Document:

BUILDING LOAN AGREEMENT

                            dated as of June 21, 2000

                                      among

                   WILLOW BEND ASSOCIATES LIMITED PARTNERSHIP,
                                  as Borrower,

                         PNC BANK, NATIONAL ASSOCIATION,
                            as Lender, Co-Lead Agent
                               and Lead Bookrunner

                              FLEET NATIONAL BANK,
                   as Lender, Co-Lead Agent, Joint Bookrunner
                              and Syndication Agent

                        COMMERZBANK AG, NEW YORK BRANCH,
              as Lender, Managing Agent and Co-Documentation Agent

                      BAYERISCHE HYPO- UND VEREINSBANK AG,
                                NEW YORK BRANCH,
              as Lender, Managing Agent and Co-Documentation Agent

                                       and

                         PNC BANK, NATIONAL ASSOCIATION,
                             as Administrative Agent

                              LOCATION OF PREMISES:

                Northwest corner of the Dallas North Tollway and
                  Park Boulevard in Plano, Collin County, Texas

<PAGE>

         BUILDING LOAN AGREEMENT ("this  Agreement") dated as of June 21st, 2000
by and among WILLOW BEND  ASSOCIATES  LIMITED  PARTNERSHIP,  a Delaware  limited
partnership  ("Borrower"),  PNC BANK,  NATIONAL  ASSOCIATION  (in its individual
capacity and not as Administrative Agent, "PNC"), FLEET NATIONAL BANK ("Fleet"),
COMMERZBANK  AG,  NEW YORK  BRANCH  ("Commerzbank")  and  BAYERISCHE  HYPO-  UND
VEREINSBANK AG, NEW YORK BRANCH  ("HypoVereinsbank";  PNC,  Fleet,  Commerzbank,
HypoVereinsbank  and each  other  lender  who may  become a Lender  pursuant  to
Section 3.04,  Section 7.20 or Section 9.13, each, a "Lender" and  collectively,
"Lenders")  and PNC BANK,  NATIONAL  ASSOCIATION,  as  Administrative  Agent for
Lenders (together with its successors in such capacity, "Administrative Agent").

         Borrower  desires that Lenders  extend credit as provided  herein,  and
Lenders  are  prepared  to  extend  such  credit  on the  terms  and  conditions
hereinafter set forth.

         NOW, THEREFORE,  in consideration of the mutual promises and agreements
herein  contained,  Borrower,  Administrative  Agent and Lenders hereby agree as
follows:

                                   Article I

                      DEFINITIONS AND RULES OF CONSTRUCTION

     Section 1.01. Definitions.  The following terms, as used herein, shall have
the following meanings:

"Additional Costs" -- Any costs,  losses or  expenses  actually  incurred by any
         Lender  which  it  determines  are   attributable   to  its  making  or
         maintaining  its Pro Rata Share of the Loan, or its  obligation to make
         any Loan  advances,  or any  reduction in any amount  receivable by any
         Lender under the Loan or its Note.

Administrative Agent's Office" -- Administrative  Agent's Office as set forth on
         its  signature  page of this  Agreement,  or such other  address in the
         United  States  as  Administrative  Agent  may  designate  by notice to
         Borrower and Lenders.

"Affected Lender" -- Has the meaning specified in Section 3.04.

"Affiliate" --With respect to any Person (the "first Person"),  any other Person
         (i) which directly or indirectly  controls,  or is controlled by, or is
         under  common  control with the first Person or (ii) 10% or more of the
         beneficial interest in which is directly or indirectly owned or held by
         the first Person. The term "control" means the possession,  directly or
         indirectly,  of the power,  alone,  to direct or cause the direction of
         the management and policies of a Person,  whether through the ownership
         of voting securities, by contract, or otherwise.

"Aggregate Change Order Amount" -- $3,000,000.
<PAGE>

"Anchors" --  Collectively,  May (Lord & Taylor  and  Foley's),  Neiman  Marcus,
         Dillard and Saks.

"Anchor  Stores" --  Collectively,  (i) the  approximately  150,000-square  foot
         Neiman Marcus department store to be constructed and operated by Neiman
         Marcus  pursuant  to the REA on a parcel  of land  owned by it which is
         contiguous  to  portions  of  the  Premises,   (ii)  the  approximately
         140,000-square  foot Lord & Taylor  department  store to be constructed
         and operated by May pursuant to the REA on a parcel of land owned by it
         which  is   contiguous   to  portions  of  the   Premises,   (iii)  the
         approximately  240,000-square  foot  Foley's  department  store  to  be
         constructed and operated by May pursuant to the REA on a parcel of land
         owned by it which is contiguous  to portions of the Premises,  (iv) the
         approximately  250,000-square  foot  Dillard  department  store,  to be
         constructed and operated by Mercantile  pursuant to the REA on a parcel
         of land to be  owned  by it  which is  contiguous  to  portions  of the
         Premises  and (v) the  approximately  120,000-square  foot  Saks  Fifth
         Avenue  department  store to be constructed  and operated by Saks Texas
         pursuant  to the REA on a  portion  of the  Premises  ground  leased by
         Borrower to Saks.

"Applicable Lending  Office"  -- For each  Lender  and for the  portions  of the
         outstanding  principal  balance under its Note bearing  interest at the
         Prime Based Rate or the LIBO Based  Rate,  as  applicable,  the lending
         office of such Lender (or of an Affiliate of such Lender) designated as
         such on the signature page hereof or in the  applicable  Assignment and
         Assumption  Agreement,  or such other  office of such  Lender (or of an
         Affiliate  of such Lender) as such Lender may from time to time specify
         to  Administrative  Agent  and  Borrower  as the  office  by which  the
         portions of the  outstanding  principal  balance under its Note bearing
         interest at the Prime Based Rate or the LIBO Based Rate, as applicable,
         are to be made and maintained.

"Applicable Margin" -- With respect to the Prime Based Rate, .35% per annum, and
         with respect to the LIBO Based Rate,  1.85% per annum,  as the same may
         be reduced in accordance with Section 2.20.

"Assignee" -- Has the meaning specified in Section 9.13.

"Assignment and Assumption Agreement" -- An Assignment and Assumption Agreement,
         substantially  in the form of  EXHIBIT  E,  pursuant  to which a Lender
         assigns and an Assignee  assumes  rights and  obligations in accordance
         with Section 9.13.

"Authorization Letter" -- A letter from Borrower to Administrative  Agent in the
         form of EXHIBIT H setting forth,  among other things,  the name of each
         individual  authorized to execute Requisitions  hereunder on Borrower's
         behalf.

"Borrower's Accountants" -- Deloitte & Touche, or such other accounting  firm(s)
         selected by Borrower and reasonably acceptable to Administrative Agent.

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<PAGE>

"Borrower's  Architects"  --JPRA  Architects,  the architects  and/or  engineers
         responsible for preparing the Plans and supervising construction of the
         Improvements.

"Building Loan Trust  Account" -- A separate  bank account  with the  Depositary
         Bank  which (i)  shall  not be drawn  upon  except  to pay  Direct  and
         Indirect Costs approved by Administrative Agent, (ii) be the depository
         for all advances made to Borrower hereunder and (iii) be established so
         that  Administrative  Agent  receives,  or is entitled to receive  upon
         request,  from the Depositary Bank, duplicate copies of regular monthly
         statements of all deposits and withdrawals.

"Business Day"  -- Any day on  which  commercial  banks are  not  authorized  or
         required to close in Pittsburgh  and New York;  and,  whenever such day
         relates to a LIBOR Amount,  an Interest  Period with respect to a LIBOR
         Amount, or notice with respect to a LIBOR Amount, any such day in which
         dealings  in  Dollar  deposits  are  also  carried  out in  the  London
         interbank market and banks are open for business in London.

"Capital Lease" -- Any lease  which  has been or  should be  capitalized  on the
         books of the lessee in accordance with GAAP.

"Change  Orders"  -- Any  amendments  or  modifications  to the  Plans,  General
         Contract or Major Subcontracts.

"Change Order Amount" -- $250,000.

"City" -- The City of Plano,  a Texas  municipal  corporation  of Collin County,
         Texas.

"Code" -- The Internal Revenue Code of 1986.

"Commitment Amount" -- At any time,  the sum of the  Principal  Amount  plus the
         remaining  amount, if any, of the Loan Amount available to be disbursed
         hereunder.

"Completion Costs  Guaranty" -- The Completion  Costs Guaranty in respect of the
         Loan, dated the date hereof, from Guarantor to Lenders.

"Completion  Date" --August 17, 2001, as the same may be extended for reasons of
         Force Majeure.

"Construction Consultant"  --Merritt & Harris, Inc., or other firm designated by
         Administrative Agent.

"Debt"   -- Without  duplication,  any and all of (i)  indebtedness or liability
         for borrowed money,  or for the deferred  purchase price of property or
         services  (including  trade  obligations),  (ii)  obligations as lessee
         under Capital Leases,  (iii) current liabilities in respect of unfunded
         vested benefits under any Pension Plan, (iv) obligations  under letters
         of credit  issued for the  account of any Person,  (v) all  obligations
         arising  under  bankers'  or  trade  acceptance  facilities,  (vi)  all
         guarantees,

                                       3
<PAGE>

         endorsements  (other than  for  collection  or  deposit in the ordinary
         course of  business),  and  other  contingent  obligations  to purchase
         any  of  the  items  included  in  this  definition, to  provide  funds
         for payment,  to supply funds to invest in any Person,  or otherwise to
         assure a creditor  against loss,  (vii) all obligations  secured by any
         lien on  property  owned by the Person  whose  Debt is being  measured,
         whether  or not the  obligations  have  been  assumed  and  (viii)  all
         obligations under any agreement providing for contingent  participation
         or other hedging  mechanisms with respect to interest payable on any of
         the items described above in this definition.

"Debt    Service Coverage" -- As of any date of  determination,  the quotient of
         (i) Net  Operating  Income  as of the end of the  most  recently  ended
         calendar month,  divided by (ii) Hypothetical Annual Debt Service as of
         the date of determination.

"Default"-- Any event or  circumstance  which,  with the giving of notice or the
         passage of time, or both, would become an Event of Default.

"Default Rate" -- A rate  equal to (i) with  respect  to those  portions  of the
         Principal  Amount  bearing  interest at the Prime Based Rate, the Prime
         Based Default  Rate;  and (ii) with respect to LIBOR  Amounts,  a fixed
         rate of 4% per annum in excess of the LIBO Based Rate in effect thereon
         at the current  Interest  Period  therefor and,  thereafter,  the Prime
         Based Default Rate.

"Delinquency  Amount";  "Delinquency  Notice";  "Delinquent  Lender" -- Have the
         respective meanings specified in Section 7.16.

"Depositary  Bank" -- Comerica Bank or a replacement bank reasonably  acceptable
         to Administrative Agent.

"Dillard"  --  Dillard's,  Inc.,  a  Delaware  corporation,   the  guarantor  of
         Mercantile's obligations under the REA.

"Direct  Costs"  -- The  aggregate  costs of all  labor,  materials,  equipment,
         fixtures and furnishings necessary for completion of the Improvements.

"Direct  Costs Loan";  "Indirect  Costs Loan" -- That portion of the Loan Amount
         applicable  and equal to the sum of the Loan Budget  Amounts for Direct
         Costs and  Indirect  Costs,  respectively,  shown on the  Project  Cost
         Statement.

"Direct  Cost Statement" -- A statement, in the form of SCHEDULE I or other form
         approved by  Administrative  Agent,  of Direct Costs incurred and to be
         incurred,  trade by trade, to be prepared by the General Contractor (or
         Borrower's   supervisor  of   construction   if  there  is  no  General
         Contractor)  and  submitted  to  Administrative  Agent  as part of each
         Requisition.

"Disposition" -- A sale (whether by assignment, transfer or Capital Lease) of an
         asset.

"Dollars" and "$" -- Lawful money of the United States.

                                       4
<PAGE>

"Electing Lender";  "Election Notice";  "Election Period" -- Have the respective
         meanings specified in Section 7.16.

"Employee Benefit  Plan" -- Any  employee  benefit or other plan  established or
         maintained,  or to which  contributions  have been made, by Borrower or
         Guarantor.

"Environmental Discharge" -- Any discharge or release of any Hazardous Materials
         in violation of any applicable Environmental Law.

"Environmental  Law"  -- Any  Law  relating  to  pollution  or the  environment,
         including Laws relating to noise or to emissions,  discharges, releases
         or threatened  releases of Hazardous Materials into the work place, the
         community or the environment,  or otherwise relating to the generation,
         manufacture,   processing,   distribution,   use,  treatment,  storage,
         disposal, transport or handling of Hazardous Materials.

"Environmental  Notice"  -- Any  written  complaint,  order,  citation,  letter,
         inquiry,  notice or other  written  communication  from any  Person (i)
         affecting or relating to Borrower's  compliance with any  Environmental
         Law in connection with any activity or operations at any time conducted
         by Borrower, (ii) relating to the occurrence or presence of or exposure
         to or possible or  threatened  or alleged  occurrence or presence of or
         exposure to  Environmental  Discharges  or  Hazardous  Materials at the
         Premises,  including,  without  limitation  (a)  the  existence  of any
         contamination  or possible or threatened  contamination at the Premises
         and  (b)  remediation  of  any  Environmental  Discharge  or  Hazardous
         Materials at the Premises or any part thereof and (iii) relating to any
         violation or alleged violation of any relevant Environmental Law.

"ERISA"  -- The Employee  Retirement Income Security Act of 1974,  including the
         rules and regulations promulgated thereunder.

"ERISA   Affiliate" -- Any corporation  which is a member of the same controlled
         group of  corporations  (within  the  meaning of Section  414(b) of the
         Code) as Borrower and/or  Guarantor,  or any trade or business which is
         under common control (within the meaning of Section 414(c) of the Code)
         with Borrower and/or Guarantor,  or any organization  which is required
         to be treated as a single employer with Borrower and/or Guarantor under
         Section 414(m) or 414(o) of the Code.

"Event of Default" -- Has the meaning given to such term in the Mortgage.

"Exchange Agreement" -- That certain Agreement for Real Estate Exchange dated as
         of May __,  1999 by and  among  Guarantor,  the City and  Dallas  North
         Tollway  Partnership,  as amended by Amendment  to  Agreement  for Real
         Estate  Exchange  dated  October 12,  1999,  as  Guarantor's  interests
         thereunder  have been assigned to and assumed by Borrower by instrument
         dated June 19, 2000.

"Federal Funds Rate" -- For any day,  the rate per annum (based on a year of 360
         days)  announced  by the  Federal  Reserve  Bank  of New  York  (or any
         successor)  on such day as being the  weighted  average of the rates on
         overnight Federal funds

                                       5
<PAGE>

         transactions  arranged by Federal funds brokers on the previous trading
         day, as computed and  announced by  such  Federal  Reserve Bank (or any
         successor)  in   substantially   the  same   manner  as  such   Federal
         Reserve   Bank   computes  and  announces  the   weighted   average  it
         refers to as the "Federal  Funds  Effective  Rate" as  of the  date  of
         this Agreement;  provided,  however,  that if such Federal Reserve Bank
         (or its successor) does not announce such rate on any day, the "Federal
         Funds Rate" for such day shall be the Federal Funds  Effective Rate for
         the last day on which such rate was announced.

"Fee     Letter"  -- That  certain  letter  agreement,  dated  the date  hereof,
         between  PNC  and  Borrower,   providing  for  Borrower's   payment  to
         Administrative  Agent,  on the  date  hereof  and  from  time  to  time
         hereafter, of certain fees in connection with the Loan, such fees to be
         for the respective accounts of the parties specified therein.

"Force   Majeure" -- Acts of God, fire, earthquake,  floods, explosion,  actions
         of the elements,  war, riots,  mob violence,  inability to procure or a
         general shortage of labor, equipment, facilities, materials or supplies
         in the open  market,  failure  of  transportation,  strikes,  lockouts,
         actions of labor unions, condemnation,  court orders, laws, regulations
         or orders of governmental  or military  authorities or any other cause,
         whether  similar or dissimilar to the foregoing  (other than lack of or
         inability  to  procure   funds  or  financing  to  fulfill   Borrower's
         commitments  and  obligations  under the Loan Documents or otherwise in
         respect of the Premises and  Improvements) so long as, in any such case
         (i) such  cause  or  event is not  within  the  reasonable  control  of
         Borrower,  (ii) Borrower shall have given notice of such cause or event
         to  Administrative  Agent  within  fifteen  (15)  Business  Days of the
         occurrence   thereof   and  (iii)   Administrative   Agent  shall  have
         determined, in its judgment to be reasonably exercised, that such cause
         or event constitutes Force Majeure.

"GAAP"   -- Generally  accepted  accounting  principles  in the United States of
         America as in effect from time to time,  applied on a basis  consistent
         with those used in the preparation of the financial statements referred
         to in Section  5.03  (except for  changes  concurred  in by  Borrower's
         Accountants).

"General Contract" -- Any contract (together with all riders,  addenda and other
         instruments  referred  to  therein  as  "contract  documents")  between
         Borrower and the General  Contractor or any other Person which requires
         the General Contractor or such other Person to provide, or supervise or
         manage the procurement of, substantially all labor and materials needed
         for completion of the Improvements.

"General Contractor"-- Sordoni Skanska Construction Co., a Delaware corporation.

"Good    Faith  Contest" -- The contest of an item if (i) the item is diligently
         contested in good faith,  and, if  appropriate,  by proceedings  timely
         instituted,  (ii) adequate reserves are established with respect to the
         contested  item,   (iii)  during  the  period  of  such  contest,   the
         enforcement of any contested  item is  effectively  stayed and (iv) the
         failure to pay or comply with the  contested  item during the period of
         the

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<PAGE>

         contest  is not  likely   to (x)  to  have an   adverse   effect on the
         Mortgaged  Property or any part thereof or on Lender's interest therein
         or (y) result in a Material Adverse Change.

"Governmental  Authorities"  -- The  United  States,  the State of Texas and any
         political subdivision, agency, department, commission, board, bureau or
         instrumentality  of either of them,  including  any local  authorities,
         which exercises jurisdiction over Borrower,  Guarantor, the Premises or
         the Improvements.

"Guarantor" -- The Taubman Realty Group Limited Partnership,  a Delaware limited
         partnership of which Borrower is, as of the date hereof, a wholly owned
         and controlled subsidiary.

"Guaranty" --  Collectively,  the  Completion  Costs  Guaranty  and the  Payment
         Guaranty.

"Hazardous Materials" -- Any  pollutants,  effluents,  emissions,  contaminants,
         toxic or  hazardous  wastes or  substances,  as any of those  terms are
         defined  from  time  to time in or for  the  purposes  of any  relevant
         Environmental  Law,  including  asbestos  fibers and friable  asbestos,
         polychlorinated  biphenyls,  and  any  petroleum  or  hydrocarbon-based
         products or derivatives.

"Hypothetical Annual Debt Service" -- For any date of  determination,  an amount
         equal to the greatest of (i) the constant  annual  payment of principal
         plus interest  required to fully  amortize,  over a term of twenty-five
         (25) years,  a  hypothetical  loan in an amount equal to the Commitment
         Amount as of such  date of  determination,  assuming  such loan were to
         bear  interest  at a  rate  equal  to 2% per  annum  in  excess  of the
         percentage  yield to maturity of the then  "on-the-run"  ten  (10)-year
         United States Treasury Note, (ii) 9.25% of the Commitment  Amount as of
         the date of determination  or (iii) the sum of the annualized  interest
         (based on the weighted average actual interest rate under the Notes) on
         a hypothetical  loan in an amount equal to the Commitment  Amount as of
         such date of determination plus scheduled principal actually payable on
         the Loan for the succeeding twelve (12)-month period as of such date of
         determination; provided, however, that for purposes of determining Debt
         Service  Coverage  under  clause  (i) of Section  2.20  hereof or under
         paragraph 2 of the Payment Guaranty, the term Commitment Amount as used
         in clauses (i), (ii) and (iii) above shall mean the  Commitment  Amount
         less the  "Residual  Land  Guaranty  Amount"  (as such  quoted  term is
         defined in the Payment Guaranty) as of the date of determination.

"Improvements" --An enclosed, two (2)-level first class shopping mall containing
         approximately 561,000 of SFGLA of mall stores,  together with three (3)
         parking decks for a minimum of 2,750 automobiles, in the aggregate, and
         surface parking for a minimum of an additional 4,130 automobiles.

"Indemnity" -- An agreement  from  Borrower and Guarantor  whereby,  among other
         things,  Administrative  Agent and  Lenders are  indemnified  regarding
         Hazardous Materials.

                                       7
<PAGE>

"Indirect Costs" -- All costs of acquisition  of the Premises and  completion of
         the Improvements other than Direct Costs, including but not limited to,
         architects' and attorneys' fees,  ground rents,  interest,  real estate
         taxes, survey costs and insurance premiums.

"Indirect Cost  Statement"  -- A  statement, in the form of SCHEDULE II or other
         form approved by  Administrative  Agent, of Indirect Costs incurred and
         to  be  incurred,   to  be  prepared  by  Borrower  and   submitted  to
         Administrative Agent as part of each Requisition.

"Individual Loan  Commitment"  -- With  respect to each  Lender,  the amount set
         forth  below  opposite  the name of such  Lender  (subject to change in
         accordance with the terms of this Agreement):

         Lender                                       Individual Loan Commitment
         ------                                       --------------------------
         PNC                                                   $70,000,000
         Fleet                                                 $70,000,000
         Commerzbank                                           $40,000,000
         Hypo Vereinsbank                                      $40,000,000

"Initial Advance" -- The first advance of Loan proceeds to be made hereunder.

"Interest Period" -- The period during  which  interest  at the LIBO Based Rate,
         determined  as provided in this  Agreement,  shall be applicable to the
         LIBO Rate Request Amount in question, provided, however, that each such
         period shall be either one (1), two (2),  three (3) (or, if  available,
         four (4) or six (6))  months,  which  shall be  measured  from the date
         specified by Borrower in each LIBO Rate Request for the commencement of
         the  computation of interest at the LIBO Based Rate, to the numerically
         corresponding day in the calendar month in which such period terminates
         (or, if there be no numerical  correspondent  in such month,  or if the
         date  selected by Borrower for such  commencement  is the last Business
         Day of a calendar  month,  then the last  Business  Day of the calendar
         month  in  which  such  period   terminates,   or  if  the  numerically
         corresponding  day is not a  Business  Day  then  the  next  succeeding
         Business  Day,  unless such next  succeeding  Business Day enters a new
         calendar  month,  in  which  case  such  period  shall  end on the next
         preceding  Business  Day) and in no event shall any such period  extend
         beyond the Maturity Date.

"Law"    --  Any  federal,  state  or  local  law,  statute,  rule,  regulation,
         ordinance,  order,  decree,  directive,  requirement,  code,  notice of
         violation or rule of common law,  now or  hereafter  in effect,  and in
         each case as amended, and any judicial or administrative interpretation
         thereof  by  a  Governmental  Authority  or  otherwise,  including  any
         judicial or  administrative  order,  determination,  consent  decree or
         judgment.

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<PAGE>

"Lender Reply Period" -- Has the meaning specified in Section 9.12.

"LIBO    Based  Rate" -- With  respect to any LIBOR  Amount,  the rate per annum
         (expressed as a percentage)  determined by  Administrative  Agent to be
         equal to the sum of (i) the  quotient  of the LIBO  Rate for the  LIBOR
         Amount and Interest Period in question  divided by [1 minus the Reserve
         Requirement]  (at  Administrative   Agent's  option,   rounded  up,  if
         necessary, to the nearest 1/100 of 1%) and (ii) the Applicable Margin.

"LIBO    Rate" -- With  respect to any Interest  Period,  the rate per annum for
         the first day of the Interest Period ("the Reset Date") for deposits in
         Dollars for a period of the number of months  contained in the Interest
         Period which appears on Dow Jones Page 3750 (or such other display page
         on the Dow Jones  System or otherwise as may replace such Page 3750) as
         of 11:00 a.m.  (London  time) on the day that is two (2) Business  Days
         prior to that Reset Date for a period, and in an amount,  comparable to
         such Interest  Period and LIBOR Amount in question  outstanding  during
         such  Interest  Period.  If such rate does not appear on Dow Jones Page
         3750 (or such  replacement  page),  the rate for a Reset  Date  will be
         determined by Administrative Agent acting reasonably.

"LIBO    Rate Request" -- Borrower's telephonic notice (to be promptly confirmed
         in  writing),  to be  received  by  Administrative  Agent by 10:00 a.m.
         (Pittsburgh  time) three (3) Business Days prior to the date  specified
         in the LIBO Rate Request for the  commencement  of the Interest  Period
         (which  specified date must be a Business Day), of (a) its intention to
         have (i) all or any portion of the  Principal  Amount which is not then
         the subject of an Interest  Period (other than an Interest Period which
         is terminating on the Business Day specified in the notice) and/or (ii)
         all or any portion of any advance of proceeds of the Loan  evidenced by
         the Notes  which is to be made on the  Business  Day  specified  in the
         notice,  bear  interest  at the LIBO  Based  Rate and (b) the  Interest
         Period desired by Borrower in respect of the amount specified.

"LIBO    Rate Request Amount" -- The amount, to be specified by Borrower in each
         LIBO Rate  Request,  which  Borrower  desires bear interest at the LIBO
         Based Rate and which shall in no event be less than $1,000,000.

"LIBOR   Amount" -- Each portion of the Principal Amount bearing interest at the
         LIBO Based Rate pursuant to a particular LIBO Rate Request.

"Loan"   -- The Direct Costs Loan and Indirect Costs Loan, collectively,  and in
         an amount initially equal to the Loan Amount.

"Loan Amount" -- $220,000,000.

"Loan    Budget Amounts" -- The portion of the Loan Amount set forth in Column D
         on the  Project  Cost  Statement  to be advanced  for each  category of
         Direct and Indirect Costs.

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<PAGE>

"Loan    Documents" -- This Agreement,  the Notes,  the Mortgage,  the Guaranty,
         the  Indemnity,  the  Authorization  Letter,  Uniform  Commercial  Code
         financing statements in respect of the Mortgaged Property and any other
         collateral  given as  security  for the Loan,  and any other  documents
         which evidence or secure the Loan.

"Major Lease" -- The Parking  Lease and any lease for space in the  Improvements
         containing 10,000 SFGLA or more.

"Major   Subcontractor";  "Major  Subcontract" -- Any  subcontractor or supplier
         engaged  by the  General  Contractor  and any  contractor  or  supplier
         engaged  by  Borrower,  under  one or more  contracts  or  work  orders
         aggregating $2,000,000 or more; any such contract or work order.

"Master  Agreement"  -- The Master  Agreement  between  Guarantor  and the City,
         dated October 25, 1999 and  authorized by City Council  Resolution  No.
         99-8-14 (R) dated August 9, 1999,  providing,  among other things,  for
         certain  payments  aggregating up to  $22,800,000,  plus  interest,  to
         Guarantor  from tax  revenues  paid to the City in  respect  of the TIF
         District, as Guarantor's interests thereunder have been assigned to and
         assumed by  Borrower  (with the City's  consent) by  instruments  dated
         November 8, 1999.

"Material Adverse  Change" -- Either (i) a material adverse change in the status
         of the business, results of operations,  financial condition,  property
         or prospects  of Borrower or Guarantor or (ii) any event or  occurrence
         of  whatever  nature  which is  likely to (x) have a  material  adverse
         effect on the  ability  of  Borrower  or  Guarantor  to  perform  their
         respective  obligations  under the Loan Documents or (y) create, in the
         sole and absolute  judgment  (reasonably  exercised) of  Administrative
         Agent,  a material  risk of sale or  forfeiture of any of the Mortgaged
         Property  (other  than an  immaterial  portion  thereof)  or  otherwise
         materially impair the Mortgaged Property or Lenders' rights therein.

"Maturity Date" --July 1, 2003,  subject to extension in accordance with Section
         2.18.

"May" -- The May Department Stores Company, a New York corporation.

"Mercantile -- Collectively, Mercantile Properties, Inc., a Delaware corporation
         (as to an undivided 75% interest),  Mercantile Real Estate Co., Inc., a
         Delaware corporation (as to an undivided 11% interest)  and  Mercantile
         Kansas  City, Inc., a  Delaware corporation (as  to  an  undivided  14%
         interest).

"Mortgage" -- The deed of trust,  assignment  of leases  and rents and  security
         agreement made to or for the benefit of Administrative  Agent, as agent
         for  Lenders,  to secure the  payment  and  performance  of  Borrower's
         obligations hereunder,  under the Notes and otherwise in respect of the
         Loan,  including  any sums in addition  to the Loan Amount  advanced by
         Lenders for completion of the Improvements.

                                       10
<PAGE>

"Mortgaged  Property"  -- The  Premises  and  other  property  constituting  the
         "Mortgaged Property", as said quoted term is defined in the Mortgage.

"Multiemployer Plan" -- Any plan defined as such in Section 3(37) of ERISA.

"Neiman Marcus" -- The Neiman Marcus Group, Inc., a Delaware corporation.

"Net     Operating  Income"  --As of any date of  determination,  an amount  (as
         determined by Administrative Agent in its sole but reasonable judgment)
         equal to:

                           (i) the sum,  determined in accordance with GAAP (but
         adjusted for  non-cash  revenues  attributable  to  straight-lining  of
         rents),  of (a)  annualized  rental  income and  common  area and other
         expense reimbursements under executed and, if required hereby, approved
         by  Administrative  Agent (or deemed  approved  as  provided in Section
         6.20)  leases of the  Improvements,  as of such date of  determination,
         plus (b) annualized other income from operating the Premises (excluding
         income from sales of property), as of such date of determination,  plus
         (c)  the  actual  amounts   received  by  Borrower  from  the  City  in
         reimbursement  of "Project Costs" under the Master Agreement during the
         twelve   (12)-month   period   immediately   prior  to  such   date  of
         determination;

less

                           (ii) the sum,  determined in accordance with GAAP, of
         (a) in the case of any date of  determination  falling (x) prior to the
         opening of the  Improvements  for  business  to the  public,  pro forma
         operating  expenses of the  Premises,  (y) during the first twelve (12)
         months  following the opening of the  Improvements  for business to the
         public,  the  sum of (A)  actual  operating  expenses  of the  Premises
         (including a management  fee  reasonably  acceptable to  Administrative
         Agent),  real estate  taxes and bad debt  expense  during the period of
         operation plus (B) pro forma operating expenses of the Premises for the
         balance of said twelve  (12)-month period or (z) after the first twelve
         (12) months of operation of the Improvements, actual operating expenses
         of the Premises  (including a management fee  reasonably  acceptable to
         Administrative  Agent),  real estate taxes and bad debt expense for the
         twelve  (12)-month  period ending with such date of determination  plus
         (b) a reserve for tenant  improvements and capital expenses in a deemed
         aggregate amount equal to $220,000.

"Non-Delinquent Lender" -- Each Lender other than the Delinquent Lender(s).

"Note"; "Notes" -- Have the respective meanings specified in Section 2.10.

"Obligations" -- Has the meaning given to such term in the Mortgage.

"Option  Parcel" -- The  approximately  56.767 acre parcel south of the Premises
         (across Park  Boulevard)  described more  particularly  in that certain
         Option to Purchase  Contract [South Tract] dated March 19, 1997, by and
         between  Guarantor,  as

                                       11
<PAGE>

         Purchaser,  and Kemp  Investment  Partnership , Ltd.,  Randall C. Kemp,
         Judith Marie Kemp,  Elizabeth C. Kemp and Kemp  Grandchildren's  Trust,
         collectively,  as Seller,  as amended by  First  Amendment to Option to
         Purchase Contract [South Tract], dated March 17, 2000.

"Parking Lease" -- The Parking  Lease  between  Guarantor  (as Landlord) and the
         City (as Tenant) dated October 25, 1999 and  authorized by City Council
         Resolution  No.  99-8-15 (R) dated  August 9, 1999,  as the  Landlord's
         interests  thereunder  have been  assigned  to and  assumed by Borrower
         (with the City's consent) by instruments dated November 8, 1999.

"Participant";  "Participation"  -- Have the  respective  meanings  specified in
         Section 9.13.

"Payment Guaranty" -- The Guaranty of Payment in respect of the Loan,  dated the
         date hereof, from Guarantor to Lenders.

"PBGC"   -- The Pension Benefit Guaranty  Corporation and any entity  succeeding
         to any or all of its functions under ERISA.

"Pension Plan" -- Any  employee  pension  benefit  plan  within  the  meaning of
         Section 3(2) of ERISA with respect to which Borrower,  Guarantor or any
         ERISA  Affiliate at any relevant time has liability or an obligation to
         contribute.

"Person" -- An individual, partnership,  corporation, limited liability company,
         business trust, joint stock company, trust, unincorporated association,
         joint venture or other entity of whatever nature.

"Plans"  -- All final drawings,  plans and specifications  prepared by Borrower,
         Borrower's Architects,  the General Contractor or Major Subcontractors,
         and approved by Administrative  Agent and the Construction  Consultant,
         which describe and show the labor, materials,  equipment,  fixtures and
         furnishings   necessary  for  the  construction  of  the  Improvements,
         including  all  amendments  and  modifications  thereof  made by Change
         Orders  implemented  in accordance  with Section 6.13 (and also showing
         minimum grade of finishes and furnishings for all common areas).

"Premises" -- The real  property  described  on Schedule A to the  Mortgage  and
         located as indicated on the cover hereof, upon all or part of which the
         Improvements are to be constructed.

"Premises Documents" -- Has the meaning given to such term in the Mortgage.

"Prime  Based  Default  Rate" -- The rate per annum equal to 4% in excess of the
         Prime Based Rate.

"Prime   Based  Rate"  -- The  Applicable  Margin  plus the  greater  of (i) the
         Federal  Funds  Rate  plus  1/2 of 1%  per  annum  or  (ii)  the  prime
         commercial  lending rate as

                                       12
<PAGE>

         announced  from time to time by PNC at its principal  office (currently
         located at One PNC  Plaza, 249 Fifth Avenue,  Pittsburgh,  Pennsylvania
         15222) as  its then  prime  rate (which rate may not be the lowest rate
         then being  charged to  commercial  borrowers by PNC);  each change in
         said rates to be effective as of the date of such change.

"Principal Amount" -- At any time, the aggregate outstanding principal amount of
         the Notes.

"Pro     Rata Share" -- With respect to each Lender,  the ratio of such Lender's
         Individual Loan  Commitment to the Loan Amount.  As of the date hereof,
         the Lenders' respective Pro Rata Shares are as follows:

         Lender                                                   Pro Rata Share
         ------                                                   --------------

         PNC                                                           31.8182%

         Fleet                                                         31.8182%

         Commerzbank                                                   18.1818%

         Hypo Vereinsbank                                              18.1818%

"Project Cost  Statement" -- A statement in the form of EXHIBIT A setting forth,
         by  category,  the  Direct  and  Indirect  Costs of  completion  of the
         Improvements and the Loan Budget Amounts in respect of the Direct Costs
         Loan and Indirect Costs Loan.

"REA"    --  That  certain  Construction,   Operation  and  Reciprocal  Easement
         Agreement,  dated as of February 29, 2000, by and among  Borrower,  May
         (as to the Lord & Taylor and Foley's stores), Neiman Marcus, Mercantile
         and  Saks  Texas  (the  obligations  of  Mercantile   thereunder  being
         guaranteed  by Dillard  and the  obligations  of Saks Texas  thereunder
         being  guaranteed  by Saks),  which was recorded in the land records of
         Collin  County,  Texas  on April  17,  2000 in Book  4648,  at page 173
         (together  with any and all leases or other  agreements  incidental  or
         supplemental  thereto) pursuant to which the Improvements (by Borrower)
         and the Anchor Stores (by the respective Anchors) are to be constructed
         and operated as an  integrated  regional  shopping  center known as The
         Shops at Willow Bend.

"Regulation D" -- Regulation D of the Board of Governors of the Federal  Reserve
         System.

"Regulatory  Change"  --  With  respect  to any  Lender  and  the  charging  and
         collecting  of interest at the LIBO Based  Rate,  any change  after the
         date hereof in federal, state or foreign laws or regulations (including
         Regulation  D) or  the  adoption  or  making  after  such  date  of any
         interpretations,  directives  or requests  applying to a class of banks
         including  such  Lender  under any  federal,  state or foreign  laws or
         regulations  (whether  or not  having the force of law) by any court or
         governmental or monetary  authority charged with the  interpretation or
         administration  thereof,

                                       13
<PAGE>

         excluding  any  change  the effect of which is reflected in a change in
         the LIBO Based Rate.

"Replacement Lender" -- Has the meaning specified in Section 7.20.

"Required Lenders" -- At any time, those Non-Delinquent Lenders holding at least
         66-2/3% of that portion of the aggregate  outstanding  principal amount
         of those of the Notes held by the Non-Delinquent Lenders.

"Requisition" -- A statement  by or on behalf of Borrower in the form of EXHIBIT
         B or other form  approved by  Administrative  Agent  setting  forth the
         amount of the Loan advance requested in each instance and including:

               (i)  the Direct and Indirect Cost Statements;

               (ii) the "Contractor's Cost Certification" in the form of EXHIBIT
          B-1 or other form approved by Administrative Agent;

               (iii)  "Payment   Receipts/Lien   Releases"  in  respect  of  the
          immediately preceding Requisition from all contractors, subcontractors
          or  suppliers  in the form of EXHIBIT  B-2 or other form  approved  by
          Administrative Agent; and

               (iv) proof of payment of all Indirect Costs covered by a previous
          Requisition.

"Reserve Requirement"  -- The rate at which  reserves  (including  any marginal,
         supplemental  or  emergency  reserves)  are  actually  required  to  be
         maintained  by any Lender  under  Regulation  D against  "Euro-Currency
         Liabilities",  as such quoted  term is used in  Regulation  D.  Without
         limiting the effect of the  foregoing,  the Reserve  Requirement  shall
         reflect any other  reserves  actually  required to be maintained by any
         Lender by reason of any  Regulatory  Change against (i) any category of
         liabilities  which  includes  deposits by  reference  to which the LIBO
         Based Rate is to be  determined  as provided in this  Agreement or (ii)
         any category of  extensions  of credit or other  assets which  includes
         loans the interest  rate on which is  determined  on the basis of rates
         used in determining the LIBO Rate.

"Saks" -- Saks Fifth Avenue, Inc., a New York corporation.

"Saks Texas" -- Saks Fifth Avenue Texas, L.P., a Texas limited partnership.

"SFGLA" -- Square feet of gross leasable area.

"Solvent"-- Means,  when  used with  respect  to any  Person,  that (i) the fair
         value of the  property of such Person,  on a going  concern  basis,  is
         greater  than the  total  amount  of  liabilities  (including,  without
         limitation,  contingent  liabilities) of such Person,  (ii) the present
         fair  saleable  value of the assets of such Person,  on a going concern
         basis,  is not less than the amount  that will be  required  to pay the
         probable  liabilities  of such  Person  on its  debts  as  they  become
         absolute  and  matured,  (iii)

                                       14
<PAGE>

         such Person does not  intend to, and does not  believe  that  it  will,
         incur  debts or  liabilities  beyond   such Person's  ability to pay as
         such debts and liabilities mature, (iv) such   Person is not engaged in
         business or a transaction, and is not about to  engage in business or a
         transaction,  for  which  such  Person's   property  would   constitute
         unreasonably   small   capital  after  giving  due consideration to the
         prevailing  practice in the industry in  which such Person  is  engaged
         and (v)  such  Person  has  sufficient  resources, provided  that  such
         resources  are  prudently  utilized,  to satisfy  all  of such Person's
         obligations.  Contingent  liabilities  will  be  computed at the amount
         that,   in  light   of  all  the  facts   and   circumstances  existing
         at such time,  represents the amount that can reasonably be expected to
         become an actual or matured liability.

"Stored  Materials  Statement"  -- A statement  in the form of  SCHEDULE  I-A or
         other form approved by  Administrative  Agent which, if advances are to
         be made  for  stored  materials  pursuant  to  Section  2.05,  shall be
         submitted with, and made a part of, the Direct Cost Statement.

"Substitute  Lender" and "Substitution  Notice" -- Have the respective  meanings
         specified in Section 3.04.

"TCI"-- Taubman  Centers,  Inc., a Michigan  corporation,  Guarantor's  managing
         general partner.

"TIF District" -- The Tax Increment  Financing  Reinvestment Zone No. One of the
         City of  Plano, Texas, established  by City  Ordinance No.  98-11-38 on
         November 23, 1998, as amended  by  Ordinance No. 99-1-16 on January 25,
         1999, pursuant to Chapter 311 of the Texas Tax Code.

"Title   Insurer" -- The issuer(s),  approved by  Administrative  Agent,  of the
         title insurance policy or policies insuring the Mortgage.

"TRG     Consolidated  Financial  Statements" -- The consolidated  balance sheet
         and  related   consolidated   statement  of   operations,   accumulated
         deficiency in assets and cash flows,  and, at year-end only,  footnotes
         thereto, of Guarantor, prepared in accordance with GAAP.

"TRG     Credit Facility" -- That certain Secured  Revolving  Credit  Agreement,
         dated as of June 24, 1999,  among  Guarantor (as  borrower),  the banks
         signatory  thereto  and  UBS AG,  Stamford  Branch  (as  administrative
         agent).

"United States" and "U.S." -- The United States of America.

         Section  1.02.  Rules  of  Construction.  Except as expressly  provided
otherwise,  when  used  in  this  Agreement  (i)  "or"  is not  exclusive,  (ii)
"hereunder", "herein", "hereof" and the like refer to this Agreement as a whole,
(iii)  "Article",   "Section",  "Schedule"  and  "Exhibit"  refer  to  Articles,
Sections,  Schedules and Exhibits of this  Agreement,  (iv) terms defined in the
singular  shall  have a  correlative  meaning  when used in the  plural and vice
versa,  (v) a  reference  to a  Law  includes  any  amendment,

                                       15
<PAGE>

modification  or supplement to, or replacement of, such Law and (vi) a reference
to a document  shall mean such document as the same may be amended,  modified or
supplemented  from time to time in accordance with its terms. The cover page and
the Exhibits and Schedules  annexed  hereto are  incorporated  as a part of this
Agreement with the same effect as if set forth in the body hereof.  Any table of
contents and all captions and headings herein are for convenience only and shall
not affect the interpretation or construction hereof.

         Section 1.03. Accounting Terms. All  accounting  terms not specifically
defined  herein shall be construed in  accordance  with GAAP,  and all financial
data required to be delivered  hereunder  shall be prepared in  accordance  with
GAAP.

         Section 1.04. Computation of Time Periods. Except as otherwise provided
herein, in the computation of periods of time in this Agreement from a specified
date to a later  specified  date, the word "from" means "from and including" and
words "to" and "until" each means "to but excluding".

                                   Article II

                                 LOAN; ADVANCES

         Section  2.01. Advances Generally.  Subject  to the  provisions of this
Agreement,  each Lender will  advance its Pro Rata Share of, and  Borrower  will
accept, the Loan Amount in installments as follows:

                  The Initial Advance will be made upon the  satisfaction of the
         applicable  conditions  set forth in Section 4.01,  and all  subsequent
         advances shall be made monthly thereafter, upon the satisfaction of the
         applicable conditions set forth in Section 4.02, in amounts which shall
         be equal to the aggregate of the Direct and Indirect  Costs incurred by
         Borrower through the end of the period covered by the Requisition less:

                    (a)  the  greater  of (x) 10%  (or  5%,  in the  case of the
               subcontracts  with TJ Lambrect and The Trane  Company,  and 0% in
               the case of "General Conditions" and "Contractor's Fee" under the
               General  Contract)  of  such  Direct  Costs  or  (y)  the  actual
               "Retained Amounts" specified on the Direct Cost Statement;

                    (b) the total of the Loan advances theretofore made; and

                    (c) Borrower's equity  investment,  as required by paragraph
               (23) of Section 4.01;

         and, at the election of Administrative  Agent,  less any combination of
         the following further amounts:

                                       16
<PAGE>

                    (d) all or a portion  of the  amount by which any  Direct or
               Indirect Costs are or are estimated by Administrative Agent to be
               greater than the respective  Loan Budget Amounts (as the same may
               have been adjusted in accordance  with Sections 2.06 or 2.07) for
               such costs; and/or

                    (e) any  costs  covered  by the  Requisition  not  approved,
               certified or verified as provided in Section  2.02,  any Indirect
               Costs  covered  by a  previous  Requisition  for  which  proof of
               payment (and, where applicable,  Payment Receipts/Lien  Releases)
               has not been received by Administrative  Agent, and/or any Direct
               Costs  covered  by  a  previous  Requisition  for  which  Payment
               Receipts/Lien  Releases have not been received by  Administrative
               Agent and the Construction Consultant.

At Administrative  Agent's option, the amount of each advance shall be a minimum
of $1,000,000.

         Section 2.02. Certification and Verification of Costs. Direct Costs are
to  be  certified  by  the   General  Contractor  or  Borrower's  supervisor  of
construction if there is no General  Contractor.  Verification  of  the  monthly
progress  and Direct  Costs which have been  incurred  by Borrower  from time to
time, and the estimated total Direct Costs, shall be conclusively  determined by
the  Construction  Consultant  in its  reasonable  discretion,  except that both
Direct and  Indirect  Costs are also subject to the  reasonable  approval of and
verification by Administrative Agent from time to time.

