Document:

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                                                           EXHIBIT 10.40

                                 PROMISSORY NOTE
                                   (A-2 NOTE)

                                LOAN TERMS TABLE

LENDER: KeyBank National Association, a national banking association, its
        successors and assigns
LOAN NO.: 10021677
LENDER'S ADDRESS: 911 Main Street, Suite #1500, Kansas City, Missouri 64105
LENDER'S FACSIMILE NO.: (816) 221-8848
BORROWER: MFC Beavercreek, LLC, a Delaware limited liability company
BORROWER'S ADDRESS: c/o Glimcher Realty Trust, 20 South Third Street, Columbus,
                    Ohio 43215
BORROWER'S FACSIMILE NO.: 614-621-8863
BORROWER'S TAX IDENTIFICATION NUMBER: 20-0225220
PROPERTY: Real property located at 2727 Fairfield Commons, Beaver Creek, Ohio
          45431 in Greene County, Ohio and certain personal property
NOTE DATE: October __, 2003
ORIGINAL PRINCIPAL AMOUNT: $28,500,000.00
MATURITY DATE: November 1, 2014
INTEREST RATE: 5.45 percent (5.45%) per annum
INITIAL INTEREST PAYMENT PER DIEM: $4,314.58
MONTHLY PAYMENT: $160,926.93
MONTHLY PAYMENT DATE: December 1, 2003 and on the first day of each successive
                      month thereafter
FINANCIAL STATEMENT REPORTING DEPOSIT: N/A

         1.       LOAN AMOUNT AND RATE. FOR VALUE RECEIVED, Borrower promises to
pay to the order of Lender, the Original Principal Amount (or so much thereof as
is outstanding from time to time, which is referred to herein as the
"OUTSTANDING PRINCIPAL BALANCE" or "OPB"), with interest on the unpaid OPB from
the date of disbursement of the Loan (as hereinafter defined) evidenced by this
Promissory Note ("NOTE") at the Interest Rate. Interest shall be calculated
based on the daily rate which is produced assuming a three hundred sixty (360)
day year multiplied by the actual number of days elapsed. The loan evidenced by
this Note will sometimes hereinafter be called the "LOAN". The above Loan Terms
Table (hereinafter referred to as the "TABLE") is a part of the Note and all
terms used in this Note that are defined in the Table shall have the meanings
set forth therein.

         2.       PRINCIPAL AND INTEREST PAYMENTS. Payments of principal and
interest shall be made as follows:

         (a)      An interest payment on the date of disbursement of the Loan
proceeds in an amount calculated by multiplying the Initial Interest Payment Per
Diem by the number of days from (and including) the date of the disbursement of
the Loan proceeds through the last day of the calendar month in which the
disbursement was made;

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         (b)      A Monthly Payment on each Monthly Payment Date until the
Maturity Date, each of such payments to be applied: (i) to the payment of
interest computed at the Interest Rate; and (ii) the balance applied toward the
reduction of the principal balance of the Loan; and

         (c)      If not sooner paid, the balance of the principal amount of the
Loan, all unpaid interest thereon, and all other amounts owed to Lender pursuant
to this Note or any other Loan Document (as hereinafter defined) or otherwise in
connection with the Loan or the security for the Loan shall be due and payable
on the Maturity Date.

         3.       SECURITY FOR NOTE. This Note is secured by a first deed of
trust, mortgage, or deed to secure debt (which is herein called the "SECURITY
INSTRUMENT") encumbering the Property. This Note, the Security Instrument, and
all other documents and instruments evidencing and/or securing this Note whether
now or hereafter executed by Borrower or others in connection with or related to
the Loan, including any assignments of leases and rents, other assignments,
security agreements, financing statements, guaranties, indemnity agreements
(including environmental indemnity agreements), letters of credit, or
completion/repair, debt service, tenant finish/leasing commissions, earn-out or
other escrow/holdback or similar agreements or arrangements, together with all
amendments, modifications, substitutions or replacements thereof and that
certain Promissory Note of even date herewith executed by Borrower evidencing a
loan in the principal amount of $85,500,000.00 (the "A-1 NOTE") together with
all amendments, modifications, substitutions or replacements thereof, are
sometimes herein collectively referred to as the "LOAN DOCUMENTS" or
individually as a "LOAN DOCUMENT". All amounts that are now or in the future
become due and payable under this Note, the Security Instrument, or any other
Loan Document, including any Prepayment Consideration (as hereinafter defined)
and all applicable expenses, costs, charges, and fees will be referred to herein
as the "DEBT." The remedies of Lender as provided in this Note, any other Loan
Document, or under applicable law shall be cumulative and concurrent, may be
pursued singularly, successively, or together at the sole discretion of Lender,
and may be exercised as often as an occasion shall occur. The failure to
exercise any right or remedy shall not be construed as a waiver or release of
the right or remedy respecting the same or any subsequent default.

         4.       FINANCIAL STATEMENT REPORTING DEPOSIT; REBATE OF DEPOSIT. In
addition to and concurrently with each Monthly Payment, Borrower shall also pay
to Lender a constant monthly amount equal to the Financial Statement Reporting
Deposit. On the first day of the fourteenth (14th) month following the date of
the initial disbursement of funds under this Note (the "DISBURSEMENT DATE"), and
on an annual basis thereafter during the term of this Note, Lender shall remit
to Borrower a portion of the Financial Statement Reporting Deposit then held by
Lender in an amount equal to the aggregate amount of the Financial Statement
Reporting Deposit actually received by Lender during the twelve (12) month
period ending upon the immediately prior annual anniversary of the Disbursement
Date (the "ANNUAL COMPLIANCE PERIOD") provided that no Event of Default (as
hereinafter defined), including any failure by Borrower to strictly comply with
the financial reporting requirements set forth in the Security Instrument, is
currently existing or has occurred in the Annual Compliance Period.

         5.       PAYMENTS. All amounts payable hereunder shall be payable in
lawful money of the United States of America to Lender at Lender's Address or
such other place as the holder

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hereof may designate in writing. Each payment made hereunder shall be made in
immediately available funds and must state the Borrower's Loan Number. If any
payment of principal or interest on this Note is due on a day other than a
Business Day (as hereinafter defined), such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in
computing interest in connection with such payment. Any payment on this Note
received after 2:00 o'clock p.m. (CST or other applicable current time in Kansas
City, Missouri) shall be deemed to have been made on the next succeeding
Business Day. All amounts due under this Note shall be payable without set off,
counterclaim, or any other deduction whatsoever. All payments from Borrower to
Lender following the occurrence of an Event of Default shall be applied in such
order and manner as Lender elects in its sole discretion in reduction of costs,
expenses, charges, disbursements and fees payable by Borrower hereunder or under
any other Loan Document, in reduction of interest due on unpaid principal, or in
reduction of principal. Lender may, without notice to Borrower or any other
person, accept one or more partial payments of any sums due or past due
hereunder from time to time while an uncured Event of Default exists hereunder,
after Lender accelerates the indebtedness evidenced hereby, and/or after Lender
commences enforcement of its remedies under any Loan Document or applicable law,
without thereby waiving any Event of Default, rescinding any acceleration, or
waiving, delaying, or forbearing in the pursuit of any remedies under the Loan
Documents. Lender may endorse and deposit any check or other instrument tendered
in connection with such a partial payment without thereby giving effect to or
being bound by any language purporting to make acceptance of such instrument an
accord and satisfaction of the indebtedness evidenced hereby. As used herein,
the term "Business Day" shall mean a day upon which commercial banks are not
authorized or required by law to close in Kansas City, Missouri.

         6.       LATE CHARGE. If any sum payable under this Note or any other
Loan Document is not received by Lender by close of business on the fifth (5th)
day after the date on which it was due, Borrower shall pay to Lender an amount
(the "LATE CHARGE") equal to the lesser of (a) five percent (5%) of the full
amount of such sum or (b) the maximum amount permitted by applicable law in
order to help defray the expenses incurred by Lender in handling and processing
such delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such Late Charge shall be secured by the Security
Instrument and other Loan Documents. The collection of any Late Charge shall be
in addition to, and shall not constitute a waiver of or limitation of, a default
or Event of Default hereunder or a waiver of or limitation of any other rights
or remedies that Lender may be entitled to under any Loan Document or applicable
law.

         7.       DEFAULT RATE. Upon the occurrence of an Event of Default
(including the failure of Borrower to make full payment on the Maturity Date),
Lender shall be entitled to receive and Borrower shall pay interest on the
Outstanding Principal Balance at the rate of five percent (5%) per annum above
the Interest Rate ("DEFAULT RATE") but in no event greater than the maximum rate
permitted by applicable law. Interest shall accrue and be payable at the Default
Rate from the occurrence of an Event of Default until all Events of Default have
been fully cured. Such accrued interest shall be added to the Outstanding
Principal Balance, and interest shall accrue thereon at the Default Rate until
fully paid. Such accrued interest shall be secured by the Security Instrument
and other Loan Documents. Borrower agrees that Lender's right to collect
interest at the Default Rate is given for the purpose of compensating Lender at
reasonable amounts for Lender's added costs and expenses that occur as a result
of Borrower's default and

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that are difficult to predict in amount, such as increased general overhead,
concentration of management resources on problem loans, and increased cost of
funds. Lender and Borrower agree that Lender's collection of interest at the
Default Rate is not a fine or penalty, but is intended to be and shall be deemed
to be reasonable compensation to Lender for increased costs and expenses that
Lender will incur if there occurs an Event of Default hereunder. Collection of
interest at the Default Rate shall not be construed as an agreement or privilege
to extend the Maturity Date or to limit or impair any rights and remedies of
Lender under any Loan Documents. If judgment is entered on this Note, interest
shall continue to accrue post-judgment at the greater of (a) the Default Rate or
(b) the applicable statutory judgment rate.

         8.       ENFORCEMENT AND DEFENSE EXPENSES. Borrower shall pay on
demand, in addition to the principal and interest due hereunder, all expenses of
protecting the security for this Note and all expenses incurred or paid by
Lender in connection with or relating to the Loan Documents and the enforcement
thereof, including costs and expenses incurred or paid in protecting Lender or
its interest in the Property (including attorney's fees and litigation expenses
related to or arising out of any lawsuit or proceeding brought by or against
Lender in any court or other forum, including actions or proceedings brought by
or on behalf of Borrower's bankruptcy estate or any guarantor or indemnitor) or
in connection with the collection of any amounts payable hereunder or in
enforcing Lender's rights under the Security Instrument and the other Loan
Documents with respect to the Property, whether or not any legal proceeding is
commenced hereunder or thereunder and whether or not any default or Event of
Default shall have occurred and is continuing, together with interest thereon at
the Default Rate from the date paid or incurred by Lender until such expenses
are paid by Borrower. Such costs and expenses shall include costs for title
insurance searches and endorsements, retention of collection agents, court costs
and litigation expenses in connection with any proceedings of any nature,
including appellate and bankruptcy proceedings, and all reasonable attorneys'
fees and expenses, whether incurred as part of or separately from any formal
legal proceedings.

         9.       PREPAYMENT; DEFEASANCE.

         (a)      RESTRICTIONS. Voluntary prepayment of this Note is prohibited
except during the last ninety (90) days of the term when prepayment may be made
in whole, but not in part, without payment of any premium or penalty, on any
Monthly Payment Date.

         (b)      DEFEASANCE.

                  (i)      Provided that as of the Release Date (as hereinafter
defined) the Debt has not been accelerated, no Event of Default exists, and no
event has occurred that with the passage of time, giving of notice, or
modification or termination of the automatic stay of Section 362 of the United
States Bankruptcy Code may become an Event of Default ("DEFAULT"), Borrower may
cause the release of the Property from the lien of the Security Instrument and
the other Loan Documents ("DEFEASANCE") on any Monthly Payment Date following
the date which is two (2) years and fifteen (15) days after the "startup day"
within the meaning of Section 860G(a)(9) of the Internal Revenue Code of 1986,
as amended (together with any successor statute and the related Treasury
Department Regulations including temporary regulations, the "CODE") of any "real
estate mortgage investment conduit" within the meaning of Section 860D of the
Code ("REMIC") that holds this Note upon Borrower's satisfaction of the
following conditions:

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                  (A)      Borrower shall provide Lender not less than thirty
         (30) days prior written notice specifying a Monthly Payment Date (such
         Date, or any extended date upon which Borrower and Lender may mutually
         agree is referred to herein as the "RELEASE DATE") on which the
         Defeasance Collateral (as hereinafter defined) is to be delivered;

                  (B)      On the Release Date Borrower shall pay in full all
         accrued and unpaid interest and all other sums due under this Note and
         under the other Loan Documents up to the Release Date, including all
         costs and expenses including attorneys' fees incurred by Lender or its
         servicers or other agent(s) or to or on behalf of any rating agencies
         in connection with such release and related transactions (including the
         review of the proposed Defeasance Collateral and the preparation of the
         Defeasance Security Agreement (as hereinafter defined) and related
         documentation) together with a defeasance processing fee in an amount
         equal to one-half of one percent (0.5%) of the then Outstanding
         Principal Balance but in no event less than (A) $10,000 or greater than
         (B) $20,000; and

                  (C)      Borrower shall deliver the following, all of which
         must be satisfactory to Lender in its sole discretion, at or prior to
         the release of the Property and substitution of the Defeasance
         Collateral:

                           (1)      Direct, non-callable and non-redeemable
         securities evidencing an obligation to pay principal and interest in a
         full and timely manner that are direct obligations of the United States
         of America for the payment of which its full faith and credit is
         pledged (the "DEFEASANCE COLLATERAL") in amounts sufficient to pay all
         scheduled principal and interest payments required under this Note,
         which securities provide for payments prior, but as close as possible,
         to the Business Day prior to each successive Monthly Payment Date
         occurring after the Release Date, with each such payment being equal to
         or greater than the amount of the corresponding Monthly Payment
         required to be made hereunder for the balance of the term hereof plus
         the amount required to be paid on the Maturity Date (the "SCHEDULED
         DEFEASANCE PAYMENTS"), each of which shall be duly endorsed by the
         holder thereof as directed by Lender or accompanied by a written
         instrument of transfer in form and substance satisfactory to Lender in
         its sole discretion (including such instruments as may be required by
         the depository institution or other entity holding such securities or
         the issuer thereof, as the case may be, to effectuate book-entry
         transfers and pledges through the book-entry facilities of such
         institution) in order to perfect upon the delivery of the Defeasance
         Security Agreement (as hereinafter defined) a valid, first priority
         lien and security interest therein in favor of Lender in conformity
         with all applicable state and federal laws governing granting of such
         security interest;

                           (2)      any and all agreements, certificates,
         opinions, documents or instruments required by Lender in its sole
         discretion in connection with the Defeasance including (a) a pledge and
         security agreement, in form and substance satisfactory to Lender in its
         sole discretion, creating a first priority security interest in favor
         of Lender in the Defeasance Collateral (the "DEFEASANCE SECURITY
         AGREEMENT"), and (b) any and all agreements, certificates, opinions,
         documents, or instruments required by Lender in its

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         sole discretion that affect or relate in any way to the maintenance by
         any REMIC that holds this Note of its qualification and status for tax
         purposes as a REMIC;

                           (3)      a certificate of Borrower certifying that
         (a) all of the requirements set forth in this Section 9(b) have been
         satisfied, (b) the transactions that are being carried out pursuant to
         this Section 9(b) (including specifically the release of the lien of
         the Security Instrument) are being effected to facilitate the
         disposition of the Property or any other customary commercial
         transaction and not as part of an arrangement to collateralize a REMIC
         offering with obligations that are not real estate mortgages, and (c)
         the amounts of the Defeasance Collateral comply with all the
         requirements of this section including the requirement that the
         Defeasance Collateral shall generate monthly amounts equal to or
         greater than the Scheduled Defeasance Payments required to be paid
         under this Note through the Maturity Date;

                           (4)      an opinion of counsel for Borrower,
         delivered by counsel acceptable to Lender in its sole discretion,
         stating, among other things but without substantive qualification, that
         (a) Lender has a valid, duly perfected, first priority security
         interest in the Defeasance Collateral and that the Defeasance Security
         Agreement is enforceable against Borrower in accordance with its terms,
         (b) neither the Defeasance nor any other transaction that occurs
         pursuant to the provisions of this Section 9(b) has caused or will
         cause the Loan (including for this purpose the Loan Documents) to cease
         to be a "qualified mortgage" within the meaning of Section 860G of the
         Code, either under the provisions of Treasury Regulation Sections
         1.860G-2(a)(8) or 1.860G-2(b) (as such regulations may be amended or
         superseded from time to time) or under any other provision of the Code
         or otherwise, and (c) the tax qualification and status of any REMIC or
         any other entity that holds this Note will not be adversely impaired or
         affected as a result of the Defeasance and/or any other transaction
         that occurs pursuant to the provisions of this Section 9(b);

                           (5)      a certificate and opinion delivered by an
         independent certified public accounting firm acceptable to Lender in
         its sole discretion (a) certifying that the amounts of the Defeasance
         Collateral comply with all the requirements of this Section including
         the requirement that the Defeasance Collateral shall generate monthly
         amounts equal to or greater than the Scheduled Defeasance Payments
         required to be paid under this Note through the Maturity Date; and (b)
         setting forth the change in the yield of the Loan that results from the
         Defeasance and any other transactions that occur pursuant to the
         provisions of this Section 9(b), including supporting computations
         which shall be made in a manner that is consistent with the provisions
         of Treasury Regulation Sections 1.1001-3(e)(1) and (2), and opining
         that such change has not constituted or caused and will not constitute
         or cause a significant modification of the Loan (including for this
         purpose the Loan Documents) under such provisions of the regulations;

                           (6)      written confirmation from the rating
         agencies that have rated any of the securities issued by any REMIC that
         holds this Note to the effect that the Defeasance will not result in a
         downgrading, withdrawal or qualification of the respective ratings in
         effect immediately prior to such Defeasance for any rated securities
         then outstanding, and if required by any rating agency or Lender, a
         non-consolidation opinion

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         with respect to the Defeasance Obligor (as hereinafter defined) in form
         and substance satisfactory to Lender and such rating agency; and

                           (7)      Borrower shall (unless otherwise agreed to
         in writing by Lender in its sole discretion), at Borrower's sole
         expense, assign all of its obligations under this Note, together with
         the Defeasance Collateral, to a successor entity ("DEFEASANCE OBLIGOR")
         designated by Lender in its sole discretion (including to an entity
         that is owned and/or controlled by Lender) that is a single purpose,
         bankruptcy remote entity as determined by Lender in its sole
         discretion. The Defeasance Obligor shall execute an assumption
         agreement pursuant to which it shall assume Borrower's obligations
         under this Note, the Loan Documents, and the Defeasance Security
         Agreement. As conditions to such assignment and assumption, Borrower
         shall (a) deliver to Lender an opinion of counsel delivered by counsel
         acceptable to Lender in its sole discretion stating, among other
         things, that such assumption agreement has been duly authorized and is
         enforceable against Borrower and the Defeasance Obligor in accordance
         with its terms, that the Note, the Defeasance Security Agreement and
         the other Loan Documents, as so assumed, have been duly authorized and
         are enforceable against the Defeasance Obligor in accordance with their
         respective terms, and that the delivery of the Defeasance Collateral to
         the Defeasance Obligor does not constitute a fraudulent transfer,
         preferential payment, or other voidable transfer under applicable
         bankruptcy law and (b) pay all costs and expenses including attorneys'
         fees incurred by Lender or its servicer or other agent(s) in connection
         with such assignment and assumption (including the review of the
         proposed transferee and the preparation of the assumption agreement and
         related documentation). Upon such assumption, Borrower shall be
         relieved of its obligations under this Note, the Defeasance Security
         Agreement and the other Loan Documents, other than those obligations
         which are specifically intended to survive the payment of this Note and
         the termination, satisfaction or assignment of this Note, the
         Defeasance Security Agreement or the other Loan Documents or the
         exercise of Lender's rights and remedies under any of such documents
         and instruments.

                  (ii)     Upon compliance with the requirements of this
Section, Lender shall release the Property from the lien of the Security
Instrument and the other Loan Documents, and the Defeasance Collateral shall
constitute collateral which shall secure this Note and all other obligations
under the Loan Documents. Lender will, at Borrower's expense, execute and
deliver any agreements reasonably requested by Borrower to release the lien of
the Security Instrument from the Property. Borrower, pursuant to the Defeasance
Security Agreement, shall authorize and direct that the payments received from
Defeasance Collateral be made directly to Lender and applied to satisfy the
obligations of Borrower under this Note.

                  (iii)    Upon the release of the Property in accordance with
this Section 9(b), Borrower shall have no further right to prepay this Note.
Borrower shall pay any revenue, documentary stamp or intangible taxes or any
other tax or charge due in connection with the transfer of this Note or
otherwise required to accomplish the agreements of this Section.

                  (iv)     If any notice of defeasance is given pursuant to
Section 9(b)(i)(A), Borrower shall be required to defease the Loan on the
Release Date (unless such notice is revoked by Borrower prior to the Release
Date in which event Borrower shall immediately

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reimburse Lender for any and all reasonable costs and expenses incurred by
Lender in connection with Borrower's giving of such notice and revocation).

                  (v)      At Borrower's request, Lender may agree in its sole
discretion that Lender or its servicer or other agent, acting on Borrower's
behalf as Borrower's agent and attorney-in-fact, shall purchase the Defeasance
Collateral that Borrower is required to deliver to Lender pursuant to Section
9(b)(i)(C)(1). If such an agreement is made then Borrower shall deposit with
Lender or Lender's servicer or other agent, as directed by Lender or Lender's
agent(s), on or prior to the Release Date a sum of money sufficient to purchase
the Defeasance Collateral. By making such deposit Borrower shall thereby appoint
Lender or Lender's servicer or other agent as Borrower's agent and
attorney-in-fact, with full power of substitution, for the purpose of purchasing
the Defeasance Collateral with the funds so provided and delivering the
Defeasance Collateral to Lender pursuant to Section 9(b)(i)(C)(1).

                  (vi)     Notwithstanding any release of the Security
Instrument or any Defeasance hereunder, the Defeasance Obligor shall be bound by
and obligated under Sections 3.1 (Payment of Debt), 7.2 (Further Acts Etc.),
7.4(a) (Estoppel Certificates), 11.2 (Application of Proceeds), 11.7 (Other
Rights Etc.) and 14.2 (Marshalling and Other Matters) and Article 13
(Indemnification) of the Security Instrument; provided, however, that all
references therein to "PROPERTY" or "PERSONAL PROPERTY" shall be deemed to refer
only to the Defeasance Collateral delivered to Lender.

         (c)      DEFAULT PREPAYMENT. If a Default Prepayment (as hereinafter
defined) occurs, such Default Prepayment shall be deemed to be a voluntary
prepayment under this Note and in such case the applicable Prepayment
Consideration (as hereinafter defined) shall be due and payable to Lender in
connection with such Default Prepayment. The Prepayment Consideration shall be
secured by all security and collateral for the Loan and shall be added to the
Outstanding Principal Balance for all purposes including accrual of interest,
judgment on the Note, foreclosure (whether through power of sale, judicial
proceeding, or otherwise), redemption, and bankruptcy (including pursuant to
Section 506 of the United States Bankruptcy Code). The term "DEFAULT PREPAYMENT"
shall mean a prepayment of any portion of the principal amount of this Note made
after occurrence of a Default or Event of Default under any circumstances
including a prepayment in connection with reinstatement of the Security
Instrument provided by statute under foreclosure proceedings or exercise of
power of sale, any statutory right of redemption exercised by Borrower or any
other party having a statutory right to redeem or prevent foreclosure or power
of sale, any sale in foreclosure or under exercise of a power of sale or
otherwise (including pursuant to a credit bid made by Lender in connection with
such sale), or any other collection action by Lender. Classification and
treatment of Lender's claim pursuant to a plan of reorganization in bankruptcy
shall also be deemed to be a Default Prepayment hereunder. The "PREPAYMENT
CONSIDERATION" (as the term is used in this Note) shall mean the present value,
as of the date of the occurrence of the Default, of the remaining scheduled
payments of principal and interest from the date of the occurrence of the
Default through the Maturity Date (including any balloon payment), which shall
be determined by discounting such payments at the Discount Rate (hereinafter
defined) less the amount of principal being prepaid. The term "DISCOUNT RATE"
shall mean the rate that, when compounded monthly, is equivalent to the Treasury
Rate (hereinafter defined) when compounded semi-annually. The term "TREASURY
RATE" shall mean the yield calculated by the linear interpolation of the yields,
as reported in

<PAGE>

Federal Reserve Statistical Release H.15-Selected Interest Rates under the
heading U.S. Government Securities/Treasury Constant Maturities for the week
ending prior to the Prepayment Date, of U.S. Treasury constant maturities with
maturity dates (one longer and one shorter) most nearly approximating the
Maturity Date. (If Release H.15 is no longer published, Lender shall select a
comparable publication to determine the Treasury Rate.)

         10.      MAXIMUM RATE PERMITTED BY LAW. All agreements in this Note and
all other Loan Documents are expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise, shall the amount agreed to be paid
hereunder for the use, forbearance, or detention of money exceed the highest
lawful rate permitted under applicable usury laws. If, from any circumstance
whatsoever, fulfillment of any provision of this Note or any other Loan Document
at the time performance of such provision shall be due shall involve exceeding
any usury limit prescribed by law that a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to allow compliance with such limit, and if, from any circumstance
whatsoever, Lender shall ever receive as interest an amount that would exceed
the highest lawful rate, the receipt of such excess shall be deemed a mistake
and shall be canceled automatically or, if theretofore paid, such excess shall
be credited against the principal amount of the indebtedness evidenced hereby to
which the same may lawfully be credited, and any portion of such excess not
capable of being so credited shall be refunded immediately to Borrower.

         11.      EVENTS OF DEFAULT; ACCELERATION OF AMOUNT DUE. Lender may in
its sole discretion, without notice to Borrower, declare the entire Debt,
including the principal balance of the Loan, all accrued interest, and all
costs, expenses, charges and fees payable under any Loan Document, together with
any applicable Prepayment Consideration, immediately due and payable, and Lender
shall have all remedies available to it at law or equity for collection of the
amounts due, if any of the following (the "EVENTS OF DEFAULT") occurs:

                  (a)      Borrower fails to make full and punctual payment of
any Monthly Payment or any other amount payable on a monthly basis under this
Note, the Security Instrument or any other Loan Document within five (5) days of
the date on which such payment was due; or

                  (b)      Borrower fails to make full payment of the Debt when
due, whether on the Maturity Date, upon acceleration or prepayment, or
otherwise; or

                  (c)      Borrower fails to make full and punctual payment of
any Late Charges, costs and expenses due hereunder, or any other sum of money
required to be paid to Lender under this Note, the Security Instrument or under
any other Loan Document (other than any payment described in subclauses (a) and
(b) immediately above), which failure is not cured on or before the fifth (5th)
day after Lender's written notice to Borrower that such payment is required.

                  (d)      an Event of Default occurs under the Security
Instrument or any other Loan Document.

         12.      TIME OF ESSENCE. Time is of the essence with regard to each
provision contained in this Note.

<PAGE>

         13.      TRANSFER AND ASSIGNMENT. This Note may be freely transferred
and assigned by Lender. Borrower's right to transfer its rights and obligations
with respect to the Debt, and to be released from liability under this Note,
shall be governed by the Security Instrument.

         14.      AUTHORITY OF PERSONS EXECUTING NOTE. Borrower warrants and
represents that the persons or officers who are executing this Note and the
other Loan Documents on behalf of Borrower have full right, power and authority
to do so, and that this Note and the other Loan Documents constitute valid and
binding documents, enforceable against Borrower in accordance with their terms,
and that no other person, entity, or party is required to sign, approve, or
consent to, this Note.

         15.      SEVERABILITY. The terms of this Note are severable, and should
any provision be declared by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions shall, at the option of Lender, remain
in full force and effect and shall in no way be impaired.

