mortgagor, to the extent that it lawfully may,
hereby waives all benefit or advantage of any such law or laws. Mortgagor, for
itself and all who may claim under it, hereby waives, to the maximum extent
permitted by applicable law, any and all rights and equities of redemption from
sale under the power of sale created hereunder or from sale under any
foreclosure of this Mortgage and (if an Event of Default shall have occurred)
all notice or notices of seizure, and all right to have the Mortgaged Property
marshalled upon any foreclosure hereof. Mortgagee shall not be obligated to
pursue or exhaust its rights or remedies as against any other part of the
Mortgaged Property and Mortgagor hereby waives any right or claim of right to
have Mortgagee proceed in any particular order.

         Section 5.9. Waiver of Homestead. Mortgagor hereby waives and renounce
all homestead and exemption rights provided for by the Constitution and the laws
of the United States and of any state, in and to the Mortgaged Property as
against the collection of the Loan Obligations, or any part thereof.

         Section 5.10. Discontinuance of Proceedings. If Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, power of sale, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to Mortgagee, then in every such case, Mortgagor and Mortgagee shall
be restored to their former positions and rights hereunder, and all rights,
powers and remedies of Mortgagee shall continue as if no such proceedings had
occurred.

                                   ARTICLE VI

                                  Ground Lease

         Section 6.1. Representations and Warranties. The Mortgagor hereby
represents and warrants as follows: (i) the Ground Lease is in full force and
effect in accordance with its terms, unmodified by any writing or otherwise
except as specifically set forth herein; (ii) all base rent, additional rent (if
any) and other charges reserved in or payable under the Ground Lease have been
paid in full to the extent that they are payable to the date hereof; (iii) the
Mortgagor is the owner of the Leasehold Estate and the Mortgagor

<PAGE>

enjoys the quiet, peaceful and undisturbed possession of such Leasehold Estate;
(iv) neither the Mortgagor nor the Fee Owner is in default under any of the
terms of the Ground Lease and there are no circumstances that with the passage
of time, the giving of notice, or both, would constitute a default by either
party thereunder; (v) the Leasehold Estate is not subject to any encumbrances or
other matters except for the Permitted Encumbrances; (vi) this Mortgage is and
shall remain a valid and enforceable first lien on the Leasehold Estate subject
only to the Permitted Encumbrances; (vii) the Mortgagor has full power and
authority to encumber the Leasehold Estate in the manner and form herein
provided or intended hereafter to be provided; and (viii) the Mortgagor has
delivered to the Mortgagee a true, accurate and complete copy of the Ground
Lease.

         Section 6.2. Covenants. The Mortgagor covenants and agrees as follows:
(i) to promptly and faithfully observe, perform and comply with all of the
terms, covenants and provisions of the Ground Lease; (ii) to refrain from doing
anything, as a result of which, there could likely be a default under or breach
of any of the terms of the Ground Lease; (iii) not to do or permit any act,
event or omission , as a result of which, there is likely to occur a default or
breach under the Ground Lease; (iv) to immediately give the Mortgagee notice of
any default by any party under the Ground Lease upon learning of such default
and immediately deliver to the Mortgagee a copy of each notice of default and
all responses to such notice of default and all other such instruments, notices
or demands received or delivered by Mortgagor under or in connection with the
Ground Lease; (v) to immediately notify the Mortgagee in writing in the event of
the initiation of any litigation or arbitration proceeding under or in
connection with the Ground Lease upon learning of same; (vi) to furnish to the
Mortgagee copies of such information and such other evidence as the Mortgagee
may reasonably request from time to time concerning the Mortgagor's due
observance, performance and compliance with the terms, covenants and provisions
of the Ground Lease; and (vii) the occurrence of a default on the part of the
Mortgagor as tenant under the Ground Lease, which default is continuing beyond
the expiration of any cure period applicable thereto under such Ground Lease,
shall constitute an immediate Event of Default by the Mortgagor under this
Mortgage.