         Section 2.03.  Procedures for Advances.  All  advances  to Borrower are
to be made at Administrative Agent's Office.  Borrower shall submit Requisitions
to Administrative  Agent no later than 10:00 a.m.  (Pittsburgh time) on the date
which is seven (7)  Business  Days prior to the date the  advance is to be made.
Administrative  Agent, no later than three (3) Business Days prior to the date a
requested  advance  is to be made,  shall  (i)  notify  each  Lender  either  by
telephone  or by  facsimile  of the amount  requested  by  Borrower,  the amount
approved by  Administrative  Agent,  the portion of such advance to be funded by
such Lender and the  proposed  date of such advance and (ii) send to each Lender
by facsimile the summary pages of Borrower's  Requisition  (without  attachments
except for the Direct and Indirect Cost  Statements).  Not later than 10:00 a.m.
(Pittsburgh  time) on the date of each advance,  each Lender shall,  through its
Applicable Lending Office and subject to the conditions of this Agreement,  make
the amount to be advanced by it on such day available to  Administrative  Agent,
at Administrative  Agent's Office and in immediately available funds. The amount
so received by  Administrative  Agent shall,  subject to the  conditions of this
Agreement,  be made available to Borrower, by Administrative Agent's wiring said
amount to the Building Loan Trust Account.

         Section  2.04.  Held-Back  Amounts;  Termination  of Advances.  Amounts
not  advanced  pursuant to  paragraph  (a) of Section  2.01 during the course of
construction  of the  Improvements  shall  be  advanced  upon  the  satisfactory
completion  of the work to be  performed  by the  contractor,  subcontractor  or
supplier in question,  as reasonably  determined by  Administrative  Agent,  and
Administrative Agent's receipt of a final

                                       17
<PAGE>

Payment  Receipt/Lien  Release from such contractor,  subcontractor or supplier,
but in no event  shall such  advance be made  sooner  than as  specified  in the
contract in question. Notwithstanding anything to the contrary contained herein,
(a) no proceeds of the Loan shall be  advanced  to  Borrower  subsequent  to the
third  anniversary of the date hereof,  other than in respect of the Loan Budget
Amounts for "Tenant Improvements" and "Tenant Allowances" and in respect of that
portion of the Loan Budget Amount for "Major/Anchor  Allowances" attributable to
Saks,  and (b) no proceeds of the Loan shall be advanced to Borrower  subsequent
to the  fourth  anniversary  of the date  hereof,  other than in respect of that
portion of the Loan Budget Amount for "Major/Anchor  Allowances" attributable to
Saks.

         Section  2.05. Stored Materials. (a) Lenders shall not make advances of
proceeds of the Loan for building materials or furnishings not yet affixed to or
incorporated  into  the  Improvements,  except  for  major  building  materials,
equipment and furnishings  approved by Administrative  Agent which are stored on
the Premises and intended to be incorporated  into the Improvements  pursuant to
the Plans, and not until  Administrative  Agent shall have received (a) invoices
or  other  documentation  evidencing  the  cost  of such  materials,  Borrower's
ownership thereof and the release of any right, title or lien in respect thereof
by any vendor,  (b) evidence  that such  materials  are covered by the insurance
policies  required by this Agreement and are  identified  and protected  against
loss, theft and damage in a manner acceptable to the Construction Consultant and
(c) evidence that advances made by Lenders for any such materials  stored on the
Premises  pursuant to this  paragraph  do not, at any one time,  exceed,  in the
aggregate, $6,000,000, inclusive of the amount requested.

         (b) Lenders shall from time to time make Loan  advances,  in accordance
with the terms of this Agreement,  for major building  materials,  equipment and
furnishings approved by Administrative  Agent, which are stored at locations off
the Premises  acceptable to  Administrative  Agent prior to their  incorporation
into the Improvements  pursuant to the Plans, provided that, in the case of each
such  advance,  Administrative  Agent  shall  have  received  (i) such  security
agreements,   financing  statements  and  other  documents  as  it  may  require
sufficient to create,  perfect and protect a first lien on said materials,  (ii)
evidence that said materials are covered by the insurance  policies  required by
this Agreement,  (iii) a written  statement from the storer of said materials to
the effect that the  Construction  Consultant  may inspect said materials at all
reasonable  times and (iv)  evidence  that advances made by Lenders for any such
materials stored off the Premises  pursuant to this paragraph do not, at any one
time, exceed, in the aggregate,  $4,000,000,  inclusive of the amount requested.
Each request for an advance of Loan  proceeds for materials to be stored off the
Premises shall constitute Borrower's  representation to Administrative Agent and
Lenders that said  materials are (1) stored in a designated and secure area, and
that said materials will not be moved from the storage site except in connection
with  their  delivery  to the  Premises  and (2)  reasonably  anticipated  to be
incorporated  into the Improvements  within one hundred twenty (120) days of the
date of the advance  therefor.  Borrower  covenants to deliver to Administrative
Agent  within  thirty (30) days of any such  advance (x) paid bills and original
warehouse receipts or other documents of title which correspond to the materials
so purchased and stored off-site and (y) a certificate of Borrower to the effect
that said materials are owned by Borrower outright,  free and clear of all liens
other  than the lien held by  Administrative  Agent and that all of the terms of
this paragraph have been complied with.

                                       18
<PAGE>

         (c) Notwithstanding the foregoing  provisions of this Section,  Lenders
shall from time to time make  advances  of Loan  proceeds  to pay the deposit on
account of the purchase  price for materials to be stored on or off the Premises
pursuant to paragraphs (a) and (b) above,  provided,  however,  that the maximum
amount of such advances that may be outstanding at any one time shall not exceed
$2,000,000.

         Section 2.06. Owner Contingency Advances. There shall be no advances of
the Loan Budget  Amounts for "Owner's  Contingency"  unless  mutually  agreed by
Borrower and Administrative  Agent, acting reasonably;  provided,  however, that
(a)  Borrower  shall be entitled to advances of the (i) Direct Costs Loan Budget
Amount for "Owner's Contingency" up to a maximum of $2,000,000 and (ii) Indirect
Costs Loan Budget  Amount for "Owner's  Contingency"  up to a maximum  amount of
$2,000,000  without  Administrative  Agent's approval,  provided that amounts so
advanced  are used by Borrower for the payment of Direct or Indirect  Costs,  as
the case may be, the Loan Budget Amounts for which are, in Borrower's reasonable
judgment, insufficient and (b) following such time as the Improvements have been
satisfactorily completed,  lien-free,  Borrower shall be entitled to advances of
said Loan Budget  Amounts to the extent it has actually  incurred and paid Costs
in respect of completion of the Improvements from its own funds and in excess of
amounts advanced hereunder and has provided appropriate evidence of such payment
to Administrative Agent.

         Section 2.07. Reallocation of Amounts on  Project Cost Statement. If at
any time the  undisbursed  balance of the Loan Budget Amount for any category of
cost  shown  on  the  Project  Cost  Statement  is,  in  Administrative  Agent's
reasonable  judgment,  excessive,  the excess shall, at Borrower's  request,  be
reallocated to any other Loan Budget Amount balance which  Administrative  Agent
reasonably  deems to be  insufficient  or to the Direct Costs Loan Budget Amount
for "Owner's Contingency".

         Section 2.08.   Certain   Limitations   on   Advances.  Notwithstanding
anything to the contrary  contained herein,  Lenders shall have no obligation to
advance any portion of the Loan Budget Amount for (a) "Tenant Allowances" unless
Administrative  Agent  shall  have  received  copies,  certified  to be true and
complete, of the leases for space in the Improvements  providing for the payment
requested  and,  in the case of all leases  which  Administrative  Agent has the
right to approve  hereunder or under the  Mortgage,  Administration  Agent shall
have approved (or, if  applicable,  deemed to have  approved,  at any time) such
leases  and  (b)  "Interest  on  Loan"  (i)  if,  when  and to the  extent  that
Administrative Agent, in its sole judgment, reasonably exercised, determines, at
any  time   subsequent  to  ninety  (90)  days  following  the  opening  of  the
Improvements  for business to the public,  that the Improvements are generating,
on a cash  basis,  positive  cash  flow in  excess of  Borrower's  other  usual,
reasonable and customary expenses regarding the Premises and/or  Improvements or
(ii) if and to the extent that Borrower shall have  previously paid any interest
under the Notes  from  sources  other  than  advances  hereunder  or  agreements
supplemental  hereto.  In  addition,  notwithstanding  anything to the  contrary
contained herein, Lenders shall have no obligation to advance all or any portion
of the Loan Budget Amount for "Land Acquisition:  Residual Land - Option Parcel"
other than in connection  with  Borrower's  acquisition of the Option Parcel and
unless

                                       19
<PAGE>

Administrative  Agent   shall  have  first received  and  approved the following
with respect to the Option Parcel: (i) an agreement, executed by Borrower and in
proper form for  recording,  spreading  the lien of the Mortgage to encumber the
Option  Parcel,  together  with  related UCC  financing  statements  executed by
Borrower and in proper form for filing,  (ii) an endorsement to the title policy
insuring  the  Mortgage  adding  the  Option  Parcel  to  the  insured  premises
thereunder  with no additional  title  exceptions  other than those  approved by
Administrative  Agent, (iii) a current survey of the Option Parcel conforming to
the requirements of paragraph (8) of Section 4.01 (d) with respect thereto, (iv)
an appraisal and an  environmental  site  assessment  report and reliance letter
regarding the Option  Parcel,  in each case of the types  required by paragraphs
(4) and (6),  respectively,  of Section  4.01 (d) and (v) such other  documents,
opinions and  assurances as  Administrative  Agent may  reasonably  request.  In
connection  with the  appraisal and  environmental  site  assessment  report and
reliance letter required by clause (iv) above, Administrative Agent will accept,
(x) in lieu of a new or separate appraisal,  the appraisal delivered pursuant to
paragraph  (4) of  Section  4.01 so long as the  Option  Parcel is  acquired  by
Borrower within twelve (12) months of the date of said appraisal and (y) in lieu
of a new or separate  environmental  site assessment report and reliance letter,
the environmental  site assessment report and reliance letter delivered pursuant
to  paragraph  (6) of Section  4.01 so long as the Option  Parcel is acquired by
Borrower on or before September 29, 2000.

         Section  2.09.  Nature  of  Lenders' Obligations; Borrower's Rights and
Obligations  in Event a Lender  Fails to Make an  Advance.  The  obligations  of
Lenders under this Agreement are several, and no Lender shall be responsible for
the  failure of any other  Lender to fund the  portion  required to be funded by
such other Lender of an advance of the Loan. In cases where a Delinquent  Lender
fails to fund the portion required to be funded by it of an advance and (x) none
of the other Lenders  elects to be an Electing  Lender  pursuant to Section 7.16
and to fund the  Delinquent  Lender's  share of the advance and (y)  Borrower is
unable to procure a  Replacement  Lender in accordance  with Section  7.20,  the
obligation of the  Non-Delinquent  Lenders to fund their respective  portions of
such advance and each subsequent  advance shall be conditioned on (i) Borrower's
committing in writing to Lenders,  prior to any such advance,  that it will fund
the  entire  Delinquency  Amount  and (ii)  Borrower's  submitting  satisfactory
evidence to  Administrative  Agent,  at the time of each advance,  that Borrower
and/or  Guarantor  have paid,  from their own funds, a portion of the Direct and
Indirect  Costs that are the subject of such  advance in an amount  equal to the
Delinquent Lender's portion of such advance.

         Section 2.10. Notes. The Loan  shall be evidenced  by notes of Borrower
in the form of EXHIBIT G, duly  completed and executed by Borrower (one for each
Lender in an amount equal to such Lender's  Individual Loan Commitment,  payable
for the account of such Lender's  Applicable  Lending  Office),  in an aggregate
principal amount equal to the Loan Amount (such notes, as the same may hereafter
be amended,  modified,  extended,  severed,  assigned,  substituted,  renewed or
restated from time to time (including,  without limitation, any substitute notes
pursuant to Section 3.04, 7.16, 7.20 or 9.13),  each, a "Note" and collectively,
the "Notes").  The Notes shall mature,  and all outstanding  principal and other
sums thereunder  shall be paid in full, on the Maturity Date, as the same may be
accelerated or extended.

                                       20
<PAGE>

         In case of any loss,  theft,  destruction or mutilation of any Lender's
Note,  Borrower  shall,  upon its receipt of an  affidavit of an officer of such
Lender as to such loss,  theft,  destruction  or mutilation  and an  appropriate
indemnification,  execute and deliver a  replacement  Note to such Lender in the
same principal amount and otherwise of like tenor as the lost, stolen, destroyed
or mutilated Note.

         Section  2.11.  Payments and Distributions;  Certain   Consequences  of
Delinquent Lender Status.  Borrower shall make each payment under this Agreement
and under the Notes not later than 11:00 a.m. (Pittsburgh time) on the date when
due in Dollars  to  Administrative  Agent at  Administrative  Agent's  Office in
immediately available funds.  Administrative Agent will thereafter, by 4:00 p.m.
on the day of its receipt of each such payment (assuming receipt by 11:00 a.m.),
cause to be  distributed to each Lender such Lender's  appropriate  share (based
upon  the  respective  outstanding  principal  amounts  of  the  Notes  and  the
respective  rates of  interest  thereunder)  of the  payments of  principal  and
interest, and its appropriate share of the payments of other sums, in like funds
for the account of such Lender's Applicable Lending Office.

         Except to the extent otherwise provided in this Agreement, whenever any
payment  to be made under  this  Agreement  or under the Notes is due on any day
other than a Business  Day,  such payment  shall be made on the next  succeeding
Business Day, and such first extension of time shall in such case be included in
the computation of the payment of interest and, if applicable, fees, as the case
may be.

         Notwithstanding   the  foregoing   provisions  of  this  Section,   (i)
Administrative  Agent  shall make no payment to a  Delinquent  Lender  until the
Non-Delinquent Lenders have been paid in full all outstanding principal, accrued
and unpaid  interest and any other sums owing to them under the Loan  Documents,
it being  understood  that  payments of  interest on account of the  outstanding
principal  amount of the Note  held by the  Delinquent  Lender  shall be held by
Administrative  Agent in a non-interest  bearing  account and not distributed to
the Delinquent Lender until such time as all principal,  interest and other sums
due to the  Non-Delinquent  Lenders  have been paid in full,  (ii) any  payments
(other than interest,  as provided in clause (i) above) which would otherwise be
due a Delinquent Lender shall be distributed to the Non-Delinquent Lenders until
such time as all  principal,  interest and other sums due to the  Non-Delinquent
Lenders have been paid in full (except  that any such  amounts  otherwise  due a
Delinquent  Lender  received by  Administrative  Agent during an Election Period
shall be retained by  Administrative  Agent until the expiration of the Election
Period and either paid to the Delinquent Lender, if the delinquency is cured, or
paid to the Non-Delinquent  Lenders,  if the delinquency is not cured) and (iii)
Administrative  Agent  shall  deduct,  from  amounts  due (or,  in the case of a
Delinquent  Lender,  amounts that would  otherwise be payable to such Delinquent
Lender being held by Administrative Agent pursuant to clause (i) above) a Lender
in default under its  obligations  under Section 7.05,  the amount owing by such
Lender  pursuant to said  Section 7.05 and pay the amount so deducted to itself,
the other  Lenders,  or such  other  party as is  entitled  to such  amount,  as
applicable.

         Notwithstanding anything to the contrary contained in this Agreement or
the  Delinquent  Lender's  Note, to the extent a Delinquent  Lender is obligated
under this

                                       21
<PAGE>

Agreement  to advance  Loan  proceeds in respect of  interest on the Notes,  and
fails to do so,  and such  amount  is not  funded  by a  Replacement  Lender  or
Electing  Lender,  such portion of the interest on the Delinquent  Lender's Note
(i.e., the interest on the Delinquent  Lender's Note that, absent the Delinquent
Lender's  delinquency,  would have been paid by  advances  from the Loan  Budget
Amount for "Interest on Loan",  until the same was fully disbursed) shall accrue
and payment thereof shall be deferred until the Maturity Date (whether as stated
or by acceleration or otherwise), it being understood that the maximum amount of
interest  that  may be so  deferred  shall  be the  undisbursed  portion  of the
Delinquent Lender's portion of the Loan Budget Amount for "Interest on Loan".

         If,  following  such time as all  amounts  owing  under the Loan to the
Non-Delinquent  Lenders  and  Administrative  Agent  have  been  paid  in  full,
Administrative  Agent is holding  funds in  respect  of  amounts  payable to the
Delinquent   Lender  as  provided  in  the  third  paragraph  of  this  Section,
Administrative  Agent shall file an interpleader action in any appropriate court
of general  jurisdiction  located in New York or Pennsylvania  and shall deposit
the funds so held (less a sum equal to  Administrative  Agent's  reasonable fees
and expenses in connection with said interpleader  action and deposit) with said
court and Administrative  Agent shall thereupon be relieved of responsibility to
any party with respect to the funds  deposited.  Each  Delinquent  Lender hereby
jointly and severally agrees to reimburse Administrative Agent for all costs and
expenses that  Administrative  Agent may incur in connection  with the foregoing
interpleader  action.  Nothing in this  Section is intended to limit  Borrower's
rights and claims against a Delinquent Lender.

         Except as  provided  above in this  Section and in Section  7.16,  each
Lender's  interest in the Loan shall be of equal  priority  with the interest of
each other Lender.

Section 2.12. Interest. Borrower shall have the option, subject to the terms and
conditions  set forth in this  Agreement,  of paying  interest on the  Principal
Amount or portions  thereof at the Prime  Based Rate or the LIBO Based Rate.  If
Borrower  desires the application of the LIBO Based Rate, it shall submit a LIBO
Rate  Request  to  Administrative  Agent,  which  LIBO  Rate  Request  shall  be
irrevocable, subject to Borrower's right to convert the rate of interest payable
under the Notes with respect to any LIBOR Amount from the LIBO Based Rate to the
Prime Based Rate as provided in Section 2.14. Administrative Agent shall, on the
day of its receipt of the LIBO Rate Request from Borrower, notify each Lender by
either telephone or by facsimile of the specified LIBOR Amount and the amount of
the  Lender's  portion  thereof,  the Interest  Period and date of  commencement
thereof,  and the interest rate applicable to such LIBOR Amount.  Each LIBO Rate
Request  shall be  applicable  to the  Notes  in  accordance  with the  Lenders'
respective Pro Rata Shares,  so that,  barring a conversion or suspension of the
LIBO Based Rate by one or more, but not all,  Lenders,  pursuant to Article III,
the outstanding  principal  amounts of each of the Notes shall contain  segments
bearing  interest  at the Prime  Based  Rate  and/or  LIBO Based  Rate(s)  under
particular  Interest  Period(s),  each of which segments  shall  correspond to a
proportional  segment of the outstanding  principal  amount of every other Note.
Notwithstanding the foregoing,  if a Lender shall fail to fund the portion it is
required to fund of any advance of the Loan and

                                       22
<PAGE>

an Electing  Lender  shall  commit to fund the  Delinquency  Amount  pursuant to
Section  7.16,  then from and after  the time of the first  disbursement  of the
Delinquency  Amount  by the  Electing  Lender,  (i) in the  case of a LIBO  Rate
Request with respect to an advance,  such LIBO Rate Request  shall be applicable
to the Notes in accordance with the respective  portions of such advance made by
the  Lenders;  (ii) in the case of a LIBO Rate Request with respect to a portion
of the Principal Amount bearing interest at the Prime Based Rate to be converted
to the LIBO Based Rate,  such LIBO Rate Request shall be applicable to the Notes
ratably in accordance  with the portions of the outstanding  principal  balances
under the respective  Notes bearing  interest at the Prime Based Rate; and (iii)
in the case of a LIBO Rate Request with respect to an existing LIBOR Amount that
is to be the subject of a new Interest  Period,  such LIBO Rate Request shall be
applicable to the Notes ratably in accordance  with the  respective  portions of
such existing LIBOR Amount allocable to the respective  Notes. In the event that
Borrower  fails to submit a LIBO Rate Request with respect to a LIBOR Amount not
later than 10:00 a.m.  (Pittsburgh  time) three (3)  Business  Days prior to the
last day of the relevant  Interest  Period,  the LIBOR Amount in question  shall
bear interest, commencing at the end of such Interest Period, at the Prime Based
Rate.

         Interest shall be computed on an actual/360-day  basis (i.e.,  interest
for each day  during  which any  portion  of the  Principal  Amount  is  bearing
interest at a particular  interest rate per annum shall be computed at such rate
divided by 360).

         Borrower shall pay interest on the Principal  Amount to  Administrative
Agent for the account of  Lenders.  Interest on the  Principal  Amount  shall be
payable,  in arrears,  monthly on the first day of the first month following the
Initial  Advance and on the first day of each month  thereafter  until the Notes
are repaid in full.

         Section 2.13. Limitation on Number of Interest Periods.  Borrower shall
not  have  the  right to have  more  than  five  (5)  Interest  Periods,  in the
aggregate,  in respect of the Loan in effect at any one time, whether or not any
portion of the  Principal  Amount is then  bearing  interest  at the Prime Based
Rate.

         Section 2.14.  Conversions of Interest Rate.  Provided  there exists no
Event of Default,  Borrower shall have the right to convert,  from time to time,
the rate of interest  payable under the Notes with respect to any portion of the
Principal Amount to the LIBO Based Rate or the Prime Based Rate,  subject to the
terms of this  Agreement  (including,  without  limitation,  the  payment of all
amounts due in connection with any such conversion from the LIBO Based Rate on a
date other than the last day of an  applicable  Interest  Period)  and  provided
that,  in the case of a  conversion  from the LIBO Based Rate,  the entire LIBOR
Amount is the subject of the conversion.  Conversions  shall be accomplished (i)
in the case of a conversion from the Prime Based Rate to the LIBO Based Rate, by
Borrower's  submission of a LIBO Rate Request in accordance with Section 2.12 or
(ii) in the case of a  conversion  from the LIBO Based  Rate to the Prime  Based
Rate, by Borrower's request to Administrative Agent by telephone (to be promptly
confirmed in writing), to be received by Administrative Agent at least three (3)
Business Days prior to the date  specified for such  conversion,  specifying the
LIBOR Amount with respect to which the interest  rate is to be converted and the
date of the conversion. On

                                       23
<PAGE>

the date of its receipt of such request,  Administrative Agent shall notify each
Lender thereof either by telephone or by facsimile.

         Section  2.15.  Inapplicability  of LIBO  Based  Rate.  Any  portion of
the Principal  Amount to which the LIBO Based Rate is not or cannot  pursuant to
the terms of this Agreement be applicable shall bear interest at the Prime Based
Rate. Upon the occurrence of an Event of Default,  the entire  Principal  Amount
shall, at the option of Administrative Agent,  immediately and without notice to
Borrower,  bear  interest  at the Prime  Based  Rate.  In  addition,  during the
existence of an Event of Default,  Borrower shall have no right to submit a LIBO
Rate Request  with  respect to any LIBOR  Amount for which the current  Interest
Period is expiring.  The foregoing provisions shall not be construed as a waiver
by Lenders of their right to pursue any other  remedies  available to them under
the Mortgage or any other Loan  Document nor shall they be construed to limit in
any way the application of the Default Rate as provided in the Mortgage.

         Section 2.16. Late Payment Premium. Borrower shall,  at  Administrative
Agent's option,  pay to  Administrative  Agent for the account of Lenders a late
payment  premium in the amount of 4% of any  payments of  principal  (other than
principal at  maturity)  or interest  under the Loan made more than fifteen (15)
days after the due date  thereof,  which late payment  premium shall be due with
any such late payment.  Such late charge (i) represents the reasonable  estimate
of Borrower and Lenders of a fair average  compensation for the loss that may be
sustained by Lenders due to the failure of Borrower to make timely  payments and
(ii) shall be paid  without  prejudice  to the right of  Lenders to collect  any
other amounts  provided  herein or in the other Loan  Documents to be paid or to
exercise any other remedies under the Loan Documents.

         Section 2.17. Voluntary  Prepayments.   Borrower may, upon at least ten
(10) Business Days' notice to Administrative Agent, prepay the Principal Amount,
in whole or part, without premium or penalty;  provided,  however,  that (i) any
partial prepayment under this Section shall be in a principal amount of not less
than $1,000,000 and an integral multiple of $100,000, (ii) prepayment of a LIBOR
Amount  other than on the last day of the  applicable  Interest  Period shall be
subject to the provisions of Section 3.03 and (iii) each  prepayment  under this
Section  shall include all interest  accrued on the amount of principal  prepaid
(and all late  charges and other sums that may be  payable)  through the date of
prepayment.  Amounts  prepaid  may not be  reborrowed.  In  connection  with the
foregoing, Administrative Agent shall notify (by telephone or by fax) Lenders on
the next  Business  Day  following  its receipt of a notice of  prepayment  from
Borrower.

         Section  2.18. Extension(s) of Maturity Date. Provided  there exists no
Default or Event of Default, Borrower shall have the option,  exercisable twice,
to extend the Maturity  Date for a period of one (1) year,  subject in each case
(unless  otherwise  indicated),  to (i)  Administrative  Agent's  receipt of (w)
evidence  that the  operating  covenants of the Anchors  under the REA remain in
full force and effect,  (x) a written  request from Borrower for such  extension
between  thirty  (30) and  ninety  (90) days  prior to the  Maturity  Date to be
extended,  (y) no later than one day prior to the Maturity  Date to be extended,
an extension fee, for the account of Lenders, in the amount of .20% (in the case
of the first  extension)  and .25% (in the case of the second  extension) of the
Commitment  Amount  as of the  Maturity  Date to be  extended  and (z) such note
extension  agreement(s) as Administrative  Agent may reasonably require and (ii)
Administrative

                                       24
<PAGE>

Agent's determination (which shall be conclusive so long as made on a reasonable
basis)  that,  as of the  Maturity  Date to be  extended,  (1)  Guarantor  is in
compliance  with the  covenants  set forth in paragraphs 9 and 10 of the Payment
Guaranty, (2) the Improvements and the Anchor Stores (other than unleased tenant
space in the Improvements,  the Saks' Anchor Store and minor "punch-list" items)
have been  satisfactorily  completed (and, in the case of the Improvements,  are
lien-free)  in accordance  with this  Agreement (3) at least 70% (in the case of
the first extension) and 80% (in the case of the second  extension) of the total
SFGLA in the  Improvements  is covered by executed  leases pursuant to which the
tenants  thereunder are in occupancy and which have an unexpired term of one (1)
year or more, (4) for the first extension  only, the Commitment  Amount does not
exceed 65% of the "as-is"  value of the Premises  (as  reflected in an update to
the appraisal  delivered  pursuant to Section 4.01(4),  which updated  appraisal
shall be commissioned  by  Administrative  Agent at Borrower's  expense) and (5)
Debt Service  Coverage is at least 1.25 (in the case of the first extension) and
1.40 (in the case of the second extension),  as of the date immediately prior to
the  Maturity  Date  to be  extended;  provided,  however,  that  the  foregoing
loan-to-value and Debt Service Coverage  conditions set forth in clauses (4) and
(5) above shall be deemed  satisfied if Borrower  makes a partial  prepayment of
the Principal  Amount on or before the Maturity Date to be extended in an amount
such that the requisite  loan-to-value or Debt Service Coverage, each recomputed
based on the reduced Commitment Amount, is attained.

         Section  2.19. Required Amortization During Extension  Term(s).  If the
original  Maturity Date is extended by Borrower for one (1) year pursuant to the
first  exercise of its option to extend in  accordance  with the  provisions  of
Section 2.18,  then,  commencing on the first day of the second month  following
such first  extension,  and on the first day of each month  thereafter until the
extended  Maturity Date,  Borrower shall,  and hereby covenants and promises to,
make monthly payments in reduction of the Principal  Amount.  The amount of such
principal payments shall be computed in accordance with a twenty-five  (25)-year
fully  amortizing,  constant payment  mortgage  schedule based on the Commitment
Amount at the time of the  first  such  payment  date and an  assumed  per annum
interest  rate of 2% in excess of the  percentage  yield to maturity of the then
"on-the-run"  ten (10)-year United States Treasury Note. If the Maturity Date is
further extended by Borrower for another year pursuant to the second exercise of
its option to extend in accordance  with the  provisions of Section 2.18,  then,
commencing on the first day of the second month following such second extension,
and on the  first  day of each  month  thereafter  until  the  further  extended
Maturity  Date,  Borrower  shall,  and hereby  covenants  and  promises to, make
adjusted  monthly payments in reduction of the Principal  Amount.  The amount of
such  adjusted   monthly  payments  shall  be  computed  in  accordance  with  a
twenty-four  (24)-year,  fully-amortizing,  constant payment  mortgage  schedule
based on the Commitment Amount at the time of the first such payment date and an
assumed  per annum  interest  rate of 2% in excess  of the  percentage  yield to
maturity of the then "on-the-run" ten (10)-year United States Treasury Note.

         Section 2.20. Interest Rate Reduction. Provided there exists no Default
or Event of Default,  the Applicable Margin with respect to the Prime Based Rate
and the

                                       25
<PAGE>

LIBO  Based  Rate  shall be  reduced  to (i) .20% per annum and 1.70% per annum,
respectively,   upon  Administrative   Agent's  determination  (which  shall  be
conclusive so long as made on a reasonable  basis) that Debt Service Coverage is
at least  1.25 and (ii) .00% per annum and 1.55% per annum,  respectively,  upon
(x) Administrative  Agent's receipt of evidence that the operating  covenants of
the Anchors under the REA remain in full force and effect and (y) Administrative
Agent's determination (which shall be conclusive so long as made on a reasonable
basis) that (1)  Guarantor  is in  compliance  with the  covenants  set forth in
paragraphs 9 and 10 of the Payment Guaranty, (2) the Improvements and the Anchor
Stores (other than unleased tenant space in the  Improvements,  the Saks' Anchor
Store and minor "punch-list" items) have been satisfactorily  completed (and, in
the case of the Improvements,  are lien-free) in accordance with this Agreement,
(3) at least 80% of the total SFGLA in the  Improvements  is covered by executed
leases pursuant to which the tenants  thereunder are in occupancy and which have
an unexpired  term of one (1) year or more and (4) Debt  Service  Coverage is at
least 1.40.  Administrative  Agent's  determination of Debt Service Coverage and
Guarantor's  financial covenant  compliance and of the satisfaction of the other
conditions,  all as set forth above,  shall be made within  thirty (30) Business
Days of  Administrative  Agent's receipt from Borrower of sufficiently  detailed
financial  data and  calculations.  Interest rate  reductions for which Borrower
qualifies  pursuant to this Section  shall be  retroactive  to the date on which
Administrative  Agent shall have received the financial data and calculations as
aforesaid.

                                  Article III

                             YIELD MAINTENANCE ETC.

         Section 3.01.  Additional  Costs   and  Other  Effects   of  Regulatory
Changes.  Borrower  shall pay directly to a Lender,  promptly upon demand,  such
amounts  as are  necessary  to  compensate  such  Lender  for  Additional  Costs
resulting from any Regulatory  Change which (i) subjects such Lender to any tax,
duty or other charge with respect to the Loan or its Note,  or changes the basis
of  taxation of any  amounts  payable to such Lender  under the Loan or its Note
(other  than taxes  imposed on the  overall  net income of such Lender or of its
Applicable  Lending Office by the jurisdiction in which such Lender's  principal
office or such Applicable Lending Office is located), (ii) imposes,  modifies or
deems  applicable any reserve (other than to the extent the Reserve  Requirement
is taken into account in determining the LIBO Based Rate at the  commencement of
the  applicable  Interest  Period),  special  deposit  or  similar  requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender,  (iii) imposes on such Lender or, in the case
of LIBOR Amounts,  on the London interbank market, any other condition affecting
the Loan or its Note, or any of such extensions of credit or liabilities or (iv)
imposes any capital  adequacy  requirements on such Lender by virtue of the Loan
or the Notes.  Such Lender will notify  Borrower (with a copy to  Administrative
Agent) of any event  occurring  after the date hereof which would  entitle it to
compensation  pursuant to this  paragraph  as promptly as  practicable  after it
obtains

                                       26
<PAGE>

knowledge  thereof  and  determines  to  request  such  compensation,  and  will
designate a different  Applicable  Lending Office for those portions of the Loan
affected  by such event if such  designation  will avoid the need for, or reduce
the amount of, such compensation and will not, in such Lender's sole opinion, be
disadvantageous  to it, provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located in the United States.

         Without limiting the effect of the immediately preceding paragraph,  in
the  event  that,  by  reason  of any  Regulatory  Change,  (i) a Lender  incurs
Additional  Costs based on or measured by the excess above a specified  level of
the amount of (1) a category  of deposits  or other  liabilities  of such Lender
which  includes  deposits by reference to which the LIBO Rate is  determined  as
provided  in this  Agreement  and/or (2) a category of  extensions  of credit or
other  assets of such  Lender  which  includes  loans the  interest  on which is
determined on the basis of rates referred to in the definition of "LIBO Rate" in
Section 1.01,  (ii) a Lender becomes  subject to  restrictions  on the amount of
such a category of  liabilities or assets which it may hold or (iii) it shall be
unlawful or  impossible  for a Lender to make or maintain  its Pro Rata Share of
the Loan (or any portion  thereof) at the LIBO Based  Rate,  then such  Lender's
obligation  to make or  maintain  its Pro Rata  Share  of the Loan (or  portions
thereof) at the LIBO Based Rate (and Borrower's right to request the same) shall
be suspended and such Lender shall give notice  thereof to Borrower (with a copy
to Administrative  Agent) and, upon the giving of such notice,  interest payable
on the affected  Note shall be  converted  to the Prime Based Rate,  unless such
Lender may lawfully  continue to maintain its Pro Rata Share of the Loan (or any
portion  thereof) then bearing interest at the LIBO Based Rate to the end of the
current Interest Period(s), at which time the interest rate on the affected Note
shall convert to the Prime Based Rate.  If  subsequent to any  conversion to the
Prime Based Rate as provided above such Lender  determines  that such Regulatory
Change has ceased to be in effect,  such Lender will so notify  Borrower (with a
copy to  Administrative  Agent),  and  Borrower may convert the rate of interest
payable under the affected Note with respect to those  portions of the Principal
Amount  bearing  interest  at the Prime  Based  Rate to the LIBO  Based  Rate by
submitting a LIBO Rate Request in respect  thereof and otherwise  complying with
the provisions of this Agreement with respect thereto.

         No  Lender  shall be  entitled  to any  compensation  pursuant  to this
Section  relating  to any period  more than  ninety  (90) days prior to the date
notice thereof is given to Borrower by such Lender.

         Determinations  by  each  Lender  of the  existence  or  effect  of any
Regulatory  Change on its costs of making or  maintaining  its Pro Rata Share of
the Loan, or portions thereof,  at the LIBO Based Rate, or on amounts receivable
by it in respect thereof,  and of the additional  amounts required to compensate
such Lender in respect of Additional Costs,  shall be conclusive so long as made
on a reasonable basis.

         Section 3.02. Limitations on Availability of LIBO Based Rate.  Anything
herein  to the  contrary  notwithstanding,  if,  at the  time of or prior to the
determination  of the LIBO Based Rate in respect of any LIBO Rate Request Amount
as  provided in this  Agreement,  (i)  Administrative  Agent  determines  (which
determination shall be

                                       27
<PAGE>

conclusive  so  long  as  made  on  a  reasonable   basis)  that  by  reason  of
circumstances affecting the London interbank market generally, adequate and fair
means do not or will not exist for determining the LIBO Based Rate applicable to
an Interest Period or (ii) a Lender  determines  (which  determination  shall be
conclusive  so long as made on a  reasonable  basis) that the LIBO Rate will not
accurately reflect the cost to such Lender of making or maintaining its Pro Rata
Share  of the  Loan (or any  portion  thereof)  at the  LIBO  Based  Rate,  then
Administrative  Agent, in the case of the circumstances  described in clause (i)
above, or such Lender, in the case of the circumstances described in clause (ii)
above,  shall give Borrower prompt notice thereof (with a copy to Administrative
Agent in the case of the notice  from such  Lender),  and the LIBO Rate  Request
Amount in  question,  in the case of the  circumstances  described in clause (i)
above,  or such  Lender's  portion  thereof,  in the  case of the  circumstances
described  in clause  (ii)  above,  shall bear  interest,  or  continue  to bear
interest, as the case may be, at the Prime Based Rate. If at any time subsequent
to Administrative Agent's or such Lender's giving of such notice, Administrative
Agent or such Lender, as the case may be, determines that because of a change in
circumstances the LIBO Based Rate is again available to Borrower, Administrative
Agent or such Lender,  as the case may be, shall so notify Borrower (with a copy
to  Administrative  Agent,  in the case of the  notice  from  such  Lender)  and
Borrower  may  convert  the rate of  interest  payable  under  the Notes or such
Lender's  Note,  as the case may be, from the Prime Based Rate to the LIBO Based
Rate by  submitting  a LIBO  Rate  Request  in  respect  thereof  and  otherwise
complying with the provisions of this Agreement with respect thereto.

         Section  3.03. Certain Compensation. Borrower shall pay  directly  to a
Lender,   immediately  upon  request  and  notwithstanding  contrary  provisions
contained in the Mortgage or other Loan Documents, such amounts as shall, in the
judgment  of  such  Lender  (which  shall  be  conclusive  so  long as made on a
reasonable basis), compensate it for any loss, cost or expense incurred by it as
a result of (i) any payment or prepayment (under any  circumstances  whatsoever,
whether voluntary or involuntary) of any portion of the Principal Amount bearing
interest  at the  LIBO  Based  Rate on a date  other  than  the  last  day of an
applicable  Interest  Period,  (ii) the conversion  (for any reason  whatsoever,
whether  voluntary or  involuntary)  of the rate of interest  payable under such
Lender's  Note from the LIBO Based Rate to the Prime Based Rate with  respect to
any portion of the Principal Amount then bearing interest at the LIBO Based Rate
on a date other than the last day of an applicable  Interest  Period,  (iii) the
failure  of all or a portion  of an  advance of the Loan which was to have borne
interest at the LIBO Based Rate  pursuant  to a LIBO Rate  Request to be made or
(iv) the failure of Borrower to borrow, continue or convert in accordance with a
LIBO  Rate  Request  submitted  by it,  which  amounts  shall  include,  without
limitation,  an amount equal to the present  value (using as a discount rate the
rate at which interest is computed  pursuant to clause (y) below) of the excess,
if any, of (x) the amount of interest  that would have accrued at the LIBO Based
Rate  on the  amount  so  prepaid,  converted,  not  advanced  or not  borrowed,
continued  or  converted,  as the case may be, for the  period  from the date of
occurrence to the last day of the applicable Interest Period over (y) the amount
of interest (as  determined in good faith by such Lender) that such Lender would
have paid to Borrower (and other  customers) on a Euro-Dollar  deposit placed by
such  Lender with  leading  banks in the London  interbank  market for an amount
comparable  to the amount so prepaid,  converted,  not advanced or not

                                       28
<PAGE>

borrowed,  continued or  converted,  as the case may be, for the period from the
date of occurrence to the last day of the applicable Interest Period.

         Section 3.04.  Substitution  of Lenders.  If any  Lender (an  "Affected
Lender")  (i) makes  demand  upon  Borrower  for (or if  Borrower  is  otherwise
required to pay) Additional  Costs pursuant to Section 3.01 or (ii) gives notice
to Borrower that such Lender is unable to make or maintain its Pro Rata Share of
the Loan at the LIBO Based Rate as a result of a condition  described  in clause
(ii) of Section 3.02 or in the second  paragraph of Section 3.01,  Borrower may,
within ninety (90) days of receipt of such demand or notice, as the case may be,
give notice (a "Substitution Notice") to Administrative Agent and to each Lender
of its  intention  to  replace  such  Affected  Lender  with  another  financial
institution (the "Substitute  Lender")  designated in such Substitution  Notice.
If,  within  thirty  (30)  days  of  Administrative   Agent's  receipt  of  such
Substitution  Notice,  (x)  Administrative  Agent shall notify Borrower and each
Lender in writing that the Substitute  Lender is reasonably  satisfactory to the
Required  Lenders  and (y) the  Affected  Lender  shall  not  agree to waive the
payment of the Additional  Costs in question or the effect of the  circumstances
described in clause (ii) of Section  3.02 or in the second  paragraph of Section
3.01, then the Affected Lender shall, so long as no Default shall exist,  assign
its Note and all of its  rights and  obligations  under  this  Agreement  to the
Substitute  Lender,  and the Substitute  Lender shall assume all of the Affected
Lender's rights and obligations, pursuant to an agreement,  substantially in the
form of an Assignment and Assumption Agreement,  executed by the Affected Lender
and the Substitute  Lender.  In connection  with such assignment and assumption,
the  Substitute  Lender shall pay to the Affected  Lender an amount equal to the
outstanding  principal amount under the Affected Lender's Note plus all interest
accrued thereon, plus all other amounts, if any (other than the Additional Costs
in  question),  then due and payable to the Affected  Lender with respect to the
Loan;  provided,  however,  that  prior  to  or  simultaneously  with  any  such
assignment and assumption,  Borrower shall have paid to such Affected Lender all
amounts  properly  demanded and  unreimbursed  under this Article III.  Upon the
effective  date  of such  assignment  and  assumption  and  the  payment  by the
Substitute Lender to Administrative  Agent of a fee, for Administrative  Agent's
own account, in the amount of $3,500, the Substitute Lender shall become a party
to this  Agreement and shall have all the rights and  obligations of a Lender as
set forth in such Assignment and Assumption  Agreement,  and the Affected Lender
shall be released  from its  obligations  hereunder,  and no further  consent or
action by any party shall be required.  Upon the  consummation of any assignment
pursuant to this  Section,  a note shall be issued to the  Substitute  Lender by
Borrower,  in  substitution  for the Affected  Lender's  Note,  and the Affected
Lender shall return its Note to Borrower.  Such substitute note shall constitute
a "Note", and the obligations evidenced by such substitute note shall be secured
by the Mortgage. In connection with Borrower's execution of such substitute note
as aforesaid,  Borrower shall deliver to  Administrative  Agent such evidence of
the due  authorization,  execution and delivery of the  substitute  note and any
related  documents  as  Administrative  Agent  may  reasonably  request.  If the
Substitute  Lender is not incorporated  under the Laws of the United States or a
state thereof,  it shall,  prior to the first date on which interest or fees are
payable hereunder for its account,  deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 7.13.

                                       29
<PAGE>

         Borrower,   Administrative   Agent  and  Lenders   shall  execute  such
modifications  to the Loan  Documents as shall,  in the  reasonable  judgment of
Administrative   Agent,  be  necessary  or  desirable  in  connection  with  the
substitution  of Lenders in  accordance  with the  foregoing  provisions of this
Section.