         16.      BORROWER'S WAIVERS. Borrower and all others liable hereon
hereby waive presentation for payment, demand, notice of dishonor, protest, and
notice of protest, notice of intent to accelerate, and notice of acceleration,
stay of execution and all other suretyship defenses to payment generally. No
release of any security held for the payment of this Note, or extension of any
time periods for any payments due hereunder, or release of collateral that may
be granted by Lender from time to time, and no alteration, amendment or waiver
of any provision of this Note or of any of the other Loan Documents, shall
modify, waive, extend, change, discharge, terminate or affect the liability of
Borrower and any others that may at any time be liable for the payment of this
Note or the performance of any covenants contained in any of the Loan Documents.

         17.      GOVERNING LAW. This Note shall be governed and construed
generally according to the laws of the jurisdiction in which the real property
collateral for this Note is located without regard to the conflicts of law
provisions thereof ("GOVERNING STATE").

         18.      JURISDICTION AND VENUE. BORROWER HEREBY CONSENTS TO PERSONAL
JURISDICTION IN THE GOVERNING STATE. VENUE OF ANY ACTION BROUGHT TO ENFORCE THIS
NOTE OR ANY OTHER LOAN DOCUMENT OR ANY ACTION RELATING TO THE LOAN OR THE DEBT
OR THE RELATIONSHIPS CREATED BY OR UNDER THE LOAN DOCUMENTS ("ACTION") SHALL, AT
THE ELECTION OF LENDER, BE IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN
ANOTHER VENUE, THE ACTION SHALL AT THE ELECTION OF LENDER BE TRANSFERRED TO) A
STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED IN THE GOVERNING
STATE. BORROWER HEREBY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF THE
STATE COURTS OF THE GOVERNING STATE AND OF FEDERAL COURTS LOCATED IN THE
GOVERNING STATE IN CONNECTION WITH ANY ACTION AND HEREBY WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION
WITHIN SUCH STATE FOR PURPOSES OF ANY ACTION. Borrower hereby waives and agrees
not to assert, as a defense to any Action or a motion to transfer venue of any
Action, (i) any claim that it is not subject to such jurisdiction, (ii) any
claim that any

<PAGE>

Action may not be brought against it or is not maintainable in those courts or
that this Note or any of the other Loan Documents may not be enforced in or by
those courts, or that it is exempt or immune from execution, (iii) that the
Action is brought in an inconvenient forum, or (iv) that the venue for the
Action is in any way improper.

         19.      NOTICES. Any notice required or permitted to be given
hereunder must be in writing and given (a) by depositing same in the United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested; (b) by delivering the
same in person to such party; (c) by transmitting a facsimile copy to the
correct facsimile phone number of the intended recipient (with a second copy
sent by registered or certified regular mail); or (d) by depositing the same
into the custody of a nationally recognized overnight delivery service addressed
to the party to be notified. In the event of mailing, notices shall be deemed
effective three (3) days after posting; in the event of overnight delivery,
notices shall be deemed effective on the next Business Day following deposit
with the delivery service; in the event of personal service or facsimile
transmissions, notices shall be deemed effective when delivered. For purposes of
notice, the addresses of the parties shall be as set forth in the Table. From
time to time either party may designate another address than the address set
forth for all purposes of this Note by giving the other party no less than ten
(10) days advance notice of such change of address in accordance with the notice
provisions hereof.

         20.      AVOIDANCE OF DEBT PAYMENTS. To the extent that any payment to
Lender and/or any payment or proceeds of any collateral received by Lender in
reduction of the Debt is subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, to Borrower
(or Borrower's successor) as a debtor in possession, or to a receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then the portion of the Debt intended to have been satisfied by
such payment or proceeds shall remain due and payable hereunder, be evidenced by
this Note, and shall continue in full force and effect as if such payment or
proceeds had never been received by Lender whether or not this Note has been
marked "paid" or otherwise cancelled or satisfied and/or has been delivered to
Borrower, and in such event Borrower shall be immediately obligated to return
the original Note to Lender and any marking of "paid" or other similar marking
shall be of no force and effect.

         21.      NONRECOURSE.

                  (a)      Subject to the provisions of subsections (b) and (c)
of this Section 21, Lender shall not be entitled to recover any deficiency
judgment against Borrower or any general partner (if any) of Borrower on this
Note, provided, however, the foregoing shall not be interpreted to: (i) impair
or affect the right of Lender to enforce any of its rights or remedies (other
than any right to a deficiency judgment) provided for in any of the Loan
Documents or under applicable law in full accordance with the terms thereof
including but not limited to the right of Lender to name Borrower or any general
partner of Borrower as a party defendant in any action or suit for specific
performance, foreclosure, or sale (or similar remedy) under the Security
Instrument, or any other Loan Document; (ii) impair or affect the validity or
enforceability of any guaranty, indemnity agreement (including but not limited
to any environmental indemnity agreement), letter of credit, or other similar
third party agreement or undertaking made in connection with this Note, the
Security Instrument, or any other Loan

<PAGE>

Document; (iii) impair or affect Lender's right to offset any and all amounts
outstanding under any of the Loan Documents against any claim or amount that may
be asserted against Lender by Borrower or any partners, members, shareholders,
or other owners of legal or beneficial interests in Borrower; or (iv) affect the
validity or enforceability of or impair the right of Lender to bring suit and
obtain specific performance or personal, recourse judgment to enforce the
liability of Borrower or any other person or entity to the extent of, and
Borrower hereby agrees to be personally liable for, any loss, damage, cost,
expense, liability, or claim incurred by or made against Lender (including all
attorneys' fees and expenses and other collection and litigation expenses)
arising out of or in connection with any of the following:

                           (A)      Borrower or any affiliate, agent, or
         employee of Borrower misappropriates any rents or other Property income
         or collateral proceeds including but not limited to insurance or
         condemnation proceeds or awards;

                           (B)      Borrower or any affiliate, agent, or
         employee of Borrower fails to apply or pay over any tenant security
         deposits or other refundable deposits in accordance with the terms of
         the applicable lease or other agreement or the Security Instrument or
         any other Loan Document;

                           (C)      Borrower or any affiliate, agent, or
         employee of Borrower receives rents or other payments from tenants more
         than one month in advance and fails to apply them in accordance with
         the Loan Documents;

                           (D)      following the occurrence of an Event of
         Default, Borrower or any affiliate, agent, or employee of Borrower
         (including Borrower in its capacity as a debtor or debtor in possession
         in a bankruptcy proceeding) fails either to apply rents or other
         Property income, whether collected before or after such Event of
         Default, to the ordinary, customary, and necessary expenses of
         operating the Property or, upon demand, to deliver such rents or other
         Property income to Lender;

                           (E)      waste is committed on the Property during a
         period while Borrower or any affiliate, agent, or employee of Borrower
         is in possession thereof ("waste" meaning the diminution in the
         Property's value resulting from Borrower's negligent or willful failure
         to manage, maintain, repair and otherwise operate the Property in a
         commercially reasonable manner);

                           (F)      any damage to the Property or the Lender is
         caused as a result of the intentional misconduct or gross negligence of
         Borrower or any affiliate, agent, or employee of Borrower;

                           (G)      any Property is removed in violation of the
         terms of the Loan Documents;

                           (H)      Borrower fails, in accordance with the terms
         of the Loan Documents, to maintain insurance or to pay taxes,
         assessments, or other liens or claims that could create liens affecting
         the Property (unless Lender is escrowing funds therefor and fails to
         make such payments or has taken possession of the Property following an
         Event of Default, has received all rents from the Property applicable
         to the period for

<PAGE>

         which such insurance, taxes or other items are due, and thereafter
         fails to make such payments);

                           (I)      there is any fraud or material
         misrepresentation by Borrower or any of its affiliates, any guarantor,
         any indemnitor or any agent, employee, or other person with actual or
         apparent authority to make statements or representations on behalf of
         Borrower, any affiliate of Borrower, or any guarantor or indemnitor
         ("apparent authority" meaning such authority as the principal knowingly
         or negligently permits the agent to assume, or which he holds the agent
         out as possessing); or

                           (J)      Borrower fails, following an Event of
         Default, to deliver to Lender on demand all security deposits, books
         and records relating to the Property and in the possession or control
         of Borrower or any affiliate, agent, or employee of Borrower.

                  (b)      Notwithstanding anything to the contrary in the
provisions of subsection (a) of this Section, Borrower and any general partner
of Borrower shall be personally liable for the Debt if the Property or any part
thereof shall at any time hereafter become property of the estate, or an asset
in a bankruptcy, insolvency, receivership, liquidation, winding up, or other
similar type of proceeding or if Borrower shall at any time hereafter make a
general assignment for the benefits of its creditors.

                  (c)      Nothing herein shall be deemed to constitute a waiver
by Lender of any right Lender may have under Sections 506(a), 506(b), 1111(b) or
any other provision of the United States Bankruptcy Code to file a claim for the
full amount of the Debt (as defined in the Security Instrument) or to require
that all collateral shall continue to secure all of the Debt.

         22.      MISCELLANEOUS. Neither this Note nor any of the terms hereof,
including but not limited to the provisions of this Section, may be terminated,
amended, supplemented, waived or modified orally, but only by an instrument in
writing executed by the party against which enforcement of the termination,
amendment, supplement, waiver or modification is sought, and the parties hereby:
(a) expressly agree that it shall not be reasonable for any of them to rely on
any alleged, non-written amendment to this Note; (b) irrevocably waive any and
all right to enforce any alleged, non-written amendment to this Note; and (c)
expressly agree that it shall be beyond the scope of authority (apparent or
otherwise) for any of their respective agents to agree to any non-written
modification of this Note. If Borrower consists of more than one person or
entity, then the obligations and liabilities of each person or entity shall be
joint and several. As used in this Note, (i) the terms "include," "including"
and similar terms shall be construed as if followed by the phrase "without being
limited to," (ii) words of masculine, feminine, or neuter gender shall mean and
include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa, (iii)
all captions to the Sections hereof are used for convenience and reference only
and in no way define, limit or describe the scope or intent of, or in any way
affect, this Note, (iv) no inference in favor of, or against, Lender or Borrower
shall be drawn from the fact that such party has drafted any portion hereof or
any other Loan Document, and (v) the words "Lender" and "Borrower" shall include
their respective successors, assigns, heirs, personal representatives, executors
and administrators. In the event of a conflict between or among the terms,
covenants, conditions or provisions of the Loan Documents, the term(s),
covenant(s), condition(s) and/or provision(s) that Lender may

<PAGE>

elect to enforce from time to time so as to enlarge the interest of Lender in
its security, afford Lender the maximum financial benefits or security for the
Debt, and/or provide Lender the maximum assurance of payment of the Debt in full
shall control. BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS BEEN PROVIDED WITH
SUFFICIENT AND NECESSARY TIME AND OPPORTUNITY TO REVIEW THE TERMS OF THIS NOTE,
THE SECURITY INSTRUMENT, AND EACH OF THE LOAN DOCUMENTS, WITH ANY AND ALL
COUNSEL IT DEEMS APPROPRIATE, AND THAT NO INFERENCE IN FAVOR OF, OR AGAINST,
LENDER OR BORROWER SHALL BE DRAWN FROM THE FACT THAT EITHER SUCH PARTY HAS
DRAFTED ANY PORTION HEREOF, OR THE SECURITY INSTRUMENT, OR ANY OF THE LOAN
DOCUMENTS.

         23.      WAIVER OF COUNTERCLAIM AND JURY TRIAL. BORROWER HEREBY
KNOWINGLY WAIVES THE RIGHT TO ASSERT ANY COUNTERCLAIM, OTHER THAN A COMPULSORY
COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT AGAINST BORROWER BY LENDER OR
ITS AGENTS. ADDITIONALLY, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON THE LOAN OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE
LOAN, THIS NOTE, THE SECURITY INSTRUMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR
ACTION OF BORROWER OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
LENDER'S MAKING OF THE LOAN.

         24.      LOCAL LAW PROVISIONS. In the event of any inconsistencies
between the terms and conditions of this Section and any other terms and
conditions of this Note (other than the terms and conditions of Section 25), the
terms and conditions of this Section shall be binding.

                                      NONE.

         25.      ADDITIONAL PROVISIONS. In the event of any inconsistencies
between the terms and conditions of this Section and any other terms and
conditions of this Note, the terms and conditions of this Section shall be
binding.

                  25.1 SECURITY FOR NOTE. Section 3 is modified by deleting the
words "or others" in the fourth line thereof and substituting the following
therefor: ", its successors and assigns, or any guarantor."

                  25.2 FINANCIAL STATEMENT REPORTING DEPOSIT. Section 4 is
deleted in its entirety.

                  25.3 ENFORCEMENT AND DEFENSE EXPENSES. Section 8 is modified
by inserting the word "reasonable" in the fifth line thereof between "including"
and "attorney's."

                  25.4 PREPAYMENT. Section 9 is modified in the following
manner:

<PAGE>

                  (a)      Notwithstanding anything to the contrary in Section 9
hereof, Borrower shall not have the right to defease or prepay all or any
portion of the Debt at any time during the term of this Note unless Borrower is
concurrently defeasing or prepaying the indebtedness and obligations evidenced
by or arising under the A-2 Note in accordance with the terms thereof.

                  (b)      The following provisions are added to the end of
Section 9(a):

                  Notwithstanding the foregoing, if a Partial Prepayment Event
(as defined in the Letter of Credit Agreement of even date herewith between
Borrower and Lender ("LETTER OF CREDIT AGREEMENT")) occurs under the Letter of
Credit Agreement, the proceeds of the Letter of Credit (as defined in the Letter
of Credit Agreement) may be applied in prepayment of the Outstanding Principal
Balance of this Note and the A-1 Note on a pro rata basis (a "PARTIAL
PREPAYMENT"), and such Partial Prepayment will be accompanied by all accrued
interest thereon and the Yield Maintenance Amount (as hereinafter defined).
Furthermore, the regularly scheduled monthly payments of principal and interest
under this Note shall be recast by Lender over the remainder of the original
amortization period of thirty years from the date hereof to reflect the reduced
balance of said principal indebtedness. The date of such Partial Prepayment
shall be the "PARTIAL PREPAYMENT DATE.

         Borrower acknowledges that the Yield Maintenance Amount is a bargained
for consideration and not a penalty, and Borrower recognizes that Lender will
incur substantial additional costs and expenses upon the occurrence of a Partial
Prepayment Event, and that the Yield Maintenance Amount compensates Lender for
such costs and expenses and the loss of Lender's investment opportunity for the
principal amount being prepaid during the period from the Partial Prepayment
Date until the Maturity Date. Borrower agrees that Lender shall not, as a
condition to receiving any Yield Maintenance Amount, be obligated to actually
reinvest the amount prepaid in any treasury obligation or in any other manner
whatsoever. The "YIELD MAINTENANCE AMOUNT" (as used herein) shall mean the
excess of: (a) the present value, as of the Partial Prepayment Date, of each of
the then remaining scheduled payments of principal and interest payable under
this Note from the Partial Prepayment Date through the Maturity Date (including
any balloon payment) determined by: (i) subtracting from each then remaining
scheduled payment of principal and interest the amount of principal and interest
that is still scheduled to be paid on the due date thereof following the Partial
Prepayment; and (ii) discounting such payments (using simple discounting) at the
Discount Rate (as defined in Section 9(c) hereof); over (b) the amount of
principal being prepaid.

                  (c)      The word "reasonable" is inserted in the third line
of Section 9(b)(i)(B) between "including" and "attorneys'."

                  (d)      The text of Section 9(b)(i)(C)(1) is deleted and the
following substituted therefor:

                           (1)      Direct, non-callable and non-redeemable
                  securities evidencing an obligation to pay principal and
                  interest in a full and timely manner that are direct
                  obligations of the United States of America for the payment of
                  which its full faith and credit is pledged (the "DEFEASANCE
                  COLLATERAL") in amounts sufficient to pay all scheduled
                  principal and interest payments required under this Note,
                  which securities provide for payments prior, but as close as
                  possible, to the Business

<PAGE>

                  Day prior to each successive Monthly Payment Date occurring
                  after the Release Date, with each such payment being equal to
                  or greater than the amount of the corresponding Monthly
                  Payment required to be made hereunder for the balance of the
                  term hereof plus the amount required to be paid on the
                  Maturity Date (the "SCHEDULED DEFEASANCE PAYMENTS"), each of
                  which shall be duly endorsed by the holder thereof as directed
                  by Lender or accompanied by a written instrument of transfer
                  in form and substance satisfactory to Lender in its sole
                  discretion (including such instruments as may be required by
                  the depository institution or other entity holding such
                  securities or the issuer thereof, as the case may be, to
                  effectuate book-entry transfers and pledges through the
                  book-entry facilities of such institution) in order to perfect
                  upon the delivery of the Defeasance Security Agreement (as
                  hereinafter defined) a valid, first priority lien and security
                  interest therein in favor of Lender in conformity with all
                  applicable state and federal laws governing granting of such
                  security interest. For purposes of this Section, the term
                  "DEFEASANCE COLLATERAL" shall include obligations or
                  securities that satisfy the following criteria: (i) such
                  securities or obligations are (A) securities or obligations
                  rated "AAA" by S&P and/or constitute "Qualified Investments
                  for AAA Financings" and "Eligible Investments," each as
                  defined in the then applicable S&P (as defined in the Security
                  Instrument) finance criteria, and (B) government securities"
                  as defined in Section 2(a)(16) of the Investment Company Act
                  of 1940 as amended (15 U.S.C. 80a-1); (ii) each applicable
                  Rating Agency (as defined in the Security Instrument) shall
                  have approved such securities or obligations; (iii) such
                  securities or obligations comply with the criteria set forth
                  in the applicable Sections of the Code and Treasury
                  Regulations; and (iv) such securities or obligations are not
                  subject to prepayment, call or early redemption.

                  (e)      The word "sole" in the seventh line of Section
9(b)(i)(C)(2) is deleted and "reasonable" substituted therefor.

                  (f)      Section 9(b)(i)(C)(4) is modified by deleting the
following from the second line thereof: "in its sole discretion." Section
9(b)(i)(C)(4) is further modified by inserting the following at the end thereof:
"The opinions set forth in clauses (b) and (c) above may, in Lender's
discretion, be rendered by counsel to Lender at Borrower's sole cost and
expense;"

                  (g)      Section 9(b)(i)(C)(7) is modified by deleting the
following from subsection (a) thereof: ", and that the delivery of the
Defeasance Collateral to the Defeasance Obligor does not constitute a fraudulent
transfer, preferential payment, or other voidable transfer under applicable
bankruptcy law." Section 9(b)(i)(C)(7) is further modified by inserting the word
"reasonable" in the second line of subsection (b) between "including" and
"attorneys'".

                  25.5 MAXIMUM RATE PERMITTED BY LAW. The second sentence of
Section 10 is deleted and the following substituted therefor: "If, from any
circumstance whatsoever, fulfillment of any provision of this Note or any other
Loan Document at the time performance of such provision shall be due shall
involve exceeding any usury limit prescribed by law that a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be
fulfilled shall be reduced to allow compliance with such limit, and if, from any
circumstance

<PAGE>

whatsoever, Lender shall ever receive as interest an amount that would exceed
the highest lawful rate, the receipt of such excess shall be deemed a mistake
and shall be credited against the principal amount of the indebtedness evidenced
hereby to which the same may lawfully be credited, and any portion of such
excess not capable of being so credited shall be refunded immediately to
Borrower."

                  25.6 EVENTS OF DEFAULT; ACCELERATION OF AMOUNT DUE. The
following is inserted at the end of Section 11(d) following "Loan Document:" "as
such term is defined therein."

                  25.7 NOTICES. In addition to the notice provisions set forth
above, Lender shall use reasonable efforts to provide a courtesy copy of any
notice required or permitted to be given by Lender to Borrower hereunder to: Kim
A. Rieck, Esq., Squire, Sanders, & Dempsey, 1300 Huntington Center, 41 South
High Street, Columbus, Ohio 43215, Facsimile: 614-365-2499. Lender's failure to
send any courtesy copy shall not impair the effect of the notice sent to
Borrower.

                  25.8 NONRECOURSE. Section 21 is modified in the following
manner:

                  (a)      Section 21(a) is modified in its entirety to state
the following:

                  Subject to the qualifications below, Lender shall not enforce
the liabilities and obligations of Borrower to perform and observe the
obligations contained in this Note, the Security Instrument or the other Loan
Documents by any action or proceeding wherein a money judgment shall be sought
against Borrower, except that Lender may bring a foreclosure action, an action
for specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon its interest under this Note, the Security
Instrument and the other Loan Documents, or in the Property, the Rents (as
defined in the Security Instrument), or any other collateral given to Lender
pursuant to the Loan Documents; provided, however, that, except as specifically
provided herein, any judgment in any such action or proceeding shall be
enforceable against Borrower only to the extent of Borrower's interest in the
Property, in the Rents and in any other collateral given to Lender, and Lender,
by accepting this Note, the Security Instrument and the other Loan Documents,
agrees that it shall not sue for, seek or demand any deficiency judgment against
Borrower in any such action or proceeding under or by reason of or under or in
connection with this Note, the Security Instrument or the other Loan Documents.
The provisions of this Section 21 shall not, however: (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by any of the Loan
Documents; (ii) impair the right of Lender to name Borrower as a party defendant
in any action or suit for foreclosure and sale under the Mortgage; (iii) affect
the validity or enforceability of or any guaranty made in connection with the
Loan or any of the rights and remedies of Lender thereunder; (iv) impair the
right of Lender to obtain the appointment of a receiver; (v) impair the
enforcement of the Assignment of Leases; (vi) constitute a prohibition against
Lender to seek a deficiency judgment against Borrower, but only to fully realize
the security granted by the Security Instrument or to commence any other
appropriate action or proceeding in order for Lender to exercise its remedies
against the Property; or (vii) constitute a waiver of the right of Lender to
enforce the liability and obligation of Borrower, by money judgment or
otherwise, to the extent of any loss, damage, cost, expense, liability, claim or
other obligation incurred by Lender (including attorneys' fees and costs
reasonably incurred) arising out of or in connection with the following:

<PAGE>

                  (A)      fraud or intentional misrepresentation by Borrower or
         any Guarantor (as defined in the Security Instrument) in connection
         with the Loan;

                  (B)      the willful misconduct of Borrower or any Guarantor
         in connection with the Loan;

                  (C)      the breach of any representation, warranty, covenant
         or indemnification provision in the Environmental Indemnity Agreement
         executed this same date herewith by Borrower and Guarantor, or in the
         Security Instrument concerning environmental laws, hazardous substances
         and asbestos and any indemnification of Lender with respect thereto in
         either document;

                  (D)      the wrongful removal or destruction of any portion of
         the Property after an Event of Default that adversely affects the value
         of the Property;

                  (E)      the misapplication or conversion by Borrower of (A)
         any insurance proceeds paid by reason of any loss, damage or
         destruction to the Property, (B) any awards or other amounts received
         in connection with the condemnation of all or a portion of the
         Property, or (C) any Rents following an Event of Default;

                  (F)      failure to pay charges for labor or materials or
         other charges that can create liens on any portion of the Property;

                  (G)      any security deposits, advance deposits or any other
         deposits collected with respect to the Property which are not delivered
         to Lender upon a foreclosure of the Property or action in lieu thereof,
         except to the extent any such security deposits were applied in
         accordance with the terms and conditions of any of the Leases;

                  (H)      Borrower's indemnifications of Lender set forth in
         this Note and the other Loan Documents;

                  (I)      the first full monthly payment of principal and
         interest under the Note is not paid when due;

                  (J)      failure of Borrower to (A) permit on-site inspections
         of the Property, (B) provide financial information, (C) maintain its
         status as a single purpose entity or (D) appoint a new property manager
         upon the request of Lender after an Event of Default, each as required
         by, and in accordance with the terms and provisions of, the Security
         Instrument;

                  (K)      failure of Borrower to obtain Lender's prior written
         consent to any subordinate financing or other voluntary lien
         encumbering the Property;

                  (L)      failure of Borrower to obtain Lender's prior written
         consent to any assignment, transfer, or conveyance of the Property or
         any interest therein as required by the Security Instrument or
         hereunder; or

<PAGE>

                  (M)      Borrower's failure to pay the Yield Maintenance
         Amount in the event of a Partial Prepayment Event.

                  (b)      Section 21(b) is modified in its entirety to state
the following:

                  "Notwithstanding anything to the contrary in this Note or any
of the Loan Documents, the Debt shall be fully recourse to Borrower in the event
that any petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be filed by
or consented to by Borrower."

                  (c)      Section 21(c) is modified in the following manner to
state the following:

                  "Notwithstanding anything to the contrary in this Note or any
of the Loan Documents, Lender shall not be deemed to have waived any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of
the U.S. Bankruptcy Code to file a claim for the full amount of the Debt secured
by the Security Instrument or to require that all collateral shall continue to
secure all of the Debt owing to Lender in accordance with the Loan Documents."

                [THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         Intending to be fully bound, Borrower has executed this Note effective
as of the day and year first above written.

BORROWER:                               MFC BEAVERCREEK, LLC, a Delaware limited
                                        liability company

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

                                            By: Glimcher Properties Corporation,
                                                a Delaware corporation, its
                                                general partner

                                                By: ____________________________
                                                       George A. Schmidt
                                                       Executive Vice President

   Pay to the order of ___________________________________, without recourse.

                                        KEYBANK NATIONAL ASSOCIATION, a national
                                        banking association

                                        By: ____________________________________
                                        Print Name: ____________________________
                                        Print Title: ___________________________

<PAGE>

State of ___________________________

County of __________________________

         The foregoing instrument was acknowledged before me this October __,
2003, by GEORGE A. SCHMIDT, Executive Vice President of Glimcher Properties
Corporation, a Delaware corporation, general partner of Glimcher Properties
Limited Partnership, a Delaware limited partnership, sole member of MFC
Beavercreek, LLC, a Delaware limited liability company, on behalf of the limited
liability company.