         Section 6.3. Additional Covenants. The Mortgagor further covenants and
agrees that it will not voluntarily or involuntarily, directly or indirectly,
assign, transfer or convey the Leasehold Estate, nor surrender, terminate or
cancel the Ground Lease nor, without the prior written consent of the Mortgagee,
fail to exercise in a timely manner any renewals options(s) contained in the
Ground Lease nor, without the prior written consent of Mortgagee, modify, alter
or amend the Ground Lease either orally or in writing. Any assignment, transfer,
conveyance surrender, termination, cancellation, modification, alteration or
amendment of the Ground Lease in contravention of the foregoing sentence shall
be an Event of Default hereunder.

         Section 6.4. No Release. The Mortgagor acknowledges and agrees that no
release or forbearance of any of the Mortgagor's obligations under the Ground
Lease or otherwise shall release the Mortgagor from any of its obligations under
this Mortgage, including without limitation the performance of all of the terms,
provisions, covenants, conditions and agreements contained in the Ground Lease,
to be kept, performed and complied with by the Mortgagor therein.

         Section 6.5. Defaults. In the event of a default by the Mortgagor under
the Ground Lease or the occurrence of an event that, with the giving of notice,
the passage of time, or both, would constitute a default by the Mortgagor under
the Ground Lease (including, without limitation, any default in the payment of
any sums payable thereunder), then, in each and every such case, the Mortgagee
may (but shall not be obligated to ), in its sole discretion, cause such default
or defaults by the Mortgagor to be

<PAGE>

remedied and otherwise take or perform such other actions as the Mortgagee may
deem necessary or desirable as a result thereof of or in connection therewith.
The Mortgagor shall, on demand, reimburse the Mortgagee for all advances made
and expenses incurred by the Mortgagee in curing any such default(s) (including,
without limitation, reasonable attorneys' fees), together with interest thereon
from the date the same is paid in full to the Mortgagee and all such sums so
advanced shall be secured hereby. The provisions of this subsection are in
addition to any other right or remedy given to or allowed the Mortgagee under
the Ground Lease or otherwise.

         Section 6.6 Cancellation or Termination. If the Ground Lease is
cancelled or terminated and the Mortgagee or its nominee shall acquire an
interest in any new lease of the Facility, the Mortgagor shall have no right,
title or interest in or to the new lease or the leasehold estate created by such
new lease.

         Section 6.7. Estoppel Certificate. Subject to the fact that the Fee
Owner under the Ground Lease may not have an obligation to deliver an estoppel
certificate, the Mortgagor shall, from time to time, use reasonable efforts to
obtain and deliver (or cause to be delivered) to the Mortgagee, within sixty
(60) days after written demand therefor by the Mortgagee, an estoppel
certificate from the Fee Owner certifying to such matters as the Mortgagee may
require, including without limitation, the following: (1) the name of the tenant
entitled to possession of the Leasehold Estate under the Ground Lease; (2) that
the Ground Lease is in full force and effect and has not been modified or, if it
has been modified, the date of each such modification (together with copies of
each modification); (3) the date to which the fixed (or base) rent has been paid
under the Ground Lease, (4) the dates to which all other fees or charges have
been paid under the Ground Lease; (5) whether any notice of default has been
sent to the Mortgagor, as tenant, under the Ground Lease which has not been
cured, and if such notice has been sent, the date it was sent and the nature of
the default; (6) to the best of the Fee Owner's knowledge, whether the
Mortgagor, as tenant, under the Ground Lease is in default in keeping, observing
or performing any term, covenant, agreement, provision, condition or limitation
contained in the Ground Lease and (7) if the Mortgagor, as tenant, under the
Ground Lease shall be in default, the nature of the default in reasonable
detail.

         Section 6.8. No Liability. Notwithstanding anything contained herein or
otherwise to the contrary, the Mortgagee shall not have any a liability or
obligation under the Ground Lease by virtue of its acceptance of this Mortgage.
The Mortgagor acknowledges and agrees that the Mortgagee shall be liable for the
obligations of the tenant arising under the Ground Lease for only that period of
time, if any, during which the Mortgagee is in possession of the Leasehold
Estate or has acquired, by foreclosure, or otherwise, and is holding, all of the
Mortgagor's right, title and interest as tenant therein.

