MANUFACTURED HOME COMMUNITIES INC
$50,000,000 PROMISSORY NOTE
<DOCUMENT>
<TYPE>EX-10.43
<SEQUENCE>5
<FILENAME>c68299ex10-43.txt
<DESCRIPTION>$50,000,000 PROMISSORY NOTE
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.43

                                                              [WELLS FARGO LOGO]

MODIFICATION AGREEMENT

Loan No. 31-0900553R

THIS MODIFICATION AGREEMENT ("Agreement") dated December 6, 2001 is entered into
by and between WELLS FARGO BANK, NATIONAL ASSOCIATION ("Lender"), and MHC
STAGECOACH, L.L.C., a Delaware limited liability company, ("Borrower").

                                 R E C I T A L S

A.    Pursuant to the terms of a promissory note dated July 31, 2001 executed by
      Borrower in favor of Lender ("Note"), Lender made a loan to Borrower in
      the principal amount of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is further evidenced by the documents
      described in the Note as "Loan Documents". The Note is secured by, among
      other things: (i) that certain Deed of Trust and Absolute Assignment of
      Rents and Leases and Security Agreement (And Fixture Filing) ("Casa del
      Sol III Deed of Trust") of even date therewith, executed by Borrower
      encumbering certain real property and improvements located in Peoria,
      Arizona; (ii) that certain Deed of Trust and Absolute Assignment of Rents
      And Leases and Security Agreement (And Fixture Filing) ("Apollo Village
      Deed of Trust") of even date therewith, executed by Borrower encumbering
      certain other real property and improvements located in Peoria, Arizona;
      (iii) that certain Deed of Trust and Absolute Assignment of Rents and
      Leases and Security Agreement (And Fixture Filing) ("Woodland Hills Deed
      of Trust") of even date therewith, executed by Borrower encumbering
      certain real property and improvements located in Thornton, Colorado; (iv)
      that certain Deed of Trust and Absolute Assignment of Rents and Leases and
      Security Agreement (And Fixture Filing) ("Cabana Deed of Trust") of even
      date therewith, executed by Borrower encumbering certain real property and
      improvements located in Las Vegas, Nevada; (v) that certain Mortgage and
      Absolute Assignment of Rents and Leases and Security Agreement (And
      Fixture Filing) ("Pickwick Village Mortgage") of even date therewith,
      executed by Borrower encumbering certain real property and improvements
      located in Port Orange, Florida; (vi) that certain Mortgage and Absolute
      Assignment of Rents and Leases and Security Agreement (And Fixture Filing)
      ("Indian Oaks Mortgage") of even date therewith, executed by Borrower
      encumbering certain real property and improvements located in Rockledge,
      Florida; and (vii) that certain Mortgage and Absolute Assignment of Rents
      and Leases and Security Agreement (And Fixture Filing) ("Windmill Manor
      Mortgage") of even date therewith, executed by Borrower encumbering
      certain real property and improvements located in Bradenton, Florida. The
      Casa del Sol III Deed of Trust, the Apollo Village Deed of Trust, the
      Woodland Hills Deed of Trust, the Cabana Deed of Trust, the Pickwick
      Village Mortgage, the Indian Oaks Mortgage and the Windmill Manor Mortgage
      are referred to herein collectively and individually, as applicable, and
      as modified, extended or renewed, as the "Mortgage" or the "Mortgages."

B.    The Note, Mortgages, this Agreement, and the other documents described in
      the Note as "Loan Documents", together with all modifications and
      amendments thereto and any document required hereunder, are collectively
      referred to herein as the "Loan Documents".

C.    By this Agreement, Borrower and Lender intend to modify and amend certain
      terms and provisions of the Loan Documents.

NOW, THEREFORE, the parties agree as follows:

1.    REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants to
      Lender that no Default, breach or failure of condition has occurred, or
      would exist with notice or the lapse of time or both, under any of the
      Loan Documents (as modified by this Agreement) and that all
      representations and warranties therein are true and correct, which
      representations and warranties shall survive execution of this Agreement.
      Borrower also hereby represents, warrants and re-affirms to Lender that
      the representations and warranties contained in the Loan Documents are, to
      Borrower's current actual knowledge after reasonable investigation and
      inquiry, true and correct as of the date hereof.

2.    MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby amended as
      follows:

      2.1   Section 3.6 of Exhibit A to the Note is hereby amended and restated
            in its entirety as follows:


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            "3.6  BORROWER LETTER OF CREDIT.

                  a.    Delivery to Lender. Lender has agreed that in lieu of
                        the Capital Expenditure Impounds required by Subsection
                        3.1(c) above, Lender will accept and Borrower may
                        deliver by November 14, 2001 an irrevocable standby
                        letter of credit (such letter of credit, together with
                        any replacement or renewal thereof, is referred to
                        herein as the "Borrower Letter of Credit") in the
                        aggregate principal amount of $306,991 issued by an
                        issuer reasonably acceptable to Lender in favor of
                        Lender, in form and content reasonably satisfactory to
                        Lender. Subject to the provisions of this Section 3.6,
                        Lender shall retain custody of any Borrower Letter of
                        Credit until such time as the Loan is repaid in full
                        (other than through judicial or nonjudicial foreclosure
                        of the Mortgages or deeds in lieu thereof).

                  b.    Right to Draw. Lender shall have the right to draw upon
                        the Borrower Letter of Credit in the full amount thereof
                        upon the occurrence of any Default. In the event that
                        the Borrower Letter of Credit will not be renewed for
                        any reason, Borrower shall either (a) deliver a
                        substitute or replacement letter of credit in form and
                        content reasonably satisfactory to Lender (a
                        "Replacement Letter of Credit") prior to the date (the
                        "Replacement Date") that is thirty (30) days prior to
                        the expiration of the Borrower Letter of Credit or (b)
                        elect to reinstate the Capital Expenditure Impounds by
                        delivering to Lender the sum of $61,308 (the
                        "Reinstatement Deposit") prior to the Replacement Date
                        and $10,218 on each payment date thereafter for payment
                        or reimbursement of Capital Expenditures. The failure of
                        Borrower to either deliver a Replacement Letter of
                        Credit or the Reinstatement Deposit prior to the
                        Replacement Date shall be considered a Default under the
                        Loan Documents, and Lender shall, in addition to any
                        other remedy available to Lender under the Loan
                        Documents, be entitled to draw upon the Borrower Letter
                        of Credit in the full amount thereof.

                  c.    Application of Proceeds. The proceeds of any draw under
                        the Borrower Letter of Credit shall be retained by
                        Lender as Impounds and shall be governed by the terms
                        and conditions of this Note and the other Loan
                        Documents.

                  d.    Release of the Borrower Letter of Credit. Lender shall
                        surrender the Borrower Letter of Credit to Borrower and
                        refund to Borrower all sums drawn that Lender is holding
                        (and that have not otherwise been applied or spent) at
                        such time as the Loan is repaid in full (other than
                        through judicial or nonjudicial foreclosure of the
                        Mortgages or deeds in lieu thereof)."

      2.2   All references to the term "Note" in the Loan Documents shall mean
            the Note, as amended hereby and as the same may hereafter be
            amended, restated, supplemented or modified from time to time.

      2.3   The Mortgages and other Loan Documents which recite they are
            security instruments shall secure, in addition to any other
            obligations secured thereby, the payment and performance by Borrower
            of all obligations under (a) the Note, as amended hereby; and (b)
            this Agreement, as amended, modified, extended or renewed in writing
            by Borrower and Lender.

3.    FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has previously delivered
      to Lender all of the relevant formation and organizational documents of
      Borrower, of the partners or joint venturers of Borrower (if any), and of
      all guarantors of the Loan (if any), and all such formation documents
      remain in full force and effect and have not been amended or modified
      since they were delivered to Lender. Borrower hereby certifies that: (i)
      the above documents previously delivered to Lender are all of the relevant
      formation and organizational documents of Borrower; (ii) they remain in
      full force and effect; and (iii) they have not been amended or modified
      since they were previously delivered to Lender.

4.    NON-IMPAIRMENT. Except as expressly provided herein, nothing in this
      Agreement shall alter or affect any provision, condition, or covenant
      contained in the Note or any other Loan Document or affect or impair any
      rights, powers, or remedies of Lender, it being the intent of the parties
      hereto that the provisions of the Note and other Loan Documents shall
      continue in full force and effect except as expressly modified hereby.

5.    MISCELLANEOUS. This Agreement and the other Loan Documents shall be
      governed by and interpreted in accordance with the laws of the State of
      California, except to the extent the same are preempted by Federal law. In
      any


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      action brought or arising out of this Agreement or the Loan Documents,
      Borrower, and the general partners and joint venturers of Borrower (if
      any), hereby consent to the jurisdiction of any Federal or State Court
      having proper venue within the State of California and also consent to the
      service of process by any means authorized by California or federal law.
      The headings used in this Agreement are for convenience only and shall be
      disregarded in interpreting the substantive provisions of this Agreement.
      Except as expressly provided otherwise herein, all terms used herein shall
      have the meaning given to them in the other Loan Documents. Time is of the
      essence of each term of the Loan Documents, including this Agreement. If
      any provision of this Agreement or any of the other Loan Documents shall
      be determined by a court of competent jurisdiction to be invalid, illegal
      or unenforceable, that portion shall be deemed severed from this Agreement
      and the remaining parts shall remain in full force as though the invalid,
      illegal, or unenforceable portion had never been a part thereof.

6.    INTEGRATION; INTERPRETATION. The Loan Documents, including this Agreement,
      contain or expressly incorporate by reference the entire agreement of the
      parties with respect to the matters contemplated therein and supersede all
      prior negotiations. The Loan Documents shall not be modified except by
      written instrument executed by all parties.

7.    EXECUTION IN COUNTERPART. This Agreement, and other Loan Documents which
      expressly so provide, may be executed in any number of counterparts, each
      of which when executed and delivered will be deemed to be an original and
      all of which, taken together, will be deemed to be one and the same
      instrument.

IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be duly
executed as of the date first above written.

                          "LENDER"

WELLS FARGO BANK,
NATIONAL ASSOCIATION

By: /s/ Steven R. Lowery
    ------------------------------
Name: Steven R. Lowery
Title: Vice President


                        "BORROWER"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member

      By: /s/ John M. Zoeller
         ---------------------------------
      Name: John M. Zoeller
      Its:  Vice President, Chief Financial
            Officer and Treasurer


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                               GUARANTOR'S CONSENT

The undersigned ("Guarantor") consents to the foregoing Modification Agreement
and the transactions contemplated thereby and reaffirms its obligations under
the Limited Guaranty ("Guaranty") dated July 31, 2001, and its waivers, as set
forth in the Guaranty, of each and every one of the possible defenses to such
obligations. Guarantor further reaffirms that its obligations under the Guaranty
are separate and distinct from the obligations of Borrower (as defined in the
Guaranty).

AGREED:

Dated as of: December 6, 2001                             "GUARANTOR"

                                        MANUFACTURED HOME COMMUNITIES, INC.,
                                        a Maryland corporation


                                        By: /s/ John M. Zoeller
                                           -------------------------------------
                                        Name: John M. Zoeller
                                        Its: Vice President, Chief Financial
                                             Officer and Treasurer


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<PAGE>
[WELLS FARGO LOGO]

                                            PROMISSORY NOTE SECURED BY MORTGAGES

                                                            Loan No. 31-0900553R
$50,000,000.00                                         San Francisco, California
                                                                   July 31, 2001

            THIS PROMISSORY NOTE SECURED BY MORTGAGES (this "Note") is made and
entered into by and between MHC STAGECOACH, L.L.C., a Delaware limited liability
company ("Borrower"), and WELLS FARGO NATIONAL BANK, NATIONAL ASSOCIATION
("Lender").

1.    PROMISE TO PAY. For value received, Borrower promises to pay to the order
      of Lender, at 1320 Willow Pass Road, Suite 205, Concord, California 94520,
      or at such other place as may be designated in writing by Lender, the
      principal sum of FIFTY MILLION AND NO/100THS DOLLARS ($50,000,000.00)
      ("Loan"), with interest thereon as specified herein. All sums owing
      hereunder are payable in lawful money of the United States of America, in
      immediately available funds, without offset, deduction or counterclaim of
      any kind.

2.    SECURED BY MORTGAGES. This Note is secured by, among other things: (i)
      that certain Deed of Trust and Absolute Assignment of Rents and Leases and
      Security Agreement (And Fixture Filing) ("Casa del Sol III Deed of Trust")
      of even date herewith, executed by Borrower encumbering certain real
      property and improvements located in Peoria, Arizona, as more particularly
      described therein ("Casa del Sol III Property"); (ii) that certain Deed of
      Trust and Absolute Assignment of Rents And Leases and Security Agreement
      (And Fixture Filing) ("Apollo Village Deed of Trust") of even date
      herewith, executed by Borrower encumbering certain real property and
      improvements located in Peoria, Arizona, as more particularly described
      therein ("Apollo Village Property"); (iii) that certain Deed of Trust and
      Absolute Assignment of Rents and Leases and Security Agreement (And
      Fixture Filing) ("Woodland Hills Deed of Trust") of even date herewith,
      executed by Borrower encumbering certain real property and improvements
      located in Thornton, Colorado, as more particularly described therein
      ("Woodland Hills Property"); (iv) that certain Deed of Trust and Absolute
      Assignment of Rents and Leases and Security Agreement (And Fixture Filing)
      ("Cabana Deed of Trust") of even date herewith, executed by Borrower
      encumbering certain real property and improvements located in Las Vegas,
      Nevada and as more particularly described therein ("Cabana Property"); (v)
      that certain Mortgage and Absolute Assignment of Rents and Leases and
      Security Agreement (And Fixture Filing) ("Pickwick Village Mortgage") of
      even date herewith, executed by Borrower encumbering certain real property
      and improvements located in Port Orange, Florida, as more particularly
      described therein ("Pickwick Village Property"); (vi) that certain
      Mortgage and Absolute Assignment of Rents and Leases and Security
      Agreement (And Fixture Filing) ("Indian Oaks Mortgage") of even date
      herewith, executed by Borrower encumbering certain real property and
      improvements located in Rockledge, Florida, as more particularly described
      therein ("Indian Oaks Property"); and (vii) that certain Mortgage and
      Absolute Assignment of Rents and Leases and Security Agreement (And
      Fixture Filing) ("Windmill Manor Mortgage") of even date herewith,
      executed by Borrower encumbering certain real property and improvements
      located in Bradenton, Florida, as more particularly described therein
      ("Windmill Manor Property"). The Casa del Sol III Deed of Trust, the
      Apollo Village Deed of Trust, the Woodland Hills Deed of Trust, the Cabana
      Deed of Trust, the Pickwick Village Mortgage, the Indian Oaks Mortgage and
      the Windmill Manor Mortgage are referred to herein collectively and
      individually, as applicable, and as modified, extended or renewed, as the
      "Mortgage" or the "Mortgages." The Casa del Sol III Property, the Apollo
      Village Property, the Woodland Hills Property, the Cabana Property, the
      Pickwick Village Property, the Indian Oaks Property and the Windmill Manor
      Property are referred to herein collectively and individually, as
      applicable, as the "Property" or the "Properties."

3.    DEFINITIONS. For the purposes of this Note, the following terms shall have
      the following meanings:

      "Affiliate" shall mean, as to any specified Person, any other Person that,
      directly or indirectly, is in Control of, is Controlled by or is under
      common Control with such specified Person.

      "Business Day" shall mean any day other than a Saturday, Sunday, legal
      holiday or other day on which commercial banks in California are
      authorized or required by law to close. All references in this Note to a
      "day" or a "date" shall be to a calendar day unless specifically
      referenced as a Business Day.


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<PAGE>
      "Control" shall mean with respect to any specified Person either (i)
      ownership directly or through other entities of more than 100% of all
      beneficial equity interest in such Person and (ii) the power to direct the
      management, operation and business of such person.

      "Debt Service Coverage Ratio" shall mean, as of the last day of the
      calendar month immediately preceding the applicable calculation date, the
      ratio in which (a) the numerator is the sum of the Net Operating Income
      for each of the applicable Properties for the immediately preceding twelve
      month period and (b) the denominator is the aggregate amount of principal
      and interest that would be due under this Note for such period based upon
      a debt service constant of seven and 97/100ths percent (7.97%).

      "Default" shall have the meaning set forth in the Mortgages.

      "Disbursement Date" shall mean the date upon which the Loan proceeds are
      funded into escrow in connection with the closing of the Loan.

      "Effective Date" shall mean the date Lender authorizes the Loan proceeds
      to be released to Borrower.

      "Loan Documents" shall mean the documents listed in Exhibit B attached
      hereto and incorporated herein by this reference.

      "Loan-to-Value Ratio" shall mean, as of the last day of the calendar month
      immediately preceding the applicable calculation date, the ratio in which
      (a) the numerator is the aggregate amount of principal and interest then
      due under this Note and (b) the denominator is the "as-is" value of the
      applicable Properties as set forth in the appraisals for such Properties.

      "Maturity Date" shall mean September 1, 2011.

      "Net Operating Income" shall mean, with respect to a Property, (i) the
      rental payments actually received by Borrower ("Gross Rents"); plus (ii)
      the expense reimbursements actually received by Borrower ("Expense
      Reimbursements"); minus the sum of (w) an adjustment for
      vacancy/collection losses equal to the greater of actual, market or five
      percent (5%) of the Gross Rents and Expense Reimbursements; and (x) the
      actual Operating Expenses; and (y) an amount for reasonable management
      expenses equal to the greater of (A) four percent (4%) of Gross Rents or
      (B) actual management expenses; and (z) a capital improvement reserve
      equal to $17,612 for the Casa del Sol III Property, $16,450 for the Apollo
      Village Property, $28,644 for the Woodland Hills Property, $13,150 for the
      Cabana Property, $21,600 for the Pickwick Village Property, $10,550 for
      the Indian Oaks Property, and $14,600 for the Windmill Manor Property, and
      such amount as shall be reasonably determined by Lender for any
      Replacement Property (as hereinafter defined).

      "Operating Expenses" shall mean, with respect to a Property, all
      reasonable operating expenses of such Property, including, without
      limitation, those for maintenance, repairs, annual taxes, bond
      assessments, ground lease payments, insurance, utilities, and other annual
      expenses (but not capital expenses) that are standard and customary for
      properties of this type. Operating Expenses for this purpose shall not
      include any interest or principal payments on the Loan or any allowance
      for depreciation.

      "Person" shall mean any individual, corporation, partnership, joint
      venture, estate, trust, unincorporated association, any federal, state,
      county or municipal government or any bureau, department or agency thereof
      and any fiduciary acting in such capacity on behalf of any of the
      foregoing.

      "Property Worth" shall mean the fair market value of the Property or
      Properties owned by Borrower as of the Disbursement Date.

      "Rating Agency" shall mean each of Standard & Poor's Ratings Services,
      Moody's Investors Services, Inc., and Fitch IBCA, Inc., and their
      successors or assigns, or any other nationally recognized statistical
      rating agency which rates securities in connection with a securitization.

      "Remaining Properties" shall mean all of the Properties other than those
      that have been released or requested to be released from the lien of the
      applicable Mortgage pursuant to a Defeasance (hereinafter defined in
      Section 14) or in exchange for a Replacement Property.


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<PAGE>
4.    INTEREST; PAYMENTS.

      4.1   DEFINITIONS. The following terms shall have the meanings indicated:

            "Actual/360 Basis" shall mean on the basis of a 360-day year and
            charged on the basis of actual days elapsed for any whole or partial
            month in which interest is being calculated.

            "30/360 Basis" shall mean on the basis of a 360-day year consisting
            of 12 months of 30 days each.

            "Interest Rate" shall mean a fixed interest rate equal to 6.98%.

      4.2   INTEREST ACCRUAL. Interest on the outstanding principal balance of
            this Note shall accrue from the Disbursement Date at an annual rate
            equal to the Interest Rate calculated on an Actual/360 Basis.

      4.3   PAYMENTS. Monthly payments hereunder shall commence on the first day
            of the calendar month following the Disbursement Date and continue
            on the first day of each calendar month thereafter through the
            Maturity Date. If the Disbursement Date is a date other than the
            first day of a calendar month, the first monthly payment shall be
            interest only. Subsequent monthly payments shall be calculated on
            the basis of an equal-payment thirty (30) year amortization of
            principal and interest. Notwithstanding that interest on this Note
            accrues on an Actual/360 Basis, the total amount of each such
            amortized monthly payment of principal and interest shall be
            determined using a 30/360 Basis. On the Maturity Date, all unpaid
            principal and accrued but unpaid interest shall be due and owing in
            full. All interest shall be paid in arrears.

      4.4   ACKNOWLEDGMENTS. Borrower acknowledges that interest calculated on
            an Actual/360 Basis exceeds interest calculated on a 30/360 Basis
            and, therefore: (a) a greater portion of each monthly installment of
            principal and interest will be applied to interest using the
            Actual/360 Basis than would be the case if interest accrued on a
            30/360 Basis; and (b) the unpaid principal balance of this Note on
            the Maturity Date will be greater using the Actual/360 Basis than
            would be the case if interest accrued on a 30/360 Basis.

      4.5   APPLICATION OF PAYMENTS. In the absence of a specific determination
            by Lender to the contrary, all payments paid by Borrower to Lender
            in connection with the obligations of Borrower under this Note and
            under the other Loan Documents shall be applied in the following
            order of priority: (a) to amounts, other than principal and
            interest, due to Lender pursuant to this Note or the other Loan
            Documents; (b) to accrued but unpaid interest on this Note; and (c)
            to the unpaid principal balance of this Note. Upon the occurrence of
            a Default: (i) Borrower irrevocably waives the right to direct the
            application of any and all payments at any time thereafter received
            by Lender from or on behalf of Borrower, and (ii) Borrower
            irrevocably agrees that Lender shall have the continuing exclusive
            right to apply any and all such payments against the then due and
            owing obligations of Borrower in such order of priority as Lender
            may deem advisable.

5.    LATE CHARGE; DEFAULT RATE.

      5.1   LATE CHARGE. If any payment required hereunder is not paid on or
            before the fifth calendar day of the month in which it is due,
            Borrower shall pay a late or collection charge, as liquidated
            damages, equal to 4% of the amount of such unpaid payment. Borrower
            acknowledges that Lender will incur additional expenses as a result
            of any late payments hereunder, which expenses would be
            impracticable to quantify, and that Borrower's payments under this
            paragraph are a reasonable estimate of such expenses. The foregoing
            to the contrary notwithstanding, no late or collection charge shall
            be payable by Borrower as a result of any delay in the payment of
            any sum due and payable on the Maturity Date.

      5.2   DEFAULT RATE. Commencing upon a Default and continuing until such
            Default shall have been cured by Borrower, all sums owing on this
            Note shall bear interest until paid in full at a rate per annum
            equal to 5% plus the Interest Rate ("Default Rate").

6.    MAXIMUM RATE PERMITTED BY LAW. Neither this Note nor any of the other Loan
      Documents shall require the payment or permit the collection of any
      interest or any late payment charge in excess of the maximum rate
      permitted by law. If any such excess interest or late payment charge is
      provided for under this Note or any of the other Loan Documents or if this
      Note or any of the other Loan Documents shall be adjudicated to provide
      for such excess, neither


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      Borrower nor Borrower's successors or assigns shall be obligated to pay
      such excess, and the right to demand the payment of any such excess shall
      be and hereby is waived, and this provision shall control any other
      provision of this Note or any of the other Loan Documents. If Lender shall
      collect amounts which are deemed to constitute interest and which would
      increase the effective interest rate to a rate in excess of the maximum
      rate permitted by law, all such amounts deemed to constitute interest in
      excess of the maximum legal rate shall, upon such determination, at the
      option of Lender, be returned to Borrower or credited against the
      outstanding principal balance of this Note.

7.    ACCELERATION. If (a) Borrower shall fail to pay when due, subject to any
      applicable grace or cure period, any sums payable under this Note; (b) any
      other Default shall occur; or (c) any other event or condition shall occur
      which, under the terms of any of the Mortgages or any other Loan Document,
      gives rise to a right of acceleration of sums owing under this Note, then
      Lender, at its sole option, shall have the right to declare all sums owing
      under this Note immediately due and payable; provided, however, that if
      any of the Mortgages or any other Loan Document provides for the automatic
      acceleration of payment of sums owing under this Note, all sums owing
      under this Note shall be automatically due and payable in accordance with
      the terms of such of the Mortgages or such other Loan Document.