                                        ________________________________________
                                                      Notary Public<PAGE>

                                                                   EXHIBIT 10.41

                              MFC BEAVERCREEK, LLC,
                      a Delaware limited liability company

                                   (Borrower)

                                   in favor of

                          KEYBANK NATIONAL ASSOCIATION,
                         a national banking association
                                    (Lender)

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

Dated: October 17, 2003

Location: 2727 Fairfield Commons, Beaver Creek, Ohio 45431

RECORD AND RETURN TO:

KEYBANK NATIONAL ASSOCIATION
911 Main Street, Suite 1500
Kansas City, Missouri  64105
Attention: Carol Brownfield

Loan No.: 10021677

<PAGE>

                                TABLE OF CONTENTS

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RECITALS..........................................................................................................     1

DEFINITIONS.......................................................................................................     1

ARTICLE 1 - GRANTS OF SECURITY....................................................................................     2
         SECTION 1.1          PROPERTY MORTGAGED..................................................................     2
                              (a)   Land..........................................................................     3
                              (b)   Additional Land...............................................................     3
                              (c)   Improvements..................................................................     3
                              (d)   Easements and Appurtenances...................................................     3
                              (e)   Fixtures and Tangible Personal Property.......................................     3
                              (f)   Leases and Rents..............................................................     4
                              (g)   Condemnation Awards...........................................................     4
                              (h)   Insurance Proceeds............................................................     4
                              (i)   Tax Certiorari................................................................     4
                              (j)   Miscellaneous Personal Property...............................................     4
                              (k)   Personal Property As Defined In Uniform Commercial Code.......................     5
                              (l)   Conversion....................................................................     5
                              (m)   Other Rights..................................................................     5
         SECTION 1.2          ASSIGNMENT OF LEASES AND RENTS......................................................     5
         SECTION 1.3          SECURITY AGREEMENT..................................................................     5
         SECTION 1.4          PLEDGE OF MONIES HELD...............................................................     6
         SECTION 1.5          COMMON LAW PLEDGE/ASSIGNMENT........................................................     6

CONDITIONS TO GRANT...............................................................................................     6

ARTICLE 2 - DEBT AND OBLIGATIONS SECURED..........................................................................     7
         SECTION 2.1          DEBT................................................................................     7

ARTICLE 3 - BORROWER COVENANTS....................................................................................     8
         SECTION 3.1          PAYMENT OF DEBT.....................................................................     8
         SECTION 3.2          INCORPORATION BY REFERENCE..........................................................     8
         SECTION 3.3          INSURANCE...........................................................................     8
                              (a)   Insurance.....................................................................     8
                                    (i)    Property Insurance.....................................................     8
                                    (ii)   Business Interruption..................................................     8
                                    (iii)  Boiler and Machinery...................................................     8
                                    (iv)   Builder's Risk.........................................................     9
                                    (v)    Ordinance/Law Coverage.................................................     9
                                    (vi)   Personal Property......................................................     9
                                    (vii)  Liability Insurance....................................................     9
                                    (viii) Workers Compensation Insurance.........................................     9
                                    (ix)   Other Insurance........................................................     9
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                                       i

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                              (b)   Insurance Policies............................................................     9
                              (c)   Compliance With Insurance Requirements.......................................     10
                              (d)   Restoration..................................................................     10
                              (e)   Blanket Insurance Policies...................................................     10
                              (f)   Absolute Transfer On Foreclosure.............................................     10
         SECTION 3.4          PAYMENT OF TAXES, ETC..............................................................     10
         SECTION 3.5          TAX AND INSURANCE ESCROW FUND......................................................     11
         SECTION 3.6          CONDEMNATION.......................................................................     12
         SECTION 3.7          LEASES AND RENTS...................................................................     13
         SECTION 3.8          MAINTENANCE OF PROPERTY............................................................     13
         SECTION 3.9          WASTE..............................................................................     13
         SECTION 3.10         COMPLIANCE WITH LAWS...............................................................     13
         SECTION 3.11         BOOKS AND RECORDS..................................................................     14
         SECTION 3.12         PAYMENT FOR LABOR AND MATERIALS....................................................     15
         SECTION 3.13         PERFORMANCE OF OTHER AGREEMENTS....................................................     16
         SECTION 3.14         CHANGE OF NAME, IDENTITY OR STRUCTURE..............................................     16
         SECTION 3.15         EXISTENCE..........................................................................     16

ARTICLE 4 - SPECIAL COVENANTS....................................................................................     16
         SECTION 4.1          PROPERTY USE.......................................................................     16
         SECTION 4.2          ERISA..............................................................................     16
         SECTION 4.3          SINGLE PURPOSE ENTITY..............................................................     16
         SECTION 4.4          RESTORATION AFTER CASUALTY.........................................................     21

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES.......................................................................     24
         SECTION 5.1          WARRANTY OF TITLE..................................................................     24
         SECTION 5.2          AUTHORITY..........................................................................     25
         SECTION 5.3          LEGAL STATUS AND AUTHORITY.........................................................     25
         SECTION 5.4          VALIDITY OF DOCUMENTS..............................................................     25
         SECTION 5.5          LITIGATION.........................................................................     25
         SECTION 5.6          STATUS OF PROPERTY.................................................................     26
         SECTION 5.7          NO FOREIGN PERSON..................................................................     27
         SECTION 5.8          SEPARATE TAX LOT...................................................................     27
         SECTION 5.9          ERISA COMPLIANCE...................................................................     27
         SECTION 5.10         LEASES.............................................................................     27
         SECTION 5.11         FINANCIAL CONDITION................................................................     28
         SECTION 5.12         BUSINESS PURPOSES..................................................................     28
         SECTION 5.13         TAXES..............................................................................     28
         SECTION 5.14         MAILING ADDRESS....................................................................     28
         SECTION 5.15         NO CHANGE IN FACTS OR CIRCUMSTANCES................................................     28
         SECTION 5.16         DISCLOSURE.........................................................................     28
         SECTION 5.17         THIRD PARTY REPRESENTATIONS........................................................     28
         SECTION 5.18         ILLEGAL ACTIVITY...................................................................     28

ARTICLE 6 - DEBTOR/CREDITOR RELATIONSHIP.........................................................................     28
         SECTION 6.1          RELATIONSHIP OF BORROWER AND LENDER................................................     28
</TABLE>

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ARTICLE 7 - FURTHER ASSURANCES...................................................................................     29
         SECTION 7.1          RECORDING OF SECURITY INSTRUMENT, ETC..............................................     29
         SECTION 7.2          FURTHER ACTS, ETC..................................................................     29
         SECTION 7.3          CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.............................     29
         SECTION 7.4          ESTOPPEL CERTIFICATES..............................................................     30
         SECTION 7.5          FLOOD INSURANCE....................................................................     30
         SECTION 7.6          SPLITTING OF SECURITY INSTRUMENT...................................................     30
         SECTION 7.7          REPLACEMENT DOCUMENTS..............................................................     31
         SECTION 7.8          AMENDED FINANCING STATEMENTS.......................................................     31

ARTICLE 8 - DUE ON SALE/ENCUMBRANCE/CHANGE IN BORROWER...........................................................     31
         SECTION 8.1          NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT............................     31
         SECTION 8.2          CONDITIONS TO LENDER'S CONSENT.....................................................     32

ARTICLE 9 - PREPAYMENT...........................................................................................     33

ARTICLE 10 - DEFAULT.............................................................................................     33
         SECTION 10.1         EVENTS OF DEFAULT..................................................................     33
         SECTION 10.2         LATE CHARGE........................................................................     34
         SECTION 10.3         DEFAULT INTEREST...................................................................     34

ARTICLE 11 - RIGHTS AND REMEDIES.................................................................................     35
         SECTION 11.1         REMEDIES...........................................................................     35
         SECTION 11.2         APPLICATION OF PROCEEDS............................................................     37
         SECTION 11.3         RIGHT TO CURE DEFAULTS.............................................................     37
         SECTION 11.4         ACTIONS AND PROCEEDINGS............................................................     37
         SECTION 11.5         RECOVERY OF SUMS REQUIRED TO BE PAID...............................................     38
         SECTION 11.6         EXAMINATION OF BOOKS AND RECORDS...................................................     38
         SECTION 11.7         OTHER RIGHTS, ETC..................................................................     38
         SECTION 11.8         RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.......................................     39
         SECTION 11.9         VIOLATION OF LAWS..................................................................     39
         SECTION 11.10        RIGHT OF ENTRY.....................................................................     39
         SECTION 11.11        RIGHTS PERTAINING TO SALES.........................................................     39

ARTICLE 12 - ENVIRONMENTAL HAZARDS...............................................................................     41
         SECTION 12.1         ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.......................................     41
         SECTION 12.2         ENVIRONMENTAL COVENANTS............................................................     42
         SECTION 12.3         LENDER'S RIGHTS....................................................................     43

ARTICLE 13 - INDEMNIFICATION.....................................................................................     43
         SECTION 13.1         GENERAL INDEMNIFICATION............................................................     43
         SECTION 13.2         MORTGAGE AND/OR INTANGIBLE TAX.....................................................     45
         SECTION 13.3         ERISA INDEMNIFICATION..............................................................     45
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                                      iii

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         SECTION 13.4         ENVIRONMENTAL INDEMNIFICATION......................................................     45
         SECTION 13.5         DUTY TO DEFEND, ATTORNEYS' FEES AND OTHER FEES AND EXPENSES........................     46

ARTICLE 14 - WAIVERS.............................................................................................     46
         SECTION 14.1         WAIVER OF COUNTERCLAIM.............................................................     46
         SECTION 14.2         MARSHALLING AND OTHER MATTERS......................................................     46
         SECTION 14.3         WAIVER OF NOTICE...................................................................     46
         SECTION 14.4         WAIVER OF STATUTE OF LIMITATIONS...................................................     47
         SECTION 14.5         SURVIVAL...........................................................................     47
         SECTION 14.6         WAIVER OF TRIAL BY JURY............................................................     47

ARTICLE 15 - EXCULPATION.........................................................................................     47

ARTICLE 16 - NOTICES.............................................................................................     47
         SECTION 16.1         NOTICES............................................................................     47

ARTICLE 17 - APPLICABLE LAW......................................................................................     48
         SECTION 17.1         CHOICE OF LAW/JURISDICTION AND VENUE...............................................     48
         SECTION 17.2         USURY LAWS.........................................................................     48
         SECTION 17.3         PROVISIONS SUBJECT TO APPLICABLE LAW...............................................     49
         SECTION 17.4         INAPPLICABLE PROVISION.............................................................     49

ARTICLE 18 - SECONDARY MARKET....................................................................................     49
         SECTION 18.1         DISSEMINATION OF INFORMATION.......................................................     49
         SECTION 18.2         CONVERSION TO REGISTERED FORM......................................................     49

ARTICLE 19 - COSTS...............................................................................................     50
         SECTION 19.1         PERFORMANCE AT BORROWER'S EXPENSE..................................................     50
         SECTION 19.2         ATTORNEY'S FEES FOR ENFORCEMENT....................................................     50

ARTICLE 20 - CERTAIN DEFINITIONS, HEADINGS, RULE OF CONSTRUCTION.................................................     50
         SECTION 20.1         GENERAL DEFINITIONS................................................................     50
         SECTION 20.2         HEADINGS, ETC......................................................................     51
         SECTION 20.3         RULES OF CONSTRUCTION..............................................................     51

ARTICLE 21 - MISCELLANEOUS.......................................................................................     51
         SECTION 21.1         NO ORAL CHANGE.....................................................................     51
         SECTION 21.2         LIABILITY..........................................................................     52
         SECTION 21.3         DUPLICATE ORIGINALS; COUNTERPARTS..................................................     52
         SECTION 21.4         NUMBER AND GENDER..................................................................     52
         SECTION 21.5         SUBROGATION........................................................................     52
         SECTION 21.6         ENTIRE AGREEMENT...................................................................     52
         SECTION 21.7         LENDER'S RIGHT TO SUBORDINATE......................................................     52

ARTICLE 22 - LOCAL LAW PROVISIONS................................................................................     53
</TABLE>

                                       iv
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<S>                                                                                                                   <C>
         SECTION 22.1         INCONSISTENCIES....................................................................     53

ARTICLE 23 - ADDITIONAL OR SPECIAL PROVISIONS OR MODIFICATIONS...................................................     53
         SECTION 23.1         INCONSISTENCIES....................................................................     53
</TABLE>

                                       v

<PAGE>

                                    PREAMBLE

         THIS OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING ("SECURITY INSTRUMENT") is made as of October 17,
2003, by and among MFC BEAVERCREEK, LLC, a Delaware limited liability company
having its principal place of business or residing at c/o Glimcher Realty Trust,
150 E. Gay Street, Columbus, Ohio 43215 ("BORROWER," such term includes any
successors or assigns of Borrower and any future owners of all or any part of
the Property, as hereinafter defined) and KEYBANK NATIONAL ASSOCIATION, a
national banking association having a place of business at 911 Main Street,
Suite 1500, Kansas City, Missouri 64105, as mortgagee ("LENDER," such term
includes all successors and assigns and all subsequent holders, if any, of the
Promissory Note that this Security Instrument secures).

PROPERTY ADDRESS: 2727 Fairfield Commons, Beaver Creek, Ohio 45431

                                    RECITALS

         Borrower by its promissory note of even date herewith in the principal
amount of $85,500,000.00 given to Lender (together with all extensions,
renewals, modifications, consolidations, substitutions, replacements,
restatements and increases thereof, the "A-1 NOTE") and by its promissory note
of even date herewith in the principal amount of $28,500,000.00 given to Lender
(together with all extensions, renewals, modifications, consolidations,
substitutions, replacements, restatements and increases thereof, the "A-2 NOTE")
is indebted to Lender in the total principal sum of $114,000,000.00 in lawful
money of the United States of America (the A-1 Note and the A-2 Note together
with all extensions, renewals, modifications, consolidations, substitutions,
replacements, restatements and increases thereof shall individually and
collectively be referred to as the "NOTE"), with interest from the date thereof
at the rates set forth in the Note, principal and interest to be payable in
accordance with the terms and conditions provided in the Note.

         Borrower desires to secure the payment of the Debt and the performance
of all of its obligations under the Note and other Loan Documents.

                                   DEFINITIONS

         The terms set forth below are defined in the following Loan Documents
or Sections and Subsections of this Security Instrument and when used in this
Security Instrument shall have the meanings set forth in such Loan Documents
(such Loan Documents being incorporated herein by reference for such purposes),
Sections, and Subsections unless the context clearly otherwise requires. Certain
other capitalized words and phrases that are used on a more limited basis are
defined in the Sections in which they are used.

         Applicable Laws: Subsection 3.10(a);
         Borrower: Preamble and Section 20.1;
         Debt: Section 2.1;
         Default Rate: Note;
         Environmental Law: Section 12.1;

<PAGE>

         ERISA: Subsection 4.2(a);
         Escrow Fund: Section 3.5;
         Event of Default: Section 10.1;
         Financial Statement Reporting Deposit: Note;
         Guarantor: Section 5.5;
         Hazardous Substances: Section 12.1;
         Indemnified Parties: Section 13.1;
         Indemnitor: Subsection 5.5;
         Insurance Premiums: Subsection 3.3(b);
         Investor: Section 18.1;
         Land: Subsection 1.1(a);
         Late Charges: Note;
         Leases: Subsection 1.1(f);
         Lender: Preamble and Section 20.1;
         Loan: Subsection 2.1(a);
         Loan Documents: Subsection 2.1(a);
         Maturity Date: Note;
         Monthly Payment: Note;
         Net Proceeds: Subsection 4.4(b);
         Note: Recitals and Section 20.1;
         O&M Plan: Section 12.2;
         Other Charges: Subsection 3.4(a);
         Permitted Exceptions: Section 5.1;
         Personal Property: Subsection 1.1(e);
         Policies/Policy: Subsection 3.3(b);
         Prepayment Consideration: Note;
         Property: Section 1.1 and Section 20.1;
         Release: Section 12.1;
         Remediation: Section 12.1;
         Rents: Subsection 1.1 (f);
         Restoration: Subsection 3.3(d);
         Securities: Section 18.1;
         Security Instrument: Preamble;
         Taxes: Subsection 3.4(a);
         Transfer: Section 8.1;
         Uniform Commercial Code: Subsection 1.1(e).

                         ARTICLE 1 - GRANTS OF SECURITY

         SECTION 1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably deed,
mortgage, grant, bargain, sell, alien, enfeoff, hypothecate, remise, release,
pledge, assign, warrant, transfer, confirm, convey, and grant to Lender a lien
on, pledge of, and security interest in, the following property, rights,
interests, and estates now owned or hereafter acquired by Borrower to the full
extent of Borrower's right, title, and interest therein, including hereafter
acquired rights, interests, and property, and all products and proceeds thereof
and additions and accessions thereto (sometimes collectively referred to herein
as the "PROPERTY"):

                                       2

<PAGE>

         (a)      Land. The real property described in Exhibit A attached hereto
and made a part hereof (the "LAND"); TOGETHER with

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

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

         (d)      Easements and Appurtenances. All easements, rights-of-way or
use, rights, strips and gores of land, streets, ways, alleys, passages, sewer
rights, water, water courses, water rights and powers, air rights and
development rights, riparian rights, and all estates, rights, titles, interests,
privileges, liberties, servitudes, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way now or hereafter belonging, relating or
pertaining to the Land and the Improvements and the reversion and reversions,
remainder and remainders, including any homestead or other claim at law or in
equity and any after-acquired title, franchises, licenses, and any reversions
and remainders thereof, and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Land, to the center
line thereof and all the estates, rights, titles, interests, dower and rights of
dower, curtesy and rights of curtesy, property, possession, claim and demand
whatsoever, both at law and in equity, of Borrower of, in, and to the Land and
the Improvements and every part and parcel thereof, with the appurtenances
thereto;

         (e)      Fixtures and Tangible Personal Property. All inventory,
machinery, furniture, equipment, and fixtures (including all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature whatsoever located upon the Land or the
Improvements or appurtenant thereto or used in connection with the present or
future operation or occupancy of the Land or the Improvements, including all
materials intended for construction, reconstruction, refurbishment, renovation,
alterations, and repairs to the Property (whether stored or located on or off
the Property) (all of the items described in Subsections 1.1(e) through 1.1(m)
below are herein sometimes collectively called the "PERSONAL PROPERTY"),
including the right, title and interest of Borrower in and to any of the
Personal Property that may be subject to any security interests, as defined in
the Uniform Commercial Code, as adopted and enacted by any state or states where
any of the Property is located (the "UNIFORM COMMERCIAL CODE") superior in lien
to the lien of this Security Instrument, such Personal Property to include, for
example, the following: (1) all furniture and furnishings, including carpets,
rugs and other floor coverings, draperies, drapery rods and brackets, awnings,
window shades, Venetian blinds, curtains, lighting fixtures, desk chairs,
stools, pictures, lamps, ash trays, waste baskets, clocks, radios, and all other
furniture and furnishings of every kind and nature whatsoever; (2) all cash
registers, coin machines, computers, word processing equipment, adding machines,
calculators, check protectors, postage meters, desks, chairs, tables, room
dividers, filing cabinets, safes, vaults, time clocks, time card machines, and
other office furniture, equipment and supplies of every kind and nature
whatsoever; (3) all right and interest of the Borrower in and to all equipment
leases, personal

                                       3

<PAGE>

property leases, conditional sales contracts and similar agreements in and to
the telephone system (including the switching components thereof), television
sets, computer systems, refrigerator/bars, and point of sale computer systems
and/or inventory control systems; (4) all apparatus, machinery, motors, tools,
insurance proceeds, leases, and equipment, including fire sprinklers and alarm
systems, air conditioning, heating, refrigerating, electronic monitoring, window
or structural cleaning rigs, maintenance equipment, equipment for the
extermination or exclusion of vermin or insects, equipment for removal of dust,
debris, snow, refuse or garbage, and all other equipment of every kind; (5)
elevators, fittings, radiators, gas ranges, mechanical equipment, and all
plumbing, heating, lighting, cooking, laundry, ventilating, refrigerating,
incinerating, air conditioning, central energy and sprinkler equipment and
fixtures and appurtenances thereto; and (6) all renewals or replacements of any
of the foregoing, whether or not the same are or shall be attached to the
Improvements;

         (f)      Leases and Rents. All leases and other agreements affecting or
relating to the use, enjoyment or occupancy of all or any part of the Land or
the Improvements heretofore or hereafter entered into, whether before or after
the filing by or against Borrower of any petition for relief under 11 U.S.C.
Section 101 et seq. (the "BANKRUPTCY CODE"), as the same may be amended from
time to time (the "LEASES") and all right, title and interest of Borrower, its
successors and assigns therein and thereunder, including cash or securities
deposited thereunder to secure the performance by the lessees of their
obligations thereunder and all rents, additional rents, royalties, licenses,
payments (including payments pursuant to the exercise of any purchase option by
any tenant under any Lease), fees, revenues, income, receipts, charges,
accounts, accounts receivable, issues and profits and other benefits (including
all oil and gas or other mineral royalties and bonuses) from the Land or the
Improvements whether paid or accruing before or after the filing by or against
Borrower of any petition for relief under the Bankruptcy Code (collectively, the
"RENTS") and all proceeds from the sale or other disposition of the Leases and
the right to receive and apply the Rents to the payment of the Debt;

         (g)      Condemnation Awards. All awards or payments, including
interest thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including
any transfer made in lieu of or in anticipation of the exercise of the right),
or for a change of grade, or for any other injury to or decrease in the value of
the Property;

         (h)      Insurance Proceeds. All proceeds of and any unearned premiums
on any insurance policies covering the Property, including the right to receive
and apply the proceeds of any insurance judgments, or settlements made in lieu
thereof, for damage to the Property;

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

         (j)      Miscellaneous Personal Property. All intangible property used
in connection with or generated by, located on or at or pertaining to the
Property including all general intangibles, payment intangibles, software,
goodwill, trademarks, trade names, service marks, logos, copyrights, option
rights, purchase contracts, contract rights, or leases of personal property and
security deposits received pursuant thereto, utility contracts, service
contracts, guaranties,

                                       4

<PAGE>

warranties, telephone exchange numbers, licenses, government permits and
applications, approvals and other government rights relating to the Property or
the operation of the business thereon; all books and records; deposit accounts,
letter-of-credit rights, accounts, contract rights, instruments, chattel paper,
investment property, all rights of Borrower for payment of money for property
sold, rented or lent, for services rendered, for money lent, or advances or
deposits made; all claims, actions, and causes of action (including those
arising in tort, including commercial tort claims) of Borrower against others;
all agreements, contracts, certificates, instruments (including promissory
notes, guaranties, liens and all writings which evidence a right to the payment
of money), franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Property or any part thereof or respecting any business or
activity conducted on the Property or any part thereof and all right, title and
interest of Borrower therein and thereunder, including the right to receive and
collect any sums payable to Borrower thereunder; all extensions, improvements,
betterments, replacements, renewals, or additions and accessions to any of the
foregoing; and any other intangible property of Borrower related to the
Property; and

         (k)      Personal Property As Defined In Uniform Commercial Code. In
addition to any other property mentioned in this Section 1.1, all property in
which a security interest may be created pursuant to the Uniform Commercial Code
(or any similar laws) including all goods, inventory, equipment, accounts,
accounts receivable, contract rights, general intangibles, chattel paper,
documents, documents of title, instruments, deposit accounts, letter-of-credit
rights, investment property, tort claims (including commercial tort claims), and
securities located on or generated by or used in connection with the ownership
or operation of the Property;

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

         (m)      Other Rights. Any and all other rights of Borrower in and to
the items set forth in Subsections (a) through (l) above.

         SECTION 1.2 ASSIGNMENT OF LEASES AND RENTS. Borrower hereby absolutely
and unconditionally assigns to Lender Borrower's right, title and interest in
and to all current and future Leases and Rents, it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of
this Section 1.2 and Section 3.7, Lender grants to Borrower a revocable license
to collect and receive the Rents. Borrower shall hold a portion of the Rents
sufficient to discharge all current sums due on the Debt for use in the payment
of such sums.

         SECTION 1.3 SECURITY AGREEMENT. This Security Instrument is both a real
property mortgage and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Debt, a security interest
in any of the Property that is deemed to be personal property to the full extent
that such property may be subject to the Uniform Commercial Code. This Security
Instrument

                                       5

<PAGE>

shall be and is intended to serve as a financing statement under the Uniform
Commercial Code with respect to the Personal Property, and when filed shall
serve as a financing statement for all intents and purposes thereunder. Borrower
authorizes Lender to file financing statements describing the Personal Property.
Lender shall be entitled to all rights and remedies of a "secured party" under
the Uniform Commercial Code. Upon its recording in the real property records,
this Security Instrument shall be effective as a financing statement filed as a
fixture filing and when filed shall serve as a financing statement for all
intents and purposes thereunder. For purposes of this filing, Borrower is the
record owner of the Property. The name and mailing address of Borrower, as
debtor, and the name and mailing address of Lender, as secured party, from which
information concerning this Financing Statement may be obtained, are set forth
in the Preamble of this Security Instrument. The Borrower shall immediately
advise the Lender in writing of the opening of any new place of business or the
closing of any of its existing places of business, or of any change in the
location of the chief executive office of Borrower, or the state of Borrower's
organization, or Borrower's exact legal name, or the places where the Personal
Property, or any part thereof, or the books and records concerning the Personal
Property, or any part thereof, are kept.

         If any of the Property is deemed to be personal property, this Security
Instrument shall also constitute a security agreement with respect to such
personal property executed by Borrower as debtor in favor of Lender as Secured
Party. Upon the occurrence of an Event of Default, Lender may, in addition to
and not in derogation of any other rights and remedies of Lender under the Loan
Documents or applicable law, in accordance with Section 9-501(4) or 9-604 of the
Uniform Commercial Code, as applicable, or other such provisions of the Uniform
Commercial Code, elect (i) to proceed under and have all the rights and remedies
of a secured party under Article 9 of the Uniform Commercial Code and any other
applicable law, or (ii) to proceed as to both the real property and the personal
property in accordance with Lender's rights and remedies in respect of the real
property encumbered by this Security Instrument, whereupon at any foreclosure
sale conducted pursuant to this Security Instrument may offer the real and
personal property together as part of the same sale, with bids to be taken on
the whole of the real and personal property rather than separately.

         SECTION 1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender
any and all items and monies now or hereafter held by Lender including any sums
deposited in escrow including in the Escrow Fund as additional security for the
Debt until expended or applied as provided in this Security Instrument.

         SECTION 1.5 COMMON LAW PLEDGE/ASSIGNMENT. To the extent that the
Uniform Commercial Code does not apply to any item of the Personal Property, it
is the intention of this Security Instrument that Lender have a common law
pledge and/or collateral assignment of such item of Personal Property.

                               CONDITIONS TO GRANT

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

                                        6

<PAGE>

         PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Loan Documents, and shall abide by and comply with each
and every covenant and condition set forth in the Loan Documents, these presents
and the estate hereby granted shall terminate.

                    ARTICLE 2 - DEBT AND OBLIGATIONS SECURED

         SECTION 2.1 DEBT. This Security Instrument and the grants, assignments,
and transfers made in Article 1 are given for the purpose of securing the
following, in such order of priority as Lender may determine in its sole
discretion (the "DEBT"):

         (a)      the payment of the indebtedness and obligations evidenced by
or arising under the following, which, together with all amendments or
modifications thereto and substitutions or replacements thereof are sometimes
herein collectively called the "LOAN DOCUMENTS": the Note; this Security
Instrument; any other documents or instruments evidencing and/or securing the
Note or now or hereafter executed by Borrower or others in connection with or
related to the indebtedness and loan that is evidenced by the Note ("LOAN")
including any assignments of leases and rents, security agreements, financing
statements, guarantys, indemnity agreements (including environmental indemnity
agreements), letters of credit, and escrow/holdback arrangements;

         (b)      the payment of interest, default interest, late charges and
other sums, as provided in the Note, this Security Instrument, or any other Loan
Document;

         (c)      Prepayment Consideration (as defined in the Note);

         (d)      the payment of all other monies agreed or provided to be paid
by Borrower in the Note, this Security Instrument, or any other Loan Document;

         (e)      the payment of all sums advanced pursuant to this Security
Instrument or any other Loan Document to protect and preserve the Property and
the lien and the security interest created hereby;

         (f)      the payment of all loans, debts, and advances by Lender, all
liabilities and claims of any kind or nature (in contract, tort or otherwise),
and costs and expenses (including reasonable attorneys' fees) incurred by Lender
in connection with the Debt or any part thereof, any renewal, extension,
modification, consolidation, change, substitution, replacement, restatement or
increase of the Debt or any part thereof, or the acquisition or perfection of
the security therefor, whether made or incurred at the request of Borrower or
Lender and whether or not evidenced by additional promissory notes or other
instruments;

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

         (h)      the performance of each obligation of Borrower contained in
the Note in addition to the payment of the Debt and of Borrower contained in any
Loan Document; and

                                        7

<PAGE>

         (i)      the performance of each obligation of Borrower contained in
any renewal, extension, modification, consolidation, change, substitution,
replacement for, restatement or increase of all or any part of the Note, this
Security Instrument or any other Loan Document.

                         ARTICLE 3 - BORROWER COVENANTS

         Borrower covenants and agrees that:

         SECTION 3.1 PAYMENT OF DEBT. Borrower shall pay the Debt at the time
and in the manner provided in the Note and in this Security Instrument.

         SECTION 3.2 INCORPORATION BY REFERENCE. All of the covenants,
conditions and agreements contained in the Note and each other Loan Document are
hereby made a part of this Security Instrument to the same extent and with the
same force as if fully set forth herein.

         SECTION 3.3 INSURANCE.