         Section 6.9. Bankruptcy. Notwithstanding anything contained herein or
otherwise to the contrary, the Mortgagor hereby assigns, transfers and sets over
to the Mortgagee any and all rights and interests that may arise in favor of the
Mortgagor in connection with or as a result of the bankruptcy or insolvency of
the Fee Owner, including, without limitation, all of the Mortgagor's right,
title and interest in, to and under ss.365 of the Bankruptcy Code (11
U.S.C. Section 365), as the same may be amended, supplemented or modified from
time to time.

         Section 6.10. No Merger. Except as provided in the immediately
following sentence, it is hereby agreed by the parties that the fee title
currently vested in the Fee Owner and the Leasehold Estate currently held by the
Mortgagor shall not merge but shall always be kept separate and distinct,
notwithstanding the union of such estates in either the Fee Owner (or its
successors and assigns), the Mortgagor or a third party,

<PAGE>

whether by purchase or otherwise. If the Mortgagor acquires such fee title or
any other estate, title or interest in such property, or any part thereof, the
lien of this Mortgage shall automatically spread and attach to, cover and be a
first lien upon such acquired estate, title or interest and the same shall
thereupon and thereafter be and become a part of the premises encumbered hereby
with the same force and effect as if specifically encumbered herein. The
Mortgagor agrees to execute all instruments and documents which the Mortgagee
may reasonably require to ratify, confirm and further evidence the Mortgagee's
first lien on the acquired estate, title or interest. Furthermore, the Mortgagor
hereby appoints the Mortgagee its true and lawful attorney-in-fact to execute
and deliver all such instruments and documents in the name and on behalf of the
Mortgagor. This power, being coupled with an interest, shall be irrevocable as
long as the indebtedness secured hereby remains unpaid.

         Section 6.11. Taxes. In the event that it is claimed by any
governmental agency, authority or subdivision that any tax or governmental
charge or imposition is due, unpaid or payable by the Mortgagor or the Mortgagee
upon or in connection with the obligations secured hereby or the Ground Lease,
the Mortgagor shall promptly either (i) pay such tax, charge or imposition when
due and deliver to the Mortgagee satisfactory proof of payment thereof or (ii)
deposit with the Mortgagee the amount of such claimed tax, together with
interest and penalties thereon, pending an application for review of the claim
for such tax, and within a reasonable time, deliver to the Mortgagee either (a)
evidence satisfactory to the Mortgagee that such claim of taxability has been
withdrawn or defeated, in which event any such deposit shall be returned to the
Mortgagor or (b) a direction from the Mortgagor to the Mortgagee to pay the same
out of the deposit above mentioned, any excess due over the amount of said
deposit to be paid by the Mortgagor directly to the taxing authority and any
excess of such deposit over such payment by the Mortgagee to be returned to the
Mortgagor. If liability for such tax is asserted against the Mortgagee, the
Mortgagee will give to the Mortgagor prompt notice of such claim, and the
Mortgagor, upon complying with the provision of this subsection shall have full
right and authority to contest such claim of taxability.

                                   ARTICLE VII

                                  Miscellaneous

         Section 7.1. Reconveyance by Mortgagee. Upon payment in full of the
Loan Obligations or a complete defeasance with respect to the Mortgaged Property
which complies with the Loan Agreement (f the Loan Agreement provides for
defeasance), Mortgagee shall release the lien of this Mortgage, or upon the
request of Mortgagor, and at Mortgagor's expense, assign this Mortgage without
recourse to Mortgagor's designee, or to the Person or Persons legally entitled
thereto, by an instrument duly acknowledged in form for recording.