8.    BORROWER'S LIABILITY.

      8.1   LIMITATION. Except as otherwise provided in this Section 8, Lender's
            recovery against Borrower under this Note and the other Loan
            Documents shall be limited solely to the Properties and the
            "Collateral" (as defined in the Mortgages).

      8.2   EXCEPTIONS. Nothing contained in Section 8.1 or elsewhere in this
            Note or the other Loan Documents, however, shall limit in any way
            the personal liability of Borrower owed to Lender for any losses or
            damages incurred by Lender (including, without limitation, any
            impairment of Lender's security for the Loan) with respect to any of
            the following matters: (a) fraud or willful misrepresentation; (b)
            material physical waste of the Properties (or any portions thereof)
            or the Collateral; (c) failure to pay property or other taxes,
            assessments or charges (other than amounts paid to Lender for taxes,
            assessments or charges pursuant to Impounds as defined in Exhibit A
            and where Lender elects not to apply such funds toward payment of
            the taxes, assessments or charges owed) which may create liens
            senior to the lien of any of the Mortgages on all or any portion of
            the Properties; (d) failure to deliver any insurance or condemnation
            proceeds or awards or any security deposits received by Borrower to
            Lender as required under the terms of the Loan Documents or any
            other instrument now or hereafter securing this Note or to otherwise
            apply such sums as required under the terms of the Loan Documents or
            any other instrument now or hereafter securing this Note; (e)
            failure to apply any rents, royalties, accounts, revenues, income,
            issues, profits and other benefits from the Properties (or any
            portion thereof) which are collected or received by Borrower during
            the period of any Default or after acceleration of the indebtedness
            and other sums owing under the Loan Documents to the payment of
            either (i) such indebtedness or other sums or (ii) the normal and
            necessary operating expenses of the Properties; or (f) any breach by
            Borrower of any covenant in this Note or in any of the Mortgages
            regarding Hazardous Materials (as defined in the Mortgages) or any
            representation or warranty of Borrower regarding Hazardous Materials
            proving to have been untrue when made.

      8.3   NO RELEASE OR IMPAIRMENT. Nothing contained in Section 8.1 shall be
            deemed to release, affect or impair the indebtedness evidenced by
            this Note or the obligations of Borrower under, or the liens and
            security interests created by the Loan Documents, or Lender's rights
            to enforce its remedies under this Note and the other Loan
            Documents, including, without limitation, the right to pursue any
            remedy for injunctive or other equitable relief, or any suit or
            action in connection with the preservation, enforcement or
            foreclosure of the liens, mortgages, deeds of trust, assignments and
            security interests which are now or at any time hereafter security
            for the payment and performance of all obligations under this Note
            or the other Loan Documents.

      8.4   PREVAIL AND CONTROL. The provisions of this Section 8 shall prevail
            and control over any contrary provisions elsewhere in this Note or
            the other Loan Documents.

9.    NON-MORTGAGOR BORROWER. If Borrower is not also a "Mortgagor" under the
      Mortgages, Borrower hereby makes all representations and warranties in
      favor of Lender contained in Article 5 of the Mortgages, all covenants
      contained in Section 6.15 of the Mortgages, and all indemnities of Lender
      contained in Section 6.19 of the Mortgages, jointly and severally with the
      "Mortgagor" under each of the Mortgages.


                                       4
<PAGE>
10.   MISCELLANEOUS.

      10.1  JOINT AND SEVERAL LIABILITY. If this Note is executed by more than
            one person or entity as Borrower, the obligations of each such
            person or entity shall be joint and several. No person or entity
            shall be a mere accommodation maker, but each shall be primarily and
            directly liable hereunder.

      10.2  WAIVER OF PRESENTMENT. Except as otherwise provided herein or in any
            other Loan Document, Borrower hereby waives presentment, demand,
            notice of dishonor, notice of default or delinquency, notice of
            acceleration, notice of nonpayment, notice of costs, expenses or
            losses and interest thereon, and notice of interest on interest and
            late charges.

      10.3  DELAY IN ENFORCEMENT. No previous waiver or failure or delay by
            Lender in acting with respect to the terms of this Note or the
            Mortgages shall constitute a waiver of any breach, default or
            failure of condition under this Note, the Mortgages or the
            obligations secured thereby. A waiver of any term of this Note, the
            Mortgages or of any of the obligations secured thereby must be made
            in writing signed by Lender, shall be limited to the express terms
            of such waiver, and shall not constitute a waiver of any subsequent
            obligation of Borrower. The acceptance at any time by Lender of any
            past-due amount shall not be deemed to be a waiver of the right to
            require prompt payment when due of any other amounts then or
            thereafter due and payable.

      10.4  TIME OF THE ESSENCE. Time is of the essence with respect to every
            provision hereof.

      10.5  GOVERNING LAW. This Note was accepted by Lender in the state of
            California and the proceeds of this Note were disbursed from the
            state of California, which state the parties agree has a substantial
            relationship to the parties and to the underlying transaction
            embodied hereby. Accordingly, in all respects, including, without
            limiting the generality of the foregoing, matters of construction,
            validity, enforceability and performance, this Note, the Mortgages
            and the other Loan Documents and the obligations arising hereunder
            and thereunder shall be governed by, and construed in accordance
            with, the laws of the state of California applicable to contracts
            made and performed in such state and any applicable law of the
            United States of America, except that at all times the provisions
            for the foreclosure of the liens granted under the Mortgages
            securing this Note and the creation, perfection and enforcement of
            the security interests created pursuant thereto and pursuant to the
            other Loan Documents shall be governed by and construed according to
            the law of the states where the Properties are located. Except as
            provided in the immediately preceding sentence, Borrower hereby
            unconditionally and irrevocably waives, to the fullest extent
            permitted by law, any claim to assert that the law of any
            jurisdiction other than California governs the Mortgages, this Note
            and the other Loan Documents.

      10.6  CONSENT TO JURISDICTION. Borrower irrevocably submits to the
            jurisdiction of: (a) any state or federal court sitting in the state
            of California over any suit, action, or proceeding, brought by
            Borrower against Lender, arising out of or relating to this Note or
            the Loan evidenced hereby; (b) any state or federal court sitting in
            any of the states where the Properties are located or the state in
            which Borrower's principal place of business is located over any
            suit, action or proceeding, brought by Lender against Borrower,
            arising out of or relating to this Note or the Loan evidenced
            hereby; and (c) any state court sitting in any of the counties of
            the states where the Properties are located over any suit, action,
            or proceeding, brought by Lender to exercise its rights of
            foreclosure under the applicable Mortgage or any action brought by
            Lender to enforce its rights with respect to the Collateral.
            Borrower irrevocably waives, to the fullest extent permitted by law,
            any objection that Borrower may now or hereafter have to the laying
            of venue of any such suit, action, or proceeding brought in any such
            court and any claim that any such suit, action, or proceeding
            brought in any such court has been brought in an inconvenient forum.

      10.7  COUNTERPARTS. This Note may be executed in any number of
            counterparts, each of which when executed and delivered shall be
            deemed an original and all of which taken together shall be deemed
            to be one and the same Note.

      10.8  HEIRS, SUCCESSORS AND ASSIGNS. All of the terms, covenants,
            conditions and indemnities contained in this Note and the other Loan
            Documents shall be binding upon the heirs, successors and assigns of
            Borrower and shall inure to the benefit of the successors and
            assigns of Lender. The foregoing sentence shall not be construed to
            permit Borrower to assign the Loan except as otherwise permitted in
            this Note or the other Loan Documents.

      10.9  SEVERABILITY. If any term of this Note, or the application thereof
            to any person or circumstances, shall, to any extent, be invalid or
            unenforceable, the remainder of this Note, or the application of
            such term to persons or


                                       5
<PAGE>
            circumstances other than those as to which it is invalid or
            unenforceable, shall not be affected thereby, and each term of this
            Note shall be valid and enforceable to the fullest extent permitted
            by law.

      10.10 CONSENTS, APPROVALS AND EXPENSES. Wherever Lender's consent,
            approval, acceptance or satisfaction is required under any provision
            of this Note (including, without limitation, Exhibits A and B
            hereto) or any of the other Loan Documents, such consent, approval,
            acceptance or satisfaction shall not be unreasonably withheld,
            conditioned or delayed by Lender unless such provision expressly so
            provides. Wherever costs or expenses are required to be paid under
            any provision of this Note or any of the other Loan Documents, such
            costs or expenses shall be reasonable.

11.   NOTICES. All requests, demands, notices and other communications that are
      required or permitted to be given to a party under this Note shall be in
      writing and shall be sent to such party, either by personal delivery, by
      overnight delivery service, by certified first class mail, return receipt
      requested, or by facsimile transmission to the address or facsimile number
      below. All such notices and communications shall be effective upon receipt
      of such delivery or facsimile transmission, together with a printed
      receipt of the successful delivery of such facsimile transmission. The
      addresses and facsimile numbers of the parties shall be:

      Borrower:                                 Lender:
      --------                                  ------
      MHC Stagecoach, L.L.C.                    Wells Fargo Bank, N.A.
      c/o Manufactured Home Communities, Inc.   1320 Willow Pass Road, Suite 205
      Two North Riverside Plaza                 Concord, CA  94520
      Suite 800                                 Loan No. 31-0900553R
      Chicago, Illinois 60606                   FAX No.: (925) 691-5947
      Attention:  General Counsel
      FAX No.:  (312) 279-1715

      With a copy to:

      Katz Randall Weinberg & Richmond
      333 West Wacker Drive
      Suite 1800
      Chicago, IL 60606-1288
      Attention: Benjamin J. Randall
      FAX No.: (312) 807-3903

12.   ADDITIONAL TERMS AND CONDITIONS. The additional terms and conditions set
      forth in Exhibit A and Exhibit B attached hereto are incorporated herein
      by this reference.

13.   PREPAYMENT. Borrower acknowledges that any prepayment of this Note will
      cause Lender to lose its interest rate yield on this Note and will
      possibly require that Lender reinvest any such prepayment amount in loans
      of a lesser interest rate yield (including, without limitation, in debt
      obligations other than first mortgage loans on commercial properties). As
      a consequence, Borrower agrees as follows, as an integral part of the
      consideration for Lender's making the Loan:

      13.1  RESTRICTIONS. Any voluntary prepayment of this Note: (a) is
            prohibited except during the last 3 months of the term, (b) is
            permitted in full only, and not in part, and (c) may only be made on
            the first day of a month.

      13.2  PREPAYMENT CHARGE. Except as provided below, if this Note is prepaid
            prior to the last three (3) months of the term, whether such
            prepayment is involuntary or upon acceleration of the principal
            amount of this Note by Lender following a Default, Borrower shall
            pay to Lender on the prepayment date (in addition to all other sums
            then due and owing to Lender under the Loan Documents) a prepayment
            charge equal to the greater of the following two amounts: (a) an
            amount equal to 1% of the then outstanding principal balance of the
            Loan; or (b) an amount equal to (i) the amount, if any, by which the
            sum of the present values as of the prepayment date of all unpaid
            principal and interest payments required under this Note, calculated
            by discounting such payments from their respective scheduled payment
            dates back to the prepayment date at a discount rate equal to the
            Periodic Treasury Yield (defined below) exceeds the outstanding
            principal balance of the Loan as of the prepayment date, multiplied
            by (ii) a fraction whose numerator is the amount of the prepayment
            and whose denominator is the outstanding principal balance of the
            Loan as of the prepayment date. Notwithstanding the


                                       6
<PAGE>
            foregoing, no prepayment charge shall apply in respect to any
            insurance or condemnation proceeds received by Lender and applied by
            Lender to the outstanding principal balance of the Loan. For
            purposes of the foregoing, "Periodic Treasury Yield" means (c) the
            annual yield to maturity of the actively traded non-callable United
            States Treasury fixed interest rate security (other than any such
            security which can be surrendered at the option of the holder at
            face value in payment of federal estate tax or which was issued at a
            substantial discount) that has a maturity closest to (whether
            before, on or after) the Maturity Date (or if two or more such
            securities have maturity dates equally close to the Maturity Date,
            the average annual yield to maturity of all such securities), as
            reported in The Wall Street Journal or other authoritative
            publication or news retrieval service on the fifth Business Day
            preceding the prepayment date, divided by (d) 12, if scheduled
            payment dates are monthly, or 4, if scheduled payment dates are
            quarterly.

      13.3  WAIVER. Borrower waives any right to prepay this Note except under
            the terms and conditions set forth in this Section and agrees that
            if this Note is prepaid, Borrower will pay the prepayment charge set
            forth above. Borrower hereby acknowledges that: (a) the inclusion of
            this waiver of prepayment rights and agreement to pay the prepayment
            charge for the right to prepay this Note was separately negotiated
            with Lender; (b) the economic value of the various elements of this
            waiver and agreement was discussed; (c) the consideration given by
            Borrower for the Loan was adjusted to reflect the specific waiver
            and agreement negotiated between Borrower and Lender and contained
            herein; and (d) this waiver is intended to comply with California
            Civil Code Section 2954.10.

                                               Borrower's Initials: ________

      13.4  INSURANCE PROCEEDS; CONDEMNATION AWARDS. Notwithstanding anything
            herein to the contrary, no prepayment charge shall be due and owing
            with respect to any involuntary prepayment resulting from Lender's
            application of any insurance proceeds or condemnation awards to the
            Loan.

14.   DEFEASANCE. At any time after the Lockout Expiration Date (defined below),
      Borrower may elect to cause Lender to release one or more of the
      Properties from the lien of any of the Mortgages and the other Loan
      Documents and to accept other collateral in substitution therefor, in
      accordance with the provisions of this Section ("Defeasance"), at
      Borrower's sole cost and expense. "Lockout Expiration Date" means the
      earlier of (a) the second anniversary of the "startup day" (as defined in
      Internal Revenue Code Section 860(G)(a)(9)) of any "real estate mortgage
      investment conduit" (as defined in Internal Revenue Code Section 860D)
      that holds this Note and (b) the third anniversary of the date of this
      Note. For purposes of this Section 14 only, (a) the values of the Casa del
      Sol III Property, the Apollo Village Property, the Woodland Hills
      Property, the Cabana Property, the Pickwick Village Property, the Indian
      Oaks Property and the Windmill Manor Property, expressed as a percentage
      of the total principal amount of the Loan ("Allocated Loan Percentage"),
      shall be deemed to be 13.3%, 10.6%, 23.6%, 16.9%, 16.8%, 6.2%, and 12.6%,
      respectively; and (b) the portion of the principal amount of the Loan
      allocable to each of the Properties ("Allocated Loan Amount") shall be
      deemed initially to be the Allocated Loan Percentage for such Property
      multiplied by the initial total principal amount of the Loan and,
      thereafter, the same such amount as the same shall be reduced by ratable
      application of payments of principal made under this Note from time to
      time.

      14.1  CONDITIONS. Borrower shall only have the right to cause a Defeasance
            if no Default has occurred and is continuing and all of the
            following conditions have been satisfied:

            a.    Notice. Borrower shall give at least 60 days but not more than
                  90 days' written notice to Lender specifying the date of
                  Borrower's intended Defeasance ("Release Date"), which date
                  shall be a scheduled payment date and such notice shall
                  indicate the principal amount of the Note to be defeased;

            b.    Payments. Borrower shall pay in full, on or before the Release
                  Date, all accrued and unpaid interest and all other sums due
                  under this Note and the other Loan Documents on or before the
                  Release Date, including, without limitation, (i) all costs and
                  expenses paid or incurred by Lender or its agents in
                  connection with the Defeasance, the purchase of the Defeasance
                  Collateral (defined below), the release of the applicable
                  Properties, the review of the proposed Defeasance Collateral
                  and the preparation of the Defeasance Security Agreement
                  (defined below) and related documentation, and (ii) any
                  revenue, documentary stamp, intangible or other taxes, charges
                  or fees due in connection with the transfer or assumption of
                  this Note or the Defeasance;

            c.    Deliveries. Borrower shall deliver the following items to
                  Lender on or before the Release Date:


                                       7
<PAGE>
                  (i)     immediately available funds ("Defeasance Deposit") in
                          an amount sufficient to enable Lender to purchase,
                          through means and sources customarily employed and
                          available to Lender, for the account of Borrower,
                          direct, non-callable obligations of the United States
                          of America that provide for payments prior, but as
                          close as possible, to all successive scheduled payment
                          dates occurring after the Release Date, with each such
                          payment being equal to or greater than one hundred
                          twenty five percent (125%) of the product of the
                          Allocated Loan Percentage for the Properties that are
                          the subject of the applicable Defeasance multiplied by
                          the installments of principal and interest required to
                          be paid under this Note (including, without
                          limitation, all amounts due on the Maturity Date) for
                          the balance of the term hereof ("Defeasance
                          Collateral"), each of which shall be duly endorsed by
                          the holder as directed by Lender or accompanied by a
                          written instrument of transfer in form and substance
                          satisfactory to Lender in its sole discretion
                          (including, without limitation, such instruments as
                          may be required by the depository institution holding
                          such securities or the issuer of such securities, as
                          the case may be, to effectuate book-entry transfers
                          and pledges through the book-entry facilities of such
                          institution) in order to perfect upon the delivery of
                          the Defeasance Security Agreement (as defined below)
                          the first priority security interest in the Defeasance
                          Collateral in favor of Lender;

                  (ii)    a pledge and security agreement, in form and substance
                          satisfactory to Lender in its reasonable discretion,
                          creating a first priority security interest in favor
                          of Lender in the Defeasance Collateral ("Defeasance
                          Security Agreement"), which shall provide, among other
                          things, that any payments generated by the applicable
                          Defeasance Collateral shall be paid directly to Lender
                          and applied by Lender to amounts then due and payable
                          under this Note allocable to the Allocated Loan Amount
                          for the Properties that are the subject of the
                          applicable Defeasance and that any excess received by
                          Lender from the applicable Defeasance Collateral over
                          the amounts payable by Borrower under this Note
                          allocable to the Allocated Loan Amount for the
                          Properties that are the subject of the applicable
                          Defeasance shall be first, paid to Lender and applied
                          by Lender to any other amounts then due and payable
                          under this Note, and second, refunded to Borrower
                          promptly after each scheduled payment date;

                  (iii)   a certificate of Borrower certifying that all of the
                          requirements of this Section 14.1 have been satisfied;

                  (iv)    an opinion of counsel for Borrower in form and
                          substance and delivered by counsel satisfactory to
                          Lender in its sole discretion, subject, however, to
                          standard enforceability opinion qualifications and
                          limitations, stating, among other things, that (aa)
                          Lender has a perfected first priority security
                          interest in the Defeasance Collateral, (bb) the
                          Defeasance Security Agreement is enforceable against
                          Borrower in accordance with its terms and (cc) any
                          REMIC Trust formed pursuant to a securitization will
                          not fail to maintain its status as a "real estate
                          mortgage investment conduit" within the meaning of
                          Internal Revenue Code Section 860D, as amended from
                          time to time, or any successor statute, as a result of
                          the Defeasance;

                  (v)     a certificate from a firm of independent certified
                          public accountants acceptable to Lender certifying
                          that the Defeasance Collateral satisfies the
                          requirements of Section 14.1c(i);

                  (vi)    written evidence from the applicable Rating Agencies
                          that the Defeasance will not result in a downgrading,
                          withdrawal or qualification of the respective ratings
                          in effect immediately prior to the Defeasance for any
                          securities issued in connection with the
                          securitization which are then outstanding;

                  (vii)   a conveyance of title to the Property to be released
                          to a Person other than Borrower; and

                  (viii)  such other certificates, documents or instruments as
                          Lender may reasonably require, including, without
                          limitation, such amendments to this Note and the other
                          Loan Documents as Lender reasonably deems appropriate
                          to reflect the Defeasance.


                                       8
<PAGE>
      14.2  RELEASE OF LIEN. Upon satisfaction of all conditions specified above
            with respect to any Defeasance, the Property subject to such
            Defeasance shall be released from the lien of the applicable
            Mortgage and the other Loan Documents to which it is subject, and
            the applicable Defeasance Collateral, any Defeasance Collateral
            previously delivered to Lender under this Note, the Remaining
            Properties and the proceeds thereof shall constitute the only
            collateral which shall secure the obligations of Borrower under this
            Note and the other Loan Documents. Simultaneously with the release
            of a Property pursuant to this Section, Lender shall release that
            portion of all cash or other accounts maintained pursuant to the
            Loan Documents relating to such Property. Lender shall, at
            Borrower's expense, execute and deliver any agreements reasonably
            requested by Borrower to release the lien of the applicable Mortgage
            from the applicable Property. Upon any Defeasance, this Note shall
            be automatically amended such that the Allocated Loan Percentage for
            each of the Remaining Properties after such Defeasance shall be
            equal to (A) one hundred (100) times (B) the Allocated Loan
            Percentage for such Remaining Property immediately prior to such
            Defeasance divided by (C) the sum of the Allocated Loan Percentages
            for all of the Remaining Properties immediately prior to such
            Defeasance (such that at all times the sum of the Allocated Loan
            Percentages for all Remaining Properties shall be equal to one
            hundred percent (100%)).

      14.3  DEFEASANCE DEPOSIT. Borrower hereby authorizes and directs Lender,
            using the means and sources customarily employed and available to
            Lender, to use the Defeasance Deposit to purchase the Defeasance
            Collateral as agent and for the account of Borrower. Payments from
            the Defeasance Collateral shall be made directly to Lender for
            application to the Loan as provided hereinabove. Any part of the
            Defeasance Deposit exceeding the amount necessary to purchase the
            Defeasance Collateral and to pay the other costs which Borrower is
            obligated to pay under this Section 14 shall be refunded to
            Borrower. Borrower agrees to pay all sums referred to in Section
            14.1b above on or before the Release Date.

      14.4  ASSIGNMENT AND ASSUMPTION. Upon the release of any of the Properties
            in accordance with this Section 14, Borrower shall, at the request
            of Lender, assign all of its right, title and interest in and to the
            pledged Defeasance Collateral, any Defeasance Collateral previously
            delivered to Lender under this Note and all its obligations and
            rights under this Note, the Defeasance Security Agreement, any
            Defeasance Security Agreement previously delivered to Lender under
            this Note and the other Loan Documents, to a successor entity
            designated by Borrower and approved by Lender in its sole
            discretion. Such successor entity shall execute an assumption
            agreement in form and substance satisfactory to Lender in its sole
            discretion pursuant to which it shall assume Borrower's obligations
            under this Note, the Defeasance Security Agreement, any Defeasance
            Security Agreement previously delivered to Lender under this Note
            and the other Loan Documents. As conditions to such assignment and
            assumption, Borrower shall: (a) deliver to Lender a new limited
            guaranty in form and substance satisfactory to Lender in its sole
            discretion executed by the principals of such successor entity; (b)
            deliver to Lender an opinion of counsel in form and substance and
            delivered by counsel satisfactory to Lender in its sole discretion
            subject, however, to standard enforceability opinion qualifications
            and limitations, stating, among other things, that such assumption
            agreement is enforceable against Borrower and such successor entity
            in accordance with its terms and that this Note, the Defeasance
            Security Agreement, any Defeasance Security Agreement previously
            delivered to Lender under this Note and the other Loan Documents, as
            so assumed, are enforceable against such successor entity in
            accordance with their respective terms; and (c) pay all costs and
            expenses incurred by Lender or its agents in connection with such
            assignment and assumption (including, without limitation, the review
            of the proposed transferee and the preparation of the assumption
            agreement and related documentation). Upon such assumption, Borrower
            shall be relieved of its obligations under this Note, the Defeasance
            Security Agreement, any Defeasance Security Agreement previously
            delivered to Lender under this Note and the other Loan Documents
            other than those obligations which are specifically intended to
            survive the payment of the Loan or other termination, satisfaction
            or assignment of this Note, the Defeasance Security Agreement, any
            Defeasance Security Agreement previously delivered to Lender under
            this Note or the other Loan Documents or Lender's exercise of its
            rights and remedies under any of such documents and instruments.