         (a)      Insurance. Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Property providing at least the
following coverages:

                  (i)      Property Insurance. Insurance against loss or damage
by, or abatement of rental income resulting from, fire, lightning, windstorm,
hail, explosion, riot attending a strike, riot, civil commotion, aircraft,
vehicles, smoke, vandalism, malicious mischief, burglary and theft, earthquake
(if required by Lender), flood (meeting the requirements of the Federal
Insurance Administration, if any part of the Property is located in an area
having special flood hazards and for which flood insurance has been made
available under the National Flood Insurance Act of 1968 and any amendments or
successor acts thereto) and such other hazards, casualties and contingencies
(including, but not limited to, so-called "all risk" coverage), in an amount not
less than the lesser of (1) the full replacement cost of the Property, without
deduction for physical depreciation, or (2) the outstanding balance of the Debt,
but in either case in an amount sufficient to ensure that the insurer issuing
such policies would not deem Borrower to be a co-insurer under such policies;

                  (ii)     Business Interruption. Business interruption and/or
loss of "rental income" insurance in an amount sufficient to avoid any
co-insurance penalty and to provide proceeds that will cover a period of not
less than one (1) year from the date of casualty or loss, the term "rental
income" to mean the sum of (A) the total then ascertainable Rents payable under
the Leases and (B) the total ascertainable amount of all other amounts to be
received by Borrower from third parties which are the legal obligation of the
tenants, reduced to the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy of that portion
of the Property then not being occupied;

                  (iii)    Boiler and Machinery. Broad form boiler and machinery
insurance (without exclusion for explosion) covering all boilers or other
pressure vessels, machinery, and equipment located in, on or about the Property
and insurance against loss of occupancy or use arising from any breakdown in
such amounts as are generally available at commercially

                                        8

<PAGE>

reasonable premiums and are generally required by institutional lenders for
properties comparable to the Property;

                  (iv)     Builder's Risk. During the course of any substantial
construction, repair, renovation or refurbishment of the Property, builder's
completed value risk insurance against all risks of physical loss, including
collapse and transit coverage, with a deductible not to exceed $25,000.00, in
non-reporting form, covering the total value of the work performed and
equipment, supplies and materials furnished;

                  (v)      Ordinance/Law Coverage. Ordinance or law coverage to
compensate for the cost of demolition and the increased cost of construction if
the Property is a non-conforming use;

                  (vi)     Personal Property. Insurance against loss or damage
to the Personal Property described herein, by fire and other risks covered by
"All Risk Replacement Cost Insurance," in an amount not less than the full
replacement cost of the Personal Property, including the cost of debris removal,
with a deductible of not more than $25,000.00;

                  (vii)    Liability Insurance. Borrower agrees to carry and
maintain liability and indemnity insurance, including without limitation water
damage insurance and the so-called assumed and contractual liability coverage,
in forms, in the minimum amount of $3,000,000.00 per occurrence, including broad
form property damage, blanket contractual and personal injuries (including death
resulting therefrom) coverages;

                  (viii)   Workers Compensation Insurance. Workers' compensation
insurance (including employer's liability insurance) for all employees of
Borrower or affiliated entities which are engaged on or with respect to the
Property or the business operations thereon, in such amount as is satisfactory
to Lender. Borrower shall also require the managing agent for the Property to
carry such insurance; and

                  (ix)     Other Insurance. Such other insurance with respect to
the Property against loss or damage of the kinds from time to time customarily
insured against and in such amounts as are generally available at commercially
reasonable premiums and are generally required by institutional lenders for
properties comparable to the Property.

         (b)      Insurance Policies. All insurance provided for in Subsection
3.3(a) hereof shall be obtained under valid and enforceable policies (the
"POLICIES" or in the singular, the "POLICY") issued by one or more insurers
satisfactory to Lender in its sole discretion and having a rating of A:V or
better by Best's Key Rating Guide. All insurers providing insurance required by
this Security Instrument shall be authorized to issue insurance in the state in
which the Property is located. The Policy referred to in Subsection 3.3(a)(i)
above shall name Lender as an additional named insured and all Policies other
than those referred to in Sections 3.3(a)(vii) and (viii) above shall provide
that all proceeds be payable to Lender as set forth in Section 4.4 hereof and
shall also: (1) contain a standard "non-contributory mortgagee" endorsement or
its equivalent relating, inter alia, to recovery by Lender notwithstanding the
negligent or willful acts or omission of Lender; (2) contain a waiver of
subrogation endorsement as to Lender; and (3) be approved by Lender in its sole
discretion as to amounts, form, risk coverage, deductibles, loss

                                        9

<PAGE>

payees and insureds. All Policies shall contain (i) a provision that such
Policies shall not be cancelled or terminated, nor shall they expire, without at
least thirty (30) days prior written notice to Lender in each instance; and (ii)
include effective waivers by the insurer of all claims for Insurance Premiums
against any loss payees, additional insureds and named insureds (other than
Borrower). Certificates of insurance with respect to all renewal and replacement
Policies shall be delivered to Lender not less than thirty (30) days prior to
the expiration date of any of the Policies required to be maintained hereunder
which certificates shall bear notations evidencing payment of applicable
premiums (the "INSURANCE PREMIUMS"). Duplicate originals of such replacement
Policies shall be delivered to Lender promptly after Borrower's receipt thereof
but in any case within thirty (30) days after the effective date thereof. If
Borrower fails to maintain and deliver to Lender the original Policies or
certificates of insurance required by this Security Instrument, upon ten (10)
days prior notice to Borrower, Lender may procure such insurance at Borrower's
sole cost and expense.

         (c)      Compliance With Insurance Requirements. Borrower shall comply
with all insurance requirements and shall not bring or keep or permit to be
brought or kept any Article upon any of the Property or cause or permit any
condition to exist thereon which would be prohibited by an insurance
requirement, or would invalidate the insurance coverage required hereunder to be
maintained by Borrower on or with respect to any part of the Property pursuant
to this Section 3.3.

         (d)      Restoration. If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty, Borrower shall give prompt notice
of such damage to Lender and provided that Borrower shall have received the Net
Proceeds, Borrower shall promptly commence and diligently prosecute the
completion of the repair and restoration of the Property as nearly as possible
to the condition the Property was in immediately prior to such fire or other
casualty, with such alterations as may be approved by Lender (the "RESTORATION")
and otherwise in accordance with Section 4.4 of this Security Instrument.

         (e)      Blanket Insurance Policies. The insurance coverage required
under Section 3.3(a) may be effected under a blanket policy or policies covering
the Property and other properties and assets not constituting a part of the
security hereunder; 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 Property, and any sub-limit in such blanket
policy applicable to the Property, and shall in any case comply in all other
respects with the requirements of this Section 3.3. Lender may make such other
requirements with respect to blanket insurance as Lender may deem appropriate or
desirable from time to time.

         (f)      Absolute Transfer On Foreclosure. In the event of a
foreclosure of this Security Instrument or other transfer of title to the
Property extinguishing the Debt or the lien of this Security Instrument, all
right, title and interest of Borrower in and to any insurance policies then in
force shall pass to and are hereby assigned by Borrower to the purchaser or
grantee.

         SECTION 3.4 PAYMENT OF TAXES, ETC.

         (a)      Borrower shall pay by their due date all taxes, assessments,
water rates, sewer rents, governmental impositions, and other charges,
including, without limitation, vault charges

                                       10

<PAGE>

and license fees for the use of vaults, chutes and similar areas adjoining the
Land, now or hereafter levied or assessed or imposed against the Property or any
part thereof (the "TAXES"), all ground rents, maintenance charges and similar
charges, now or hereafter levied or assessed or imposed against the Property or
any part thereof (the "OTHER CHARGES"), and all charges for utility services
provided to the Property as same become due and payable. Borrower shall deliver
to Lender, promptly upon Lender's request, evidence satisfactory to Lender that
the Taxes, Other Charges, and utility service charges have been so paid or are
not then delinquent. Borrower shall not suffer and shall promptly cause to be
paid and discharged any lien or charge whatsoever which may be or become a lien
or charge against the Property. Except to the extent sums sufficient to pay all
Taxes and Other Charges have been deposited with Lender in accordance with the
terms of this Security Instrument, Borrower shall furnish to Lender paid
receipts for the payment of the Taxes and Other Charges prior to the date the
same shall become delinquent.

         (b)      After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Taxes, provided that (i) no Event
of Default has occurred and is continuing under the Note, this Security
Instrument or any of the Loan Documents, (ii) Borrower is permitted to do so
under the provisions of any other mortgage, deed of trust or deed to secure Debt
affecting the Property (it not being implied by this clause that any such
encumbrance will be permitted), (iii) such proceeding shall suspend the
collection of the Taxes from Borrower and from the Property or Borrower shall
have paid all of the Taxes under protest, (iv) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower is subject and shall not constitute a default
thereunder, (v) neither the Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, cancelled or lost, (vi)
Borrower shall have set aside adequate reserves for the payment of the Taxes,
together with all interest and penalties thereon, unless Borrower has paid all
of the Taxes under protest, and (vii) Borrower shall have furnished the security
as may be required in the proceeding, or as may be reasonably requested by
Lender to insure the payment of any contested Taxes, together with all interest
and penalties thereon, taking into consideration the amount in the Escrow Fund
available for payment of Taxes.

         SECTION 3.5 TAX AND INSURANCE ESCROW FUND. At the option of the Lender,
Lender may require Borrower to establish an Escrow Fund sufficient to discharge
its obligations for the payment of Insurance Premiums and Taxes one month prior
to their due dates pursuant to Sections 3.3 and 3.4 hereof. Initial deposits of
Taxes and Insurance Premiums shall be made by Borrower to Lender in amounts
determined by Lender in its discretion on the date hereof to be held by Lender
in escrow. Additionally, Borrower shall pay to Lender on the first day of each
calendar month (a) one-twelfth of an amount which would be sufficient to pay the
Taxes payable, or estimated by Lender to be payable one month prior to the due
dates established by the appropriate taxing authority during the next ensuing
twelve (12) months and (b) one-twelfth of an amount which would be sufficient to
pay the Insurance Premiums due for the renewal of the coverage afforded by the
Policies one month prior to the expiration thereof (the initial deposits
together with the amounts in (a) and (b) above shall be called the "ESCROW
FUND"). Borrower agrees to notify Lender immediately of any changes to the
amounts, schedules and instructions for payment of any Taxes and Insurance
Premiums of which it has

                                       11

<PAGE>

obtained knowledge and authorizes Lender or its agent to obtain the bills for
Taxes and Other Charges directly from the appropriate tax authority. The Escrow
Fund and the payments of interest or principal or both, payable pursuant to the
Note shall be added together and shall be paid as an aggregate sum by Borrower
to Lender. Provided there are sufficient amounts in the Escrow Fund and no Event
of Default exists, Lender shall be obligated to pay the Taxes and Insurance
Premiums as they become due on their respective due dates on behalf of Borrower
by applying the Escrow Fund to the payments of such Taxes and Insurance Premiums
required to be made by Borrower pursuant to Sections 3.3 and 3.4 hereof. If the
amount of the Escrow Fund shall exceed the amounts due for Taxes and Insurance
Premiums pursuant to Sections 3.3 and 3.4 hereof Lender shall, in its
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Escrow Fund. In allocating such excess, Lender may
deal with the person shown on the records of Lender to be the owner of the
Property. If the Escrow Fund is not sufficient to pay the items set forth in (a)
and (b) above, Borrower shall promptly pay to Lender, upon demand, an amount
which Lender shall reasonably estimate as sufficient to make up the deficiency.
The Escrow Fund shall not constitute a trust fund and may be commingled with
other monies held by Lender. Unless otherwise required by Applicable Law, no
earnings or interest on the Escrow Fund shall be payable to Borrower.

         SECTION 3.6 CONDEMNATION. Borrower shall promptly give Lender notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Lender copies of any and all papers served in
connection with such proceedings. Lender may participate in any such proceedings
to the extent permitted by law. Borrower shall deliver to Lender all instruments
requested by it to permit such participation. Borrower shall, at its expense,
diligently prosecute any such proceedings, and shall consult with Lender, its
attorneys and experts, and cooperate with them in the carrying on or defense of
any such proceedings. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including, but not limited to any
transfer made in lieu of or in anticipation of the exercise of such taking),
Borrower shall continue to pay the Debt at the time and in the manner provided
for its payment in the Note and in this Security Instrument and the Debt shall
not be reduced until any award or payment therefor shall have been actually
received and applied by Lender, after the deduction of expenses of collection,
to the reduction or discharge of the Debt. Lender shall not be limited to the
interest paid on the award by the condemning authority but shall be entitled to
receive out of the award interest at the rate or rates provided herein or in the
Note. Borrower shall cause any award or payment payable to Borrower in any
condemnation to be paid directly to Lender. Lender shall apply any such award or
payment (after deducting any expenses of collection) to the reduction or
discharge of the Debt (whether or not then due and payable). No Prepayment
Consideration (as defined in the Note) shall be payable solely in connection
with such application; provided, however, that notwithstanding the foregoing, if
an Event of Default is existing as of the date of the condemnation, or an event
has occurred as of the date of the condemnation that with notice and/or the
passage of time, or both, would constitute an Event of Default hereunder, then
any condemnation awards or proceeds applied to the Debt pursuant to this Section
shall be subject to the Prepayment Consideration (as defined in the Note)
computed in accordance with the terms of the Note. If the Property or any
portion thereof is taken by the power of eminent domain, Borrower shall promptly
commence and diligently prosecute the restoration of the Property in accordance
with Section 4.4 of this Security Instrument. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the award or
payment, Lender shall

                                       12

<PAGE>

have the right, whether or not a deficiency judgment on the Note shall have been
sought, recovered or denied, to receive the award or payment, or a portion
thereof sufficient to fully satisfy the Debt.

         SECTION 3.7 LEASES AND RENTS. Borrower shall comply at all times with
that certain Assignment of Leases and Rents of even date herewith executed by
Borrower in favor of Lender, which is incorporated herein by this reference as
though fully set forth herein.

         SECTION 3.8 MAINTENANCE OF PROPERTY. Borrower shall cause the Property
to be maintained in a good and safe condition and repair. The Improvements and
the Personal Property shall not be removed, demolished or materially altered
(unless such Personal Property is replaced with personal property of equal or
better quality) without the consent of Lender. Borrower shall promptly repair,
replace or rebuild any part of the Property which may be destroyed by any
casualty, or become damaged, worn or dilapidated or which may be affected by any
proceeding of the character referred to in Section 3.6 hereof and shall complete
and pay for any structure at any time in the process of construction or repair
on the Land. Borrower shall not initiate, join in, acquiesce in, or consent to
any change in any private restrictive covenant, zoning law or other public or
private restriction, limiting or defining the uses which may be made of the
Property or any part thereof. If under applicable zoning provisions the use of
all or any portion of the Property is or shall become a nonconforming use,
Borrower will not cause or permit the nonconforming use or Improvement to be
discontinued or abandoned without the express written consent of Lender.

         SECTION 3.9 WASTE. Borrower shall not commit or suffer any waste of the
Property ("waste" meaning the diminution in the Property's value resulting from
Borrower's negligent or willful failure to manage, maintain, repair and
otherwise operate the Property in a commercially reasonable manner) or make any
change in the use of the Property which will in any way materially increase the
risk of fire or other hazard arising out of the operation of the Property, or
take any action that might invalidate or give cause for cancellation of any
Policy, or do or permit to be done thereon anything that may in any way impair
the value of the Property or the security of this Security Instrument. Borrower
shall not, without the prior written consent of Lender, permit any drilling or
exploration for or extraction, removal, or production of any minerals from the
surface or the subsurface of the Land, regardless of the depth thereof or the
method of mining or extraction thereof.

         SECTION 3.10 COMPLIANCE WITH LAWS.

         (a)      Borrower shall promptly comply with all existing and future
federal, state and local laws, orders, ordinances, governmental rules and
regulations or court orders affecting the Property and the use thereof
("APPLICABLE LAW").

         (b)      Borrower shall from time to time, upon Lender's request,
provide Lender with evidence reasonably satisfactory to Lender that the Property
complies with all Applicable Laws or is exempt from compliance with Applicable
Laws.

         (c)      Notwithstanding any provisions set forth herein or in any
document regarding Lender's approval of alterations of the Property, Borrower
shall not alter the Property in any

                                       13

<PAGE>

manner that would materially increase Borrower's responsibilities for compliance
with Applicable Laws without the prior written approval of Lender. Lender's
approval of the plans, specifications, or working drawings for alterations of
the Property shall create no responsibility or liability on behalf of Lender for
their completeness, design, sufficiency or their compliance with Applicable
Laws. The foregoing shall apply to tenant improvements constructed by Borrower
or by any of its tenants. Lender may condition any such approval upon receipt of
a certificate of compliance with Applicable Laws from an independent architect,
engineer, or other person acceptable to Lender.

         (d)      Borrower shall give prompt notice to Lender of the receipt by
Borrower of any notice related to a violation of any Applicable Laws and of the
commencement of any proceedings or investigations which relate to compliance
with Applicable Laws.

         (e)      After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the Applicable Laws affecting
the Property, provided that (i) no Event of Default has occurred and is
continuing under the Note, this Security Instrument or any of the Loan
Documents; (ii) Borrower is permitted to do so under the provisions of any other
mortgage, deed of trust or deed to secure Debt affecting the Property; (iii)
such proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and shall not
constitute a default thereunder; (iv) neither the Property nor any part thereof
or interest therein nor any of the tenants or occupants thereof shall be
affected in any material adverse way as a result of such proceeding; and (v)
Borrower shall have furnished to Lender all other items reasonably requested by
Lender.

         SECTION 3.11 BOOKS AND RECORDS.

         (a)      Borrower shall keep adequate books and records of account in
accordance with methods acceptable to Lender in its sole discretion and
consistently applied and shall furnish to Lender:

                  (i)      Within ninety (90) days after the close of each
fiscal year of Borrower, Borrower shall deliver or cause to be delivered to
Lender: (A) an annual rent roll, certified by the Borrower's chief financial
officer (or other person acceptable to Lender); (B) an annual operating
statement of the Property, certified by the Borrower's chief financial officer
(or other person acceptable to Lender); and (C) an annual balance sheet of
Borrower certified by the Borrower's chief financial officer (or other person
acceptable to Lender).

                  (ii)     For each Guarantor, Borrower shall deliver, or cause
to be delivered to Lender within ninety (90) days after the close of the fiscal
year of such Guarantor (A) an annual balance sheet and profit and loss statement
of such Guarantor certified by such Guarantor's chief financial officer (or
other person acceptable to Lender) if such Guarantor is an entity, or (B) a
signed personal financial statement (on a financial statement form satisfactory
to Lender in its sole discretion) if such Guarantor is an individual.

                  (iii)    For the first 12 months after the date of this
Security Instrument, Borrower shall deliver, or cause to be delivered, all of
the following with respect to the previous calendar

                                       14

<PAGE>

month within 21 days after the close of each calendar month, all to be certified
by the Borrower's chief financial officer (or other person acceptable to
Lender): (A) monthly rent roll(s); (B) monthly operating statement(s) of the
Property; and (C) year to date operating statement(s) of the Property.

                  (iv)     Beginning 13 months after the date of this Security
Instrument, Borrower shall deliver, or cause to be delivered, all of the
following with respect to the previous fiscal quarter within 30 days after the
close of each fiscal quarter, all to be certified by the Borrower's chief
financial officer (or other person acceptable to Lender): (A) a quarterly rent
roll; (B) a quarterly operating statement of the Property; and (C) a year to
date operating statement of the Property.

         (b)      Annually, no later than each February 1 during the term of the
Note, Borrower shall deliver to Lender, for Lender's approval in its sole
discretion, a report (the "LEASING REPORT") setting forth the minimum economic
terms that Borrower proposes for use in connection with the standard lease form
for leases of portions of the Property during the twelve month period beginning
upon such anniversary date. The terms set forth in the Leasing Report shall
reflect the prevailing market conditions for like properties in the locality of
the Property.

         (c)      Immediately upon Borrower's receipt of such information, but
in no event less frequently than annually, Borrower shall deliver to Lender, in
form satisfactory to Lender, information regarding the sales and/or receipts of
each tenant of the Property who is required to report such information to
Borrower pursuant to such tenant's Lease or otherwise.

         (d)      Upon reasonable request from Lender, Borrower and its
Affiliates shall furnish to Lender:

                  (i)      a property management report for the Property,
showing the number of inquiries made and/or rental applications received from
tenants or prospective tenants and deposits received from tenants and any other
information requested by Lender, in reasonable detail and certified by Borrower
under penalty of perjury to be true and complete, but no more frequently than
quarterly; and

                  (ii)     an accounting of all security deposits held in
connection with any Lease of any part of the Property, including the name and
identification number of the accounts in which such security deposits are held,
the name and address of the financial institutions in which such security
deposits are held and the name of the person to contact at such financial
institution, along with any authority or release necessary for Lender to obtain
information regarding such accounts directly from such financial institutions.

         (e)      Borrower and its Affiliates shall furnish Lender with such
other additional financial or management information as may, from time to time,
be reasonably required by Lender in form and substance satisfactory to Lender.

         SECTION 3.12 PAYMENT FOR LABOR AND MATERIALS. Borrower shall promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Property and never permit
to exist beyond the due date thereof in respect of the Property or any part
thereof any lien or security interest, even though

                                       15

<PAGE>

inferior to the liens and the security interests hereof, and in any event never
permit to be created or exist in respect of the Property or any part thereof any
other or additional lien or security interest other than the liens or security
interests hereof, except for the Permitted Exceptions.

         SECTION 3.13 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe
and perform each and every term to be observed or performed by Borrower pursuant
to the terms of any agreement or recorded instrument affecting or pertaining to
the Property.

         SECTION 3.14 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower shall not
change Borrower's name, identity (including its trade name or names) or, if not
an individual, Borrower's corporate, partnership or other structure, or its
state of organization, without notifying the Lender of such change in writing at
least thirty (30) days prior to the effective date of such change and, in the
case of a change in Borrower's structure, without first obtaining the prior
written consent of the Lender.

         SECTION 3.15 EXISTENCE. Borrower shall continuously maintain (a) its
existence and shall not dissolve or permit its dissolution, (b) its rights to do
business in the state where the Property is located and (c) its franchises and
trade names.

                          ARTICLE 4 - SPECIAL COVENANTS

         Borrower covenants and agrees that:

         SECTION 4.1 PROPERTY USE. The Property shall be used only for the use
approved by Lender in connection with the making of the Loan and for no other
use without the prior written consent of Lender.

         SECTION 4.2 ERISA.

         (a)      Borrower shall not engage in any transaction that would cause
any obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Security Instrument and any
other Loan Document) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").

         (b)      Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the term of
the Security Instrument, as requested by Lender in its sole discretion, that (i)
Borrower is not an "employee benefit plan" as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(3) of ERISA; (ii) Borrower is not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (iii) one or more of the following circumstances is true:

                  (i)      Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);

                                       16

<PAGE>

                  (ii)     Less than 25 percent of each outstanding class of
equity interests in Borrower are held by "benefit plan investors" within the
meaning of 29 C.F.R. Section 2510.3-101(f)(2); or

                  (iii)    Borrower qualifies as an "operating company" or a
"real estate operating company" within the meaning of 29 C.F.R. Section
2510.3-101(c) or (e) or an investment company registered under The Investment
Company Act of 1940.

         SECTION 4.3 SINGLE PURPOSE ENTITY.

         (a)      Limited Purpose. Borrower by execution of this Security
Instrument represents, warrants and covenants that it (i) has been and shall
continue to be organized solely for the limited purpose of acquiring, owning,
improving, leasing, managing, operating, holding for investment and selling or
otherwise disposing of the Property and doing only those things necessary in
connection therewith, (ii) shall not engage in any other business, (iii) shall
have no other purpose, (iv) shall not own or acquire any real property other
than the real estate included in the Property or any personal (tangible or
intangible) property other than personal property included in the Property or in
furtherance of the purposes of Borrower as stated herein, and (v) shall not
incur, create, or assume any indebtedness or liabilities, secured or unsecured,
direct or contingent, other than (A) the Loan and (B) unsecured indebtedness
that represents trade payables or accrued expenses occurring in the normal
course of business of owning and operating the Property that is not evidenced by
a promissory note and is due and payable within thirty (30) days after the date
incurred and which in no event exceeds two percent (2%) of the original
principal amount of the Note.

         (b)      Prohibited Actions. Borrower by execution of this Security
Instrument represents, warrants, and covenants that it has not taken and shall
not take any of the following actions:

                  (i)      without the written consent of each Independent
Manager (as hereinafter defined), take any "BANKRUPTCY ACTION", which is defined
to include without limitation:

                           (A)      taking any action that might cause Borrower
to become insolvent;

                           (B)      commencing any case, proceeding or other
action on behalf of Borrower or under any existing or future law of any
jurisdiction relating to bankruptcy, insolvency, reorganization or relief of
debtors;

                           (C)      instituting proceedings to have Borrower
adjudicated as bankrupt or insolvent;

                           (D)      consenting to the institution of bankruptcy
or insolvency proceedings against Borrower;

                           (E)      filing a petition or consent to a petition
seeking reorganization, arrangement, adjustment, winding-up, dissolution,
composition, liquidation or other relief on behalf of Borrower of its debts
under any federal or state law relating to bankruptcy;

                                       17

<PAGE>

                           (F)      seeking or consenting to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator, custodian or any
similar official for Borrower or a substantial portion of its properties;

                           (G)      admitting in writing Borrower's inability to
pay debts generally as they become due;

                           (H)      making any assignment for the benefit of
Borrower's creditors; or

                           (I)      taking any action in furtherance of the
foregoing;

                  (ii)     dissolve, liquidate or terminate in whole or in part,
or consolidate with or merge into any person or entity, or sell, transfer or
otherwise dispose of or encumber all or substantially all of its assets or
change its legal structure;

                  (iii)    amend or recommend the amendment of any formation or
organizational document of Borrower unless (i) Lender consents to such amendment
and (ii) following any securitization of the Loan, the applicable rating
agencies confirm in writing that such change will not result in the
qualification, withdrawal or downgrade of any securities ratings;

                  (iv)     fail to preserve its existence as an entity duly
organized, validly existing and in good standing (if required) under the
applicable laws of the jurisdiction of its organization or formation;

                  (v)      terminate or fail to comply with the provisions of
its organizational documents; or

                  (vi)     engage in any business or activity that is not
consistent with the purposes of Borrower as set forth in Section 4.3(a) above.

         (c)      Separateness Covenants. Except as otherwise expressly required
by any Loan Document, Borrower by execution of this Security Instrument
represents, warrants, and covenants that it shall at all times:

                  (i)      not commingle assets with those of any other entity,

                  (ii)     hold its assets in its own name;

                  (iii)    conduct its own business in its own name;

                  (iv)     maintain its bank accounts, books, records and
financial statements in accordance with generally accepted accounting
principles, keep such bank accounts, books, records and financial statements
separate from those of any other person or entity, not permit the listing of its
assets on the financial statement of any other person or entity;

                  (v)      maintain its books, records, resolutions and
agreements as official records;

                  (vi)     pay its own liabilities out of its own funds;

                                       18

<PAGE>

                  (vii)    maintain adequate capital in light of its
contemplated business operations;

                  (viii)   observe all organizational formalities;

                  (ix)     maintain an arm's-length relationship with Affiliates
and enter into transactions with Affiliates only on a commercially reasonable
basis;

                  (x)      pay the salaries of only its own employees and
maintain a sufficient number of employees in light of contemplated business
operations;

                  (xi)     not guarantee or become obligated for the debts of
any other entity or hold out its credit as being available to satisfy the
obligations of others;

                  (xii)    not acquire the obligations or securities of its
Affiliates or owners, including partners, members or shareholders;

                  (xiii)   not make loans or advances to any other person or
entity;

                  (xiv)    allocate fairly and reasonably any overhead for
shared office space;

                  (xv)     use separate stationery, invoices and checks;

                  (xvi)    file its own tax returns (unless prohibited by
applicable laws from doing so);

                  (xvii)   not pledge its assets for the benefit of any other
person or entity;

                  (xviii)  hold itself out as a separate entity, and not fail to
correct any known misunderstanding regarding its separate identity;

                  (xix)    not identify itself as a division of any other person
or entity;

                  (xx)     not maintain its assets in such a manner that will be
costly or difficult to segregate, ascertain or identify its individual assets
from those or any other person or entity; and

                  (xxi)    observe the single purpose entity and separateness
covenants and requirements set forth herein.

         (d)      Organizational Documents. The organizational documents of
Borrower shall provide that:

                  (i)      the business and affairs of Borrower shall be managed
by or under the sole member of Borrower, provided that at all times there shall
be at least two duly appointed independent managers (each, an "INDEPENDENT
MANAGER") of Borrower reasonably satisfactory to Lender who shall not have been
at the time of such individual's initial appointment, and shall not have been at
anytime during the proceeding five years, either:

                                       19

<PAGE>

                           (A)      a shareholder (or other equity owner),
officer, director (other than an Independent Manager of Borrower), partner,
attorney, counsel, member or employee of Borrower, or any of its respective
shareholders, partners, members, subsidiaries or Affiliates;

                           (B)      a customer of, a supplier to, or any other
person or entity that derives any of its purchases or revenues from activities
with Borrower or any of their respective shareholders, partners, members,
subsidiaries or Affiliates;

                           (C)      a person or entity who controls or is under
common control with any such shareholder, partner, officer, director, member,
employee, supplier, customer or Affiliates; or

                           (D)      a member of the immediate family of any such
shareholder, director, officer, partner, member, employee, supplier, customer or
Affiliates;

                  (ii)     Borrower shall not take any action which, under the
terms of its articles of organization, operating agreement or other
organizational documents, requires the written consent of each Independent
Manager without obtaining the written consent of each Independent Manager.