         Section 7.2. Mortgagee's Discretion. Whenever pursuant to the Mortgage,
Mortgagee exercises any right, option or election given to Mortgagee to approve
or disapprove, or to consent to or withhold consent, or any arrangement or term
is to be satisfactory to Mortgagee or is to be in Mortgagee's discretion, the
decision of Mortgagee to approve or disapprove, consent or withhold consent, or
to decide whether arrangements or terms are satisfactory or not satisfactory, or
acceptable or not acceptable to Lender in Lender's discretion, shall (except as
is otherwise specifically herein provided) be in the sole and absolute
discretion of Mortgagee.

<PAGE>

         Section 7.3. Notices. All notices, demands, consents, requests or other
communications that are permitted or required to be given by any party to the
other hereunder shall be in writing and given in the manner specified in Section
8.6 of the Loan Agreement.

         Section 7.4. Amendments; Waiver; etc. This Mortgage cannot be modified,
changed or discharged except by an agreement in writing, duly acknowledged in
form for recording, signed by Mortgagor and Mortgagee.

         Section 7.5. Successors and Assigns. This Mortgage applies to, inures
to the benefit of and binds Mortgagor, Mortgagee and Mortgagee and their
respective successors and assigns, and shall run with the Land.

         Section 7.6. Captions. The captions or headings at the beginning of
each Article and Section hereof are for the convenience of the parties hereto
and are not a part of this Mortgage.

         Section 7.7. Severability. If any term or provision of this Mortgage or
the application thereof to any Person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Mortgage, or the application of
such term or provision to Person or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Mortgage shall be valid and enforceable to the maximum extent
permitted by law. If any portion of the Loan Obligations shall for any reason
not be secured by a valid and enforceable lien upon any part of the Mortgaged
Property, then any payments made in respect of the Loan Obligations (whether
voluntary or under foreclosure or other enforcement action or procedure or
otherwise) shall, for purposes of this Mortgage (except to the extent otherwise
required by applicable law) be deemed to be made (a) first, in respect of the
portion of the Loan Obligations not secured by the lien of this Mortgage, (b)
second, in respect of the portion of the Loan Obligation secured by the lien of
this Mortgage, but which lien is on less than all of the Mortgaged Property, and
(c) last, to the portion of the Loan Obligations secured by the lien of this
Mortgage, and which lien is on all of the Mortgaged Property.

         Section 7.8. Indemnity; Expenses. Except for actions by Mortgagor
against Mortgagee where Mortgagor is the prevailing party, Mortgagor will pay or
reimburse Mortgagee for all reasonable attorneys' fees, costs and expenses
incurred by Mortgagee in any suit, action, legal proceeding or dispute of any
kind in which Mortgagee is made a party or appears as party plaintiff or
defendant, affecting the Loan Obligations, this Mortgage or the interest created
therein, or the Mortgaged Property, or any appeal thereof, including, without
limitation, activities related to enforcement of the remedies of Mortgagee,
activities related to protection of Mortgagee's collateral, any foreclosure
action or exercise of the power of sale, any action commenced under Section
5.3(a)(iii), any condemnation action involving the Mortgaged Property or any
action to protect the security hereof, any bankruptcy or other insolvency
proceeding commenced by or against Mortgagor, or any lessee of the Mortgaged
Property (or any part thereof), and any such amounts paid or incurred by
Mortgagee shall be added to the Loan Obligations and shall be secured by this
Mortgage. Mortgagor will indemnify, defend and hold Mortgagee harmless from and
against all claims, damages, and expenses, including reasonable attorneys' fees
and court costs, resulting from any action by a third party against Mortgagee
relating to this Mortgage or the interest created herein, or the Mortgaged
Property, including, without limitation, any action or proceeding claiming loss,
damage or injury to person or property, or any action or proceeding claiming a
violation of or liability under any Legal Requirements, including applicable
Environmental Laws,