                                   Article IV

                              CONDITIONS PRECEDENT

         Section 4.01. Conditions Precedent to Initial Advance. Lenders shall
not be  obligated to make the Initial  Advance  until the  following  conditions
shall have been satisfied:

               (a) There shall exist no Default or Event of Default;

               (b) The  representations  and warranties  made to  Administrative
          Agent or Lenders herein,  in the other Loan Documents and in any other
          document,   certificate   or   statement   executed  or  delivered  to
          Administrative  Agent or Lenders in connection  with the Loan shall be
          true and correct on and as of the date of the Initial Advance with the
          same effect as if made on such date;

               (c) The  Improvements,  if any,  shall not have  been  materially
          injured  or damaged by fire or other  casualty  unless  Administrative
          Agent  shall have  received,  for the  account of  Lenders,  insurance
          proceeds sufficient in the judgment of the Construction  Consultant to
          effect the satisfactory  restoration of the Improvements and to permit
          completion of the Improvements prior to the Completion Date;

               (d) Administrative Agent shall have received and approved each of
          the following:

                    (1) Fees and  Expenses.  (i) Those fees  required by the Fee
               Letter to be paid by  Borrower/Guarantor  on or  before  the date
               hereof and (ii) all fees and expenses  incurred by Administrative
               Agent  (including,  without  limitation,  the reasonable fees and
               expenses of counsel, the Construction  Consultant,  environmental
               and  insurance  consultants,  and the  preparer of the  appraisal
               required by paragraph (4) below);

                    (2) Loan Documents and Fee Letter.  This Agreement,  each of
               the other Loan Documents and the Fee Letter, duly executed by the
               parties thereto, and, where applicable,  duly acknowledged and in
               proper form for recording or filing,  as the case may be, and all
               necessary or  desirable  recordings  and filings  shall have been
               duly made;

                    (3)  Financial   Statements.   Current  unaudited  financial
               statements  of Borrower,  certified by an  appropriate  financial
               officer, and audited TRG Consolidated  Financial Statements (each
               as of and for the

                                       30
<PAGE>

               year  ended  December  31,  1999) and such other  financial  data
               (including,  without limitation,  current financial statements of
               the General Contractor) as Administrative Agent shall require;

                    (4)  Appraisal.  A written  appraisal  of the  Premises  and
               Improvements, and also covering the Option Parcel, prepared by an
               independent  appraiser engaged by Administrative  Agent on behalf
               of Lenders  at  Borrower's  sole cost and  expense,  prepared  in
               compliance with all applicable regulatory  requirements and being
               also  subject to  Administrative  Agent's  customary  independent
               appraisal requirements;

                    (5)  Insurance  Policies.   The   policies/certificates   of
               insurance required by the Mortgage, together with evidence of the
               payment of the premiums therefor;

                    (6) Hazardous Materials  Report/Reliance  Letter. A detailed
               environmental  site  assessment  report  regarding  each  of  the
               Premises  and the  Option  Parcel  (with  accompanying  "reliance
               letter") by a properly qualified engineer;

                    (7)  Title  Policy.   A  paid  title  insurance  policy  (or
               policies),  dated the date of the Initial Advance,  in the amount
               of the Mortgage,  in the standard form  promulgated  by the Texas
               Department  of Insurance  and approved by  Administrative  Agent,
               issued by the Title  Insurer,  which shall insure the Mortgage to
               be a valid lien on Borrower's  interests in the Premises free and
               clear of all defects and  encumbrances  except  those  previously
               received and approved by Administrative Agent, and shall contain,
               to the extent available in Texas:

                         (i) full coverage  against  mechanics' liens (filed and
                    inchoate),

                         (ii) a reference to the survey (with the standard Texas
                    survey  exception),  but no other survey  exceptions  except
                    those theretofore approved by Administrative Agent,

                         (iii) such affirmative insurance and endorsements which
                    are   available  in  Texas  as   Administrative   Agent  may
                    reasonably require, and

                         (iv)  a  pending   disbursements  clause  in  the  form
                    prescribed  by the Texas  Department  of  Insurance,  and an
                    undertaking by the Title Insurer to provide periodic updates
                    of the  state of  title  to the  Premises  as  requested  by
                    Administrative Agent;

               and shall be accompanied by such reinsurance  agreements  between
               the Title Insurer and title companies  approved by Administrative
               Agent, in the

                                       31
<PAGE>

               facultative  reinsurance form promulgated by the Texas Department
               of Insurance, as Administrative Agent may require;

                    (8)  Survey.  A current  ALTA/ACSM  survey of the  Premises,
               certified to Administrative Agent and the Title Insurer, showing:

                         (i) the  location of the  perimeter  of the Premises by
                    courses and distances,

                         (ii) all  easements,  rights-of-way,  and utility lines
                    referred to in the title policy  required by this  Agreement
                    or which  actually  service  or  cross  the  Premises  (with
                    instrument, book and page number indicated),

                         (iii) the lines of the streets  abutting  the  Premises
                    and the width  thereof,  and any  established  building  and
                    setback lines,

                         (iv)  encroachments  and the  extent  thereof  upon the
                    Premises,

                         (v) locations of all portions (with the acreage thereof
                    also identified) of the Premises,  if any, which are located
                    in an area designated as a "flood prone area", as defined by
                    the  U.S.   Department  of  Housing  and  Urban  Development
                    pursuant to the Flood Disaster Protection Act of 1973,

                         (vi) the  Improvements to the extent  constructed,  and
                    the  relationship  of the  Improvements  by distances to the
                    perimeter of the Premises, established building, setback and
                    street lines, and

                         (vii) if the Premises are described as being on a filed
                    map, a legend relating the survey to said map;

                    (9) Leases and Premises  Documents.  Certified copies of the
               Parking  Lease and all other  executed  leases in  respect of the
               Premises,   accompanied  by  (i)  executed   notice-of-assignment
               letters  in the form of  EXHIBIT F in  respect  thereof  and (ii)
               estoppel certificates and subordination and attornment agreements
               (on a "best efforts" basis), in form acceptable to Administrative
               Agent,  in respect  of such  leases as  Administrative  Agent may
               require;  a certified copy of the standard form of lease Borrower
               will  use  in  connection  with  the  leasing  of  space  in  the
               Improvements;  and  certified  copies  of  the  REA,  the  Master
               Agreement  and  all  other  Premises  Documents,   together  with
               estoppel  certificates  from the Anchors,  the City and all other
               parties to any thereof;

                    (10)  Counsel  Opinions.  Favorable  opinions of  Borrower's
               counsel and local counsel as to such matters as may be reasonably
               requested by Administrative Agent;

                                       32
<PAGE>

                    (11)  Partnership  Documents.   For  each  of  Borrower  and
               Guarantor:

                         (i) certified  copies of its  certificate and agreement
                    of limited  partnership,  with all amendments  thereto,  and
                    certificates  of the  Secretary  of State  of  Texas  and of
                    Delaware as to its good standing in such jurisdictions,

                         (ii)  certified  copies  of  all  documents  evidencing
                    partnership  action taken by it  authorizing  the execution,
                    delivery  and  performance  of the Loan  Documents  and each
                    other  document  to be  delivered  by it  or on  its  behalf
                    pursuant to this Agreement, and

                         (iii) a certificate  of the secretary of TCI certifying
                    the names,  offices and true  signatures of each  individual
                    authorized to sign on behalf of Borrower and Guarantor;

                    (12)  Requisition.  A Requisition  for the Initial  Advance,
               together  with proof of payment of, or unpaid  invoices  for, any
               Indirect Costs included therein;

                    (13)   Permits  and   Approvals.   Copies  of  any  and  all
               authorizations  (including plot plan and  subdivision  approvals,
               zoning  variances,  water,  sewer,  building  and other  permits)
               required by Governmental  Authorities or otherwise  necessary for
               the  construction,  use,  occupancy and operation of the Premises
               and/or Improvements for the purposes contemplated by the Plans in
               accordance with all applicable Laws;

                    (14) Management and Leasing Contract.  A copy,  certified to
               be true and complete,  of its agreement with The Taubman  Company
               Limited  Partnership  providing for the management,  maintenance,
               operation and leasing of the Premises and Improvements,  together
               with such collateral assignment or "will-serve" letter in respect
               thereof as Administrative Agent may require;

                    (15) Chattel  Searches.  UCC searches  against  Borrower and
               advice  from the Title  Insurer to the effect  that  searches  of
               proper  public  records  disclose  no  leases  of  personalty  or
               financing  statements  filed or recorded  against the Premises or
               Borrower;

                    (16)  Interest  Rate  Protection  and  Assignment.  A  fully
               executed  counterpart  of an interest rate  protection  agreement
               between  Borrower  and  a  financial  institution  acceptable  to
               Administrative  Agent,  at a rate,  for a term and  otherwise  on
               terms and conditions  reasonably  satisfactory to  Administrative
               Agent, in an accreting notional amount (increasing as advances of
               Loan proceeds are made  hereunder) up to  $147,000,000,

                                       33
<PAGE>

               together with an assignment  of Borrower's  rights  thereunder to
               Administrative  Agent as security for the Loan,  which assignment
               shall  be  acknowledged   and  consented  to  by  said  financial
               institution;

                    (17) Plans, Etc. A complete set of the Plans and copies of a
               soil-engineer's  report,  a  site  plan  (showing  all  necessary
               approvals,  utility  connections and site  improvements)  and all
               inspection  and test  records and reports made by or for Borrower
               or Borrower's Architects;

                    (18)  Consultant's  Report.  A report from the  Construction
               Consultant  to the effects  that (i) it has received and approved
               the items  required by paragraph  (e) below,  (ii) the Plans have
               been approved by all applicable Governmental  Authorities,  (iii)
               the   Improvements  as  shown  by  the  Plans  will  comply  with
               applicable zoning and other Laws and with all applicable Premises
               Documents,  (iv) a General Contract and/or Major Subcontracts are
               in effect which  satisfactorily  provide for the  construction of
               the Improvements,  (v) all roads and utilities  necessary for the
               full utilization of the Improvements for their intended  purposes
               have been  completed,  or the  presently  installed  and proposed
               roads and utilities will be sufficient  for the full  utilization
               of the  Improvements  for  their  intended  purpose  and  will be
               available to and servicing  the Premises  upon  completion of the
               Improvements,   (vi)  the   construction   of  the   Improvements
               theretofore  performed,  if any, was performed in accordance with
               the Plans and (vii) construction of the Improvements,  along with
               all necessary roads and utilities,  will be finished on or before
               the Completion Date; and to such other effects as  Administrative
               Agent may reasonably request;

                    (19) Construction  Contracts and Will-Serve Letters.  Copies
               of the General  Contract,  all executed  Major  Subcontracts  and
               Borrower's  agreement with  Borrower's  Architects,  in each case
               certified  by Borrower  to be true and  complete,  together  with
               letters from Borrower's  Architects and the General Contractor in
               the forms of EXHIBITS C and D, respectively;

                    (20) Bonds.  Performance bonds (naming  Administrative Agent
               as co-obligee)  and labor and materials  payment  bonds,  each in
               form and issued by a surety acceptable to  Administrative  Agent,
               in  respect  of  all   subcontracts   as  may  be   specified  by
               Administrative Agent;

                    (21) Progress Schedule. A progress schedule or chart showing
               the  interval  of time over  which  each  item of Direct  Cost is
               projected to be incurred or paid;

                    (22) Project Cost Statement. The Project Cost Statement;

                                       34
<PAGE>

                    (23)  Equity   Investment.   A  certificate   from  Borrower
               demonstrating  that it has invested equity in the Premises (i.e.,
               its payment of Direct or Indirect Costs) in an amount equal to at
               least   $73,192,321.75, which  certificate  shall  be accompanied
               by such evidence of such investment as  Administrative  Agent may
               reasonably request;

                    (24) Covenant Compliance  Certificate.  A certificate of the
               sort required by paragraph (3) of Section 6.19; and

                    (25)  Additional   Documentation.   Such  other   approvals,
               opinions or  documents  as  Administrative  Agent may  reasonably
               request; and

               (e) The Construction  Consultant shall have received and approved
          each of the following:

                    (1)  Related  Documents.  Copies  of the items  required  by
               paragraphs  (6), (8), (13),  (17),  (19),  (20), (21) and (22) of
               Section  4.01(d),  together  with  copies of any Major  Leases or
               Premises    Documents   which   contain   any   requirements   or
               specifications in respect of construction of the Improvements;

                    (2)  Title  Documents.  Copies  of any  documents  listed as
               exceptions to title in the title policy required hereby which are
               relevant to the construction or use of the Improvements; and

                    (3) Requisition. If the Initial Advance consists in whole or
               in part of advances for Direct Costs,  a copy of the  Requisition
               therefor.

         Section 4.02.Conditions to Advances After the Initial Advance. Lenders'
obligation  to make  advances of proceeds of the Loan after the Initial  Advance
shall be subject to the satisfaction of the following conditions:

               (a) All  conditions  of  Section  4.01 shall have been and remain
          satisfied as of the date of such advances, it being understood that in
          the  case  of  4.01(c)  (i.e.,   material  injury  or  damage  to  the
          Improvements by fire or other casualty),  subsequent advances shall be
          conditioned  on Borrower's  satisfaction  of the provisions of Section
          1.09 of the Mortgage;

               (b) There shall exist no Default or Event of Default;

               (c) The  representations  and warranties  made to  Administrative
          Agent and/or  Lenders  herein,  in the other Loan Documents and in any
          other  document,  certificate  or  statement  executed or delivered to
          Administrative  Agent and/or Lenders in connection with the Loan shall
          be true and correct on and as of the date of the advance with the same
          effect as if made on such date;

               (d)   Administrative   Agent   shall  have   received  a  written
          continuation report of or endorsement to the title policy insuring the
          Mortgage to the date of

                                       35
<PAGE>

          such  advance,  in the form  prescribed  by the  Texas  Department  of
          Insurance and approved by  Administrative  Agent, and setting forth no
          additional  exceptions  (including  survey  exceptions)  except  those
          approved by Administrative Agent;

               (e) If required by  Administrative  Agent, but no more frequently
          than once during any twelve  (12)-month period unless a current survey
          is required by the Title Insurer or Administrative Agent has reason to
          believe a survey encroachment exists,  Administrative Agent shall have
          received  a survey  of the  Premises,  certified  to it and the  Title
          Insurer,  updated,  with  respect  to all  relevant  requirements  and
          information, to within ten (10) days of the advance;

               (f)  Administrative  Agent and the Construction  Consultant shall
          have received a Requisition for the advance,  together with such other
          documentation  and  information  as  either  of  them  may  reasonably
          require; and

               (g)  Administrative  Agent and the Construction  Consultant shall
          have  received from  Borrower's  Architects,  the General  Contractor,
          Major Subcontractors and other contractors or subcontractors  required
          by  Administrative  Agent,  lien  waivers  filed in the real  property
          records of Collin County,  Texas and Payment Receipts for all payments
          due on or before the date of the immediately  prior  Requisition under
          contracts or other arrangements with such Persons,  the performance of
          which could give rise to a Lien on the Mortgaged Property.

         Section 4.03.  Conditions to Last Direct Costs Advance.  In addition to
the  requirements  of Section  4.02,  in the case of the last Direct  Costs Loan
advance  as  provided  in Section  2.04,  Administrative  Agent  shall also have
received and approved:

               (a) A report from the Construction  Consultant to the effect that
          construction of the  Improvements  has been completed  (other than for
          unleased tenant space and minor "punch-list" items), and any necessary
          utilities and roads have been finished and made  available for use, in
          accordance  with  the  Plans  and  that it has  received  satisfactory
          evidence  of the  approval  by  all  Governmental  Authorities  of the
          Improvements (exclusive of tenant space) for permanent occupancy,  and
          of the contemplated uses thereof, to the extent any such approval is a
          condition of the lawful use and occupancy thereof;

               (b)  A  current  final  survey  of  the  Premises,  certified  to
          Administrative  Agent and the Title  Insurer,  showing  the  completed
          Improvements;

               (c) Evidence that Borrower has filed the notice or affidavit,  in
          accordance  with  Section  53.106  of  the  Texas  Property  Code,  of
          completion of the Improvements  necessary to establish commencement of
          the  shortest  statutory  period  for the  filing  of  mechanics'  and
          materialmen's  liens,  and that at least  thirty (30) days have lapsed
          since the date of completion specified therein;

               (d) At Administrative Agent's option, a certificate from the City
          to the effect that the Improvements have been satisfactorily completed
          for all purposes of the Parking Lease and the Master Agreement and, to
          the extent any tenants

                                       36
<PAGE>

          under any other  Major  Leases or any  parties  to the other  Premises
          Documents have rights of approval with respect to  construction of the
          Improvements,  certificates  by such  tenants  or  parties  (or  other
          satisfactory evidence), to the effect that, for purposes of such Major
          Leases and Premises  Documents,  respectively,  the Improvements  have
          been satisfactorily completed; and

               (e) Such  endorsements  to the  title  policy(ies)  insuring  the
          Mortgage as Administrative Agent may reasonable request.

                                   Article V

                         REPRESENTATIONS AND WARRANTIES

         Borrower  represents and warrants to  Administrative  Agent and Lenders
that:

         Section 5.01. Due Formation, Power and  Authority. If it, the mortgagor
or grantor under the Mortgage (if  different  from  Borrower),  Guarantor or any
general partner or member of any of them is a corporation, partnership, venture,
limited liability company or trust, each such entity is duly organized,  validly
existing  and in  good  standing  under  the  Laws  of the  jurisdiction  of its
formation,  is qualified to do business (if required) and is in good standing in
the  jurisdiction  in which the  Premises  are  located,  and has full power and
authority to consummate  the  transactions  contemplated  hereby and to execute,
deliver and perform this  Agreement and any other Loan Document to which it is a
party.

         Section 5.02. Legally Enforceable Agreements.  The  Fee Letter and each
Loan  Document to which  Borrower or Guarantor is a party is a legal,  valid and
binding obligation of such party,  enforceable against Borrower or Guarantor, as
the case may be, in  accordance  with its terms,  except to the extent that such
enforcement  may be  limited  by  applicable  bankruptcy,  insolvency  and other
similar Laws affecting creditors' rights generally.

         Section 5.03. Financial Statements. Borrower's financial statements and
the TRG Consolidated  Financial  Statements most recently  delivered pursuant to
the terms of this  Agreement are in all material  respects  complete and correct
and fairly  present the  financial  condition of the subjects  thereof as of the
dates of and for the periods covered by such statements,  all in accordance with
GAAP except as otherwise  expressly  noted;  there has been no Material  Adverse
Change  since  the date of such most  recently  delivered  Borrower's  financial
statements and TRG Consolidated  Financial Statements,  and no borrowings (other
than those expressly  permitted hereby or by the Mortgage) which might give rise
to a lien or claim against the Mortgaged Property or against the proceeds of the
Loan have been made by Borrower or others since the dates of such most  recently
delivered  Borrower's  financial  statements  and  TRG  Consolidated   Financial
Statements.

         Section  5.04. Compliance With Laws; Payment  of  Taxes.  Borrower  and
Guarantor are in compliance with, and the transactions  contemplated  hereby and
by the other Loan  Documents  do not and will not violate any  provision  of, or
require any filing,

                                       37
<PAGE>

registration,  consent or approval  under,  any Law  presently in effect  having
applicability  to Borrower or  Guarantor  where the failure to be in  compliance
would cause a Material Adverse Change;  each of Borrower and Guarantor has filed
(or duly  obtained an extension  of the time to file) all tax returns  (federal,
state and local)  required to be filed and has paid all taxes,  assessments  and
governmental  charges and levies due and payable  (including those in respect of
the Premises),  including interest and penalties,  except to the extent they are
the subject of a Good Faith Contest.

         Section  5.05.  Litigation. There are no actions, suits or  proceedings
pending  or, to  Borrower's  knowledge,  threatened  against  or  affecting  it,
Guarantor,  the Premises,  the validity or enforceability of the Mortgage or the
priority of the lien thereof at law, in equity or before or by any  Governmental
Authorities  except actions,  suits or proceedings  which have been disclosed to
Administrative  Agent and  Lenders  in  writing  and which are fully  covered by
insurance  or would,  if  adversely  determined,  not  substantially  impair the
ability of Borrower or  Guarantor  to pay when due any amounts  which may become
payable  under the Notes or  Guaranty  or to  otherwise  pay and  perform  their
respective Obligations; to Borrower's knowledge,  neither it nor Guarantor is in
default with  respect to any order,  writ,  injunction,  decree or demand of any
court or Governmental Authorities.

         Section  5.06.  No  Conflicts  or  Defaults. The  consummation  of  the
transactions  contemplated  hereby and the  performance  hereof and of the other
Loan  Documents  have not  resulted  and will not  result in any  breach  of, or
constitute a default under,  any mortgage,  deed of trust,  lease,  bank loan or
credit agreement,  corporate charter,  by-laws,  partnership  agreement or other
instrument to which  Borrower or Guarantor is a party or by which either of them
may be bound or  affected.  Each of Borrower and  Guarantor  has  satisfied  all
judgments which are not being appealed and is not in default with respect to any
judgment,  order, writ, injunction,  decree, rule or regulation binding on it of
any  court,  arbitrator  or  federal,  state,  municipal  or other  Governmental
Authority,  commission,  board, bureau,  agency or instrumentality,  domestic or
foreign.

         Section  5.07.   Solvency.   Borrower  and  Guarantor  are,  and   upon
consummation of the transactions  contemplated by this Agreement, the other Loan
Documents and any other related documents, will be, Solvent.

         Section 5.08.  Governmental  Regulation. Neither Borrower nor Guarantor
is subject to regulation  under the Investment  Company Act of 1940 or any other
Law  limiting  its  ability  to  incur   indebtedness   for  money  borrowed  as
contemplated hereby.

         Section 5.09.  Insurance.  Borrower has  in  force,  and has  paid  the
premiums in respect of, all of the insurance required by the Mortgage.  Borrower
and Guarantor have in force paid insurance with financially  sound and reputable
insurance  companies or  associations in such amounts and covering such risks as
are usually carried by companies  engaged in the same or a similar  business and
similarly situated.

                                       38
<PAGE>

         Section 5.10.  ERISA.  Neither  Borrower  nor  Guarantor  nor any other
Person,  including any fiduciary,  has engaged in any prohibited transaction (as
defined in Section 4975 of the Code or Section 406 of ERISA) which could subject
Borrower or Guarantor or any Person whom they have an obligation to indemnify to
any tax or penalty  imposed  under  Section  4975 of the Code or Section  502 of
ERISA;  neither  Borrower  nor  Guarantor  nor any  ERISA  Affiliate  maintains,
contributes to or has any liability with respect to a Multiemployer  Plan or any
other  plan  subject  to  Title  IV of  ERISA;  each  Employee  Benefit  Plan is
administered  in all  material  respects  in  accordance  with its  terms and in
compliance with all applicable Laws, including any reporting requirements;  each
Pension Plan  intending to qualify  under  Section  401(a) or 401(k) of the Code
does so qualify;  there is no lien  outstanding  or security  interest  given in
connection  with a Pension  Plan;  neither  Borrower nor Guarantor nor any ERISA
Affiliate has any liability  with respect to an accumulated  funding  deficiency
(whether or not waived)  under  Section 412 of the Code or Section 302 of ERISA;
and neither  Borrower nor Guarantor  has any  liability  for retiree  medical or
death benefits (contingent or otherwise) other than as required by Section 4980B
of the Code.

         Section 5.11. Other Documents.  The Major Leases and Premises Documents
are unmodified and in full force and effect (except as permitted hereby); to the
best of Borrower's knowledge, there are no defaults (or events which with notice
or the passage of time,  or both,  would  constitute  such a default)  under any
thereof  except  as  disclosed  to  Administrative  Agent  in  writing,  and all
conditions to the effectiveness and continuing effectiveness thereof required to
be satisfied as of the date hereof have been satisfied.

         Section 5.12. No Default. There exists no Default or Event of Default.

         Section 5.13. Accuracy of Information; Full  Disclosure. To the best of
Borrower's knowledge,  neither this Agreement,  nor any other Loan Document, nor
any documents, financial statements, reports, notices, schedules,  certificates,
statements or other writings  furnished by or on behalf of Borrower or Guarantor
to  Administrative  Agent or Lenders in connection  with the negotiation of this
Agreement or the other Loan Documents or the  consummation  of the  transactions
contemplated  hereby, or required herein or by or in the other Loan Documents to
be  furnished by or on behalf of Borrower or  Guarantor,  contains any untrue or
misleading  statement of a material fact or omits a material  fact  necessary to
make the statements herein or therein not misleading;  to the best of Borrower's
knowledge,  there is no fact which  Borrower or Guarantor  has not  disclosed to
Administrative  Agent and Lenders in writing which materially  affects adversely
or, so far as Borrower can now foresee,  will materially affect adversely any of
the  Mortgaged  Property  or the  business  affairs or  financial  condition  of
Borrower or  Guarantor,  or the ability of Borrower or Guarantor to perform this
Agreement and the other Loan Documents.

         Section  5.14. Separate Tax and Zoning Lot. The Premises  constitute  a
distinct parcel or parcels for purposes of zoning and of taxes,  assessments and
impositions  (public or private) and are not  otherwise  considered as part of a
larger single lot for purposes of zoning or of taxes, assessments or impositions
(public or private).

                                       39
<PAGE>

         Section 5.15.  Requisition as Reaffirmation. Each Requisition submitted
to Administrative  Agent, and the receipt of the funds requested thereby,  shall
constitute an affirmation  that the  representations  and  warranties  contained
herein  and in the  other  Loan  Documents  remain  true and  correct  as of the
respective dates of such Requisitions.

         Section 5.16. Plans and  Improvements. The approved Plans are scheduled
by sheet  number,  title,  date and revised  date in the letter from  Borrower's
Architects  in the form of EXHIBIT  C, which  schedule  is hereby  certified  by
Borrower to be true and  correct,  and are  substantially  the same as the filed
plans referred to in the building  permits for the  Improvements;  the Plans are
satisfactory  to it, have been reviewed and approved by  Guarantor,  the General
Contractor,  the tenants  under any Major Leases and the parties to any Premises
Documents which require approval of the Plans, Borrower's Architects and, to the
extent  required  by  applicable  Law  or  any  restrictive   covenant,  by  all
Governmental   Authorities  and  the  beneficiary  of  any  such  covenant;  all
construction,  if any, already  performed on the Improvements has been performed
on the Premises in accordance with the Plans approved by the Persons named above
and with any restrictive  covenants applicable thereto;  there are no structural
defects in the Improvements or violations of any requirement of any Governmental
Authorities with respect  thereto;  the Improvements and the planned use thereof
comply  with all  applicable  zoning  and other  Laws and all  restrictions  and
covenants  affecting the Premises;  and all  requirements for such use have been
satisfied.

         Section 5.17.  Utility Services;  Roads. All utility services necessary
for the  construction of the  Improvements  and the operation  thereof for their
intended  purposes are available at the  boundaries  of the Premises,  including
water  supply,  storm and sanitary  sewer,  gas,  electric  power and  telephone
facilities. All roads necessary for the full utilization of the Improvements for
their  intended  purposes  have  either  been  completed  or the land  necessary
therefor  is owned by  Borrower  or will be  acquired  by  Borrower  pursuant to
legally  enforceable  agreements which are in full force and effect (which land,
upon completion of the roads, is intended to be dedicated to and accepted by the
appropriate  Governmental  Authorities  for public use, and all necessary  steps
have been taken by  Borrower  and said  Governmental  Authorities  to assure the
complete construction and installation thereof no later than the Completion Date
or any earlier date required by any Law, Premises Document or Major Lease.

         Section  5.18. Creation of Liens. It has  entered into no  contract  or
arrangement  of any kind the  performance  of which by the other  party  thereto
would give rise to a lien on the Mortgaged Property prior to the Mortgage except
for its arrangements with Borrower's Architects,  the General Contractor,  Major
Subcontractors  and contractors or subcontractors who have filed lien waivers or
signed  Payment  Receipts/Lien  Releases  in the  form  of  EXHIBIT  B-2 for all
payments due under said  arrangements as of the end of the period covered by the
last Requisition.

         Section 5.19.  Construction   Prior  to  Closing.  It advised the Title
Insurer  writing prior to the issuance of the title policy insuring the Mortgage
whether any survey,  soils-testing,  site-development,  excavation or other work
related  to  construction  of the  Improvements  was  begun or done  before  the
Mortgage was recorded.

                                       40
<PAGE>

         Section  5.20. Environmental Protection.  To  the  best  of  Borrower's
knowledge, none of Borrower's or Guarantor's properties (including the Premises)
contains any Hazardous  Materials that, under any Environmental Law currently in
effect (x) would impose  liability  on Borrower or  Guarantor  that is likely to
result in a Material Adverse Change or (y) is likely to result in the imposition
of a lien on any assets  (including  the Premises) of Borrower,  in each case if
not  properly  handled  in  accordance  with  applicable  Law.  To the  best  of
Borrower's   knowledge,   neither  it  nor  any  portion  of  the   Premises  or
Improvements,  is in  violation  of, or  subject  to any  existing,  pending  or
threatened  investigation or proceeding by any Governmental Authority under, any
Environmental  Law.  Except  as  may be  disclosed  in  the  environmental  site
assessment report delivered pursuant to paragraph (6) of Section 4.01,  Borrower
is not  aware of any  matter,  claim,  condition  or  circumstance  which  would
reasonably  cause a Person to make further  inquiry with respect to such matters
in order to ascertain whether any Hazardous Materials or their effects have been
disposed of or released on or to any portion of the Premises or  Improvements or
any surrounding areas; to the best of Borrower's  knowledge,  it is not required
by any  Environmental  Law to obtain any permits or license to  construct or use
any  improvements,  fixtures,  or  equipment  with  respect to the  Premises  or
Improvements,  or if such permit or license is  required  it has been  obtained;
and,  to  Borrower's  actual  knowledge,  except  as  may  be  disclosed  in the
aforementioned  environmental  site  assessment  report,  the  prior  use of the
Premises  and  Improvements  has not  resulted in the disposal or release of any
Hazardous  Materials  on or to any portion of the  Premises  or any  surrounding
areas in violation of applicable Law.

                                   Article VI

                              COVENANTS OF BORROWER

         Borrower covenants and agrees that it shall:

         Section 6.01.  Compliance with Laws; Payment of Taxes. Comply with  all
Laws  applicable  to it or to any  of  its  property  (including  the  Mortgaged
Property) or any part thereof,  such compliance to include,  without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed on it or any such property,  or any part thereof,  except to the
extent they are the subject of a Good Faith Contest.

         Section 6.02. Maintenance of Records. Keep  adequate  records and books
of account,  in which  complete  entries will be made in  accordance  with GAAP,
reflecting all of its financial transactions.

         Section 6.03.     Intentionally Omitted.

         Section 6.04. Covenants,  Restrictions  and  Easements. Comply  in  all
material respects with all restrictions,  covenants and easements  affecting the
Premises  or the  Improvements  and cause  the  satisfaction  of all  conditions
hereof.

                                       41
<PAGE>

         Section 6.05.  Inspection  and  Cooperation. (a) At any reasonable time
and from time to time upon reasonable notice, permit Administrative Agent or any
Lender or any agent or representative thereof (provided that a representative of
any Lender must, at Borrower's  request,  be accompanied by a representative  of
Borrower),  to examine and make copies and abstracts  from the records and books
of account of, and visit the properties  (including  the Premises) of,  Borrower
and to discuss the affairs,  finances  and  accounts of Borrower  with the chief
financial officers or treasurers thereof and with Borrower's Accountants.

                  Each  Lender  and  Administrative  Agent  agree  that it shall
maintain confidentiality with respect to the materials referred to above in this
paragraph  (a),  provided  that  Lenders and  Administrative  Agent shall not be
precluded from making disclosure regarding such information: (i) to any Lender's
or Administrative Agent's respective counsel, accountants and other professional
advisors  (who are, in each case,  subject to this  confidentiality  agreement),
(ii) to officers,  directors,  employees, agents and partners of each Lender and
Administrative  Agent who need to know such  information (who are, in each case,
subject to this confidentiality  agreement),  (iii) in response to a subpoena or
order of a court or Governmental Authority,  (iv) to any Assignee or Participant
or prospective  Assignee or Participant,  provided that any such entity shall be
subject to this  paragraph;  it being  understood,  however,  that  Lenders  and
Administrative  Agent shall have no duty to monitor any Assignee or  Participant
or prospective  Assignee or Participant and shall have no liability in the event
that any Assignee or Participant or prospective Assignee or Participant violates
this paragraph or (v) as required by Law or by GAAP.

         (b)  Permit   Administrative   Agent,  its   representatives   and  the
Construction Consultant to enter upon the Premises, inspect the Improvements and
all  materials to be used in the  construction  thereof and examine all detailed
plans  and shop  drawings  which  are or may be kept at the  construction  site;
provided that the  foregoing  rights shall not be exercised in a manner so as to
interfere  unduly with the  conduct of  business  and  operations  of  Borrower;
cooperate and cause the General Contractor and Major Subcontractors to cooperate
with  the  Construction  Consultant  to  enable  it  to  perform  its  functions
hereunder; at the time of each inspection by the Construction  Consultant,  make
available to said  consultant,  on demand,  daily log sheets covering the period
since  the  immediately   preceding   inspection  showing  the  date,   weather,
subcontractors on the job, number of workers and status of construction.

         Section  6.06.  Payment of Costs. Pay all Direct and Indirect Costs and
expenses required for completion of the Improvements and the satisfaction of the
conditions hereof, including, without limitation:

               (a) all document and stamp taxes,  recording and filing  expenses
          and fees and  commissions  lawfully due to brokers (other than brokers
          engaged solely by Administrative  Agent or Lenders) in connection with
          the transactions contemplated hereby,

                                       42
<PAGE>

               (b) any taxes,  insurance premiums,  liens, security interests or
          other claims or charges  against the Premises or  Improvements,  other
          than those  which are the  subject  of a Good Faith  Contest as may be
          permitted hereby or by the Mortgage, and

               (c) all  costs  of  completion  of the  work to be  performed  by
          Borrower in space to be occupied in the Improvements (including public
          space)  to  permit  the  lawful  occupancy  thereof  for the  purposes
          contemplated  by actual or  prospective  lessees  of such space as set
          forth in the individual  leases thereof or in detailed work letters or
          other  agreements  or letters of intent with respect  thereto,  or, in
          cases where there are no such leases,  work letters or other documents
          as aforesaid,  as set forth in Borrower's  standard work letter or the
          standard form of lease  required by paragraph (9) of Section  4.01(d),
          or,  in cases  where  none of the  foregoing  exists,  to the level of
          building   standard  in  accordance   with  industry   practices,   as
          conclusively determined by the Construction Consultant.

         Section 6.07. Brokers.  Indemnify   Administrative  Agent  and  Lenders
against claims of brokers (other than brokers  engaged solely by  Administrative
Agent or Lenders)  arising by reason of the execution hereof or the consummation
of the transactions contemplated hereby.

         Section 6.08. Construction of Improvements.  Commence  construction  of
the  Improvements no later than thirty (30) days from the date hereof;  submit a
Requisition  for the  Initial  Advance  within  thirty  (30) days after the date
hereof and subsequent advances on a monthly basis thereafter; cause construction
thus  begun  to be  prosecuted  with  diligence  and  continuity  in a good  and
workmanlike  manner in accordance  with the Plans except during the existence of
delays  (for  not  more  than  sixty  (60)  days  or  such   longer   period  as
Administrative  Agent  may  reasonably  permit)  caused  by  events  beyond  its
reasonable control; use only materials,  fixtures,  furnishings and equipment in
connection with  construction of the Improvements that are not used or obsolete;
and complete  construction of the Improvements (other than unleased tenant space
and minor  "punch-list"  items), and the installation of all necessary roads and
utilities, in accordance with the Plans and with all applicable Laws, leases and
Premises  Documents,  on or before the Completion Date free and clear of defects
and  liens or  claims  for  liens for  material  supplied  or labor or  services
performed in connection with the construction of the Improvements; time being of
the essence as to this Section.

         Section 6.09. Project Sign.  Following  the execution  hereof,  place a
sign, at its own expense, on the Premises at a location reasonably  satisfactory
to  Administrative  Agent  regarding  the  financing  for  construction  of  the
Improvements,  in form and substance  reasonably  acceptable  to  Administrative
Agent.

         Section  6.10.  Building Loan Trust Account. Receive and deposit in the
Building Loan Trust Account all advances made  hereunder;  and hold the same and
the right to  receive  the same as a trust fund for the  purpose of paying  only
Direct and Indirect Costs.

                                       43
<PAGE>

         Section   6.11.   Certain   Materials  to  be   Submitted.  Deliver  to
Administrative  Agent and the Construction  Consultant  copies of all contracts,
bills of sale, statements, receipted vouchers or agreements under which Borrower
claims  title  to  any  materials,  fixtures  or  articles  incorporated  in the
Improvements  or  subject  to the lien of the  Mortgage,  or under  which it has
incurred  costs for which it is  entitled to an advance of proceeds of the Loan,
and deliver to  Administrative  Agent such other data or documents in connection
with the Improvements as  Administrative  Agent may from time to time reasonably
request.

         Section 6.12.  Correction of Defects and  Departures  from  Plans. Upon
demand of  Administrative  Agent or the  Construction  Consultant,  correct  any
defects (including structural) in the Improvements or any departures (other than
de minimus departures) from the Plans not approved by Administrative Agent.

         Section  6.13.  Change Orders. Not permit the  performance  of any work
pursuant to any General Contract, Major Subcontract, Change Order or Plans until
Administrative  Agent  and the  Construction  Consultant  (i) in the case of any
General Contract, Major Subcontract or Plans, shall have received copies thereof
and (ii) in the case of Plans or Change Orders which will result in (A) a change
in the aggregate of the contract prices for the construction of the Improvements
in excess of the Change Order Amount or which,  together  with the  aggregate of
Change Orders  theretofore  executed by Borrower  (excluding  those  approved by
Administrative  Agent  pursuant to this Section) will result in a change in such
prices in excess of the  Aggregate  Change  Order  Amount or (B) a change in the
character  of the  Improvements,  shall have  given  specific  written  approval
thereof (it being understood that approval of any Plans or Change Order will not
obligate Lenders to increase or advance any Loan Budget Amount on account of any
such  Plans  or  Change   Order);   deliver  copies  of  all  Change  Orders  to
Administrative Agent and the Construction Consultant either prior to or promptly
following the implementation  thereof;  notwithstanding  the existence of Change
Order and Aggregate  Change Order  Amounts,  Borrower shall not suffer or permit
the  performance  of any work  pursuant to any Change  Order until it shall have
procured the approval  thereof (if such approval is required) by the Anchors and
the City and, if requested by Administrative  Agent,  submitted evidence of such
approval to Administrative Agent.

         Section 6.14. Regarding Construction Contracts. Deliver, or cause to be
delivered,  to Administrative Agent or the Construction Consultant copies of all
Major  Subcontracts,  Change Orders and any other  contract,  purchase  order or
subcontract  covering labor,  materials,  equipment or furnishings to or for the
Improvements,  and the names of all Persons with whom the General Contractor has
contracted or intends to contract for the  construction  of the  Improvements or
for the furnishing of labor or materials therefor.

         Section 6.15. Security of Site. Employ  suitable  means to protect from
theft or vandalism all portions of the  Improvements  and all tools and building
materials stored on the Premises.

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<PAGE>

         Section 6.16. Management,  Leasing and Service  Contracts.  (i) Keep in
full force and effect and not  materially  modify  the  management  and  leasing
agreement  approved  pursuant  to  paragraph  (14) of  Section  4.01(d)  without
Administrative   Agent's  prior  written   consent,   such  consent  not  to  be
unreasonably withheld and (ii) as and when requested,  deliver to Administrative
Agent certified copies of all other service  contracts entered into with respect
to the Premises or  Improvements  and use its best efforts to cause each service
contract  to  contain a  provision  allowing  for the  as-of-right  cancellation
thereof on thirty (30) days' notice from either  Borrower or its  successors  as
owners of the Premises.

         Section 6.17. Maintenance of Insurance. At all  times, (i) maintain and
keep in force the insurance  required by the Mortgage and (ii) maintain and keep
in force insurance with financially sound and reputable  insurance  companies or
associations  in such amounts and covering such risks as are usually  carried by
companies  engaged in the same or a similar  business  and  similarly  situated,
which insurance may provide for reasonable deductibility from coverage thereof.

         Section 6.18. Fees Required by Fee Letter. Pay to Administrative Agent,
for the accounts of the parties specified therein, the fees provided for, on the
dates specified, in the Fee Letter.

         Section 6.19. Reporting Requirements. Furnish directly to each Lender:

               (1) Annual Financial Statements.  As soon as available and in any
          event within ninety (90) days after the end of the  respective  fiscal
          years of Borrower and  Guarantor  (in the case of  Borrower,  however,
          commencing with the fiscal year in which the  Improvements  are opened
          for business to the public),  Borrower's  financial statements and the
          TRG Consolidated  Financial Statements,  in each case as of the end of
          and for  such  fiscal  year,  in  reasonable  detail  and  stating  in
          comparative form the respective figures for the corresponding date and
          period in the prior fiscal year and audited by Borrower's Accountants;
          and  accompanied  by a  detailed  explanation  in the  event  any such
          audited annual  Borrower's  financial  statements or TRG  Consolidated
          Financial Statements are qualified;

               (2) Quarterly Financial  Statements.  As soon as available and in
          any event within  forty-five  (45) days after the end of each calendar
          quarter  (other than the last quarter of the fiscal  year),  unaudited
          Borrower's   financial   statements  and  unaudited  TRG  Consolidated
          Financial  Statements,  in each  case  as of the  end of and for  such
          calendar quarter, in reasonable detail and stating in comparative form
          the respective  figures for the  corresponding  date and period in the
          prior fiscal year and certified by an appropriate financial officer;

               (3)   Certificates   of  No  Default  and   Guarantor   Financial
          Compliance.  Within  forty-five (45) days after the end of each of the
          first three  quarters of each fiscal year and within  ninety (90) days
          after the end of each fiscal year, (a) a certificate of an appropriate
          financial  officer of Borrower stating that, to the best

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<PAGE>

          of his or her  knowledge,  no Default or Event of Default has occurred
          and is  continuing,  or if a Default or Event of Default has  occurred
          and is continuing,  specifying the nature thereof and the action which
          is proposed to be taken with respect  thereto and (b) a certificate of
          an  appropriate  financial  officer of Guarantor  (x) stating that the
          covenants  contained in  paragraphs  9 and 10 of the Payment  Guaranty
          have  been  complied  with (or  specifying  those  that  have not been
          complied   with)  and  including   computations   demonstrating   such
          compliance  (or  non-compliance)  and (y) setting forth the details of
          all  items  comprising  "Total  Outstanding  Indebtedness"  (including
          amount, maturity, interest rate and amortization requirements),  as of
          the end of such quarter, and "Combined EBITDA", "Interest Expense" and
          "Fixed  Charges",  each for the twelve  (12)-month  period ending with
          such  quarter (as all of such quoted  terms are defined in the Payment
          Guaranty);

               (4) Certificate of Borrower's  Accountants.  Simultaneously  with
          the delivery of the annual financial  statements required by paragraph
          (1) of this  Section,  so long as  there  exists a  similar  reporting
          requirement  under  the TRG  Credit  Facility  or any  refinancing  or
          replacement thereof, a statement of Borrower's Accountants who audited
          such financial  statements comparing the computations set forth in the
          financial  compliance  certificate  required by paragraph  (3) of this
          Section to the audited financial  statements required by paragraph (1)
          of this  Section  (where such  information  appears in such  financial
          statements);

               (5)  Dispositions or Acquisitions of Assets by Guarantor.  Within
          thirty (30) days after the occurrence  thereof,  written notice of any
          Disposition  or  acquisition  of assets  (other than  acquisitions  or
          Dispositions of investments such as certificates of deposit,  Treasury
          securities  and  money  market  deposits  in the  ordinary  course  of
          Guarantor's cash management) in excess of $25,000,000,  together with,
          in the case of any acquisition of such an asset, (a) a certificate, of
          the sort  required by  paragraph  (3)(b) of this  Section,  containing
          covenant   compliance   calculations   that   include  the   pro-forma
          adjustments set forth in paragraph 11 of the Payment  Guaranty,  which
          calculations shall demonstrate Guarantor's compliance,  on a pro-forma
          basis,  as of the end of the most recently ended calendar  quarter for
          which financial  results are required  hereunder to have been reported
          by Guarantor,  with all covenants  enumerated in said paragraph (3)(b)
          and  (b)  such  other  information  relating  to  the  acquisition  as
          Administrative  Agent  may  reasonably  request,  including,   without
          limitation, (x) copies of the agreements governing the acquisition and
          (y) historical balance sheets (to the extent available) and statements
          of income and cash flows with respect to the property  acquired for at
          least the  preceding  three (3) years (to the  extent  available)  and
          Guarantor's  revenue and expense projections for the property acquired
          for at least the next five (5) years  (all of the  foregoing  to be in
          form and detail reasonably satisfactory to Administrative Agent);

               (6) Notice of  Litigation.  Promptly after the  commencement  and
          knowledge  thereof,  notice of all  actions,  suits,  and  proceedings
          before any

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<PAGE>

          Governmental  Authority,  court  or  arbitrator,  affecting  Borrower,
          Guarantor or all or any portion of the Mortgaged  Property  which,  if
          determined  adversely,  is  likely to  result  in a  Material  Adverse
          Change;

               (7)  Notices  of  Defaults  and  Events  of  Default.  As soon as
          possible and in any event within ten (10) days after Borrower  becomes
          aware of the occurrence of a material Default or any Event of Default,
          a written notice setting forth the details of such Default or Event of
          Default  and the action  which is  proposed  to be taken with  respect
          thereto;

               (8) Material Adverse Change. As soon as is practicable and in any
          event within five (5) days after  knowledge of the  occurrence  of any
          event or circumstance  which is likely to result in or has resulted in
          a Material Adverse Change, written notice thereof;

               (9)  Bankruptcy of Tenants.  Promptly after becoming aware of the
          same,  written  notice of the  bankruptcy,  insolvency or cessation of
          operations  of  (a)  any  of  the  Anchors,  (b)  any  tenant  in  the
          Improvements  to which 5% or more of the  aggregate  minimum rent from
          the  Improvements  is  attributable  or (c) except to the extent  such
          information  is  (or  will  be)  disclosed  in  the  TRG  Consolidated
          Financial  Statements  delivered  pursuant to  paragraphs  (1) and (2)
          above,  any tenant in any property of Guarantor or in which  Guarantor
          has an  interest  to which 5% or more of the  aggregate  minimum  rent
          payable, directly or indirectly, to Guarantor is attributable;

               (10)  Offices.  Thirty  (30) days'  prior  written  notice of any
          change in the chief executive office or principal place of business of
          Borrower or Guarantor;

               (11) Environmental and Other Notices.  As soon as possible and in
          any  event  within  five (5) days  after  receipt,  copies  of (a) all
          Environmental  Notices received by Borrower or Guarantor which are not
          received in the  ordinary  course of business  and which relate to the
          Premises  or to a  situation  which is likely to result in a  Material
          Adverse  Change and (b) all reports of any official  searches  made by
          any Governmental  Authority having  jurisdiction  over the Premises or
          the Improvements, and of any claims of violations thereof;

               (12) Insurance Coverage.  Promptly,  such information  concerning
          Borrower's or Guarantor's  insurance coverage as Administrative  Agent
          may reasonably request;

               (13) SEC  Filings,  Etc.  As soon as  possible  and in any  event
          within ten (10) days of the sending or filing  thereof,  copies of all
          annual reports on Form 10-K (without  exhibits) and quarterly  reports
          on Form 10-Q  (without  exhibits);  and as soon as possible  following
          Administrative   Agent's  request   therefor,   copies  of  all  proxy
          statements, financial statements,  registration statements and reports
          which TCI sends to its  shareholders  or files with the Securities and
          Exchange  Commission  or  any  Governmental  Authority  which  may  be
          substituted therefor;

                                       47
<PAGE>

               (14)  Leasing  Reports  and  Operating   Statements  As  soon  as
          available  and in any event within  fifteen (15) days after the end of
          each calendar  month (except  January) (a) prior to the opening of the
          Improvements  for  business to the  public,  a leasing  status  report
          regarding the  Improvements  and (b)  subsequent to the opening of the
          Improvements for business to the public, operating and cash statements
          (including a rent roll), in each case certified by Borrower to be true
          and complete;

               (15) Tenant Sales Reports.  As soon as available and in any event
          within  thirty  (30)  days  after  the  end  of  each  calendar  month
          subsequent  to the  opening of the  Improvements  for  business to the
          public,   a  tenant  sales  report  for  such  month   regarding   the
          Improvements;

               (16)  Operating  Budgets  As soon as  available  and in any event
          within  ninety  (90)  days  after  the end of  each  fiscal  year,  an
          operating budget for the Premises for the next fiscal year; and

               (17)  General  Information.   Promptly,  such  other  information
          respecting  the condition or  operations,  financial or otherwise,  of
          Borrower,  Guarantor  or the Premises as  Administrative  Agent or any
          Lender may from time to time reasonably request.