         (e)      The organizational documents of Borrower shall provide that,
as long as any Debt remains outstanding, upon the occurrence of any event that
causes the sole member of Borrower to cease to be a member of Borrower (other
than (i) upon an assignment by such member of all of its limited liability
company interest in Borrower and the admission of the transferee, if permitted
pursuant to the organizational documents of Borrower and the Loan Documents, or
(ii) the resignation of such member and the admission of an additional member of
Borrower, if permitted pursuant to the organizational documents of Borrower and
the Loan Documents), the person acting as one of the Independent Managers of
Borrower shall, without any action of any person or entity and simultaneously
with the sole member of Borrower ceasing to be a member of Borrower,
automatically be admitted as the sole member of Borrower (the "SPECIAL MEMBER")
and shall preserve and continue the existence of Borrower without dissolution.
The organizational documents of Borrower shall further provide that for so long
as any Debt is outstanding, no Special Member may resign or transfer its rights
as Special Member unless (i) a successor Special Member has been admitted to
Borrower as a Special Member, and (ii) such successor Special Member has also
accepted its appointment as an Independent Manager.

         (f)      Definitions. As used in this Section, the following terms
shall have the meanings set forth herein:

                  (i)      "AFFILIATE" means a person or entity that directly or
indirectly (through one or more intermediaries) controls, is controlled by, or
is under common control of or with, the person or entity specified; and

                  (ii)     "CONTROL" means (A) whether directly or indirectly,
ownership or control of the power to vote ten percent (10%) or more of the
outstanding equity interests of any such entity, (B) the control in any manner
of the election of more than one director or trustee (or

                                       20

<PAGE>

persons exercising similar functions) of such entity, or (C) the possession of
the power to direct or cause the direction of the management and/or policies of
such entity, whether through the ownership of voting securities, by contract, or
otherwise.

         (g)      Injunctive Relief. Borrower by execution of this Security
Instrument acknowledge and agree with Lender that Lender would be irreparably
damaged if any of the covenants of this Section 4.3 are breached or not
performed in accordance with their specific terms and that monetary damages
would not provide an adequate remedy in such event. Accordingly, it is agreed
that, in addition to any other remedy to which Lender may be entitled, at law or
in equity, Lender shall be entitled to injunctive relief to prevent or remedy
breaches of the provisions of this Section 4.3 and specifically to enforce the
terms and provisions of this Section 4.3 in any action instituted in any court
of the United States or any state thereof having subject matter jurisdiction
thereof.

         SECTION 4.4 RESTORATION AFTER CASUALTY. In the event of a casualty, the
following provisions shall apply in connection with the Restoration of the
Property:

         (a)      If (i) the Net Proceeds do not exceed $30,000.00 ("CASUALTY
AMOUNT"), (ii) the costs of completing the Restoration as reasonably estimated
by Borrower shall be less than or equal to the Casualty Amount, (iii) no Event
of Default shall have occurred and be continuing under the Note, this Security
Instrument or any other Loan Document, (iv) the Property and the use thereof
after the Restoration will be in compliance with, and permitted under, all
applicable zoning laws, ordinances, rules and regulations (including, without
limitation, all applicable Environmental Laws, and (v) such fire or other
casualty does not materially impair access to the Property or the Improvements,
then the Net Proceeds will be disbursed directly to Borrower and Borrower shall
commence and diligently prosecute to completion, the Restoration of the Property
to as nearly as possible the condition it was in immediately prior to such fire
or other casualty or to such taking. Except upon the occurrence and continuance
of an Event of Default, Borrower shall settle any insurance claims with respect
to the Net Proceeds that in the aggregate are less than or equal to the Casualty
Amount. Lender shall have the right to participate in and reasonably approve any
settlement for insurance claims with respect to the Net Proceeds that in the
aggregate are equal to or greater than the Casualty Amount. If an Event of
Default shall have occurred and be continuing, Borrower hereby irrevocably
empowers Lender, in the name of Borrower as its true and lawful
attorney-in-fact, to file and prosecute such claim and to collect and to make
receipt for any such payment. If the Net Proceeds are received by Borrower, such
Net Proceeds shall, until the completion of the related work, be held in trust
for Lender and shall be segregated from other funds of Borrower to be used to
pay for the cost of the Restoration in accordance with the terms hereof.

         (b)      If the Net Proceeds are greater than the Casualty Amount, such
Net Proceeds shall, subject to the provisions of the Leases that are superior to
the lien of this Security Instrument or with respect to which subordination,
non-disturbance agreements binding upon Lender have been entered into concerning
the deposits of Net Proceeds, be forthwith paid to Lender to be held by Lender
in a segregated account to be made available to Borrower for the Restoration in
accordance with the provisions of this Subsection 4.4(b). Borrower shall
commence and diligently prosecute to completion, the Restoration. The term "NET
PROCEEDS" for purposes of this Section 4.4 shall mean the net amount of all
insurance proceeds under the

                                       21

<PAGE>

Policies carried pursuant to Subsections 3.3(a)(i) (Property Insurance), (ii)
(Business Interruption), (iii) (Boiler and Machinery), (iv) (Builder's Risk),
(v) (Ordinance/Law Coverage), and (vi) (Personal Property) of this Security
Instrument as a result of such damage or destruction, after deduction of
Borrower's reasonable costs and expenses (including, but not limited to
reasonable counsel fees), if any, in collecting the same.

                  (i)      The Net Proceeds shall be made available to Borrower
for payment of, or reimbursement of Borrower's reasonable and customary expenses
in connection with, the Restoration, subject to the following conditions:

                           (A)      no Event of Default shall have occurred and
be continuing under the Note, this Security Instrument, or any other Loan
Document;

                           (B)      Lender shall, within a reasonable period of
time prior to request for initial disbursement, be furnished with an estimate of
the cost of the Restoration accompanied by an independent architect's
certification as to such costs and appropriate plans and specifications for the
Restoration, which plans and specifications shall be subject to Lender's
approval;

                           (C)      the Net Proceeds, together with any cash or
cash equivalent deposited by Borrower with Lender, are sufficient to cover the
cost of the Restoration as such costs are certified by the independent
architect;

                           (D)      less than fifty percent (50%) of the total
floor area of the Improvements has been damaged or destroyed or rendered
unusable as a result of such fire or other casualty;

                           (E)      Lender shall be satisfied that any operating
deficits, including all scheduled payments of principal and interest under the
Note that will be incurred with respect to the Property as a result of the
occurrence of any such fire or other casualty or taking, whichever the case may
be, will be covered out of (1) the Net Proceeds, or (2) other funds of Borrower;

                           (F)      Lender shall be satisfied that, upon the
completion of the Restoration and related lease-up, if applicable, the net cash
flow of the Property will be restored to a level sufficient to cover all
carrying costs and operating expenses of the Property, including, without
limitation, debt service on the Note at a coverage ratio (after deducting
replacement reserve requirements and reserves for tenant improvements and
leasing commissions from net operating income) equal to or greater than the
coverage ratio calculated and assumed by Lender in connection with the
origination of the Loan or, if lower, the coverage ratio that existed as of the
date immediately preceding such casualty;

                           (G)      the Restoration can reasonably be completed
on or before the earliest to occur of (1) six (6) months prior to the Maturity
Date (as defined in the Note), (2) the earliest date required for such
completion under the terms of any Leases and (3) such time as may be required
under applicable zoning law, ordinance, rule or regulation in order to repair
and restore the Property to as nearly as possible the condition it was in
immediately prior to such casualty;

                                       22

<PAGE>

                           (H)      the Property and the use thereof after the
Restoration will be in compliance with, and permitted under, all applicable
zoning laws, ordinances, rules and regulations (including, without limitation,
all applicable Environmental Laws); and

                           (I)      such casualty does not materially impair
post-Restoration access to the Land or the Improvements.

                  (ii)     The Net Proceeds shall be held by Lender, and until
disbursed in accordance with the provisions of this Subsection 4.4(b), shall
constitute additional security for the obligations. The Net Proceeds other than
the Net Proceeds paid under the Policy described in Subsection 3.3(a)(ii)
(Business Interruption) shall be disbursed by Lender to, or as directed by,
Borrower from time to time during the course of the Restoration, upon receipt of
evidence satisfactory to Lender that (A) all materials installed and work and
labor performed (except to the extent that they are to be paid for out of the
requested disbursement) in connection with the Restoration have been paid for in
full, and (B) there exist no notices of pendency, stop orders, mechanic's or
materialman's liens or notices of intention to file same, or any other liens or
encumbrances of any nature whatsoever on the Property arising out of the
Restoration that have not either been fully bonded and discharged of record or
in the alternative fully insured to the satisfaction of Lender by the title
company insuring the lien of this Security Instrument.

                  (iii)    Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the contractors, subcontractors
and materialmen engaged in the Restoration, as well as the contracts under which
they have been engaged, shall be subject to prior review and acceptance by
Lender and an independent consulting engineer, architect, or other expert
selected by Lender (the "CASUALTY CONSULTANT"), such acceptance not to be
unreasonably withheld or delayed. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration including,
without limitation, reasonable counsel fees and disbursements and the Casualty
Consultant's fees, shall be paid by Borrower.

                  (iv)     In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, minus the Casualty
Retainage. The term "CASUALTY RETAINAGE" as used in this Subsection 4.4(b) shall
mean an amount equal to 10% of the costs actually incurred for work in place as
part of the Restoration, as certified by the Casualty Consultant. The Casualty
Retainage shall in no event, and notwithstanding anything to the contrary set
forth above in this Subsection 4.4(b), be less than the amount actually held
back by Borrower from contractors, subcontractors and materialmen engaged in the
Restoration. The Casualty Retainage shall not be released until the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Subsection 4.4(b) and that all approvals
necessary for the re-occupancy and use of the Property have been obtained from
all appropriate governmental and quasi-governmental authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage,
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or

                                       23

<PAGE>

materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor's, subcontractor's or
materialman's contract, and the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company insuring the lien of this Security Instrument. If
required by Lender, the release of any such portion of the Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.

                  (v)      Lender shall not be obligated to make disbursements
of the Net Proceeds more frequently than once every calendar month.

                  (vi)     If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the opinion of Lender, be sufficient to pay in
full the balance of the costs that are estimated by the Casualty Consultant to
be incurred in connection with the completion of the Restoration, Borrower shall
deposit the deficiency (the "NET PROCEEDS DEFICIENCY") with Lender before any
further disbursement of the Net Proceeds shall be made. The Net Proceeds
Deficiency deposited with Lender shall be held by Lender and shall be disbursed
for costs actually incurred in connection with the Restoration on the same
conditions applicable to the disbursement of the Net Proceeds, and until so
disbursed pursuant to this Subsection 4.4(b) shall constitute additional
security for the obligations.

                  (vii)    The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited with Lender
after the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Subsection 4.4(b), and the
receipt by Lender of evidence satisfactory to Lender that all costs incurred in
connection with the Restoration have been paid in full, shall be remitted by
Lender to Borrower, provided no Event of Default shall have occurred and shall
be continuing under the Note, this Security Instrument or any other Loan
Document.

         (c)      All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Subsection 4.4(b)(vii) shall be retained and applied by Lender toward the
payment of the Debt whether or not then due and payable in such order, priority
and proportions as Lender in its discretion shall deem proper or, at the sole
discretion of Lender, the same shall be paid, either in whole or in part, to
Borrower. If Lender shall receive and retain Net Proceeds, the lien of this
Security Instrument shall be reduced only by the amount received and retained by
Lender and actually applied by Lender in reduction of the Debt.

                   ARTICLE 5 - REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Lender that:

         SECTION 5.1 WARRANTY OF TITLE. Borrower has good, marketable and
indefeasible title to the Property and has the right to mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer, and convey the same and that
Borrower possesses an unencumbered fee simple absolute estate in the Land and
the Improvements, and that it owns the Property free and

                                       24

<PAGE>

clear of all liens, encumbrances and charges whatsoever except for those
exceptions shown in the title insurance policy insuring the lien of this
Security Instrument (the "PERMITTED EXCEPTIONS"). Borrower shall forever
warrant, defend and preserve the title and the validity and priority of the lien
of this Security Instrument and shall forever warrant and defend the same to
Lender against the claims of all persons whomsoever.

         SECTION 5.2 AUTHORITY. Borrower (and the undersigned representative of
Borrower, if any) has full power, authority and legal right to execute this
Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the Property pursuant to the terms hereof and to
keep and observe all of the terms of this Security Instrument on Borrower's part
to be performed.

         SECTION 5.3 LEGAL STATUS AND AUTHORITY. Borrower (a) is duly organized,
validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now conducted and proposed to be
conducted. Borrower now has and shall continue to have the full right, power and
authority to operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to be performed by
Borrower under the Note, this Security Instrument and the Loan Documents.

         SECTION 5.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery and
performance of the Note, this Security Instrument and the Loan Documents and the
borrowing evidenced by the Note (i) are within the power and authority of
Borrower; (ii) have been authorized by all requisite organizational action;
(iii) have received all necessary approvals and consents, corporate,
governmental or otherwise; (iv) will not violate, conflict with, result in a
breach of or constitute (with notice or lapse of time, or both) a default under
any provision of law, any order or judgment of any court or governmental
authority, the articles of incorporation, by-laws, partnership or operating
agreement, or other governing instrument of Borrower, or any indenture,
agreement or other instrument to which Borrower is a party or by which it or any
of its assets or the Property is or may be bound or affected; (v) will not
result in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of its assets, except the lien and security interest created
hereby; and (vi) will not require any authorization or license from, or any
filing with, any governmental or other body (except for the recordation of this
instrument in appropriate land records in the State where the Property is
located and except for Uniform Commercial Code filings relating to the security
interest created hereby), and (b) the Note, this Security Instrument and the
Loan Documents constitute the legal, valid and binding obligations of Borrower.

         SECTION 5.5 LITIGATION. There is no action, suit or proceeding,
judicial, administrative or otherwise (including any condemnation or similar
proceeding), pending or, to the best of Borrower's knowledge, threatened or
contemplated against Borrower, any person guaranteeing the payment of the Debt
or any portion thereof or performance by Borrower of any terms of this Security
Instrument (a "GUARANTOR"), if any, any person liable under that certain
Environmental Indemnity Agreement of even date herewith or any other indemnity
agreement entered into in favor of Lender in connection with the Loan
("INDEMNITOR"), if any, or against or

                                       25

<PAGE>

affecting the Property that (a) has not been disclosed to Lender, and has a
material, adverse effect on the Property or Borrower's, any Guarantor's or any
Indemnitor's ability to perform its obligations under the Note, this Security
Instrument or the Loan Documents, or (b) is not adequately covered by insurance,
each as determined by Lender in its sole and absolute discretion.

         SECTION 5.6         STATUS OF PROPERTY.

         (a)      No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any successor
thereto as an area having special flood hazards pursuant to the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, or the
National Flood Insurance Reform Act of 1994, as each may be amended, or any
successor law, or, if any portion of the Improvements is now or at any time in
the future located within any such area, Borrower has obtained and will maintain
the insurance prescribed in Section 3.3 hereof.

         (b)      Borrower has obtained all necessary certificates, licenses and
other approvals, governmental and otherwise, necessary for the operation of the
Property and the conduct of its business and all required zoning, building code,
land use, environmental and other similar permits or approvals, all of which are
in full force and effect as of the date hereof and not subject to revocation,
suspension, forfeiture or modification.

         (c)      The Property and the present and contemplated use and
occupancy thereof are in full compliance with all applicable zoning ordinances,
building codes, land use and Environmental Laws and other similar laws.

         (d)      The Property is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by public
utilities and the Property has accepted or is equipped to accept such utility
service.

         (e)      All public roads and streets necessary for service of and
access to the Property for the current or contemplated use thereof have been
completed, are serviceable and all-weather and are physically and legally open
for use by the public.

         (f)      The Property is served by public water and sewer systems.

         (g)      The Property is free from damage caused by fire or other
casualty.

         (h)      All costs and expenses of any and all labor, materials,
supplies and equipment used in the construction of the Improvements have been
paid in full.

         (i)      Borrower has paid in full for, and is the owner of, all
furnishings, fixtures and equipment (other than tenants' property) used in
connection with the operation of the Property, free and clear of any and all
security interests, liens or encumbrances, except the lien and security interest
created hereby.

         (j)      All liquid and solid waste disposal, septic and sewer systems
located on the Property are in a good and safe condition and repair and in
compliance with all Applicable Laws.

                                       26

<PAGE>

         (k) All security deposits relating to the Leases reflected on the
certified rent roll delivered to Lender have been collected by Borrower except
as noted on the certified rent roll.

         (l)      Borrower has received no notice of an actual or threatened
condemnation or eminent domain proceeding by any public or quasi-public
authority.

         (m)      All the Improvements lie within the boundaries of the
Property.

         SECTION 5.7 NO FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.

         SECTION 5.8 SEPARATE TAX LOT. The Property is assessed for real estate
tax purposes as one or more wholly independent tax lot or lots, separate from
any adjoining land or improvements not constituting a part of such lot or lots,
and no other land or improvements is assessed and taxed together with the
Property or any portion thereof.

         SECTION 5.9         ERISA COMPLIANCE.

         (a)      As of the date hereof and throughout the term of this Security
Instrument, (i) Borrower is not and will not be an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, and (ii)
the assets of Borrower do not and will not constitute "plan assets" of one or
more such plans for purposes of Title I of ERISA; and

         (b)      As of the date hereof and throughout the term of this Security
Instrument, (i) Borrower is not and will not be a "governmental plan" within the
meaning of Section 3(3) of ERISA, and (ii) transactions by or with Borrower are
not and will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental plans.

         SECTION 5.10 LEASES. Except as disclosed in the rent roll for the
Property delivered to and approved by Lender, (a) Borrower is the sole owner of
the entire lessor's interest in the Leases; (b) the Leases are valid and
enforceable; (c) the current terms of the Leases including all effective
alterations, modifications and amendments to the Leases are reflected in the
certified rent roll delivered to and approved by Lender; (d) none of the Rents
reserved in the Leases have been assigned or otherwise pledged or hypothecated
(except to Lender); (e) none of the Rents have been collected for more than one
(1) month in advance (except a security deposit shall not be deemed rent
collected in advance); (f) the premises demised under the Leases have been
completed and the tenants under the Leases have accepted the same and have taken
possession of the same on a rent-paying basis; (g) there exist no offsets or
defenses to the payment of any portion of the Rents; (h) Borrower has received
no notice from any tenant challenging the validity or enforceability of any
Lease; (i) there are no agreements with the tenants under the Leases other than
expressly set forth in each Lease; (j) the Leases are valid and enforceable
against Borrower and the tenants set forth therein; (k) no Lease contains an
option to purchase, right of first refusal to purchase, or any other similar
provision; (l) no person or entity has any possessory interest in, or right to
occupy, the Property except under and pursuant to a Lease; (m) each Lease (other
than a Residential Lease, as defined in the Assignment of Leases and Rents of
even date herewith) is subordinate to this Security

                                       27

<PAGE>

Instrument, either pursuant to its terms or a recorded subordination agreement;
(n) no Lease has the benefit of a non-disturbance agreement that would be
considered unacceptable to prudent institutional lenders; and (o) no brokerage
commissions or finders fees are due and payable regarding any Lease.

         SECTION 5.11 FINANCIAL CONDITION. Borrower is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state or
federal law with respect to Borrower has been initiated, and it has received
reasonably equivalent value for the granting of this Security Instrument.

         SECTION 5.12 BUSINESS PURPOSES.

         [Reserved.]

         SECTION 5.13 TAXES. Borrower, any Guarantor and any Indemnitor have
filed, or timely obtained extensions for the filing of, all federal, state,
county, municipal, and city income and other tax returns required to have been
filed by them and have paid all taxes and related liabilities which have become
due pursuant to such returns or pursuant to any assessments received by them.
Neither Borrower, any Guarantor nor any Indemnitor knows of any basis for any
additional assessment in respect of any such taxes and related liabilities for
prior years.

         SECTION 5.14 MAILING ADDRESS. Borrower's mailing address, as set forth
in the opening paragraph hereof or as changed in accordance with Article 16, is
true and correct.

         SECTION 5.15 NO CHANGE IN FACTS OR CIRCUMSTANCES. All information in
the application for the loan submitted to Lender (the "LOAN APPLICATION") and in
all financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan Application or in satisfaction of the
terms thereof, are accurate, complete and correct in all respects. There has
been no adverse change in any condition, fact, circumstance or event that would
make any such information inaccurate, incomplete or otherwise misleading.

         SECTION 5.16 DISCLOSURE. Borrower has disclosed to Lender all material
facts and has not failed to disclose any material fact that could cause any
representation or warranty made herein to be materially misleading.

         SECTION 5.17 THIRD PARTY REPRESENTATIONS. Each of the representations
and the warranties made by each Guarantor and Indemnitor herein or in any Loan
Document(s) is true and correct in all material respects.

         SECTION 5.18 ILLEGAL ACTIVITY. No portion of the Property has been or
will be purchased, improved, fixtured, equipped or furnished with proceeds of
any criminal or other illegal activity and to the best of Borrower's knowledge,
there are no illegal activities or activities relating to controlled substances
at the Property.

                    ARTICLE 6 - DEBTOR/CREDITOR RELATIONSHIP

         SECTION 6.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary

                                       28

<PAGE>

or other special relationship with Borrower, and no term or condition of any of
the Note, this Security Instrument or the Loan Documents shall be construed so
as to deem the relationship between Borrower and Lender to be other than that of
debtor and creditor.

                         ARTICLE 7 - FURTHER ASSURANCES

         SECTION 7.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, shall cause this Security Instrument and any of the Loan Documents
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect and perfect the
lien or security interest hereof upon, and the interest of Lender in, the
Property. Borrower shall pay all taxes, filing, registration or recording fees,
and all expenses incident to the preparation, execution, acknowledgment and/or
recording of the Note, this Security Instrument, the Loan Documents, any note or
mortgage supplemental hereto, any security instrument with respect to the
Property and any instrument of further assurance, and any modification or
amendment of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any
mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.

         SECTION 7.2 FURTHER ACTS, ETC. Borrower shall, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Lender the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security Instrument, or
for complying with all Applicable Laws. Borrower, on demand, shall execute and
deliver and hereby authorizes Lender to execute in the name of Borrower, or
without the signature of Borrower to the extent Lender may lawfully do so, one
or more financing statements, chattel mortgages or other instruments, to
evidence or perfect more effectively the security interest of Lender in the
Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting any and all rights
and remedies available to Lender pursuant to this Section 7.2 or Section 7.1.

         SECTION 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.

         (a)      If any law is enacted or adopted or amended after the date of
this Security Instrument which deducts the Debt from the value of the Property
for the purpose of taxation or which imposes a tax, either directly or
indirectly, on the Debt or Lender's interest in the Property, Borrower shall pay
the tax, with interest and penalties thereon, if any. If Lender is

                                       29

<PAGE>

advised by counsel chosen by it that the payment of tax by Borrower would be
unlawful or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then Lender shall have the option by written notice of not
less than ninety (90) days to declare the Debt immediately due and payable.

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

         (c)      If at any time the United States of America, any State thereof
or any subdivision of any such State or other governmental authorities shall
require revenue or other stamps to be affixed to the Note, this Security
Instrument, or any of the Loan Documents or impose any other tax or charge on
the same, Borrower shall pay for the same, with interest and penalties thereon,
if any.

         SECTION 7.4 ESTOPPEL CERTIFICATES.

         (a)      Within ten days after any request by Lender, Borrower shall
furnish Lender with a statement, duly acknowledged and certified in such form as
Lender may reasonably request, setting forth (i) the original principal amount
of the applicable Note, (ii) the then current unpaid principal balance of the
applicable Note, (iii) the then applicable rate of interest on the applicable
Note, (iv) the date the most recent installment of interest and/or principal
under the applicable Note was paid, (v) any offsets or defenses to the payment
of the Debt, if any, and (vi) that the Note, this Security Instrument and the
other Loan Documents are valid, legal and binding obligations of Borrower and
have not been modified or amended (or, if so, giving the particulars of such
modifications or amendments).

         (b)      Within ten days after any request by Lender, Borrower shall
furnish Lender with estoppel certificates from any tenants of the Property
(other than tenants under Residential Leases) in such form and containing such
information as Lender may reasonably require.

         SECTION 7.5 FLOOD INSURANCE. Within fifteen (15) days after Lender's
request, Borrower shall deliver evidence satisfactory to Lender that no portion
of the Improvements is situated in a federally designated "special flood hazard
area" or, if it is, that Borrower has obtained insurance meeting the
requirements of Section 3.3(a)(i).

         SECTION 7.6 SPLITTING OF SECURITY INSTRUMENT. This Security Instrument
and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, be split or divided into two or more
notes and two or more security instruments, each of which shall cover all or a
portion of the Property to be more particularly described therein. To that end,
Borrower, upon written request of Lender, shall execute, acknowledge and deliver
to Lender and/or its designee or designees substitute notes and security
instruments in such principal amounts, aggregating not more than the then unpaid
principal amount secured by this

                                       30

<PAGE>

Security Instrument, and containing terms, provisions and clauses no less
favorable to Borrower than those contained herein and in the Note, and such
other documents and instruments as may be required by Lender to effect the
splitting of the Note and this Security Instrument.

         SECTION 7.7 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of any Note
or any Loan Document that is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or Loan Document,
Borrower shall issue, in lieu thereof, a replacement Note or Loan Document,
dated the date of such lost, stolen, destroyed or mutilated Note or Loan
Document in the same principal amount thereof and otherwise of like tenor.

         SECTION 7.8 AMENDED FINANCING STATEMENTS. Borrower shall execute and
deliver to the Lender, prior to or contemporaneously with the effective date of
any such change, any financing statement or financing statement change required
by the Lender to establish or maintain the validity, perfection and priority of
the security interest granted herein. At the request of the Lender, Borrower
shall execute a certificate in form satisfactory to the Lender listing the trade
names under which Borrower intends to operate the Property, and representing and
warranting that Borrower does business under no other trade name with respect to
the Property.

             ARTICLE 8 - DUE ON SALE/ENCUMBRANCE/CHANGE IN BORROWER

         SECTION 8.1 NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT.
Borrower acknowledges that Lender has examined and relied on the
creditworthiness and experience of Borrower and Guarantor (if any) and
Indemnitor (if any) in agreeing to make the Loan secured hereby. Borrower agrees
that Borrower shall not, without the prior written consent of Lender, which may
be given or withheld in its sole and absolute discretion, do or permit any of
the following (hereinafter any of the following is sometimes referred to as a
"TRANSFER"): sell, convey, mortgage, grant, bargain, encumber, pledge, assign,
or otherwise transfer the Property or any part thereof or interest therein
(legal or equitable) or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred. A "Transfer" within the meaning of this Article 8 shall
be deemed to include (a) an installment sales agreement wherein Borrower agrees
to sell the Property or any part thereof for a price to be paid in installments;
(b) an agreement by Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rents; (c) if
Borrower, any Guarantor, any Indemnitor, or any general partner or managing
member (or if no managing member, any member) of Borrower, Guarantor or
Indemnitor is an entity (including a corporation, partnership, limited liability
company, or trust) rather than an individual, a transaction or series of
transactions involving (i) the creation or issuance of new legal or beneficial
ownership interests or (ii) the voluntary or involuntary sale, conveyance,
transfer or pledge, by operation of law or otherwise, of legal or beneficial
ownership interests in such entity or the legal or beneficial ownership
interests in any entity that directly or indirectly controls such Borrower,
Guarantor or Indemnitor pursuant to which transaction or series of transactions
any of such entity's legal or beneficial ownership interests shall become vested
in a party or parties who are not now owners of such entity's legal or
beneficial ownership interests as of the date of this

                                       31

<PAGE>

Security Instrument; (d) if Borrower, any Guarantor or Indemnitor or any general
partner or managing member (or if no managing member, any member) of Borrower,
any Guarantor or Indemnitor is a limited or general partnership or joint
venture, the change, removal or resignation of a general partner or the transfer
or pledge of the partnership interest of any general partner or any profits or
proceeds relating to such partnership interest, and (e) if Borrower, any
Guarantor, any Indemnitor or any general partner or member of Borrower, any
Guarantor or any Indemnitor is a limited liability company, the change, removal
or resignation of a managing member (or if no managing member, any member) or
the transfer of the membership interest of a managing member (or if no managing
member, any member) or any profits or proceeds relating to such membership
interest. Notwithstanding the foregoing, a transfer by devise or descent or by
operation of law upon the death of a member, general partner or stockholder of
Borrower, any Guarantor or Indemnitor or any member or general partner thereof
shall not be deemed to be a "Transfer" within the meaning of this Article 8. As
used herein, the term "ownership interest" includes stock, partnership
interests, membership or other interests in limited liability companies, and
beneficial interests or other interests in trusts.