15.   WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY
      AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
      RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
      CONNECTION WITH, THIS NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
      CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
      ACTIONS OF LENDER OR BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
      LENDER TO MAKE THE


                                       9
<PAGE>
      LOAN TO BORROWER. BY ACCEPTANCE OF THIS EXECUTED NOTE, LENDER AGREES TO
      THE FOREGOING WAIVER.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       10
<PAGE>
"BORROWER"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By: MHC-QRS STAGECOACH, INC.,
    a  Delaware corporation,
    its Managing Member


    By: /s/ John M. Zoeller
       ----------------------------------
    Name: John M. Zoeller
    Its: Vice President, Chief Financial
         Officer and Treasurer


                                       11
<PAGE>
                                                            Loan No. 31-0900553R

                          EXHIBIT A TO PROMISSORY NOTE
                         ADDITIONAL TERMS AND CONDITIONS

This Exhibit A is attached to and forms a part of that Promissory Note Secured
by Mortgages ("Note") executed by MHC STAGECOACH, L.L.C., a Delaware limited
liability company ("Borrower") in favor of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Lender").

1.    DISBURSEMENT OF LOAN PROCEEDS; LIMITATION OF LIABILITY. Borrower hereby
      authorizes Lender to disburse the proceeds of the Loan, after deducting
      any and all fees owed by Borrower to Lender in connection with the Loan,
      to Commonwealth Land Title Insurance Company (the "Title Company"). With
      respect to such disbursement, Borrower understands and agrees that Lender
      does not accept responsibility for errors, acts or omissions of others,
      including, without limitation, the escrow company, other banks,
      communications carriers or clearinghouses through which the transfer of
      Loan proceeds may be made or through which Lender receives or transmits
      information, and no such entity shall be deemed Lender's agent. As a
      consequence, Lender shall not be liable to Borrower for any actual
      (whether direct or indirect), consequential or punitive damages which may
      arise with respect to the disbursement of Loan proceeds, whether or not
      (a) any claim for such damages is based on tort or contract, or (b) either
      Lender or Borrower knew or should have known of the likelihood of such
      damages in any situation.

2.    FINANCIAL STATEMENTS.

      2.1   STATEMENTS REQUIRED. During the term of the Loan and while any
            liabilities of Borrower to Lender under any of the Loan Documents
            remain outstanding and unless Lender otherwise consents in writing,
            Borrower shall provide to Lender the following:

            a.    OPERATING STATEMENT. Not later than 10 days after and as of
                  each calendar month during the first 6 months of the term of
                  the Loan, and thereafter not later than 30 days after and as
                  of the end of each calendar quarter, an operating statement,
                  signed and dated by Borrower and in a form acceptable to
                  Lender, showing all revenues and expenses during such month or
                  quarter and year-to-date, relating to each of the Properties,
                  including, without limitation, all information requested under
                  any of the Loan Documents;

            b.    RENT ROLL. Not later than 10 days after and as of each
                  calendar month during the first 6 months of the term of the
                  Loan, and thereafter not later than 30 days after and as of
                  the end of each calendar quarter, a rent roll signed and dated
                  by Borrower and in a form acceptable to Lender, showing the
                  following lease information with regard to each tenant: the
                  name of the tenant, monthly or other periodic rental amount,
                  date of commencement of the lease, and payment status;

            c.    BALANCE SHEET. If requested by Lender, not later than 90 days
                  after and as of the end of each fiscal year, a balance sheet,
                  signed and dated by Borrower and in a form acceptable to
                  Lender (or audited financial statements if Borrower obtains
                  them), showing all assets and liabilities of Borrower; and

            d.    OTHER INFORMATION. From time to time, upon Lender's delivery
                  to Borrower of at least 10 days' prior written notice, such
                  other information with regard to Borrower, principals of
                  Borrower, guarantors or the Properties as Lender may
                  reasonably request in writing.

      2.2   FORM; WARRANTY. Borrower agrees that all financial statements to be
            delivered to Lender pursuant to Section 2.1 shall: (a) be complete
            and correct in all material respects; (b) present fairly the
            financial condition of the party; (c) disclose all liabilities that
            are required to be reflected or reserved against; and (d) be
            prepared in accordance with the same accounting standard used by
            Borrower to prepare the financial statements delivered to and
            approved by Lender in connection with the making of the Loan or
            other accounting standards acceptable to Lender. Borrower shall be
            deemed to warrant and represent that, as of the date of delivery of
            any such financial statement, there has been no material adverse
            change in financial condition, nor have any assets or properties
            been sold, transferred, assigned, mortgaged, pledged or encumbered
            since the date of such


                                    EXHIBIT A
                                        1
<PAGE>
            financial statement except as disclosed by Borrower in a writing
            delivered to Lender. Borrower agrees that all rent rolls and other
            information to be delivered to Lender pursuant to Section 2.1 shall
            not contain any misrepresentation or omission of a material fact.

      2.3   LATE CHARGE. If any financial statement, leasing schedule or other
            item required to be delivered to Lender pursuant to Section 2.1 is
            not timely delivered, Borrower shall promptly pay to Lender, as a
            late charge, the sum of $500 per item. In addition, Borrower shall
            promptly pay to Lender an additional late charge of $500 per item
            for each full month during which such item remains undelivered
            following written notice from Lender. Borrower acknowledges that
            Lender will incur additional expenses as a result of any such late
            deliveries, which expenses would be impracticable to quantify, and
            that Borrower's payments under this Section 2.3 are a reasonable
            estimate of such expenses. Notwithstanding anything to the contrary
            contained herein, once during each year of the term of the Loan
            Lender will give notice to Borrower of its failure to provide any
            item required to be delivered to Lender pursuant to Section 2.1 and
            if any such items are not delivered within three (3) Business Days
            following such notice, then at such time the late charge specified
            herein shall take effect.

3.    IMPOUNDS.

      3.1   AMOUNTS. Borrower shall deposit with Lender the amounts ("Impounds")
            stated below on the dates stated below, for the purpose of paying
            the costs stated below:

            a.    TAXES. (i) $364,529.00 on the Disbursement Date, and (ii) on
                  the first payment date on which both principal and interest
                  under the Loan are payable and on each payment date
                  thereafter, an amount estimated from time to time by Lender in
                  its reasonable discretion to be sufficient to pay for taxes
                  and other liabilities payable by Borrower under Section 6.9 of
                  each of the Mortgages. The initial estimated monthly amount to
                  be deposited by Borrower on each payment date is $46,881.00.

            b.    INSURANCE. (i) $35,144.00 on the Disbursement Date, and (ii)
                  on the first payment date on which both principal and interest
                  under the Loan are payable and on each payment date
                  thereafter, an amount estimated from time to time by Lender in
                  its reasonable discretion to be sufficient to pay for premiums
                  for insurance payable by Borrower under Section 6.10 of each
                  of the Mortgages. The initial estimated monthly amount to be
                  deposited by Borrower on each payment date is $4,393.00.

            c.    CAPITAL EXPENDITURES. $10,218 on the first payment date on
                  which both principal and interest under the Loan are payable
                  and on each payment date thereafter for payment or
                  reimbursement of Capital Expenditures (defined below).

      3.2   APPLICATION.

            a.    TAXES. If no Default exists, Lender shall apply the Impounds
                  in a timely fashion to the payment of the taxes and other
                  liabilities stated above.

            b.    INSURANCE. If no Default exists, Lender shall apply the
                  Impounds to the payment of the insurance premiums stated
                  above.

            c.    CAPITAL EXPENDITURES. If no Default exists, Lender shall
                  release the Impounds to Borrower once a quarter, no less than
                  $10,000.00 per release, to pay or reimburse Borrower for the
                  Capital Expenditures (defined below); provided, however, that
                  Lender shall have received and approved each of the following:

                  (i)   Borrower's written request for such release, describing
                        the Capital Expenditures and certifying that all Capital
                        Expenditures have been paid or incurred by Borrower for
                        work completed lien-free and in a workmanlike manner;

                  (ii)  copies of invoices supporting the request for such
                        release; and


                                    EXHIBIT A
                                        2
<PAGE>
                  (iii) if deemed necessary by Lender, an inspection report
                        signed by an inspector selected by Lender, whose fees
                        and expenses shall be paid by Borrower, and such other
                        evidence as Lender shall reasonably require, confirming
                        borrower's certification.

      3.3   GENERAL. Any portion of the Impounds that exceeds the amount
            required for payment of the foregoing costs shall be repaid to
            Borrower upon Borrower's compliance with the foregoing. Reference is
            made to Section 6.12(b) of each of the Mortgages for a description
            of the account into which the Impounds shall be deposited and for a
            description of certain rights and remedies of Lender with respect to
            amounts in such account.

      3.4   MAINTENANCE AND CONSTRUCTION.

            a.    CAPITAL EXPENDITURES. Borrower shall complete the lien-free
                  performance or installation of the Capital Expenditures (as
                  defined below) from time to time as necessary, in a
                  workmanlike manner and in accordance with all applicable laws,
                  ordinances, rules and regulations. "Capital Expenditures"
                  shall mean major repairs and replacements to maintain or
                  improve the Properties, including, without limitation,
                  structural repairs, roof replacements, HVAC repairs and
                  replacements, mechanical and plumbing repairs and replacements
                  and boiler repair and replacements.

            b.    RIGHT OF INSPECTION. Lender shall have the right to enter upon
                  the Properties at all reasonable times, subject to reasonable
                  notice except in the event of an emergency, in which case no
                  notice shall be required, to inspect all work for the purpose
                  of verifying information disclosed or required pursuant to
                  this Note, in a manner which does not unreasonably interfere
                  with the operations on the Properties. Notwithstanding the
                  foregoing, Lender shall not be obligated to supervise or
                  inspect any work or to inform Borrower or any third party
                  regarding any aspect of any work.

      3.5   RELEASE. Lender shall release any Impounds to Borrower through a
            funds transfer of such Impounds initiated by Lender to the following
            account or such other account as Borrower specifies in a notice to
            Lender:

                     Bank Name:  Bank of America
                                 -------------------------------------
               ABA Routing No.:  071-000039
                                 -------------------------------------
                  Account Name:  7366-9-01095
                                 -------------------------------------
                     Reference:  MHC Operating Limited Partnership
                                 -------------------------------------
                        Advise:  Megan McBride (312) 828-6274
                                 -------------------------------------

            Lender will determine the funds transfer system and other means to
            be used in making each such release. Borrower agrees that each such
            funds transfer initiated by Lender will be deemed to be a funds
            transfer properly authorized by Borrower, even if the transfer is
            not actually properly authorized by Borrower. Borrower acknowledges
            that Lender will rely on the account number and ABA routing number
            set forth above or specified in a notice from Borrower to Lender,
            even if such account number identifies an account with a name
            different from the name so specified, or the routing number
            identifies a bank different from the bank so specified. If Borrower
            learns of any error in the transfer of any Impounds or of any
            transfer which was not properly authorized, Borrower shall notify
            Lender as soon as possible in writing but in no case more than 14
            days after Lender's first confirmation to Borrower of such transfer.

      3.6   LETTER OF CREDIT.

            a.    Delivery to Lender. Lender has agreed that in lieu of the
                  Capital Expenditure Impounds required by Subsection 3.1(d)
                  above, Lender will accept and Borrower may deliver within ten
                  (10) Business Days after the Disbursement Date an irrevocable
                  standby letter of credit (such letter of credit, together with
                  any replacement or renewal thereof, is referred to herein as
                  the "Borrower Letter of Credit") in the aggregate principal
                  amount of $306,991 issued by an issuer reasonably acceptable
                  to Lender in favor of Lender, in form and content reasonably
                  satisfactory to Lender. Subject to the provisions of this
                  Section 3.6, Lender shall retain custody of any Borrower
                  Letter of Credit until such time as the Loan is repaid in full
                  (other than through judicial or nonjudicial foreclosure of the
                  Mortgages or deeds in lieu thereof).


                                    EXHIBIT A
                                        3
<PAGE>
            b.    Right to Draw. Lender shall have the right to draw upon the
                  Borrower Letter of Credit in the full amount thereof upon the
                  occurrence of (i) any Default or (ii) the receipt by Lender of
                  notice stating that the Borrower Letter of Credit will not be
                  renewed (as provided for in such Borrower Letter of Credit)
                  and, in the event of such nonrenewal (whether by notice by the
                  issuing bank or otherwise), the failure of Borrower to deliver
                  a substitute or replacement letter of credit in form and
                  content satisfactory to Lender prior to the date that is
                  thirty (30) days prior to the expiration of the Borrower
                  Letter of Credit.

            c.    Application of Proceeds. The proceeds of any draw under the
                  Borrower Letter of Credit shall be retained by Lender as
                  Impounds and shall be governed by the terms and conditions of
                  this Note and the other Loan Documents.

            d.    Release of the Borrower Letter of Credit. Lender shall
                  surrender the Borrower Letter of Credit to Borrower and refund
                  to Borrower all sums drawn that Lender is holding (and have
                  not otherwise been applied or spent) at such time as the Loan
                  is repaid in full (other than through judicial or nonjudicial
                  foreclosure of the Mortgages or deeds in lieu thereof).

4.    ONE-TIME RIGHT OF TRANSFER OF PROPERTIES TO THIRD PARTY. Notwithstanding
      anything to the contrary contained in Section 6.15 of the Mortgages,
      Lender shall, one time only, consent to the voluntary sale or exchange of
      all (but not less than all) of the Properties to a bona-fide third party
      purchaser ("Transfer"), if no Default has occurred and is continuing, no
      event has occurred which, with the giving of notice or the passage of
      time, or both, would constitute a Default and all of the following
      conditions have been satisfied:

      4.1   Lender receives at least sixty-five (65) days prior written notice
            of the proposed Transfer;

      4.2   Lender's reasonable determination that the proposed purchaser, the
            proposed guarantor, if any, and the Properties all satisfy Lender's
            then applicable credit review and underwriting standards, taking
            into consideration, among other things, (a) any decrease in the
            Properties' cash flow which would result from any increase in real
            property taxes due to any anticipated reassessment of the Properties
            for tax purposes and (b) any then applicable requirement of Lender
            that such proposed borrowing entity constitute a single purpose
            asset and bankruptcy remote entity which, at the time of the
            Transfer, shall be in full compliance with the representations and
            covenants set forth in Section 5.2 of the Mortgages (as such
            representations may be reasonably modified by Lender after reviewing
            the ownership structure of the proposed borrowing entity);

      4.3   if required by Lender, delivery to Lender of a non-consolidation
            opinion from a law firm reasonably acceptable to Lender and in form
            and substance reasonably satisfactory to Lender;

      4.4   Lender's reasonable determination that the proposed purchaser
            possesses satisfactory recent experience in the ownership and
            operation of properties comparable to the Properties;

      4.5   the execution and delivery to Lender of such documents and
            instruments as Lender shall reasonably require, in form and content
            reasonably satisfactory to Lender, including, without limitation,
            (i) an assumption agreement under which the purchaser assumes all
            obligations and liabilities of Borrower under this Note and the
            other Loan Documents and agrees to periodically pay such new or
            additional Impounds to Lender as Lender may reasonably require, and
            (ii) a consent to the Transfer by any existing guarantor and a
            reaffirmation of such guarantor's obligations and liabilities under
            any guaranty made in connection with the Loan or a new guaranty
            executed by a new guarantor reasonably satisfactory to Lender;

      4.6   if required by Lender, delivery to Lender of evidence of title
            insurance reasonably satisfactory to Lender insuring Lender that the
            liens of the Mortgages and the priority thereof will not be impaired
            or affected by reason of such Transfer of the Properties;

      4.7   payment to Lender of an assumption fee equal to 0.5% of the then
            outstanding principal balance of this Note;

      4.8   if reasonably required by Lender, deposit with Lender of any new or
            additional Impounds;

      4.9   reimbursement to Lender of any and all costs and expenses paid or
            incurred by Lender in connection with such Transfer, including,
            without limitation, all in-house or outside counsel attorneys' fees,
            title insurance fees,


                                    EXHIBIT A
                                        4
<PAGE>
            appraisal fees, inspection fees, environmental consultants' fees and
            any fees or charges of the applicable Rating Agencies;

      4.10  if required by Lender, delivery to Lender of written evidence from
            the applicable Rating Agencies that such Transfer will not result in
            a downgrading, withdrawal or qualification of the respective ratings
            in effect immediately prior to the Transfer for any securities
            issued in connection with the securitization of the Loan which are
            then outstanding; and

      4.11  any third party consents or approvals that are required in order to
            consummate the contemplated transaction shall have been obtained and
            Lender shall be provided with satisfactory evidence of same.

Lender shall fully release Borrower and any existing guarantor from any further
obligation or liability to Lender under this Note and the other Loan Documents
upon the assumption by the purchaser and any new guarantor of all such
obligations and liabilities and the satisfaction of all other conditions
precedent to a Transfer in accordance with the provisions of this Section.

5.    TRANSFER OF PROPERTY TO AN AFFILIATE. Notwithstanding anything to the
      contrary contained in Section 6.15 of the Mortgage, Lender shall one time
      only with respect to each of the Properties consent to the voluntary sale
      or exchange of such Property by deed to an Affiliate of Manufactured Home
      Communities, Inc. ("MHC") (such sale or exchange being herein referred to
      as an "Affiliate Transfer"), if no Default has occurred and is continuing,
      no event has occurred which, with the giving of notice or the passage of
      time, or both, would constitute a Default and all of the following
      conditions have been satisfied:

      5.1   Lender receives at least sixty-five (65) days prior written notice
            of the proposed Affiliate Transfer;

      5.2   Lender's reasonable determination that (a) such Property's cash flow
            will not be materially and adversely impacted due to any increase in
            real property taxes resulting from the Affiliate Transfer and (b)
            the Affiliate of MHC satisfies any then applicable requirement of
            Lender that such proposed borrowing entity constitute a single
            purpose asset and bankruptcy remote entity which, at the time of the
            transfer, shall be in full compliance with the representations and
            covenants set forth in Section 5.2 of the Mortgage encumbering such
            Property (as such representations may be reasonably modified by
            Lender after reviewing the ownership structure of the proposed
            borrowing entity);

      5.3   if required by Lender, delivery to Lender of a non-consolidation
            opinion from a law firm reasonably acceptable to Lender and in form
            and substance reasonably satisfactory to Lender;

      5.4   the execution and delivery to Lender of such documents and
            instruments as Lender shall reasonably require, in form and content
            reasonably satisfactory to Lender, including, without limitation,
            (i) an assumption agreement under which the purchaser assumes all
            obligations and liabilities of Borrower under this Note and the
            other Loan Documents and agrees to periodically pay such new or
            additional Impounds to Lender as Lender may reasonably require, and
            (ii) a consent to the Affiliate Transfer by any existing guarantor
            and a reaffirmation of such guarantor's obligations and liabilities
            under any guaranty made in connection with the Loan or a new
            guaranty executed by a new guarantor reasonably satisfactory to
            Lender;

      5.5   if required by Lender, delivery to Lender of evidence of title
            insurance reasonably satisfactory to Lender insuring Lender that the
            lien of such Mortgage and the priority thereof will not be impaired
            or affected by reason of such Affiliate Transfer of any such
            Property;

      5.6   reimbursement to Lender of any and all costs and expenses paid or
            incurred by Lender in connection with such Affiliate Transfer,
            including, without limitation, all in-house or outside counsel
            attorneys' fees, title insurance fees, appraisal fees, inspection
            fees, environmental consultants' fees and any fees or charges of the
            applicable Rating Agencies;

      5.7   if required by Lender, delivery to Lender of written evidence from
            the applicable Rating Agencies that such Affiliate Transfer will not
            result in a downgrading, withdrawal or qualification of the
            respective ratings in effect immediately prior to the Affiliate
            Transfer for any securities issued in connection with the
            securitization of the Loan which are then outstanding; and


                                    EXHIBIT A
                                        5
<PAGE>
      5.8   any third party consents or approvals that are required in order to
            consummate the contemplated transaction shall have been obtained and
            Lender shall be provided with satisfactory evidence of same.

      Lender shall fully release Borrower from any further obligation or
      liability to Lender under this Note and the other Loan Documents upon the
      assumption by the Affiliate of all such obligations and liabilities and
      the satisfaction of all other conditions precedent to an Affiliate
      Transfer in accordance with the provisions of this Section. In addition to
      the Affiliate Transfers permitted above, Lender's consent shall not be
      required for the normal day to day trading of shares of MHC in the public
      securities market and such transactions shall not constitute an Affiliate
      Transfer hereunder.

6.    REPLACEMENT PROPERTIES. Upon at least 65 days' but not more than 90 days'
      written notice to Lender specifying the date of Borrower's intended
      substitution ("Substitution Date"), which date shall be a scheduled
      payment date, Borrower may elect to cause Lender to release one or more of
      the Properties from the lien of the Mortgage encumbering such Property,
      provided that simultaneously with such release, Borrower shall execute and
      deliver to Lender, as security for the Loan, a mortgage, deed of trust or
      deed to secure debt, as applicable ("Replacement Mortgage"), encumbering a
      manufactured housing community property ("Replacement Property"), in
      substantially the same form as the Mortgage to be released, such other
      documents as Lender may reasonably require for the purpose of granting
      Lender a first priority, perfected lien on and security interest in such
      Replacement Property and all related rents, personal property, reserves
      and escrows on the same terms and conditions as the liens and security
      interests granted to Lender in such Property on the Effective Date, and
      such other modifications and amendments to the Loan Documents as may be
      necessitated due to the substitution of the Replacement Property for the
      Property that will be released (all of the foregoing, together with the
      Replacement Mortgage, the "Replacement Documents").

      6.1   Borrower's right to obtain a release of a Property shall also be
            subject to the following conditions and restrictions:

            a.    no Default shall have occurred and be continuing and no event
                  has occurred which, with the giving of notice or the passage
                  of time, or both, would constitute a Default;

            b.    Borrower shall not, over the life of the Loan, be entitled to
                  replace Properties having, in the aggregate, an Allocated Loan
                  Amount of more twenty-five percent (25%) of the Loan;

            c.    at least sixty-five (65) days prior to the proposed date of
                  such release, Lender shall have obtained an appraisal of the
                  Replacement Property and, if required by Lender, updated
                  appraisals of the Remaining Properties, prepared by Cushman &
                  Wakefield, or such other third-party real estate professional
                  that is approved by the Rating Agencies, indicating that the
                  Loan-to-Value Ratio as of the date of such release, obtained
                  by using the "as-is" value of the proposed Replacement
                  Property set forth in such appraisal together with the "as-is"
                  value of the Remaining Properties as of the date of such
                  proposed release if new appraisals are required by Lender for
                  the Remaining Properties, or as of the Disbursement Date if
                  new appraisals are not required by Lender, is at least equal
                  to the Loan-to-Value Ratio existing on the Disbursement Date
                  which is sixty-four percent (64%);

            d.    Lender shall have obtained a Phase I environmental report and,
                  if recommended by such Phase I report, a Phase II
                  environmental report prepared by SI Group, or such other
                  environmental consultant as is approved by the Rating
                  Agencies, stating that the Replacement Property complies with
                  all applicable environmental laws;

            e.    Lender shall have obtained an engineering report, prepared by
                  SI Group, or such other consulting engineer as is approved by
                  the Rating Agencies, stating that the Replacement Property
                  complies with all applicable building laws and does not
                  require performance of deferred maintenance, or if remedial
                  steps are required to effect such compliance or such deferred
                  maintenance, identifying such steps and projecting the cost
                  thereof, which may not exceed $10,000, and in which case
                  Borrower shall be required to deposit with Lender an amount
                  equal to one hundred fifty percent (150%) of such projected
                  costs, which shall be deemed Impounds to be released
                  substantially in accordance with the provisions contained in
                  Section 3 of Exhibit A to this Note;

            f.    Borrower shall have caused to be delivered all leases, title
                  commitments, title insurance policies, surveys, hazard and
                  liability insurance, evidence of compliance with zoning and
                  other laws, legal


                                    EXHIBIT A
                                        6
<PAGE>
                  opinions and other items of due diligence with respect to the
                  Replacement Property as the Rating Agencies may require, all
                  of which shall be in form and substance acceptable to the
                  Rating Agencies;

            g.    the Debt Service Coverage Ratio, calculated by substituting
                  the Net Operating Income of the Replacement Property for the
                  Net Operating Income of the Property to be released, combined
                  with the Net Operating Income of the Remaining Properties, as
                  of the time of such release shall be at least equal to the
                  Debt Service Coverage Ratio existing on the Disbursement Date
                  which is 1.55 to 1;

            h.    the Person transferring the Replacement Property to Borrower
                  shall be solvent and shall be making such transfer on an arm's
                  length basis and for fair consideration, and Borrower and such
                  Person shall deliver certifications and evidence to such
                  effect and such other certifications as Lender shall
                  reasonably require to assure itself that the substitution does
                  not constitute a fraudulent conveyance on the part of any
                  Person (assuming such Person was not solvent at the time of
                  substitution);

            i.    Borrower shall comply with such other terms and conditions as
                  the Rating Agencies shall require in connection with such
                  substitution;

            j.    the organizational documents of Borrower shall, if required,
                  be modified to permit the ownership and operation of the
                  Replacement Property;

            k.    an opinion of counsel for Borrower in form and substance and
                  delivered by counsel satisfactory to Lender in its sole
                  discretion stating, among other things, that any REMIC Trust
                  formed pursuant to a securitization will not fail to maintain
                  its status as a "real estate mortgage investment conduit"
                  within the meaning of Internal Revenue Code Section 860D, as
                  amended from time to time, or any successor statute, as a
                  result of the release of such Property and the substitution of
                  the Replacement Property;

            l.    Borrower shall transfer title to the Property to be released
                  to a Person other than Borrower or any other borrower;

            m.    written evidence from the applicable Rating Agencies that the
                  proposed release of such Property and substitution of the
                  Replacement Property will not result in a downgrading,
                  withdrawal or qualification of the respective ratings in
                  effect immediately prior to such release and substitution for
                  any securities issued in connection with the securitization
                  which are then outstanding;

            n.    any third party consents or approvals that are required in
                  order to consummate the contemplated transaction shall have
                  been obtained and Lender shall be provided with satisfactory
                  evidence of same;

            o.    delivery to Lender of evidence of title insurance reasonably
                  satisfactory to Lender; and

            p.    reimbursement to Lender of any and all costs and expenses paid
                  or incurred by Lender in connection with the request to
                  substitute a Replacement Property, including, without
                  limitation, all in-house or outside counsel attorneys' fees,
                  title insurance fees, appraisal fees, inspection fees,
                  environmental consultants' fees and any fees or charges of the
                  applicable Rating Agencies.