<PAGE>

provided Mortgagor shall not be required to indemnify Mortgagee for matters to
the extent caused by Mortgagee's willful misconduct or fraud. Mortgagor
acknowledges that it has undertaken the obligation to pay all intangibles taxes
and documentary taxes now or hereafter due in connection with the Loan
Obligations and the Loan Documents, and Mortgagor agrees to indemnify and hold
Mortgagee harmless from any intangibles taxes and documentary stamp taxes, and
any interest or penalties, which Mortgagee may hereafter be required to pay in
connection with the Loan Obligations or Loan Documents. The agreements of this
Section 7.8 shall expressly survive, in perpetuity, satisfaction of this
Mortgage and repayment of the Loan Obligations, any release, reconveyance,
discharge or foreclosure of this Mortgage, conveyance by deed in lieu of
foreclosure, sale, and any subsequent transfer by Mortgagee's conveyance of the
Mortgaged Property. The indemnification by Mortgagor of Mortgagee does not and
shall not be deemed to limit or modify Mortgagor's insurance or other
obligations under the Loan Documents and, Mortgagor's compliance with the
insurance requirements under the Loan Documents shall not limit or modify
Mortgagor's indemnification obligations under the Loan Documents. Mortgagor's
duty to defend is independent of Mortgagor's duty to indemnify, and shall be
applicable regardless of mortgagor's independent liability for such claims,
claims based on Mortgagee's strict liability or liability without fault, or
Mortgagee's lack of detriment or payment of claims. At any stage in the claim or
suit against Mortgagee, Mortgagee is entitled to obtain summary adjudication
regarding Mortgagor's duty to defend.

         Section 7.9. Estoppel Certificates. Mortgagor and Mortgagee each hereby
agree at any time and from time to time upon not less than fifteen (15) days
prior written notice from the other party to execute, acknowledge and deliver to
the party specified in such notice, a statement, in writing, certifying that
this Mortgage is unmodified and in full force and effect (of if there have been
modifications, that the same, as modified, is in full force and effect and
stating the modifications hereto), and stating whether or not, to the best
knowledge of such certifying party, any Default or Event of Default has
occurred, and, if so, specifying each such Default or Event of Default;
provided, however, that it shall be a condition precedent to Mortgagee's
obligation to deliver the statement pursuant to this Section 7.9, that Mortgagee
shall have received, together with Mortgagor's request for such statement, an
Officer's Certificate stating that no Default or Event of Default exists as of
the date of such certificate (or specifying such Default or Event of Default).

         Section 7.10. Applicable Law. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Facility is
located.

         Section 7.11. Limitation of Interest. It is the intention of Mortgagor
and Mortgagee to conform strictly to applicable usury laws. Accordingly, if the
transaction contemplated hereby would be usurious under applicable law, then, in
that event, notwithstanding anything to the contrary in any Loan Document, it is
agreed as follows: (i) the aggregate of all consideration which constitutes
interest under applicable law that is taken, reserved, contracted for, charged
or received under any Loan Document or otherwise in connection with the Loan
shall under no circumstances exceed the maximum amount of interest allowed by
applicable law, and any excess shall be credited to principal by Mortgagee (or
if the Loan shall have been paid in full, refunded to Mortgagor); and (ii) in
the event that maturity of the Loan is accelerated by reason of an election by
Mortgagee resulting from any default hereunder or otherwise, or in the event of
any required or permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount of interest allowed by
applicable law, and any interest in excess of the maximum amount of interest
allowed by applicable law, if any, provided for in the Loan Documents or
otherwise shall be cancelled automatically

<PAGE>

as of the date of such acceleration or prepayment and, if theretofore prepaid,
shall be credited to principal (or if the principal portion of the Loan and any
other amounts not constituting interest shall have been paid in full, refunded
to Mortgagor).

         In determining whether or not the interest paid or payable under any
specific contingency exceeds the maximum amount allowed by applicable law,
Mortgagee shall, to the maximum extent permitted under applicable law (a)
exclude voluntary prepayments and the effects thereof, and (b) amortize,
prorate, allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of the Loan so that the interest rate is
uniform through the entire term of the Loan; provided, that if the Loan is paid
and performed in full prior to the end of the full contemplated term hereof, and
if the interest received for the actual period of existence thereof exceeds the
maximum amount allowed by applicable law, Mortgagee shall refund to Mortgagor
the amount of such excess, and in such event, Mortgagee shall not be subject to
any penalties provided by any laws for contracting for, charging or receiving
interest in excess of the maximum amount allowed by applicable law.