         SECTION 8.2 CONDITIONS TO LENDER'S CONSENT. Unless expressly waived in
writing by Lender at the time of the Transfer or other express written waiver by
Lender, Lender's prior written consent shall be given only upon the satisfaction
of all of the following minimum conditions: (i) Lender has received Borrower's
written request for a Transfer and Lender shall have expressly approved such
request in writing subject to the satisfaction of all requirements hereunder;
(ii) no Event of Default has occurred and is continuing; (iii) the proposed new
owner/assignee (the "NEW BORROWER") meets all of the Lender's Underwriting
Standards; (iv) the Property meets all of the Lender's Underwriting Standards
related to its financial condition, cash flow, operating income, physical
condition, management and operation; (v) Borrower reimburses Lender for all
underwriting costs incurred by Lender in connection with such Transfer
(including without limitation, engineering and/or architect's fees,
environmental studies, title searches, credit checks, attorney fees), whether or
not any requested Transfer is approved or consummated; (vi) Borrower remits to
Lender an assumption fee in the amount of one percent (1%) of the outstanding
balance of the Debt as of the date of such Transfer; and (vii) the execution by
New Borrower of an assumption agreement and other documents required by Lender
in its sole and absolute discretion. "LENDER'S UNDERWRITING STANDARDS" shall
mean the actual commercial loan underwriting standards of KeyBank National
Association (or any successor entity that is then servicing the Loan) in effect
at the time of the proposed Transfer, or, if no such standards exist, such
standards which are then customary for a commercial lender in connection with a
mortgage loan of the size and type of the Borrower's loan from Lender secured
hereby.

         Lender shall not be required to demonstrate any actual impairment of
its security or any increased risk of default hereunder in order to declare the
Debt immediately due and payable upon a Transfer without Lender's consent.

         The provisions of this Article 8 shall apply to every Transfer
regardless of whether voluntary or not or whether or not Lender has consented to
any previous Transfer.

                                       32
<PAGE>

                             ARTICLE 9 - PREPAYMENT

         The Debt may be prepaid only in accordance with the terms of the Note.

                              ARTICLE 10 - DEFAULT

         SECTION 10.1 EVENTS OF DEFAULT. The occurrence of any one or more of
the following events shall constitute an "EVENT OF DEFAULT":

         (a)      Borrower fails to make full and punctual payment of the
Monthly Payment (as defined in the Note) or any other amount due on a monthly
basis under the Note, this Security Instrument, or any other Loan Document
within five (5) days after the date on which such payment is due;

         (b)      Borrower fails to make full payment of the Debt when due,
whether on the Maturity Date (as defined in the Note), upon acceleration or
prepayment, or otherwise;

         (c)      Borrower fails to make full and punctual payment of any Late
Charges (as defined in the Note), costs and expenses due hereunder, or any other
sum of money required to be paid to Lender hereunder or under the Note or any
other Loan Document (other than any payment described in subclauses (a), (b) or
(d) of this Article 10.1), which failure is not cured on or before the fifth
(5th) day after Lender's written notice to Borrower that such payment is
required; or

         (d)      Borrower fails to make the full and punctual payment of Taxes
or Other Charges as required hereby;

         (e)      Borrower fails to keep the Policies in full force and effect,
or fails to promptly deliver copies thereof to Lender upon request;

         (f)      if a Transfer occurs in violation of the provisions of Article
8, or Borrower violates or does not comply with the provisions of Article 12 or
13 of this Security Instrument;

         (g)      if any representation or warranty of Borrower or any Guarantor
or Indemnitor in any guaranty or in any certificate, report, financial statement
or other instrument or document furnished to Lender shall have been false or
misleading in any material respect when made;

         (h)      Borrower shall make an assignment for the benefit of creditors
or Borrower is not paying debts as and when the same become due;

         (i)      if (i) Borrower or any Guarantor or Indemnitor shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any Guarantor or Indemnitor shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against

                                       33
<PAGE>

Borrower or any Guarantor or Indemnitor any case, proceeding or other
action of a nature referred to in clause (i) above; or (iii) there shall be
commenced against the Borrower or any Guarantor or Indemnitor any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets; or (iv) the Borrower or any Guarantor or Indemnitor shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any Guarantor or Indemnitor shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due;

         (j)      Borrower shall be in default under any other deed of trust,
mortgage or security agreement covering any part of the Property whether it be
superior or junior in priority to this Security Instrument (it not being implied
by this clause that any such encumbrance will be permitted);

         (k)      the Property becomes subject to any mechanic's, materialman's
or other lien (other than a lien for local real estate taxes and assessments not
then due and payable), and such lien shall remain undischarged of record (by
payment, bonding or otherwise) for a period of thirty (30) calendar days;

         (l)      Borrower fails to promptly and diligently cure any material
violations of laws or ordinances affecting the Property;

         (m)      the occurrence of an Event of Default under any other Loan
Document and the expiration of any applicable grace or cure period thereunder;
or

         (n)      any breach or default hereunder by Borrower (including breach
of or default under any covenant herein), other than a default or breach set
forth in any of Sections 10.1(a) through (m), if such breach or default is not
cured within thirty (30) days after written notice from Lender to Borrower
(provided that Borrower shall not be entitled to a cure period hereunder if such
breach or default is not capable of being cured as determined by Lender in its
sole and absolute discretion), provided that if such breach or default cannot
reasonably be cured within such thirty (30) day period and Borrower 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 so long as it shall require Borrower in the
exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of one hundred twenty (120) days,
unless, only in the case of cures that require construction or remedial work,
such cure cannot with diligence be completed within such one hundred twenty
(120) day period, in which case such period shall be extended for an additional
one hundred twenty (120) days or such longer period as Lender shall determine in
its sole discretion.

         SECTION 10.2 LATE CHARGE. If any monthly installment of principal and
interest is not paid when due, Borrower shall pay any late payment charge
required by the Note.

         SECTION 10.3 DEFAULT INTEREST. Borrower shall pay, from the date of an
Event of Default through the earlier of the date upon which the Event of Default
is cured or the

                                       34
<PAGE>

date upon which the Debt is paid in full, interest on the unpaid principal
balance of the Note at the Default Rate (as defined in the Note).

                        ARTICLE 11 - RIGHTS AND REMEDIES

         SECTION 11.1 REMEDIES. Upon the occurrence of any Event of Default,
Borrower agrees that Lender may take such action, without notice or demand, as
it deems advisable to protect and enforce its rights against Borrower and in and
to the Property, including, but not limited to the following actions, each of
which may be pursued concurrently or otherwise, without notice or demand, at
such time and in such order as Lender may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Lender:

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

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

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

         (d)      sell for cash or upon credit the Property or any part thereof
and all estate, claim, demand, right, title and interest of Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entity or in parcels, at such time and place, upon such terms
and after such notice thereof as may be required or permitted by law;

         (e)      subject to the provisions of Article 15, institute an action,
suit or proceeding in equity for the specific performance of any covenant,
condition or agreement contained herein, in the Note or in the Loan Documents;

         (f)      subject to the provisions of Article 15, recover judgment on
the Note either before, during or after any proceedings for the enforcement of
this Security Instrument or the Loan Documents;

         (g)      apply for the appointment of a receiver, trustee, liquidator
or conservator of the Property on an ex parte basis (any required notice of such
appointment or any proceeding to appoint the same being hereby expressly waived)
and without regard for the adequacy of the security for the Debt and without
regard for the solvency of Borrower, any Guarantor, Indemnitor or of any person,
firm or other entity liable for the payment of the Debt;

         (h)      subject to any applicable law, the license granted to Borrower
under Section 1.2 shall automatically be revoked and Lender may enter into or
upon the Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, without liability for
trespass, damages or otherwise and exclude Borrower and its

                                       35
<PAGE>

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

         (i)      exercise any and all rights and remedies granted to a secured
party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing: (i) the right to take possession of
the Personal Property or any part thereof, and to take such other measures as
Lender may deem necessary for the care, protection and preservation of the
Personal Property, and (ii) request Borrower at its expense to assemble the
Personal Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other intended action
by Lender with respect to the Personal Property sent to Borrower in accordance
with the provisions hereof at least ten (10) days prior to such action, shall
constitute commercially reasonable notice to Borrower;

         (j)      apply any sums then deposited in the Escrow Fund and any other
sums held in escrow or otherwise by Lender in accordance with the terms of this
Security Instrument or any Loan Document to the payment of the following items
in any order in its sole and absolute discretion:

                  (i)      Taxes and Other Charges;

                  (ii)     Insurance Premiums;

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

                  (iv)     amortization of the unpaid principal balance of the
Note; and all other sums payable pursuant to the Note, this Security Instrument
and the Loan Documents, including, without limitation, advances made by Lender
pursuant to the terms of this Security Instrument;

                                       36
<PAGE>

         (k)      surrender the Policies maintained pursuant to Article 3
hereof, collect the unearned Insurance Premiums and apply such sums as a credit
on the Debt in such priority and proportion as Lender in its discretion shall
deem proper, and in connection therewith, Borrower hereby appoints Lender as
agent and attorney-in-fact (which is coupled with an interest and is therefore
irrevocable) for Borrower to collect such Insurance Premiums;

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

         (m)      pursue such other remedies as Lender may have under applicable
law.

         In the event of a sale, by foreclosure, power of sale, or otherwise, of
less than all of the Property, this Security Instrument shall continue as a lien
and security interest on the remaining portion of the Property unimpaired and
without loss of priority. Notwithstanding the provisions of this Section 11.1 to
the contrary, if any Event of Default as described in Subsection 10.1(i)(i) or
(ii) shall occur, the entire unpaid Debt shall be automatically due and payable,
without any further notice, demand or other action by Lender.

         SECTION 11.2 APPLICATION OF PROCEEDS. The purchase money, proceeds and
avails of any disposition of the Property, or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
Loan Documents, may be applied by Lender to the payment of the Debt in such
priority and proportions as Lender in its discretion shall deem proper.

         SECTION 11.3 RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event
of Default, Lender may, but without any obligation to do so and without notice
to or demand on Borrower and without releasing Borrower from any obligation
hereunder, cure the same in such manner and to such extent as Lender may deem
necessary to protect the security hereof. Lender is authorized to enter upon the
Property for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in the Property or to foreclose this Security
Instrument or collect the Debt, and the cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law), with interest as
provided in this Section 11.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred
by Lender in remedying such Event of Default or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate
(as defined in the Note), for the period after notice from Lender that such cost
or expense was incurred to the date of payment to Lender. All such costs and
expenses incurred by Lender together with interest thereon calculated at the
Default Rate (as defined in the Note) shall be deemed to constitute a portion of
the Debt and be secured by this Security Instrument and the Loan Documents and
shall be immediately due and payable upon demand by Lender therefor.

         SECTION 11.4 ACTIONS AND PROCEEDINGS. After the occurrence and during
the continuance of an Event of Default, Lender has the right to appear in and
defend any action or proceeding brought with respect to the Property and to
bring any action or proceeding, in the name and on behalf of Borrower, which
Lender, in its discretion, decides should be brought to protect its interest in
the Property.

                                       37
<PAGE>

         SECTION 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have
the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.

         SECTION 11.6 EXAMINATION OF BOOKS AND RECORDS. Lender, its agents,
accountants and attorneys shall have the right upon prior written notice to
examine the records, books, management and other papers of Borrower and its
affiliates or of any Guarantor or Indemnitor which reflect upon their financial
condition, at the Property or at any office regularly maintained by Borrower,
its affiliates or any Guarantor or Indemnitor where the books and records are
located. Lender and its agents shall have the right upon notice to make copies
and extracts from the foregoing records and other papers. In addition, Lender,
its agents, accountants and attorneys shall have the right to examine and audit
the books and records of Borrower and its affiliates or of any Guarantor or
Indemnitor pertaining to the income, expenses and operation of the Property
during reasonable business hours at any office of Borrower, its affiliates or
any Guarantor or Indemnitor where the books and records are located.

         SECTION 11.7 OTHER RIGHTS, ETC.

         (a)      The failure of Lender to insist upon strict performance of any
term hereof shall not be deemed to be a waiver of any term of this Security
Instrument. Borrower shall not be relieved of Borrower's obligations hereunder
by reason of (i) the failure of Lender to comply with any request of Borrower,
any Guarantor or any Indemnitor to take any action to foreclose this Security
Instrument or otherwise enforce any of the provisions hereof or of the Note or
the Loan Documents, (ii) the release, regardless of consideration, of the whole
or any part of the Property, or of any person liable for the Debt or any portion
thereof, or (iii) any agreement or stipulation by Lender extending the time of
payment or otherwise modifying or supplementing the terms of the Note, this
Security Instrument or the Loan Documents.

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

         (c)      Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its discretion,
may elect. Lender may take action to recover the Debt, or any portion thereof,
or to enforce any covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Security Instrument. The rights of Lender under
this Security Instrument shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of Lender shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.

                                       38
<PAGE>

         SECTION 11.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property.

         SECTION 11.9 VIOLATION OF LAWS. If the Property is not in compliance
with Applicable Laws, Lender may impose additional requirements upon Borrower in
connection herewith including, without limitation, monetary reserves or
financial equivalents.

         SECTION 11.10 RIGHT OF ENTRY. Lender and its agents shall have the
right upon prior written notice to enter and inspect the Property at all
reasonable times upon notice to Borrower.

         SECTION 11.11 RIGHTS PERTAINING TO SALES. The following provisions
shall, to the extent permitted by law, apply to any sale or sales of all or any
portion of the Property under or by virtue of this Security Instrument, whether
under any power of sale herein granted or by virtue of judicial proceedings or
of a judgment or decree of foreclosure and sale:

         (a)      The public officer or other person conducting such sale
(herein called the "Sale Officer") may conduct any number of sales from time to
time. The power of sale shall not be exhausted by any one or more of such sales
as to any part of the Property that has not been sold or by any sale that is not
completed or is defective until the Debt has been paid in full.

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

         (c)      Lender is hereby appointed the true and lawful
attorney-in-fact of Borrower, which appointment is irrevocable and shall be
deemed to be coupled with an interest, in Borrower's name and stead, to make all
necessary conveyances, assignments, transfers and deliveries of the Property and
rights so sold, and for that purpose Lender may execute all necessary
instruments to accomplish the same, and may substitute one or more persons with
like power, and Borrower hereby ratifies and confirms all that said attorney or
such substitute or substitutes shall lawfully do by virtue thereof.
Nevertheless, Borrower, if requested by Lender, shall ratify and confirm any
such sale or sales by executing and delivering to Lender or such purchaser or
purchasers, as applicable, all such instruments as may be advisable, in Lender's
judgment, for the purposes designated in such request.

         (d)      Any and all statements of fact or other recitals made in any
of the instruments referred to in Subsection 11.11(c) given by Lender concerning
nonpayment of the Debt, occurrence of any Event of Default, any declaration by
Lender that all or any of the Debt is due and payable, any request to sell, any
representation that notice of time, place and terms of sale

                                       39
<PAGE>

and property or rights to be sold was duly given, or that any other act or thing
was duly done by Lender, shall be taken as prima facie evidence of the truth of
the facts so stated and recited.

         (e)      The receipt by Sale Officer of the purchase money paid at any
such sale, or the receipt of any other person authorized to give the same, shall
be sufficient discharge therefor to any purchaser of any property or rights sold
as aforesaid, and no purchaser, or its representatives, grantees or assigns,
after paying such purchase price and receiving such receipt, shall be bound to
see to the application of such purchase price or any part thereof upon or for
any trust or purpose of this Security Instrument or, in any manner whatsoever,
be answerable for any loss, misapplication or non-application of any such
purchase money, or part thereof, or be bound to inquire as to the authorization,
necessity, expediency or regularity of any such sale.

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

         (g)      Upon any such sale or sales, Lender may bid for and acquire
the Property and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting against the Debt the amount of the bid made
therefor, after deducting therefrom the expenses of the sale, the cost of any
enforcement proceeding hereunder and any other sums that Lender is authorized to
charge to Borrower under the terms of the Note, this Security Instrument, or any
other Loan Document to the extent necessary to satisfy such bid.

         (h)      If Borrower, or any person claiming by, through or under
Borrower, shall transfer or refuse or fail to surrender possession of the
Property after any sale thereof, then Borrower or such person shall be deemed a
tenant at sufferance of the purchaser at such sale, subject to eviction by means
of unlawful detainer proceedings or other appropriate proceedings, and to any
other right or remedy available hereunder or under applicable law.

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

         (j)      In the event of any sale referred to in this Subsection 11.11,
the entire Debt, if not previously due and payable, immediately thereupon shall,
notwithstanding anything to the contrary in the Note, this Security Instrument
or any other Loan Document, become due and payable.

         (k)      This instrument shall be effective as a mortgage. If a sale
hereunder shall be commenced by Sale Officer, Lender may, at any time before the
sale of the Property, direct the Sale Officer to abandon the sale, and may
institute suit for the collection of the Debt or part thereof and for the
foreclosure of this Security Instrument. If Lender shall institute suit for the
collection of the Debt or part thereof, and for the foreclosure of this Security
Instrument, Lender may at any time before the entry of final judgment in said
suit dismiss the same (or part thereof) and direct the Sale Officer to sell the
Property in accordance with the provisions of this Security

                                       40
<PAGE>

Instrument. Lender may pursue its rights and remedies against any guarantor or
other party liable for any of the obligations in such a suit for foreclosure or
by separate suit, whether or not the Sale Officer is also pursuing a sale under
the terms hereof.

                       ARTICLE 12 - ENVIRONMENTAL HAZARDS

         SECTION 12.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Borrower
represents and warrants, that, to the best of Borrower's knowledge, after due
inquiry and investigation: (a) there are no Hazardous Substances or underground
storage tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws and with permits issued pursuant thereto, if
any, and (ii) fully disclosed to Lender in writing pursuant to the written
reports resulting from the environmental assessments of the Property delivered
to Lender (the "ENVIRONMENTAL REPORT"); (b) there are no past or present
Releases of Hazardous Substances in violation of any Environmental Law or which
would require Remediation by a Governmental Authority in, on, under or from the
Property except as described in the Environmental Report; (c) there is no past
or present non-compliance with Environmental Laws, or with permits issued
pursuant thereto, in connection with the Property except as described in the
Environmental Report; (d) Borrower does not know of, and has not received, any
written or oral notice or other communication from any person or entity
(including, but not limited to a governmental entity) relating to Hazardous
Substances or Remediation thereof, of possible liability of any person or entity
pursuant to any Environmental Law, other environmental conditions in connection
with the Property, or any actual administrative or judicial proceedings in
connection with any of the foregoing; and (e) Borrower has truthfully and fully
provided to Lender, in writing, any and all information relating to
environmental conditions in, on, under or from the Property that is known to
Borrower and that is contained in Borrower's files and records, including, but
not limited to any reports relating to Hazardous Substances in, on, under or
from the Property and/or to the environmental condition of the Property.
"ENVIRONMENTAL LAW" means any present, and for the purposes of Sections 12.2,
12.3 and 13.4 only, future, federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law, relating to protection
of human health or the environment, relating to Hazardous Substances, relating
to liability for or costs of Remediation or prevention of Releases of Hazardous
Substances or relating to liability for or costs of other actual or threatened
danger to human health or the environment. "Environmental Law" includes, but is
not limited to, the following statutes, as amended, any successor thereto, and
any regulations promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Emergency Planning and Community Right-to-Know Act; the Hazardous Substances
Transportation Act; the Resource Conservation and Recovery Act (including, but
not limited to Subtitle I relating to underground storage tanks); the Solid
Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide
and Rodenticide Act; the Endangered Species Act; the National Environmental
Policy Act; and the River and Harbors Appropriation Act. "Environmental Law"
also includes, but is not limited to, any present, and for the purposes of
Sections 12.2, 12.3 and 13.4 only, future, federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
conditioning transfer of property upon a negative declaration or other approval
of a governmental authority of the environmental condition of the property;

                                       41
<PAGE>

requiring notification or disclosure of Releases of Hazardous Substances or
other environmental condition of the Property to any governmental authority or
other person or entity, whether or not in connection with transfer of title to
or interest in property. "HAZARDOUS SUBSTANCES" include but are not limited to
any and all substances (whether solid, liquid or gas) (i) defined, listed, or
otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present, or for the purposes of Sections 12.2, 12.3
and 13.4 only, future, Environmental Laws or (ii) that may have a negative
impact on human health or the environment, including, but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives. "RELEASE" of any Hazardous Substance includes, but is not limited to
any release, deposit, discharge, emission, leaking, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances. "REMEDIATION" includes, but is not
limited to any response, remedial removal, or corrective action, any activity to
cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous
Substance, any actions to prevent, cure or mitigate any Release of any Hazardous
Substance, any action to comply with any Environmental Laws or with any permits
issued pursuant thereto, any inspection, investigation, study, monitoring,
assessment, audit, sampling and testing, laboratory or other analysis, or
evaluation relating to any Hazardous Substances or to anything referred to in
this Article 12.

         SECTION 12.2 ENVIRONMENTAL COVENANTS. Borrower covenants and agrees
that so long as the Borrower owns, manages, is in possession of, or otherwise
controls the operation of the Property: (a) all uses and operations on or of the
Property, whether by Borrower or any other person or entity, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto; (b)
there shall be no Releases of Hazardous Substances in, on, under or from the
Property; (c) there shall be no Hazardous Substances in, on, or under the
Property, except those that are in compliance with all Environmental Laws and
with permits issued pursuant thereto, if and to the extent required; (d)
Borrower shall keep the Property free and clear of all liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of Borrower or any other person or entity (the "ENVIRONMENTAL
LIENS"); (e) Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Section 12.3 below,
including, but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (f) Borrower shall, at its sole
cost and expense, perform any environmental site assessment or other
investigation of environmental conditions in connection with the Property,
pursuant to any reasonable written request of Lender after Lender has reason to
believe this Section 12.2 has been violated (including, but not limited to
sampling, testing and analysis of soil, water, air, building materials and other
materials and substances whether solid, liquid or gas, and the preparation of
any Operations and Maintenance Plan ("O&M PLAN") required by Lender), and share
with Lender the reports and other results thereof, and Lender and other
Indemnified Parties shall be entitled to rely on such reports and other results
thereof; (g) Borrower shall, at its sole cost and expense, comply with all
reasonable written requests of Lender to (i) reasonably effectuate Remediation
of any condition (including, but not limited to a Release of a Hazardous
Substance or the correction of any conditions identified in any O&M Plan) in,
on, under or from the Property, (ii) comply with any Environmental Law, (iii)
comply with any directive from any governmental authority, and (iv) take any
other reasonable action necessary or appropriate for protection of human health
or the environment; (h) Borrower shall not do or allow any tenant or other user
of the Property to do

                                       42
<PAGE>

any act that materially increases the dangers to human health or the
environment, poses an unreasonable risk of harm to any person or entity (whether
on or off the Property), impairs or may impair the value of the Property, is
contrary to any requirement of any insurer, constitutes a public or private
nuisance, constitutes waste, or violates any covenant, condition, agreement or
easement applicable to the Property; and (i) Borrower shall immediately notify
Lender in writing promptly after it has become aware of (A) any presence or
Releases or threatened Releases of Hazardous Substances in, on, under, from or
migrating towards the Property which is required to be reported to a
governmental authority under any Environmental Law, (B) any actual Environmental
Lien affecting the Property, (C) any required Remediation of environmental
conditions relating to the Property, and (D) any written or oral notice or other
communication of which Borrower becomes aware from any source whatsoever
(including, but not limited to a governmental entity) relating in any way to
Hazardous Substances or Remediation thereof, possible liability of any person or
entity pursuant to any Environmental Law, other environmental conditions in
connection with the Property, or any actual or threatened administrative or
judicial proceedings in connection with anything referred to in this Article 12.

         SECTION 12.3 LENDER'S RIGHTS. Lender, its environmental consultant, and
any other person or entity designated by Lender, including, but not limited to
any receiver and any representative of a governmental entity, shall have the
right, but not the obligation, at intervals of not less than one year, or more
frequently if the Lender reasonably believes that a Hazardous Substance or other
environmental condition violates or threatens to violate any Environmental Law,
after notice to Borrower, to enter upon the Property at all reasonable times to
assess any and all aspects of the environmental condition of the Property and
its use, including, but not limited to conducting any environmental assessment
or audit of the Property or portions thereof to confirm Borrower's compliance
with the provisions of this Article 12 and performance of any Remediation
required under any O&M Plan, and Borrower shall cooperate in all reasonable ways
with Lender in connection with any such audit. Such audit shall be performed in
a manner so as to minimize interference with the conduct of business at the
Property. If such audit discloses that a violation of or a liability under any
Environmental Law exists or if such audit was required or prescribed by law,
regulation or governmental or quasi-governmental authority, Borrower shall pay
all costs and expenses incurred in connection with such audit; otherwise, the
costs and expenses of such audit shall, notwithstanding anything to the contrary
set forth in this Section, be paid by Lender.

                          ARTICLE 13 - INDEMNIFICATION

         SECTION 13.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, or punitive damages, of whatever kind or nature (including, but not
limited to attorneys' fees and other costs) (the "LOSSES") imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following (but excluding Losses arising out of Lender's gross negligence or
willful misconduct): (a) ownership of this Security Instrument, the Property or
any interest therein or receipt of any Rents; (b) any amendment to, or
restructuring of, the Debt, and the Note, this Security

                                       43
<PAGE>

Instrument, or any other Loan Document; (c) any and all lawful action that may
be taken by Lender in connection with the enforcement of the provisions of this
Security Instrument or the Note or any other Loan Document, whether or not suit
is filed in connection with same, or in connection with Borrower, any Guarantor
or Indemnitor and/or any member, partner, joint venturer or shareholder thereof
becoming a party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (e) any use, nonuse or condition in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (f) any failure on
the part of Borrower to perform or be in compliance with any of the terms of
this Security Instrument; (g) performance of any labor or services or the
furnishing of any materials or other property in respect of the Property or any
part thereof; (h) the failure of any person to file timely with the Internal
Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds
from Real Estate, Broker and Barter Exchange Transactions, which may be required
in connection with the Security Instrument, or to supply a copy thereof in a
timely fashion to the recipient of the proceeds of the transaction in connection
with which this Security Instrument is made; (i) any failure of the Property to
be in compliance with any Applicable Laws; (j) the enforcement by any
Indemnified Party of the provisions of this Article 13; (k) any and all claims
and demands whatsoever which may be asserted against Lender by reason of any
alleged obligations or undertakings on its part to perform or discharge any of
the terms, covenants, or agreements contained in any Lease; (l) the payment of
any commission, charge or brokerage fee to anyone which may be payable in
connection with the funding of the loan evidenced by the Note and secured by
this Security Instrument; or (m) any misrepresentation made by Borrower in this
Security Instrument or other Loan Document.

         Any amounts payable to Lender by reason of the application of this
Article 13 shall become immediately due and payable and shall bear interest at
the Default Rate (as defined in the Note) from the date loss or damage is
sustained by Lender until paid, and be secured by this Security Instrument and
the other Loan Documents. The obligations and liabilities of Borrower under this
Article 13 shall survive any termination, satisfaction, or assignment of this
Security Instrument and the exercise by Lender of any of its rights or remedies
hereunder including the acquisition of the Property by foreclosure or a
conveyance in lieu of foreclosure.