                                    EXHIBIT A
                                       7
<PAGE>
                                                            Loan No. 31-0900553R

                          EXHIBIT B TO PROMISSORY NOTE
                   LOAN DOCUMENTS AND OTHER RELATED DOCUMENTS

This Exhibit B is attached to and forms a part of that Promissory Note Secured
by Mortgages ("Note") executed by MHC STAGECOACH, L.L.C., a Delaware limited
liability company ("Borrower") in favor of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Lender").

1.    LOAN DOCUMENTS. The documents numbered 1.1 through 1.13 below of even date
      herewith (unless otherwise specified) and any amendments, modifications
      and supplements thereto which have received the prior written approval of
      Lender and any documents executed in the future that are approved by
      Lender and that recite that they are "Loan Documents" for purposes of this
      Note are collectively referred to as the "Loan Documents".

      1.1   This Note;

      1.2   Casa del Sol III Deed of Trust, Apollo Village Deed of Trust,
            Woodland Hills Deed of Trust, Cabana Deed of Trust, Pickwick Village
            Mortgage, Indian Oaks Mortgage and Windmill Manor Mortgage

      1.3   State of Arizona Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.4   State of Colorado Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.5   State of Delaware Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.6   State of Florida Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.7   State of Illinois Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.8   State of Nevada Uniform Commercial Code - Financing Statements -
            Form UCC-1;

      1.9   Limited Liability Company Borrowing Certificate;

      1.10  Corporate Resolution Authorizing Limited Liability Company Activity
            and Certificate of Incumbency;

      1.11  Corporate Resolution Authorizing Execution of Guaranty and
            Endorsement and Hypothecation of Property and Certificate of
            Incumbency;

      1.12  Assignment of Management Contracts and Consent and Subordination of
            Manager; and

      1.13  O&M Plan Letters executed for Casa del Sol III Property, Cabana
            Property, Apollo Village Property, Pickwick Village Property, Indian
            Oaks Property, and Woodland Hills Property, respectively.

2.    OTHER RELATED DOCUMENTS WHICH ARE NOT LOAN DOCUMENTS.

      2.1   Flood Hazard Notice with respect to Pickwick Property;

      2.2   Limited Guaranty; and

      2.3   Bankruptcy Non-Consolidation Opinion of Borrower's legal counsel.


                                    EXHIBIT B
                                        1
<PAGE>
Recording requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC #A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention: CMO Loan Admin.
Loan No.: 31-0900553R
Property Name: Windmill Manor

Prepared by:

Lee M. Smolen
Sidley Austin Brown & Wood
10 South Dearborn
Chicago, Illinois 60603

                  MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND
               LEASES AND SECURITY AGREEMENT (AND FIXTURE FILING)

                                                                   July 31, 2001

THIS MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(AND FIXTURE FILING) (the "Mortgage") is made and entered into by and among MHC
STAGECOACH, L.L.C., a Delaware limited liability company ("Mortgagor"), having
an address at c/o Manufactured Home Communities, Inc., Two North Riverside
Plaza, Suite 800, Chicago, Illinois 60606, and WELLS FARGO NATIONAL BANK,
NATIONAL ASSOCIATION ("Lender" or "Mortgagee").

THIS MORTGAGE EVIDENCES A MULTI-STATE LOAN WHICH IS SECURED BY REAL PROPERTY
LOCATED OUTSIDE THE STATE OF FLORIDA AND REAL PROPERTY LOCATED IN BREVARD,
VOLUSIA, AND MANATEE COUNTIES, FLORIDA. FLORIDA DOCUMENTARY STAMP TAX IN THE
AMOUNT OF $61,250.00 AND FLORIDA NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX
IN THE AMOUNT OF $35,000.00 ARE BEING PAID UPON RECORDATION OF ONE OF THE
FLORIDA MORTGAGES IN THE PUBLIC RECORDS OF VOLUSIA COUNTY, FLORIDA. ATTACHED
HERETO AS EXHIBIT B IS A DESCRIPTION OF THE CALCULATION OF LIABILITY FOR
DOCUMENTARY STAMP TAX AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX.


                                     Page 1
<PAGE>
                                 R E C I T A L S

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Mortgagee, and Mortgagee proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Mortgage, payable to
      the order of Mortgagee in the principal amount of the Loan. The maturity
      date of the Loan is September 1, 2011.

B.    The loan documents include this Mortgage, the Note and the other documents
      described in the Note as Loan Documents ("Loan Documents").

                              ARTICLE I. MORTGAGE

                  1.1 GRANT. For the purposes of and upon the terms and
conditions of this Mortgage, Mortgagor irrevocably mortgages, grants, bargains,
sells, conveys, transfers, pledges, sets over and assigns, and grants a security
interest to Mortgagee, its successors and assign, with right of entry and
possession, all of Mortgagor's right, title and interest, whether now owned or
hereafter acquired, in or to all of the following:

                  (a) That real property ("Land") located in Bradenton, county
of Manatee, state of Florida, and more particularly described on Exhibit A
attached hereto;

                  (b) All appurtenances, easements, rights of way, water and
water rights, pumps, pipes, flumes and ditches and ditch rights, water stock,
ditch and/or reservoir stock or interests, royalties, development rights and
credits, air rights, minerals, oil rights, all sewer capacity rights, and gas
rights, now or later used or useful in connection with, appurtenant to or
related to the Land;

                  (c) All buildings, structures, facilities, other improvements
and fixtures now or hereafter located on the Land;

                  (d) All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and substitutions
therefor used in the operation or occupancy of the Land, it being intended by
the parties that all such items shall be conclusively considered to be a part of
the Land, whether or not attached or affixed to the Land;

                  (e) All land lying in the right-of-way of any street, road,
avenue, alley or right-of-way opened, proposed or vacated, and all sidewalks,
strips and gores of land adjacent to or used in connection with the Land;

                  (f) All additions and accretions to the property described
above;

                  (g) All licenses, authorizations, certificates, variances,
consents, approvals and other permits now or hereafter pertaining to the Land
and all estate, right, title and interest of Mortgagor in, to, under or derived
from all tradenames or business names relating to the Land or the present or
future development, construction, operation or use of the Land; and


                                     Page 2
<PAGE>
            (h) All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.

                        ARTICLE II. OBLIGATIONS SECURED

            2.1 OBLIGATIONS SECURED. Mortgagor makes the foregoing grant and
assignment for the purpose of securing the following obligations ("Secured
Obligations"):

            (a) Full and punctual payment to Mortgagee of all sums at any time
owing under the Note;

            (b) Payment and performance of all covenants and obligations of
Mortgagor under this Mortgage, including, without limitation, indemnification
obligations and advances made to protect the Property;

            (c) Payment and performance of all additional covenants and
obligations of Borrower and Mortgagor under the Loan Documents;

            (d) Payment and performance of all covenants and obligations, if
any, which any rider attached as an exhibit to this Mortgage recites are secured
hereby;

            (e) Payment and performance of all future advances and other
obligations that the then record owner of all or part of the Property may agree
to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Mortgagee, when the obligation is evidenced by a writing which
recites that it is secured by this Mortgage;

            (f) All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges and loan fees;
and

            (g) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without limitation:
(i) modifications of the required principal payment dates or interest payment
dates or both, as the case may be, deferring or accelerating payment dates
wholly or partly; and (ii) modifications, extensions or renewals at a different
rate of interest whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

            2.2 FUTURE ADVANCES. This Mortgage is given to secure not only the
Secured Obligations, but also such future advances, whether such advances are
obligatory or are to be made at the option of Mortgagee or the holder hereof, or
otherwise as are made within twenty years from the date hereof, to the same
extent as if such future advances were made on the date of the execution of this
Mortgage. The total amount of Secured Obligations that may be so secured by this
Mortgage may be increased or decreased from time to time, but the total unpaid
balance so secured at any one time shall not exceed twice the face amount of the
Note, plus interest thereon, and any disbursements made under this Mortgage for
the payment of impositions, taxes, assessments, levies, insurance, or otherwise
with interest on such disbursements as provided for


                                     Page 3
<PAGE>
herein, plus any increases in the principal balance as the result of negative
amortization or deferred interest, if any. It is agreed that any additional sum
or sums advanced by Mortgagee pursuant to the terms hereof shall be equally
secured with and have the same priority as the original Secured Obligations and
shall be subject to all of the terms, provisions and conditions of this
Mortgage, whether or not such additional loans or advances are evidenced by
other promissory notes or other guaranties of Mortgagor and whether or not
identified by a recital that it or they are secured by this Mortgage. It is
further agreed that any additional promissory note or guaranty or promissory
notes or guaranties executed and delivered pursuant to this paragraph shall
automatically be deemed to be included in the term "Note" wherever it appears in
the context of this Mortgage. Without the prior written consent of Mortgagee,
which Mortgagee may grant or withhold in its sole discretion, Mortgagor shall
not file for record any notice limiting the maximum principal amount that may be
secured by this Mortgage to a sum less than the maximum principal amount set
forth in this paragraph.

            2.3 OBLIGATIONS. The term "obligations" is used herein in its
broadest and most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges and loan
fees at any time accruing or assessed on any of the Secured Obligations.

            2.4 MATURITY DATE. The maturity date of the Note is September 1,
2011.

            2.5 INCORPORATION. All terms and conditions of the documents which
evidence any of the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall
be deemed to have notice of the terms of the Secured Obligations and to have
notice that the rate of interest on one or more Secured Obligations may vary
from time to time.

              ARTICLE III. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

            3.1 ASSIGNMENT. Mortgagor irrevocably assigns to Mortgagee all of
Mortgagor's right, title and interest in, to and under: (a) all present and
future leases of the Property or any portion thereof, all licenses and
agreements relating to the management, leasing or operation of the Property or
any portion thereof, and all other agreements of any kind relating to the use or
occupancy of the Property or any portion thereof, whether such leases, licenses
and agreements are now existing or entered into after the date hereof
("Leases"); and (b) the rents, issues, deposits and profits of the Property,
including, without limitation, all amounts payable and all rights and benefits
accruing to Mortgagor under the Leases ("Payments"). The term "Leases" shall
also include all guarantees of and security for the tenants' performance
thereunder, and all amendments, extensions, renewals or modifications thereto
which are permitted hereunder. This is a present and absolute assignment, not an
assignment for security purposes only, and Mortgagee's right to the Leases and
Payments is not contingent upon, and may be exercised without possession of, the
Property.

            3.2 GRANT OF LICENSE. Notwithstanding the terms contained in Section
3.1, Mortgagee confers upon Mortgagor a revocable license ("License") to collect
and retain the Payments as they become due and payable, until the occurrence of
a Default (as hereinafter defined). Upon a Default, the License shall be
automatically revoked and Mortgagee may collect


                                     Page 4
<PAGE>
and apply the Payments pursuant to the terms hereof without notice and without
taking possession of the Property. Upon Mortgagor's cure of the Default,
Mortgagee shall re-confer upon Mortgagor a revocable license to collect and
retain the Payments as they become due and payable, until the occurrence of a
Default. All Payments thereafter collected by Mortgagor shall be held by
Mortgagor as trustee under a constructive trust for the benefit of Mortgagee.
Mortgagor hereby irrevocably authorizes and directs the tenants under the
Leases, upon notice of a Default from Mortgagee, to rely upon and comply with
any notice or demand by Mortgagee for the payment to Mortgagee of any rental or
other sums which may at any time become due under the Leases, or for the
performance of any of the tenants' undertakings under the Leases, and the
tenants shall have no right or duty to inquire as to whether any Default has
actually occurred or is then existing. Mortgagor hereby relieves the tenants
from any liability to Mortgagor by reason of relying upon and complying with any
such notice or demand by Mortgagee. Mortgagee may apply, in its sole discretion,
any Payments so collected by Mortgagee against any Secured Obligation or any
other obligation of Borrower, Mortgagor or any other person or entity, under any
document or instrument related to or executed in connection with the Loan
Documents, whether existing on the date hereof or hereafter arising. Collection
of any Payments by Mortgagee shall not cure or waive any Default or notice of
Default or invalidate any acts done pursuant to such notice.

            3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the tenants
under any of the Leases or by any other parties; for any dangerous or defective
condition of the Property; or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee, invitee or other person; or (d) responsible for or
impose upon Mortgagee any duty to produce rents or profits. Mortgagee shall not
directly or indirectly be liable to Mortgagor or any other person as a
consequence of: (e) the exercise of or failure to exercise any of the rights,
remedies or powers granted to Mortgagee hereunder; or (f) the failure or refusal
of Mortgagee to perform or discharge any obligation, duty or liability of
Mortgagor arising under the Leases.

            3.4 COVENANTS.

            (a) ALL LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense:

            (i) perform all obligations of the landlord under the Leases and use
reasonable efforts to enforce performance by the tenants of all obligations of
the tenants under the Leases;

            (ii) use reasonable efforts to keep the Property leased at all times
to tenants whom Mortgagor reasonably and in good faith believes are creditworthy
at rents not less than the fair market rental value (including, but not limited
to, free or discounted rents to the extent the market so requires);

            (iii) promptly upon Mortgagee's request, deliver to Mortgagee a copy
of each requested Lease and all amendments thereto and waivers thereof; and


                                     Page 5
<PAGE>
            (iv) promptly upon Mortgagee's request, execute and record any
additional assignments of landlord's interest under any Lease to Mortgagee and
specific subordinations of any Lease to this Mortgage, in form and substance
satisfactory to Mortgagee.

Unless consented to in writing by Mortgagee or otherwise permitted under any
other provision of the Loan Documents, Mortgagor shall not:

            (v) grant any tenant under any Lease any option, right of first
refusal or other right to purchase all or any portion of the Property under any
circumstances;

            (vi) grant any tenant under any Lease any right to prepay rent more
than 1 month in advance;

            (vii) except upon Mortgagee's request, execute any assignment of
landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
other than to collect rent 1 month in advance of the time when it becomes due.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

Mortgagor shall deposit with Mortgagee any sums received by Mortgagor in
consideration of any termination, modification or amendment of any Lease or any
release or discharge of any tenant under any Lease from any obligation
thereunder and any such sums received by Mortgagor shall be held in trust by
Mortgagor for such purpose. Notwithstanding the foregoing, so long as no Default
exists, the portion of any such sum received by Mortgagor with respect to any
Lease which is less than $50,000 shall be payable to Mortgagor. All such sums
received by Mortgagee with respect to any Lease shall be deemed "Impounds" (as
defined in Section 6.12) and shall be deposited by Mortgagee into a pledged
account in accordance with Section 6.12. If no Default exists, Mortgagee shall
release such Impounds to Mortgagor from time to time as necessary to pay or
reimburse Mortgagor for such tenant improvements, brokerage commissions and
other leasing costs as may be required to re-tenant the affected space;
provided, however, Mortgagee shall have received and approved each of the
following for each tenant for which such costs were incurred; (1) Mortgagor's
written request for such release, including the name of the tenant, the location
and net rentable area of the space and a description and cost breakdown of the
tenant improvements or other leasing costs covered by the request; (2)
Mortgagor's certification that any tenant improvements have been completed
lien-free and in a workmanlike manner; (3) a fully executed Lease, or extension
or renewal of the current Lease; (4) an estoppel certificate executed by the
tenant including its acknowledgement that all tenant improvements have been
satisfactorily completed; and (5) such other information with respect to such
costs as Mortgagee may require. Following the re-tenanting of all affected space
(including, without limitation, the completion of all tenant improvements), and
provided no Default exists, Mortgagee shall release any remaining such Impounds
relating to the affected space to Mortgagor. Mortgagor shall construct all
tenant improvements in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations.

            (b) MAJOR LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense, give Mortgagee prompt written notice of any material default by
landlord or tenant under any


                                     Page 6
<PAGE>
Major Lease (as defined below). Unless consented to in writing by Mortgagee or
otherwise permitted under any other provision of the Loan Documents, Mortgagor
shall not:

            (i) enter into any Major Lease which (aa) is not on fair market
terms (which terms may include free or discounted rent to the extent the market
so requires); (bb) does not contain a provision requiring the tenant to execute
and deliver to the landlord an estoppel certificate in form and substance
satisfactory to the landlord promptly upon the landlord's request; or (cc)
allows the tenant to assign or sublet the premises without the landlord's
consent;

            (ii) materially reduce any rent or other sums due from the tenant
under any Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv) release or discharge the tenant or any guarantor under any
Major Lease from any material obligation thereunder.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

"Major Lease", as used herein, shall mean any Lease, which is, at any time: (1)
a Lease of more than 20% of the total rentable area of the Property, as
reasonably determined by Mortgagee; or (2) a Lease which generates a gross base
monthly rent exceeding 20% of the total gross base monthly rent generated by all
Leases (excluding all Leases under which the tenant is then in default), as
reasonably determined by Mortgagee. Mortgagor's obligations with respect to
Major Leases shall be governed by the provisions of Section 3.4(a) as well as by
the provisions of this Section.

            (c) FAILURE TO DENY REQUEST Mortgagee's failure to deny any written
request by Mortgagor for Mortgagee's consent under the provisions of Sections
3.4(a) or 3.4(b) within 10 Business Days after Mortgagee's receipt of such
request (and all documents and information reasonably related thereto) shall be
deemed to constitute Mortgagee's consent to such request.

            3.5 RIGHT OF SUBORDINATION. Mortgagee may at any time and from time
to time by specific written instrument intended for the purpose unilaterally
subordinate the lien of this Mortgage to any Lease, without joinder or consent
of, or notice to, Mortgagor, any tenant or any other person. Notice is hereby
given to each tenant under a Lease of such right to subordinate. No
subordination referred to in this Section shall constitute a subordination to
any lien or other encumbrance, whenever arising, or improve the right of any
junior lienholder. Nothing herein shall be construed as subordinating this
Mortgage to any Lease.

               ARTICLE IV. SECURITY AGREEMENT AND FIXTURE FILING

            4.1 SECURITY INTEREST. Mortgagor grants and assigns to Mortgagee a
security interest to secure payment and performance of all of the Secured
Obligations, in all of Mortgagor's right, title and interest in and to the
following described personal property in which Mortgagor now or at any time
hereafter has any interest ("Collateral"):


                                     Page 7
<PAGE>
      All goods, building and other materials, supplies, work in process,
      equipment, machinery, fixtures, furniture, furnishings, signs and other
      personal property, wherever situated, which are or are to be incorporated
      into, used in connection with or appropriated for use on the Property; all
      rents, issues, deposits and profits of the Property (to the extent, if
      any, they are not subject to the Absolute Assignment of Rents and Leases);
      all inventory, accounts, cash receipts, deposit accounts, impounds,
      accounts receivable, contract rights, general intangibles, software,
      chattel paper, instruments, documents, promissory notes, drafts, letters
      of credit, letter of credit rights, supporting obligations, insurance
      policies, insurance and condemnation awards and proceeds, any other rights
      to the payment of money, trade names, trademarks and service marks arising
      from or related to the Property or any business now or hereafter conducted
      thereon by Mortgagor; all permits, consents, approvals, licenses,
      authorizations and other rights granted by, given by or obtained from, any
      governmental entity with respect to the Property; all deposits or other
      security now or hereafter made with or given to utility companies by
      Mortgagor with respect to the Property; all advance payments of insurance
      premiums made by Mortgagor with respect to the Property; all plans,
      drawings and specifications relating to the Property; all loan funds held
      by Mortgagee, whether or not disbursed; all funds deposited with Mortgagee
      pursuant to any Loan Document, all reserves, deferred payments, deposits,
      accounts, refunds, cost savings and payments of any kind related to the
      Property or any portion thereof, including, without limitation, all
      "Impounds" as defined herein; together with all replacements and proceeds
      of, and additions and accessions to, any of the foregoing, and all books,
      records and files relating to any of the foregoing.

            As to all of the above described personal property which is or which
hereafter becomes a "fixture" under the Florida Uniform Commercial Code (the
"UCC"), this Mortgage constitutes a fixture filing under Florida Statutes
Section 679.313 and 679.402, as amended and recodified from time to time, this
Mortgage shall constitute a fixture filing recorded in the real estate records.
Notwithstanding the foregoing, nothing herein shall be deemed to create any lien
or interest in favor of Mortgagee under this Mortgage in any such Collateral
which is not a fixture, and the purpose of this Article IV is to create a
fixture filing under Florida Statutes Section 679.313 and 679.402, as amended or
recodified from time to time.

            4.2 COVENANTS. Mortgagor agrees: (a) to execute and deliver such
documents as Mortgagee reasonably deems necessary to create, perfect and
continue the security interests contemplated hereby; (b) not to change its name,
and, as applicable, its chief executive offices, its principal residence or the
jurisdiction in which it is organized without giving Mortgagee at least 30 days'
prior written notice thereof; and (c) to cooperate with Mortgagee in perfecting
all security interests granted herein and in obtaining such agreements from
third parties as Mortgagee deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of Mortgagee's rights
hereunder.

            4.3 RIGHTS OF MORTGAGEE. In addition to Mortgagee's rights as a
"Secured Party" under the UCC, Mortgagee may, but shall not be obligated to, at
any time without notice and at the expense of Mortgagor: (a) give notice to any
person of Mortgagee's rights hereunder and enforce such rights at law or in
equity; (b) insure, protect, defend and


                                     Page 8
<PAGE>
preserve the Collateral or any rights or interests of Mortgagee therein; and (c)
inspect the Collateral during normal business hours upon reasonable prior
written notice, provided, however, that such notice shall not be required in the
event of an emergency. Notwithstanding the above, in no event shall Mortgagee be
deemed to have accepted any property other than cash in satisfaction of any
obligation of Mortgagor to Mortgagee unless Mortgagee shall make an express
written election of said remedy under the UCC or other applicable law.