         Section 7.12. Assignment. Mortgagee shall have the right to assign this
Mortgage and the obligations hereunder to any Person in accordance with the Loan
Agreement. The parties hereto acknowledge that following the execution and
delivery of this Mortgage, Mortgagee may sell, transfer and assign this Mortgage
and all or any of the other Loan Documents to the trustee or servicer in
connection with a Securitization. All references to "Mortgagee" hereunder shall
be deemed to include the assigns of Mortgagee including the trustee or servicer
in any Securitization.

         Section 7.13. Time of the Essence. Time is of the essence with respect
to each and every covenant, agreement and obligation of Mortgagor under this
Mortgage, the Note and all other Loan Documents.

         SECTION 7.14. WAIVER OF JURY TRIAL. MORTGAGOR AND MORTGAGEE HEREBY
WAIVE ANY RIGHT THAT EITHER OR THEM MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM,
COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN
ANY WAY RELATED TO THIS MORTGAGE OR THE LOAN, OR (B) IN ANY WAY CONNECTED WITH
OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF MORTGAGOR AND/OR
MORTGAGEE WITH RESPECT TO THE LOAN DOCUMENTS OR IN CONNECTION WITH MORTGAGE OR
THE EXERCISE OF ANY PARTY'S RIGHTS AND REMEDIES UNDER THIS MORTGAGE OR
OTHERWISE, OR THE CONDUCT OF THE RELATIONSHIP OF THE PARTIES HERETO, IN ALL OF
THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH OF MORTGAGOR AND MORTGAGEE AGREE
THAT THE OTHER MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY, AND BARGAINED AGREEMENT OF MORTGAGOR AND
MORTGAGEE IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY JURY AS AN INDUCEMENT OF
MORTGAGEE TO MAKE THE LOAN, AND THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY DISPUTE OR CONTROVERSY WHATSOEVER (WHETHER OR NOT MODIFIED HEREIN) BETWEEN
MORTGAGOR AND MORTGAGEE SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

<PAGE>

         Section 7.15. Exculpation. This Mortgage and the obligations of
Mortgagor hereunder are and shall be subject to and limited by the exculpation
provisions of Section 8.14 of the Loan Agreement.

         Section 7.16. Exhibits. The information set forth on the cover, heading
and recitals hereof, and the Exhibits attached hereto, are hereby incorporated
herein as a part of this Mortgage with the same effect as if set forth in the
body hereof.