         As used in this Security Instrument, the term "INDEMNIFIED PARTIES"
means Lender and any person or entity who is or will have been involved in the
origination of this loan, any person or entity who is or will have been involved
in the servicing of this loan, any person or entity in whose name the
encumbrance created by this Security Instrument is or will have been recorded,
persons and entities who may hold or acquire or will have held a full or partial
interest in this loan (including, but not limited to Investors or prospective
Investors in the Securities, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in this loan for
the benefit of third parties) as well as the respective directors, officers,
shareholders, members, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, but not limited to any
other person or entity who holds or acquires or will have held a participation
or other full or partial interest in this loan or the Property, whether during
the term of this loan or as a part of or following a foreclosure of this loan
and including, but not limited to

                                       44
<PAGE>

any successors by merger, consolidation or acquisition of all or a substantial
portion of Lender's assets and business).

         SECTION 13.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Security Instrument, the Note or any of the other Loan Documents.

         SECTION 13.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, attorneys' fees and costs incurred in the investigation, defense,
and settlement of Losses incurred in correcting any prohibited transaction or in
the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender's sole
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Section 4.2 or 5.9.

         SECTION 13.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses and costs of Remediation
(whether or not performed voluntarily or required under any O&M Plan),
engineers' fees, environmental consultants' fees, and costs of investigation
(including, but not limited to sampling, testing and analysis of soil, water,
air, building materials and other materials and substances whether solid, liquid
or gas) imposed upon or incurred by or asserted against any Indemnified Parties,
and arising out of or in any way relating to any one or more of the following ,
unless caused by the gross negligence or willful misconduct of any Indemnified
Party: (a) any presence of any Hazardous Substances in, on, above or under the
Property; (b) any past, present or threatened release of Hazardous Substances
in, on, above, under or from the Property; (c) any activity by Borrower, any
person or entity affiliated with Borrower or tenant or other users of the
Property in connection with any actual, proposed or threatened use, treatment,
storage, holding, existence, disposition or other Release, generation,
production, manufacturing, processing, refining, control, management, abatement,
removal, handling, transfer or transportation to or from the Property of any
Hazardous Substances at any time located in, under, on or above the Property;
(d) any activity by Borrower, any person or entity affiliated with Borrower or
tenant or other users of the Property in connection with any actual or proposed
Remediation of any Hazardous Substances at any time located in, under, on or
above the Property, whether or not such Remediation is voluntary or required
under any O&M Plan or pursuant to court or administrative order, including, but
not limited to any removal, remedial or corrective action; (e) any past, present
or threatened violations of any Environmental Laws (or permits issued pursuant
to any Environmental Law) in connection with the Property or operations thereon,
including, but not limited to any failure by Borrower, any person or entity
affiliated with Borrower or tenant or other users of the Property to comply with
any order of any governmental authority in connection with Environmental Laws;
(f) the imposition, recording or filing of any Environmental Lien encumbering
the Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 12 and
this Section 13.4; (h) any past, present or threatened injury to, destruction of
or loss of natural resources in any way connected with the

                                       45
<PAGE>

Property, including, but not limited to costs to investigate and assess such
injury, destruction or loss; (i) any acts of Borrower or other users of the
Property in arranging for disposal or treatment, or arranging with a transporter
for transport for disposal or treatment, of Hazardous Substances owned or
possessed by such Borrower or other users, at any facility or incineration
vessel owned or operated by another person or entity and containing such or
similar Hazardous Substance; (j) any acts of Borrower or other users of the
Property, in accepting any Hazardous Substances for transport to disposal or
treatment facilities, incineration vessels or sites selected by Borrower or such
other users, from which there is a Release, or a threatened Release of any
Hazardous Substance which causes the incurrence of costs for Remediation; (k)
any personal injury, wrongful death, or property damage caused by Hazardous
Substances arising under any statutory or common law or tort law theory,
including, but not limited to damages assessed for the maintenance of a private
or public nuisance or for the conducting of an abnormally dangerous activity on
or near the Property; and (l) any intentional misrepresentation in any
representation or warranty or material breach or failure to perform any
covenants or other obligations pursuant to Article 12.

         SECTION 13.5 DUTY TO DEFEND, ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall control the resolution of any claim or
proceeding. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.

                              ARTICLE 14 - WAIVERS

         SECTION 14.1 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against it by Lender arising out of or in any
way connected with this Security Instrument, the Note, any of the other Loan
Documents, or the Debt.

         SECTION 14.2 MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to
the extent permitted by law, the benefit of all homestead, appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of or in connection with any
sale hereunder of the Property or any part thereof or any interest therein.
Further, Borrower hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, and on behalf of each and every person acquiring any
interest in or title to the Property subsequent to the date of this Security
Instrument and on behalf of all persons to the extent permitted by Applicable
Law.

         SECTION 14.3 WAIVER OF NOTICE. To the extent permitted by Applicable
Law, Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with

                                       46
<PAGE>

respect to matters for which this Security Instrument specifically and expressly
provides for the giving of notice by Lender to Borrower and except with respect
to matters for which Lender is required by Applicable Law to give notice, and
Borrower hereby expressly waives the right to receive any notice from Lender
with respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Lender to
Borrower.

         SECTION 14.4 WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby
expressly waives and releases to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to payment of the Debt or
performance of its other obligations under this Security Instrument.

         SECTION 14.5 SURVIVAL. Except as hereinafter specifically set forth
below, the representations and warranties, covenants, and other obligations
arising under Article 12 shall in no way be impaired by: any satisfaction or
other termination of this Security Instrument, any assignment or other transfer
of all or any portion of this Security Instrument or Lender's interest in the
Property (but, in such case, shall benefit both Indemnified Parties and any
assignee or transferee), any exercise of Lender's rights and remedies pursuant
hereto including, but not limited to, foreclosure or acceptance of a deed in
lieu of foreclosure, any exercise of any rights and remedies pursuant to the
Note or any other Loan Document, any transfer of all or any portion of the
Property (whether by Borrower or by Lender following foreclosure or acceptance
of a deed in lieu of foreclosure or at any other time), any amendment to this
Security Instrument, the Note or any other Loan Documents, and any act or
omission that might otherwise be construed as a release or discharge of Borrower
from the obligations pursuant hereto.

         SECTION 14.6 WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR ANY OTHER
LOAN DOCUMENT OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.

                            ARTICLE 15 - EXCULPATION

         To the extent of any conflict between the provisions of this Security
Instrument and Section 21 of the Note, the provisions of Section 21 of the Note
shall control.

                              ARTICLE 16 - NOTICES

         SECTION 16.1 NOTICES. Any notice required or permitted to be given
hereunder must be in writing and given (a) by depositing same in the United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested; (b) by delivering the
same in person to such party; (c) by transmitting a facsimile copy to the
correct facsimile phone number of the intended recipient (with a second copy
sent by registered or certified regular mail); or (d) by depositing the same
into the custody of a nationally recognized overnight delivery service addressed
to the party to be notified. In the event of

                                       47
<PAGE>

mailing, notices shall be deemed effective three (3) days after posting; in the
event of overnight delivery, notices shall be deemed effective on the next
Business Day following deposit with the delivery service; in the event of
personal service or facsimile transmissions, notices shall be deemed effective
when delivered. For purposes of notice, the addresses of the parties shall be as
set forth in the Preamble to this Security Instrument. From time to time either
party may designate another address than the address set forth for all purposes
of this Security Instrument by giving the other party no less than ten (10) days
advance notice of such change of address in accordance with the notice
provisions hereof.

         For purposes of this Subsection, "BUSINESS DAY" shall mean a day on
which commercial banks are not authorized or required by law to close in the
State in which the Land is located.

                           ARTICLE 17 - APPLICABLE LAW

         SECTION 17.1 CHOICE OF LAW/JURISDICTION AND VENUE. This Security
Instrument shall be governed, construed, applied and enforced in accordance with
the laws of the state where the Land is located without regard to the conflicts
of law provisions thereof ("GOVERNING STATE"). Borrower hereby consents to
personal jurisdiction in the Governing State. JURISDICTION AND VENUE OF ANY
ACTION BROUGHT TO ENFORCE THIS SECURITY INSTRUMENT OR ANY OTHER LOAN DOCUMENT OR
ANY ACTION RELATING TO THE LOAN OR THE RELATIONSHIPS CREATED BY OR UNDER THE
LOAN DOCUMENTS ("ACTION") SHALL, AT THE ELECTION OF LENDER, BE IN (AND IF ANY
ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE ELECTION
OF LENDER BE TRANSFERRED TO) A STATE OR FEDERAL COURT OF APPROPRIATE
JURISDICTION LOCATED IN THE GOVERNING STATE. BORROWER HEREBY CONSENTS AND
SUBMITS TO THE PERSONAL JURISDICTION OF THE STATE COURTS OF THE GOVERNING STATE
AND OF FEDERAL COURTS LOCATED IN THE GOVERNING STATE IN CONNECTION WITH ANY
ACTION AND HEREBY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY OTHER
STATE TO OBJECT TO JURISDICTION WITHIN SUCH GOVERNING STATE FOR PURPOSES OF ANY
ACTION. Borrower hereby waives and agrees not to assert, as a defense to any
Action or a motion to transfer venue of any Action, (i) any claim that it is not
subject to such jurisdiction, (ii) any claim that any Action may not be brought
against it or is not maintainable in those courts or that this Security
Instrument may not be enforced in or by those courts, or that it is exempt or
immune from execution, (iii) that the Action is brought in an inconvenient
forum, or (iv) that the venue for the Action is in any way improper.

         SECTION 17.2 USURY LAWS. This Security Instrument and the Note are
subject to the express condition that at no time shall Borrower be obligated or
required to pay interest on the Debt at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by applicable law to
contract or agree to pay. If by the terms of this Security Instrument or the
Note, Borrower is at any time required or obligated to pay interest on the Debt
at a rate in excess of such maximum rate, the rate of interest under the
Security Instrument and the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate

                                       48
<PAGE>

shall be applied and shall be deemed to have been payments in reduction of the
principal balance of the Note. All sums paid or agreed to be paid to Lender for
the use, forbearance, or detention of the Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.

         SECTION 17.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any Applicable Law.

         SECTION 17.4 INAPPLICABLE PROVISION. If any term of this Security
Instrument or any application thereof shall be invalid or unenforceable, the
remainder of this Security Instrument and any other application of the term, at
the option of Lender, shall not be affected thereby.

                          ARTICLE 18 - SECONDARY MARKET

         SECTION 18.1 DISSEMINATION OF INFORMATION. If Lender determines at any
time to sell, transfer or assign the Note, this Security Instrument, or any
other Loan Document, or all servicing rights with respect thereto, or to grant
participations therein (the "PARTICIPATIONS") or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "SECURITIES"), Lender may
forward to each purchaser, transferee, assignee, servicer, participant,
investor, or their respective successors in such Participations and/or
Securities (collectively, the "INVESTOR") or any rating agency rating such
Securities and each prospective Investor, all documents and information which
Lender now has or may hereafter acquire relating to the Debt and to Borrower,
any Guarantor, any Indemnitors and the Property, which shall have been furnished
by Borrower, any Guarantor or any Indemnitors, as Lender determines necessary or
desirable.

         SECTION 18.2 CONVERSION TO REGISTERED FORM. At the request of Lender,
Borrower shall appoint, as its agent, a registrar and transfer agent (the
"REGISTRAR") which shall maintain, subject to such reasonable regulations as it
shall provide, such books and records as are necessary for the registration and
transfer of the Note in a manner that shall cause the Note to be considered to
be in registered form for purposes of Section 163(f) of the Internal Revenue
Code of 1986. The option to convert the Note into registered form once exercised
may not be revoked. Borrower's choice of Registrar and any agreement setting out
the rights and obligation of the Registrar shall be subject to the reasonable
approval of Lender. Borrower may revoke the appointment of any particular person
as Registrar, effective upon the effectiveness of the appointment of a
replacement Registrar. The costs and fees of the Registrar shall be borne by
Borrower and the Registrar shall not be entitled to any fee from Lender or any
other lender in respect of transfers of the Note and Security Instrument (other
than Taxes and governmental charges and fees).

                                       49
<PAGE>

                               ARTICLE 19 - COSTS

         SECTION 19.1 PERFORMANCE AT BORROWER'S EXPENSE. Borrower acknowledges
and confirms that Lender shall impose certain administrative processing and/or
commitment fees in connection with (a) the extension, renewal, modification,
amendment and termination of the Loan, (b) the release or substitution of
collateral therefor, (c) obtaining certain consents, waivers and approvals with
respect to the Property, or (d) the review of any Lease or proposed Lease or the
preparation or review of any subordination and non-disturbance agreement (the
occurrence of any of the above shall be called an "EVENT" when used in this
Subsection 19.1). Borrower further acknowledges and confirms that it shall be
responsible for the payment of all costs of reappraisal of the Property or any
part thereof, whether required by law, regulation, Lender or any governmental or
quasi-governmental authority. Borrower hereby acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased
or decreased from time to time), and any additional fees of a similar type or
nature which may be imposed by Lender from time to time, upon the occurrence of
any Event or otherwise. Wherever it is provided for herein that Borrower pay any
costs and expenses, such costs and expenses shall include, but not be limited
to, all legal fees and disbursements of Lender, whether of retained firms, the
reimbursement for the expenses of in-house staff or otherwise.

         SECTION 19.2 ATTORNEY'S FEES FOR ENFORCEMENT AND DEFENSE. (a) Borrower
shall pay all reasonable legal fees incurred by Lender in connection with (i)
the preparation of the Note, this Security Instrument and any other Loan
Document; and (ii) the items set forth in Section 19.1 above, and (b) Borrower
shall pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys' fees, incurred or paid by Lender in protecting Lender or
its interest in the Property (including attorney's fees and litigation expenses
related to or arising out of any lawsuit or proceeding brought by or against
Lender in any court or other forum, including actions or proceedings brought by
or on behalf of Borrower's bankruptcy estate or any guarantor or indemnitor) or
in connection with the collection of any amounts payable hereunder or in
enforcing Lender's rights under the Loan Documents with respect to the Property,
whether or not any legal proceeding is commenced hereunder or thereunder and
whether or not any default or Event of Default shall have occurred and is
continuing, together with interest thereon at the Default Rate (as defined in
the Note) from the date paid or incurred by Lender until such expenses are paid
by Borrower.

        ARTICLE 20 - CERTAIN DEFINITIONS, HEADINGS, RULE OF CONSTRUCTION

         SECTION 20.1 GENERAL DEFINITIONS. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Security Instrument may be used interchangeably in singular or plural
form and the word "Borrower" shall mean "each Borrower and any subsequent owner
or owners of the Property or any part thereof or any interest therein," the word
"Lender" shall mean "Lender and any subsequent holder of the Note," the word
"Note" shall mean "the Note and any other evidence of indebtedness secured by
this Security Instrument," the word "person" shall include an individual,
corporation, limited liability company, partnership, trust, unincorporated
association, government, governmental authority, and any other entity, the word
"Property" shall include any portion of the Property and any interest therein,
and the phrases "attorneys' fees" and "counsel

                                       50
<PAGE>

fees" shall include any and all attorneys', paralegal and law clerk fees and
disbursements, including, but not limited to fees and disbursements at the
pre-trial, trial and appellate levels incurred or paid by Lender (a) in
protecting its interest in the Property, the Leases and the Rents, (b) relating
to or arising out of any lawsuit or proceeding brought by or against Lender in
any court or other forum (including actions or proceedings brought by or on
behalf of Borrower's bankruptcy estate or any guarantor or indemnitor, or (c) in
enforcing its rights under this Security Instrument.

         SECTION 20.2 HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.

         SECTION 20.3 RULES OF CONSTRUCTION.

         The following rules of construction shall be applicable for all
purposes of this Security Instrument and all documents or instruments
supplemental hereto, unless the context otherwise requires:

         (a)      The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."

         (b)      No inference in favor of or against any party shall be drawn
from the fact that such party has drafted any portion hereof or any other Loan
Document.

         (c)      The cover page (if any) of, all recitals set forth in, and all
Exhibits to, this Security Instrument are hereby incorporated herein.

         (d)      Wherever Lender's judgment, consent, or approval is required
under this Security Instrument or any other Loan Document for any matter or
thing or Lender shall have an option, election, or right of determination
thereunder including any right to determine that something is satisfactory or
not ("DECISION POWER"), such Decision Power shall be exercised in the sole and
absolute discretion of Lender unless otherwise expressly stated to be reasonably
exercised. Such Decision Power and each other power granted to Lender upon this
Security Instrument or any other Loan Document may be exercised by lender or by
any authorized agent of Lender (including any servicer and/or attorney-in-fact),
and Borrower hereby expressly agrees to recognize the exercise of such Decision
Power by such authorized agent.

                           ARTICLE 21 - MISCELLANEOUS

         SECTION 21.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, including but not limited to the provisions of this Section,
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought, and the parties hereby: (a) expressly agree that it
shall not be reasonable for any of them to rely on any alleged, non-written
amendment to this Security Instrument; (b) irrevocably waive any and all right
to enforce any alleged, non-written amendment to this Security Instrument; and
(c) expressly agree that it shall be beyond the scope

                                       51
<PAGE>

of authority (apparent or otherwise) for any of their respective agents to agree
to any non-written modification of this Security Instrument.

         SECTION 21.2 LIABILITY. If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder shall be joint and
several. This Security Instrument shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns forever.

         SECTION 21.3 DUPLICATE ORIGINALS; COUNTERPARTS. This Security
Instrument may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Security Instrument
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto to execute this
Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

         SECTION 21.4 NUMBER AND GENDER. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.

         SECTION 21.5 SUBROGATION. If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Note and any other Loan
Document, and the performance and discharge of the obligations.

         SECTION 21.6 ENTIRE AGREEMENT. The Note, this Security Instrument and
any other Loan Document constitute the entire understanding and agreement
between Borrower and Lender with respect to the transactions arising in
connection with the Debt and supersede all prior written or oral understandings
and agreements between Borrower and Lender with respect thereto. Borrower hereby
acknowledges that, except as incorporated in writing in the Note, this Security
Instrument and any other Loan Document, there are not, and were not, and no
persons are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, this Security
Instrument and any other Loan Document.

         SECTION 21.7 LENDER'S RIGHT TO SUBORDINATE. Lender may, at its election
in its sole and absolute discretion, subordinate the lien of this Security
Instrument and any or all of Lender's rights, titles or interests hereunder to
any lien, leasehold interest, easement, plat, covenant, restriction, dedication,
encumbrance or other matter affecting the Property or any part thereof by
recording a written declaration of such subordination in the office of the
register or recorder of deeds or similar filing officer for the county in which
the Land is located. If foreclosure sale occurs hereunder after the recording of
any such declaration, the title received

                                       52
<PAGE>

by the purchaser at such sale shall be subject to the matters specified in such
declaration, but such declaration shall not otherwise affect the validity or
terms of this Security Instrument or any other Loan Document or the priority of
any lien or security interest created hereunder or under any other Loan
Document.

                        ARTICLE 22 - LOCAL LAW PROVISIONS

         SECTION 22.1 INCONSISTENCIES. In the event of any inconsistencies
between the terms and conditions of this Article 22 and the other provisions of
this Security Instrument (other than the terms and provisions of Article 23),
the terms and conditions of this Article 22 shall control and be binding.

         SECTION 22.2 MATURITY DATE. The maturity date of the principal sum of
the Note secured by this Security Instrument is November 1, 2014.

         SECTION 22.3 ADVANCES BY LENDER SECURED. Without limiting the
generality of any other provisions of this Security Instrument, upon the
occurrence of an Event of Default hereunder, Lender may, but without any
obligation to do so, make advances with respect to the Property for Taxes, Other
Charges, Insurance Premiums or costs incurred for the protection of the
Property, and any such advances shall be secured by this Security Instrument.

         SECTION 22.4 OPEN-END MORTGAGE. Borrower and Lender intend that this
Security Instrument comply with Division (A) of Ohio Revised Code Section.
5301.232. In that regard, Borrower and Lender intend that, in addition to any
other debtor obligations secured hereby, this Security Instrument shall secure
unpaid balances of loan advances made after this Security Instrument is
delivered to the Recorder for record. The maximum amount of unpaid loan
indebtedness secured hereby, exclusive of interest thereon, which may be
outstanding at any time is $114,000,000.00.

         ARTICLE 23 - ADDITIONAL OR SPECIAL PROVISIONS OR MODIFICATIONS

         SECTION 23.1 INCONSISTENCIES. In the event of any inconsistencies
between the terms and conditions of this Article 23 and the other provisions of
this Security Instrument, the terms and conditions of this Article 23 shall
control and be binding.

         SECTION 23.2 INSURANCE. Section 3.3 is modified in the following
manner:

         (a)      The following is inserted at the end of the parenthetical
                  phrase in the eighth line of Section 3.3(a)(i) following the
                  word "coverage": "and the perils of terrorism and acts of
                  terrorism)."

         (b)      The first three lines of Section 3.3(a)(ii) ending with the
                  words "casualty or loss" are deleted and the following
                  substituted therefor:

                  "Business interruption and/or loss of "rental income"
                  insurance in an amount sufficient to avoid any co-insurance
                  penalty and to provide proceeds that will cover a period of
                  not less than eighteen (18) months from the date of casualty
                  or loss and that includes coverage for the perils of terrorism
                  and acts of terrorism,"

         (c)      Section 3.3(a)(vii) is hereby deleted and the following
                  substituted therefor:

                  "(vii) Liability Insurance. Borrower agrees to carry and
                  maintain liability and indemnity insurance, including without
                  limitation water damage insurance and the

                                       53
<PAGE>

                  so-called assumed and contractual liability coverage, in
                  forms, in the minimum amount of $10,000,000.00 per occurrence,
                  including broad form property damage, blanket contractual and
                  personal injuries (including death resulting therefrom)
                  coverages;"

         (d)      The first sentence of Section 3.3(b) is deleted and the
                  following substitute therefor:

                  "All insurance provided for in Subsection 3.3(a) hereof shall
                  be obtained under valid and enforceable policies (the
                  "POLICIES" or in the singular, the "POLICY") issued by one or
                  more insurers satisfactory to Lender in its sole discretion
                  and having a rating of A:V or better by Best's Key Rating
                  Guide and an Insurer Financial Strength Rating of AA or better
                  from Standard & Poor's Ratings Services, a Division of
                  McGraw-Hill Companies, Inc. ("S&P") and, upon Lender's
                  request, an equivalent rating by any other nationally
                  recognized credit rating agency approved by Lender."

SECTION 23.3 INSURANCE ESCROW FUND. The text of Section 3.5 is modified in the
following manner:

         (a)   The words "if applicable," are inserted in the third sentence of
               Section 3.5 between "(b)" and "one-twelfth."

         (b)   The following is inserted in the fourth sentence of Section 3.5
               between "Insurance Premiums" and "of": "(if Lender has required
               an Escrow Fund for Insurance Premiums)."

         (c)   The following is inserted in the sixth sentence of Section 3.5
               between "Insurance Premiums" and "as": "(if Lender has required
               an Escrow Fund for Insurance Premiums)."

         (d)   The following is inserted in the sixth sentence of Section 3.5
               between "Insurance Premiums" and "required": "(if applicable)."

         (e)   The following is inserted in the seventh sentence of Section 3.5
               between "Insurance Premiums" and "pursuant": "(if applicable)."

         (f)   Lender agrees to waive the requirement of an Escrow Fund for
               Insurance Premiums provided Borrower complies at all times with
               the following requirements to Lender's satisfaction: (i) the
               Property remains covered under blanket Policies that satisfy the
               conditions set forth in Section 3.3(e) above, and Borrower
               submits to Lender a certificate of insurance for the Policies not
               less than thirty (30) days prior to the expiration date thereof;
               (ii) such blanket Policies remain in full force and effect
               without any reduction in coverage (except with respect to any
               properties other than the Property which may be deleted from the
               blanket coverage under the Policy) and no notice of termination
               or cancellation has been issued; (iii) Borrower submits to Lender
               paid insurance premium receipts or other documentation evidencing
               timely payment of all Insurance Premiums not less than thirty
               (30) days prior to the due date thereof; (iv) the terms,
               coverages, types and amounts of the Policies are in strict
               compliance with the requirements set forth in Section 3.3 above;
               and (v) no Event of Default shall have occurred and be continuing
               under this Security Instrument or any other Loan Document. If
               Borrower fails to satisfy any of the foregoing requirements,
               Lender may immediately reinstate the provisions of Section 3.5
               relating to an Escrow Fund for Insurance Premiums.

                                       54
<PAGE>

         (g)   An Escrow Fund for Taxes in accordance with Section 3.5 will be
               required with respect to the Taxes at the Property applicable to
               the portions of the Property designated by the following tax
               parcel numbers: B42000400030000400, B42000400030000500,
               B42000400030000600, B42000400030001100, B42000400030001200,
               B42000400030003800, B42000400030004000, B42000400030000900,
               B42000400030002000. The Escrow Fund for Taxes with respect to the
               Taxes allocated to the portion of the Property currently demised
               by Lazarus, Inc. ("LAZARUS") designated by tax parcel number
               B42000400030001700 (the "LAZARUS TAXES") will be waived provided
               the following requirements are satisfied to Lender's
               satisfaction: (i) the Lease with Lazarus dated October 4, 1993,
               as approved by Lender ("LAZARUS LEASE") remains in full force and
               effect, and there is no default thereunder (or if a new tenant
               acceptable to Lender ("NEW TENANT") has executed a lease ("NEW
               LEASE") demising the premises currently demised by Lazarus, such
               New Lease is in full force and effect with no default
               thereunder); (ii) Lazarus (or the New Tenant, if applicable)
               remains in occupancy of the premises demised under the Lazarus
               Lease (or New Lease, if applicable); (iii) the Lazarus Lease or
               New Lease, as applicable, contains a provision requiring Lazarus
               or the New Tenant, respectively, to pay Taxes directly to the
               appropriate taxing authority, and Lazarus or such New Tenant
               makes such respective payments as so required; (iv) no Event of
               Default exists; and (v) within 30 days of the delinquency date of
               the Lazarus Taxes, Borrower furnishes to Lender evidence
               satisfactory to Lender that the Lazarus Taxes have been paid
               prior to the delinquency date. If Borrower shall fail to satisfy
               any of the foregoing requirements, Lender may immediately
               reinstate the provisions of Section 3.5 relating to an Escrow
               Fund for Taxes with respect to the Lazarus Taxes.

         (h)   All deposits in any Escrow Fund required by Lender under this
               Section 3.5 shall be interest bearing, and Borrower shall be
               entitled to any interest earned thereon.

         SECTION 23.4 CONDEMNATION. Section 3.6 is modified by inserting the
following at the end thereof: "Notwithstanding any provision in this Section 3.6
to the contrary, to the extent the provisions hereof relating to condemnation
conflict with the provisions of any Lease, subordination, non-disturbance and
attornment agreement ("SNDA") or estoppel certificate delivered to Lender, the
provisions of the Lease, SNDA or estoppel certificate shall control."

         SECTION 23.5 LEASES AND RENTS. The following sentence is hereby added
to Section 3.7 hereof: "All Rents generated by or derived from the Property
shall first be utilized solely for current expenses directly attributable to the
ownership and operation of the Property, including, without limitation, current
expenses relating to Borrower's liabilities and obligations with respect to the
Loan Documents, and none of the Rents generated by or derived from the Property
shall be diverted by Borrower and utilized for any other purpose unless all such
current expenses attributable to the ownership and operation of the Property
have been fully paid and satisfied."

         SECTION 23.6 BOOKS AND RECORDS. Section 3.11 is modified in the
following manner:

         (a)   The following sentence is added to Section 3.11(a)(i): "If
               required by Lender, the annual operating statement and annual
               balance sheet shall be audited or prepared and certified by an
               independent certified public accountant acceptable to Lender."

         (b)   The reference to "21" in the third line of Section 3.11(a)(iii)
               is deleted and "30" substituted therefor.