            4.4 ADDITIONAL RIGHTS OF MORTGAGEE UPON DEFAULT. Upon the occurrence
of a Default, then in addition to all of Mortgagee's rights as a "Secured Party"
under the UCC or otherwise at law:

            (a) DISPOSITION OF COLLATERAL. Mortgagee may: (i) upon written
notice, require Mortgagor to assemble the Collateral and make it available to
Mortgagee at a place reasonably designated by Mortgagee; (ii) without prior
notice (to the extent permitted by law), enter upon the Property or other place
where the Collateral may be located and take possession of, collect, sell,
lease, license and otherwise dispose of the Collateral, and store the same at
locations acceptable to Mortgagee at Mortgagor's expense; or (iii) sell, assign
and deliver the Collateral at any place or in any lawful manner and bid and
become purchaser at any such sales; and

            (b) OTHER RIGHTS. Mortgagee may, for the account of Mortgagor and at
Mortgagor's expense: (i) operate, use, consume, sell, lease, license or
otherwise dispose of the Collateral as Mortgagee reasonably deems appropriate
for the purpose of performing any or all of the Secured Obligations; (ii) enter
into any agreement, compromise or settlement including insurance claims, which
Mortgagee may reasonably deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title for, and receive,
enforce and collect by legal action or otherwise, all indebtedness and
obligations now or hereafter owing to Mortgagor in connection with or on account
of the Collateral.

            Mortgagor acknowledges and agrees that a disposition of the
Collateral in accordance with Mortgagee's rights and remedies as heretofore
provided is a disposition thereof in a commercially reasonable manner and that 5
Business Days prior notice of such disposition is commercially reasonable
notice. Mortgagee shall have no obligation to process or prepare the Collateral
for sale or other disposition. In disposing of the Collateral, Mortgagee may
disclaim all warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any sale or other disposition of the Collateral may be applied by
Mortgagee first to the reasonable expenses incurred by Mortgagee in connection
therewith, including, without limitation, reasonable attorneys' fees and
disbursements, and then to the payment of the Secured Obligations, in such order
of application as Mortgagee may from time to time elect.

            4.5 POWER OF ATTORNEY. Mortgagor hereby irrevocably appoints
Mortgagee as Mortgagor's attorney-in-fact (such agency being coupled with an
interest), and as such attorney-in-fact, Mortgagee may, without the obligation
to do so, in Mortgagee's name or in the name of Mortgagor, prepare, execute,
file and record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve any of
Mortgagee's security interests and rights in or to the Collateral, and upon a
Default, take


                                     Page 9
<PAGE>
any other action required of Mortgagor; provided, however, that Mortgagee as
such attorney-in-fact shall be accountable only for such funds as are actually
received by Mortgagee.

                   ARTICLE V. REPRESENTATIONS AND WARRANTIES

            5.1 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and
warrants to Mortgagee that, to Mortgagor's current actual knowledge after
reasonable investigation and inquiry, the following statements are true and
correct as of the Effective Date:

            (a) LEGAL STATUS. Mortgagor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in which Mortgagor
and Borrower are organized. Mortgagor and Borrower are qualified or licensed to
do business in all jurisdictions in which such qualification or licensing is
required.

            (b) PERMITS. Mortgagor and Borrower possess all permits, franchises
and licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, necessary to enable Mortgagor and Borrower to conduct
the business(es) in which Mortgagor and Borrower are now engaged in compliance
with applicable law.

            (c) AUTHORIZATION AND VALIDITY. The execution and delivery of the
Loan Documents have been duly authorized and the Loan Documents constitute valid
and binding obligations of Mortgagor, Borrower or the party which executed the
same, enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights, or by the application of rules
of equity.

            (d) VIOLATIONS. The execution, delivery and performance by Mortgagor
and Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or result in any breach or default under any contract,
obligation, indenture or other instrument to which Mortgagor or Borrower is a
party or by which Mortgagor or Borrower is bound.

            (e) LITIGATION. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental authority, court or
administrative agency which may adversely affect the financial condition or
operations of Mortgagor or Borrower other than those previously disclosed in
writing by Mortgagor or Borrower to Mortgagee.

            (f) FINANCIAL STATEMENTS. The financial statements of Mortgagor and
Borrower, of each general partner (if Mortgagor or Borrower is a partnership),
of each member (if Mortgagor or Borrower is a limited liability company) and of
each guarantor, if any, previously delivered by Mortgagor or Borrower to
Mortgagee: (i) are materially complete and correct; (ii) present fairly the
financial condition of such party; and (iii) have been prepared in accordance
with the same accounting standard used by Mortgagor or Borrower to prepare the
financial statements delivered to and approved by Mortgagee in connection with
the making of the Loan, or other accounting standards approved by Mortgagee.
Since the date of such financial statements, there has been no material adverse
change in such financial condition, nor have any assets or properties reflected
on such financial statements been sold, transferred, assigned, mortgaged,


                                    Page 10
<PAGE>
pledged or encumbered except as previously disclosed in writing by Mortgagor or
Borrower to Mortgagee and approved in writing by Mortgagee.

            (g) REPORTS. All reports, documents, instruments and information
delivered to Mortgagee in connection with the Loan: (i) are correct in all
material respects and sufficiently complete to give Mortgagee accurate knowledge
of their subject matter; and (ii) do not contain any misrepresentation of a
material fact or omission of a material fact which omission makes the provided
information misleading.

            (h) INCOME TAXES. There are no material pending assessments or
adjustments of Mortgagor's or Borrower's income tax payable with respect to any
year.

            (i) SUBORDINATION. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would require the
subordination in right of payment of any of Borrower's obligations under the
Note to an obligation owed to another party.

            (J) TITLE. Mortgagor lawfully holds and possesses fee simple title
to the Property, without limitation on the right to encumber same. This Mortgage
is a first lien on the Property prior and superior to all other liens and
encumbrances on the Property except: (i) liens for real estate taxes and
assessments not yet due and payable; (ii) senior exceptions previously approved
by Mortgagee and shown in the title insurance policy insuring the lien of this
Mortgage; and (iii) other matters, if any, previously disclosed to Mortgagee by
Mortgagor in a writing specifically referring to this representation and
warranty.

            (k) MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to any such liens) affecting the
Property which are or may be prior to or equal to the lien of this Mortgage,
other than those (if any) previously approved by Mortgagee and shown in the
title insurance policy insuring the lien of this Mortgage.

            (l) ENCROACHMENTS. Except as shown in the survey, if any, previously
delivered to Mortgagee, none of the buildings or other improvements which were
included for the purpose of determining the appraised value of the Property lies
outside of the boundaries or building restriction lines of the Property and no
buildings or other improvements located on adjoining properties encroach upon
the Property.

            (m) LEASES. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. Except as disclosed on a
rent roll provided to Mortgagee prior to the date hereof, no material breach or
default by any party, or event which would constitute a material breach or
default by any party after notice or the passage of time, or both, exists under
any existing Lease. None of the landlord's interests under any of the Leases,
including, but not limited to, rents, additional rents, charges, issues or
profits, has been transferred or assigned. Except as disclosed on a rent roll
provided to Mortgagee prior to the date hereof, no rent or other payment under
any existing Lease has been paid by any tenant for more than 1 month in advance.

            (n) COLLATERAL. Mortgagor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if any, previously
disclosed to Mortgagee by Mortgagor in writing specifically referring to this
representation and warranty. Mortgagor's chief


                                    Page 11
<PAGE>
executive office (or principal residence, if applicable) is located at the
address shown on page one of this Mortgage. Mortgagor is an organization
organized solely under the laws of the State of Delaware. All organizational
documents of Mortgagor delivered to Mortgagee are complete and accurate in every
respect. Mortgagor's legal name is exactly as shown on page one of this
Mortgage.

            (o) CONDITION OF PROPERTY. Except as shown in the property condition
survey or other engineering reports, if any, previously delivered to or obtained
by Mortgagee, the Property is in good condition and repair and is free from any
damage that would materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.

            (p) HAZARDOUS MATERIALS. Except as shown in the environmental
assessment report(s), if any, previously delivered to or obtained by Mortgagee,
the Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of Hazardous Materials (as hereinafter
defined) in violation of Hazardous Materials Laws (as hereinafter defined)
except as otherwise previously disclosed in writing by Mortgagor to Mortgagee.

            (q) HAZARDOUS MATERIALS LAWS. The Property complies with all
Hazardous Materials Laws.

            (r) HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
Hazardous Materials Claims (as hereinafter defined).

            (s) WETLANDS. No part of the Property consists of or is classified
as wetlands, tidelands or swamp and overflow lands.

            (t) COMPLIANCE WITH LAWS. All federal, state and local laws, rules
and regulations applicable to the Property, including, without limitation, all
zoning and building requirements and all requirements of the Americans With
Disabilities Act of 1990, as amended from time to time (42 U. S. C. Section
12101 et seq.) have been satisfied or complied with. Mortgagor is in possession
of all certificates of occupancy and all other licenses, permits and other
authorizations required by applicable law for the existing use of the Property.
All such certificates of occupancy and other licenses, permits and
authorizations are valid and in full force and effect.

            (u) PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, and ground
rents, if any, which previously became due and owing in respect of the Property
have been paid.

            (v) CONDEMNATION. There is no proceeding pending or threatened for
the total or partial condemnation of the Property.

            (w) HOMESTEAD. There is no homestead or other exemption available to
Mortgagor which would materially interfere with the right to sell the Property
or the right to foreclose this Mortgage.

            (x) SOLVENCY. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or defraud any
present or future creditors


                                    Page 12
<PAGE>
of Mortgagor, and Mortgagor, on the Effective Date, will have received fair and
reasonably equivalent value in good faith for the grant of the liens or security
interests effected by the Loan Documents. On the Effective Date, Mortgagor will
be solvent and will not be rendered insolvent by the transactions contemplated
by the Loan Documents. Mortgagor is able to pay its debts as they become due.

            (y) SEPARATE TAX PARCEL(S). The Property is assessed for real estate
tax purposes as one or more wholly independent tax parcels, separate from any
other real property, and no other real property is assessed and taxed together
with the Property or any portion thereof.

            5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS
(LEVEL V SPE). Mortgagor hereby represents, warrants and covenants to Mortgagee
that with respect to both Mortgagor and MHC-QRS STAGECOACH, INC., a Delaware
corporation, the managing member of Mortgagor:

      (a) each such entity was organized solely for the purpose of (i) owning
the Properties (as defined in the Note); (ii) acting as a general partner of a
limited partnership which owns the Properties; or (iii) acting as a managing
member of a limited liability company which owns the Properties;

      (b) each such entity has not engaged and will not engage in any business
unrelated to (i) the ownership of the Properties; (ii) acting as general partner
of a limited partnership which owns the Properties; or (iii) acting as a
managing member of a limited liability company which owns the Properties;

      (c) each such entity has not had and will not have any assets other than
the Properties (and personal property incidental to the ownership and operation
of the Properties) or its partnership or membership interest in the limited
partnership or limited liability company which owns the Properties, as
applicable;

      (d) each such entity has not and will not engage in, seek or consent to
any dissolution, winding up, liquidation, consolidation, merger, asset sale,
transfer of partnership or membership interest, or amendment of its articles of
incorporation, articles of organization, certificate of formation, operating
agreement or limited partnership agreement, as applicable;

      (e) if any such entity is a limited partnership, all of its general
partners are corporations that satisfy the requirements set forth in this
Section 5.2;

      (f) if any such entity is a limited liability company, it has at least one
managing member that is a corporation that satisfies the requirements set forth
in this Section 5.2;

      (g) each such entity, without the unanimous consent of all of its general
partners, directors or members, as applicable, shall not file or consent to the
filing of any bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or any other entity in which it
has a direct or indirect legal or beneficial ownership interest;

      (h) each such entity has no indebtedness (and will have no indebtedness)
other than (i) the Loan (to the extent it is liable under the terms of the Loan
Documents); and (ii) unsecured


                                    Page 13
<PAGE>
trade debt not to exceed $1,000,000 in the aggregate with respect to Mortgagor
or $10,000 in the aggregate with respect to its managing member, which is not
evidenced by a note and is incurred in the ordinary course of its business in
connection with owning, operating and maintaining the Property (or its interest
in Mortgagor, as applicable) and is paid within thirty (30) days from the date
incurred;

      (i) each such entity has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;

      (j) each such entity has maintained and will maintain its accounts, books
and records separate from any other person or entity;

      (k) each such entity has maintained and will maintain its books, records,
resolutions and agreements as official records;

      (l) each such entity (i) has not commingled and will not commingle its
funds or assets with those of any other entity; and (ii) has held and will hold
its assets in its own name;

      (m) each such entity has conducted and will conduct its business in its
own name or in a registered trade name;

      (n) each such entity has maintained and will maintain its accounting
records and other entity documents separate from any other person or entity;

      (o) each such entity has prepared and will prepare separate tax returns
and financial statements, or if part of a consolidated group, is shown as a
separate member of such group;

      (p) each such entity has paid and will pay its own liabilities and
expenses out of its own funds and assets;

      (q) each such entity has held and will hold regular meetings, as
appropriate, to conduct its business and has observed and will observe all
corporate, partnership or limited liability company formalities and record
keeping, as applicable;

      (r) each such entity has not assumed or guaranteed and will not assume or
guarantee or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity;

      (s) each such entity has not acquired and will not acquire obligations or
securities of its partners, members or shareholders;

      (t) each such entity has allocated and will allocate fairly and reasonably
the costs associated with common employees and any overhead for shared office
space and each such entity has used and will use separate stationery, invoices
and checks under its own name or under its registered trade name;

      (u) each such entity has not pledged and will not pledge its assets for
the benefit of any other person or entity;


                                    Page 14
<PAGE>
      (v) each such entity has held out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its own
name or under its registered trade name and not as a division or part of any
other person or entity;

      (w) each such entity has not made and will not make loans to any person or
entity;

      (x) each such entity has not identified and will not identify its
partners, members or shareholders, or any affiliates of any of the foregoing, as
a division or part of it;

      (y) each such entity has not entered into and will not enter into or be a
party to, any transaction with its partners, members, shareholders, or any
affiliates of any of the foregoing, except in the ordinary course of its
business pursuant to written agreements and on terms which are intrinsically
fair and are no less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;

      (z) if any such entity is a corporation, the directors of such entity
shall consider the interests of the creditors of such entity in connection with
all corporate action;

      (aa) each such entity has paid and will pay the salaries of its own
employees and has maintained and will maintain a sufficient number of employees
in light of its contemplated business operations;

      (bb) each such entity has maintained and will maintain adequate capital in
light of its contemplated business operations;

      (cc) if any such entity is a limited partnership with more than one
general partner, its limited partnership agreement requires the remaining
partners to continue the partnership as long as one solvent general partner
exists;

      (dd) if any such entity is a limited liability company, its operating
agreement, if any such entity is a limited partnership, its limited partnership
agreement, and if any such entity is a corporation, to the full extent permitted
by applicable law, its articles of incorporation, contain the provisions set
forth in this Section 5.2 and any such entity shall conduct its business and
operations in strict compliance with the terms contained therein;

      (ee) each such entity will, as a condition to the closing of the Loan,
deliver to Mortgagee a nonconsolidation opinion in form and substance acceptable
to Mortgagee;

      (ff) if any such entity is a corporation, it has maintained and will
continue to maintain at least one Independent Director (as hereinafter defined);
and

      (gg) if any such entity is a corporation, it has not caused or allowed and
will not cause or allow the board of directors of such entity to take any action
requiring the unanimous affirmative vote of 100% of the members of the board of
directors unless an Independent Director shall have participated in such vote.

An "Independent Director" shall be an individual who, except in his or her
capacity as an Independent Director of the corporation is not, and has not been
during the five (5) years


                                    Page 15
<PAGE>
immediately before such individual's appointment as an Independent Director: (i)
a stockholder, director, partner, officer or employee of the corporation or its
Affiliates; (ii) affiliated with a customer or supplier of the corporation or
its Affiliates; or (iii) a spouse, parent, sibling, child or other family
relative of any person described by (i) or (ii) above.

As used herein, the term "Affiliate" shall mean any person or entity other than
the corporation (i) which owns beneficially, directly or indirectly, any
outstanding shares of the corporation's stock, or (ii) which controls, is
controlled by or is under common control with the corporation. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through ownership of voting securities, by contract or otherwise.

            5.3 COMMERCIAL LOAN. Borrower warrants that the loan evidenced by
this Note is being made solely to acquire or carry on a business or commercial
enterprise, and/or Borrower is a business or commercial organization. Borrower
further warrants that all of the proceeds of the Note shall be used for
commercial purposes and stipulates that the loan evidenced by the Note shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family or household purposes.

ARTICLE VI. RIGHTS AND DUTIES OF THE PARTIES

            6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Mortgagor shall,
or shall cause the property manager to: (a) keep the Property in good condition
and repair; (b) complete or restore promptly and in workmanlike manner the
Property or any part thereof which may be damaged or destroyed (unless, if and
to the extent permitted under Section 6.11, Mortgagee elects to require that
insurance proceeds be used to reduce the Secured Obligations and after such
repayment the ratio of Secured Obligations to the value of the Property, as
reasonably determined by Mortgagee is the same as or lower than it was
immediately before the loss or taking occurred); (c) comply and cause the
Property to comply with (i) all laws, ordinances, regulations and standards,
(ii) all covenants, conditions, restrictions and equitable servitudes, whether
public or private, of every kind and character and (iii) all requirements of
insurance companies and any bureau or agency which establishes standards of
insurability, which laws, covenants or requirements affect the Property and
pertain to acts committed or conditions existing thereon, including, without
limitation, any work of alteration, improvement or demolition as such laws,
covenants or requirements mandate; (d) operate and manage the Property at all
times in a professional manner and do all other acts which from the character or
use of the Property may be reasonably necessary to maintain and preserve its
value; (e) promptly after execution, deliver to Mortgagee a copy of any
management agreement concerning the Property and all amendments thereto and
waivers thereof; and (f) execute and acknowledge all further documents,
instruments and other papers as Mortgagee reasonably deems necessary or
appropriate to preserve, continue, perfect and enjoy the benefits of this
Mortgage and perform Mortgagor's obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no offset.
Mortgagor shall not, without Mortgagee's prior written consent: (g) remove or
demolish all or any material part of the Property; (h) alter either (i) the
exterior of the Property in a manner which materially and adversely affects the
value of the Property or (ii) the roof or other structural elements of the


                                    Page 16
<PAGE>
Property in a manner which requires a building permit except for tenant
improvements required under the Leases; (i) initiate or acquiesce in any change
in any zoning or other land classification which affects the Property; (j)
materially alter the type of occupancy or use of all or any part of the
Property; or (k) commit or permit physical waste of the Property.

            6.2 HAZARDOUS MATERIALS. Without limiting any other provision of
this Mortgage, Mortgagor agrees as follows:

            (a) PROHIBITED ACTIVITIES. Mortgagor shall not cause or permit the
Property to be used as a site for the use, generation, manufacture, storage,
treatment, release, discharge, disposal, transportation or presence of any oil
or other petroleum products, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are "hazardous substances," "hazardous wastes," "hazardous materials" or
"toxic substances" under the Hazardous Materials Laws (defined below) and/or
other applicable environmental laws, ordinances or regulations ("Hazardous
Materials").

            The foregoing to the contrary notwithstanding, (i) Mortgagor may
store, maintain and use on the Property janitorial and maintenance supplies,
paint and other Hazardous Materials of a type and in a quantity readily
available for purchase by the general public and normally stored, maintained and
used by owners and managers of properties of a type similar to the Property; and
(ii) tenants of the Property may store, maintain and use on the Property (and,
if any tenant is a retail business, hold in inventory and sell in the ordinary
course of such tenant's business) household and consumer cleaning supplies and
other Hazardous Materials of a type and quantity readily available for purchase
by the general public and normally stored, maintained and used (and, if tenant
is a retail business, sold) by tenants of properties similar to the Property or
in similar lines of business on properties similar to the Property.

            (b) HAZARDOUS MATERIALS LAWS. Mortgagor shall comply and cause the
Property to comply with all federal, state and local laws, ordinances and
regulations relating to Hazardous Materials ("Hazardous Materials Laws"),
including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of
other jurisdictions or orders and regulations.

            (c) NOTICES. Mortgagor shall immediately notify Mortgagee in writing
of: (i) the discovery of any Hazardous Materials on, under or about the Property
(other than Hazardous Materials permitted under Section 6.2(a)); (ii) any
knowledge by Mortgagor that the Property does not comply with any Hazardous
Materials Laws; (iii) any claims or actions ("Hazardous Materials


                                    Page 17
<PAGE>
Claims") pending or threatened in writing against Mortgagor or the Property by
any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to the Hazardous Materials Laws; and (iv) the
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Property that could cause the Property or any part thereof
to become contaminated by or with Hazardous Materials.

            (d) REMEDIAL ACTION. In response to knowledge of or notification to
Mortgagor of the presence of any Hazardous Materials on, under or about the
Property, Mortgagor shall immediately take, at Mortgagor's sole expense, all
remedial action required of Mortgagor by any Hazardous Materials Laws or any
judgment, consent decree, settlement or compromise in respect to any Hazardous
Materials Claims.

            (e) INSPECTION BY MORTGAGEE. Upon reasonable prior notice to
Mortgagor (except in the event of an emergency) and during normal business
hours, Mortgagee, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Property for the purpose of determining the
existence, location, nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto, beneath or from the
Property.

            (f) LEGAL EFFECT OF SECTION. Mortgagor and Mortgagee agree that: (i)
this Hazardous Materials Section is intended as Mortgagee's written request for
information (and Mortgagor's response) concerning the environmental condition of
the real property security as required by California Code of Civil Procedure
Section 726.5, or any other applicable law; and (ii) each representation and
warranty and covenant in this Section (together with any indemnity applicable to
a breach of any such representation and warranty) with respect to the
environmental condition of the Property is intended by Mortgagee and Mortgagor
to be an "environmental provision" for purposes of California Code of Civil
Procedure Section 736, or any other applicable law.

            6.3 COMPLIANCE WITH LAWS. Mortgagor shall comply with all federal,
state and local laws, rules and regulations applicable to the Property,
including, without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C. Section
12101 et seq.), as amended from time to time. Mortgagor shall possess and
maintain or cause Borrower to possess and maintain in full force and effect at
all times (a) all certificates of occupancy and other licenses, permits and
authorizations required by applicable law for the existing use of the Property
and (b) all permits, franchises and licenses and all rights to all trademarks,
trade names, patents and fictitious names, if any, required by applicable law
for Mortgagor and Borrower to conduct the business(es) in which Mortgagor and
Borrower are now engaged.

            6.4 LITIGATION. Mortgagor shall promptly notify Mortgagee in writing
of any litigation pending or threatened in writing against Mortgagor or Borrower
claiming damages in excess of $100,000 and of all pending or threatened (in
writing) litigation against Mortgagor or Borrower if the aggregate damage claims
against Mortgagor or Borrower exceed $500,000.

            6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Mortgagor shall not:
(a) merge or consolidate with any other entity or permit Borrower to merge or


                                    Page 18
<PAGE>
consolidate with any other entity; (b) make any substantial change in the nature
of Mortgagor's business or structure or permit Borrower to make any substantial
change in the nature of Borrower's business or structure; (c) acquire all or
substantially all of the assets of any other entity or permit Borrower to
acquire all or substantially all of the assets of any other entity; or (d) sell,
lease, assign, transfer or otherwise dispose of a material part of Mortgagor's
assets except in the ordinary course of Mortgagor's business or permit Borrower
to sell, lease, assign, transfer or otherwise dispose of a material part of
Borrower's assets except in the ordinary course of Borrower's business.

            6.6 ACCOUNTING RECORDS. Mortgagor shall maintain and cause Borrower
to maintain adequate books and records in accordance with the same accounting
standard used by Mortgagor or Borrower to prepare the financial statements
delivered to and approved by Mortgagee in connection with the making of the Loan
or other accounting standards approved by Mortgagee. Mortgagor shall permit and
shall cause Borrower to permit any representative of Mortgagee, at any
reasonable time and from time to time, upon reasonable prior notice to
Mortgagor, to inspect, audit and examine such books and records and make copies
of same.