         Section 7.17. CONFESSION OF JUDGMENT. FOR THE PURPOSE OF OBTAINING
POSSESSION OF THE MORTGAGED PREMISES FOLLOWING ANY DEFAULT HEREUNDER OR UNDER
ANY OF THE LIABILITIES, MORTGAGOR IRREVOCABLY AUTHORIZES AND EMPOWERS ANY
ATTORNEY OF RECORD, OR THE PROTHONOTARY, CLERK OR SIMILAR OFFICER, OF ANY COURT
IN THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR MORTGAGOR, AS
WELL AS FOR THE PERSONS CLAIMING UNDER, BY, OR THROUGH MORTGAGOR, TO SIGN AN
AGREEMENT FOR ENTERING THEREIN AN APPROPRIATE ACTION IN EJECTMENT FOR POSSESSION
OF THE MORTGAGED PREMISES (WITHOUT THE NECESSITY OF FILING ANY BOND AND WITHOUT
ANY STAY OF EXECUTION OR APPEAL) AGAINST MORTGAGOR AND ALL PERSONS CLAIMING
UNDER, BY OR THROUGH MORTGAGOR, AND THEREIN CONFESS JUDGMENT FOR THE RECOVERY BY
MORTGAGEE OF POSSESSION OF THE MORTGAGED PREMISES FOR WHICH THIS INSTRUMENT (OR
A COPY THEREOF VERIFIED BY AFFIDAVIT) SHALL BE A SUFFICIENT WARRANT; WHEREUPON A
WRIT OF POSSESSION OF THE MORTGAGED PREMISES MAY BE ISSUED FORTHWITH, WITHOUT
ANY PRIOR WRIT OR PROCEEDING WHATSOEVER, MORTGAGOR HEREBY RELEASING AND AGREEING
TO RELEASE MORTGAGEE AND ANY SUCH ATTORNEY FROM ALL PROCEDURAL ERRORS AND
DEFECTS WHATSOEVER IN ENTERING SUCH ACTION OR JUDGMENT OR IN CAUSING SUCH WRIT
OR PROCESS TO BE ISSUED OR IN ANY PROCEEDING THEREON OR CONCERNING THE SAME,
PROVIDED THAT MORTGAGEE SHALL HAVE FILED IN SUCH ACTION AN AFFIDAVIT MADE ON
MORTGAGEE'S BEHALF SETTING FORTH THE FACTS NECESSARY TO AUTHORIZE THE ENTRY OF
SUCH JUDGMENT ACCORDING TO THE TERMS OF THIS INSTRUMENT, OF WHICH FACTS SUCH
AFFIDAVIT SHALL BE PRIMA FACIE EVIDENCE. IT IS HEREBY EXPRESSLY AGREED THAT IF
FOR ANY REASON AFTER ANY SUCH ACTION HAS BEEN COMMENCED, THE SAME SHALL BE
DISCONTINUED, MARKED SATISFIED OF RECORD, OR TERMINATED, OR POSSESSION OF THE
MORTGAGED PREMISES REMAIN IN OR BE RESTORED TO MORTGAGOR OR ANYONE CLAIMING
UNDER, BY, OR THROUGH MORTGAGOR, MORTGAGEE MAY, WHEREVER AND AS OFTEN AS
MORTGAGEE SHALL HAVE THE RIGHT TO TAKE POSSESSION AGAIN OF THE MORTGAGED
PREMISES, BRING ONE OR MORE FURTHER ACTIONS IN THE MANNER HEREINBEFORE SET FORTH
TO RECOVER POSSESSION OF THE MORTGAGED PREMISES AND TO CONFESS JUDGMENT THEREIN
AS HEREINABOVE PROVIDED, AND THE AUTHORITY AND POWER ABOVE GIVEN TO ANY SUCH
ATTORNEY SHALL EXTEND TO ALL SUCH FURTHER ACTIONS IN EJECTMENT AND CONFESSION OF
JUDGMENT THEREIN AS HEREINABOVE PROVIDED, WHETHER BEFORE OR AFTER AN ACTION OF
MORTGAGE FORECLOSURE IS BROUGHT OR OTHER PROCEEDINGS IN EXECUTION ARE INSTITUTED
UPON THIS MORTGAGE OR UPON ANY INSTRUMENT THEN EVIDENCING ANY OF THE
LIABILITIES, AND AFTER JUDGMENT THEREON OR THEREIN AND AFTER A JUDICIAL SALE OF
THE MORTGAGED PREMISES.

<PAGE>

         Section 7.18 Open-End Mortgage.