         Section  6.20. Leases and Premises Documents. Deliver to Administrative
Agent, promptly following the execution thereof,  certified copies of all leases
(together  with  abstracts  of such  leases,  as  available)  in  respect of the
Premises and all Premises  Documents and all  amendments or  supplements  to any
thereof (in any case, whether executed before or after the date hereof) together
with (i) if requested by Administrative  Agent, estoppel certificates (on a best
efforts basis) from the tenants  thereunder or parties thereto,  as the case may
be, and (ii) in the case of all Major Leases, a  notice-of-assignment  letter in
the form of EXHIBIT F; not enter into any Major  Lease or any lease for space in
the Improvements which contains a unilateral "kickout clause" on the part of the
tenant, or modify (other than de minimus  modifications)  any Major Lease or the
REA,  without,  in any such case, the prior written  approval of  Administrative
Agent,  such  approval not to be  reasonably  withheld or delayed;  and keep all
Premises  Documents and, except as may be permitted by the Mortgage,  all leases
in full force and effect.

                  Provided  there exists no Event of Default,  in any case where
Administrative  Agent's  prior  written  approval is  required  pursuant to this
Section,  Administrative  Agent  shall be  deemed  to have  approved  Borrower's
written request for approval if Administrative Agent fails to respond, either by
reasonably requesting additional documentation or information or by disapproving
the request,  within ten (10) Business Days after Administrative Agent's receipt
of such written request for approval from Borrower,  provided such request shall
make specific  reference to the  provisions of this Section and shall  expressly
state,  in solid  capital  letters  on the first page  thereof:  "YOU ARE HEREBY
REMINDED THAT YOUR FAILURE TO PROVIDE  NOTIFICATION  OF APPROVAL OR DISAPPROVAL,
OR TO REASONABLY REQUEST ADDITIONAL DOCUMENTATION OR INFORMATION, NOT LATER

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<PAGE>

THAN TEN (10)  BUSINESS  DAYS AFTER YOUR RECEIPT OF THIS REQUEST SHALL BE DEEMED
TO CONSTITUTE YOUR APPROVAL THEREOF."

         Section 6.21.  Environmental Laws. Comply in all material respects with
all Environmental Laws applicable to Borrower,  the Premises or the Improvements
and  immediately  pay or cause to be paid all costs  and  expenses  incurred  in
connection  with such  compliance,  except to the  extent  there is a Good Faith
Contest; and at its sole cost and expense, promptly remove, or cause removal of,
any and all Hazardous Materials or the effects thereof at any time identified as
being on, in, under or affecting the Premises or the  Improvements  in violation
of applicable Environmental Law.

         Section  6.22.  Maintenance  of  Properties.   Do all things reasonably
necessary to maintain,  preserve, protect and keep in good repair, working order
and condition the Premises and Improvements.

         Section  6.23.  Proceeds from Sale of Certain Personalty.  Pay  over to
Administrative  Agent, promptly upon its receipt thereof, an amount equal to 75%
of (x) the  proceeds  Borrower  receives  from the sale or  leasing  of any mall
artworks,  equipment or  furnishings  if and to the extent that  proceeds of the
Loan were used to purchase said items and (y) any "tenant  recoveries"  received
by Borrower in respect of leases of space in the  Improvements,  said amounts to
be applied by  Administrative  Agent in reduction of the Principal Amount and to
the  payment of accrued  and unpaid  interest  on the  portion of the  Principal
Amount so repaid.

                                  Article VII

                  ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS

         Section 7.01.   Appointment,  Powers and  Immunities  of Administrative
Agent.  Each Lender hereby  irrevocably  appoints and authorizes  Administrative
Agent to act as its agent  hereunder and under any other Loan Document with such
powers as are  specifically  delegated to  Administrative  Agent by the terms of
this Agreement and any other Loan  Document,  together with such other powers as
are reasonably incidental thereto.  Administrative Agent shall have no duties or
responsibilities  except those  expressly  set forth in this  Agreement  and any
other  Loan  Document  or  required  by Law,  and  shall  not by  reason of this
Agreement  be a fiduciary  or trustee  for any Lender  except to the extent that
Administrative  Agent acts as an agent with respect to the receipt or payment of
funds,  nor shall  Administrative  Agent have any fiduciary duty to Borrower nor
shall any Lender have any  fiduciary  duty to Borrower or any other  Lender.  No
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this  Agreement  or  otherwise  exist  against  Administrative  Agent.
Neither  Administrative  Agent nor any of its  directors,  officers,  employees,
agents,  attorneys-in-fact or Affiliates shall be responsible to Lenders for any
recitals,  statements,   representations  or  warranties  made  by  Borrower  or
Guarantor  or any  officer,  partner or official of Borrower or Guarantor or any
other Person  contained in this Agreement or any other Loan Document,  or in any
certificate or other  document or instrument  referred to or provided for in, or
received by any of them under, this Agreement or any other Loan Document, or for
the

                                       49
<PAGE>

value,  legality,  validity,  effectiveness,   genuineness,   enforceability  or
sufficiency  of this  Agreement or any other Loan Document or any other document
or instrument referred to or provided for herein or therein,  for the perfection
or priority of any lien securing the  Obligations or for any failure by Borrower
or Guarantor to perform any of its Obligations.  Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible, except as to money or
securities  received  by it or its  authorized  agents,  for the  negligence  or
misconduct  of  any  such  agents  or  attorneys-in-fact  selected  by  it  with
reasonable  care.  Neither  Administrative  Agent  nor  any  of  its  directors,
officers, employees, agents,  attorneys-in-fact or Affiliates shall be liable or
responsible  for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith,  except
for its or their own gross negligence or willful misconduct.

         Section 7.02. Reliance by  Administrative  Agent.  Administrative Agent
shall be entitled to rely upon any certification,  notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine  and  correct  and to have been signed or sent by or on behalf of the
proper  Person or Persons,  and upon  advice and  statements  of legal  counsel,
independent  accountants  and other experts  selected by  Administrative  Agent.
Administrative  Agent may deem and treat  each  Lender as the holder of its Note
and  interest in the Loan for all  purposes  hereof and shall not be required to
deal with any Person who has acquired a Participation in the Loan from a Lender.
As to any matters not expressly provided for by this Agreement or any other Loan
Document,  Administrative Agent shall in all cases be fully protected in acting,
or in refraining  from acting,  in accordance  with  instructions  signed by the
Required  Lenders,  and such instructions of the Required Lenders and any action
taken or failure to act pursuant thereto shall be binding on all Lenders and any
other holder of all or any portion of the Loan or Participation therein.

         Section 7.03.  Defaults.  Administrative   Agent shall not be deemed to
have  knowledge of the  occurrence of a Default or of an Event of Default unless
Administrative  Agent has received  notice from a Lender or Borrower  specifying
such  Default or Event of Default and  stating  that such notice is a "Notice of
Default." In the event that  Administrative  Agent receives such a notice of the
occurrence  of a Default or Event of  Default,  Administrative  Agent shall give
prompt notice  thereof to Lenders.  Administrative  Agent shall promptly send to
each  Lender  a copy of any  notice  of a  Default  or  Event  of  Default  that
Administrative  Agent  sends to  Borrower or  Guarantor.  Administrative  Agent,
following  consultation with Lenders,  shall (subject to Section 7.07) take such
action with  respect to such  Default or Event of Default  which is  continuing,
including  with  respect to the exercise of remedies or the  realization  on, or
operation or disposition  of, any or all of the Mortgaged  Property or any other
collateral for the Loan, as shall be directed by the Required Lenders; provided,
however,  that, unless and until  Administrative  Agent shall have received such
directions,  Administrative  Agent may take such action,  or refrain from taking
such  action,  with respect to such Default or Event of Default as it shall deem
to  be  in  the  best  interest  of  Lenders;   and  provided,   further,   that
Administrative Agent shall not send a notice of acceleration to Borrower without
the approval of the Required Lenders. In no event shall  Administrative Agent be
required to take any such action which it  determines to be contrary to the Loan

                                       50
<PAGE>

Documents or to Law. Each of Lenders  acknowledges and agrees that no individual
Lender may  separately  enforce or exercise any of the  provisions of any of the
Loan Documents  (including,  without  limitation,  the Notes) other than through
Administrative Agent.

         Section 7.04. Rights of Administrative Agent as Lender. With respect to
its Note and  interest in the Loan,  Administrative  Agent in its  capacity as a
Lender  hereunder  shall have the same rights and powers  hereunder as any other
Lender and may exercise the same as though it were not acting as  Administrative
Agent, and the terms "Lender" and "Lenders" shall include  Administrative  Agent
in its  capacity  as a  Lender.  Administrative  Agent  and its  Affiliates  may
(without  having to account  therefor to any Lender) accept  deposits from, lend
money to (on a secured or unsecured basis),  and generally engage in any kind of
banking,  trust or other business with Borrower or Guarantor (and any Affiliates
of either of them) as if it were not acting as Administrative Agent.

         Section   7.05.   Sharing   of  Costs by  Lenders;  Indemnification  of
Administrative  Agent. Each Lender agrees to pay its ratable share, based on the
respective outstanding principal balances under its Note and the other Notes, of
any expenses  incurred (and not paid or reimbursed by Borrower  after demand for
payment  is  made  by  Administrative  Agent)  by or on  behalf  of  Lenders  in
connection with any Default or Event of Default, including,  without limitation,
costs of  enforcement  of the Loan  Documents  and any  advances to pay taxes or
insurance  premiums,  to complete the  Improvements or otherwise to preserve the
lien of the Mortgage or to preserve or protect the  Mortgaged  Property.  In the
event a Lender  fails to pay its share of  expenses as  aforesaid,  and all or a
portion of such unpaid amount is paid by Administrative Agent and/or one or more
of the other Lenders, then the defaulting Lender shall reimburse  Administrative
Agent and/or the other  Lender(s)  for the portion of such unpaid amount paid by
it or them,  as the case may be,  together  with  interest  thereon at the Prime
Based  Rate from the date of payment by  Administrative  Agent  and/or the other
Lender(s).   In  addition,   each  Lender  agrees  to  reimburse  and  indemnify
Administrative  Agent (to the extent it is not paid by on or behalf of Borrower,
after demand for payment is made by Administrative  Agent, under Section 9.19 or
under the applicable provisions of any other Loan Document, but without limiting
the obligation of Borrower under said Section 9.19 or such provisions), for such
Lender's ratable share, based upon the respective outstanding principal balances
under its Note and the other  Notes,  of any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements  of any  kind and  nature  whatsoever  which  may be  imposed  on,
incurred by or asserted against  Administrative  Agent in any way relating to or
arising out of this  Agreement,  any other Loan Document or any other  documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which Borrower is
obligated to pay under  Section 9.19 or under the  applicable  provisions of any
other Loan Document) or the enforcement of any of the terms hereof or thereof or
of any such other documents or instruments;  provided,  however,  that no Lender
shall be liable for (i) any of the  foregoing  to the extent they arise from the
gross negligence or willful misconduct of the party to be indemnified,  (ii) any
loss of principal or interest  with  respect to  Administrative  Agent's Note or

                                       51
<PAGE>

interest  in the Loan or (iii)  any loss  suffered  by  Administrative  Agent in
connection with a "swap" or other interest rate hedging arrangement entered into
by Administrative Agent with Borrower.

         Section 7.06.  Non-Reliance on Administrative Agent and Other  Lenders.
Each  Lender  agrees  that  it  has,   independently  and  without  reliance  on
Administrative  Agent or any  other  Lender,  and  based on such  documents  and
information  as it  has  deemed  appropriate,  made  its  own  analysis  of  the
collateral for the Loan and of the credit of Borrower and Guarantor, and its own
decision  to enter  into this  Agreement,  and that it will,  independently  and
without  reliance upon  Administrative  Agent or any other Lender,  and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own analysis and  decisions in taking or not taking  action
under this Agreement or any other Loan Document.  Administrative Agent shall not
be required  to keep itself  informed as to the  performance  or  observance  by
Borrower of this  Agreement  or any other Loan  Document  or any other  document
referred  to or  provided  for herein or therein  or to inspect  the  properties
(including,  without limitation,  the Premises) or books of Borrower. Except for
notices,  reports and other documents and information  expressly  required to be
furnished to Lenders by  Administrative  Agent hereunder,  Administrative  Agent
shall not have any duty or  responsibility to provide any Lender with any credit
or other information concerning the affairs,  financial condition or business of
Borrower or Guarantor  (or any  Affiliate of either of them) which may come into
the possession of Administrative Agent or any of its Affiliates.  Administrative
Agent shall not be required to file this  Agreement,  any other Loan Document or
any  document or  instrument  referred to herein or therein,  for record or give
notice of this Agreement,  any other Loan Document or any document or instrument
referred to herein or therein, to anyone.

         Section 7.07.  Failure of  Administrative   Agent  to Act.   Except for
action expressly  required of  Administrative  Agent  hereunder,  Administrative
Agent  shall in all cases be fully  justified  in  failing  or  refusing  to act
hereunder  unless it shall have received further  assurances  (which may include
cash  collateral)  of the  indemnification  obligations of Lenders under Section
7.05 in respect of any and all liability and expense which may be incurred by it
by reason of taking or  continuing  to take any such  action.  If any  indemnity
furnished  to  Administrative  Agent for any  purpose  shall,  in the opinion of
Administrative  Agent, be insufficient or become impaired,  Administrative Agent
may call for an  additional  indemnity and cease,  or not  commence,  the action
indemnified against until such additional indemnity is furnished.

         Section 7.08.  Resignation  or  Removal  of    Administrative    Agent.
Provided  there exists no Event of Default,  Administrative  Agent hereby agrees
not to resign unilaterally except in the event it becomes an Affected Lender and
is replaced as a Lender  pursuant to Section 3.04.  Administrative  Agent may be
removed at any time by the  Required  Lenders  for gross  negligence  or willful
misconduct,  provided  that  Borrower  and the other  Lenders  shall be promptly
notified thereof.  Upon any such resignation or removal of Administrative Agent,
the Required Lenders shall have the right to appoint a successor  Administrative
Agent,  which  successor  Administrative  Agent shall  (provided there exists no
Event of Default) be subject to  Borrower's  approval,  such  approval not to be
unreasonably  withheld or delayed.  If no successor  Administrative  Agent shall
have

                                       52
<PAGE>

been so  appointed  by the  Required  Lenders,  and  shall  have  accepted  such
appointment  (and, if required,  been approved by Borrower),  within twenty (20)
days after the  resignation  or the  Required  Lenders'  removal of the retiring
Administrative  Agent, then the retiring  Administrative Agent may, on behalf of
Lenders,  appoint  a  successor  Administrative  Agent,  which  shall  be one of
Lenders,   within  ten  (10)  days.   The  Required   Lenders  or  the  retiring
Administrative  Agent,  as the case may be,  shall  upon  the  appointment  of a
successor  Administrative  Agent  promptly  so  notify  Borrower  and the  other
Lenders.  Upon  the  acceptance  of  any  appointment  as  Administrative  Agent
hereunder by a successor  Administrative  Agent,  such successor  Administrative
Agent shall thereupon succeed to and become vested with all the rights,  powers,
privileges  and duties of the retiring  Administrative  Agent,  and the retiring
Administrative  Agent  shall be  discharged  from  its  duties  and  obligations
hereunder.  After any retiring  Administrative  Agent's  resignation  or removal
hereunder as  Administrative  Agent,  the  provisions  of this Article VII shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.

         Section  7.09. Amendments Concerning Agency  Function.  Notwithstanding
anything to the contrary contained in this Agreement, Administrative Agent shall
not be  bound by any  waiver,  amendment,  supplement  or  modification  of this
Agreement or any other Loan Document  which affects its duties,  rights,  and/or
functions  hereunder or thereunder  unless it shall have given its prior written
consent thereto.

         Section 7.10. Liability of  Administrative Agent. Administrative  Agent
shall not have any liabilities or  responsibilities  to Borrower or Guarantor on
account of the failure of any Lender to perform its obligations  hereunder or to
any Lender on account of the  failure of Borrower  or  Guarantor  to perform the
Obligations to be performed by them.

         Section 7.11. Transfer  of  Agency  Function.  Without  the  consent of
Borrower  or any  Lender,  Administrative  Agent may at any time or from time to
time  transfer its  functions as  Administrative  Agent  hereunder to any of its
offices  wherever  located in the United  States,  provided that  Administrative
Agent shall promptly notify Borrower and Lenders thereof.

         Section   7.12.  Non-Receipt   of   Funds  by   Administrative   Agent;
Adjustments.  (a) Unless  Administrative Agent shall have received notice from a
Lender or Borrower  (either one as  appropriate  being the "Payor") prior to the
date on which such Lender is to make payment hereunder to  Administrative  Agent
of Loan proceeds or Borrower is to make payment to Administrative  Agent, as the
case may be (either such payment being a "Required Payment"), which notice shall
be effective upon receipt,  that the Payor will not make the Required Payment in
full to Administrative Agent,  Administrative Agent may assume that the Required
Payment  has  been  made in full  to  Administrative  Agent  on such  date,  and
Administrative  Agent in its sole discretion may, but shall not be obligated to,
in reliance  upon such  assumption,  make the amount  thereof  available  to the
intended  recipient on such date.  If and to the extent the Payor shall not have
in fact so made  the  Required  Payment  in full to  Administrative  Agent,  the
recipient  of such  payment  shall repay to  Administrative  Agent  forthwith on
demand such amount made available to it together with interest thereon, for each
day from the date such  amount was so made

                                       53
<PAGE>

available by Administrative  Agent until the date Administrative  Agent recovers
such amount, at the Federal Funds Rate.

         (b) If, after  Administrative Agent has paid each Lender's share of any
payment received or applied by Administrative Agent in respect of the Loan, that
payment  is   rescinded   or  must   otherwise  be  returned  or  paid  over  by
Administrative  Agent,  whether  pursuant to any  bankruptcy or insolvency  Law,
sharing of  payments  clause of any loan  agreement  or  otherwise,  such Lender
shall,  at  Administrative  Agent's  request,  promptly return its share of such
payment or  application  to  Administrative  Agent,  together with such Lender's
proportionate  share of any  interest  or other  amount  required  to be paid by
Administrative  Agent with respect to such payment or application.  In addition,
if a court of competent  jurisdiction shall adjudge that any amount received and
distributed  by  Administrative  Agent is to be repaid,  each Person to whom any
such  distribution  shall have been made shall  either  repay to  Administrative
Agent its share of the  amount  so  adjudged  to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.

         Section 7.13.  Withholding  Taxes.  Each  Lender  represents that it is
entitled  to  receive  any  payments  to be made  to it  hereunder  without  the
withholding  of any tax and will  furnish to  Administrative  Agent such  forms,
certifications,  statements  and other  documents  as  Administrative  Agent may
reasonably  request from time to time to evidence such Lender's  exemption  from
the   withholding  of  any  tax  imposed  by  any   jurisdiction  or  to  enable
Administrative  Agent to  comply  with any  applicable  Laws  relating  thereto.
Without  limiting the effect of the  foregoing,  if any Lender is not created or
organized under the Laws of the United States or any state thereof,  such Lender
will  furnish to  Administrative  Agent Form  W-8ECI or Form  W-8BEN of the U.S.
Internal Revenue  Service,  or such other forms,  certifications,  statements or
documents,  duly  executed and  completed  by such  Lender,  as evidence of such
Lender's  complete  exemption  from the  withholding  of United  States tax with
respect  thereto.  Administrative  Agent  shall  not be  obligated  to make  any
payments hereunder to such Lender in respect of the Loan until such Lender shall
have  furnished  to  Administrative  Agent the  requested  form,  certification,
statement or document.

         Section 7.14.  Sharing of Payments among Lenders.  If   a  Lender shall
obtain payment of any principal of its Note or of interest  thereon  through the
exercise of any right of setoff,  banker's lien,  counterclaim,  or by any other
means  (including  direct  payment),  and such  payment  results in such  Lender
receiving a greater payment than it would have been entitled to had such payment
been paid directly to  Administrative  Agent for  disbursement to Lenders,  then
such  Lender  shall   promptly   purchase  for  cash  from  the  other   Lenders
Participations in the Loan in such amounts, and make such other adjustments from
time to time as shall be  equitable,  to the end that all  Lenders  shall  share
ratably the benefit of such payment.  To such end Lenders shall make appropriate
adjustments among themselves (by the resale of Participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. Borrower agrees that
any Lender so  purchasing  a  Participation  in the Loan from other  Lenders may
exercise all rights of setoff,  banker's  lien,  counterclaim  or similar rights
with respect to such  Participation.  Nothing contained herein shall require any
Lender to  exercise  any such  right or shall

                                       54
<PAGE>

affect  the  right of any  Lender  to  exercise,  and  retain  the  benefits  of
exercising, any such right with respect to any other indebtedness of Borrower.

         Section  7.15.   Possession of  Documents.  Each Lender shall  maintain
possession  of its own Note.  Administrative  Agent  shall  hold all other  Loan
Documents and related  documents in its possession and maintain separate records
and accounts  with respect to the Loan,  reflecting  the interests of Lenders in
the Loan,  and shall  permit  Lenders  and their  representatives  access at all
reasonable times to inspect such Loan Documents,  related documents, records and
accounts.

         Section 7.16. Effect of a Lender's  Failure to  Make an Advance. In the
event any Lender fails for any reason to fund the portion it is required to fund
of any  advance  of Loan  proceeds  by 3:00 p.m.  (Eastern  time) on the  second
Business Day after the date established by Administrative Agent as the date such
advance  is to be made,  such  Lender  shall be a  "Delinquent  Lender"  for all
purposes hereunder until and unless such delinquency is cured in accordance with
the terms of and by the time  permitted  under Section  7.17,  and the following
provisions shall apply:

               (a) Administrative Agent shall notify (such notice being referred
          to as the  "Delinquency  Notice")  each  Lender  and  Borrower  of any
          Lender's  failure to fund. Each  Non-Delinquent  Lender shall have the
          right, but in no event or under any  circumstance  the obligation,  to
          fund such Delinquent Lender's portion of such advance,  provided that,
          within  twenty  (20) days of the date of the  Delinquency  Notice (the
          "Election Period"),  such Non-Delinquent  Lender or Lenders (each such
          Lender,  an  "Electing  Lender")  irrevocably  commit(s)  by notice in
          writing (an  "Election  Notice") to  Administrative  Agent,  the other
          Lenders and Borrower to fund the  Delinquent  Lender's  portion of the
          advance  that is the  subject  of the  delinquency  and to assume  the
          Delinquent  Lender's  obligations with respect to the advancing of the
          entire undisbursed  portion of the Delinquent Lender's Individual Loan
          Commitment (such entire undisbursed portion of the Delinquent Lender's
          Individual Loan Commitment,  including its portion of the advance that
          is the  subject of the  delinquency,  the  "Delinquency  Amount").  If
          Administrative Agent receives more than one Election Notice within the
          Election Period,  then the Electing Lenders sending such notices shall
          be deemed to have committed to fund ratable shares of the  Delinquency
          Amount  based upon the  amounts of their  respective  Individual  Loan
          Commitments.  If  there  are  one or  more  Electing  Lenders  and the
          Delinquent Lender fails to cure during the Election Period as provided
          in Section 7.17, then upon the expiration of the Election Period, each
          Electing  Lender's  Individual Loan Commitment  shall be automatically
          increased  by the  Delinquency  Amount (if there is only one  Electing
          Lender)  or  such  Electing  Lender's  ratable  share,  determined  as
          aforesaid,  of the  Delinquency  Amount  (if  there  are  two or  more
          Electing  Lenders),   and  the  Delinquent  Lender's  Individual  Loan
          Commitment shall  automatically be reduced by the Delinquency  Amount.
          Administrative  Agent shall thereupon  notify Borrower and each Lender
          of (i) the adjusted  amounts of the Individual  Loan  Commitments  and
          (ii) if the advance  that was the subject of the  delinquency  was not
          made pursuant to Section 7.12 or was refunded by Borrower  pursuant to
          paragraph (e) of this Section,  the

                                       55
<PAGE>

          rescheduled  date of such advance (which shall be no sooner than three
          (3)  Business  Days after such  notice).  In the event  Administrative
          Agent shall have funded,  pursuant to Section 7.12, the entire advance
          that was the  subject of the  delinquency  (including  the  Delinquent
          Lender's  portion),  and Borrower shall not have refunded such advance
          pursuant to paragraph  (e) of this  Section,  the  Electing  Lender(s)
          shall remit to Administrative Agent the Delinquent Lender's portion of
          the advance,  or their  ratable  shares  thereof,  as the case may be,
          within  three (3)  Business  Days of the  notice  provided  for in the
          immediately   preceding  sentence,   and  Administrative  Agent  shall
          reimburse  itself from such funds for making the  Delinquent  Lender's
          portion  of the  advance.  Notwithstanding  anything  to the  contrary
          contained herein,  if  Administrative  Agent advances its own funds in
          respect of a Delinquent Lender's portion of an advance, Administrative
          Agent  shall  be  entitled  to  the  interest  on the  portion  of the
          Principal Amount  represented  thereby,  from the date  Administrative
          Agent makes such advance until the date it is reimbursed therefor.

               (b) In  connection  with the  adjustment  of the  amounts  of the
          Individual  Loan  Commitments  of the  Delinquent  Lender and Electing
          Lender(s)  upon the  expiration  of the Election  Period as aforesaid,
          Borrower  covenants that it shall,  promptly  following the request of
          the Electing  Lender(s),  execute and deliver to each Electing  Lender
          and the Delinquent Lender  substitute notes  substantially in the form
          of  EXHIBIT  H  and  stating:  "This  Note  is a  substitute  note  as
          contemplated by Section 7.16 of the Loan Agreement; it replaces and is
          in lieu of that certain note made by Maker dated [date of Note] to the
          order  of  [Lender]  in  the  principal  sum  of  [Lender's   original
          Individual  Loan  Commitment]."  Such  substitute  notes  shall  be in
          amounts equal to such Lenders' respective Individual Loan Commitments,
          as adjusted.  All such substitute notes shall  constitute  "Notes" and
          the obligations evidenced by such substitute notes shall be secured by
          the Mortgage.  In connection with  Borrower's  execution of substitute
          notes as aforesaid,  Borrower  shall deliver to  Administrative  Agent
          such evidence of the due authorization,  execution and delivery of the
          substitute notes and any related documents as Administrative Agent may
          reasonably request.  The execution and delivery of substitute notes as
          required above shall be a condition  precedent to any further advances
          of Loan proceeds.  Upon receipt of its  substitute  note, the Electing
          Lender and the  Delinquent  Lender will return to Borrower their notes
          that were replaced, provided that the delivery of a substitute note to
          the Delinquent  Lender  pursuant to this Section 7.16 shall operate to
          void and replace the note(s)  previously held by the Delinquent Lender
          regardless  of whether or not the  Delinquent  Lender  returns same as
          required  hereby.  Borrower,  Administrative  Agent and Lenders  shall
          execute such  modifications  to the Loan  Documents  as shall,  in the
          reasonable judgment of Administrative Agent, be necessary or desirable
          in connection  with the  adjustment of the amounts of Individual  Loan
          Commitments  in  accordance  with  the  foregoing  provisions  of this
          Section.

               (c) In the  event  that no  Lender  elects  to commit to fund the
          Delinquency Amount within the Election Period as provided in paragraph
          (a) of

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<PAGE>

          this Section,  Administrative  Agent shall, upon the expiration of the
          Election Period, so notify Borrower and each Lender and the provisions
          of Section 2.09 shall apply.

               (d) Subject to a Delinquent Lender's right to cure as provided in
          Section  7.17,  but  notwithstanding  anything  else  to the  contrary
          contained in this Agreement,  the Delinquent Lender's interest in, and
          any and  all  amounts  due to a  Delinquent  Lender  under,  the  Loan
          Documents  (including,  without limitation,  all principal,  interest,
          fees and expenses)  shall be  subordinate  in lien priority and to the
          repayment of all amounts  (including,  without  limitation,  interest)
          then or thereafter due or to become due to the Non-Delinquent  Lenders
          under  the  Loan  Documents  (including  future  advances),   and  the
          Delinquent Lender thereafter shall have no right to participate in any
          discussions  among and/or decisions by Lenders  hereunder and/or under
          the other  Loan  Documents.  Further,  subject to  Section  7.17,  any
          Delinquent  Lender shall be bound by any  amendment  to, or waiver of,
          any  provision  of,  or any  action  taken or  omitted  to be taken by
          Administrative Agent and/or the Non-Delinquent Lenders under, any Loan
          Document which is made subsequent to the Delinquent  Lender's becoming
          a Delinquent Lender.

               (e) If,  pursuant to the operation of Section 7.12, an advance of
          Loan  proceeds is made  without  Administrative  Agent's  receipt of a
          Delinquent   Lender's  portion  thereof,  in  addition  to  Borrower's
          obligations  under  Section  7.12,  Borrower  shall,  upon  demand  of
          Administrative Agent, refund the entire such advance to Administrative
          Agent. Borrower's failure to do so within ten (10) days of such demand
          shall, notwithstanding anything to the contrary contained herein or in
          the Mortgage,  constitute an Event of Default under the Mortgage. Upon
          its receipt of such funds from  Borrower,  Administrative  Agent shall
          promptly remit to each  Non-Delinquent  Lender its  appropriate  share
          thereof.

         Section 7.17. Cure by Delinquent Lender. A Delinquent Lender may cure a
delinquency  arising  out of its  failure  to fund its  required  portion of any
advance if, within the Election Period,  it remits to  Administrative  Agent its
required portion of such advance  (together with interest thereon at the Default
Rate from the date such  advance was to have been made if such  advance was made
by Administrative  Agent and not refunded by Borrower pursuant to either Section
7.12 or paragraph  (e) of Section  7.16),  in which event  Administrative  Agent
shall so notify  Borrower and the  Non-Delinquent  Lenders (i) of its receipt of
such funds and  (ii)(A) if the advance  that was the subject of the  delinquency
shall not have been made (or shall have been  refunded by  Borrower  pursuant to
paragraph (e) of Section 7.16),  of the  rescheduled  date of the advance (which
shall be no sooner  then three (3)  Business  Days after such  notice) or (B) if
Administrative  Agent shall have funded the entire  advance that was the subject
of the  delinquency  (including  the Delinquent  Lender's  portion) and Borrower
shall not have refunded such advance  pursuant to paragraph (e) of Section 7.16,
of its intention to reimburse  itself from funds  received  from the  Delinquent
Lender (which  reimbursement  is hereby  authorized)  for funding the Delinquent
Lender's  required  portion of the advance.  In the event any Delinquent  Lender
cures  a  delinquency  prior  to the  expiration  of  the  Election  Period  (or

                                       57
<PAGE>

thereafter  with  the  consent  of  all  of the  Non-Delinquent  Lenders),  such
Delinquent  Lender  nonetheless  shall be bound by any amendment to or waiver of
any provision  of, or any action taken or omitted to be taken by  Administrative
Agent and/or the  Non-Delinquent  Lenders under, any Loan Document which is made
subsequent to that Lender's becoming a Delinquent Lender and prior to its curing
the  delinquency  as provided in this Section,  provided that such  amendment or
waiver of action was taken in accordance  with the provisions of this Agreement.
A Delinquent Lender shall have absolutely no right to cure any delinquency after
the  expiration of the Election  Period unless all  Non-Delinquent  Lenders,  in
their sole discretion, elect to permit such cure.

         Section 7.18.  Delinquent  Lender  Not  Excused.  Nothing  contained in
Sections  7.16 or 7.17 shall  release or in any way limit a Delinquent  Lender's
obligations as a Lender  hereunder and/or under any other of the Loan Documents.
Further,  a Delinquent  Lender shall indemnify and hold harmless  Administrative
Agent and each of the  Non-Delinquent  Lenders  from any claim,  loss,  or costs
incurred by Administrative  Agent and/or the Non-Delinquent  Lenders as a result
of a  Delinquent  Lender's  failure  to  comply  with the  requirements  of this
Agreement,  including,  without  limitation,  any  and  all  additional  losses,
damages,  costs and expenses  (including,  without limitation,  attorneys' fees)
incurred  by  Administrative  Agent  and any  Lender  as a result  of  and/or in
connection with (i) a Non-Delinquent Lender's acting as an Electing Lender, (ii)
any  enforcement  action  brought by  Administrative  Agent against a Delinquent
Lender and (iii) any action brought against Administrative Agent and/or Lenders.
The  indemnification  provided  above  shall  survive  any  termination  of this
Agreement.

         Section   7.19.   Notices   Regarding  Delinquent  Lender.  Notices  by
Administrative  Agent or Lenders  pursuant  to  Sections  7.16 or 7.17 may be by
telephone (to be promptly confirmed in writing).

         Section  7.20. Replacement Lender.  In the event any  Lender  becomes a
Delinquent  Lender and none of the other Lenders elects to be an Electing Lender
pursuant to Section 7.16,  Borrower  shall have the right,  at any time prior to
the third  anniversary of the Initial Advance,  provided there exists no Default
or  Event  of  Default,  to  cause  another  financial  institution   reasonably
acceptable to the Required Lenders to assume the Delinquent Lender's obligations
with respect to the Delinquency Amount on the then-existing terms and conditions
of the Loan Documents (such replacement  institution,  a "Replacement  Lender").
Such  assumption   shall  be  pursuant  to  a  written   instrument   reasonably
satisfactory  to the Required  Lenders.  Upon such assumption and the payment by
the  Replacement  Lender to  Administrative  Agent of a fee, for  Administrative
Agent's own  account,  in the amount of $3,500,  the  Replacement  Lender  shall
become a "Lender" for all purposes hereunder, with an Individual Loan Commitment
in an  amount  equal to the  Delinquency  Amount,  and the  Delinquent  Lender's
Individual Loan  Commitment  shall  automatically  be reduced by the Delinquency
Amount. In connection with the foregoing,  Borrower shall execute and deliver to
the Replacement Lender and the Delinquent Lender replacement notes substantially
in the form of  EXHIBIT  H and  stating:  "This  Note is a  replacement  note as
contemplated by Section 7.20 of the Loan  Agreement;  it replaces and is in lieu
of that  certain  note  made by Maker  dated  [date  of  Note]  to the  order of
[Delinquent  Lender]  in

                                       58
<PAGE>

the principal sum of [Delinquent Lender's original Individual Loan Commitment]."
Such  replacement  notes  shall  be in  amounts  equal  to,  in the  case of the
Replacement  Lender's  note,  the  Delinquency  Amount  and,  in the case of the
Delinquent  Lender's  note,  its  Individual  Loan  Commitment,  as  reduced  as
aforesaid.  Such replacement notes shall constitute  "Notes" and the obligations
evidenced  thereby  shall  be  secured  by  the  Mortgage.  In  connection  with
Borrower's  execution of replacement notes as aforesaid,  Borrower shall deliver
to Administrative  Agent such evidence of the due  authorization,  execution and
delivery of the replacement  notes and any related  documents as  Administrative
Agent may reasonably  request.  If the  Replacement  Lender is not  incorporated
under the Laws of the United States or a state thereof,  it shall,  prior to the
first date on which  interest or fees are  payable  hereunder  for its  account,
deliver to Borrower and Administrative  Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 7.13. The execution and delivery of  replacement  notes as required
above shall be a condition  precedent to any further  advances of Loan proceeds.
Upon  receipt of its  replacement  note,  the  Delinquent  Lender will return to
Borrower  its  note(s)  that  was  replaced,  provided  that the  delivery  of a
replacement  note to the Delinquent  Lender  pursuant to this Section 7.20 shall
operate to void and replace the note(s) previously held by the Delinquent Lender
regardless of whether or not the Delinquent  Lender returns the same as required
hereby.

         Borrower,   Administrative   Agent  and  Lenders   shall  execute  such
modifications  to the Loan  Documents as shall,  in the  reasonable  judgment of
Administrative   Agent,  be  necessary  or  desirable  in  connection  with  the
substitution  of Lenders in  accordance  with the  foregoing  provisions of this
Section.

         Lenders shall reasonably cooperate with Borrower's attempts to obtain a
Replacement Lender, but they shall not be obligated to modify the Loan Documents
in connection  therewith,  other than modifications  pursuant to the immediately
preceding paragraph. As part of the first advance of Loan proceeds following the
admission of the Replacement  Lender,  the  Replacement  Lender shall advance to
Borrower,  subject to the  satisfaction of all conditions of this Agreement,  an
amount  equal to the Direct and  Indirect  Costs paid by  Borrower  pursuant  to
clause (ii) of Section 2.09.

                                  Article VIII

                                EVENTS OF DEFAULT

         Section 8.01.  Events of Default. Any of the following  events shall be
an "Event of Default":

               (1) If  Borrower  shall  fail to pay the  principal  of any Notes
          (including,  without  limitation,  any principal  payments required by
          Section 2.19) as and when due; or fail to pay interest accruing on any
          Notes  as  and  when  due  and  such  failure  to pay  shall  continue
          unremedied  for five (5) days  after the due date of such  amount;  or
          fail to deliver  any  additional  collateral  for the Loan as and when
          required by Section  9.27;  or fail to pay any fee or any other amount
          under  this

                                       59
<PAGE>

          Agreement  or any other Loan  Document  or under the Fee Letter as and
          when due and such failure to pay shall continue unremedied for two (2)
          Business Days after notice by Administrative  Agent of such failure to
          pay; or

               (2) If  any  representation  or  warranty  made  by  Borrower  or
          Guarantor in this  Agreement or in any other Loan Document or which is
          contained in any certificate,  document,  opinion,  financial or other
          statement  furnished  at any time under or in  connection  with a Loan
          Document  shall  prove  to  have  been  unknowingly  incorrect  in any
          material  respect  on or as of the date  made or remade  and,  if such
          incorrect  representation  or  warranty is  susceptible  to being made
          correct through Borrower's or Guarantor's actions, such representation
          or  warranty  remains  incorrect  for thirty  (30) days  after  notice
          thereof shall have been given to Borrower by Administrative Agent; or

               (3) If  Guarantor  shall fail to  perform  or  observe  any term,
          covenant or agreement  contained in  paragraphs 9 or 10 of the Payment
          Guaranty; or

               (4) If Borrower or Guarantor shall fail to perform or observe any
          term,  covenant  or  agreement  contained  in Article VI or  otherwise
          contained  in  this  Agreement  or  any  Loan  Document   (other  than
          obligations specifically referred to elsewhere in this Section) or any
          other  document  executed by Borrower or  Guarantor  and  delivered to
          Administrative   Agent   and/or   Lenders  in   connection   with  the
          transactions   contemplated  hereby  and  such  failure  shall  remain
          unremedied for thirty (30)  consecutive  calendar days after notice of
          the occurrence thereof from Administrative Agent (or such shorter cure
          period  as  may  be  expressly   prescribed  in  the  applicable  Loan
          Document);  provided,  however, that if any such default cannot by its
          nature be cured  within such thirty (30) day, or shorter,  as the case
          may be, grace period and so long as Borrower shall have commenced cure
          within such thirty  (30) day,  or shorter,  as the case may be,  grace
          period and shall, at all times  thereafter,  diligently  prosecute the
          same to completion,  Borrower shall have an additional  period, not to
          exceed sixty (60) days, to cure such default; in no event, however, is
          the foregoing intended to effect an extension of the Maturity Date; or

               (5) If  Guarantor  or TCI shall fail to pay any Debt  (other than
          the payment obligations described in paragraph (1) of this Section) in
          an amount  equal to or greater than  $15,000,000  when due (whether by
          scheduled  maturity,  required  prepayment,  acceleration,  demand, or
          otherwise); or

               (6) If Borrower, Guarantor or TCI shall: (a) generally not, or be
          unable to, or shall admit in writing its  inability  to, pay its debts
          as such debts become due; or (b) make an assignment for the benefit of
          creditors,  petition or apply to any tribunal for the appointment of a
          custodian,  receiver or trustee for it, the Premises or a  substantial
          part of its other  assets;  or (c) commence any  proceeding  under any
          bankruptcy,   reorganization,   arrangement,   readjustment  of  debt,
          dissolution or liquidation law or statute of any jurisdiction, whether
          now or

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<PAGE>

          hereafter in effect;  or (d) have had any such petition or application
          filed or any such proceeding shall have been commenced,  against it or
          the Premises, in which an adjudication or appointment is made or order
          for relief is entered,  or which  petition,  application or proceeding
          remains  undismissed  or unstayed  for a period of ninety (90) days or
          more; or (e) be the subject of any proceeding under which the Premises
          or all or a  substantial  part of its other  assets  may be subject to
          seizure,  forfeiture  or  divestiture;  or (f) by any act or  omission
          indicate  its consent  to,  approval  of or  acquiescence  in any such
          petition,  application  or  proceeding  or  order  for  relief  or the
          appointment  of a  custodian,  receiver or trustee for the Premises or
          all or any substantial  part of its other property;  or (g) suffer any
          such  custodianship,  receivership  or trusteeship for the Premises or
          all  or any  substantial  part  of its  other  property,  to  continue
          undischarged for a period of ninety (90) days or more; or

               (7) If one or more  judgments,  decrees or orders for the payment
          of money in excess of $10,000,000  in the aggregate  shall be rendered
          against Borrower, Guarantor or TCI, and any such judgments, decrees or
          orders shall continue unsatisfied and in effect for a period of thirty
          (30) consecutive days without being vacated, discharged,  satisfied or
          stayed or bonded pending appeal; or

               (8) If any of the  following  events  shall  occur or exist  with
          respect  to  Borrower,  Guarantor  or any  ERISA  Affiliate:  (a)  any
          non-exempt Prohibited  Transaction involving any Pension Plan; (b) any
          Reportable Event with respect to any Pension Plan (c) the filing under
          Section 4041 of ERISA of a notice of intent to  terminate  any Pension
          Plan  or the  termination  of any  Pension  Plan;  (d)  any  event  or
          circumstance  which might  constitute  grounds  entitling  the PBGC to
          institute  proceedings under Section 4042 of ERISA for the termination
          of, or for the  appointment  of a trustee to  administer,  any Pension
          Plan, or the institution by the PBGC of any such  proceedings;  or (e)
          complete or partial  withdrawal  under  Section  4201 or 4204 of ERISA
          from a  Multiemployer  Plan  or  the  reorganization,  insolvency,  or
          termination of any Multiemployer Plan; and in each case above, if such
          event or  conditions,  if any,  could  in the  opinion  of any  Lender
          reasonably  be expected to result in liability of Borrower,  Guarantor
          or any ERISA Affiliate for any tax, penalty,  or other liability to or
          in  respect  of a  Pension  Plan,  Multiemployer  Plan,  the  PBGC  or
          otherwise (or any combination  thereof) which materially and adversely
          affects the  financial  condition of (x)  Borrower or  Guarantor  with
          respect to clause (a) above or (y)  Borrower,  Guarantor  or any ERISA
          Affiliate with respect to clauses (b) through (e) above; or

               (9) If at any time TCI is not a qualified real estate  investment
          trust under  Sections  856 through 860 of the Code or is not listed on
          the New York Stock Exchange or the American Stock Exchange; or

               (10) If at any time any part of the funds to be used by  Borrower
          or Guarantor in satisfaction  of their  respective  obligations  under
          this  Agreement and the other Loan  Documents,  or any other assets of
          Borrower  or  Guarantor,

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<PAGE>

          constitute  "plan  assets" of any  "employee  benefit plan" within the
          meaning  of ERISA or of any  "plan"  within  the  meaning  of  Section
          4975(e)(1) of the Code, as interpreted by the Internal Revenue Service
          and the  United  States  Department  of Labor in  rules,  regulations,
          releases or bulletins or as interpreted under applicable case law; or

               (11) If the  Mortgage  shall at any time and for any reason cease
          (a) to create a valid and perfected  first priority lien in and to the
          Mortgaged  Property  purported  to be subject  thereto or (b) to be in
          full  force and  effect  or shall be  declared  null and void;  or the
          validity or enforceability  thereof,  in whole,  shall be contested by
          any  party  thereto,  or any  party  thereto  shall  deny any  further
          liability or obligation thereunder; or

               (12) If an "Event of Default" shall occur under the Mortgage,  as
          such quoted term is defined therein; or

               (13) If an "Event of  Default"  shall  occur under the TRG Credit
          Facility,  (as such  quoted  term is defined  therein) or if a default
          shall occur and continue  beyond any  applicable  grace or cure period
          under any replacement or refinancing of the TRG Credit Facility,  and,
          in any such case,  the same shall not be waived  within  fifteen  (15)
          days of the occurrence thereof; or

               (14) If a default shall occur and continue  beyond any applicable
          grace or cure period  under any credit  facility of  Guarantor  in the
          amount  of  $100,000,000  or more,  and the same  shall  not be waived
          within fifteen (15) days of the occurrence thereof.

         Section  8.02.  Remedies. If any  Event of Default shall  occur  and be
continuing, Administrative Agent shall, upon request of the Required Lenders, by
notice to Borrower, (i) declare the outstanding Notes, all interest thereon, and
all other amounts  payable under this  Agreement and any other Loan Documents to
be forthwith due and payable,  whereupon the Notes,  all such interest,  and all
such amounts due under this  Agreement and under any other Loan  Document  shall
become and be forthwith due and payable,  without presentment,  demand, protest,
or  further  notice of any kind,  all of which are  hereby  expressly  waived by
Borrower;  and/or  (ii)  exercise  any  remedies  provided  in any  of the  Loan
Documents or by Law.