                                       55
<PAGE>

         (c)   The reference to "30" in the third line of Section 3.11(a)(iv) is
               deleted and "45" substituted therefor.

         (d)   Section 3.11(b) is modified by deleting the following from the
               second line thereof: "for Lender's approval in its sole
               discretion."

         SECTION 23.7 PAYMENT FOR LABOR AND MATERIALS. The text of Section 12 is
deleted in its entirety and the following substituted therefor:

                  Borrower shall promptly pay when due all bills and costs for
labor, materials, and specifically fabricated materials incurred in connection
with the Property and never permit to exist beyond the due date thereof in
respect of the Property or any part thereof any lien or security interest, even
though inferior to the liens and the security interests hereof, and in any event
never permit to be created or exist in respect of the Property or any part
thereof any other or additional lien or security interest other than the liens
or security interests hereof, except for the Permitted Exceptions.
Notwithstanding the foregoing, after prior written notice to Lender, Borrower
may, at its own expense, contest any mechanic's lien affecting the Property by
appropriate legal proceedings, promptly initiated and conducted in good faith
and with due diligence as determined by Lender, provided that all of the
following conditions are satisfied in Lender's discretion: (i) no Event of
Default has occurred and is continuing; (ii) Borrower is permitted to do so
under the provisions of any other mortgage, deed of trust or deed to secure debt
affecting the Property; (iii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
Borrower or the Property is subject and shall not constitute a default
thereunder; (iv) neither the Property, any part thereof or interest therein, any
of the tenants or occupants thereof, nor Borrower shall be affected in any
material adverse way as a result of such proceeding; and (v) Borrower shall have
furnished to Lender additional security in respect of the lien being contested
in an amount reasonably requested by Lender, but in any event not less than 125%
of the amount of the lien.

         SECTION 23.8 PROPERTY USE. The text of Section 4.1 is deleted in its
entirety and the following substituted therefor: "The Property shall be used
only for a retail shopping mall and for no other use without the prior written
consent of Lender."

         SECTION 23.9 SINGLE PURPOSE ENTITY. Section 4.3 is modified in the
following manner:

         (a)   Subsection (v) of Section 4.3(a) is modified in its entirety to
               state the following: "(v) shall not incur, create, or assume any
               indebtedness or liabilities, secured or unsecured, direct or
               contingent, other than (A) the Loan, (B) unsecured indebtedness
               that represents trade payables (including liabilities for tenant
               improvements and allowances due tenants under Leases), (ii)
               accrued expenses, and (iii) indebtedness incurred for assets
               necessary for the operating of the Property (including vehicles
               and trash compactors)) occurring in the normal course of business
               of owning and operating the Property that is not evidenced by a
               promissory note and is due and payable within sixty (60) days
               after the date incurred, and which in no event exceeds two
               percent (2%) of the original principal amount of the Note, (C)
               equipment leases related to the operation of the Property
               occurring in the normal course of business of owning and
               operating the Property, provided that such leases do not require
               annual payments by Borrower that aggregate more than $500,000.00,
               and (D) the Letter of Credit (as defined in the Letter of Credit
               Agreement executed by Borrower on this same date herewith)."

                                       56
<PAGE>

         (b)   The following is inserted in the second line of Section
               4.3(d)(i)(B) between "revenues" and "from": "(other than any fee
               the Independent Managers or the entity which employs the
               Independent Managers receive from (i) serving as Independent
               Managers or (ii) normal corporate services)."

         (c)   The following is inserted at the end of Section 4.3(c)(iv)
               following "entity": "; provided however, Borrower's assets may be
               included on a consolidated financial statement of its parent
               company in accordance with generally accepted accounting
               principles, but only if such assets shall be listed on the
               Borrower's own separate balance sheet;"

         SECTION 23.10 RESTORATION AFTER CASUALTY. Section 4.4 is modified in
the following manner:

         (a)   The reference to "$30,000.00" in Section 4.4(a) is deleted and
               "$500,000.00" substituted therefor.

         (b)   Section 4.4(b)(i)(G) is hereby deleted and the following
               substituted therefor:

               "(G) the Restoration can reasonably be completed on or before the
               earliest to occur of (1) twelve (12) months from the date of the
               casualty, (2) six (6) months prior to the Maturity Date (as
               defined in the Note), (3) the earliest date required for such
               completion under the terms of any Leases, or (4) such time as may
               be required under applicable zoning law, ordinance, rule or
               regulation in order to repair and restore the Property to as
               nearly as possible the condition it was in immediately prior to
               such casualty;"

         (c)   The following is inserted in the first line of Section
               4.4(b)(i)(F) between "satisfied" and "that": "in its reasonable
               discretion."

         (d)   The following subsection (J) is hereby added to Section
               4.4(b)(i):

               "(J)  less than twenty-five percent (25%) of the fair market
               value of the Improvements has been damaged or destroyed or
               rendered unusable as a result of such fire or other casualty;"

         (e)   The following is inserted in the fifth line of Section 4.4(b)(iv)
               between "10%" and "of": ", until such time as 50% of the work has
               been completed, and 5% thereafter,"

         (f)   The following is inserted at the end of Section 4.4:
               "Notwithstanding any provision in this Section 4.4 to the
               contrary, to the extent the provisions hereof relating to
               restoration conflict with the provisions of any Lease, SNDA or
               estoppel certificate delivered to Lender, the provisions of the
               Lease, SNDA or estoppel certificate shall control."

         SECTION 23.11 WARRANTY OF TITLE. The first sentence of Section 5.1 is
hereby deleted and the following substituted therefor:

                  "SECTION 5.1 WARRANTY OF TITLE. Borrower has good, marketable
         and indefeasible title to the Property and has the right to mortgage,
         grant, bargain, sell, pledge, assign, warrant, transfer, and convey the
         same and that Borrower possesses a fee simple absolute estate in the
         Land and the Improvements, and that it owns the Property free and clear
         of all liens, encumbrances and charges whatsoever except for those
         exceptions shown in the title insurance

                                       57
<PAGE>

         policy insuring the lien of this Security Instrument (the "PERMITTED
         EXCEPTIONS"), none of which, individually or in the aggregate,
         materially (a) interfere with the benefits of the security intended to
         be provided by this Security Instrument, (b) affect the value or
         marketability of the Property, (c) impair the use or operation of the
         Property for the uses currently made thereof, or (d) impair Borrower's
         ability to pay its obligations in a timely manner."

         SECTION 23.12 STATUS OF PROPERTY. Section 5.6 is modified in the
         following manner:

                  (a)      The following is inserted at the beginning of Section
         5.6(i) prior to "Borrower": "Except as previously disclosed to Lender
         in writing prior to the date hereof,"

                  (b)      The text of Section 5.6(k) is amended in its entirety
         to state the following: "All security deposits relating to the Leases
         reflected on the schedule delivered to Lender have been collected by
         Borrower except as noted on the schedule delivered to Lender."

                  (c)      The following is inserted at the end of Section
         5.6(m) following "Property": "except as may be disclosed on the survey
         dated September 29, 2003 prepared by M-E Companies."

         SECTION 23.13 LEASES. Section 5.10 is modified by deleting the
introductory clause thereof and substituting the following therefor: "Except as
disclosed in the estoppel certificates, the Galyan's Lease (as hereinafter
defined), or the rent roll for the Property delivered to and approved by
Lender,"

         SECTION 23.14 REPRESENTATIONS AND WARRANTIES. The following Section
5.19 is hereby added to Article 5:

                  "SECTION 5.19 NON-CONSOLIDATION. All of the assumptions made
in that certain substantive non-consolidation opinion letter of even date
herewith delivered by Borrower's counsel in connection herewith and any
subsequent non-consolidation opinion delivered in accordance with the terms and
conditions of this Security Instrument and/or the Note, including, but not
limited to, any exhibits attached thereto (the "NON-CONSOLIDATION OPINION"), are
true and correct in all respects. Borrower has complied and will comply with all
of the assumptions made with respect to it in the Non-Consolidation Opinion.
Each entity other than Borrower with respect to which an assumption is made in
the Non-Consolidation Opinion has complied and will comply with all of the
assumptions made with respect to it in the Non-Consolidation Opinion."

         SECTION 23.15 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.
Section 7.3(a) is modified by inserting the following in the third line thereof
between "tax," and "either": "(not including franchise or income taxes of
Lender)."

         SECTION 23.16 ESTOPPEL CERTIFICATES. Section 7.4 is modified in the
following manner:

         (a)      The reference to "ten" in the first line of Section 7.4(a) is
                  deleted and "thirty" substituted therefor.

         (b)      The text of Section 7.4(b) is deleted and the following
                  substituted therefor:

                  "Within thirty days after any request by Lender, Borrower
                  shall use its best efforts to furnish Lender with duly
                  executed estoppel certificates from any one or more lessees as

                                       58
<PAGE>

                  required by Lender attesting to such facts regarding any Lease
                  as Lender may reasonably require. Notwithstanding the
                  foregoing, if the terms of any Lease do not require the lessee
                  to deliver an estoppel certificate upon request, Borrower
                  agrees that it shall use its best efforts to deliver to
                  Lender, promptly upon request, such an estoppel certificate
                  with respect to such Lease."

         SECTION 23.17 SPLITTING OF SECURITY INSTRUMENT. Section 7.6 is modified
by inserting the following in the fifth line thereof between "Lender" and ",
shall": "and without cost to Borrower."

         SECTION 23.18 REPLACEMENT DOCUMENTS. Section 7.7 is modified by
inserting the following at the end thereof after "tenor": "; provided however,
if Borrower becomes legally obligated to pay a third party under the Note or
other Loan Documents by operation of law or final judgment, then, to the extent
Borrower does not receive credit from such third party for any payments made to
Lender under such duplicate Note or other Loan Document, Lender shall indemnify
and hold Borrower harmless in an amount not to exceed the sum of such payments
made to Lender under such duplicate Note or other Loan Document; provided
further, that in connection with any litigation, arbitration or other proceeding
pertaining to any such claim of such third party, Borrower shall vigorously
defend against such claim and not confess any judgment pertaining thereto
without Lender's prior written consent, and at Lender's option, permit Lender to
assume and control such defense with counsel acceptable to Lender, the costs of
both of which shall be borne by Lender."

         SECTION 23.19 AMENDED FINANCING STATEMENTS. Section 7.8 is modified by
deleting the following from the first line thereof: "execute and."

         SECTION 23.20 CONDITIONS TO LENDER'S CONSENT. Section 8.2 is modified
in the following manner:

         (a)      The following is inserted as Section 8.2(viii): "(viii) Lender
                  has received, (A) if requested by Lender, written confirmation
                  from the Rating Agencies (as hereinafter defined) that the
                  Transfer will not result in a qualification, down-grading or
                  withdrawal of any rating initially assigned or to be assigned
                  to the securities issued in a Securitization (as hereinafter
                  defined) ("RATING AGENCY APPROVAL"), and (B) evidence
                  reasonably satisfactory to Lender (which may include a legal
                  non-consolidation opinion acceptable to Lender) that the
                  single purpose nature and bankruptcy remoteness of Borrower
                  following the Transfer satisfies the standards of the Rating
                  Agencies."

                  (b)      Lender's consent with respect to a New Borrower in
                  accordance with Section 8.2(iii) will not be unreasonably
                  withheld.

                  (c)      The word "reasonable" is inserted in Section 8.2(v)
                  between "all" and "underwriting" and "limitation," and
                  "engineering."

         SECTION 23.21 PERMITTED TRANSFERS. Notwithstanding any provision in
Section 8.1 or Section 8.2 to the contrary:

         (a)      Up to 49% of the membership interests in Borrower (in the
                  aggregate) may be transferred to third parties without the
                  consent of Lender and without the application of the 1% fee
                  set forth in Section 8.2(vi) provided the following conditions
                  precedent are satisfied: (i) no Event of Default has occurred
                  and no event has occurred that with notice and/or the passage
                  of time, or both, would constitute an Event of Default; (ii)
                  Lender has received

                                       59
<PAGE>

                  Borrower's notice of the Transfer no less than 15 days prior
                  to the commencement of the Transfer; (iii) no Indemnitor is
                  released from any guaranty or indemnity agreement by virtue of
                  the Transfer; (iv) Borrower is responsible for the reasonable
                  costs and expenses of documenting each Transfer; (v) Borrower
                  reimburses Lender for all reasonable costs and expenses
                  incurred by Lender in connection with the Transfer, whether
                  the Transfer is approved or consummated; (vi) Borrower
                  furnishes Lender with copies of any documentation executed in
                  connection with the Transfer promptly after execution thereof;
                  (vii) Borrower delivers satisfactory evidence to Lender that,
                  following the Transfer, Borrower will continue to comply with
                  the provisions of Section 4.3 hereof; and (viii) upon request
                  by Lender, Borrower delivers to Lender a substantive
                  non-consolidation opinion acceptable to Lender in its
                  discretion or an update to the opinion received as of the date
                  of this Security Instrument. Transfers to all other parties or
                  entities shall be subject to all conditions and requirements
                  set forth in Sections 8.1 and 8.2 hereof.

         (b)      Transfers of limited partnership interests in Glimcher
                  Properties Limited Partnership, and transfers and issuances of
                  stock of Glimcher Realty Trust may occur without Lender's
                  prior approval or Rating Agency Approval.

         SECTION 23.22  ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Section 12.1 is modified in the following manner:

         (a)      The following is inserted at the end of the definition of
"Hazardous Substances": "but shall not include those substances that are both
(1) in compliance with current Environmental Laws and with permits issued
pursuant thereto (if such permits are required), and (2) either (a) in amounts
not in excess of that necessary to operate, clean, repair and maintain the
applicable Property or each tenant's respective business at such Property as set
forth in their respective leases, (b) held by a tenant for sale to the public in
its ordinary course of business, or (c) fully disclosed to and approved by
Lender in writing pursuant to the Environmental Reports."

         (b)      The definition of "Environmental Law" is modified by deleting
the phrase "of human health" in the fourth line of such definition.

         SECTION 23.23 ENVIRONMENTAL COVENANTS. Section 12.2 is modified in the
following manner:

         (a)      The following is inserted at the beginning of Section 12.2(a):
                  "Borrower shall use reasonable efforts to ensure that."

         (b)      The words "there shall be no" at the beginning of Section
                  12.2(b) are deleted and the following substituted therefor:
                  "Borrower shall not cause or permit to be caused."

         (c)      The following is inserted in Section 12.2(d) between "shall"
                  and "keep": "use its best efforts to."

         (d)      The words "human health" in Section 12.2(h) between "to" and
                  "or" are deleted.

         SECTION 23.24 LENDER'S RIGHTS. Section 12.3 is modified by inserting
the following in the second to last sentence thereof between "in" and "a": "a
non-invasive manner and in."

                                       60
<PAGE>

         SECTION 23.25 ENVIRONMENTAL INDEMNIFICATION. Section 13.4 is modified
by inserting the following at the end thereof:

         "Notwithstanding the foregoing, Borrower's indemnities under this
Section shall not apply to: (i) events first occurring after the date that
Lender or any other Indemnified Party acquires the Property through a
foreclosure, trustee's sale or deed in lieu of foreclosure (collectively,
"FORECLOSURE") provided such event or condition is unrelated to any event or
condition which existed prior to such date; (ii) legal requirements which are
first enacted following the date of acquisition of the Property by an
Indemnified Party following a Foreclosure; or (iii) claims arising solely and
directly from the gross negligence, bad faith or willful misconduct of Lender."

         SECTION 23.26 SECONDARY MARKET. Section 18.1 of this Security
Instrument is hereby deleted and the following substituted therefore:

         (a)      TRANSFER OF LOAN. Lender may, at no cost to Borrower, at any
time, sell, transfer or assign the Note, this Security Instrument, and the other
Loan Documents, and any or all servicing rights with respect thereto, or grant
participations therein ("PARTICIPATIONS") or issue mortgage pass-through
certificates or other securities ("SECURITIES") evidencing a beneficial interest
in a rated or unrated public offering or private placement (a "SECURITIZATION").
Lender may forward to each purchaser, transferee, assignee, servicer,
participant, or investor in such Participations or Securities (collectively, the
"INVESTOR") or any of Fitch IBCA, Inc., Moody's Investors Service, Inc. and S&P
or any successor thereto, and any other nationally recognized statistical rating
organization (each a "RATING AGENCY") rating such Securities, each prospective
Investor, and any organization maintaining databases on the underwriting and
performance of commercial mortgage loans, all documents and information which
Lender now has or may hereafter acquire relating to the Debt and to Borrower,
any Guarantor, any Indemnitor(s) and the Property, whether furnished by
Borrower, any Guarantor, any Indemnitor(s) or otherwise, as Lender determines
necessary or desirable. Borrower irrevocably waives any and all rights it may
have under applicable law to prohibit such disclosure, including but not limited
to any right of privacy.

         (b)      SECONDARY MARKET TRANSACTIONS GENERALLY. Lender shall have the
right to engage in one or more Secondary Market Transactions (as hereinafter
defined) with respect to the Loan, and to structure and restructure all or any
part of the Loan, including without limitation in multiple tranches, as a
wraparound loan, or for inclusion in a "real estate mortgage investment conduit"
(a "REMIC") within the meaning of Section 860D of the Internal Revenue Code of
1986, as amended, or other Securitization. Without limitation, Lender shall have
the right to cause the Note and the Security Instrument to be split into a first
and a second mortgage loan, or into one or more loans secured by mortgages in
whatever proportion Lender determines, and thereafter to engage in Secondary
Market Transactions with respect to all or any part of the indebtedness and loan
documentation. Borrower acknowledges that it is the intention of the parties
that all or a portion of the Loan will be securitized and that all or a portion
of the Loan will be rated by one or more Rating Agencies. Borrower further
acknowledges that additional structural modifications may be required to satisfy
issues raised by any Rating Agencies. As used herein, "Secondary Market
Transaction" means any of (i) the sale, assignment, or other transfer of all or
any portion of the Debt or the Loan Documents or any interest therein to one or
more Investors, (ii) the sale, assignment, or other transfer of one or more
participation interests in the Debt or Loan Documents to one or more Investors,
(iii) the transfer or deposit of all or any portion of the Debt or Loan
Documents to or with one or more trusts or other entities which may sell
certificates or other instruments to Investors evidencing an ownership interest
in the assets of such trust or the right to receive income or proceeds therefrom
or (iv) any other Securitization backed in whole or in part by the Loan or any
interest therein.
                                       61
<PAGE>

         (c)      COOPERATION; LIMITATIONS. Borrower shall use all reasonable
efforts and cooperate reasonably and in good faith with Lender in effecting any
such restructuring or Secondary Market Transaction. Such cooperation shall
include without limitation, executing and delivering such reasonable amendments
to the Loan Documents and the organizational documents of Borrower and its
general partner as Lender or any Interested Party (as defined below) may
request, provided however, that no such amendment shall modify (i) the interest
rate payable under the Note (except as set forth in Section 18.1(e); (ii) the
stated maturity date of the Note, (iii) the amortization of the principal amount
of the Note, (iv) any other material economic terms of the Loan, (v) the
non-recourse provisions of the Loan or (vi) any provision, the effect of which
would materially increase Borrower's obligations or materially decrease
Borrower's rights under the Loan Documents. Such cooperation also shall include
using best efforts to obtain such certificates and assurances from governmental
entities and others as Lender may request. Borrower shall not be required to
provide additional collateral that was not initially contemplated by the parties
to effect any such restructuring or Secondary Market Transaction. Borrower shall
not be required to pay any third party costs and expenses incurred by Lender in
connection with any such Secondary Market Transaction unless otherwise payable
by Borrower under this Security Instrument or the other Loan Documents.

         (d)      INFORMATION. Borrower, at its sole cost and expense, shall
provide such access to personnel and such information and documents relating to
Borrower, its general partner, any Guarantor or Indemnitor, the Property and the
business and operations of all of the foregoing and such opinions of counsel
(including nonconsolidation opinions) as any Rating Agency may request or as
Lender or any other Interested Party (as defined below) may reasonably request
(and in form and substance reasonably acceptable to Lender and each Interested
Party) in connection with any such Secondary Market Transaction including,
without limitation, updated financial information, appraisals, market studies,
environmental reviews (Phase I's and, if appropriate, Phase II's), property
condition reports and other due diligence investigations together with
appropriate verification of such updated information and reports through letters
of auditors and consultants and, as of the closing date of the Secondary Market
Transaction, updated representations and warranties made in the Loan Documents
and such additional representations and warranties as any Rating Agency may
request or any purchaser; transferee, assignee, trustee, servicer or potential
investor (the Rating Agencies and all of the foregoing parties, collectively,
"INTERESTED PARTIES") may reasonably request. If requested by any Rating Agency
or reasonably required by Lender, provide revisions or "bringdowns" to any
opinions delivered at Closing (including nonconsolidation opinions), or if
required new versions of such opinions, addressed to Lender, any trustee under
any Securitization backed in whole or in part by the Loan, any Rating Agency
that assigns a rating to any securities in connection therewith and any investor
purchasing securities therein. Lender shall be permitted to share all such
information with the investment banking firms, Rating Agencies, accounting
firms, law firms, other third party advisory firms, potential investors,
servicers and other service providers and other parties involved in any proposed
Secondary Market Transaction. Borrower understands that any such information may
be incorporated into any offering circular, prospectus, prospectus supplement,
private placement memorandum or other offering documents for any Secondary
Market Transaction. Lender and all of the aforesaid third-party advisors and
professional firms and investors shall be entitled to rely upon such
information.

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         (e)      SEVERANCE. In connection with any Secondary Market
Transaction, Borrower shall, at the request of Lender and at its sole cost and
expense (a) sever the Loan into two or more portions in such individual amounts
as Lender may determine, each of which portion shall be secured by a mortgage
lien on the Property or (b) sever the Loan into two or more tranches in such
individual amounts as Lender may determine (collectively, a "Conversion"). Any
such Conversion shall be evidenced by Lender's then standard form "A/B Loan" or
mortgage documentation, as applicable, and any such Conversion shall not
preclude any further Conversion or modification of the Loan by agreement of
Borrower and Lender. In the event any portion of the Loan is converted into an
"A/B Loan", the interest rate on any one or more components of the Loan may be
changed at Lender's request provided that the weighted average interest rate of
all components of the Loan shall in no event exceed the interest rate set forth
in the Note. Borrower shall cooperate with all of Lender's reasonable requests
made in connection with a Conversion and shall deliver such documents as Lender
may reasonably request in connection therewith, including, without limitation,
any opinion letters which Lender may reasonably request, all of which shall be
in form and substance reasonably acceptable to Lender. The aggregate of the
principal amount of all such portions shall in no event exceed the then
principal balance of the Loan."

         SECTION 23.27 MANAGEMENT. The Property shall be managed by either: (i)
Borrower or an Affiliate of Borrower approved by Lender for so long as Borrower
or said Affiliate of Borrower possesses experience in managing and operating
commercial properties similar in size, scope, uses and value of the Property; or
(ii) a professional property management company approved by Lender. Management
by an Affiliate of Borrower or a professional property management company shall
be pursuant to a written agreement approved by Lender. In no event shall any
manager be removed or replaced or the terms of any management agreement modified
or amended without the prior written consent of Lender. If (1) an Event of
Default shall occur under any Loan Document or under any management contract
then in effect, which Event of Default is not cured within any applicable grace
or cure period, or (2) the bankruptcy or insolvency of any manager of the
property shall occur, Lender shall have the right to immediately terminate, or
to direct Borrower to immediately terminate, such manager and to retain, or to
direct Borrower to retain, a new manager approved by Lender. Lender's approval
of a replacement property manager shall not be unreasonably withheld provided
the proposed property manager is a Qualifying Manager (as hereinafter defined).
As used herein, "QUALIFYING MANAGER" means a reputable and experienced
management organization reasonably satisfactory to Lender, which organization or
its principals possess at least ten (10) years experience in managing commercial
properties similar in size, scope, use and value of the Property and which, on
the date Lender determines whether such management organization is a Qualifying
Manager, (i) manages an amount of square footage acceptable to lender of the
same property type as the property, and (ii) upon Lenders request, obtains prior
written confirmation from the Rating Agencies that management of the Property by
such entity will not cause a downgrading, withdrawal or qualification of the
then current rating of the securities issued pursuant to the securitization.

         SECTION 23.28 IMPROVEMENTS TO PROPERTY. Notwithstanding anything herein
to the contrary, provided the following conditions are satisfied in Lender's
discretion, certain improvements (the "ADDITIONAL IMPROVEMENTS") may be made to
the Property:

         (a)      The Additional Improvements are (i) limited to and in
                  accordance with the terms of the Lease ("GALYAN'S LEASE")
                  substantially in the form approved by Lender dated October 1,
                  2003, with Galyan's Trading Company, Inc. ("GALYAN'S"), and
                  (ii) limited to the construction of approximately 84,000
                  square feet of gross building area;

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         (b)      The Galyan's Lease is in full force and effect;

         (c)      No Event of Default has occurred and is continuing;

         (d)      The Letter of Credit is in full force and effect;

         (e)      In connection with the Additional Improvements, Borrower is
                  not incurring any indebtedness in violation of the terms of
                  this Security Instrument;

         (f)      The Additional Improvements shall be fully completed in a
                  diligent and good and workmanlike manner in accordance with
                  all applicable laws and ordinances (including zoning);

         (g)      Upon completion of the Additional Improvements, the Property
                  continues to be in compliance with all applicable laws and
                  ordinances (including zoning);

         (h)      During the construction of the Additional Improvements,
                  Borrower shall, within ten Business Days of its receipt
                  thereof, provide Lender copies of each of the following
                  received from Galyan's: (i) certification from an architect
                  regarding the status of the Additional Improvements in
                  accordance with the Galyan's Lease; and (ii) copies lien
                  waivers from Galyan's general contractor;

         (i)      Upon completion of the Additional Improvements, Borrower shall
                  provide Lender (at Borrower's cost) an endorsement to the
                  mortgage title insurance policy issued to Lender updating the
                  effective date of the policy to a date after the completion of
                  the Additional Improvements and reflecting that no mechanic's
                  or other liens have been placed against the Property;

         (j)      If Lender reasonably determines that it is necessary, an
                  opinion of counsel shall be delivered to Lender indicating
                  that upon completion of the Additional Improvements, the Loan
                  will remain a "qualified mortgage" under Section 860G(a)(3) of
                  the Internal Revenue Code; and

         (k)      Borrower shall reimburse Lender for any fees (including fees
                  for inspection, attorney's, engineer, architect, or inspector)
                  incurred by Lender in connection with the completion of the
                  Additional Improvements.

         SECTION 23.29 SUBORDINATION OF AFFILIATE AGREEMENTS. During the term of
the Loan, prior to entering into any contract or agreement with an Affiliate of
Borrower that affects the Property (the "AGREEMENT"), Borrower shall obtain an
agreement acceptable to Lender in its reasonable discretion from such Affiliate
stating that the Agreement and all claims such Affiliate may have against
Borrower on account of services or obligations to be performed by the Affiliate
under the Agreement shall be subordinated to the Note, this Security Instrument,
and the other Loan Documents, including, without limitation, all indebtedness
and any interest, fees, costs or expenses thereon due or to become due to Lender
under the Note, Security Instrument, or any other Loan Document.

             [THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

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

BORROWER:                   MFC BEAVERCREEK, LLC, a Delaware limited
                            liability company

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

                                 By:  Glimcher Properties Corporation, a
                                      Delaware corporation, its general
                                      partner

                                      By: ______________________________________
                                             George A. Schmidt
                                             Executive Vice President

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<PAGE>

State of____________________________

County of___________________________

         The foregoing instrument was acknowledged before me this October __,
2003, by GEORGE A. SCHMIDT, Executive Vice President of Glimcher Properties
Corporation, a Delaware corporation, general partner of Glimcher Properties
Limited Partnership, a Delaware limited partnership, sole member of MFC
Beavercreek, LLC, a Delaware limited liability company, on behalf of the limited
liability company.

                                         _______________________________________
                                         Notary Public

This Instrument Prepared By:

Marla R. Bell, Esq.
Polsinelli Shalton & Welte
700 W. 47th Street, Ste. 1000
Kansas City, Missouri 64112
(816) 753-1000
FAX (816) 753-1536

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<PAGE>

                                    EXHIBIT A

                              (DESCRIPTION OF LAND)

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