            6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor shall pay to
Mortgagee the full amount of all costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses of Mortgagee's in-house or
outside counsel, incurred by Mortgagee in connection with: (a) appraisals and
inspections of the Property or Collateral required by Mortgagee as a result of
(i) a Transfer or proposed Transfer (as defined below), or (ii) a Default; (b)
appraisals and inspections of the Property or Collateral required by applicable
law, including, without limitation, federal or state regulatory reporting
requirements; and (c) any acts performed by Mortgagee at Mortgagor's request or
wholly or partially for the benefit of Mortgagor (including, without limitation,
the preparation or review of amendments, assumptions, waivers, releases,
reconveyances, estoppel certificates or statements of amounts owing under any
Secured Obligation). In connection with appraisals and inspections, Mortgagor
specifically (but not by way of limitation) acknowledges that: (aa) a formal
written appraisal of the Property by a state certified or licensed appraiser may
be required by federal regulatory reporting requirements on an annual or more
frequent basis; and (bb) Mortgagee may require inspection of the Property by an
independent supervising architect, a cost engineering specialist, or both.
Mortgagor shall pay all indebtedness arising under this Section immediately upon
demand by Mortgagee together with interest thereon following notice of such
indebtedness at the rate of interest then applicable to the principal balance of
the Note as specified therein.

            6.8 LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section
8.4, Mortgagor shall immediately discharge by bonding or otherwise any lien,
charge or other encumbrance which attaches to the Property in violation of
Section 6.15. Subject to Mortgagor's right to contest such matters under this
Mortgage or as expressly permitted in the Loan Documents, Mortgagor shall pay
when due all obligations secured by or reducible to liens and encumbrances which
shall now or hereafter encumber or appear to encumber all or any part of the
Property or any interest therein, whether senior or subordinate hereto,
including, without limitation, all claims for work or labor performed, or
materials or supplies furnished, in connection with any work of demolition,
alteration, repair, improvement or construction of or upon the Property, except
such as Mortgagor may in good faith contest or as to which a bona fide dispute
may arise (provided provision is made to the satisfaction of Mortgagee for
eventual payment thereof in the


                                    Page 19
<PAGE>
event that Mortgagor is obligated to make such payment and that any recorded
claim of lien, charge or other encumbrance against the Property is immediately
discharged by bonding or otherwise).

            6.9 TAXES AND OTHER LIABILITIES. Mortgagor shall pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and local
property taxes and assessments. Mortgagor shall promptly provide to Mortgagee
copies of all tax and assessment notices pertaining to the Property. Mortgagor
hereby authorizes Mortgagee to obtain, at Mortgagor's expense, a tax service
contract which shall provide tax information on the Property to Mortgagee for
the term of the Loan and any extensions or renewals of the Loan.

            6.10 INSURANCE COVERAGE. Mortgagor shall insure the Property against
loss or damage by fire and such other hazards as Mortgagee shall from time to
time require; provided, however, (a) Mortgagee, at Mortgagee's election, may
only require flood insurance if all or any portion of the improvements located
on the Property is or becomes located in a special flood hazard area, and (b)
Mortgagee, at Mortgagee's election, may only require earthquake insurance if all
or any portion of the Property is or becomes located in an earthquake fault
zone. Mortgagor shall also carry public liability insurance and such other
insurance as Mortgagee may reasonably require, including, without limitation,
business interruption insurance or loss of rents insurance. Such policies shall
contain a standard mortgage clause naming Mortgagee and its successors in
interest as a loss payee and requiring at least 30 days prior notice to the
holder at termination or cancellation. Mortgagor shall maintain all required
insurance throughout the term of the Loan and while any liabilities of Borrower
or Mortgagor to Mortgagee under any of the Loan Documents remain outstanding at
Mortgagor's expense, with companies, and in substance and form satisfactory to
Mortgagee. Mortgagee, by reason of accepting, rejecting, approving or obtaining
insurance shall not incur any liability for: (c) the existence, nonexistence,
form or legal sufficiency of any insurance; (d) the solvency of any insurer; or
(e) the payment of claims.

            6.11 INSURANCE AND CONDEMNATION PROCEEDS.

            (a) ASSIGNMENT OF CLAIMS. Mortgagor absolutely and irrevocably
assigns to Mortgagee all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid to Mortgagee: (i) all
awards of damages and all other compensation payable directly or indirectly by
reason of a condemnation or proposed condemnation for public or private use
affecting all or any part of, or any interest in, the Property; (ii) all other
claims and awards for damages to or decrease in value of all or any part of, or
any interest in, the Property; (iii) all proceeds of any insurance policies
payable by reason of loss sustained to all or any part of the Property; and (iv)
all interest which may accrue on any of the foregoing. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty affecting, or
the institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof. So long as no Default has occurred and
is continuing at the time, Mortgagor shall have the right to adjust, compromise
and settle any Claim of $100,000 or less without the consent of Mortgagee,
provided, however, all awards, proceeds and other sums described herein shall
continue to be payable to Mortgagee. Mortgagee may commence, appear in, defend
or prosecute any Claim exceeding $100,000, and may adjust, compromise and settle
all Claims (except for Claims which Mortgagor may settle as provided herein),
but shall not be responsible


                                    Page 20
<PAGE>
for any failure to commence, appear in, defend, prosecute or collect any such
Claim regardless of the cause of the failure. All awards, proceeds and other
sums described herein shall be payable to Mortgagee.

            (b) APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
occurred and is continuing at the time of Mortgagee's receipt of the proceeds of
the Claims ("Proceeds") and no Default occurs thereafter, Mortgagee shall apply
the Proceeds in the following order of priority: First, to Mortgagee's expenses
in settling, prosecuting or defending the Claims; Second, to the repair or
restoration of the Property; and Third, to Mortgagor if the repair or
restoration of the Property has been completed, but to the Secured Obligations
in any order without suspending, extending or reducing any obligation of
Mortgagor to make installment payments if the repair or restoration of the
Property has not been completed. Notwithstanding the foregoing, Mortgagee shall
have no obligation to make any Proceeds available for the repair or restoration
of the Property unless and until all the following conditions have been
satisfied: (i) delivery to Mortgagee of the Proceeds plus any additional amount
which is needed to pay all costs of the repair or restoration (including,
without limitation, taxes, financing charges, insurance and rent during the
repair period); (ii) establishment of an arrangement for lien releases and
disbursement of funds acceptable to Mortgagee; (iii) delivery to Mortgagee in
form and content acceptable to Mortgagee of all of the following: (aa) plans and
specifications for the work; (bb) a contract for the work, signed by a
contractor acceptable to Mortgagee; (cc) a cost breakdown for the work; (dd) if
reasonably required by Mortgagee, a payment and performance bond for the work;
(ee) evidence of the continuation of substantially all Leases unless consented
to in writing by Mortgagee; (ff) evidence that, upon completion of the work, the
size, capacity, value, and income coverage ratios for the Property will be at
least as great as those which existed immediately before the damage or
condemnation occurred; and (gg) evidence of the satisfaction of any additional
conditions that Mortgagee may reasonably establish to protect Mortgagee's
security. Mortgagor acknowledges that the specific conditions described above
are reasonable.

            (c) APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and
is continuing at the time of Mortgagee's receipt of the Proceeds or if a Default
occurs at any time thereafter, Mortgagee may, at Mortgagee's absolute discretion
and regardless of any impairment of security or lack of impairment of security,
but subject to applicable law governing use of the Proceeds, if any, apply all
or any of the Proceeds to Mortgagee's expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured Obligations in
any order without suspending, extending or reducing any obligation of Mortgagor
to make installment payments, and may release all or any part of the Proceeds to
Mortgagor upon any conditions Mortgagee chooses.

            6.12 IMPOUNDS.

            (a) POST-DEFAULT IMPOUNDS. If required by Mortgagee at any time
after a Default occurs (and regardless of whether such Default is thereafter
cured), Mortgagor shall deposit with Mortgagee such amounts ("Post-Default
Impounds") on such dates (determined by Mortgagee as provided below) as will be
sufficient to pay any or all "Costs" (as defined below) specified by Mortgagee.
Mortgagee in its reasonable discretion shall estimate the amount of such Costs
that will be payable or required during any period selected by Mortgagee not
exceeding 1 year and shall determine the fractional portion thereof that
Mortgagor shall deposit with Mortgagee


                                    Page 21
<PAGE>
on each date specified by Mortgagee during such period. If the Post-Default
Impounds paid by Mortgagor are not sufficient to pay the related Costs,
Mortgagor shall deposit with Mortgagee upon demand an amount equal to the
deficiency. All Post-Default Impounds shall be payable by Mortgagor in addition
to (but without duplication of) any other Impounds (as defined below).

            (b) ALL IMPOUNDS. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively called "Impounds".
All Impounds shall be deposited into one or more segregated or commingled
accounts maintained by Mortgagee or its servicing agent. Except as otherwise
provided in the Note, such account(s) shall not bear interest. Mortgagee shall
not be a trustee, special depository or other fiduciary for Mortgagor with
respect to such account, and the existence of such account shall not limit
Mortgagee's rights under this Mortgage, any other agreement or any provision of
law. If no Default exists, Mortgagee shall apply all Impounds to the payment of
the related Costs, or in Mortgagee's sole discretion may release any or all
Impounds to Mortgagor for application to and payment of such Costs. If a Default
exists, Mortgagee may apply any or all Impounds to any Secured Obligation and/or
to cure such Default, whereupon Mortgagor shall restore all Impounds so applied
and cure all Defaults not cured by such application. The obligations of
Mortgagor hereunder shall not be diminished by deposits of Impounds made by
Mortgagor, except to the extent that such obligations have actually been met by
application of such Impounds. Upon any assignment of this Mortgage, Mortgagee
may assign all Impounds in its possession to Mortgagee's assignee, whereupon
Mortgagee shall be released from all liability with respect to such Impounds.
Within 60 days following full repayment of the Secured Obligations (other than
as a consequence of foreclosure or conveyance in lieu of foreclosure) or at such
earlier time as Mortgagee may elect, Mortgagee shall pay to Mortgagor all
Impounds in its possession, and no other party shall have any right or claim
thereto. "Costs" means (i) all taxes and other liabilities payable by Mortgagor
under Section 6.9, (ii) all insurance premiums payable by Mortgagor under
Section 6.10, (iii) all other costs and expenses for which Impounds are required
under the Note, and/or (iv) all other amounts that will be required to preserve
the value of the Property. Mortgagor shall deliver to Mortgagee, promptly upon
receipt, all bills for Costs for which Mortgagee has required Post-Default
Impounds.

            6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Mortgagor
shall protect, preserve and defend the Property and title to and right of
possession of the Property, the security of this Mortgage and the rights and
powers of Mortgagee hereunder at Mortgagor's sole expense against all adverse
claims, whether the claim: (a) is against a possessory or non-possessory
interest; (b) arose prior or subsequent to the Effective Date; or (c) is senior
or junior to Mortgagor's or Mortgagee's rights. Mortgagor shall give Mortgagee
prompt notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to the Property and of any
condemnation offer or action.

            6.14 RIGHT OF INSPECTION. Mortgagee and its independent contractors,
agents and employees may enter the Property from time to time at any reasonable
time upon reasonable prior notice to Mortgagor (except that such notice shall
not be required in the event of an emergency) for the purpose of inspecting the
Property and ascertaining Mortgagor's compliance with the terms of this
Mortgage. Mortgagee shall use reasonable efforts to assure that Mortgagee's
entry upon and inspection of the Property shall not materially and unreasonably
interfere with the business or operations of Mortgagor or Mortgagor's tenants on
the Property.


                                    Page 22
<PAGE>
            6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN MORTGAGOR.
Mortgagor acknowledges that Mortgagee has relied upon the principals of
Mortgagor and Borrower and their experience in owning and operating properties
similar to the Property in connection with the closing of the Loan. Accordingly,
except with the prior written consent of Mortgagee or as otherwise expressly
permitted in the Note, Mortgagor shall not cause or permit any sale, exchange,
mortgage, pledge, hypothecation, assignment, encumbrance or other transfer,
conveyance or disposition, whether voluntarily, involuntarily or by operation of
law ("Transfer") of all or any part of, or all or any direct or indirect
interest in, the Property or the Collateral (except for equipment and inventory
in the ordinary course of its business), or cause or permit a Transfer of any
direct or indirect interest (whether general partnership interest, stock,
non-managing member limited liability company interest, trust, or otherwise) in
Mortgagor or Borrower. In the event of any Transfer that is not expressly
permitted in the Note and is without the prior written consent of Mortgagee,
Mortgagee shall have the absolute right at its option, without prior demand or
notice, to declare all of the Secured Obligations immediately due and payable,
except to the extent prohibited by law, and pursue its rights and remedies under
Section 7.3 herein. Mortgagor agrees to pay any prepayment fee as set forth in
the Note in the event the Secured Obligations are accelerated pursuant to the
terms of this Section. Consent to one such Transfer shall not be deemed to be a
waiver of the right to require the consent to future or successive Transfers.
Except for Transfers expressly permitted under the Note, Mortgagee's consent to
any Transfer may be withheld, conditioned or delayed in Mortgagee's sole and
absolute discretion.

            6.16 INTENTIONALLY OMITTED.

            6.17 INTENTIONALLY OMITTED.

            6.18 EXCULPATION. Mortgagee shall not directly or indirectly be
liable to Mortgagor or any other person as a consequence of: (a) the exercise of
the rights, remedies or powers granted to Mortgagee in this Mortgage; (b) the
failure or refusal of Mortgagee to perform or discharge any obligation or
liability of Mortgagor under any agreement related to the Property or under this
Mortgage; or (c) any loss sustained by Mortgagor or any third party resulting
from Mortgagee's failure to lease the Property after a Default or from any other
act or omission of Mortgagee in managing the Property after a Default unless the
loss is caused by the willful misconduct and bad faith of Mortgagee and no such
liability shall be asserted or enforced against Mortgagee, all such liability
being expressly waived and released by Mortgagor.

            6.19 INDEMNITY. Without in any way limiting any other indemnity
contained in this Mortgage, Mortgagor agrees to defend, indemnify and hold
harmless the Mortgagee Group (as hereinafter defined) from and against any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of: (a) the making of the Loan, except for violations of banking laws or
regulations by the Mortgagee Group; (b) this Mortgage; (c) the execution of this
Mortgage or the performance of any act required or permitted hereunder or by
law; (d) any failure of Mortgagor to perform Mortgagor's obligations under this
Mortgage or the other Loan Documents; (e) any alleged obligation or undertaking
on the Mortgagee Group's part to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations
contained in any other document related to the Property; (f) any act or omission
by Mortgagor or any contractor, agent, employee or representative of Mortgagor
with respect to the Property; or (g) any claim, loss, damage, cost, expense or
liability directly or indirectly arising out of: (i) the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of any Hazardous Materials which are found
in, on, under or about the Property (including, without limitation, underground
contamination); or (ii) the breach of any covenant, representation or warranty
of Mortgagor under Section 6.2 above. The foregoing to the contrary
notwithstanding, this indemnity shall not include any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of the gross negligence
or willful misconduct of any member of the Mortgagee Group, or any claim, loss,
damage, cost, expense or liability incurred by the Mortgagee Group arising from
any act or incident on the Property occurring after the full reconveyance and
release of the lien of this Mortgage on the Property, or with respect to the
matters set forth in clause (g) above, any claim, loss,


                                    Page 23
<PAGE>
damage, cost, expense or liability incurred by the Mortgagee Group resulting
from the introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure sale
under this Mortgage, either pursuant to judicial decree or the power of sale, or
by deed in lieu of such foreclosure. This indemnity shall include, without
limitation: (aa) all consequential damages (including, without limitation, any
third party tort claims or governmental claims, fines or penalties against the
Mortgagee Group); (bb) all court costs and reasonable attorneys' fees
(including, without limitation, expert witness fees) paid or incurred by the
Mortgagee Group; and (cc) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Property which is
required by any governmental entity or is otherwise necessary to render the
Property in compliance with all laws and regulations pertaining to Hazardous
Materials. "Mortgagee Group", as used herein, shall mean (1) Mortgagee
(including, without limitation, any participant in the Loan), (2) any entity
controlling, controlled by or under common control with Mortgagee, (3) the
directors, officers, employees and agents of Mortgagee and such other entities,
and (4) the successors, heirs and assigns of the entities and persons described
in foregoing clauses (1) through (3). Mortgagor shall pay immediately upon
Mortgagee's demand any amounts owing under this indemnity together with interest
from the date the indebtedness arises until paid at the rate of interest
applicable to the principal balance of the Note as specified therein. Mortgagor
agrees to use legal counsel reasonably acceptable to the Mortgagee Group in any
action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
SECTION SHALL SURVIVE THE SATISFACTION AND RELEASE OF THIS MORTGAGE, BUT
MORTGAGOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF
THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            6.20 INTENTIONALLY OMITTED.

            6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
Without notice to or the consent, approval or agreement of any persons or
entities having any interest at any time in the Property or in any manner
obligated under the Secured Obligations ("Interested Parties"), Mortgagee may,
from time to time: (a) fully or partially release any person or entity from
liability for the payment or performance of any Secured Obligation; (b) extend
the maturity of any Secured Obligation; (c) make any agreement with Borrower
increasing the amount or otherwise altering the terms of any Secured Obligation;
(d) accept additional security for any Secured Obligation; or (e) release all or
any portion of the Property, Collateral and other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the personal
liability of any of said Interested Parties, or release or impair the priority
of the lien of this Mortgage upon the Property.


                                    Page 24
<PAGE>
            6.22 SALE OR PARTICIPATION OF LOAN. Mortgagor agrees that Mortgagee
may at any time sell, assign, participate or securitize all or any portion of
Mortgagee's rights and obligations under the Loan Documents, and that any such
sale, assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, and/or into the
public securities market, in Mortgagee's sole discretion. Mortgagor further
agrees that Mortgagee may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and financial and
other information heretofore or hereafter provided to or known to Mortgagee with
respect to: (a) the Property and its operation; and/or (b) any party connected
with the Loan (including, without limitation, Mortgagor, any partner or member
of Mortgagor, any constituent partner or member of Mortgagor, any guarantor and
any nonborrower mortgagor). In the event of any such sale, assignment,
participation or securitization, Mortgagee and the other parties to the same
shall share in the rights and obligations of Mortgagee set forth in the Loan
Documents as and to the extent they shall agree among themselves. In connection
with any such sale, assignment, participation or securitization, Mortgagor
further agrees that the Loan Documents shall be sufficient evidence of the
obligations of Mortgagor to each purchaser, assignee or participant, and
Mortgagor shall, within 15 days after request by Mortgagee, (x) deliver an
estoppel certificate verifying for the benefit of Mortgagee and any other party
designated by Mortgagee the status and the terms and provisions of the Loan in
form and substance acceptable to Mortgagee, (y) provide any information, legal
opinions or documents regarding Mortgagor, Guarantor (as defined in the Loan
Documents), the Property and any tenants of the Property as Mortgagee or
Mortgagee's rating agencies may reasonably request, and (z) enter into such
amendments or modifications to the Loan Documents or the organizational
documents of Mortgagor as may be reasonably required in order to facilitate any
such sale, assignment, participation or securitization without impairing
Mortgagor's rights or increasing Mortgagor's obligations. The indemnity
obligations of Mortgagor under the Loan Documents shall also apply with respect
to any purchaser, assignee or participant.

            6.23 RELEASE. Upon payment in full of the Secured Obligations, and
satisfaction of all of the covenants, warranties, undertakings and agreements
made in this Mortgage and in the other Loan Documents (including, without
limitation, repayment in full of all principal, interest and other amounts owing
under the Note) are kept and performed, and all obligations, if any, of
Mortgagee for further advances have been terminated, then, and in that event
only, Mortgagee shall release, without warranty, the Property or that portion
thereof then held hereunder. The recitals of any matters or facts in any release
executed hereunder shall be conclusive proof of the truthfulness thereof. To the
extent permitted by law, the release may describe the grantee as "the person or
persons legally entitled thereto". Mortgagee shall have no duty to determine the
rights of persons claiming to be rightful grantees of any release. When the
Property has been fully released, the last such release shall operate as a
reassignment of all future rents, issues and profits of the Property to the
person or persons legally entitled thereto.

            6.24 SUBROGATION. Mortgagee shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole or in part by
Mortgagee pursuant to this Mortgage or by the proceeds of any loan secured by
this Mortgage.

            6.25 MANAGEMENT AGREEMENTS. Without the prior written consent of
Mortgagee, Mortgagor shall not terminate, modify, amend or enter into any
agreement providing for the management, leasing or operation of the Property.
Mortgagor represents,


                                    Page 25
<PAGE>
warrants and covenants that any existing management agreement includes, and any
future management agreement entered into by Mortgagor shall include, a provision
which provides that the management agreement is automatically terminated upon
the transfer of the Property by Mortgagor, either by sale, foreclosure, deed in
lieu of foreclosure, or otherwise, to Mortgagee or any other purchaser of the
Property. Upon a Default under the Loan Documents or a default under any
management agreement then in effect, which default is not cured within any
applicable grace or cure period, Mortgagee shall have the right to terminate, or
to direct Mortgagor to terminate, such management agreement upon thirty (30)
days' written notice and to retain, or to direct Mortgagor to retain, a new
management agent approved by Mortgagee.

                              ARTICLE VII. DEFAULT

            7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as defined
below).

            (a) OPTIONAL DEFAULT. An "Optional Default" shall occur, at
Mortgagee's option, upon the occurrence of any of the following events:

            (i) MONETARY. Borrower or Mortgagor shall fail to (aa) pay when due
any sums payable under the Loan Documents which by their express terms require
immediate payment without any grace period or sums which are payable on the
Maturity Date, or (bb) pay within 5 days when due any other sums payable under
the Note, this Mortgage or any of the other Loan Documents, including, without
limitation, any monthly payment due under the Note.

            (ii) FAILURE TO PERFORM. Borrower or Mortgagor shall fail to
observe, perform or discharge any of Borrower's or Mortgagor's obligations,
covenants, conditions or agreements, other than Borrower's or Mortgagor's
payment obligations, under the Note, this Mortgage or any of the other Loan
Documents, and (aa) such failure shall remain uncured for 30 days after written
notice thereof shall have been given to Borrower or Mortgagor, as the case may
be, by Mortgagee or (bb) if such failure is of such a nature that it cannot be
cured within such 30 day period, Borrower or Mortgagor shall fail to commence to
cure such failure within such 30 day period or shall fail to diligently
prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certificate or other statement (financial or otherwise) made or furnished by or
on behalf of Borrower, Mortgagor, or a guarantor, if any, to Mortgagee or in
connection with any of the Loan Documents, or as an inducement to Mortgagee to
make the Loan, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished.

            (iv) CONDEMNATION; ATTACHMENT. The condemnation, seizure or
appropriation of any material portion (as reasonably determined by Mortgagee) of
the Property; or the sequestration or attachment of, or levy or execution upon
any of the Property, the Collateral or any other collateral provided by Borrower
or Mortgagor under any of the Loan Documents, or any material portion of the
other assets of Borrower or Mortgagor, which sequestration, attachment, levy or
execution is not released or dismissed within 45 days after its occurrence; or
the sale of any assets affected by any of the foregoing.


                                    Page 26
<PAGE>
            (v) UNINSURED CASUALTY. The occurrence of an uninsured casualty with
respect to any material portion (as reasonably determined by Mortgagee) of the
Property unless: (aa) no other Default has occurred and is continuing at the
time of such casualty or occurs thereafter; (bb) Mortgagor promptly notifies
Mortgagee of the occurrence of such casualty; and (cc) not more than 45 days
after the occurrence of such casualty, Mortgagor delivers to Mortgagee
immediately available funds in an amount sufficient, in Mortgagee's reasonable
opinion, to pay all costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent during the repair
period). So long as no Default has occurred and is continuing at the time of
Mortgagee's receipt of such funds and no Default occurs thereafter, Mortgagee
shall make such funds available for the repair or restoration of the Property.
Notwithstanding the foregoing, Mortgagee shall have no obligation to make any
funds available for repair or restoration of the Property unless and until all
the conditions set forth in clauses (ii) and (iii) of the second sentence of
Section 6.11(b) of this Mortgage have been satisfied. Mortgagor acknowledges
that the specific conditions described above are reasonable.