                                   Article IX

                        GENERAL CONDITIONS AND PROVISIONS

         Section 9.01. Loan Balancing.  If  at  any  time  Administrative  Agent
notifies  Borrower that, in  Administrative  Agent's sole  judgment,  reasonably
exercised,  the  undisbursed  balance  of the  Loan is  insufficient  to pay the
remaining Direct and Indirect Costs,  Borrower shall, at its option,  either (i)
within  ten (10)  days of  Administrative  Agent's  notification  as  aforesaid,
deposit  with  Administrative  Agent an amount equal to

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<PAGE>

such deficiency,  which  Administrative  Agent shall from time to time apply, or
allow Borrower to apply,  to such Costs or (ii) pay for such Costs, as incurred,
in the amount of such deficiency so that the amount of the Loan which remains to
be disbursed shall be sufficient to pay all remaining Direct and Indirect Costs,
and Borrower shall furnish  Administrative  Agent with such evidence  thereof as
Administrative  Agent shall require.  Borrower hereby agrees that Administrative
Agent shall have a lien on and security interest in, for the benefit of Lenders,
any sums deposited  pursuant to clause (i) above and that Borrower shall have no
right to withdraw any such sums except for the payment of the aforesaid Costs as
approved by Administrative  Agent.  Lenders shall have no obligation to make any
further advances of proceeds of the Loan until the sums required to be deposited
pursuant to clause (i) above have been  exhausted or until Borrower has actually
paid such Direct and Indirect Costs  pursuant to clause (ii) above,  as the case
may be, and, in either such case,  the Loan is back "in balance".  Any such sums
not used as provided  in said clause (i) shall be released to Borrower  when and
to the extent that  Administrative  Agent  determines that the amount thereof is
more than the excess,  if any, of the total remaining Costs of completion of the
Improvements over the undisbursed balance of the Loan; provided,  however,  that
should an Event of Default occur,  Administrative  Agent shall, at the option of
the Required  Lenders,  apply such amounts  either to the Costs of completion of
the Improvements or to the immediate  reduction of outstanding  principal and/or
interest under the Notes.

         Section 9.02.  Advance  Not  Waiver.  Any  advance   of  Loan  proceeds
hereunder  made prior to or without  the  fulfillment  by Borrower of all of the
conditions  precedent thereto,  whether or not known to Administrative  Agent or
Lenders, shall not constitute a waiver by Administrative Agent or Lenders of the
requirement that all conditions,  including the non-performed conditions,  shall
be required with respect to all future advances.

         Section 9.03. No  Third-Party  Beneficiaries.  This Agreement is solely
for the benefit of Lenders, Administrative Agent and Borrower. All conditions of
the  obligations  of Lenders to make advances  hereunder are imposed  solely and
exclusively  for the benefit of Lenders and may be freely  waived or modified in
whole or in part by Lenders at any time if in their sole discretion they deem it
advisable to do so, and no Person other than Borrower (provided,  however,  that
all conditions  have been  satisfied)  shall have standing to require Lenders to
make any Loan advances or to be a beneficiary  of this Agreement or any advances
to be made hereunder.

         Section 9.04.   Authorization  to  Make  Direct   Advances.  During the
existence  of any  Default  or Event of  Default,  Borrower  hereby  irrevocably
authorizes  Lenders to advance any  undisbursed  Loan  proceeds  directly to the
General Contractor, Major Subcontractors and other Persons to pay for completion
of the  Improvements.  All such  direct  advances  shall  satisfy  pro tanto the
obligations  of Lenders to  Borrower  hereunder  regardless  of the  disposition
thereof by the General Contractor, any Major Subcontractor or other Person.

         Section  9.05.  Authorization to Advance for Interest. Borrower  hereby
irrevocably  authorizes Lenders to disburse proceeds of the Loan to pay interest
accrued

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<PAGE>

on the Notes as it comes  due,  or,  upon five (5)  Business  Days'  notice,  to
satisfy any of the conditions hereof, including, without limitation, the payment
of  attorneys'  fees and expenses and the fees and expenses of the  Construction
Consultant.

         Section  9.06.  Letters of Credit. (a) Borrower may request, in lieu of
advances of proceeds of the Loan, that Administrative Agent issue unconditional,
irrevocable  standby  letters of credit  (each,  a "Letter of  Credit")  for the
account  of  Borrower.  Promptly  upon  Borrower's  request  for,  and then upon
issuance of, a Letter of Credit, Administrative Agent shall notify each Lender.

         (b) The amount of any  Letter of Credit  shall be limited to the lesser
of (i) $5,000,000 less the aggregate amount of all Letters of Credit theretofore
issued and  outstanding  or (ii) the amount of proceeds of the Loan available to
be advanced  hereunder,  it being  understood  that the amount of each Letter of
Credit issued and outstanding  shall effect a reduction,  by an equal amount, of
proceeds  available  to  Borrower  under  the Loan and  shall  be  allocated  by
Administrative  Agent to the Loan Budget Amount(s) to which the Letter of Credit
relates or, if there is no Loan Budget  Amount to which it relates,  to the Loan
Budget Amount(s) which  Administrative  Agent deems most appropriate in its sole
but reasonable  discretion.  Administrative  Agent's  issuance of each Letter of
Credit shall be subject to Administrative  Agent's  determination  that Borrower
has satisfied all conditions  precedent to its entitlement to an advance of Loan
proceeds.  Each Letter of Credit  shall expire no later than one (1) month prior
to the Maturity Date.

         (c) In connection with, and as a further  condition to the issuance of,
each Letter of Credit,  Borrower  shall  execute  and deliver to  Administrative
Agent an application for the Letter of Credit on Administrative Agent's standard
form therefor,  together with such other  documents,  opinions and assurances as
Administrative  Agent shall  reasonably  require,  and shall pay  Administrative
Agent's customary issuance and processing fees in connection  therewith.  In the
event of any inconsistency between any such application or related documents and
this Agreement, this Agreement shall control.

         (d) The parties hereto  acknowledge  and agree that,  immediately  upon
notice from  Administrative  Agent of any drawing under a Letter of Credit, each
Lender shall,  notwithstanding the existence of a Default or Event of Default or
the  non-satisfaction of any conditions precedent to the making of an advance of
the Loan,  advance proceeds of the Loan, in an amount equal to its ratable share
(based upon the undisbursed amounts of the Lenders'  respective  Individual Loan
Commitments)  of such drawing,  which  advance  shall be made to  Administrative
Agent to reimburse  Administrative Agent, for its own account, for such drawing.
Borrower  hereby  irrevocably  authorizes  Lenders to make such  advances.  Each
Lender  further  acknowledges  that its obligation to fund its share of drawings
under Letters of Credit as aforesaid  shall survive the Lenders'  termination of
this  Agreement  or  enforcement  of remedies  hereunder or under the other Loan
Documents.  In the event,  however,  that any  advance of  proceeds  of the Loan
cannot for any reason be made on the date otherwise  required above  (including,
without  limitation,  as a result of the  commencement of a proceeding under the
Code with respect to Borrower), then each Lender shall forthwith purchase (as of
the date such advance would

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<PAGE>

otherwise have occurred) from Administrative  Agent  participation  interests in
the unreimbursed drawing in an amount equal to its Pro Rata Share thereof.

         (e) Borrower agrees,  upon the occurrence of an Event of Default and at
the written request of Administrative  Agent, (i) to deposit with Administrative
Agent cash  collateral in the amount of all the  outstanding  Letters of Credit,
which cash  collateral  shall be held by  Administrative  Agent as security  for
Borrower's  obligations  in  connection  with the  Letters of Credit and (ii) to
execute and deliver to  Administrative  Agent such  documents as  Administrative
Agent  reasonably  requests to confirm and perfect the  assignment  of such cash
collateral to Administrative Agent.

         Section 9.07.  Concerning   Irrevocable   Authorizations.  Any  and all
advances made at any time by Lenders pursuant to the irrevocable  authorizations
granted by  Sections  9.04,  9.05 and 9.06 shall  require no further  direction,
authorization or request for disbursement  from Borrower and, except in the case
of  advances  under  Section  9.04,  may be made  whether or not there  exists a
Default or Event of Default.  Any and all such  disbursements  shall be added to
the outstanding principal balance evidenced by the Notes and shall be secured by
the Mortgage.  The aforesaid  authorizations shall (i) not prevent Borrower from
paying the  contractors  and other  Persons,  from paying the interest,  or from
satisfying the conditions and obligations  referred to in said Sections,  out of
its own funds, (ii) in no event be construed so as to relieve Borrower or others
from their obligations to pay such contractors or other Persons, to pay interest
as and when due under the Notes,  or to satisfy such  conditions and obligations
and (iii) except in the case of advances  pursuant to Section  9.06, in no event
obligate Lenders to disburse proceeds of the Loan for any such purposes.

         Section  9.08.  Ratification  of Requisition by Acceptance of  Advance.
Borrower  agrees  that,  by its  acceptance  of any  advance  of  Loan  proceeds
hereunder, it shall be bound in all respects by the Requisition submitted on its
behalf in connection therewith with the same force and effect as if Borrower had
itself executed and submitted the Requisition and whether or not the Requisition
is executed and/or submitted by an authorized Person.

         Section  9.09. Documentation  Etc. Satisfactory. All documentation  and
proceedings  deemed by  Administrative  Agent to be  necessary  or  required  in
connection  herewith and the documents  relating  hereto shall be subject to the
prior  approval of, and  satisfactory  to,  Administrative  Agent as to form and
substance.  In addition,  the Persons responsible for the execution and delivery
of, and signatories to, all of such  documentation,  shall be acceptable to, and
subject to the approval of,  Administrative  Agent.  Administrative  Agent shall
receive  copies,  certified if requested  by it, of all  documents  which it may
require in connection with the transactions contemplated hereby.

         Section 9.10. Intentionally Omitted.

         Section 9.11.   Notices.   Except as expressly  provided otherwise, all
notices,  demands,  consents,  approvals  and  statements  required or permitted
hereunder  shall be in  writing  and shall be  deemed to have been  sufficiently
given or served for all purposes

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<PAGE>

when  presented  personally,  three (3) days  after  mailing  by  registered  or
certified mail,  postage prepaid,  or one (1) day after delivery to a nationally
recognized overnight courier service providing evidence of the date of delivery,
addressed  to a party at its  address  on the  signature  page  hereof or of the
applicable  Assignment  and  Assumption  Agreement,  or at such other address of
which a party  shall have  notified  the party  giving such notice in writing in
accordance with the foregoing requirements.

         Section 9.12.  Amendments and Waivers. No amendment or material  waiver
of any provision of this  Agreement or any other Loan  Document,  nor consent to
any material  departure  by Borrower or any  Guarantor  therefrom,  shall in any
event be  effective  unless the same shall be in writing and signed by the party
against  whom such  amendment,  waiver or consent is sought to be  enforced  (it
being  understood,  however,  that the  signatures of the Required  Lenders and,
solely for purposes of its acknowledgement thereof,  Administrative Agent, shall
be sufficient  to bind Lenders to any such  amendment,  waiver or consent),  and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided,  however, that no amendment,
waiver or consent shall,  unless in writing and signed by all Lenders  (subject,
however,  to the provisions of Section  7.16(d)),  do any of the following:  (i)
other than as provided in this  Agreement,  reduce the principal of, or interest
on, the Notes or any fees due  hereunder  or any other  amount due  hereunder or
under any other Loan  Document;  (ii) postpone any date fixed for any payment of
principal  of, or interest on, the Notes or any fees due  hereunder or under any
other Loan Document or waive any default in the payment of  principal,  interest
or any other amount due hereunder or under any other Loan Document; (iii) change
the  definition of Required  Lenders;  (iv) release any material  portion of the
Mortgaged  Property or other  collateral  for the Loan other than in  accordance
with the Loan Documents; (v) amend this Section or any other provision requiring
the consent of all Lenders or the Required Lenders;  (vi) release Guarantor,  in
whole or in part,  other  than in  accordance  with  the Loan  Documents;  (vii)
increase the Loan Amount or the Individual Loan Commitment of any Lender; (viii)
waive any default  under  paragraph  (6) of Section  8.01; or (ix) amend Section
7.14.  Without  limiting the foregoing,  acceptance by  Administrative  Agent or
Lenders  of any sum  required  to be paid  pursuant  hereto or to any other Loan
Document,  after its due date, or in an amount less than the sum then due, shall
not  constitute  a waiver by  Administrative  Agent or Lenders of their right to
require  prompt  payment when due of all other such sums or to declare a default
or to exercise such other rights  provided herein or in the other Loan Documents
for such late or reduced payment.

         All  communications  from  Administrative  Agent to Lenders  requesting
Lenders' determination,  consent,  approval or disapproval (i) shall be given in
the form of a written  notice to each Lender,  (ii) shall be  accompanied  by or
include  a  description  or  copy  of the  matter  or  thing  as to  which  such
determination,  approval,  consent or  disapproval  is requested and (iii) shall
include  Administrative Agent's recommended course of action or determination in
respect thereof.  Each Lender shall reply promptly,  but in any event within ten
(10)  Business  Days (or five (5) Business  Days with respect to any decision to
accelerate  or stop  acceleration  of the Loan)  after  receipt  of the  request
therefor by  Administrative  Agent (the "Lender Reply Period").  Unless a Lender
shall  give  written  notice to  Administrative  Agent  that it  objects  to the
recommendation or determination of

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<PAGE>

Administrative  Agent (together with a written explanation of the reasons behind
such objection)  within the Lender Reply Period,  such Lender shall be deemed to
have approved or consented to such recommendation or determination.

         Section 9.13. Assignment;  Participation. Any Non-Delinquent Lender may
at any  time,  at no cost to  Borrower,  grant  to one or more  banks  or  other
institutions,  including  other  Non-Delinquent  Lenders (each a  "Participant")
participating   interests   in  its  Pro  Rata   Share  of  the  Loan   (each  a
"Participation")  subject to Administrative Agent's consent, which consent shall
not be  unreasonably  withheld or delayed,  and provided any such  Participation
shall be in the minimum amount of $5,000,000  unless the Participant  thereunder
is a  Non-Delinquent  Lender.  In the  event of any such  grant by a Lender of a
Participation to a Participant,  whether or not Borrower or Administrative Agent
was  given  notice  thereof,  such  Lender  shall  remain  responsible  for  the
performance of its obligations hereunder,  and Borrower and Administrative Agent
shall  continue to deal solely and directly with such Lender in connection  with
such Lender's rights and obligations hereunder.  Any agreement pursuant to which
any Lender may grant a Participation shall provide that such Lender shall retain
the sole  right and  responsibility  to  enforce  the  obligations  of  Borrower
hereunder and under any other Loan Document,  including, without limitation, the
right to approve any amendment,  modification or waiver of any provision of this
Agreement or any other Loan Document; provided, however, that such participation
agreement  may  provide  that such  Lender  will not agree to any  modification,
amendment or waiver of this  Agreement  described in clauses (i) through (ix) of
Section 9.12 without the consent of the Participant.

         Each   Lender   agrees  to  provide   Borrower   with   notice  of  all
Participations  sold by such Lender.  Borrower  agrees to provide all assistance
reasonably requested by a Lender to enable such Lender to sell Participations as
aforesaid,  or make  assignments  of its  interest  in the  Loan as  hereinafter
provided in this Section.

         A Lender may at any time assign to any bank or other  institution  with
the  consent of  Administrative  Agent and,  provided  there  exists no Event of
Default,  of Borrower,  which  consents  shall not be  unreasonably  withheld or
delayed  (such  assignee,  a "Consented  Assignee"),  or to one or more banks or
other  institutions  which are majority owned subsidiaries of a Lender or of the
parent of a Lender (each  Consented  Assignee or subsidiary bank or institution,
an "Assignee") all or a proportionate  part of all of its rights and obligations
under this  Agreement and its Note,  and such  Assignee  shall assume rights and
obligations, pursuant to an Assignment and Assumption Agreement executed by such
Assignee and the assigning  Lender,  provided that,  after giving effect to such
assignment, in each case, the Assignee's portion of the Loan and, in the case of
a partial assignment of a Lender's  interest,  the assigning Lender's portion of
the Loan will each be equal to or greater than  $5,000,000.  Upon (i)  execution
and delivery of such instrument,  (ii) payment by such Assignee to the assigning
Lender of an amount equal to the purchase  price agreed  between such Lender and
such Assignee and (iii)  payment by such Assignee or by the assigning  Lender to
Administrative  Agent of a fee, for Administrative  Agent's own account,  in the
amount of $3,500,  such  Assignee  shall be a party to this  Agreement and shall
have all the rights and  obligations of a Lender as set forth in such Assignment
and Assumption  Agreement,  and the assigning  Lender shall be released from its

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obligations  hereunder  to a  corresponding  extent,  and no further  consent or
action by any party shall be required.  Upon the  consummation of any assignment
pursuant to this paragraph, substitute notes, in the form of EXHIBIT G, shall be
issued  to the  assigning  Lender  (in the  case of a  partial  assignment)  and
Assignee by  Borrower,  in  exchange  for the return of the  assigning  Lender's
original  Note.  All such  substitute  notes  shall  constitute  "Notes" and the
obligations evidenced by such substitute notes shall constitute  Obligations for
all purposes of this Agreement and the other Loan Documents.  In connection with
Borrower's execution of substitute notes as aforesaid, Borrower shall deliver to
Administrative  Agent such  evidence  of the due  authorization,  execution  and
delivery of the  substitute  notes and any related  documents as  Administrative
Agent may reasonably request. If the Assignee is not incorporated under the Laws
of the United States or a state  thereof,  it shall,  prior to the first date on
which  interest  or fees are  payable  hereunder  for its  account,  deliver  to
Borrower and Administrative  Agent  certification as to exemption from deduction
or  withholding  of any United States  federal  income taxes in accordance  with
Section 7.13.

         Borrower,   Administrative   Agent  and  Lenders   shall  execute  such
modifications  to the Loan  Documents as shall,  in the  reasonable  judgment of
Administrative  Agent, be necessary or desirable in connection with  assignments
in accordance with the foregoing provisions of this Section, provided,  however,
that no such modifications shall increase  Borrower's  liability or obligations,
or decrease its rights, in respect of the Loan.

         Any Lender  may at any time  freely  assign  all or any  portion of its
rights under this  Agreement  and its Note to a Federal  Reserve  Bank.  No such
assignment shall release the transferor Lender from its obligations hereunder.

         Borrower  recognizes  that in  connection  with a  Lender's  selling of
Participations  or making of assignments,  any or all  documentation,  financial
statements,  appraisals and other data, or copies thereof, relevant to Borrower,
Guarantor or the Loan may be  exhibited to and retained by any such  Participant
or Assignee or prospective  Participant or Assignee.  A Lender's delivery of any
financial  statements  and  appraisals  to any such  Participant  or Assignee or
prospective  Participant  or  Assignee  shall be  accompanied  by such  Lender's
standard  confidentiality  statement indicating that the same are delivered on a
confidential basis.

         Section 9.14. Setoff. Borrower agrees that, in addition to (and without
limitation of) any right of setoff, bankers' lien or counterclaim Administrative
Agent or any Lender may  otherwise  have,  Administrative  Agent and each Lender
shall be  entitled  to offset  balances  (general  or  special,  time or demand,
provisional  or  final)  held  by it  for  the  account  of  Borrower  at any of
Administrative  Agent's or such Lender's  offices  against any amount payable by
Borrower to  Administrative  Agent or such Lender  hereunder  or under any other
Loan Document  which is not paid when due  (regardless  of whether such balances
are then due to Borrower),  in which case it shall promptly  notify Borrower and
(in the case of a Lender) Administrative Agent thereof; provided,  however, that
Administrative  Agent's or such  Lender's  failure to give such notice shall not
affect the validity thereof.  Payments by Borrower  hereunder or under the other
Loan Documents shall be made without setoff or counterclaim.

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<PAGE>

         Section  9.15. Successors and Assigns. Except as herein  provided, this
Agreement  shall  be  binding  upon  and  inure  to  the  benefit  of  Borrower,
Administrative   Agent  and  Lenders  and  their  respective   heirs,   personal
representatives, successors and assigns. Notwithstanding the foregoing, Borrower
may not assign, transfer or set over to another, in whole or in part, all or any
part of its benefits,  rights, duties and obligations hereunder,  including, but
not limited to,  performance of and compliance  with  conditions  hereof and the
right to receive the proceeds of current or future advances.

         Section  9.16. Severability. The provisions hereof are  intended  to be
severable.  Any provisions  hereof, or the application  thereof to any Person or
circumstance,  which,  for any reason,  in whole or in part,  is  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof (or the remaining portions of such provision) or the
application  thereof  to  any  other  Person  or  circumstance,   and  any  such
prohibition  or  unenforceability  in any  jurisdiction  shall not invalidate or
render  unenforceable  such  provision (or portion  thereof) or the  application
thereof to any Person or circumstance in any other jurisdiction.

         Section  9.17.  Non-Waiver; Remedies Cumulative. No failure or delay on
Administrative  Agent's or any Lender's  part in exercising  any right,  remedy,
power or  privilege  hereunder  or under  any of the  other  Loan  Documents  or
provided by law (hereinafter in this Section,  each a "Remedy") shall operate as
a waiver of any such  Remedy or shall be  deemed  to  constitute  Administrative
Agent's or any  Lender's  acquiescence  in any default by Borrower or  Guarantor
under any of said documents.  A waiver by Administrative  Agent or any Lender of
any Remedy on any one  occasion  shall not be construed as a bar to any other or
future exercise thereof or of any other Remedy. The Remedies are cumulative, may
be exercised singly or concurrently and are not exclusive of any other Remedies.

         Section  9.18.  Certain Waivers.  Borrower   hereby   irrevocably   and
unconditionally waives (i) promptness and diligence,  (ii) notice of any actions
taken by  Administrative  Agent or any Lender  hereunder or under any other Loan
Document or any other  agreement or instrument  relating  thereto  except to the
extent otherwise provided herein, (iii) all other notices, demands and protests,
and all other  formalities of every kind in connection  with the  enforcement of
the  Obligations,  the omission of or delay in which,  but for the provisions of
this Section,  might  constitute  grounds for  relieving  Borrower of any of its
Obligations,  (iv) any  requirement  that  Administrative  Agent  or any  Lender
protect,  secure,  perfect  or  insure  any  lien on or  against  the  Mortgaged
Property,  or any part thereof,  or on or against any other  collateral  for the
Loan or exhaust any right or take any action against Borrower,  Guarantor or any
other Person or against any of the  Mortgaged  Property or any other  collateral
for the  Loan,  (v) any  right or claim  of  right  to  cause a  marshalling  of
Borrower's  or  Guarantor's  assets  and  (vi)  all  rights  of  subrogation  or
contribution,  whether  arising by contract or  operation of law or otherwise by
reason of payment by Borrower  pursuant  hereto or to the other Loan  Documents.
BORROWER,  ADMINISTRATIVE  AGENT AND EACH LENDER WAIVE ANY RIGHT EACH SUCH PARTY
MAY HAVE TO JURY TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT
WITH RESPECT TO THIS AGREEMENT,

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<PAGE>

THE NOTES OR THE LOAN.  BORROWER FURTHER HEREBY IRREVOCABLY AND  UNCONDITIONALLY
WAIVES,  IN  CONNECTION  WITH ANY SUIT,  ACTION OR  PROCEEDING  BROUGHT BY OR ON
BEHALF OF  ADMINISTRATIVE  AGENT OR LENDERS WITH RESPECT TO THIS AGREEMENT,  THE
NOTES OR OTHERWISE IN RESPECT OF THE LOAN, ANY AND EVERY RIGHT BORROWER MAY HAVE
TO (1) INTERPOSE ANY COUNTERCLAIM THEREIN, OTHER THAN A COUNTERCLAIM THAT IF NOT
BROUGHT IN THE SUIT,  ACTION OR PROCEEDING  BROUGHT BY  ADMINISTRATIVE  AGENT OR
LENDERS COULD NOT BE BROUGHT IN A SEPARATE  SUIT,  ACTION OR PROCEEDING OR WOULD
BE SUBJECT TO DISMISSAL OR SIMILAR DISPOSITION FOR FAILURE TO HAVE BEEN ASSERTED
IN SUCH SUIT, ACTION OR PROCEEDING  BROUGHT BY  ADMINISTRATIVE  AGENT OR LENDERS
AND (2) HAVE THE SAME  CONSOLIDATED  WITH ANY OTHER OR SEPARATE SUIT,  ACTION OR
PROCEEDING.  NOTHING  CONTAINED  IN THE  IMMEDIATELY  PRECEDING  SENTENCE  SHALL
PREVENT OR PROHIBIT  BORROWER FROM  INSTITUTING OR MAINTAINING A SEPARATE ACTION
AGAINST ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO ANY ASSERTED CLAIM.

         Section 9.19. Expenses; Indemnification.  Borrower covenants and agrees
to pay all costs, expenses and charges (including,  without limitation, all fees
and charges of attorneys,  engineers,  appraisers and  consultants)  incurred by
Administrative  Agent or any Lender in connection  with (i) the  preparation for
and consummation of the transactions  contemplated hereby or for the performance
hereof  and of the  other  Loan  Documents,  and for any  services  which may be
required in addition to those  normally and reasonably  contemplated  hereby and
(ii)  the  enforcement  hereof  or of any or all of the  other  Loan  Documents;
provided,  however,  that Borrower shall not be responsible for (1) the fees and
expenses of legal counsel for Lenders  (other than PNC) and (2) costs,  expenses
and charges incurred by Administrative  Agent and Lenders in connection with the
administration  or  syndication of the Loan (other than the fees required by the
Fee  Letter and the  reasonable  fees and  expenses  of  Administrative  Agent's
counsel and of the Construction  Consultant).  In connection with the foregoing,
Lenders agree, to the extent practicable,  to appoint a single counsel and local
counsel,  selected by  Administrative  Agent, to act on behalf of all Lenders in
connection with the enforcement of the Loan Documents.  If Borrower fails to pay
promptly any costs,  charges or expense  required to be paid by it as aforesaid,
and  Administrative  Agent or any Lender pays such costs,  charges or  expenses,
Borrower shall reimburse Administrative Agent or such Lender, as appropriate, on
demand for the  amounts so paid,  together  with  interest  thereon at the Prime
Based Default Rate.  Borrower further agrees to indemnify  Administrative  Agent
and each Lender and their respective directors,  officers,  employees and agents
from, and hold each of them harmless against, (x) any and all losses arising out
of or by  reason  of  any  investigation  or  litigation  or  other  proceedings
(including  any  threatened  investigation  or litigation or other  proceedings)
relating to any actual or proposed  use by Borrower of the proceeds of the Loan,
including, without limitation, the fees and disbursements of counsel incurred in
connection with any such investigation,  litigation or other proceedings and (y)
any and all  claims,  actions,  suits,  proceedings,  costs,  expenses,  losses,
damages and liabilities of any kind,  including in tort, penalties and interest,
arising

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out or by reason of any matter relating, directly or indirectly, to the Mortgage
or  the  ownership,  condition,  development,   construction,  sale,  rental  or
financing of the Premises or Improvements or any part thereof (but excluding any
such losses, liabilities,  claims, damages or expenses incurred solely by reason
of the gross  negligence or willful  misconduct of the party to be indemnified).
The obligations of Borrower under this Section and under Sections 3.01, 3.03 and
6.07 shall survive the repayment of all amounts due under or in connection  with
any of the Loan Documents and the termination of the Loan.

         Section 9.20.  Counterparts.  This  Agreement  may  be  executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument,  and any party hereto may execute this Agreement by signing any
such counterpart.

         Section 9.21. Lenders' Right to Terminate.  In the event Borrower shall
not have  satisfied the conditions  precedent to its  entitlement to advances of
Loan proceeds hereunder within thirty (30) days of the date hereof, the Required
Lenders shall have the absolute  right, at their option,  to terminate  Lenders'
obligations to Borrower under this Agreement and the loan commitment represented
hereby.  In the event of such  termination,  the Required  Lenders  shall direct
Administrative Agent to send notice thereof to the other Lenders and Borrower.

         Section 9.22.  Governing Law;  Jurisdiction.  This  Agreement  and  the
rights  and  obligations  of the  parties  hereunder  shall in all  respects  be
governed by, and  construed  and enforced in  accordance  with,  the Laws of the
State of New York (without  giving effect to New York's  principles of conflicts
of law).  Borrower,  Administrative  Agent and each  Lender  hereby  irrevocably
submit to the non-exclusive  jurisdiction of any New York State or Federal court
sitting in The City of New York over any suit, action or proceeding  arising out
of or  relating  to this  Agreement,  the Note or any other  Loan  Document  and
Borrower  hereby agrees and consents that, in addition to any methods of service
of process provided for under applicable Law, all service of process in any such
suit, action or proceeding in any New York State or Federal court sitting in The
City of New York may be made by certified or  registered  mail,  return  receipt
requested,  directed to Borrower at the address  indicated on its signature page
hereof, and service so made shall be complete five (5) days after the same shall
have been so mailed.  Borrower,  Administrative  Agent and each  Lender  further
waive any  objection to venue in the State of New York on the basis of forum non
conveniens. Borrower, Administrative Agent and each Lender agree that any action
or proceeding brought against Borrower,  Administrative  Agent or any Lender, as
the case may be,  shall be brought  only in a New York  State or  Federal  court
sitting in The City of New York.

         Nothing  in  this   Section   shall   affect  the  right  of  Borrower,
Administrative  Agent or any Lender to serve legal  process in any other  manner
permitted by Law.

         Section 9.23.  Integration.  The  Loan  Documents  and  the  Fee Letter
constitute the entire agreement among Administrative Agent, Borrower and Lenders
relating  to the  transactions  contemplated  thereby  (except  with  respect to
agreements,  if

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<PAGE>

any, among Lenders or with Administrative Agent relating solely to compensation,
consideration  and the  syndication of the Loan) and supersede any prior oral or
written statements or agreements with respect to such transactions.

         Section 9.24.  Gross-Up For Taxes.  All payments made by Borrower under
this  Agreement  and the Notes  shall be made free and  clear  of,  and  without
deduction  or  withholding  for or on account of, any present or future  income,
stamp or other taxes, levies,  imposts,  duties,  charges,  fees,  deductions or
withholdings,  now or hereafter imposed, levied, collected, withheld or assessed
by any  Governmental  Authority,  excluding  income taxes and franchise or other
taxes  (imposed  in lieu of income  taxes)  imposed on a Lender as a result of a
present or former  connection  between such Lender and the  jurisdiction  of the
Governmental  Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such  Lender's  having  executed,  delivered or  performed  its  obligations  or
received a payment under, or enforced,  this Agreement or its Note). If any such
non-excluded  taxes,  levies,  imposts,  duties,  charges,  fees,  deductions or
withholdings  ("Non-Excluded Taxes") is required to be withheld from any amounts
payable to such Lender  hereunder  or under its Note,  the amounts so payable to
such Lender shall be  increased to the extent  necessary to yield to such Lender
(after  payment of all  Non-Excluded  Taxes)  interest or any such other amounts
payable  with  respect to the Loan at the rates or in the amounts  specified  in
this  Agreement and its Note;  provided,  however,  that  Borrower  shall not be
required to increase any such  amounts  payable to such Lender if such Lender is
not  organized  under the Laws of the United  States or a state thereof and such
Lender  fails to comply with the  requirements  of Section  7.13.  Whenever  any
Non-Excluded Taxes are payable by Borrower,  as promptly as possible  thereafter
Borrower  shall send to  Administrative  Agent for the  account of such Lender a
certified  copy of an original  official  receipt  received by Borrower  showing
payment thereof. If Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate  taxing  authority  or fails to remit to  Administrative  Agent  the
required  receipts  or  other  required  documentary  evidence,  Borrower  shall
indemnify such Lender for any incremental taxes,  interest or penalties that may
become payable by such Lender as a result of any such failure. The agreements in
this Section shall survive the  termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.

         Section 9.25. Single Purpose Entity.  Borrower  represents and warrants
that it is a specifically-formed  single purpose entity and that it has not, and
covenants and agrees that it shall not:

               (i) engage in any business or activity  other than the ownership,
          operation  and  maintenance  of  the  Premises  and  Improvements  and
          activities incidental thereto;

               (ii) acquire or own any  material  assets other than the Premises
          and  Improvements  and such  incidental  personal  property  as may be
          necessary for the operation thereof;

               (iii)  merge into or  consolidate  with any  Person or  dissolve,
          terminate  or  liquidate  in whole or in part,  transfer or  otherwise
          dispose of all or substantially

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<PAGE>

          all of its assets or change its legal  structure from a partnership to
          another type of business entity;

               (iv)  fail  to  preserve  its  existence  as a  partnership  duly
          organized, validly existing and in good standing under the Laws of the
          jurisdiction  of its  formation,  or amend or modify the provisions of
          its  partnership  agreement  in any way which  would be contrary to or
          conflict with the agreements made by Borrower in this Section;

               (v) own any subsidiary or make any investment in any Person;

               (vi)  commingle its assets with the assets of any of its partners
          or of any other Person;

               (vii)  create,  incur or assume any Debt,  secured or  unsecured,
          direct or contingent  (including  guaranteeing any obligation),  other
          than (x) the Loan or (y) Debt which (A) is  incurred  in the  ordinary
          course of its  business of owning and  operating  its  interest in the
          Premises and the routine  administration of Borrower,  (B) in the case
          of trade payables, is related to the operation of the Improvements and
          is not more than sixty (60) days past the date due (unless Borrower is
          in good faith  contesting any such trade payable),  (C) in the case of
          the  financing  of  fixtures,  equipment  or personal  property at the
          Premises,  is in amounts not to exceed $5,000,000 in the aggregate and
          is secured by, and only by, a pledge of such  fixtures,  equipment  or
          personal  property and (D) if evidenced by a note, is paid on the date
          payment is due under such note;

               (viii) become  insolvent or fail to pay its debts and liabilities
          from its assets as the same shall become due;

               (ix) fail to  maintain  its  records,  books of account  and bank
          accounts  separate  and apart from those of its partners and any other
          Person;

               (x) enter into any  contract  or  agreement  with any  partner or
          Affiliate, except upon commercially reasonable terms and conditions;

               (xi)  partition,  or  seek  to  partition,  its  interest  in the
          Premises,  or seek the dissolution or winding up, in whole or in part,
          of Borrower;

               (xii) fail to correct any known  misunderstandings  regarding its
          separate identity;

               (xiii)  hold  itself  out to be  responsible  for  the  Debts  or
          obligations of another Person;

               (xiv) make any loans or  advances to any third  party,  including
          any partner or principal of Borrower or their Affiliates;

               (xv) fail to file its own tax returns,  if required,  unless part
          of the consolidated returns of another Person;

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<PAGE>

               (xvi) agree to, enter into or consummate  any  transaction  which
          would render Borrower unable to make the  representation  contained in
          Section 5.07;

               (xvii)  fail  either to hold  itself out to the public as a legal
          entity  separate and distinct  from any other Person or to conduct its
          business  solely in its own name in order not (x) to mislead others as
          to the identity with which such other party is transacting business or
          (y)  to  suggest  that  Borrower  is  responsible  for  the  Debts  or
          obligations of any third party  (including any partner or principal of
          Borrower or their Affiliates);

               (xviii)  share any common  logo with or hold  itself out as or be
          designated as a department or division of any other Person;

               (xix)  without  the  unanimous  consent  of all  of  its  general
          partners,  file or consent to the filing of a bankruptcy or insolvency
          petition or otherwise institute insolvency proceedings with respect to
          itself  or to any other  entity  in which it has a direct or  indirect
          legal or beneficial ownership interest; or

               (xx)  dissolve,  liquidate,  consolidate,  merge  or sell  all or
          substantially  all of its assets or the assets of any other  entity in
          which it has a  direct  or  indirect  legal  or  beneficial  ownership
          interest or engage in any other business activity.

         Section  9.26. Partial  Releases. (a) Provided there exists no Event of
Default,  following the completion of  construction  of the Dillard Anchor Store
thereon,  Administrative  Agent shall release the lien of the Mortgage from that
8.1959-acre  portion of the Premises  identified as Tract 3  ("Dillard's  Anchor
Parcel,  Lot 1 Block 1") on Schedule A to the  Mortgage in  connection  with the
conveyance  thereof to, and acceptance  thereof by, Mercantile for the operation
thereon by Mercantile of the Dillard Anchor Store. Such release shall be subject
to  Administrative  Agent's  receipt  of (A)  evidence  that the  balance of the
Premises  constitutes a separate tax and zoning lot, (B) an  endorsement  to the
title insurance  policy for the Mortgage  insuring that the lien of the Mortgage
will not be  impaired  by  virtue of said  release,  (C) such  other  documents,
opinions and assurances as Administrative  Agent may reasonably  request (all of
the foregoing items (A), (B) and (C) to be received by  Administrative  Agent at
least seven (7) Business  Days prior to the proposed  release and be in form and
substance  reasonably  satisfactory to Administrative  Agent) and (D) payment of
Administrative Agent's out-of-pocket  expenses,  including the fees and expenses
of counsel, in connection therewith.

         (b)  Administrative  Agent shall  release the lien of the Mortgage from
portions of the Premises  outside of the "ring road" of the  shopping  center of
which the Improvements are a part (each such portion of the Premises, a "Release
Parcel") as follows:

                  (i) All such  releases  shall be  subject,  in each  case,  to
         Administrative  Agent's receipt of (A) evidence that the balance of the
         Premises  constitutes a separate tax and zoning lot and an  endorsement
         to the title insurance  policy for the Mortgage  insuring that the lien
         of the  Mortgage  will not be  impaired by virtue of

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         the  release  of  the  Release  Parcel,  (B)   a   copy,  certified  by
         Borrower  to be true  and complete,  of the  executed  contract of sale
         for  the  Release  Parcel, (C)  a  current  survey  of   the  Premises,
         specifically  delineating  (by  metes and bounds)  the  Release Parcel,
         certified to Administrative  Agent  and  the  Title  Insurer,  (D) such
         other  documents,  opinions  and  assurances  as  Administrative  Agent
         may reasonably request (all of the  foregoing items (A)  through (D) to
         be   received   by    Administrative    Agent   at   least   seven  (7)
         Business  Days  prior  to  the   proposed  release  and be  in form and
         substance  reasonably  satisfactory to Administrative  Agent),  (E) the
         appropriate  release  price,  if any,  required by  subparagraph  (vii)
         below,  to be applied by  Administrative  Agent to the repayment of the
         Principal  Amount and  accrued  and  unpaid  interest  thereon  and (F)
         payment of Administrative Agent's out-of-pocket expenses, including the
         fees  and  expenses  of  counsel,  in  connection  with  the  foregoing
         transactions.

                  (ii) Provided there exists no Event of Default, those portions
         of the Premises  identified as Tract 8 ("Adjacent  Parcel D"),  Tract 9
         ("Adjacent  Parcel  E"),  Tract  10  ("Adjacent  Parcel  F"),  Tract  6
         ("Residual  Parcel B") and Tract 4 ("Lot 2, Block 2") on  Schedule A to
         the Mortgage shall be released as provided in subparagraph (i) above in
         connection  with  Borrower's   simultaneous   conveyance   thereof,  in
         commercially   reasonable   transactions,   for  the  construction  and
         operation   thereon  by  the  transferee   thereof  of  retail  stores,
         restaurants,  entertainment  facilities or other facilities  compatible
         with the shopping center.

                  (iii)  Provided  there  exists no Event of Default,  (x) those
         portions of the Premises south of Park Boulevard identified as Tract 14
         ("Lot 5, Block A") and Tract 15 ("Lot 6, Block A") on Schedule A to the
         Mortgage  and (y) in the event the Option  Parcel  becomes  part of the
         Premises  pursuant  to Section  2.08,  the Option  Parcel,  or portions
         thereof,  shall be released as  provided in  subparagraph  (i) above in
         connection  with   Borrower's   simultaneous   conveyance   thereof  in
         commercially reasonable transactions to third parties.

                  (iv) Those portions of the Premises identified as (x) Tract 11
         (the "Chapel Hill Boulevard  Right-of-Way  Parcel"),  (y) Tract 12 (the
         "Park Boulevard Right-of-Way Parcel") and (z) Tract 7 ("Residual Parcel
         C") on Schedule A to the Mortgage shall be released in accordance  with
         subparagraph  (i)  above in  connection  with  Borrower's  simultaneous
         dedication  thereof as a public  road,  or a portion of a public  road,
         upon Administrative  Agent's receipt of evidence of such dedication and
         the  acceptance   thereof  by  the  City,  as  well  as  of  Borrower's
         completion,  and the City's acceptance,  of the roadway improvements to
         be done  by  Borrower  pursuant  to (A)  Section  3C(2)  of the  Master
         Agreement with respect to the Chapel Hill Boulevard Right-of-Way Parcel
         and the Park Boulevard  Right-of-Way Parcel and (B) Section 3(a) of the
         Exchange Agreement with respect to Residual Parcel C.

                  (v) Provided there exists no Event of Default, that portion of
         the Premises  identified as Tract 5 ("Residual Parcel A") on Schedule A
         to the Mortgage shall be released in accordance with  subparagraph  (i)
         above in

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<PAGE>

         connection   with   Borrower's  simultaneous   conveyance   thereof  to
         an adjoining property owner in exchange for that certain  approximately
         0.1085-acre parcel of land identified on Exhibit "B-10" to the Exchange
         Agreement (the  "Brown/Developer  Parcel") upon Administrative  Agent's
         receipt (unless the Brown/Developer  Parcel is conveyed directly to and
         accepted by the City as part of the dedication thereof as a public road
         or a  portion  of a  public  road)  of (x) an  agreement,  executed  by
         Borrower and in proper form for  recording,  spreading  the lien of the
         Mortgage to encumber the Brown/Developer  Parcel and (y) an endorsement
         to the title policy  insuring the Mortgage  adding the  Brown/Developer
         Parcel to the insured  premises  thereunder  with no  additional  title
         exceptions.

                  (vi)  In the  event  the  Option  Parcel  becomes  part of the
         Premises  pursuant to Section 2.08,  an  approximately  2-acre  portion
         thereof shall be released in accordance with  subparagraph (i) above in
         connection  with  Borrower's  simultaneous  dedication  thereof for the
         widening of Plano Parkway, a public road, upon  Administrative  Agent's
         receipt of evidence of such  dedication and the  acceptance  thereof by
         the City.

                  (vii) As a condition to releases of Release  Parcels  pursuant
         to  subparagraphs  (ii) and (iii) above,  Borrower shall be required to
         pay a release  price in an amount equal to (x) $5.92 per square foot in
         the case of releases  pursuant to subparagraph (ii) above and (y) $4.68
         per square foot in the case of releases pursuant to subparagraph  (iii)
         above.  No release  price  shall be  required  for  releases of Release
         Parcels pursuant to subparagraphs (iv), (v) and (vi) above.

         Section 9.27. Required Leasing Achievement Levels.  (a) If on the first
Leasing  Achievement  Measurement  Date  indicated in the table below,  Borrower
shall not have in place, as reasonably determined by Administrative Agent, fully
executed and, where required by this Agreement, approved by Administrative Agent
(or deemed  approved as provided in Section  6.20)  leases of mall stores in the
Improvements  (and delivered  certified copies of such leases to  Administrative
Agent):  (i)  covering  at  least  the  percentage  of the  total  SFGLA  of the
Improvements,  (ii) providing for a cumulative  average  minimum rent per square
foot and (iii) providing for a minimum  aggregate  annual rent, all as set forth
in said table for said first Leasing  Achievement  Measurement Date (the leasing
requirements  set forth in clauses (i), (ii) and (iii),  collectively,  for each
Leasing Achievement Measurement Date, the "Leasing Requirement"),  then Borrower
shall, within ten (10) Business Days of Administrative  Agent's demand therefor,
deliver to  Administrative  Agent  additional  collateral  for the Loan in form,
amount and otherwise as more  particularly set forth below in this Section.  If,
however, on the first leasing Achievement  Measurement Date, Borrower shall have
in place leases which satisfy the Leasing Requirement for such date as set forth
above, then the provisions of this Section shall no longer be applicable.

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<PAGE>

--------------------------------------------------------------------------------
Leasing      Required Leasing    Average Required    Required Aggregate
Achievement    Percentage (%)        Minimum            Annual Minimum
Measurement                     Rent/Square Foot($)        Rent ($)
Date
--------------------------------------------------------------------------------
11/1/2000          50                 35              9,829,680
--------------------------------------------------------------------------------
2/1/2001           57                 38             12,166,335
--------------------------------------------------------------------------------
5/1/2001           63                 41             14,508,608
--------------------------------------------------------------------------------
8/1/2001           70                 44             17,300,236
--------------------------------------------------------------------------------

         (b) Additional  collateral for the Loan required by paragraph (a) above
in respect of the first  Leasing  Achievement  Measurement  Date shall be in the
form of either cash or a letter of credit,  in either case in an amount equal to
the  greater  of (x) the  quotient  of (A) the  product of (1) the excess of the
Required  Leasing  Percentage over the actual leasing  percentage  (based on the
executed and, where required by this Agreement, approved by Administrative Agent
(or  deemed  approved  as  provided  in  Section  6.20)  leases  then in place),
multiplied  by (2)  561,696  SFGLA,  multiplied  by  (3)  the  Required  Minimum
Rent/Square Foot,  divided by (B) .0875 or (y) the quotient of (A) the excess of
the Required  Aggregate  Annual  Minimum Rent over the actual  aggregate  annual
minimum  rent (based on the  executed  and,  where  required by this  Agreement,
approved  by  Administrative  Agent (or deemed  approved  as provided in Section
6.20) leases then in place), divided by (B) .0875.