         (a) This is an Open-End Mortgage securing future advances pursuant to
42 Pa. C.S.A. Section 8143. WITHOUT LIMITING ANY OTHER PROVISION OF THIS
MORTGAGE, THIS MORTGAGE SECURES UNPAID BALANCES OF ADVANCES MADE, WITH RESPECT
TO MORTGAGED ESTATE, FOR THE PAYMENT OF TAXES, ASSESSMENTS, MAINTENANCE CHARGES,
INSURANCE PREMIUMS OR COSTS INCURRED FOR THE PROTECTION OF THE MORTGAGED
PROPERTY OR THE LIEN OF THE MORTGAGE, OR EXPENSES INCURRED BY THE MORTGAGEE BY
REASON OF DEFAULT BY THE MORTGAGOR UNDER THE MORTGAGE, AND TO ENABLE COMPLETION
OF THE IMPROVEMENTS FOR WHICH THE LOAN WAS ORIGINALLY MADE. SUCH ADVANCES
INCLUDE, WITHOUT LIMITATION, ALL ADVANCES MADE AS PROVIDED IN THE LOAN
DOCUMENTS. The receipt by Mortgagee of written notice either from Mortgagor or
another party, purportedly sent to terminate, limit or restrict future advances
whether or not such notice is sent pursuant to the provisions of 42 Pa. C.S.A.
Section 8143 (b) or 8143(c) and whether or not such notice is effective
thereunder, shall be an Event of Default hereunder without the benefit of notice
or a cure period for Mortgagor.

         (b) Obligatory Advances. If the Loan Documents provide that any
advances ("Mortgagee Advances") of Loan proceeds shall be made upon completion
by Mortgagor of certain performance obligations under the Loan Documents
(including, without limitation, compliance with the terms of the Loan Documents
such that no Event of Default shall have occurred), such Mortgagee Advances
shall be and be deemed "obligatory advances" solely for the purpose of the
application of the obligatory advance doctrine to confirm the lien priority of
Mortgagee Advances actually made by Mortgagee whether such Mortgagee Advances
are initially either (1) advanced by Mortgagee into an escrow subject to
Mortgagee's control or (2) retained by Mortgagee. Mortgagee may further
condition Mortgagee Advances upon receipt by Mortgagee of a declaratory
judgment, opinion of counsel, or title endorsement satisfactory to Mortgagee
confirming that Mortgagee Advances shall have the same lien priority as the
earliest lien priority of the Mortgage, if Mortgagee has received notice of
either (1) a lien or encumbrance on the Mortgaged Estate which is subordinate to
the lien of the Mortgage, or (2) labor performed or to be performed or materials
furnished or to be furnished for any part of the Mortgaged Estate, or (3)
Mortgagor's limitation of the loan amount.

         7.19 Commercial Loan. Mortgagor represents and warrants that the loans
or other financial accommodations included as obligations secured by this
Mortgage were obtained solely for the purpose of carrying on or acquiring a
business or commercial investment and not for residential, consumer or household
purposes.

         7.20 Industrial Plant Mortgage. This Mortgage is intended to be an
industrial plant mortgage within the broadest interpretation of the "industrial
plant mortgage doctrine" under the laws of the Commonwealth of Pennsylvania.

<PAGE>

         IN WITNESS WHEREOF, this Mortgage has been duly executed by Mortgagor
indenting to be legally bound as of the day and year first above written.

                             Mortgagor

                             CATALINA PARTNERS, L.P., a Delaware limited
                             partnership

                                   By: Colonial Park Trust, a Delaware business
                                       trust, its general partner
[CORPORATE SEAL]
ATTEST:                                   By: Glimcher Colonial Park Mall,
                                              Inc., a Delaware corporation,
                                              as Trustee

/s/ George A. Schmidt                         By: /s/ George A Schmidt
---------------------                             --------------------
Secretary                                         George A. Schmidt
                                                  Senior Vice President

COMMONWEALTH OF PENNSYLVANIA    )

COUNTY OF PHILADELPHIA          )

         The foregoing instrument was acknowledged before me this 1st day of
October, 1997 by George A. Schmidt, the Senior Vice President of Glimcher
Colonial Park Mall, Inc., the trustee of Colonial Park Trust, a Delaware
business trust the General Partner of Catalina Partners, L.P., a Delaware
limited partnership, being authorized to do so, before me executed the foregoing
instrument for the purposes therein contained by signing the name of the
partnership by himself as the Senior Vice President of the trustee of the
General Partner.

                  WITNESS my hand an official seal.

                  Signature   /s/Janice K. Wright  (Seal)
                              -------------------
                              Notary Public

My commission expires:

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