            (vi) ADVERSE FINANCIAL CHANGE. Any material adverse change in the
financial condition of Borrower or any general partner or managing member of
Borrower, any guarantor, or any other person or entity from the condition shown
on the financial statement(s) submitted to Mortgagee and relied upon by
Mortgagee in making the Loan, and which change Mortgagee reasonably determines
will have a material adverse effect on (aa) the business, operations or
condition of the Property; or (bb) the ability of Borrower or Mortgagor to pay
or perform Borrower's or Mortgagor's obligations in accordance with the terms of
the Note, this Mortgage, and the other Loan Documents.

            (b) AUTOMATIC DEFAULT. An "Automatic Default" shall occur
automatically upon the occurrence of any of the following events:

            (i) VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
filing a petition for relief under the Bankruptcy Reform Act of 1978, as amended
or recodified ("Bankruptcy Code"), or under any other present or future state or
federal law regarding bankruptcy, reorganization or other relief to debtors
(collectively, "Debtor Relief Law"); or (bb) Borrower's filing any pleading in
any involuntary proceeding under the Bankruptcy Code or other Debtor Relief Law
which admits the jurisdiction of a court to regulate Borrower or the Property or
the petition's material allegations regarding Borrower's insolvency; or (cc)
Borrower's making a general assignment for the benefit of creditors; or (dd)
Borrower's applying for, or the appointment of, a receiver, trustee, custodian
or liquidator of Borrower or any of its property; or (ee) the filing by Borrower
of a petition seeking the liquidation or dissolution of Borrower or the
commencement of any other procedure to liquidate or dissolve Borrower.

            (ii) INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
dismissal of any involuntary petition under the Bankruptcy Code or other Debtor
Relief Law that is filed against Borrower or in any way restrains or limits
Borrower or Mortgagee regarding the Loan or the Property, prior to the earlier
of the entry of any order granting relief sought in the involuntary petition or
45 days after the date of filing of the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
clauses (i) or (ii) as to Mortgagor, any general partner or managing member of
Borrower or Mortgagor,


                                    Page 27
<PAGE>
or any guarantor or other person or entity in any manner obligated to Mortgagee
under the Loan Documents.

            7.2 ACCELERATION. Upon the occurrence of an Optional Default,
Mortgagee may, at its option, declare all sums owing to Mortgagee under the Note
and the other Loan Documents immediately due and payable. Upon the occurrence of
an Automatic Default, all sums owing to Mortgagee under the Note and the other
Loan Documents shall automatically become immediately due and payable.

            7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in
Section 7.2 above, at any time after a Default, Mortgagee shall have all of the
following rights and remedies:

            (a) ENTRY ON PROPERTY. With or without notice, and without releasing
Mortgagor from any Secured Obligation, and without becoming a mortgagee in
possession, to enter upon the Property from time to time and to do such acts and
things as Mortgagee deems necessary or desirable in order to inspect,
investigate, assess and protect the security hereof or to cure any Default,
including, without limitation: (i) to take and possess all documents, books,
records, papers and accounts of Mortgagor, Borrower or the then owner of the
Property which relate to the Property; (ii) to make, terminate, enforce or
modify leases of the Property upon such terms and conditions as Mortgagee deems
proper; (iii) to make repairs, alterations and improvements to the Property
necessary, in Mortgagee's reasonable judgment, to protect or enhance the
security hereof; (iv) to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Mortgagee
hereunder; (v) to pay, purchase, contest or compromise any encumbrance, charge,
lien or claim of lien which, in the sole judgment of Mortgagee, is or may be
senior in priority hereto, the judgment of Mortgagee being conclusive as between
the parties hereto; (vi) to obtain insurance; (vii) to pay any premiums or
charges with respect to insurance required to be carried hereunder; (viii) to
obtain a court order to enforce Mortgagee's right to enter and inspect the
Property for Hazardous Materials, in which regard the decision of Mortgagee as
to whether there exists a release or threatened release of Hazardous Materials
onto the Property shall be deemed reasonable and conclusive as between the
parties hereto; (ix) to have a receiver appointed pursuant to applicable law to
enforce Mortgagee's rights to enter and inspect the Property for Hazardous
Materials; and/or (x) to employ legal counsel, accountants, engineers,
consultants, contractors and other appropriate persons to assist them;

            (b) APPOINTMENT OF RECEIVER. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain appointment of a
receiver, trustee, liquidator or conservator of the Property, for any purpose,
including, without limitation, to enforce Mortgagee's rights to collect Payments
and to enter on and inspect the Property for Hazardous Materials, as a matter of
strict right and without regard to: (i) the adequacy of the security for the
repayment of the Secured Obligations; (ii) the existence of a declaration that
the Secured Obligations are immediately due and payable; (iii) the filing of a
notice of default; or (iv) the solvency of Mortgagor, Borrower or any guarantor
or other person or entity in any manner obligated to Mortgagee under the Loan
Documents;


                                    Page 28
<PAGE>
            (c) INJUNCTION. To commence and maintain an action or actions in any
court of competent jurisdiction to obtain specific enforcement of the covenants
of Mortgagor hereunder, and Mortgagor agrees that such covenants shall be
specifically enforceable by injunction or any other appropriate equitable remedy
and that for the purposes of any suit brought under this subparagraph, Mortgagor
waives the defense of laches and any applicable statute of limitations;

            (d) FORECLOSURE. Immediately commence an action to foreclose this
Mortgage or to specifically enforce its provisions or any of the indebtedness
secured hereby pursuant to the statutes in such case made and provided and sell
the Property or cause the Property to be sold in accordance with the
requirements and procedures provided by said statutes in a single parcel or in
several parcels at the option of Mortgagee.

            (i) In the event foreclosure proceedings are filed by Mortgagee, all
expenses incident to such proceeding, including, but not limited to, reasonable
attorneys' fees and costs, shall be paid by Mortgagor and secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. The secured indebtedness and all other
obligations secured by this Mortgage, including, without limitation, interest at
the Default Rate (as defined in the Note), any prepayment charge, fee or premium
required to be paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys' fees and any other amounts
due and unpaid to Mortgagee under the Loan Documents, may be bid by Mortgagee in
the event of a foreclosure sale hereunder. In the event of a judicial sale
pursuant to a foreclosure decree, it is understood and agreed that Mortgagee or
its assigns may become the purchaser of the Property or any part thereof.

            (ii) Mortgagee may, by following the procedures and satisfying the
requirements prescribed by applicable law, foreclose on only a portion of the
Property and, in such event, said foreclosure shall not affect the lien of this
Mortgage on the remaining portion of the Property foreclosed.

            Upon sale of the Property at any foreclosure, Mortgagee may credit
bid (as determined by Mortgagee in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Mortgagee
may, but is not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or adjusted by
Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and
costs incurred by Mortgagee with respect to the Property prior to foreclosure;
(iii) expenses and costs which Mortgagee anticipates will be incurred with
respect to the Property after foreclosure, but prior to resale, including,
without limitation, costs of structural reports and other due diligence, costs
to carry the Property prior to resale, costs of resale (e.g. commissions,
attorneys' fees, and taxes), costs of any Hazardous Materials clean-up and
monitoring, costs of deferred maintenance, repair, refurbishment and retrofit,
costs of defending or settling litigation affecting the Property, and lost
opportunity costs (if any), including the time value of money during any
anticipated holding period by Mortgagee; (iv) declining trends in real property
values generally and with respect to properties similar to the Property; (v)
anticipated discounts upon resale of the Property as a distressed or foreclosed
property; (vi) the fact of additional collateral (if any), for the Secured
Obligations; and (vii) such other factors or matters that Mortgagee (in its sole
and absolute discretion) deems appropriate. In regard to the above, Mortgagor
acknowledges and


                                    Page 29
<PAGE>
agrees that: (viii) Mortgagee is not required to use any or all of the foregoing
factors to determine the amount of its credit bid; (ix) this paragraph does not
impose upon Mortgagee any additional obligations that are not imposed by law at
the time the credit bid is made; (x) the amount of Mortgagee's credit bid need
not have any relation to any loan-to-value ratios specified in the Loan
Documents or previously discussed between Mortgagor and Mortgagee; and (xi)
Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion)
higher or lower than any appraised value of the Property;

            (e) MULTIPLE FORECLOSURES. To resort to and realize upon the
security hereunder and any other security now or later held by Mortgagee
concurrently or successively and in one or several consolidated or independent
judicial actions and to apply the proceeds received upon the Secured Obligations
all in such order and manner as Mortgagee determines in its sole discretion;

            (f) RIGHTS TO COLLATERAL. To exercise all rights Mortgagee may have
with respect to the Collateral under this Mortgage, the UCC or otherwise at law;
and

            (g) OTHER RIGHTS. To exercise such other rights as Mortgagee may
have at law or in equity or pursuant to the terms and conditions of this
Mortgage or any of the other Loan Documents.

            In connection with any sale or sales hereunder, Mortgagee may elect
to treat any of the Property which consists of a right in action or which is
property that can be severed from the Property (including, without limitation,
any improvements forming a part thereof) without causing structural damage
thereto as if the same were personal property or a fixture, as the case may be,
and dispose of the same in accordance with applicable law, separate and apart
from the sale of the Property. Any sale of Collateral hereunder shall be
conducted in any manner permitted by the UCC.

            7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. To the fullest extent
permitted by law, proceeds of any sale under this Mortgage shall be applied to
the extent funds are so available to the following items in such order as
Mortgagee in its discretion may determine:

            (a) To payment of the costs, expenses and fees of taking possession
of the Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee's right and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers' fees, court costs, reasonable
attorneys', accountants', appraisers', managers', and other professional fees,
title charges and transfer taxes.

            (b) To payment of all sums expended by Mortgagee under the terms of
any of the Loan Documents and not yet repaid, together with interest on such
sums at the Default Rate.

            (c) To payment of the secured indebtedness and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Rate and, to the extent permitted by applicable law, any prepayment fee, charge
or premium required to be paid under the Note in order to prepay principal, in
any order that Mortgagee chooses in its sole discretion.


                                    Page 30
<PAGE>
            7.5 WAIVER OF MARSHALING RIGHTS. Mortgagor, for itself and for all
parties claiming through or under Mortgagor, and for all parties who may acquire
a lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property, including, without limitation, the
Collateral, which is now or later may be security for any Secured Obligation,
marshaled upon any foreclosure of this Mortgage or on a foreclosure of any other
security for any of the Secured Obligations.

            7.6 NO CURE OR WAIVER. Neither Mortgagee's nor any receiver's entry
upon and taking possession of all or any part of the Property, nor any
collection of rents, issues, profits, insurance proceeds, condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation, nor the exercise of
any other right or remedy by Mortgagee or any receiver shall cure or waive any
Default or notice of default under this Mortgage, or nullify the effect of any
notice of default or sale (unless all Secured Obligations then due have been
paid or performed and Mortgagor has cured all other Defaults hereunder), or
impair the status of the security, or prejudice Mortgagee in the exercise of any
right or remedy, or be construed as an affirmation by Mortgagee of any tenancy,
lease or option or a subordination of the lien of this Mortgage.

            7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor agrees
to pay to Mortgagee immediately and upon demand all costs and expenses incurred
by Mortgagee in the enforcement of the terms and conditions of this Mortgage
(including, without limitation, court costs and attorneys' fees, whether
incurred in litigation or not) with interest from the date of expenditure until
said sums have been paid at the rate of interest applicable to the principal
balance of the Note as specified therein.

            7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Mortgagor hereby
irrevocably appoints Mortgagee and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest, to perform any
obligation of Mortgagor hereunder upon the occurrence of an event, act or
omission which, with notice or passage of time or both, would constitute a
Default, provided, however, that: (a) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(b) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to act under this Section.

            7.9 REMEDIES CUMULATIVE. All rights and remedies of Mortgagee
provided hereunder are cumulative and are in addition to all rights and remedies
provided by applicable law (including specifically that of foreclosure of this
instrument as though it were a mortgage) or in any other agreements between
Mortgagor and Mortgagee. Mortgagee may enforce any one or more remedies or
rights hereunder successively or concurrently.

                     ARTICLE VIII. MISCELLANEOUS PROVISIONS

            8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
by reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan Documents
grant further rights to Mortgagee and contain further agreements and affirmative
and negative covenants by Mortgagor which apply to this Mortgage and to the
Property and such further rights and agreements are incorporated herein by this
reference. THE OBLIGATIONS AND LIABILITIES OF MORTGAGOR UNDER THIS


                                    Page 31
<PAGE>
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE
SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            8.2 NON-WAIVER. By accepting payment of any amount secured hereby
after its due date or late performance of any other Secured Obligation,
Mortgagee shall not waive its right against any person obligated directly or
indirectly hereunder or on any Secured Obligation, either to require prompt
payment or performance when due of all other sums and obligations so secured or
to declare default for failure to make such prompt payment or performance. No
exercise of any right or remedy by Mortgagee hereunder shall constitute a waiver
of any other right or remedy herein contained or provided by law. No failure by
Mortgagee to exercise any right or remedy hereunder arising upon any Default
shall be construed to prejudice Mortgagee's rights or remedies upon the
occurrence of any other or subsequent Default. No delay by Mortgagee in
exercising any such right or remedy shall be construed to preclude Mortgagee
from the exercise thereof at any time while that Default is continuing. No
notice to nor demand on Mortgagor shall of itself entitle Mortgagor to any other
or further notice or demand in similar or other circumstances.

            8.3 CONSENTS, APPROVALS AND EXPENSES. Wherever Mortgagee's consent,
approval, acceptance or satisfaction is required under any provision of this
Mortgage or any of the other Loan Documents, such consent, approval, acceptance
or satisfaction shall not be unreasonably withheld, conditioned or delayed by
Mortgagee unless such provision expressly so provides. Wherever costs or
expenses are required to be paid under any provision of this Mortgage or any of
the other Loan Documents, such costs or expenses shall be reasonable.

            8.4 PERMITTED CONTESTS. After prior written notice to Mortgagee,
Mortgagor may contest, by appropriate legal or other proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any lien, levy, tax or assessment, or any lien of any laborer,
mechanic, materialman, supplier or vendor, or the application to Mortgagor or
the Property of any law or the validity thereof, the assertion or imposition of
which, or the failure to pay when due, would constitute a Default; provided that
(a) Mortgagor pursues the contest diligently, in a manner which Mortgagee
determines is not prejudicial to Mortgagee, and does not impair the lien of this
Mortgage; (b) the Property, or any part hereof or estate or interest therein,
shall not be in any danger of being sold, forfeited or lost by reason of such
proceedings; (c) in the case of the contest of any law or other legal
requirement, Mortgagee shall not be in any danger of any civil or criminal
liability; and (d) if required by Mortgagee, Mortgagor deposits with Mortgagee
any funds or other forms of assurance (including a bond or letter of credit)
satisfactory to Mortgagee to protect Mortgagee from the consequences of the
contest being unsuccessful. Mortgagor's right to contest pursuant to the terms
of this provision shall in no way relieve Mortgagor or Borrower of its
obligations under the Loan or to make payments to Mortgagee as and when due.

            8.5 FURTHER ASSURANCES. Mortgagor shall, upon demand by Mortgagee,
execute, acknowledge (if appropriate) and deliver any and all documents and
instruments and do or cause to be done all further acts reasonably necessary or
appropriate to effectuate the provisions hereof.



                                    Page 32
<PAGE>
            8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is
commenced between Mortgagor and Mortgagee regarding their respective rights and
obligations under this Mortgage or any of the other Loan Documents, the
prevailing party shall be entitled to recover, in addition to damages or other
relief, costs and expenses, reasonable attorneys' fees and court costs
(including, without limitation, expert witness fees). As used herein the term
"prevailing party" shall mean the party which obtains the principal relief it
has sought, whether by compromise settlement or judgment. If the party which
commenced or instituted the action, suit or proceeding shall dismiss or
discontinue it without the concurrence of the other party, such other party
shall be deemed the prevailing party.

            8.7 MORTGAGOR AND MORTGAGEE DEFINED. The term "Mortgagor" includes
both the original Mortgagor and any subsequent owner or owners of any of the
Property, and the term "Mortgagee" includes the original Mortgagee and any
future owner or holder, including assignees, pledgees and participants, of the
Note or any interest therein.

            8.8 DISCLAIMERS.

            (a) RELATIONSHIP. The relationship of Mortgagor and Mortgagee under
this Mortgage and the other Loan Documents is, and shall at all times remain,
solely that of borrower and lender; and Mortgagee neither undertakes nor assumes
any responsibility or duty to Mortgagor or to any third party with respect to
the Property. Notwithstanding any other provisions of this Mortgage and the
other Loan Documents: (i) Mortgagee is not, and shall not be construed to be, a
partner, joint venturer, member, alter ego, manager, controlling person or other
business associate or participant of any kind of Mortgagor, and Mortgagee does
not intend to ever assume such status; (ii) Mortgagee's activities in connection
with this Mortgage and the other Loan Documents shall not be "outside the scope
of activities of a lender of money" within the meaning of California Civil Code
Section 3434, as amended or recodified from time to time, and Mortgagee does not
intend to ever assume any responsibility to any person for the quality,
suitability, safety or condition of the Property; and (iii) Mortgagee shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Mortgagor.

            (b) NO LIABILITY. Mortgagee shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action, liability,
indebtedness, damage or injury of any kind or character to any person or
property arising from any construction on, or occupancy or use of, the Property,
whether caused by or arising from: (i) any defect in any building, structure,
grading, fill, landscaping or other improvements thereon or in any on-site or
off-site improvement or other facility therein or thereon; (ii) any act or
omission of Mortgagor or any of Mortgagor's agents, employees, independent
contractors, licensees or invitees; (iii) any accident in or on the Property or
any fire, flood or other casualty or hazard thereon; (iv) the failure of
Mortgagor or any of Mortgagor's licensees, employees, invitees, agents,
independent contractors or other representatives to maintain the Property in a
safe condition; or (v) any nuisance made or suffered on any part of the
Property.

            8.9 SEVERABILITY. If any term of this Mortgage, or the application
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Mortgage, or the application of such term
to persons or circumstances other than those as to


                                    Page 33
<PAGE>
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Mortgage shall be valid and enforceable to the fullest extent
permitted by law.

            8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Mortgagee under the Mortgage established by Article 1 and the security agreement
established by Article 4 are independent and cumulative, and there shall be no
merger of any lien created by the Mortgage with any security interest created by
the security agreement. Mortgagee may elect to exercise or enforce any of its
rights, remedies or interests under either or both the Mortgage or the security
agreement as Mortgagee may from time to time deem appropriate. The absolute
assignment of rents and leases established by Article 3 is similarly independent
of and separate from the Mortgage and the security agreement.

            8.11 MERGER. No merger shall occur as a result of Mortgagee's
acquiring any other estate in, or any other lien on, the Property unless
Mortgagee consents to a merger in writing.

            8.12 OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL. If more than one
person has executed this Mortgage as "Mortgagor", the obligations of all such
persons hereunder shall be joint and several.

            8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who
executes this Mortgage as a Mortgagor agrees that any money judgment which
Mortgagee obtains pursuant to the terms of this Mortgage or any other obligation
of that married person secured by this Mortgage may be collected by execution
upon any separate property or community property of that person.

            8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or
expressly incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior negotiations
or agreements, written or oral. The Loan Documents shall not be modified except
by written instrument executed by all parties. Any reference in any of the Loan
Documents to the Property or Collateral shall include all or any part of the
Property or Collateral. Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Mortgagee in
writing. When the identity of the parties or other circumstances make it
appropriate, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.

            8.15 CAPITALIZED TERMS. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Note.

            8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions
herein contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence shall not
be construed to permit Mortgagor to assign the Loan except as otherwise
permitted under the Note or the other Loan Documents.

            8.17 GOVERNING LAW. This Mortgage was accepted by Mortgagee in the
state of California and the proceeds of the Note secured hereby were disbursed
from the state of California, which state the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality of the
foregoing, matters of construction, validity, enforceability and


                                    Page 34
<PAGE>
performance, this Mortgage, the Note and the other Loan Documents and the
obligations arising hereunder and thereunder shall be governed by, and construed
in accordance with, the laws of the state of California applicable to contracts
made and performed in such state and any applicable law of the United States of
America, except that at all times the provisions for the creation, perfection
and enforcement of the liens and security interests created pursuant thereto and
pursuant to the other Loan Documents shall be governed by and construed
according to the law of the state where the Property is located. Except as
provided in the immediately preceding sentence, Mortgagor hereby unconditionally
and irrevocably waives, to the fullest extent permitted by law, any claim to
assert that the law of any jurisdiction other than California governs this
Mortgage, the Note and other Loan Documents.

            8.18 CONSENT TO JURISDICTION. Mortgagor irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Mortgagor against
Mortgagee, arising out of or relating to this Mortgage, the Note or the Loan;
(b) any state or federal court sitting in the state where the Property is
located or the state in which Mortgagor's principal place of business is located
over any suit, action or proceeding, brought by Mortgagee against Mortgagor,
arising out of or relating to this Mortgage, the Note or the Loan; and (c) any
state court sitting in the county of the state where the Property is located
over any suit, action, or proceeding, brought by Mortgagee to foreclose this
Mortgage or any action brought by Mortgagee to enforce its rights with respect
to the Collateral. Mortgagor irrevocably waives, to the fullest extent permitted
by law, any objection that Mortgagor may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such court and any
claim that any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum.

            8.19 EXHIBITS. Exhibit A is incorporated into this Mortgage by this
reference.

            8.20 ADDRESSES; REQUEST FOR NOTICE. All requests, demands, notices
and other communications that are required or permitted to be given to a party
under this Mortgage shall be in writing, refer to the Loan number, and shall be
sent to such party, either by personal delivery, by overnight delivery service,
by certified first class mail, return receipt requested, or by facsimile
transmission to the addressee or facsimile number below. All such notices and
communications shall be effective upon receipt of such delivery or facsimile
transmission, together with a printed receipt of the successful delivery of such
facsimile transmission. The addresses of the parties are set forth on page 1 of
this Mortgage and the facsimile numbers for the parties are as follows:

            Mortgagee:   WELLS FARGO BANK, N.A.
                         FAX NO.: (925) 691-5947

            Mortgagor:   MHC STAGECOACH, L.L.C.
                         FAX NO.: (312) 279-1715

      Mortgagor's principal place of business is at the address set forth on
page 1 of this Mortgage. A copy of any notice to Mortgagor shall be sent as
follows:


                                    Page 35
<PAGE>
                           Katz Randall Weinberg & Richmond
                           333 West Wacker Drive
                           Suite 1800
                           Chicago, Illinois 60606
                           Attention: Benjamin Randall
                           Facsimile: (312) 807-3903

      Any Mortgagor whose address is set forth on page 1 of this Mortgage hereby
requests that a copy of notice of default and notice of sale be delivered to it
at that address. Failure to insert an address shall constitute a designation of
Mortgagor's last known address as the address for such notice. Any party shall
have the right to change its address for notice hereunder to any other location
within the continental United States by giving 30 days notice to the other
parties in the manner set forth above.

            8.21 COUNTERPARTS. This Mortgage may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed an
original and all of which taken together, will be deemed to be one and the same
instrument.

            8.22 WAIVER OF JURY TRIAL. MORTGAGEE (BY ITS ACCEPTANCE HEREOF) AND
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF MORTGAGEE OR MORTGAGOR. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGEE TO ENTER INTO THIS MORTGAGE.


                                    Page 36
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage as of the
day and year first above written.

WITNESS/ATTEST:                       MORTGAGOR:

                                      MHC STAGECOACH, L.L.C., a Delaware limited
                                      liability company

/s/ Lawrence M. Gritton               By: MHC-QRS STAGECOACH, INC.,
-------------------------------           a  Delaware corporation,
Print Name: Lawrence M. Gritton           its Managing Member


/s/ Benjamin Randall                  By: /s/ John M. Zoeller
-------------------------------          -----------------------------------
Print Name: Benjamin Randall          Name: John M. Zoeller
                                      Its:  Vice President, Chief Financial
                                            Officer and Treasurer
<PAGE>
STATE OF IL           )
                      )  SS:
COUNTY OF COOK        )

            On 8/1, 2001 before me, M. Dobronski, Notary Public,
personally appeared John M. Zoeller, as Vice President, Chief Financial Officer
and Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company,
personally known to me to be the person whose name is subscribed in the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument, the person or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.