         (c) Cash  collateral  delivered  by Borrower  pursuant to this  Section
shall be deposited into an interest-bearing "blocked" cash collateral account to
be  established  with and held in the name of  Administrative  Agent  (the "Cash
Collateral  Account").  All amounts  deposited into the Cash Collateral  Account
shall be invested by  Administrative  Agent in  certificates of deposit or other
money  market  instruments  (each such  certificate  of deposit or money  market
instrument,  a "MM Instrument") issued (and to be held) by Administrative Agent,
the amounts  and terms of which shall be  acceptable  to  Administrative  Agent.
Borrower  hereby assigns the Cash Collateral  Account and all sums therein,  and
all MM Instruments, including earnings thereon, to Administrative Agent, for the
benefit  of  Lenders,  as  security  for  the  payment  and  performance  of the
Obligations and  acknowledges  that Borrower shall have no right to such sums or
such MM  Instruments  except to the extent  specifically  provided  for  herein.
Borrower further  acknowledges that Administrative Agent shall retain possession
of all documents evidencing the Cash Collateral Account and any MM Instrument to
perfect its security interests therein.  Notwithstanding  the foregoing,  at any
time following the occurrence of an Event of Default,  Administrative Agent may,
upon the direction of the Required  Lenders,  apply any and all sums in the Cash
Collateral  Account and all sums invested in MM Instruments,  including earnings
thereon,  to the immediate  reduction of the Principal Amount and/or accrued and
unpaid interest and/or other sums payable  hereunder or under the Notes or other
Loan Documents,  in such order and amounts as the Required  Lenders shall elect.
Administrative  Agent is hereby appointed  Borrower's  attorney-in-fact  for the
purpose of withdrawing any and all sums from the Cash Collateral Account and all
sums

                                       77
<PAGE>

invested in MM Instruments.  Borrower  agrees to execute such further  documents
(including  security  agreements  and UCC-1  financing  statements)  and do such
further  acts as  Administrative  Agent may  reasonably  request  to  confirm or
perfect the assignment and security interests provided for in this Section.

         (d) Letters of credit  delivered  by Borrower  pursuant to this Section
shall (x) be  unconditional  and  irrevocable,  (y) be issued for the benefit of
Administrative Agent by a financial institution  reasonably acceptable to it and
(z) have an  expiration  date no  earlier  than  twelve  (12)  months  after its
issuance,  with an "evergreen"  clause  providing for automatic six (6) month or
longer extensions.  At any time following the occurrence of an Event of Default,
Administrative Agent may, upon the direction of the Required Lenders,  draw upon
any such letter of credit by sight  draft.  The  proceeds  of any such  drawings
shall be applied  by  Administrative  Agent to the  immediate  reduction  of the
Principal  Amount and/or accrued and unpaid  interest  and/or other sums payable
hereunder or under the Notes or other Loan Documents,  in such order and amounts
as the  Required  Lenders  may  elect.  In  addition,  if, any time prior to the
satisfaction  of the  conditions for the return of any such letter of credit set
forth in paragraph  (e) of this Section,  (I) either (x) Borrower  shall fail to
deliver to  Administrative  Agent an extension thereof at least thirty (30) days
prior to its  expiration  date or (y) the credit  rating of the  issuer  thereof
shall be  lowered  to below A by S&P or below A2 by  Moody's  and (II)  Borrower
shall fail to  deliver to  Administrative  Agent a  substitute  letter of credit
conforming  to the  requirements  of this  Section,  then  immediately  upon the
happening  of the event  described  in clause  (x) above or within ten (10) days
after  the  happening  of  the  event  described  in  clause  (y)  above,   then
Administrative  Agent  shall be  permitted  (irrespective  of the  existence  or
non-existence  of any Event of  Default)  to draw upon any such letter of credit
and deposit the proceeds of such drawing into the Cash Collateral Account.

                  (e) Within seven (7) Business  Days  following (x) the opening
of the  Improvements  and Anchor  Stores (other than the Sak's Anchor Store) for
business to the public and Borrower's  satisfaction of the  requirements for and
conditions to its entitlement to the first extension of the Maturity Date as set
forth in Section 2.18 or (y) Borrower's  satisfaction of the Leasing Requirement
on any Leasing  Achievement  Measurement  Date  subsequent  to the first Leasing
Achievement  Measurement Date, all sums then in the Cash Collateral Account (and
related MM  Instruments)  and all letters of credit then held by  Administrative
Agent pursuant to this Section shall be returned to Borrower; provided, however,
that if on any  subsequent  Leasing  Achievement  Measurement  Date the  Leasing
Requirement  is not  yet  satisfied  but,  based  on  the  then  actual  leasing
achievement  and the formula  set forth in  paragraph  (b) above,  the amount of
additional  collateral  that  would be  required  is less  than  the  additional
collateral then held by  Administrative  Agent,  the excess shall be returned to
Borrower.

         Section 9.28. Year 2000.  Borrower  represents,  warrants and covenants
that each of Borrower  and  Guarantor  has taken and shall  continue to take all
action  necessary  to  assure  that  its  data  processing  (including  internal
accounting and bookkeeping) systems, information technology systems and building
systems  (including   microprocessors  for  building  systems)  are  capable  of
effectively  processing  data and

                                       78
<PAGE>

information,  including  dates on and after January 1, 2000, and shall not cease
to perform, or provide, or cause any software and/or system which is material to
its  operations  or any  interface  therewith  to provide,  invalid or incorrect
results as a result of date functionality  and/or data, or otherwise  experience
any  degradation of performance or  functionality  arising from,  relating to or
including  date  functionality   and/or  data  which  represents  or  references
different  centuries  or more than one century or leap years,  and that all such
systems shall  effectively  and accurately  manage and  manipulate  data derived
from,  involving  or  relating  in any way to dates  (including  single  century
formulas  and  multi-century  or leap  year  formulas),  and will  not  cause an
abnormally  ending scenario within such systems or in any software and/or system
with which such  systems  interface,  or  generate  incorrect  values or invalid
results involving such dates. At the request of Administrative  Agent,  Borrower
shall  provide  Administrative  Agent with  reasonably  acceptable  assurance of
Borrower's and Guarantor's year 2000 capability.

                                   Article X

                              NATURE OF OBLIGATIONS

         Section   10.01.   Absolute  and  Unconditional  Obligations.  Borrower
acknowledges  and  agrees  that  its  obligations  and  liabilities  under  this
Agreement and under the other Loan Documents shall be absolute and unconditional
irrespective  of (1)  any  lack  of  validity  or  enforceability  of any of the
Obligations,  any  Loan  Documents,  or any  agreement  or  instrument  relating
thereto,  (2) any change in the time,  manner or place of payment  of, or in any
other term in respect of, all or any of the Obligations,  or any other amendment
or waiver of or consent to any  departure  from any Loan  Documents or any other
documents  or  instruments  executed  in  connection  with  or  related  to  the
Obligations,  (3) any  exchange  or release of any  collateral,  or of any other
Person from all or any of the Obligations or (4) any other  circumstances  which
might otherwise  constitute a defense  available to, or a discharge of, Borrower
or any other Person in respect of the Obligations.

                  The   obligations  and  liabilities  of  Borrower  under  this
Agreement and other Loan Documents  shall not be conditioned or contingent  upon
the pursuit by Administrative  Agent, any Lender or any other Person at any time
of any right or remedy  against  Borrower  or any other  Person  which may be or
become  liable in respect of all or any part of the  Obligations  or against any
collateral  or security or  guarantee  therefor or right of setoff with  respect
thereto.

         Section 10.02.   Non-Recourse.  (a)  Notwithstanding  anything  to  the
contrary contained in this Agreement,  in any of the other Loan Documents (other
than the Indemnity and the Guaranty), or in any other instruments, certificates,
documents  or  agreements  executed  in  connection  with the  Loan  (all of the
foregoing, with the exception of the Indemnity and the Guaranty, for purposes of
this Section,  hereinafter  referred to,  individually and collectively,  as the
"Relevant Documents"), no recourse under or upon any Obligation, representation,
warranty, promise or other matter whatsoever under or in respect of the Relevant
Documents shall be had against  Borrower or any of the  constituent  partners of
Borrower or their  successors  or assigns (said  constituent  partners

                                       79
<PAGE>

and their  successors  and assigns,  for purposes of this  Section,  hereinafter
referred to, individually and collectively,  as the "Borrower  Partners") except
to the extent of realization upon the Mortgaged Property or any other collateral
now or  hereafter  given for the Loan,  and each  Lender  expressly  waives  and
releases,  on behalf of itself  and its  successors  and  assigns,  all right to
assert any liability  whatsoever under or with respect to the Relevant Documents
against, or to satisfy any claim or obligation arising thereunder  against,  any
of  the  Borrower  Partners  or  out of any  assets  of the  Borrower  Partners,
provided,  however,  that  nothing  in  this  Section  shall  be  deemed  to (1)
constitute a waiver of any obligation  evidenced or secured by, or contained in,
the Relevant  Documents or affect in any way the validity or  enforceability  of
the Relevant  Documents;  or (2) limit the right of Administrative  Agent and/or
Lenders to proceed against or realize upon all or part of the Mortgaged Property
or any other  collateral now or hereafter given for the Loan or to name Borrower
(or,  to the  extent  that  the  same  are  required  by  applicable  Law or are
determined by a court to be necessary  parties in  connection  with an action or
suit  against  Borrower  or all or part of the  Mortgaged  Property or any other
collateral now or hereafter given for the Loan, any of the Borrower Partners) as
a party defendant in any action or suit for judicial  foreclosure and sale under
the Mortgage or any other  security  document so long as no judgment or order in
the nature of a personal  monetary  judgment or order or deficiency  judgment or
order shall be asked for or taken against Borrower or the Borrower Partners;  or
(3) affect in any way the validity or enforceability of any guaranty (whether of
payment  and/or  performance)  (including  the Guaranty) or indemnity  agreement
(including  the  Indemnity)  now or  hereafter  given to or for the  benefit  of
Lenders in connection  with the Loan;  or (4)  constitute a waiver by Lenders of
any rights to reimbursement for actual, out-of-pocket losses, costs or expenses,
or any other remedy at law or equity against Borrower or its constituent general
partner(s)  by reason of (i)  fraudulent  actions or  omissions  or  intentional
misrepresentations  by  Borrower or its  constituent  general  partner(s),  (ii)
willful misapplication of any insurance proceeds,  condemnation awards or tenant
security  deposits,  or,  during the  existence  of an Event of Default,  of any
rental or other income, in any case which was expressly required by the Mortgage
or other Loan Documents (or leases in the case of tenant  security  deposits) to
be paid or applied in a specified manner, arising in any such case, with respect
to the Mortgaged  Property or other  collateral  now or hereafter  given for the
Loan or (iii)  after  the  occurrence  of an Event of  Default,  the  reasonable
out-of-pocket  legal and  related  expenses  caused by the  failure to  deliver,
promptly  upon demand,  tenant and other  project  files and  original  executed
leases and other agreements relating to occupancy,  construction or operation in
respect  of the  Premises  in or  under  Borrower's  or  any of its  Affiliate's
possession or control  which have been  reasonably  requested by  Administrative
Agent or any Lender.

                  (b) Notwithstanding  anything to the contrary contained in the
Relevant Documents, the Indemnity or the Guaranty, no recourse under or upon any
Obligation,  representation,  warranty, promise or other matter whatsoever under
the Relevant  Documents,  the Indemnity or the Guaranty shall be had against any
of the  constituent  partners of Guarantor or their  successors or assigns (said
constituent  partners and their  successors  and  assigns,  for purposes of this
Section,  hereinafter  referred to,  individually and collectively,  as the "TRG
Partners") and Administrative Agent and each Lender

                                       80
<PAGE>

expressly  waive and release,  on behalf of themselves and their  successors and
assigns,  all right to assert any liability  whatsoever under or with respect to
the Relevant Documents, the Indemnity or the Guaranty against, or to satisfy any
claim or obligation arising thereunder  against,  any of the TRG Partners or out
of any  assets of the TRG  Partners;  provided,  however,  that  nothing in this
Section  shall be deemed to: (1)  release  Borrower or its  constituent  general
partner(s)  from  any  personal  liability  pursuant  to,  or  from  any  of its
obligations  under,  the  Indemnity,  or  release  Guarantor  from any  personal
liability  pursuant to, or from any of its obligations  under,  the Indemnity or
the Guaranty; (2) release any TRG Partner from personal liability for its or his
own  fraudulent  actions or omissions  or  intentional  misrepresentations;  (3)
constitute a waiver of any obligation  evidenced or secured by, or contained in,
the Relevant Documents,  the Indemnity or the Guaranty, or affect in any way the
validity or  enforceability of any of the Relevant  Documents,  the Indemnity or
the  Guaranty;  (4) limit the right of  Administrative  Agent and/or  Lenders to
proceed against or realize upon the Mortgaged  Property or any other  collateral
now or hereafter  given for the Loan or to name Guarantor or (to the extent that
the same are  required  by  applicable  Law or are  determined  by a court to be
necessary  parties  in  connection  with an  action  or suit  against  Borrower,
Guarantor or the  Mortgaged  Property or any other  collateral  now or hereafter
given for the Loan) any of the TRG  Partners  as a party  defendant  in,  and to
enforce against the Mortgaged  Property or any other collateral now or hereafter
given for the Loan any judgment obtained by Administrative  Agent and/or Lenders
with respect to, any action or suit under the  Relevant  Documents so long as no
judgment  shall be enforced or taken  (except to the extent taking a judgment is
required by applicable  Law or determined by a court to be necessary to preserve
Administrative  Agent's and/or Lenders' rights against the Mortgaged Property or
any  other  collateral  now or  hereafter  given  for the  Loan or  Borrower  or
Guarantor,  but not otherwise)  against the TRG Partners,  their  successors and
assigns, or their assets; or (5) limit the right of Administrative  Agent and/or
Lenders to proceed against or realize upon any and all of the assets of Borrower
or Guarantor  (notwithstanding  the fact that the TRG Partners have an ownership
interest in Guarantor and,  thereby,  an interest in the assets of Guarantor) or
to name  Borrower or Guarantor  (or, to the extent that the same are required by
applicable  Law  or  are  determined  by a  court  to be  necessary  parties  in
connection with an action or suit against Borrower or Guarantor,  any of the TRG
Partners) as a party defendant in, and to enforce against the assets of Borrower
or Guarantor any judgment obtained by  Administrative  Agent and/or Lenders with
respect to, any action or suit under the Indemnity or the Guaranty so long as no
judgment  shall be enforced or taken  (except to the extent taking a judgment is
required by applicable  Law or determined by a court to be necessary to preserve
Administrative Agent's and/or Lenders' rights against Borrower or Guarantor, but
not otherwise) against the TRG Partners,  their successors and assigns, or their
assets.

                                       81
<PAGE>

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written.

                                     WILLOW BEND ASSOCIATES LIMITED PARTNERSHIP,
                                     a Delaware limited partnership

                                     By:  Willow Bend Holdings 1 LLC,
                                          a Delaware limited liability company,
                                          its sole general partner

                                          By:  The Taubman Realty Group Limited
                                               Partnership, a Delaware limited
                                               partnership, its sole member

                                               By           /s/  Steven Eder
                                                 ------------------------------
                                                  Name:  Steven E. Eder
                                                  Title:  Authorized Signatory

                                     Address for notices:

                                     Willow Bend Associates Limited Partnership
                                     c/o The Taubman Company
                                     200 East Long Lake Road, Suite 300
                                     Bloomfield Hills, Michigan 48304
                                     Attention:  Mr. Steven E. Eder
                                     Telephone:  (248) 258-7258
                                     Telecopy:   (248) 258-7275

                                     with a copy to:

                                     Miro Weiner & Kramer
                                     38500 Woodward Avenue
                                     Suite 100
                                     Bloomfield Hills, Michigan 48304
                                     Attention:  Martin L. Katz, Esq.
                                     Telephone:  (248) 258-1222
                                     Telecopy:   (248) 646-7887

                                                and

                                     with a copy of notices of default to:

                                       82
<PAGE>

                                     City of Plano
                                     1520 Avenue K
                                     Plano, Texas 75074
                                     Attention: City Manager

                                     PNC BANK, NATIONAL ASSOCIATION
                                      (as Lender and Administrative Agent)

                                     By       /s/  David C. Martens
                                       ----------------------------------------
                                       Name:  David C. Martens
                                       Title:    Vice President

                                    Address for notices, Applicable Lending
                                    Office and Administrative Agent's Office:

                                    PNC Bank, National Association
                                    One PNC Plaza
                                    249 Fifth Avenue
                                    P1-POPP-19-2
                                    Pittsburgh, Pennsylvania 15222
                                    Attention:  Mr. David Martens
                                    Telephone:  (412) 762-8597
                                    Telecopy:   (412) 762-6500

                                    with a copy to:

                                    PNC Bank, National Association
                                    Loan Administration
                                    One PNC Plaza
                                    249 Fifth Avenue
                                    P1-POPP-19-2
                                    Pittsburgh, Pennsylvania 15222
                                    Attention:  Ms. Cheryl J. Wukich
                                    Telephone:  (412) 762-2891
                                    Telecopy:   (412) 768-5754

                                       83
<PAGE>

                                    FLEET NATIONAL BANK
                                    (as Lender)

                                    By       M. A. Mulcahy
                                      -----------------------------------------
                                      Name:    Margaret A. Mulcahy
                                      Title:   Sr. Vice President

                                    Address for Notices and Applicable Lending
                                    Office:

                                    Fleet National Bank
                                    75 State Street
                                    MA BOF 11-C
                                    Boston, Massachusetts 02109
                                    Attention:  Ms. Margaret Mulcahy
                                    Telephone:  (617) 346-4291
                                    Telecopy:   (617) 346-3220

                                    COMMERZBANK AG, NEW YORK BRANCH
                                    (as Lender)

                                    By       /s/  E. Marcus Perry
                                      -----------------------------------------
                                      Name:     E. Marcus Perry
                                      Title:    Assistant Vice President

                                    By       /s/  David Buettner
                                      -----------------------------------------
                                      Name:     David Buettner
                                      Title:    Assistant Treasurer

                                    Address for Notices and Applicable Lending
                                    Office:

                                    Commerzbank AG
                                    New York Branch
                                    2 World Financial Center
                                    New York, New York 10281-1050
                                    Attention: Mr. Douglas Traynor
                                    Telephone:  (212) 266-7569
                                    Telecopy:   (212) 266-7565

                                       84
<PAGE>

                                    BAYERISCHE HYPO- UND VEREINSBANK
                                    AG, NEW YORK BRANCH
                                    (as Lender)

                                    By       /s/  S. Altman
                                      -----------------------------------------
                                      Name:      Stephen E. Altman
                                      Title:     Managing Director

                                    By       /s./  Peter Hannigan
                                      -----------------------------------------
                                      Name:      Peter T. Hannigan
                                      Title:     Managing Director

                                    Address for Notices and Applicable Lending
                                    Office:

                                    150 East 42nd Street
                                    New York, New York 10017-4679
                                    Attention: Ms. Meggan W. Walsh
                                    Telephone:  (212) 672-5347
                                    Telecopy:   (212) 672-5527

                                       85
<PAGE>Date: June 21, 2000

                BUILDING LOAN DEED OF TRUST, ASSIGNMENT OF LEASES
                        AND RENTS AND SECURITY AGREEMENT
                                  ("this Deed")

                   WILLOW BEND ASSOCIATES LIMITED PARTNERSHIP,
                         a Delaware limited partnership
                                   ("Grantor")

         Address of Grantor:    c/o The Taubman Company Limited Partnership
                                200 East Long Lake Road, Suite 300
                                Bloomfield Hills, Michigan 48304

                                       TO

                                DAVID M. PARNELL

                                   ("Trustee")

         Address of Trustee:    c/o Commonwealth Land Title Insurance Company
                                7557 Rambler Road, Suite 1200
                                Dallas, Texas 75231

                               FOR THE BENEFIT OF

                         PNC BANK, NATIONAL ASSOCIATION,
          as Administrative Agent for Lenders (as hereinafter defined)
         (together with its successors in such capacity, "Beneficiary")

         Address of Beneficiary: One PNC Plaza
                                 249 Fifth Avenue
                                 P1-POPP-19-2
                                 Pittsburgh, Pennsylvania 15222

                            Note Amount: $220,000,000

       This instrument prepared by, and after recording please return to:
                              Dewey Ballantine LLP
                           1301 Avenue of the Americas
                          New York, New York 10019-6092
                           Attention: George C. Weiss

<PAGE>

                                     RECITAL

         Grantor  is the  owner of the  premises  described  in  SCHEDULE  A and
proposes  to erect  substantial  improvements  thereon.  In order to finance the
construction thereof,  Grantor will borrow the Note Amount from Lenders pursuant
to the Loan Agreement  identified below.  Grantor has executed and delivered its
notes, each dated the date hereof,  in the respective  amounts of $70,000,000 to
PNC BANK, NATIONAL ASSOCATION (in its individual capacity as a Lender and not as
Beneficiary,  "PNC"), $70,000,000 to FLEET NATIONAL BANK ("Fleet"),  $40,000,000
to COMMERZBANK AG, NEW YORK BRANCH ("Commerzbank") and $40,000,000 to BAYERISCHE
HYPO- UND  VEREINSBANK  AG, NEW YORK BRANCH  ("Hypo  Vereinsbank").  Said notes,
which are  described on SCHEDULE B, obligate  Grantor to pay, in the  aggregate,
the Note  Amount,  or so much  thereof as may be  advanced  from time to time in
accordance  with the terms of the Loan  Agreement.  Said notes,  as the same may
hereafter be amended, modified,  extended,  severed, assigned, renewed, replaced
or restated, and including any substitute or replacement notes executed pursuant
to Sections 3.04,  7.16,  7.20 or 9.13 of the Loan  Agreement,  are  hereinafter
referred to individually and collectively as the "Note".

                  CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION

         Grantor,  Trustee  and  Beneficiary  agree  that,  unless  the  context
otherwise  specifies or requires,  the  following  terms shall have the meanings
herein specified.

         "Chattels"  means  all  fixtures,  furnishings,  fittings,  appliances,
apparatus, equipment, building materials and components,  machinery and articles
of personal  property,  of whatever kind or nature,  including any replacements,
proceeds or products  thereof and additions  thereto,  other than those owned by
lessees,  now or at any time  hereafter  intended to be or actually  affixed to,
attached to, placed upon, or used in any way in connection with the complete and
comfortable use, enjoyment, development, occupancy or operation of the Premises,
and whether located on or off the Premises.

         "City" means the City of Plano, a Texas municipal corporation of Collin
County, Texas.

         "Construction  Consultant"  has the  meaning  given to such term in the
Loan Agreement.

         "Default  Rate" and "Prime  Based  Default  Rate"  have the  respective
meanings given to such terms in the Loan Agreement.

         "Events of Default"  means the events and  circumstances  described  as
such in Section 2.01.

         "Good Faith  Contest"  has the  meaning  given to such term in the Loan
Agreement.

         "Guarantor"  means The Taubman  Realty  Group  Limited  Partnership,  a
Delaware  limited  partnership of which Grantor is a wholly-owned and controlled
subsidiary.
<PAGE>

         "Improvements"  means all  structures  or buildings,  and  replacements
thereof, to be erected or now or hereafter located upon the Premises,  including
all plant equipment,  apparatus, machinery and fixtures of every kind and nature
whatsoever forming part of said structures or buildings.

         "Lenders"  means,  collectively,   PNC,  Fleet,  Hypo  Vereinsbank  and
Commerzbank,  and such other lending  institutions who become "Lenders" pursuant
to the Loan Agreement,  together with their successors and permitted  assigns in
accordance with the terms of the Loan Agreement.

         "Loan"  means the loan made by Lenders to Grantor  pursuant to the Loan
Agreement and secured hereby.

         "Loan Agreement"  means that certain Building Loan Agreement,  dated as
of the date hereof,  among Grantor (as Borrower),  PNC, Fleet,  Hypo Vereinsbank
and Commerzbank (as Lenders) and Beneficiary (as  Administrative  Agent), as the
same may hereafter be amended, modified or supplemented from time to time.

         "Loan Documents" means the Note, the Loan Agreement,  this Deed and any
and all other documents evidencing and/or securing the Loan from time to time.

         "Master Agreement" means the Master Agreement between Guarantor and the
City,  dated  October 25, 1999 and  authorized  by City Council  Resolution  No.
99-8-14 (R) dated August 9, 1999,  providing,  among other  things,  for certain
payments to Guarantor  from tax revenues  paid to the City in respect of the TIF
District,  as Guarantor's interests thereunder have been assigned to and assumed
by Grantor (with the City's consent) by instruments dated November 8, 1999.

         "Obligations"  means each and every obligation,  promise,  covenant and
agreement of Grantor, Guarantor or any other obligor in respect of the Loan, now
or hereafter existing,  contained in this Deed, the Loan Agreement, the Note and
any  of  the  other  Loan  Documents,   whether  for  principal,   reimbursement
obligations,  interest, fees, expenses, late charges,  indemnities or otherwise,
and any amendments, supplements,  extensions, renewals or replacements of any of
said  documents,  including  but not  limited  to,  all or any other  obligor in
respect of the Loan indebtedness, obligations and liabilities (and all increases
or additions  thereto) of Grantor,  Guarantor or any other obligor in respect of
the Loan to Beneficiary  or any Lender now existing or hereafter  incurred under
or arising out of or in connection with this Deed, the Loan Agreement, the Note,
the  other  Loan  Documents,  and  any  documents  or  instruments  executed  in
connection therewith; in each case whether direct or indirect, joint or several,
absolute or contingent,  liquidated or unliquidated,  now or hereafter existing,
renewed  or  restructured,  whether  or not  from  time  to  time  decreased  or
extinguished  and later  increased,  created  or  incurred,  and  including  all
indebtedness  of Grantor,  Guarantor or any other obligor in respect of the Loan
under  any  instrument  now  or  hereafter  evidencing  or  securing  any of the
foregoing.

         "Parking Lease" means the Parking Lease between Guarantor (as Landlord)
and the City (as Tenant) dated  October 25, 1999 and  authorized by City Council
Resolution  No.  99-

                                       2
<PAGE>

8-15 (R) dated August 9, 1999, as the Landlord's  interests thereunder have been
assigned to and  assumed by Grantor  (with the City's  consent)  by  instruments
dated November 8, 1999.

         "Premises" means the premises  described in SCHEDULE A including all of
the  easements,   rights,   privileges  and  appurtenances   (including  air  or
development rights) thereunto belonging or in anywise  appertaining,  and all of
the  estate,  right,  title,  interest,  claim or demand  whatsoever  of Grantor
therein  and in the  streets  and ways  adjacent  thereto,  either  in law or in
equity,  in possession or  expectancy,  now or hereafter  acquired,  and as used
herein shall,  unless the context otherwise  requires,  be deemed to include the
Improvements.

         "Premises   Documents"  means  all  reciprocal  easement  or  operating
agreements (including,  without limitation, the REA), declarations of covenants,
conditions or restrictions,  declarations of condominium, developer's or utility
agreements  with any  village,  town,  county  or other  governmental  authority
(including,  without  limitation,  the Master  Agreement),  and any similar such
agreements or declarations  now or hereafter  affecting the Premises or any part
thereof.

         "REA"  means  that  certain  Construction,   Operation  and  Reciprocal
Easement Agreement more particularly described in SCHEDULE A.

         "Required  Lenders"  has the  meaning  given  to such  term in the Loan
Agreement.

         "TIF District" means Tax Increment Financing  Reinvestment Zone No. One
of the City of Plano,  Texas,  established  by City  Ordinance  No.  98-11-38 on
November 23,  1998,  as amended by  Ordinance  No.  99-1-16 on January 25, 1999,
pursuant to Chapter 311 of the Texas Tax Code.

         All  terms of this Deed  which are not  defined  above  shall  have the
meaning set forth elsewhere in this Deed.

         Except as  expressly  indicated  otherwise,  when used in this Deed (i)
"or" is not exclusive, (ii) "hereunder",  "herein",  "hereof" and the like refer
to this Deed as a whole,  (iii)  "Article",  "Section" and  "Schedule"  refer to
Articles,  Sections  and  Schedules  of this  Deed,  (iv)  terms  defined in the
singular have a correlative  meaning when used in the plural and vice versa, (v)
a reference to a law or statute  includes any amendment or  modification  to, or
replacement  of,  such law or  statute  and (vi) a  reference  to an  agreement,
instrument or document means such agreement,  instrument or document as the same
may be amended,  modified or  supplemented  from time to time in accordance with
its terms and as permitted by the Loan Agreement and other documents executed or
delivered to Beneficiary or Lenders in connection  with the Loan. The cover page
and all Schedules  hereto are  incorporated  herein and made a part hereof.  Any
table of contents and the headings and captions herein are for convenience  only
and shall not affect the interpretation or construction hereof.

                                       3
<PAGE>

                                 GRANTING CLAUSE

         NOW, THEREFORE,  Grantor, in consideration of the premises and in order
to secure the payment of both the  principal  of, and the interest and any other
sums  payable on or under,  the Note,  this Deed or the Loan  Agreement  and the
performance and observance of all the provisions  hereof and of the Note and the
Loan  Agreement,  including  the  payment  of  any  sums  advanced  by  Trustee,
Beneficiary  or Lenders to complete the  "Improvements"  (as such quoted term is
defined in the Loan  Agreement) to the extent the aggregate of such sums and any
other sums expended  pursuant  hereto exceed the sum of the Note Amount,  hereby
gives, grants, bargains, sells, warrants,  aliens, remises,  releases,  conveys,
assigns, transfers,  mortgages,  hypothecates,  deposits, pledges, sets over and
confirms  unto  Trustee,  all its estate,  right,  title and interest in, to and
under  any  and  all of  the  following  described  property  (hereinafter,  the
"Mortgaged Property") whether now owned or held or hereafter acquired:

               (i)      the Premises;

              (ii)      the Improvements;

             (iii)      the Chattels;

              (iv)      the Premises Documents;

               (v) all  rents,  royalties,  issues,  profits,  revenue,  income,
          recoveries,   reimbursements  and  other  benefits  of  the  Mortgaged
          Property  (hereinafter,  the "Rents") and all leases of the  Mortgaged
          Property or portions thereof now or hereafter entered into (including,
          without  limitation,  the  Parking  Lease)  and all  right,  title and
          interest of Grantor thereunder, including, without limitation, cash or
          securities  deposited  thereunder to secure performance by the lessees
          of their obligations  thereunder,  whether such cash or securities are
          to be held until the expiration of the terms of such leases or applied
          to one or more of the  installments  of rent  coming  due  immediately
          prior to the expiration of such terms, and including any guaranties of
          such leases and any lease cancellation,  surrender or termination fees
          in respect thereof, all subject, however, to the provisions of Section
          4.01;

               (vi) all deposits  made with or other  security  given to utility
          companies by Grantor with respect to the Premises and/or Improvements,
          and all advance  payments of insurance  premiums  made by Grantor with
          respect  thereto and all claims or demands  relating to such deposits,
          other security and/or such insurance;

               (vii) all damages,  royalties  and revenue of every kind,  nature
          and  description  whatsoever  that Grantor may be entitled to receive,
          either  before  or after any  default  hereunder,  from any  person or
          entity owning or having or hereafter acquiring a right to the oil, gas
          or mineral rights and reservations of the Premises,  with the right in
          Beneficiary  to receive  and  receipt  therefor  and apply the same to
          amounts  secured  hereby,  and  Beneficiary  may  demand,  sue for and
          recover any such payments but shall not be required to do so;

                                       4
<PAGE>

               (viii) all proceeds  and claims  arising on account of any damage
          to or taking of the Premises or the  Improvements or any part thereof,
          and all causes of action and  recoveries for any loss or diminution in
          the value of the Premises or the Improvements;

               (ix) all development work product prepared in connection with the
          Premises,  including,  but  not  limited  to,  engineering,  drainage,
          traffic,  soil and other  studies and tests;  all water,  sewer,  gas,
          electrical  and telephone  approvals,  taps and  connections;  and all
          surveys,  drawings,  plans and specifications and subdivision,  zoning
          and platting materials;

               (x) all licenses  (including,  but not limited to, any  operating
          licenses  or  similar  licenses),   permits,  governmental  approvals,
          authorities or  certificates  required or used in connection  with the
          ownership,   operation  or  maintenance  of  the   Improvements;   all
          governmental  permits relating to construction,  all names under or by
          which the Premises or the  Improvements may at any time be operated or
          known, and all rights to carry on business under any such names or any
          variant thereof;

               (xi) all contracts and agreements (including, without limitation,
          contracts with  architects and engineers,  construction  contracts and
          contracts for the  maintenance,  leasing or management of the Premises
          or portions thereof), contract rights, logos, trademarks, trade names,
          copyrights and other general  intangibles used or useful in connection
          with the ownership, use, operation or occupancy of the Premises or any
          part thereof;

               (xii)  all  financing  commitments  (debt or  equity)  issued  to
          Grantor in respect of the Premises and all amounts  payable to Grantor
          thereunder;

               (xiii) all deposits,  operating or other accounts,  including the
          entire  balance  therein  (now  or  hereafter   existing)  of  Grantor
          containing proceeds of the ownership or operation of the Premises with
          any  banking or  financial  institution  and all  money,  instruments,
          securities,  documents, chattel paper, credits, demands, and any other
          property, rights, or interests of Grantor relating to the ownership or
          operation  of the  Premises  which at any  time  shall  come  into the
          possession,   custody  or  control   of  any   banking  or   financial
          institution; and

               (xiv) all proceeds of the  conversion,  voluntary or involuntary,
          of any of the  foregoing  into cash or liquidated  claims,  including,
          without limitation, proceeds of insurance and condemnation awards, and
          all rights of Grantor to refunds of real estate taxes and assessments.

         TO HAVE AND TO HOLD unto Trustee, its successors and assigns forever.

         IN TRUST,  to secure the  payment to  Lenders of the  principal  of and
interest on the Note at the  maturity  thereof and all other sums due to Lenders
or Beneficiary hereunder or under the Note or the Loan Agreement and the payment
and performance of all of the other Obligations, whereupon this Deed shall cease
and be void and the Mortgaged Property shall be released at the cost of Grantor.

                                       5
<PAGE>

                                   Article I

                              COVENANTS OF GRANTOR

         Grantor covenants and agrees as follows:

         Section 1.01. (a)  Warranty  of  Title; Power  and  Authority.  Grantor
warrants that it has a good and marketable  title to an indefeasible  fee estate
in the Premises  subject to no lien,  charge or  encumbrance  except such as are
listed as exceptions to title in the title policy insuring the lien hereof; that
it owns the  Chattels,  all leases  and the Rents in  respect  of the  Mortgaged
Property and all other  personal  property  encumbered  hereby free and clear of
liens and claims (other than, in the case of Chatttels, liens and claims granted
in  connection  with the  incurrence  of "Debt" as  permitted by clause (vii) of
Section  9.25 of the Loan  Agreement);  and that this Deed is and will  remain a
valid  and  enforceable  lien  on the  Mortgaged  Property  subject  only to the
exceptions  referred to above and those  which may be  approved  by  Beneficiary
after the date  hereof.  Grantor has full power and lawful  authority to subject
the Mortgaged  Property to the lien hereof in the manner and form herein done or
intended  hereafter  to be done.  Grantor  will  preserve  such title,  and will
forever  warrant and defend the same to Trustee and Beneficiary and will forever
warrant and defend the  validity  and  priority  of the lien hereof  against the
claims of all persons and parties whomsoever.

          (b) Flood Hazard Area.  Grantor  represents  that neither the Premises
nor any part thereof is located in an area  identified  by the  Secretary of the
United States  Department of Housing and Urban  Development or by any applicable
federal  agency as having  special  flood  hazards  or,  if it is,  Grantor  has
obtained the insurance required by Section 1.09.

         Section 1.02.(a) Further Assurances. Grantor will, at its sole cost and
expense,  do, execute,  acknowledge and deliver all and every such further acts,
deeds, conveyances, mortgages, assignments, notices of assignment, transfers and
assurances as Trustee or Beneficiary shall from time to time reasonably require,
for the better assuring, conveying, assigning,  transferring and confirming unto
Trustee the property and rights  hereby  conveyed or assigned or intended now or
hereafter  so to be, or which  Grantor may be or may  hereafter  become bound to
convey or assign to Trustee,  or for carrying out the intention or  facilitating
the  performance  of the terms hereof,  or for filing,  registering or recording
this Deed and,  on demand,  will  execute  and  deliver,  and hereby  authorizes
Trustee or Beneficiary to execute and file in Grantor's name, to the extent they
may  lawfully do so, one or more  financing  statements,  chattel  mortgages  or
comparable  security  instruments,  to  evidence  or  perfect  more  effectively
Beneficiary's  security  interest in and the lien hereof upon the  Chattels  and
other personal property encumbered hereby.

         (b) Information Reporting and Back-up Withholding. Grantor will, at its
sole cost and expense,  do, execute,  acknowledge and deliver all and every such
acts,  information  reports,  returns  and  withholding  of  monies  as shall be
necessary or appropriate to comply fully, or to cause full compliance,  with all
applicable  information  reporting and back-up  withholding  requirements of the
Internal  Revenue  Code of 1986  (including  all  regulations  now or  hereafter
promulgated  thereunder) in respect of the Premises and all transactions

                                       6
<PAGE>

related to the  Premises,  and will at all times,  upon  Beneficiary's  request,
provide  Beneficiary  with  satisfactory  evidence of such compliance and notify
Beneficiary of the information reported in connection with such compliance.

         Section 1.03. (a) Filing and Recording of Documents. Grantor  forthwith
upon the execution and delivery  hereof,  and thereafter from time to time, will
cause this Deed, the Loan Agreement and any security  instrument creating a lien
or evidencing  the lien hereof upon the Chattels and each  instrument of further
assurance to be filed,  registered or recorded in such manner and in such places
as may be required  by any  present or future law in order to publish  notice of
and fully to protect  the lien  hereof  upon,  and the title of Trustee  to, the
Mortgaged Property.

         (b) Filing and Recording Fees and Other  Charges.  Grantor will pay all
filing,  registration  or  recording  fees,  and all  expenses  incident  to the
execution and acknowledgment  hereof, any deed of trust supplemental hereto, any
security instrument with respect to the Chattels,  and any instrument of further
assurance,   and  any  reasonable  expenses   (including   attorneys'  fees  and
disbursements) incurred by Beneficiary in connection with the Loan, and will pay
all federal, state, county and municipal stamp taxes and other taxes (subject to
Section 1.08),  duties,  imposts,  assessments  and charges arising out of or in
connection  with the execution and delivery of the Note,  this Deed, any deed of
trust supplemental  hereto, any security instrument with respect to the Chattels
or any instrument of further assurance.

         Section  1.04. Payment and Performance of Loan  Documents. Grantor will
punctually  pay the  principal  and interest and all other sums to become due in
respect  hereof and of the Note and the Loan Agreement at the time and place and
in the manner  specified  therein,  according  to the true  intent  and  meaning
thereof,  all in currency of the United  States of America  which at the time of
such payment shall be legal tender for the payment of public and private  debts.
Grantor  will  duly  and  timely  comply  with  and  perform  all of the  terms,
provisions,  covenants  and  agreements  contained in said  documents and in all
other  documents or instruments  executed or delivered by Grantor to Beneficiary
or Lenders in connection with the Loan.

         Section 1.05.  Maintenance  of  Existence.  Grantor,  if  other  than a
natural  person,  will,  so long as it is owner of all or part of the  Mortgaged
Property,  do all things necessary to preserve and keep in full force and effect
its  existence,  franchises,  rights  and  privileges  as a  business  or  stock
corporation, partnership, limited liability company, trust or other entity under
the laws of the state of its formation.

         Section 1.06. After-Acquired Property. All right, title and interest of
Grantor  in  and  to  all  extensions,   improvements,   betterments,  renewals,
substitutes and  replacements  of, and all additions and  appurtenances  to, the
Mortgaged   Property,   hereafter  acquired  by,  or  released  to,  Grantor  or
constructed, assembled or placed by Grantor on the Premises, and all conversions
of the security constituted thereby, immediately upon such acquisition, release,
construction,  assembling,  placement or conversion,  as the case may be, and in
each such case,  without any further deed of trust,  conveyance,  assignment  or
other act by  Grantor,  shall  become  subject  to the lien  hereof as fully and
completely,  and with the

                                       7
<PAGE>

same effect,  as though now owned by Grantor and  specifically  described in the
Granting  Clause  hereof,  but at any and all times  Grantor  will  execute  and
deliver to Trustee or Beneficiary any and all such further assurances,  deeds of
trust,  conveyances  or  assignments  thereof  as  Trustee  or  Beneficiary  may
reasonably require for the purpose of expressly and specifically  subjecting the
same to the lien hereof.

         Section 1.07. (a) Payment  of  Taxes  and  Other Charges. Grantor, from
time to time when the same shall become due and payable, prior to delinquency or
penalty  for  non-payment,  will pay and  discharge  all taxes of every kind and
nature  (including  real and  personal  property  taxes and  income,  franchise,
withholding,  profits  and  gross  receipts  taxes),  all  general  and  special
assessments  (which may, to the extent allowed by law, be paid in installments),
levies,  permits,  inspection  and license  fees,  all water and sewer rents and
charges,  and all other public  charges  whether of a like or different  nature,
imposed  upon or  assessed  against  it or the  Mortgaged  Property  or any part
thereof or upon the revenues, rents, issues, income and profits of the Mortgaged
Property  or arising in respect of the  occupancy,  use or  possession  thereof.
Grantor  will,  upon  Beneficiary's  request,  deliver to  Beneficiary  receipts
evidencing the payment of all such taxes,  assessments,  levies, fees, rents and
other  public  charges  imposed  upon or  assessed  against it or the  Mortgaged
Property or any portion thereof.

         Following the  occurrence of an Event of Default,  Beneficiary  may, at
its option,  to be  exercised  by three (3)  business  days'  notice to Grantor,
require the deposit by Grantor, at the time of each payment of an installment of
interest or  principal  under the Note (but no less often than  monthly),  of an
additional  amount sufficient to discharge the obligations under this clause (a)
relating to real estate taxes and assessments and any other charges imposed upon
or assessed against the Mortgaged  Property or any part thereof when they become
due.  The  determination  of the amount so payable  and of the  fractional  part
thereof to be deposited with Beneficiary, so that the aggregate of such deposits
shall be sufficient  for this purpose,  shall be made by Beneficiary in its sole
discretion.  Such  amounts  shall be held by  Beneficiary  without  interest and
applied to the payment of the  obligations in respect of which such amounts were
deposited or, at  Beneficiary's  option,  to the payment of said  obligations in
such  order or  priority  as  Beneficiary  shall  determine,  on or  before  the
respective  dates on which the same or any of them would become  delinquent.  If
one (1) month prior to the due date of any of the aforementioned obligations the
amounts then on deposit  therefor shall be insufficient  for the payment of such
obligation in full,  Grantor within ten (10) days after demand shall deposit the
amount of the deficiency  with  Beneficiary.  Nothing herein  contained shall be
deemed to affect any right or remedy of Beneficiary  under any provisions hereof
or of any statute or rule of law to pay any such amount and to add the amount so
paid,   together  with  interest  at  the  Prime  Based  Default  Rate,  to  the
indebtedness hereby secured.  Upon Grantor's written request,  Beneficiary shall
not pay any taxes  which  Grantor  is  contesting  as  permitted  by this  Deed,
provided that, and only so long as, (i) there is not occurring any default under
this Deed or under any other Loan Document,  (ii) Grantor is otherwise complying
with the requirements of Section 1.07(c) (it being understood that Beneficiary's
agreement not to pay taxes as aforesaid is further  limited by the provisions of
said Section 1.07(c)) and (iii) Beneficiary determines, in its sole and absolute
discretion,  that the lien of this  Deed on the  Mortgaged  Property  would  not
otherwise be adversely affected thereby.

                                       8
<PAGE>

         (b) Payment of Mechanics and Materialmen. Grantor will pay, or cause to
be paid, from time to time when the same shall become due, all lawful claims and
demands of mechanics, materialmen,  laborers, and others which, if unpaid, might
result in, or permit the  creation of, a lien on the  Mortgaged  Property or any
part thereof,  (or promptly bond off, or cause to be bonded off (or, in the case
of any such liens aggregating less than $500,000, insured over), any such liens)
and in general will do or cause to be done everything necessary so that the lien
hereof shall be fully  preserved,  at the cost of Grantor and without expense to
Trustee or Beneficiary.

         (c) Good Faith Contests. Nothing in this Section 1.07 shall require the
payment or discharge of any  obligation  imposed upon Grantor by this Section so
long as such  obligation  is the  subject  of a Good Faith  Contest by  Grantor;
provided,  however,  that if at any time payment of any obligation  imposed upon
Grantor by clause (a) above shall become  necessary to prevent the delivery of a
tax deed or other  instrument  conveying the  Mortgaged  Property or any portion
thereof  because of  non-payment,  then Grantor shall pay the same in sufficient
time to prevent the delivery of such tax deed or other instrument.

         Section 1.08.  Taxes on Trustee,  Beneficiary or Lenders.  Grantor will
pay any taxes  (except  income,  profits,  gross  revenue,  franchise or similar
taxes)  imposed  on  Trustee,  Beneficiary  or any  Lender  by  reason  of their
interests in the Note or this Deed.

         Section 1.09. Insurance.(a) Grantor will at all times (unless otherwise
indicated) provide, maintain and keep in force:

               (i) policies of insurance insuring the Premises, Improvements and
          Chattels against loss or damage by fire and lightning; against loss or
          damage by other  risks  embraced  by coverage of the type now known as
          All Risk  Replacement  Cost Insurance with agreed amount  endorsement,
          including  but not  limited  to riot and civil  commotion,  vandalism,
          malicious  mischief and theft; and against such other risks or hazards
          as Beneficiary from time to time reasonably may designate in an amount
          sufficient  to  prevent   Beneficiary   or  Grantor  from  becoming  a
          co-insurer  under the  terms of the  applicable  policies,  but in any
          event in an amount  not less  than  100% of the then full  replacement
          cost  of the  Improvements  (exclusive  of the  cost  of  excavations,
          foundations  and footings  below the lowest  basement  floor)  without
          deduction for physical depreciation;

               (ii) policies of insurance insuring the Premises against the loss
          of "rental  value" of the  buildings  which  constitute  a part of the
          Improvements  on a "rented or vacant basis"  arising out of the perils
          insured against pursuant to clause (i) above in an amount equal to not
          less than one (1) year's  gross  "rental  value" of the  Improvements.
          "Rental  value" as used  herein is defined as the sum of (A) the total
          anticipated   gross  rental  income  from  tenant  occupancy  of  such
          buildings as  furnished  and  equipped,  (B) the amount of all charges
          which are the legal obligation of tenants and which would otherwise be
          the obligation of Grantor and (C) the fair rental value of any portion
          of such buildings which is occupied by Grantor. Grantor hereby assigns
          the  proceeds  of such  insurance  to  Beneficiary,  to be  applied by
          Beneficiary  in payment of the  interest  and  principal  on the Note,
          insurance

                                       9
<PAGE>

          premiums,  taxes,  assessments and private impositions until such time
          as the  Improvements  shall  have  been  restored  and  placed in full
          operation,  at which  time,  provided  Grantor  is not then in default
          hereunder,  the balance of such  insurance  proceeds,  if any, held by
          Beneficiary shall be paid over to Grantor;

               (iii)  if all or  part of the  Premises  are  located  in an area
          identified by the Secretary of the United States Department of Housing
          and Urban  Development or by any applicable  federal agency as a flood
          hazard  area,  flood  insurance  in an  amount  at least  equal to the
          maximum limit of coverage available under the National Flood Insurance
          Act of 1968, provided, however, that Beneficiary reserves the right to
          require flood  insurance in excess of said limit if such  insurance is
          commercially available up to the amount provided in clause (i) above;

               (iv) throughout the course of construction of the  "Improvements"
          to be  constructed  pursuant  to the Loan  Agreement,  and  during any
          period of  restoration  under this  Section  1.09 or Section  1.13,  a
          policy or policies of  builder's  "all risk"  insurance,  written on a
          Standard Builder's Risk Completed Value Form (100% non-reporting),  in
          an  amount  not less  than the full  insurable  value of the  Premises
          against such risks (including,  without limitation,  fire and extended
          coverage,  collapse  and  earthquake  coverage  to agreed  limits)  as
          Beneficiary may reasonably request,  in form and substance  acceptable
          to Beneficiary;

               (v) a policy or policies of workers'  compensation  insurance  as
          required by workers' compensation insurance laws (including employer's
          liability  insurance,   if  requested  by  Beneficiary)  covering  all
          employees of Grantor;

               (vi) comprehensive  liability  insurance on an "occurrence" basis
          against claims for "personal  injury"  liability,  including,  without
          limitation,  bodily injury, death or property damage liability, with a
          limit of not less than  $15,000,000 in the event of "personal  injury"
          to any number of persons or of damage to  property  arising out of one
          "occurrence".  Such  policies  shall name  Beneficiary  as  additional
          insured  by an  endorsement,  and shall  contain  cross-liability  and
          severability of interest clauses, all satisfactory to Beneficiary; and

               (vii)  such  other  insurance  (including,  but not  limited  to,
          earthquake  insurance),  and in such amounts, as may from time to time
          be  reasonably  required  by  Beneficiary  against  the  same or other
          insurable  hazards which at the time are commonly  insured  against in
          the case of premises similarly situated, due regard being given to the
          height and type of buildings thereon and their  construction,  use and
          occupancy.

         (b) All policies of insurance required under this Section 1.09 shall be
issued by  companies  having  an A.M.  Best  rating  of A-VII or  better  and be
otherwise acceptable to Beneficiary, shall be subject to the reasonable approval
of Beneficiary as to amount,  content,  form and expiration date and, except for
the liability policies described in clauses (a)(v) and (vi) above, shall contain
a   Non-Contributory   Standard  Mortgagee  Clause  and  Lender's  Loss  Payable
Endorsement,  or their equivalents,  in favor of Beneficiary,  and shall

                                       10
<PAGE>

provide that the proceeds  thereof shall be payable to Beneficiary.  Beneficiary
shall be furnished  with the original of each policy  required  hereunder  (or a
certificate of such insurance  and, if required by  Beneficiary,  a copy of each
such policy),  which  policies  shall provide that they shall not lapse,  nor be
modified or cancelled,  without thirty (30) days' written notice to Beneficiary.
At least ten (10) days prior to  expiration  of any policy  required  hereunder,
Grantor  shall  furnish  Beneficiary  appropriate  proof of issuance of a policy
continuing  in force the  insurance  covered by the policy so expiring.  Grantor
shall  furnish  to  Beneficiary,   promptly  upon  request,  receipts  or  other
satisfactory evidence of the payment of the premiums on such insurance policies.
In the event that Grantor does not deposit with Beneficiary a new certificate or
policy of insurance  with  evidence of payment of premiums  thereon at least ten
(10) days prior to the expiration of any expiring policy,  then Beneficiary may,
but shall not be  obligated  to,  procure  such  insurance  and pay the premiums
therefor,  and  Grantor  agrees to repay to  Beneficiary  the  premiums  thereon
promptly on demand,  together with  interest  thereon at the Prime Based Default
Rate.

         (c) Grantor hereby assigns to Beneficiary all proceeds of any insurance
required to be  maintained by this Section 1.09 which Grantor may be entitled to
receive for loss or damage to the Premises,  Improvements or Chattels.  All such
insurance  proceeds  shall  be  payable  to  Beneficiary,   and  Grantor  hereby
authorizes and directs any affected  insurance  company to make payment  thereof
directly to Beneficiary.  Grantor shall give prompt notice to Beneficiary of any
casualty in the amount of $100,000 or more, whether or not of a kind required to
be insured against under the policies to be provided by Grantor hereunder,  such
notice to  generally  describe  the  nature and cause of such  casualty  and the
extent of the damage or  destruction.  Grantor may settle,  adjust or compromise
any claims for loss,  damage or destruction,  regardless of whether or not there
are  insurance  proceeds  available or whether any such  insurance  proceeds are
sufficient in amount to fully  compensate for such loss or damage,  subject,  in
the case of claims in the amount of $2,000,000 or more, to  Beneficiary's  prior
consent,   such   consent   not  to  be   unreasonably   withheld   or  delayed.
Notwithstanding the foregoing,  Beneficiary shall have the right to join Grantor
in settling,  adjusting or compromising any loss of $2,000,000 or more.  Grantor
hereby  authorizes  the  application  or release by Beneficiary of any insurance
proceeds under any policy of insurance,  subject to the other provisions hereof.
The  application or release by  Beneficiary of any insurance  proceeds shall not
cure or waive any default or notice of default  hereunder or invalidate  any act
done pursuant to such notice.

         (d) In the event of the  foreclosure  hereof or other  transfer  of the
title to the Mortgaged Property in  extinguishment,  in whole or in part, of the
indebtedness  secured hereby, all right, title and interest of Grantor in and to
any insurance  policy,  or premiums or payments in satisfaction of claims or any
other rights  thereunder  then in force,  shall pass to the purchaser or grantee
notwithstanding  the  amount  of  any  bid at  such  foreclosure  sale.  Nothing
contained  herein shall  prevent the accrual of interest as provided in the Note
on any  portion of the  principal  balance due under the Note until such time as
insurance  proceeds  are actually  received and applied to reduce the  principal
balance outstanding.

         (e) Grantor shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section 1.09 unless Beneficiary is included thereon as a named insured with loss
payable to Beneficiary

                                       11
<PAGE>

under standard  mortgage  endorsements  of the character and to the extent above
described.  Grantor shall promptly notify Beneficiary whenever any such separate
insurance is taken out and shall promptly  deliver to Beneficiary  the policy or
policies of such insurance.

         (f) Any  and all  monies  received  as  payment  which  Grantor  may be
entitled to receive for loss or damage to the Premises, Improvements or Chattels
under any  insurance  maintained  pursuant  to this  Section  1.09  (other  than
proceeds under the policies required by clause (a)(ii) above) shall be paid over
to Beneficiary and,  provided no Event of Default shall exist and subject to the
conditions set forth below, said monies (less Beneficiary's  reasonable expenses
for collecting and disbursing the insurance  proceeds,  or otherwise incurred in
connection  therewith) shall be applied by Beneficiary to the payment of, or the
reimbursement of Grantor for, the costs and expenses  incurred by Grantor in the
restoration of the Improvements on the Premises.  Advances of insurance proceeds
shall be made to  Grantor in the same  manner and  subject to the same terms and
conditions  as  advances  of  proceeds  of the Loan  under  the Loan  Agreement.
Notwithstanding  the  foregoing,  in any case  where the extent of the damage or
destruction  is such that the  insurance  proceeds  paid in respect  thereof are
$2,000,000 or less,  and provided no default shall exist  hereunder or under the
Loan  Agreement,  so long as Grantor shall  promptly  undertake,  and thereafter
diligently  prosecute to completion,  such  restoration,  such proceeds shall be
paid  directly to Grantor,  to be applied by Grantor  for  expenses  incurred in
connection with such restoration. Insurance proceeds not needed for restoration,
or not in fact so applied,  shall,  at the option of the  Required  Lenders,  be
applied  either to the  prepayment  of the Note and interest  accrued and unpaid
thereon in such order and  proportions as the Required  Lenders shall elect,  or
shall be paid over to Grantor.  It is  understood  that any  insurance  proceeds
(less  Beneficiary's  reasonable  expenses in connection  therewith as set forth
above) received by Beneficiary and not disbursed to Grantor due to the existence
of a default  hereunder  or under  the Loan  Agreement,  and any such  insurance
proceeds,   or  portions  thereof,   being  held  by  Beneficiary  for  periodic
disbursement  during the course of restoration as set forth above, shall be held
in an  interest-bearing  account  and not applied to the  repayment  of the Loan
unless and until an Event of Default shall occur hereunder,  provided,  however,
that upon such an Event of Default any such proceeds  then held by  Beneficiary,
and any interest earned thereon,  shall, at the option of the Required  Lenders,
be applied by Beneficiary to the outstanding principal of and accrued and unpaid
interest on the Note in such order and proportions as the Required Lenders shall
elect.  It shall be a condition  to any  restoration  that  Beneficiary  and the
Construction  Consultant  shall have determined,  in their reasonable  judgment,
that the amount of available  insurance  proceeds is  sufficient  to restore the
Premises and Improvements,  to the same condition,  character and at least equal
value and general  utility as nearly as possible  to that  existing  immediately
prior to the damage or destruction,  no later than (x) in cases where the damage
and available  insurance  proceeds are in the amount of $10,000,000 or more, six
(6)  months  prior to the  Maturity  Date of the Loan or (y) in cases  where the
damage  and  available  insurance  proceeds  are  in the  amount  of  less  than
$10,000,000, the Maturity Date of the Loan. In the event such insurance proceeds
are inadequate for such  restoration,  Grantor shall deposit with Beneficiary an
amount (the "Casualty  Excess Amount") equal to the excess of the estimated cost
of  restoration,  as  determined  by  Beneficiary  after  consultation  with the
Construction   Consultant,   over  the  amount  of  such   insurance   proceeds.
Notwithstanding  the  foregoing,  Beneficiary  shall  accept,  in  lieu  of such
deposit,  an unconditional,  irrevocable letter of

                                       12
<PAGE>

credit in the  Casualty  Excess  Amount  issued to  Beneficiary  by a  financial
institution,  and otherwise in form and substance,  acceptable to Beneficiary in
all  respects.  If Grantor shall not have  deposited the Casualty  Excess Amount
with  Beneficiary  or if  Beneficiary  shall not have  received  such  letter of
credit,  as the case may be,  within  thirty (30) days  following  Beneficiary's
receipt of the insurance  proceeds,  or if restoration  work shall not have been
commenced and the other  conditions  therefor  satisfied by Grantor within sixty
(60)  days  following  Beneficiary's  receipt  of the  insurance  proceeds  and,
thereafter, not diligently pursued in accordance with this Section and all legal
requirements, Beneficiary may apply such insurance proceeds to the prepayment of
the Note and interest  accrued and unpaid  thereon and in the Loan  Agreement in
such order and proportions as the Required  Lenders shall elect.  If,  following
restoration  in  accordance  with this  Section  1.09(f)  there  are any  excess
insurance proceeds,  such excess insurance proceeds shall, provided there exists
no default hereunder or under the Loan Agreement, be paid over to Grantor.

         Section 1.10.  Protective  Advances  by  Beneficiary.  If Grantor shall
fail to perform any of the covenants  contained  herein,  Trustee or Beneficiary
may,  upon five (5)  business  days'  prior  notice  (unless,  in the good faith
judgment  of  Beneficiary,  such  performance  must take place  sooner due to an
emergency  or the  imminent  loss of,  or  impairment  to,  any of the  security
otherwise afforded to Beneficiary by this Deed,  including,  without limitation,
by virtue of the imminent sale or  forfeiture  of the Mortgaged  Property or any
part thereof,  in which events no prior notice shall be required)  make advances
to perform the same on its behalf and all sums so advanced  shall be a lien upon
the Mortgaged Property and shall be secured hereby. Grantor will repay on demand
all sums so advanced on its behalf  together with interest  thereon at the Prime
Based Default Rate. The provisions of this Section shall not prevent any default
in the observance of any covenant contained herein from constituting an Event of
Default.

         Section 1.11. Estoppel Certificates. Grantor, within three (3)days upon
request in person or within five (5) days upon  request by mail,  will furnish a
statement,  duly  acknowledged,  of the  amount due  whether  for  principal  or
interest on this Deed and whether,  to the best of its  knowledge,  any offsets,
counterclaims or defenses exist against the indebtedness secured hereby.

         Section 1.12.  Maintenance of Premises and  Improvements.  Grantor will
not commit any  physical  waste on the Premises or make any change in the use of
the Premises  which will in any way  increase any ordinary  fire or other hazard
arising out of construction or operation.  Grantor will, at all times, maintain,
or cause to be maintained, the Improvements and Chattels in good operating order
and condition and will  promptly  make, or cause to be made,  from time to time,
all repairs,  renewals,  replacements,  additions and improvements in connection
therewith which are needful or desirable to such end. The Improvements shall not
be  demolished  or  substantially  altered,  nor shall any  Chattels  be removed
without  Beneficiary's prior consent except where appropriate  replacements free
of superior  title,  liens and claims  (except  for liens and claims  granted in
connection with the incurrence of "Debt" as permitted by clause (vii) of Section
9.25 of the Loan  Agreement)  are  promptly  made of value at least equal to the
value of the removed Chattels.

                                       13
<PAGE>

         Section 1.13. Condemnation.  Grantor, promptly upon obtaining knowledge
of  the   institution  or  pending   institution  of  any  proceedings  for  the
condemnation  of the Premises or any portion  thereof,  will notify  Beneficiary
thereof.  Beneficiary  may  participate  in  any  such  proceedings  and  may be
represented therein by counsel of Beneficiary's selection.  Grantor from time to
time will deliver to Beneficiary  all  instruments  requested by it to permit or
facilitate such  participation.  In the event of such condemnation  proceedings,
the award or  compensation  payable is hereby  assigned  to and shall be paid to
Beneficiary.  Beneficiary shall be under no obligation to question the amount of
any such  award or  compensation  and may accept the same in the amount in which
the same shall be paid.  The proceeds of any award or  compensation  so received
shall,  at  the  option  of the  Required  Lenders,  either  be  applied  to the
prepayment  of the Note and all  interest  and other sums  accrued and unpaid in
respect  thereof  at the  rate of  interest  provided  therein  and in the  Loan
Agreement  regardless  of the  rate of  interest  payable  on the  award  by the
condemning  authority,  or be  disbursed  to  Grantor  from  time  to  time  for
restoration  of  the  Improvements.   Notwithstanding   the  provisions  of  the
immediately  preceding  sentence,  provided no default shall exist  hereunder or
under the Loan Agreement and subject to the conditions set forth below, any such
condemnation   award  proceeds  received  by  Beneficiary  (less   Beneficiary's
reasonable  expenses  for  collecting  and  disbursing  the same,  or  otherwise
incurred in connection therewith) shall be applied by Beneficiary to the payment
of, or the  reimbursement  of Grantor for,  the costs and  expenses  incurred by
Grantor in the  restoration  of the  Improvements  on the Premises.  Advances of
condemnation  award  proceeds  shall be made to Grantor  in the same  manner and
subject to the same terms and  conditions  as  advances  of proceeds of the Loan
under the Loan Agreement.  Notwithstanding the foregoing,  in any case where the
extent of the condemnation award proceeds paid in respect thereof are $2,000,000
or less,  and  provided  no  default  shall  exist  hereunder  or under the Loan
Agreement,  so  long  as  Grantor  shall  promptly  undertake,   and  thereafter
diligently  prosecute to completion,  such  restoration,  such proceeds shall be
paid  directly to Grantor,  to be applied by Grantor  for  expenses  incurred in
connection with such restoration.  Condemnation  award proceeds not required for
restoration,  or not in fact so applied,  shall,  at the option of the  Required
Lenders,  be applied either to the  prepayment of the Note and interest  accrued
and unpaid  thereon  (at the rate of interest  provided  therein and in the Loan
Agreement  regardless  of the  rate of  interest  payable  on the  award  by the
condemning  authority)  in such order and  proportions  as the Required  Lenders
shall  elect,  or shall  be paid  over to  Grantor.  It is  understood  that any
condemnation  award  proceeds  (less   Beneficiary's   reasonable   expenses  in
connection  therewith  as set  forth  above)  received  by  Beneficiary  and not
disbursed to Grantor due to the  existence  of a default  hereunder or under the
Loan Agreement,  and any such condemnation award proceeds,  or portions thereof,
being  held by  Beneficiary  for  periodic  disbursement  during  the  course of
restoration   as  set  forth  above,   shall  be  held  by   Beneficiary  in  an
interest-bearing account and not applied to the repayment of the Loan unless and
until an Event of Default shall occur hereunder,  provided,  however,  that upon
such an Event of Default any such  proceeds  then held by  Beneficiary,  and any
interest  earned  thereon,  shall,  at the option of the  Required  Lenders,  be
applied by  Beneficiary to the  outstanding  principal of and accrued and unpaid
interest on the Note in such order and proportions as the Required Lenders shall
elect.  It shall be a condition  to any  restoration  that  Beneficiary  and the
Construction  Consultant  shall have determined,  in their reasonable

                                       14
<PAGE>

judgment, that the amount of available condemnation award proceeds is sufficient
to restore the Premises and Improvements,  to the same condition,  character and
at least equal value and general  utility as nearly as possible to that existing
immediately  prior to the  condemnation,  no later  than (x) in cases  where the
taking  and  available   condemnation  award  proceeds  are  in  the  amount  of
$10,000,000  or more,  six (6) months prior to the Maturity  Date of the Loan or
(y) in cases where the taking and available  condemnation  award proceeds are in
the amount of less than $10,000,000, the Maturity Date of the Loan. In the event
such condemnation  award proceeds are inadequate for such  restoration,  Grantor
shall deposit with  Beneficiary  an amount (the  "Condemnation  Excess  Amount")
equal to the excess of the  estimated  cost of  restoration,  as  determined  by
Beneficiary,   over   the   amount   of  such   condemnation   award   proceeds.
Notwithstanding  the  foregoing,  Beneficiary  shall  accept,  in  lieu  of such
deposit,  an  unconditional,  irrevocable  letter of credit in the  Condemnation
Excess Amount issued to Beneficiary by a financial institution, and otherwise in
form and substance,  acceptable to Beneficiary in all respects. If Grantor shall
not have  deposited  the  Condemnation  Excess  Amount  with  Beneficiary  or if
Beneficiary  shall not have received such letter of credit,  as the case may be,
within  thirty (30) days  following  Beneficiary's  receipt of the  condemnation
award  proceeds,  or if  restoration  work shall not have been commenced and the
other conditions  therefor satisfied by Grantor within sixty (60) days following
Beneficiary's  receipt of the condemnation award proceeds and,  thereafter,  not
diligently  pursued in accordance with this Section and all legal  requirements,
Beneficiary may apply such condemnation  award proceeds to the prepayment of the
Note and interest  accrued and unpaid thereon (at the rate of interest  provided
therein and in the Loan Agreement  regardless of the rate of interest payable on
the award by the  condemning  authority)  in such order and  proportions  as the
Required Lenders shall elect. If, following  restoration in accordance with this
Section 1.13,  there are any excess  condemnation  award  proceeds,  such excess
proceeds  shall,  provided  there exists no default  hereunder or under the Loan
Agreement, be paid over to Grantor.

         Section 1.14. Leases. (a) Grantor will not (i) execute an assignment of
the rents or any part  thereof  from the Premises  without  Beneficiary's  prior
consent,  (ii) modify,  terminate or consent to the cancellation or surrender of
any lease of the Premises or of any part  thereof,  now existing or hereafter to
be  made,  in a  manner  which  is not  commercially  reasonable,  (iii)  accept
prepayments  of any  installments  of rents in excess of one (1) month's rent to
become due under such leases,  except  prepayments in the nature of security for
the  performance  of the lessees  thereunder and lease  cancellation  or buy-out
fees,  (iv) modify,  release or terminate any  guaranties of any such lease in a
manner which is not  commercially  reasonable  or (v) in any other manner impair
the value of the Mortgaged Property or the security hereof. In addition, Grantor
will comply with the covenant  regarding leases set forth in Section 6.20 of the
Loan Agreement.

         (b) Grantor will not execute any lease of all or a substantial  portion
of the Premises except for actual occupancy by the lessee  thereunder,  and will
at all times promptly and  faithfully  perform,  or cause to be performed,  in a
commercially reasonable manner, all of the covenants,  conditions and agreements
contained  in all leases of the  Premises or portions  thereof now or  hereafter
existing, on the part of the lessor thereunder to be kept and performed and will
at all times use commercially  reasonable  efforts to compel  performance by the
lessee under each lease of all  obligations,  covenants  and

                                       15
<PAGE>

agreements  by such  lessee to be  performed  thereunder.  If any of such leases
provide for the giving by the lessee of certificates  with respect to the status
of such leases,  Grantor shall  exercise its right to request such  certificates
within five (5) days of any demand  therefor by  Beneficiary  and shall  deliver
copies thereof to Beneficiary promptly upon receipt.

         (c) Each lease of the Premises, or of any part thereof,  executed after
the date hereof (or out for execution as of the date hereof) shall provide that,
in the event of the  enforcement  by  Trustee  or  Beneficiary  of the  remedies
provided for hereby or by law, the lessee  thereunder  will, upon request of any
person  succeeding  to the interest of Grantor as a result of such  enforcement,
automatically become the lessee of said successor in interest, without change in
the  terms or other  provisions  of such  lease,  provided,  however,  that said
successor  in interest  shall not be bound by any payment of rent or  additional
rent for more than one (1) month in advance, except prepayments in the nature of
security for the performance by said lessee of its obligations under said lease.
Each lease shall also provide that,  upon request by said successor in interest,
such lessee shall execute and deliver an instrument  or  instruments  confirming
such attornment.

         (d) Grantor shall,  promptly upon  Beneficiary's  request  following an
Event of  Default,  deposit  all  tenant  security  deposits  in  respect of the
Premises into an account with Beneficiary or as designated by Beneficiary, which
deposits  shall be held and disbursed to tenants as required  under the terms of
their respective leases.

         Section 1.15.  Premises  Documents.  Grantor  shall  (a)  promptly  and
faithfully  perform,  or cause to be  performed,  in a  commercially  reasonable
manner, all of the material  covenants and agreements  contained in all Premises
Documents  now or  hereafter  existing  on its  part  to be kept  and  performed
thereunder,  (b) use commercially reasonable efforts to cause the due compliance
and faithful performance by the other parties to the Premises Documents with and
of all material  obligations and agreements by such other parties to be complied
with and performed  thereunder and (c) deliver promptly to Beneficiary copies of
any notices which it gives or receives under any of the Premises Documents.

         Section  1.16. Trust Fund; Lien Laws. Grantor will receive the advances
secured  hereby and will hold the right to receive such advances as a trust fund
to be  applied  first for the  purpose  of paying  the costs of  completing  the
"Improvements"  defined in the Loan  Agreement  and will apply the same first to
the payment of such costs before using any part of the total of the same for any
other purpose. Grantor will indemnify and hold Trustee,  Beneficiary and Lenders
harmless  against any loss or  liability,  cost or expense,  including,  without
limitation,  any judgments,  attorney's fees, costs of appeal bonds and printing
costs,  arising out of or relating to any proceeding  instituted by any claimant
alleging a violation by Grantor of any applicable lien law.

         Section   1.17.  Reliance   on   Premises   to   Fulfill   Governmental
Requirements.  The Mortgaged  Property includes all right, title and interest in
any  property   necessary  to  meet  any   governmental   requirements  for  the
construction  and  operation of the  Improvements.  Grantor  shall not by act or
omission  permit any building or other  improvement  located on any property not
subject to the lien of this Deed to rely on the

                                       16
<PAGE>

Premises,  or any part thereof or interest therein,  to fulfill any governmental
requirement,  and Grantor hereby  assigns to  Beneficiary  any and all rights to
consent to all or any portion of or interest in the Premises to be so used.  Any
act or omission of Grantor  which would  result in a violation  of this  Section
shall be void.

         Section 1.18. Non-Disturbance and Attornment Agreements. Subject to the
conditions  specified in the next paragraph of this Section,  Beneficiary  will,
upon Grantor's request,  execute  non-disturbance,  attornment and subordination
agreements,  in Beneficiary's then standard form (with modifications  reasonably
satisfactory to Beneficiary),  with lessees of space in the  Improvements  which
shall  provide,  inter alia,  that in the event  Beneficiary or any purchaser at
foreclosure shall succeed to Grantor's  interest in the Premises,  the leases of
such  lessees  will  remain  in  full  force  and  effect  and be  binding  upon
Beneficiary  or such  purchaser and such lessee as though each were the original
parties thereto.

         Beneficiary's obligation to execute such agreements shall be subject to
the  following  conditions:  (i) the  credit of the  lessee and the terms of the
lease shall be  satisfactory  to Beneficiary in its  reasonable  judgment,  (ii)
Beneficiary  shall have  received and approved the standard  form of lease to be
used in connection with the leasing of the Improvements, (iii) upon each request
for such an  agreement,  Beneficiary  shall  receive a photocopy of the executed
lease,  certified to be true and complete by the responsible  officer of Grantor
or by its  counsel  and (iv)  Beneficiary  shall  receive a letter,  in the form
specified in the Loan Agreement,  signed by Grantor and addressed to the lessee,
to be forwarded to the lessee by Beneficiary, giving notice of the assignment of
each lease provided for herein.

         Section 1.19. Expenses of Trustee. Grantor shall pay all reasonable and
customary  costs,  fees and  expenses  of  Trustee,  its agents  and  counsel in
connection with the performance of its duties hereunder.

                                   Article II

                         EVENTS OF DEFAULT AND REMEDIES

         Section 2.01. Events of Default and Certain Remedies. If one or more of
the following Events of Default shall happen, that is to say:

               (a) if an "Event of Default" shall occur under the Loan Agreement
          (as such quoted term is defined therein); or

               (b) if default  shall be made in the  payment of any tax or other
          charge required by Section 1.07 to be paid and said default shall have
          continued for a period of twenty (20) days; or

               (c) if it shall be illegal  for Grantor or  Guarantor  to pay any
          tax  referred  to in  Section  1.08 or if the  payment  of such tax by
          Grantor or Guarantor would result in the violation of applicable usury
          laws; or

                                       17
<PAGE>

               (d) if there shall occur a default  which is not cured within the
          applicable grace period, if any, under any mortgage,  deed of trust or
          other  security  instrument  covering  all or  part  of the  Mortgaged
          Property  regardless  of whether any such  mortgage,  deed of trust or
          other  security  instrument is prior or subordinate  hereto;  it being
          further  agreed by Grantor  that an Event of Default  hereunder  shall
          constitute an Event of Default under any such mortgage,  deed of trust
          or  other  security   instrument   held  by  or  for  the  benefit  of
          Beneficiary; or

               (e) if there shall occur a default by Grantor  which is not cured
          within the applicable grace period,  if any, under the REA, the Master
          Agreement,  the  Parking  Lease or under any other  Premises  Document
          which  Beneficiary  has notified  Grantor that  Beneficiary  considers
          material;  or if the REA, the Master  Agreement,  the Parking Lease or
          any other Premises  Document which  Beneficiary  has notified  Grantor
          that Beneficiary considers material is amended, modified, supplemented
          or terminated  (other than as may be permitted by the Loan  Agreement)
          without   Beneficiary's   prior  consent,   such  consent  not  to  be
          unreasonably withheld or delayed; or

               (f) except as and to the extent  permitted by Section 9.26 of the
          Loan Agreement,  if Grantor shall  transfer,  or agree to transfer (or
          suffer or permit  the  transfer  or  agreement  to  transfer),  in any
          manner,  either  voluntarily or involuntarily,  by operation of law or
          otherwise,  all  or any  portion  of the  Mortgaged  Property,  or any
          interest  or rights  therein  (including  air or  development  rights)
          without,  in any such case, the prior written  consent of the Required
          Lenders.  As used in this clause,  "transfer"  shall include,  without
          limitation,  any sale,  assignment,  lease or conveyance except leases
          for  occupancy  subordinate  hereto and to all advances made and to be
          made  hereunder  or, in the event  Grantor or Guarantor  (or a general
          partner  or  co-venturer  of either of them) is a  partnership,  joint
          venture, limited liability company, trust or closely-held corporation,
          the sale, conveyance,  transfer or other disposition of more than 10%,
          in the aggregate,  of any class of the issued and outstanding  capital
          stock of such closely-held  corporation or of the beneficial  interest
          of such partnership, venture, limited liability company or trust, or a
          change of any general partner, joint venturer,  member or beneficiary,
          as the case may be,  or,  in the  event  Grantor  or  Guarantor  (or a
          general partner,  co-venturer,  member or beneficiary, as the case may
          be,  of  either  of them) is a  publicly-held  corporation,  the sale,
          conveyance,  transfer  or other  disposition  of more than 10%, in the
          aggregate, of the stock-holdings of any of the five (5) individuals or
          entities  that own the  greatest  number of  shares  of each  class of
          issued and  outstanding  stock. In the event Grantor or Guarantor is a
          limited partnership,  and so long as a limited partner has contributed
          to  (or  remains   personally  liable  for)  the  present  and  future
          partnership capital contributions  required of such limited partner by
          the  partnership  agreement,  such partner may sell,  convey,  devise,
          transfer  or  dispose  of  all or a part  of his  limited  partnership
          interest to his spouse,  children,  grandchildren or a family trust in
          which his spouse,  children or grandchildren  are sole  beneficiaries.
          Notwithstanding  the foregoing  provisions of this clause (f), consent
          shall  not be  required  for  (x)  direct  or  indirect  transfers  of
          beneficial  interests in Guarantor  and (y)  transfers of  partnership
          interests  in  Grantor  so  long  as,  following  any  such  transfer,
          Guarantor  or

                                       18
<PAGE>

          a wholly owned  subsidiary of Guarantor  remains the managing  general
          partner of Grantor and the owner of at least a 50% beneficial interest
          therein;  provided,  however, that (i) Guarantor may, without consent,
          transfer  50% of its  direct  or  indirect  ownership  and  management
          interests  in  Grantor so long as the  transferee  is, or is owned and
          controlled  by, (A) a pension  fund,  account or trust,  or investment
          banking  company  organized  under the Laws of any state of the United
          States,  and licensed or qualified to conduct  business under the Laws
          of any such state and having a minimum net worth of $500,000,000,  (B)
          an insurance  company organized under the Laws of the United States or
          any state  thereof  having  an A.M.  Best  rating  of A or better  and
          admitted  assets of at least  $500,000,000,  (C) a "money center" bank
          organized  under the Laws of the United States and having total assets
          in excess of $500,000,000 or (D) a Person consented to by the Required
          Lenders,  such consent not to be unreasonably  withheld or delayed and
          (ii) transfers of interests in the  transferees of Guarantor's  direct
          or indirect  interests in Grantor  permitted hereby (and in subsequent
          transferees of such interests) may be freely made; or

               (g) if  Grantor  shall  encumber,  or agree to  encumber,  in any
          manner,  either  voluntarily or involuntarily,  by operation of law or
          otherwise,  all  or any  portion  of the  Mortgaged  Property,  or any
          interest  or rights  therein,  including  air or  development  rights,
          (other than the granting of leases in accordance  with the  provisions
          hereof and of the Loan Agreement,  the granting of easements  designed
          to service the Premises and the granting of other  encumbrances  which
          are expressly  permitted by the Loan Documents)  without,  in any such
          case, the prior written  consent of  Administrative  Agent. As used in
          this clause, "encumber" shall include, without limitation, the placing
          or permitting the placing of any mortgage,  deed of trust,  assignment
          of  rents or other  security  device  (except  as  expressly  provided
          otherwise in clause (f) above,  Administrative Agent may grant or deny
          its consent under this clause and the immediately  preceding clause in
          its sole and absolute  discretion and, if consent should be given, any
          such transfer or encumbrance  shall be subject hereto and to any other
          documents which evidence or secure the Loan,  and, if a transfer,  any
          such transferee  shall assume all of Grantor's  obligations  hereunder
          and thereunder and agree to be bound by all provisions and perform all
          obligations contained herein and therein; consent to one such transfer
          or  encumbrance  shall  not be  deemed  to be a waiver of the right to
          require consent to future or successive transfers or encumbrances);

then and in every such case:

               I.  During  the   continuance  of  any  such  Event  of  Default,
          Beneficiary, by notice to Grantor, may declare the entire principal of
          the Note  then  outstanding  (if not then  due and  payable),  and all
          accrued and unpaid interest and other sums in respect  thereof,  to be
          due and  payable  immediately,  and  upon  any  such  declaration  the
          principal of the Note and said  accrued and unpaid  interest and other
          sums shall become and be immediately due and payable,  anything herein
          or in the Note or the Loan Agreement to the contrary notwithstanding.

                                       19
<PAGE>

          II. During the  continuance  of any such Event of Default,  Trustee or
          Beneficiary  personally,  or by their agents or  attorneys,  may enter
          into and upon all or any part of the Premises, and each and every part
          thereof,  and are each hereby given a right and license and  appointed
          Grantor's  attorney-in-fact  and  exclusive  agent  to do so,  and may
          exclude Grantor, its agents and servants wholly therefrom;  and having
          and  holding  the same,  may use,  operate,  manage  and  control  the
          Premises and conduct the business  thereof,  either  personally  or by
          their  superintendents,   managers,  agents,  servants,  attorneys  or
          receivers;  and upon every such entry, Trustee or Beneficiary,  at the
          expense  of the  Mortgaged  Property,  from  time to time,  either  by
          purchase,  repairs or  construction,  may  maintain  and  restore  the
          Mortgaged Property,  whereof they shall become possessed as aforesaid,
          may complete the construction of the Improvements and in the course of
          such completion may make such changes in the contemplated Improvements
          as  Beneficiary  may deem  desirable  and may  insure  the  same;  and
          likewise, from time to time, at the expense of the Mortgaged Property,
          Trustee  or  Beneficiary  may make all  necessary  or proper  repairs,
          renewals  and  replacements  and such useful  alterations,  additions,
          betterments  and  improvements  thereto and thereon as Beneficiary may
          seem  advisable;  and in every such case Trustee or Beneficiary  shall
          have the right to manage and operate  the  Mortgaged  Property  and to
          carry on the  business  thereof and  exercise all rights and powers of
          Grantor  with  respect  thereto  either  in the  name  of  Grantor  or
          otherwise as  Beneficiary  shall deem best; and Trustee or Beneficiary
          shall be  entitled  to collect  and  receive  the Rents and every part
          thereof,  all of which shall for all purposes  constitute  property of
          Grantor;  and in furtherance of such right Beneficiary may collect the
          rents  payable  under all  leases of the  Premises  directly  from the
          lessees  thereunder  upon  notice to each such lessee that an Event of
          Default  exists  hereunder  accompanied by a demand on such lessee for
          the  payment to  Beneficiary  of all rents due and to become due under
          its lease,  and Grantor FOR THE BENEFIT OF  BENEFICIARY  AND EACH SUCH
          LESSEE  hereby  covenants and agrees that the lessee shall be under no
          duty to question  the accuracy of  Beneficiary's  statement of default
          and shall unequivocally be authorized to pay said rents to Beneficiary
          without regard to the truth of Beneficiary's  statement of default and
          notwithstanding  notices from Grantor  disputing  the  existence of an
          Event of  Default  such  that the  payment  of rent by the  lessee  to
          Beneficiary pursuant to such a demand shall constitute  performance in
          full of the  lessee's  obligation  under the lease for the  payment of
          rents by the lessee to Grantor;  and after  deducting  the expenses of
          conducting  the  business  thereof  and of all  maintenance,  repairs,
          renewals,  replacements,   alterations,   additions,  betterments  and
          improvements  and  amounts  necessary  to pay for taxes,  assessments,
          insurance  and  prior  or other  proper  charges  upon  the  Mortgaged
          Property  or  any  part  thereof,  as  well  as  just  and  reasonable
          compensation  for the services of Trustee and  Beneficiary and for all
          attorneys,  counsel,  agents, clerks,  servants and other employees by
          them engaged and employed, Trustee or Beneficiary, as the case may be,
          shall apply the moneys arising as aforesaid,  first, to the payment of
          the  principal of the Note and the interest  thereon,  when and as the
          same  shall  become  payable  and in such  order  and  proportions  as
          Beneficiary  shall elect and second,  to the payment of any other sums

                                       20
<PAGE>

          required  to be paid by  Grantor  hereunder  or under any of the other
          Loan Documents.

               III. During the continuance of any such Event of Default, Trustee
          or Beneficiary,  as the case may be, with or without entry, personally
          or by their agents or attorneys, insofar as applicable, may:

                    (1) sell the  Mortgaged  Property,  and all  estate,  right,
               title and interest,  claim and demand therein, in accordance with
               paragraph IV below; or

                    (2)  institute  proceedings  for  the  complete  or  partial
               foreclosure hereof; or

                    (3) take such  steps to protect  and  enforce  their  rights
               whether by action, suit or proceeding in equity or at law for the
               specific  performance of any covenant,  condition or agreement in
               the  Note,  the  Loan  Agreement  or in  any of  the  other  Loan
               Documents,  or in aid  of  the  execution  of  any  power  herein
               granted, or for any foreclosure hereunder, or for the enforcement
               of any other  appropriate  legal or equitable remedy or otherwise
               as Trustee or Beneficiary shall elect.

               IV. If Grantor shall default hereunder, Grantor hereby authorizes
          and empowers  Trustee,  at the request of  Beneficiary  (which request
          shall be presumed  made),  at any time during the  continuance  of any
          Event  of  Default,  to  sell  all or  any  portion  of the  Mortgaged
          Property,  at public auction,  to the highest bidder, for cash, in the
          area at the  county  courthouse  of the  county  in Texas in which the
          Mortgaged  Property  or any part  thereof is  situated  which has been
          designated  by the  commissioner's  court of such  county  as the area
          where such sales are to take place (as such designation is recorded in
          the real property records of such county) or, if no such area has been
          designated by the commissioner's  court of such county, in the area at
          such  county  courthouse  which has been  designated  in the notice of
          sale,  between the hours of 10:00  o'clock  A.M. and 4:00 o'clock P.M.
          (but  not  later  than  three  (3)  hours  after  the time of the sale
          specified  in the  notice) on the first  Tuesday  of any month,  after
          giving  notice of the time,  place and terms of said sale,  and of the
          property to be sold as follows or in any other manner now or hereafter
          required or permitted by applicable  law,  including by Section 51.002
          of the Texas Property Code:

                  Notice of such proposed sale shall be given by posting written
                  notice  thereof at least  twenty-one  (21) days  preceding the
                  date of the sale at the courthouse door of the county in which
                  the sale is to be made,  and by filing a copy of the notice in
                  the office of the county clerk of the county in which the sale
                  is to be made at least twenty-one (21) days preceding the date
                  of the sale,  and if the  property  to be sold is  situated in
                  more  than one  county,  one  notice  shall be  posted  at the
                  courthouse  door of each  county in which the  property  to be
                  sold is situated  and one copy of the notice shall be filed in
                  the  office of the

                                       21
<PAGE>

                  county  clerk in each  county in which the property to be sold
                  is situated  (such notice shall  designate  the  county  where
                  such  property  will be sold). In addition, Beneficiary shall,
                  at   least   twenty-one   (21)   days   preceding   the   date
                  of sale,  serve   written  notice  of  the  proposed  sale  by
                  certified   mail  on  each   debtor   obligated   to  pay  the
                  indebtedness  secured  hereby  according  to  the  records  of
                  Beneficiary.  Service of such notice shall be  completed  upon
                  deposit  of  the  notice,  enclosed  in  a  postpaid  wrapper,
                  properly  addressed to such debtor at the most recent  address
                  as shown by the  records of  Beneficiary,  in a post office or
                  official  depository  under the care and custody of the United
                  States  Postal  Service.  The  affidavit of any person  having
                  knowledge  of the facts to the effect  that such  service  was
                  completed  shall  be  prima  facie  evidence  of the  fact  of
                  service.

Any sale of the Mortgaged  Property covered by this Deed may be conducted in the
manner  provided in this Deed without the necessity for Trustee to have physical
or constructive possession of the Mortgaged Property (Grantor hereby covenanting
and  agreeing to deliver to Trustee any portion of the  Mortgaged  Property  not
actually  or  constructively  possessed  by Trustee  immediately  upon demand by
Trustee) and the title to and right of  possession of that property will pass to
the purchaser as completely as if it had been actually  present and delivered to
purchaser at the sale. In the event of a sale of the Mortgaged Property,  or any
portion  thereof,  under the terms of the power of sale herein created,  Grantor
shall forthwith upon the making of such sale,  surrender and deliver  possession
of the  Mortgaged  Property so sold to the  purchaser  at such sale,  and in the
event of Grantor's failure to do so it shall thereupon from and after the making
of such sale be, and continue as, a tenant at will of such purchaser, and in the
event of Grantor's  failure to surrender  possession of the  Mortgaged  Property
upon demand,  the  purchaser,  its  successors or assigns,  shall be entitled to
institute and maintain an action for forcible detainer of the Mortgaged Property
in the Justice of the Peace Court in the Justice Precinct in which the Mortgaged
Property, or any part thereof, is situated.

         Any notice that is required or  permitted to be given to Grantor may be
addressed to Grantor at Grantor's address as stated above. Any notice that is to
be given by  certified  mail to any other  debtor  may,  if the address for such
other  debtor is not shown by the records of  Beneficiary,  be addressed to such
other  debtor  at  the  address  of  Grantor  as is  shown  by  the  records  of
Beneficiary.  Notwithstanding the foregoing provisions of this paragraph, notice
of such sale given in accordance with the  requirements of the applicable law of
the  State  of  Texas  in  effect  at the  time of such  sale  shall  constitute
sufficient  notice of such sale.  Grantor hereby authorizes and empowers Trustee
to sell all or any  portion of the  Mortgaged  Property,  together or in lots or
parcels,  as  Trustee  may deem  expedient,  and to execute  and  deliver to the
purchaser  or  purchasers  of  such  property,  good  and  sufficient  deeds  of
conveyance of fee simple title with covenants of general warranty made on behalf
of Grantor. In no event shall Trustee be required to exhibit, present or display
at any such  sale,  any of the  personalty  described  herein to be sold at such
sale.  Payment of the purchase  price to Trustee shall satisfy the obligation of
the purchaser at such sale therefor,  and such  purchaser  shall not be bound to
look after the  application  thereof.  The sale or sales by Trustee of less than
the whole of the Mortgaged  Property  shall not exhaust the power of sale herein
granted, and Trustee is specifically  empowered to make successive

                                       22
<PAGE>

sale or sales under such power until the whole of the Mortgaged  Property  shall
be sold;  and if the  proceeds  of such  sale or sales of less than the whole of
such  Mortgaged  Property  shall be less than the aggregate of the  indebtedness
secured hereby and the expense of executing this trust,  this Deed and the lien,
security interest and assignment hereof shall remain in full force and effect as
to the unsold portion of the Mortgaged  Property just as though no sale or sales
had been made;  provided,  however,  that Grantor  shall never have any right to
require the sale or sales of less than the whole of the Mortgaged Property,  but
Beneficiary  shall have the right,  at its sole election,  to request Trustee to
sell  less  than  the  whole  of the  Mortgaged  Property.  If  default  is made
hereunder,  the  holder of the  indebtedness  or any part  thereof  on which the
payment is  delinquent  shall have the option to  proceed  with  foreclosure  in
satisfaction  of such item either through  judicial  proceedings or by directing
Trustee to proceed as if under a full foreclosure, conducting the sale as herein
provided without  declaring the entire  indebtedness  secured hereby due, and if
sale is made because of default of an installment,  or a part of an installment,
such  sale may be made  subject  to the  unmatured  part of the  Note and  other
indebtedness  secured by this Deed; and it is agreed that such sale, if so made,
shall not in any manner affect the unmatured part of the indebtedness secured by
this Deed, but as to such unmatured  part,  this Deed shall remain in full force
and  effect  as  though  no sale had been  made  under  the  provisions  of this
paragraph IV. Several sales may be made hereunder  without  exhausting the right
of sale for any unmatured part of the indebtedness  secured hereby. In the event
of any sale of all or part of the  Mortgaged  Property  under the terms  hereof,
Grantor  shall pay (in addition to taxable  costs) a  reasonable  fee to Trustee
which shall be in lieu of all other fees and commission  permitted by statute or
custom to be paid,  reasonable  attorneys'  fees and all  expenses  incurred  in
obtaining or continuing abstracts of title for the purpose of any such sale. The
provisions of this paragraph IV shall control all other  conflicting  provisions
of this Deed with respect to any sale of the Mortgaged Property pursuant to this
Deed.

         Section  2.02.   Other   Matters  Concerning   Sales. (a)  Trustee   or
Beneficiary may adjourn from time to time any sale by it to be made hereunder or
by virtue hereof by  announcement  at the time and place appointed for such sale
or for such adjourned sale or sales;  and,  except as otherwise  provided by any
applicable provision of law, Trustee or Beneficiary, as the case may be, without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.

         (b)  Upon  the  completion  of any sale or  sales  made by  Trustee  or
Beneficiary, as the case may be, under or by virtue of this Article II, Trustee,
or an officer of any court  empowered to do so, shall execute and deliver to the
accepted purchaser or purchasers a good and sufficient instrument or instruments
conveying,  assigning and transferring all estate,  right, title and interest in
and to the property and rights sold.  Trustee is hereby  appointed  the true and
lawful  attorney  irrevocable  of  Grantor,  in its name and stead,  to make all
necessary  conveyances,  assignments,  transfers and deliveries of the Mortgaged
Property  and  rights  so sold and for that  purpose  Trustee  may  execute  all
necessary instruments of conveyance, assignment and transfer, and may substitute
one or more persons with like power, Grantor hereby ratifying and confirming all
that its said attorney or such  substitute or  substitutes  shall lawfully do by
virtue hereof.  Nevertheless,  Grantor,  if requested by Trustee or Beneficiary,
shall ratify and confirm any such sale or sales by executing  and  delivering to
Trustee  or to such  purchaser  or  purchasers  all such  instruments

                                       23
<PAGE>

as may be advisable, in the judgment of Trustee or Beneficiary, for the purpose,
and as may be designated  in such request.  Any such sale or sales made under or
by  virtue of this  Article  II,  whether  made  under the power of sale  herein
granted or under or by virtue of judicial proceedings or of a judgment or decree
of foreclosure and sale, shall operate to divest all the estate,  right,  title,
interest,  claim and demand whatsoever,  whether at law or in equity, of Grantor
in and to the  properties  and rights so sold, and shall be a perpetual bar both
at law and in equity against Grantor and against any and all persons claiming or
who may claim the same, or any part thereof from, through or under Grantor.

         (c) In the event of any sale or sales  made  under or by virtue of this
Article II (whether  made under the power of sale herein  granted or under or by
virtue of judicial  proceedings  or of a judgment or decree of  foreclosure  and
sale), the entire principal of, and interest and other sums on, the Note, if not
previously  due and payable,  and all other sums  required to be paid by Grantor
pursuant  hereto or to any of the other Loan  Documents,  immediately  thereupon
shall, anything in any of said documents to the contrary notwithstanding, become
due and payable.

         (d) The  purchase  money,  proceeds or avails of any sale or sales made
under or by virtue of this Article II,  together  with any other sums which then
may be held by Trustee or Beneficiary hereunder, whether under the provisions of
this Article II or otherwise, shall be applied as follows:

                  First:  To the payment of the costs and expenses of such sale,
         including  reasonable  compensation to Trustee and  Beneficiary,  their
         agents and counsel,  and of any judicial  proceedings  wherein the same
         may be made,  and of all  expenses,  liabilities  and advances  made or
         incurred  by  Trustee  or  Beneficiary  hereunder,  and also  including
         attorneys' fees,  expenses and costs of investigation,  all as actually
         incurred and including, without limitation,  attorneys' fees, costs and
         expenses of investigation  incurred in appellate  proceedings or in any
         action  or  participation  in,  or in  connection  with,  any  case  or
         proceeding under Chapters 7, 11, or 13 of the United States  Bankruptcy
         Code or any  successor  thereto,  together  with  interest at the Prime
         Based Default Rate on all advances made by Trustee or Beneficiary,  and
         of  all  taxes,   assessments  or  other  charges,  except  any  taxes,
         assessments  or other charges  subject to which the Mortgaged  Property
         shall have been sold.

                  Second:  To the payment of the whole amount then due, owing or
         unpaid upon the Note for principal  and interest,  with interest on the
         unpaid  principal at the Default  Rate from and after the  happening of
         any Event of Default described in Section 2.01 from the due date of any
         such  payment of  principal  until the same is paid,  in such order and
         amounts as Beneficiary may elect.

                  Third: To the payment of any other sums required to be paid by
         Grantor pursuant to any provision hereof or of any other Loan Document,
         including  all expenses,  liabilities  and advances made or incurred by
         Beneficiary  hereunder or in connection  with the  enforcement  hereof,
         together  with  interest  at the Prime Based  Default  Rate on all such
         advances.

                                       24
<PAGE>

                  Fourth:  To the payment of the surplus, if any, to  whomsoever
         may be  lawfully  entitled to receive the same.

         (e) Upon any sale or sales made under or by virtue of this  Article II,
whether  made  under the power of sale  herein  granted or under or by virtue of
judicial  proceedings  or of a  judgment  or  decree  of  foreclosure  and sale,
Beneficiary  may bid for and acquire the Mortgaged  Property or any part thereof
and in lieu of paying cash therefor may make  settlement  for the purchase price
by  crediting  upon the  indebtedness  secured  hereby the net sales price after
deducting therefrom the expenses of the sale and the costs of the action and any
other sums which Trustee or Beneficiary are authorized to deduct hereunder.

         Section  2.03. Payment of Amounts Due.  (a) In case an Event of Default
described in Section  2.01 shall have  happened and be  continuing,  then,  upon
demand of  Beneficiary,  Grantor will pay to Beneficiary  the whole amount which
then shall have become due and payable on the Note, for principal or interest or
both,  as the case may be, and after the happening of said Event of Default will
also  pay to  Beneficiary  interest  at the  Default  Rate  on the  then  unpaid
principal of the Note,  and the sums required to be paid by Grantor  pursuant to
any  provision  hereof or of the Loan  Agreement,  and in addition  thereto such
further  amount  as shall be  sufficient  to cover the  costs  and  expenses  of
collection,  including reasonable compensation to Trustee and Beneficiary, their
agents  and  counsel  and  any  expenses  incurred  by  Trustee  or  Beneficiary
hereunder.  In the event  Grantor  shall fail  forthwith to pay all such amounts
upon such demand,  Beneficiary shall be entitled and empowered to institute such
action or  proceedings  at law or in equity as may be advised by its counsel for
the collection of the sums so due and unpaid,  and may prosecute any such action
or proceedings to judgment or final decree, and may enforce any such judgment or
final  decree  against  Grantor  and  collect,  out of the  property  of Grantor
wherever  situated,  as well as out of the  Mortgaged  Property,  in any  manner
provided by law, moneys adjudged or decreed to be payable.

         (b)  Beneficiary  shall be  entitled to recover  judgment as  aforesaid
either  before,  after  or  during  the  pendency  of any  proceedings  for  the
enforcement  of the provisions  hereof;  and the right of Beneficiary to recover
such judgment  shall not be affected by any entry or sale  hereunder,  or by the
exercise  of any  other  right,  power  or  remedy  for the  enforcement  of the
provisions  hereof, or the foreclosure of the lien hereof; and in the event of a
sale of the Mortgaged Property,  and of the application of the proceeds of sale,
as herein provided, to the payment of the debt hereby secured, Beneficiary shall
be entitled to enforce payment of, and to receive all amounts then remaining due
and unpaid upon, the Note, and to enforce payment of all other charges, payments
and costs due  hereunder or under the Loan  Agreement or otherwise in respect of
the Loan, and shall be entitled to recover  judgment for any portion of the debt
remaining  unpaid,  with interest at the Default  Rate.  In case of  proceedings
against  Grantor  in  insolvency  or  bankruptcy  or  any  proceedings  for  its
reorganization  or involving the  liquidation  of its assets,  then  Beneficiary
shall be entitled to prove the whole  amount of  principal,  interest  and other
sums  due upon the Note to the full  amount  thereof,  and all  other  payments,
charges and costs due  hereunder  or under the Loan  Agreement  or  otherwise in
respect of the Loan, without deducting  therefrom any proceeds obtained from the
sale of the whole or any part of the Mortgaged Property, provided, however, that
in no case shall  Beneficiary  receive a greater  amount than such principal and

                                       25
<PAGE>

interest and such other payments, charges and costs from the aggregate amount of
the proceeds of the sale of the Mortgaged Property and the distribution from the
estate of Grantor.

         (c) No recovery of any judgment by  Beneficiary  and/or  Lenders and no
levy of an execution under any judgment upon the Mortgaged  Property or upon any
other property of Grantor shall affect in any manner or to any extent,  the lien
hereof upon the Mortgaged  Property or any part thereof,  or any liens,  rights,
powers or remedies of Trustee or Beneficiary hereunder,  but such liens, rights,
powers and  remedies of Trustee or  Beneficiary  shall  continue  unimpaired  as
before.

         (d) Any moneys thus  collected by  Beneficiary  under this Section 2.03
shall be applied by Beneficiary in accordance  with the provisions of clause (d)
of Section 2.02.

         Section  2.04. Actions; Receivers. After the  happening of any Event of
Default and immediately upon the commencement of any action, suit or other legal
proceedings by Trustee or  Beneficiary to obtain  judgment for the principal of,
or interest on, the Note and other sums required to be paid by Grantor  pursuant
to any provision hereof or of the Loan Agreement,  or of any other nature in aid
of the enforcement of the Note or hereof or of the Loan Agreement,  Grantor will
(a) WAIVE THE ISSUANCE AND SERVICE OF PROCESS AND ENTER ITS VOLUNTARY APPEARANCE
IN SUCH ACTION,  SUIT OR PROCEEDING AND (b) IF REQUIRED BY BENEFICIARY,  CONSENT
TO THE  APPOINTMENT  OF A RECEIVER OR RECEIVERS OF ALL OR PART OF THE  MORTGAGED
PROPERTY AND OF ANY OR ALL OF THE RENTS IN RESPECT THEREOF.  After the happening
of any Event of Default and during its continuance,  or upon the commencement of
any  proceedings to foreclose  this Deed or to enforce the specific  performance
hereof  or in aid  thereof  or  upon  the  commencement  of any  other  judicial
proceeding  to  enforce  any  right  of  Trustee  or  Beneficiary,   Trustee  or
Beneficiary  shall be  entitled,  as a matter of right,  if they shall so elect,
without  the  giving  of notice to any  other  party and  without  regard to the
adequacy or  inadequacy  of any security  for the  Obligations  secured  hereby,
forthwith  either before or after declaring the unpaid  principal of the Note to
be due and payable, to the appointment of such a receiver or receivers.

         Section   2.05.   Beneficiary's / Trustee's   Right   to    Possession.
Notwithstanding  the  appointment  of any  receiver,  liquidator  or  trustee of
Grantor,  or of any of its property,  or of the  Mortgaged  Property or any part
thereof,  Trustee and  Beneficiary  shall be entitled to retain  possession  and
control of all property now or hereafter held hereunder.

         Section  2.06. Remedies Cumulative. No remedy herein conferred  upon or
reserved to Trustee or  Beneficiary  is intended  to be  exclusive  of any other
remedy or  remedies,  and each and every such remedy  shall be  cumulative,  and
shall be in addition to every other remedy  given  hereunder or now or hereafter
existing  at law,  in equity or by  statute.  No delay or omission of Trustee or
Beneficiary  to exercise any right or power  accruing  upon any Event of Default
shall  impair any such right or power,  or shall be  construed to be a waiver of
any such Event of  Default  or any  acquiescence  therein;  and every  power and
remedy given hereby to Trustee or Beneficiary may be exercised from

                                       26
<PAGE>

time to time as often as may be deemed by them  expedient.  Nothing herein or in
the Note or the Loan Agreement shall affect the obligation of Grantor to pay the
principal of, and interest and other sums on, the Note and the Loan Agreement in
the manner and at the time and place therein respectively expressed.

         Section 2.07. Moratorium Laws; Right of Redemption. Grantor will not at
any time insist  upon,  or plead,  or in any manner  whatever  claim or take any
benefit or advantage of any stay or extension or  moratorium  law, any exemption
from execution or sale of the Mortgaged  Property or any part thereof,  wherever
enacted,  now or at any time hereafter in force,  which may affect the covenants
and terms of performance  hereof,  nor claim, take or insist upon any benefit or
advantage of any law now or hereafter in force  providing  for the  valuation or
appraisal of the Mortgaged Property,  or any part thereof,  prior to any sale or
sales thereof which may be made pursuant to any provision herein, or pursuant to
the decree, judgment or order of any court of competent jurisdiction; nor, after
any such sale or sales, claim or exercise any right under any statute heretofore
or  hereafter  enacted to redeem the  property  so sold or any part  thereof and
Grantor  hereby  expressly  waives all benefit or  advantage  of any such law or
laws,  and covenants  not to hinder,  delay or impede the execution of any power
herein granted or delegated to Trustee or Beneficiary,  but to suffer and permit
the  execution  of every  power as  though  no such law or laws had been made or
enacted.  Grantor,  for itself and all who may claim  under it,  waives,  to the
extent that it lawfully may, all right to have the Mortgaged  Property marshaled
upon any  foreclosure  hereof.  Grantor  hereby  waives  any and all  rights  of
redemption  from sale under any order or decree of  foreclosure  of this Deed on
behalf of Grantor and all persons beneficially  interested therein, and each and
every   person   except   decree  or  judgment   creditors  of  Grantor  in  its
representative  capacity  acquiring  any  interest  in or title to the  Premises
subsequent to the date of this Deed.

         Section  2.08.  Grantor's  Use and Occupancy after Default. During  the
continuance  of any Event of Default  and  pending  the  exercise  by Trustee or
Beneficiary  of  their  right  to  exclude  Grantor  from all or any part of the
Premises, Grantor agrees to pay the fair and reasonable rental value for the use
and occupancy of the Premises or any portion thereof which are in its possession
for such period and, upon default of any such payment, will vacate and surrender
possession of the Premises to Trustee or Beneficiary,  as the case may be, or to
a receiver,  if any, and in default thereof may be evicted by any summary action
or  proceeding  for the recovery of possession  of premises for  non-payment  of
rent, however designated.

         Section  2.09.  Beneficiary's Rights Concerning Application  of Amounts
Collected.  Notwithstanding  anything to the contrary contained herein or in any
of the  other  Loan  Documents,  upon the  occurrence  of an  Event of  Default,
Beneficiary  may apply,  to the extent  permitted by law,  any amount  collected
hereunder to principal, interest or any other sum due under the Note or the Loan
Agreement or otherwise in respect of the Loan in such order and amounts,  and to
such obligations, as the Required Lenders shall elect in their sole and absolute
discretion.

                                       27
<PAGE>

         Section 2.10.  Regarding   Defenses..  No action for the enforcement of
this Deed or any  provision  hereof shall be subject to any defense  which would
not be good and available to the party  interposing the same in an action at law
upon the Note.

         Section 2.11. Expenses as Indebtedness..  In  any suit to foreclose the
lien hereof  (including any partial  foreclosure) or to enforce any other remedy
of Beneficiary or Lenders under this Deed or the Note or other Loan Documents or
otherwise  in  respect  of the Loan,  there  shall be allowed  and  included  as
additional  indebtedness  in the decree for sale or other judgment or decree all
expenditures  and  expenses  which  may be paid or  incurred  by or on behalf of
Beneficiary  or Lenders  for  attorneys'  fees,  appraiser's  fees,  outlays for
documentary and expert evidence,  stenographer's charges, publication costs, and
costs  (which may be  estimated  as to items to be  expended  after entry of the
decree)  of  procuring  all  such   abstracts  of  title,   title  searches  and
examinations,  title insurance policies, Torrens certificates,  and similar data
and  assurances  with respect to title and value as  Beneficiary  or Lenders may
deem  reasonably  necessary  either to  prosecute  such suit or to  evidence  to
bidders at any sale which may be had pursuant to such decree the true  condition
of the title to or the value of the Premises.

                                  Article III

                               CONCERNING TRUSTEE

         Section 3.01. Trustee's Performance. Trustee, by its acceptance hereof,
covenants  faithfully to perform and fulfill the trusts herein created.  Trustee
shall not incur any  personal  liability  hereunder,  except for its own willful
neglect, default or misconduct,  and Trustee shall have the right to rely on any
instrument,  document or signature authorizing or supporting any action taken or
proposed  to be  taken  by it  hereunder,  believed  by it in good  faith  to be
genuine.  Without  limiting  the  generality  of the  foregoing,  Trustee,  upon
presentation  to it of an  affidavit  signed  by or on  behalf  of  Beneficiary,
setting  forth any fact or facts  showing  a  default  under any of the terms or
conditions of this Deed or other Loan Documents, is authorized to accept as true
and  conclusive  all facts and statements in such affidavit and to act hereunder
in complete reliance thereon. Trustee shall be entitled to reimbursement for all
expenses incurred by it in the performance of its duties,  and shall be entitled
to reasonable compensation for such of its services as shall be rendered. At any
time, or from time to time, without notice,  upon written request of Beneficiary
and  without  affecting  the  personal  liability  of any person for payment and
performance  of the  Obligations  secured hereby or the effect of this Deed upon
the  remainder of the Mortgaged  Property,  Trustee may (i) reconvey any part of
the Premises,  (ii) consent in writing to the making of any map or plat thereof,
(iii)  join in  granting  any  easement  thereon  or (iv) join in any  extension
agreement or any agreement subordinating the lien or charge hereof.

         Section 3.02.  Resignation by Trustee.  Trustee may resign  at any time
upon giving thirty (30) days' notice to Grantor and Beneficiary.

        Section  3.03. Removal of Trustee;  Successors.  Beneficiary  may remove
Trustee at any time or from time to time and select a successor trustee.  In the
event of the

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<PAGE>

death, removal, resignation or refusal or inability to act of Trustee, or in its
sole discretion for any reason  whatsoever,  Beneficiary may, without notice and
without specifying any reason therefor and without applying to any court, select
and appoint a successor trustee, and all powers, rights, duties and authority of
Trustee,  as aforesaid,  shall thereupon  become vested in such  successor.  The
authority  hereby  conferred on Beneficiary  shall extend to the  appointment of
other  successor and substitute  trustees  successively  until the  indebtedness
hereby  secured has been paid in full, or until the  Mortgaged  Property is sold
hereunder, and each substitute and successor trustee shall succeed to all of the
rights and powers of the original  Trustee  named  herein.  In such  connection,
Beneficiary may, on its and Grantor's behalf, execute, acknowledge and record an
instrument or agreement of such  substitution,  and Grantor  hereby  irrevocably
appoints Beneficiary as its  attorney-in-fact,  with full power of substitution,
to do so.  Such  substitute  trustee  shall not be required to give bond for the
faithful performance of its duties unless required by Beneficiary.

                                   Article IV

                                  MISCELLANEOUS

         Section  4.01.  Assignment of Leases and Rents. This Deed constitutes a
present, absolute, unconditional and irrevocable assignment of all leases now or
hereafter  existing  and of all of the  Rents  now or  hereafter  accruing,  and
Grantor,  without  limiting  the  generality  of  the  Granting  Clause  hereof,
specifically  hereby  presently,  absolutely,  unconditionally  and  irrevocably
assigns, transfers and sets over all leases now or hereafter existing and all of
the Rents now or  hereafter  accruing to  Beneficiary,  and hereby  gives to and
confers upon  Beneficiary the right,  power and authority to collect such Rents.
Grantor  irrevocably  appoints  Beneficiary  its true and lawful attorney at the
option of Beneficiary  at any time to demand,  receive and enforce  payment,  to
give  receipts,  releases and  satisfactions  and to sue,  either in the name of
Grantor or in the name of Beneficiary,  for all such Rents and apply the same to
the  indebtedness  secured hereby.  The aforesaid  assignment shall be effective
immediately upon the execution hereof and is not conditioned upon the occurrence
of any Event of Default hereunder or any other  contingency or event,  provided,
however,  that  Beneficiary  hereby  grants to Grantor  the right and license to
collect and receive the Rents as they become due, and not in advance (other than
prepayments  of rent not in excess of one month's  rent, as permitted by Section
1.14),  so long as no Event of Default exists  hereunder.  Immediately  upon the
occurrence of any such Event of Default,  the foregoing  right and license shall
be automatically terminated and of no further force or effect. Nothing contained
in this Section or elsewhere in this Deed,  nor the exercise by  Beneficiary  of
any of its rights or  remedies  under this  Section or  elsewhere  in this Deed,
shall be construed to make  Beneficiary a mortgagee in possession,  or otherwise
responsible  or liable in any manner with respect to the  Mortgaged  Property or
the use, occupancy, enjoyment or operation of all or any portion thereof, unless
and until Beneficiary  actually takes possession of the Mortgaged Property,  nor
to obligate Beneficiary to take any action or incur any expense or discharge any
duty or liability under or in respect of any leases or other agreements relating
to the  Mortgaged  Property  or any part  thereof,  nor shall  appointment  of a
receiver  for the  Mortgaged  Property  or any part  thereof by any court at the
request  of  Beneficiary  or by  agreement  with  Grantor or the  entering  into
possession  of the

                                       29
<PAGE>

Mortgaged  Property  or any part  thereof  by such  receiver  be  deemed to make
Beneficiary a mortgagee-in-possession  or otherwise responsible or liable in any
manner with respect to the Mortgaged Property or the use,  occupancy,  enjoyment
or operation of all or any portion thereof.

         Section  4.02. Security Agreement.  This  Deed  constitutes  a security
agreement  under the  applicable  Uniform  Commercial  Code with  respect to the
Chattels and such other of the Mortgaged Property which is personal property. In
addition to the rights and remedies  granted to Beneficiary by other  applicable
law or  hereby,  Beneficiary  shall have all of the  rights  and  remedies  with
respect to the  Chattels  and such other  personal  property as are granted to a
secured party under the applicable  Uniform  Commercial Code. Upon Beneficiary's
request during the existence of an Event of Default,  Grantor shall promptly and
at its expense  assemble the Chattels and such other personal  property and make
the  same  available  to  Beneficiary  at  a  convenient   place  acceptable  to
Beneficiary.  Grantor shall pay to Beneficiary  on demand,  with interest at the
Prime Based  Default  Rate,  any and all expenses,  including  attorneys'  fees,
incurred by  Beneficiary  in  protecting  its  interest in the Chattels and such
other personal  property and in enforcing its rights with respect  thereto.  Any
notice of sale, disposition or other intended action by Beneficiary with respect
to the Chattels and such other  personal  property sent to Grantor in accordance
with the  provisions  hereof at least five (5) days prior to such  action  shall
constitute  reasonable  notice  to  Grantor.  The  proceeds  of any such sale or
disposition,  or any part thereof,  may be applied by Beneficiary to the payment
of the indebtedness  secured hereby in such order and proportions as Beneficiary
in its discretion shall deem appropriate.  To the extent Grantor may lawfully do
so  and  without  limiting  any  rights  and/or  privileges  herein  granted  to
Beneficiary,  Grantor agrees that  Beneficiary  and/or Trustee and any successor
Trustee  may  dispose  of any or all of the  Chattels  or  such  other  personal
property at the same time and place and after giving the same  notices  provided
in this Deed in connection with a non-judicial  foreclosure sale under the terms
and  conditions  set forth in Article II, Section 2.01, III or IV, of this Deed.
In this connection,  Grantor agrees that the sale may be conducted by Trustee or
successor Trustee;  that the sale of the real estate and improvements  described
in this  Deed and the  Chattels  or such  other  personal  property  or any part
thereof, may be sold separately or together;  and that in the event the Premises
and the Chattels and such other personal property,  or any part thereof are sold
together,  Beneficiary  will not be  obligated  to  allocate  the  consideration
received  as between  the  Premises  and the  Chattels  and such other  personal
property.

         Section 4.03. Application of Certain Payments. In the event that all or
any part of the  Mortgaged  Property is encumbered by one or more deeds of trust
held by or for the benefit of Beneficiary, Grantor hereby irrevocably authorizes
and directs  Beneficiary to apply any payment received by Beneficiary in respect
of any note secured  hereby or by any other such deed of trust to the payment of
such of  said  notes  as  Beneficiary  shall  elect  in its  sole  and  absolute
discretion,  and  Beneficiary  shall have the right to apply any such payment in
reduction  of  principal  and/or  interest  and in such  order  and  amounts  as
Beneficiary  shall elect in its sole and absolute  discretion  without regard to
the  priority  of the deed of trust  securing  the note so repaid or to contrary
directions from Grantor or any other party.

                                       30
<PAGE>

         Section 4.04.  Severability.  In  the  event  any  one or  more  of the
provisions  contained  herein or in the Note or the Loan Agreement shall for any
reason be held to be invalid,  illegal or  unenforceable  in any  respect,  such
invalidity,  illegality or unenforceability shall not affect any other provision
hereof,  but this  Deed  shall  be  construed  as if such  invalid,  illegal  or
unenforceable  provision had never been contained  herein or therein,  provided,
however,  that if such  provision held to be invalid,  illegal or  unenforceable
relates to the payment of any principal or interest  under the Note or any other
material monetary sum under any of the Loan Documents,  then Beneficiary may, at
its option,  declare the  indebtedness  and any other sums secured  hereby to be
immediately due and payable.

         Section 4.05. Modifications and Waivers in Writing. No provision hereof
may be changed,  waived,  discharged or terminated  orally or by any other means
except  as  provided  in  Section  9.12 of the  Loan  Agreement.  Any  agreement
hereafter made by Grantor and  Beneficiary  relating hereto shall be superior to
the rights of the holder of any intervening or subordinate lien or encumbrance.

         Section  4.06.  Notices. All notices, demands, consents, approvals  and
statements  required  or  permitted  hereunder  shall be in writing and shall be
given or served as provided in Section 9.11 of the Loan Agreement.

         Section 4.07.  Successors  and  Assigns. All of the  grants, covenants,
terms,  provisions and conditions herein shall run with the land and shall apply
to, bind and inure to the benefit of, the successors and assigns of Grantor, the
successors in trust of Trustee and the  endorsees,  transferees,  successors and
assigns of Beneficiary.

         Section 4.08. Other Liens; Subrogation.  The lien hereby  created shall
take  precedence  over and be a prior lien to any other  lien of any  character,
whether  vendor's,  materialmen's or mechanic's lien,  hereafter  created on the
Mortgaged Property.  In the event any or all of the proceeds to the indebtedness
secured  hereby have been used to extinguish,  extend or renew any  indebtedness
heretofore   existing   against  the  Mortgaged   Property  or  to  satisfy  any
indebtedness  or obligation  secured by a lien or encumbrance of any kind,  such
proceeds have been advanced by Lenders and/or  Beneficiary at Grantor's request,
and, to the extent of such funds so used, the indebtedness  hereby secured shall
be  subrogated  to  all  of the  rights,  claims,  liens,  titles  and  interest
heretofore existing against the Mortgaged Property to secure the indebtedness or
obligation so extinguished,  paid,  extended or renewed,  and the former rights,
claims, liens, title and interests, if any, shall not be waived but rather shall
be  continued  in  full  force  and  effect  and  in  favor  of  Lenders  and/or
Beneficiary,  as the case may be,  and  shall  not be  merged  with the lien and
security for the repayment of the indebtedness hereby secured.

         Section 4.09. Limitation on Interest. Regardless   of   any   provision
contained herein or in any of the other Loan Documents,  the total liability for
payments in the nature of interest  shall not exceed the  applicable  limits now
imposed  by any  applicable  state  or  federal  interest  rate  laws  to  which
Beneficiary  and/or  Lenders  may be subject.  If any  payments in the nature of
interest,  fees and other charges made hereunder or under the Note or other Loan
Documents are held to be in excess of the applicable  limits imposed by

                                       31
<PAGE>

any such applicable  state or federal  interest rate laws, it is agreed that any
such amount held to be in excess shall be considered  payment of principal under
the Note and the indebtedness  evidenced thereby shall be reduced by such amount
in the inverse order of maturity so that the total liability for payments in the
nature of  interest,  fees and other  charges  shall not exceed  the  applicable
limits  imposed by any such  applicable  state or federal  interest rate laws in
compliance with the desires of Grantor, Lenders and Beneficiary.

         Section  4.10. Counterparts. This Deed may be executed in any number of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original;  and all such counterparts shall together constitute but one and
the same deed.

         Section 4.11.  Substitute Deeds.  Grantor  and  Beneficiary shall, upon
their mutual  agreement to do so,  execute such documents as may be necessary in
order  to  effectuate  the  modification  hereof,  including  the  execution  of
substitute  deeds of trust, so as to create two (2) or more liens on or security
titles in respect of the  Mortgaged  Property in such amounts as may be mutually
agreed upon but in no event to exceed,  in the  aggregate,  the Note Amount;  in
such event, Grantor covenants and agrees to pay the reasonable fees and expenses
of Beneficiary and its counsel in connection with any such modification.

         Section 4.12.  Lenders' Sale of Interests in Loan.  Grantor  recognizes
that Lenders may sell and transfer  interests in the Loan as provided in Section
9.13 of the Loan Agreement.  In connection with any replacement of notes as part
of a transfer  of  interests  in the Loan,  Grantor  (x)  agrees to execute  and
deliver  to  Beneficiary   an  amendment  to  this  Deed,  in  form   reasonably
satisfactory to Beneficiary,  to change the description of the Note set forth on
SCHEDULE B and (y) hereby  irrevocably  appoints and  designates  Beneficiary as
Grantor's attorney-in-fact, coupled with an interest, to execute and deliver any
such amendments on Grantor's behalf.

         Section 4.13. No  Merger  of  Interests.  Unless   expressly   provided
otherwise,  in the event  that  ownership  hereof  and  title to the fee  and/or
leasehold  estates in the Premises  encumbered hereby shall become vested in the
same  person  or  entity,  this Deed  shall  not  merge in said  title but shall
continue to be and remain a valid and subsisting  lien and/or trust deed on said
estates in the Premises for the amount secured hereby.

         Section 4.14. No Credit For Taxes. Grantor shall not claim or demand or
be entitled to receive any credit or credits on the principal indebtedness to be
secured by this Deed, or on the interest  payable  thereon,  for any part of the
taxes  assessed  against the Premises and no deduction  shall be made or claimed
from the taxable value of the Premises by reason of this Deed.

         Section  4.15. No Consent to Contracts. Neither Beneficiary nor Lenders
consents to any contract for labor or materials,  and all contracts for labor or
materials  that will be let by Grantor shall at all times be subordinate to this
Deed.

         Section 4.16. No Oral Agreements. THIS WRITTEN DEED OF TRUST REPRESENTS
THE FINAL AGREEMENT  BETWEEN THE PARTIES AND MAY NOT

                                       32
<PAGE>

BE  CONTRADICTED  BY  EVIDENCE  OF PRIOR,  CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL
AGREEMENT OF THE PARTIES.  THERE ARE NO UNWRITTEN  ORAL  AGREEMENTS  BETWEEN THE
PARTIES.

         Section  4.17.  Business Loan. Grantor represents  and agrees  that the
Obligations  secured  hereby (a) constitute a business loan and (b) are exempted
transactions under the federal  Truth-in-Lending Act (15 U.S.C. Section 1601, et
seq.).  None of the  forgoing  is  intended,  however,  to vitiate or in any way
detract from the intention of Grantor,  Lenders and Beneficiary to have the laws
of  the  State  of New  York  apply  in all  respects  to the  construction  and
enforcement of the Note and the Loan  Agreement,  as said intention is expressly
set forth therein.

         Section   4.18.    CERTAIN  WAIVERS.  GRANTOR  HEREBY   EXPRESSLY   AND
UNCONDITIONALLY:  (A)  ACKNOWLEDGES  THE RIGHT OF  BENEFICIARY TO ACCELERATE THE
INDEBTEDNESS EVIDENCED BY THE NOTE AND ANY OTHER INDEBTEDNESS IN ACCORDANCE WITH
THE LOAN  DOCUMENTS  AND THE POWER OF SALE GIVEN  HEREIN TO  BENEFICIARY  AND/OR
TRUSTEE TO SELL THE MORTGAGED  PROPERTY BY NONJUDICIAL  FORECLOSURE UPON DEFAULT
BY GRANTOR  WITHOUT ANY JUDICIAL  HEARING AND WITHOUT ANY NOTICE OTHER THAN SUCH
NOTICE (IF ANY) AS IS SPECIFICALLY  REQUIRED TO BE GIVEN UNDER THE PROVISIONS OF
THIS DEED OR BY LAW;  (B) WAIVES ANY AND ALL RIGHTS THAT  GRANTOR MAY HAVE UNDER
THE CONSTITUTION OF THE UNITED STATES OF AMERICA (INCLUDING, WITHOUT LIMITATION,
THE FIFTH AND  FOURTEENTH  AMENDMENTS  THEREOF),  THE VARIOUS  PROVISIONS OF THE
CONSTITUTIONS  FOR THE SEVERAL STATES, OR BY REASON OF ANY OTHER APPLICABLE LAW,
TO NOTICE AND TO JUDICIAL  HEARING PRIOR TO THE EXERCISE BY  BENEFICIARY  OF ANY
RIGHT OR REMEDY HEREIN PROVIDED TO  BENEFICIARY,  EXCEPT SUCH NOTICE (IF ANY) AS
IS  SPECIFICALLY  REQUIRED TO BE GIVEN UNDER THE LOAN  DOCUMENTS  OR BY LAW; (C)
ACKNOWLEDGES  THAT  GRANTOR  HAS READ  THIS  DEED AND ITS  PROVISIONS  HAVE BEEN
EXPLAINED FULLY TO GRANTOR,  AND GRANTOR HAS CONSULTED WITH COUNSEL OF GRANTOR'S
CHOICE PRIOR TO EXECUTING  THIS DEED AND  INITIALLING  THIS  SECTION  4.18;  (D)
ACKNOWLEDGES  THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE
KNOWINGLY,  INTENTIONALLY  AND WILLINGLY BY GRANTOR AS A PART OF A BARGAINED-FOR
LOAN  TRANSACTION  AND THAT THIS DEED IS VALID AND  ENFORCEABLE  BY  BENEFICIARY
AGAINST  GRANTOR IN ACCORDANCE  WITH ALL THE TERMS,  PROVISIONS  AND  CONDITIONS
HEREOF;  AND (E) WAIVES, IN CONNECTION WITH ANY FORECLOSURE OR SIMILAR ACTION OR
PROCEDURE  BROUGHT  BY  BENEFICIARY  OR  LENDERS  ASSERTING  AN EVENT OF DEFAULT
HEREUNDER,  ANY AND EVERY  RIGHT IT MAY HAVE TO (I)  INJUNCTIVE  RELIEF,  (II) A
TRIAL BY JURY (IT BEING  UNDERSTOOD  THAT BY ITS ACCEPTANCE  HEREOF  BENEFICIARY
ALSO  WAIVES  ITS  RIGHT TO TRIAL BY JURY),  (III)  INTERPOSE  ANY  COUNTERCLAIM
THEREIN,  OTHER THAN A COUNTERCLAIM  THAT IF NOT BROUGHT IN THE SUIT,  ACTION OR

                                       33
<PAGE>

PROCEEDING  BROUGHT BY BENEFICIARY OR LENDERS COULD NOT BE BROUGHT IN A SEPARATE
SUIT,  ACTION  OR  PROCEEDING  OR WOULD  BE  SUBJECT  TO  DISMISSAL  OR  SIMILAR
DISPOSITION FOR FAILURE TO HAVE BEEN ASSERTED IN SUCH SUIT, ACTION OR PROCEEDING
BROUGHT BY BENEFICIARY OR LENDERS AND (IV) HAVE THE SAME  CONSOLIDATED  WITH ANY
OTHER OR SEPARATE  SUIT,  ACTION OR  PROCEEDING.  NOTHING IN THIS SECTION  SHALL
PREVENT OR PROHIBIT  GRANTOR FROM  INSTITUTING OR MAINTAINING A SEPARATE  ACTION
AGAINST BENEFICIARY OR ANY LENDER WITH RESPECT TO ANY ASSERTED CLAIM.

         Section  4.19. GOVERNING LAW. GRANTOR  AND BENEFICIARY  INTEND THAT THE
VALIDITY AND CONSTRUCTION OF THE OBLIGATIONS SECURED BY THIS DEED BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK  INCLUDING  ALL  OBLIGATIONS  AND  LIABILITIES
HEREUNDER WITH RESPECT TO THE PAYMENT OF INTEREST OR ANY OTHER  COMPENSATION FOR
THE USE,  FORBEARANCE  OR DETENTION OF MONEY.  THIS DEED SHALL BE CONSTRUED  AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE
TO THE CONFLICTS OF LAW PRINCIPLES OF THAT STATE, EXCEPT ONLY TO THE EXTENT THAT
TEXAS LAW EXPRESSLY  PROVIDES  THAT IT GOVERNS AND THAT A CONTRARY  AGREEMENT BY
THE PARTIES IS  INEFFECTIVE  AND EXCEPT THAT THE LAW OF THE STATE OF TEXAS SHALL
APPLY TO ANY AND ALL ACTS WITH  RESPECT TO THE CREATION AND PRIORITY OF THE LIEN
OF THIS DEED AND ASSIGNMENT OF LEASES AND RENTS ON THE MORTGAGED PROPERTY HEREBY
EVIDENCED  AND  FORECLOSURE  BY  TRUSTEE  ON THE  MORTGAGED  PROPERTY.  GRANTOR,
BENEFICIARY AND TRUSTEE  COVENANT AND AGREE TO TAKE ANY AND ALL ACTION WHICH MAY
BE NECESSARY  UNDER TEXAS LAW WITH RESPECT TO FORECLOSURE  UNDER THE LAWS OF THE
STATE OF TEXAS.  SHOULD ANY  OBLIGATION  OR REMEDY UNDER THIS DEED BE INVALID OR
UNENFORCEABLE  UNDER THE LAWS  PROVIDED  HEREIN TO  GOVERN,  THE LAWS OF ANOTHER
STATE WHOSE LAWS CAN VALIDATE AND APPLY TO THIS DEED SHALL APPLY.

         Section  4.20. Non-Recourse. No recourse shall be had  under  this Deed
against  Grantor  or its  constituent  partners  except as and to the extent set
forth in Section 10.02 of the Loan Agreement.

                                       34
<PAGE>

         Section 4.21.   Partial   Releases. Portions   of   the Premises may be
released  from time to time from the lien of this Deed as  provided  in  Section
9.26 of the Loan Agreement.

     IN WITNESS  WHEREOF,  this Deed has been duly  executed  and  delivered  by
Grantor.

                                     WILLOW BEND ASSOCIATES LIMITED
                                     PARTNERSHIP, a Delaware limited partnership

                                     By:  Willow Bend Holdings 1 LLC,
                                          a Delaware limited liability company,
                                          its sole general partner

                                          By:  The Taubman Realty Group
                                               Limited Partnership,
                                               a Delaware limited partnership,
                                               its sole member

                                               By      /s/  Steven Eder
                                                 ------------------------------
                                                 Name:  Steven E. Eder
                                                 Title: Authorized Signatory

                                       35
<PAGE>

STATE OF NEW YORK                     ss.
                                      ss.
COUNTY OF NEW YORK                    ss.

                  BEFORE ME, the undersigned  authority,  on this day personally
appeared  Steven E. Eder,  an authorized  signatory of The Taubman  Realty Group
Limited Partnership, a Delaware limited partnership, which is the sole member of
Willow Bend Holdings 1 LLC, a Delaware limited liability  company,  which is the
general  partner  of Willow  Bend  Associates  Limited  Partnership,  a Delaware
limited  partnership,  known to me to be the person whose name is  subscribed to
the foregoing  instrument,  and acknowledged to me that he executed the same for
the purposes and  consideration  therein  expressed and in the capacity  therein
stated, as the act and deed of Taubman Realty Group Limited  Partnership,  which
is acting  for and on behalf of Willow  Bend  Holdings 1 LLC which is acting for
and on behalf of Willow Bend Associates Limited Partnership.

                  GIVEN  UNDER MY HAND AND SEAL OF OFFICE this 21st day of June,
2000.

                              /s/ Jennifer A. Meyer
                          -----------------------------------------------------
                          Notary Public in and for the
                          State of New York

                              /s/ Jennifer A. Meyer
                          -----------------------------------------------------
                          Printed Name of Notary Public

My Commission Expires:

      11/8/01
------------------------------

<PAGE>

                                   SCHEDULE B

                                     (Notes)

         1. Note dated June 21, 2000,  in the principal  amount of  $70,000,000,
         from Willow Bend Associates Limited  Partnership to PNC Bank,  National
         Association.

         2. Note dated June 21, 2000,  in the principal  amount of  $70,000,000,
         from Willow Bend Associates Limited Partnership to Fleet National Bank.

         3. Note dated June 21, 2000,  in the principal  amount of  $40,000,000,
         from Willow Bend Associates Limited Partnership to Bayerische Hypo- und
         Vereinsbank AG, New York Branch.

         2. Note dated June 21, 2000,  in the principal  amount of  $40,000,000,
         from Willow Bend Associates Limited  Partnership to Commerzbank AG, New
         York Branch.

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

RECITAL........................................................................1

CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION..................................1

GRANTING CLAUSE................................................................4

Article I          COVENANTS OF GRANTOR........................................6
  Section 1.01.   (a)  Warranty of Title; Power and Authority..................6
                  (b)  Flood Hazard Area.......................................6
  Section 1.02.   (a)  Further Assurances......................................6
                  (b)  Information Reporting and Back-up Withholding...........6
  Section 1.03.   (a)  Filing and Recording of Documents.......................7
                  (b)  Filing and Recording Fees and Other Charges.............7
  Section 1.04.    Payment and Performance of Loan Documents...................7
  Section 1.05.    Maintenance of Existence....................................7
  Section 1.06.    After-Acquired Property.....................................7
  Section 1.07.   (a)  Payment of Taxes and Other Charges......................8
                  (b)  Payment of Mechanics and Materialmen....................9
                  (c)  Good Faith Contests.....................................9
  Section 1.08.    Taxes on Trustee, Beneficiary or Lenders....................9
  Section 1.09.    Insurance...................................................9
  Section 1.10.    Protective Advances by Beneficiary.........................13
  Section 1.11.    Estoppel Certificates......................................13
  Section 1.12.    Maintenance of Premises and Improvements...................13
  Section 1.13.    Condemnation...............................................14
  Section 1.14.    Leases.....................................................15
  Section 1.15.    Premises Documents.........................................16
  Section 1.16.    Trust Fund; Lien Laws......................................16
  Section 1.17.    Reliance on Premises to Fulfill Governmental Requirements..16
  Section 1.18.    Non-Disturbance and Attornment Agreements..................17
  Section 1.19.    Expenses of Trustee........................................17

Article II         EVENTS OF DEFAULT AND REMEDIES.............................17
  Section 2.01.    Events of Default and Certain Remedies.....................17
  Section 2.02.    Other Matters Concerning Sales.............................23
  Section 2.03.    Payment of Amounts Due.....................................25
  Section 2.04.    Actions; Receivers.........................................26
  Section 2.05.    Beneficiary's/Trustee's Right to Possession................26

                                      (i)
<PAGE>

  Section 2.06.    Remedies Cumulative........................................26
  Section 2.07.    Moratorium Laws; Right of Redemption.......................27
  Section 2.08.    Grantor's Use and Occupancy after Default..................27
  Section 2.09.    Beneficiary's Rights Concerning Application of Amounts
                   Collected..................................................27
  Section 2.10.    Regarding Defenses.........................................28
  Section 2.11.    Expenses as Indebtedness...................................28

Article III        CONCERNING TRUSTEE.........................................28
  Section 3.01.    Trustee's Performance......................................28
  Section 3.02.    Resignation by Trustee.....................................28
  Section 3.03.    Removal of Trustee; Successors.............................28

Article IV         MISCELLANEOUS..............................................29
  Section 4.01.    Assignment of Leases and Rents.............................29
  Section 4.02.    Security Agreement.........................................30
  Section 4.03.    Application of Certain Payments............................30
  Section 4.04.    Severability...............................................31
  Section 4.05.    Modifications and Waivers in Writing.......................31
  Section 4.06.    Notices....................................................31
  Section 4.07.    Successors and Assigns.....................................31
  Section 4.08.    Other Liens; Subrogation...................................31
  Section 4.09.    Limitation on Interest.....................................31
  Section 4.10.    Counterparts...............................................32
  Section 4.11.    Substitute Deeds...........................................32
  Section 4.12.    Lenders' Sale of Interests in Loan.........................32
  Section 4.13.    No Merger of Interests.....................................32
  Section 4.14.    No Credit For Taxes........................................32
  Section 4.15.    No Consent to Contracts....................................32
  Section 4.16.    No Oral Agreements.........................................32
  Section 4.17.    Business Loan..............................................33
  Section 4.18.    CERTAIN WAIVERS............................................33
  Section 4.19.    GOVERNING LAW..............................................34
  Section 4.20.    Non-Recourse...............................................34
  Section 4.21.    Partial Releases...........................................35

                                      (ii)
<PAGE>

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