                                         /s/ Mary Dobronski
                                         --------------------------
                                         Print Name: Mary Dobronski

My Commission Expires:

11/3/03
[NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:


                                    EXHIBIT A



<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A
                               DESCRIPTION OF LAND

Exhibit A to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Land referred to in this Mortgage is situated in the
county of Manatee, state of Florida and is described as follows:

PARCEL A:

Begin at the Northwest corner of the Southeast 1/4 of the Northeast 1/4 of
Section 16, Township 35 South, Range 18 East, Manatee County, Florida; thence
South 00(Degree)14'17" East, 1327.25 feet to the Southwest corner of the
Southeast 1/4 of the Northeast 1/4 of the aforementioned Section 16; thence
North 89(Degree)58'09" East, 1322.53 feet to the Southeast corner of the
Southeast 1/4 of the Northeast 1/4 of Section 16; thence South 00(Degree)24'10"
East, 137.28 Feet; thence North 89(Degree)40'44" East, 1269.21 feet; thence
North 00(Degree)15'02" West, 137.28 feet; thence North 89(Degree)40'56" East,
42.00 feet along the South line of the Southwest 1/4 of the Northwest 1/4 of
Section 15, Township 35 South, Range 18 East, Manatee County, Florida to a
point, said point being the Southwest corner of the Easterly 8.00 feet of the
Southwest 1/4 of the Northwest 1/4 of Section 15; thence North 00(Degree) 15'02"
West along the West line of said Easterly 8.00 feet, 529.06 feet; thence North
89(Degree)54'48" West, 352.77 feet; thence North 83(Degree)03'14" West, 41.33
feet; thence North 89(Degree)58'10" West, 384.29 feet; thence North
64(Degree)05'35" West, 45.06 feet; thence North 89(Degree)49'37" West, 69.63
feet; thence North 00(Degree)27'02" West, 39.77 feet; thence South
89(Degree)57'27" West, 229.20 feet; thence South 00(Degree)34'37" West, 52.86
feet; thence South 89(Degree)50'04" West, 69.88 feet; thence North
68(Degree)46'00' West, 42.84 feet; thence North 89(Degree)02'58" West, 70.09
feet; thence North 00(Degree)46'23" West, 36.15 feet; thence South
89(Degree)58'50" West, 204.28 feet; thence South 01(Degree)06'03" West, 34.82
feet; thence North 89(Degree)55'45" West, 69.61 feet; thence North
61(Degree)14'43" West, 46.29 feet; thence North 89(Degree)47'56" West, 49.68
feet; thence North 01(Degree)06'00" West, 14.20 feet; thence South
89(Degree)37'41" West, 244.94 feet; thence North 14(Degree)02'42 West, 20.66
feet; thence North 00(Degree)04'49" East, 50.12 feet; thence North
07(Degree)13'20" West, 40.26 feet; thence North 00(Degree)29'42" West, 229.78
feet; thence North 89(Degree)19'18" East, 21.87 feet; thence North
00(Degree)01'05" East, 69.28 feet; thence North 16(Degree)42'43" West, 41.53
feet; thence North 00(Degree)18'37" East, 70.77 feet; thence North
90(Degree)00'00" West, 443.35 feet; thence North 02(Degree)07'48" West, 80.67
feet; thence North 25(Degree)58'34" East, 33.85 feet; thence North
00(Degree)07'24" East, 93.96 feet; thence South 89(Degree)59'49" West, 295.60
feet to the Point of Beginning.

PARCEL B:

Non-exclusive rights-of-way and easements as contained in Agreements recorded
January 13, 1939, in Deed Book 159, page 331, and re-recorded February 16, 1939,
in Deed Book 160, page


                                    EXHIBIT A
<PAGE>
23; recorded October 30, 1939, in Deed Book 164, page 340, and recorded May 31,
1974, in Official Records Book 673, page 646, all of the Public Records of
Manatee County, Florida.


                                    EXHIBIT A
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT B

      CALCULATION OF DOCUMENTARY STAMP AND INTANGIBLE PERSONAL PROPERTY TAX

Exhibit B to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

      This Mortgage is part of an out-of-state loan transaction which only
partially secures the loan. This Mortgage encumbers the property described on
Exhibit A, and separate mortgages are being executed and delivered by Mortgagor
encumbering certain other property located in Florida and in other states (such
other property being further described on Exhibit C and being referred to as the
"Other Property"). The Florida collateral is located in Brevard, Volusia and
Manatee Counties, and three (3) separate mortgages (the Florida Mortgages")
encumbering three (3) properties are being executed and delivered by Mortgagor
for simultaneous recording in the various Florida counties described above. The
total indebtedness secured by this Mortgage equals $50,000,000.00, as evidenced
by one (1) promissory note in the aggregate original principal amount of
$50,000,000.00 (the "Note"). The Note was made, executed and delivered outside
the State of Florida. The value of the Florida property encumbered by the
Florida Mortgages equals $27,200,000.00. The aggregate value of all other
property securing the loan and located outside the State of Florida equals
$50,400,000.00. Thus, the total aggregate value of all property securing the
loan equals $77,600,000.00. The property encumbered by the Florida Mortgages and
located in Florida represents thirty-five (35%) percent [$27,200,000.00 /
$77,600,000.00] of the total value of all property securing the loan. In
accordance with Florida Statutes, Section 201.08, and Florida Administrative
Code, Rule 12B-4.053(32)(b), documentary stamp tax is computed based upon the
percentage of indebtedness which the value of the mortgaged property located in
Florida bears to the total value of all mortgaged property (which, in this case,
equals $17,500,000.00). Accordingly, documentary stamp tax in the amount of
$61,250.00 is due upon the recording of the Florida Mortgages in the Florida
counties listed above. Pursuant to Chapter 199, Florida Statutes, non-recurring
intangible personal property tax is computed and payable based upon that portion
of the indebtedness which bears the same relation as the value of the mortgaged
property located in Florida bears to the total value of all mortgaged property,
which, in this case, equals [$50,000,000.00 x ($27,200,000.00 /
$77,600,000.00)]. Thus, non-recurring intangible personal property tax in the
amount of $35,000.00 is due and payable upon recording of the Florida Mortgages
in the Florida counties listed above.


                                    EXHIBIT B
<PAGE>
                                    EXHIBIT C
                          DESCRIPTION OF OTHER PROPERTY

Exhibit C to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Other Property referred to in this Mortgage is
described as follows:

                                 CABANA PROPERTY

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16,
Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01(Degree) 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89o 09' 31" East, along said Southerly right of way of Twain Avenue a
distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89(Degree) 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01o 22' 27" East along said Westerly right of way line of Cabana
Drive a distance of 1238.26 feet; thence South 88(Degree) 17' 57" West a
distance of 1271.25 feet; thence North 01(Degree) 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.


                                    EXHIBIT C
<PAGE>
                             WOODLAND HILLS PROPERTY

Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of the
Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th P.M.,
County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.


                                    EXHIBIT C
<PAGE>
                              INDIAN OAKS PROPERTY

PARCEL A:

A parcel of land lying in the Northwest 1/4 of Section 21, Township 25 South,
Range 36 East, Brevard County, Florida, being more particularly described as
follows:

Commence at the Northwest corner of said Section 21, and run North 89(Degree)
50' 50" East, along the North line of said Section 21, a distance of 330.04 feet
to the Point of Beginning; thence continue North 89(Degree) 50' 50" East, along
said North line, a distance of 816.83 feet; thence South 05(Degree) 47' 10"
West, a distance of 2488.78 feet; thence North 89(Degree) 53' 00" West, a
distance of 419.86 feet; thence South 01(Degree) 04' 00" East, a distance of
150.00 feet, to a point on the North Right of Way line of Barnes Boulevard (a
100 foot Right of Way); thence North 89(Degree) 53' 00" West, along said North
Right of Way line, a distance of 100.02 feet; thence North 01(Degree) 04' 00"
West, parallel to the West line of said Northwest 1/4, a distance of 2623.29
feet, to the Point of Beginning.

PARCEL B:

A perpetual non-exclusive easement for the benefit of Parcel A for surface water
runoff from "Pod #2" through a weir on said land eastward to an existing
drainage ditch as set forth in Grant of Easement from George M. Green, Jr. and
Sandie J. Green in favor of The Indian Oaks Corporation, dated July 27, 1987,
recorded August 4, 1987, in the Public Records of Brevard County, Florida, at
Official Records Book 2826, page 2681; and modified by Stipulated Settlement in
Civil Action No. 87-9785-CA-C, The Indian Oaks Corporation, a Florida
corporation, Plaintiffs, vs. George M. Green, Jr. and Sandie J. Green, his wife,
Defendants, dated July 27, 1987, recorded August 20, 1987, in the Public Records
of Brevard County, Florida, at Official Records Book 2831, page 2211, more
particularly described as follows:

Beginning at the approximate Southwest corner of land to the East as described
in Deed recorded in Official Records Book 2471, page 2094, Public Records of
Brevard County, Florida, said point being on the public drainage ditch on the
north side of Barnes Boulevard; thence north along an existing approximately
twenty (20) foot wide drainage ditch on the westerly boundary of the land
described in said Deed for an approximate distance of 844.00 feet to an outlet
pipe which extends easterly into said drainage ditch from a Type "C" inlet weir
located on "Pod #2" of Parcel A.


                                    EXHIBIT C
<PAGE>
                            PICKWICK VILLAGE PROPERTY

PARCEL A:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East, also a portion of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East, Volusia
County, Florida being more particularly described as follows:

As a point of reference begin at the Southwest corner of Section 6, Township 16
South, Range 33 East, thence along the South line of Section 6 South 89 degrees
35 minutes 25 seconds East a distance of 3300.00 feet to the Point of Beginning;
thence North 00 degrees 24 minutes 35 seconds East a distance of 330.00 feet;
thence North 89 degrees 35 minutes 25 seconds West a distance of 660.00 feet;
thence North 00 degrees 24 minutes 35 seconds East a distance of 200.00 feet;
thence South 89 degrees 35 minutes 25 seconds East a distance of 612.36 feet to
a point on the Southerly right-of-way line of Clyde Morris Blvd. (a 100.00 foot
right-of-way as now laid out and used); thence South 41 degrees 06 minutes 50
seconds East along the Southerly right-of-way line of said Clyde Morris Blvd. a
distance of 1067.45 feet to a point on the East line of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East; thence
South 00 degrees 24 minutes 35 seconds West along the said East line of the West
one-half of the Northeast one-quarter of said Section 7 a distance of 2370.82
feet; thence North 89 degrees 35 minutes 25 seconds West a distance of 1320.00
feet to a point in the West line of the West one-half of the Northeast
one-quarter of Section 7; thence North 00 degrees 24 minutes 35 seconds East
along the West line of the West one-half of the Northeast one-quarter of Section
7 a distance of 1650.00 feet; thence South 89 degrees 35 minutes 25 seconds East
a distance of 660.00 feet; thence North 00 degrees 24 minutes 35 seconds East a
distance of 990.00 feet to the Point of Beginning of this description.

PARCEL B:

A portion of the Northwest one-quarter of Section 7, Township 16 South, Range 33
East, Volusia County, Florida, being more particularly described as follows: As
a point of reference, commence at a concrete monument marking the Northwest
corner of Willow Run Subdivision, Unit 2, as per map recorded September 17,
1979, in Map Book 36, Pages 16 and 17 of the Public Records of Volusia County,
Florida; thence run North 00 degrees 41 minutes 47 seconds West along a
Northerly extension of the Westerly line of said Willow Run Subdivision, Unit 2,
a distance of 230.08 feet to a point in the North line of 230.00 foot Florida
Power and Light Company right-of-way as described in instrument recorded October
5, 1973, in Official Records Book 1664, Pages 448-450, of the Public Records of
Volusia County, Florida, said point also being in the Southerly line of Pickwick
Village Mobile Home Park, an unrecorded subdivision; thence run South 89 degrees
35 minutes 24 seconds West along the North line of said Florida Power and Light
Company right-of-way, being also the Southerly line of Pickwick Village, a
distance of 1.13 feet to a concrete monument marking the Southwest corner of
said Pickwick Village; thence North 00 degrees 24 minutes 10 seconds West, a
distance of 400.00 feet to the Point of Beginning; thence North 89 degrees 45
minutes 45 seconds West, a distance of 440.02 feet to the center line of an
80.00 foot drainage ditch easement as described in instrument


                                    EXHIBIT C
<PAGE>
recorded June 28, 1966, in Official Records Book 847, Pages 429 through 444, of
the Public Records of Volusia County, Florida; thence North 00 degrees 24
minutes 10 seconds West along the center line of said drainage ditch easement, a
distance of 1250.34 feet; thence South 89 degrees 45 minutes 45 seconds East, a
distance of 440.02 feet to a point on the Westerly line of said Pickwick Village
Subdivision; thence South 00 degrees 24 minutes 10 seconds East along said
Westerly line, a distance of 1250.34 feet to the Point of Beginning.

SAID PROPERTY ALSO BEING DESCRIBED AS FOLLOWS:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East; also a portion of the West one-half of the
Northeast one-quarter and a portion of the Northwest one-quarter, all lying in
Section 7, Township 16 South, Range 33 East in Volusia County, Florida, being
more particularly described as follows: Commence at the Southwest corner of said
Section 6, Township 16 South, Range 33 East and run South 89(Degree) 35' 25"
East along the South line of the Southwest one-quarter a distance of 2635.46
feet to the Southwest corner of the Southeast one-quarter of said Section 6;
thence North 01(Degree) 17' 05" East along the West line of the Southeast
one-quarter of said Section 6 a distance of 328.72 feet to an iron pipe labeled
LS 2048 and the Point of Beginning of this description; from said Point of
Beginning, continue North 01(Degree) 17' 05" East along the West line of the
Southeast one-quarter a distance of 201.23 feet to an iron pipe labeled LS 2048;
thence South 89(Degree) 35' 25" East, 619.16 feet to an iron pipe labeled LS
2048, said point being on the Southwesterly right-of-way line of Clyde Morris
Boulevard; thence South 40(Degree) 56' 13" East along the Southwesterly
right-of-way line of said Clyde Morris Boulevard a distance of 1061.80 feet to
an iron pipe labeled LS 2048, said point being on the East line of the West
one-half of the Northeast one-quarter of the aforementioned Section 7, Township
16 South, Range 33 East; thence South 00(Degree) 34' 32" West along the East
line of the West one-half of the Northeast one-quarter of said Section 7, a
distance of 2362.20 feet to an iron pin labeled LB 707, said point being on the
North line of the 230 foot wide Florida Power and Light Company right-of-way, as
described in Official Records Book 1664, Pages 448, 449, and 450 of the Public
Records of Volusia County, Florida; thence North 89o 13' 53" West along the
North line of the 230 foot wide Florida Power and Light Company right-of-way a
distance of 1321.12 feet to an iron pipe labeled LS 2048, said point being on
the West line of the West one-half of the Northeast one-quarter of the
aforementioned Section 7; thence North 00(Degree) 23' 35" East along the West
line of the West one-half of the Northeast one-quarter a distance of 400.00 feet
to an iron pipe labeled LS 2048; thence North 89(Degree) 13' 53" West, 440.02
feet to an iron pipe labled LS 2048, said point being the centerline of a
drainage ditch; thence North 00(Degree) 23' 35" East along said drainage ditch
centerline a distance of 1250.34 feet to an iron pipe labeled LS 2048; thence
South 89(Degree) 13' 53" East, 440.02 feet to an iron pipe labeled LS 2048, said
point being on the West line of the West one-half of the Northeast one-quarter
of the aforementioned Section 7; thence South 00(Degree) 23' 35" West along the
West line of the West one-half of the Northeast one-quarter a distance of 12.16
feet to an iron pipe labeled LS 2048; thence South 89(Degree) 27' 21" East,
661.65 feet to an iron pipe labeled LS 2048; thence North 00(Degree) 25' 26"
East, 984.46 feet to an iron pipe labeled LS 2048; thence North 01(Degree) 14'
43" East, 328.45 feet to a nail in disk in pavement labeled LB 707; thence North
89(Degree) 33' 59" West, 661.95 feet to the Point of Beginning.


                                    EXHIBIT C
<PAGE>
                             APOLLO VILLAGE PROPERTY

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;
THENCE North 00(Degree) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;
THENCE South 89(Degree) 25' 45" East 65.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 25' 45" East 126.95 feet;
THENCE North 87(Degree) 23' 37" East 116.40 feet;
THENCE South 00(Degree) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;
THENCE South 00(Degree) 34' 44" West along the East line of said property 156.09
feet to a point on a line 500.00 feet North and parallel to the South line of
said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;
THENCE South 00(Degree) 27' 31" West 435.31 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 51.93 feet;
THENCE North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 20' 40" East along said West line 807.45 feet to a point
on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;
THENCE South 86(Degree) 58' 05" West along said South line and the South line of
the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;
THENCE South 00(Degree) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;
THENCE North 89(Degree) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;
THENCE South 00(Degree) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;
THENCE North 00(Degree) 27' 31" East 65.05 feet to the POINT OF BEGINNING;
THENCE continuing North 00(Degree) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;
THENCE North 87(Degree) 25' 34" East 36.52 feet;
THENCE South 02(Degree) 21' 45" East 308.14 feet;


                                    EXHIBIT C
<PAGE>
THENCE South 00(Degree) 20' 35" West 127.50 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE South 88(Degree) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 08' 29" East (North 88(Degree) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 06' 45" East 669.32 feet ( North 00(Degree) 20' 40" East
669.45, record) along said West line to the POINT OF BEGINNING;
THENCE North 89(Degree) 47' 06" West (North 89(Degree) 39' 20" West, record)
115.00 feet;
THENCE North 16(Degree) 08' 00" East 325.00 feet;
THENCE North 52(Degree) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;
THENCE South 00(Degree) 06' 45" West (South 00(Degree) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;
THENCE North 00(Degree) 20' 35" East 65.04 feet to a point on a line parallel to
and 65.00 feet North of the South line of said Section 21;
THENCE continuing North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 21.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 39' 20" East 55.00 feet;
THENCE North 00(Degree) 20' 40" East 40.00 feet;
THENCE North 89(Degree) 39' 20" West 55.00 feet;
THENCE South 00(Degree) 20' 40" West 40.00 feet to the POINT OF BEGINNING.


                                    EXHIBIT C
<PAGE>
                            CASA DEL SOL III PROPERTY

PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;
THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;
THENCE North 01(Degree) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;
THENCE West along said North line 627.98 feet;
THENCE North 45(Degree) 44' 20" East 28.64 feet;
THENCE North 01(Degree) 28' 40" East 307.70 feet;
THENCE North 45(Degree) 00' 00" East 149.61 feet;
THENCE North 32(Degree) 31' 59" West 76.22 feet;
THENCE North 01(Degree) 38' 30" East 420.00 feet;
THENCE North 89(Degree) 57' 50" East 11.71 feet;
THENCE North 01(Degree) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80(Degree) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23(Degree) 03'
59";
THENCE Northeasterly along said curve 575.86 feet;
THENCE North 01(Degree) 38' 30" East 84.00 feet;
THENCE North 89(Degree) 57' 50" East 738.38 feet;
THENCE South 01(Degree) 38' 30" West 1,407.21 feet;
THENCE West 200.00 feet;
THENCE South 01(Degree) 38' 30" West 300.11 feet to the TRUE POINT OF BEGINNING.

PARCEL NO. 2:

A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
THENCE West 1,326.54 feet along the South line of said Section 24;
THENCE North 01(Degree) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;
THENCE North 01(Degree) 38' 30" East 306.11 feet;
THENCE East 206.00 feet to the point of termination; and


                                    EXHIBIT C
<PAGE>
BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,757.00 feet and
South 89(Degree) 57' 50" West 1,120.55 feet from the Southeast corner of said
Section 24;
THENCE South 89(Degree) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 3:

A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:

BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,760.50 feet and
South 89(Degree) 57' 50" West 55.00 feet from the Southeast corner of Section
24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona;
THENCE South 89(Degree) 57' 50" West 1,833.37 feet to the point of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 4:

A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:

COMMENCING at the South quarter corner of Section 24;
THENCE North 01(Degree) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;
THENCE North 89(Degree) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;
THENCE continuing North 89(Degree) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;
THENCE South 01(Degree) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76(Degree) 55' 57" West;
THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19(Degree) 06' 47" an arc length of 477.16
feet;


                                    EXHIBIT C
<PAGE>
THENCE South 89(Degree) 55' 44" West to a point 6.00 feet West of and parallel
to said Easterly and Westerly boundary lines to the beginning of a curve concave
Easterly and having a radius of 1,436.40 feet;
THENCE Northerly along said curve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19(Degree) 03'
50" an arc length of 477.93 feet;
THENCE North 01(Degree) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.


                                    EXHIBIT C
<PAGE>
Recording Requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention: CMO Loan Admin.
Loan No. : 31-0900553R
Property Name: Woodland Hills

                                  DEED OF TRUST
                                       AND
                     ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
                                       AND
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001 are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, the PUBLIC
TRUSTEE OF ADAMS COUNTY, STATE OF COLORADO ("Trustee"), for the benefit of WELLS
FARGO BANK, NATIONAL ASSOCIATION ("Beneficiary"), with a mailing address at 1320
Willow Pass Road, Suite 205, Concord, California 94520.

                                 R E C I T A L S

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan
      and having a maturity date of September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, conveys and assigns to Trustee, in
      trust for the benefit of Beneficiary, with POWER OF SALE AND RIGHT OF
      ENTRY AND POSSESSION, all estate, right, title, power, privileges and
      interest which Trustor now has or may hereafter acquire in, to, under or
      derived from any or all of the following:


                                       1
<PAGE>
      a.    That real property ("Land") located in Thornton, county of Adams,
            state of Colorado, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            wells and well rights, well permits, spring and spring rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock rights or interests, royalties,
            development rights and credits, air rights, minerals, oil rights,
            and gas rights, all crops, timber, trees, and landscaping,
            historically used, or now or later used or useful in connection
            with, appurtenant to or related to the Land and all of Trustor's
            rights and interest to obtain sewer and other services from service
            districts;

      c.    All buildings, structures, facilities, other improvements and
            fixtures whether real, personal, or mixed, and whether or not
            affixed, now or hereafter located on the Land;

      d.    All machines, articles, apparatus, equipment, machinery and
            appliances and all accessions thereto and renewals and replacements
            thereof and substitutions therefor used in the operation or
            occupancy of the Land, it being intended by the parties that all
            such items shall be conclusively considered to be a part of the
            Land, whether or not attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

      All of the property described above is hereinafter collectively defined as
      the "Property". The listing of specific rights or property shall not be
      interpreted as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for


                                       2
<PAGE>
            the benefit of Beneficiary, when the obligation is evidenced by a
            writing which recites that it is secured by this Deed of Trust;

      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.

               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to


                                       3
<PAGE>
      such notice. If and when no Default exists, Beneficiary shall re-confer
      the License upon Trustor until the occurrence of another Default.

3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      a.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants which Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All


                                       4
<PAGE>
            such sums received by Beneficiary with respect to any Lease shall be
            deemed "Impounds" (as defined in Section 6.12b) and shall be
            deposited by Beneficiary into a pledged account in accordance with
            Section 6.12b. If no Default exists, Beneficiary shall release such
            Impounds to Trustor from time to time as necessary to pay or
            reimburse Trustor for such tenant improvements, brokerage
            commissions and other leasing costs as may be required to re-tenant
            the affected space; provided, however, Beneficiary shall have
            received and approved each of the following for each tenant for
            which such costs were incurred; (1) Trustor's written request for
            such release, including the name of the tenant, the location and net
            rentable area of the space and a description and cost breakdown of
            the tenant improvements or other leasing costs covered by the
            request; (2) Trustor's certification that any tenant improvements
            have been completed lien-free and in a workmanlike manner; (3) a
            fully executed Lease, or extension or renewal of the current Lease;
            (4) an estoppel certificate executed by the tenant including its
            acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4a or 3.4b within 10 Business Days after Beneficiary's
            receipt of such request (and all documents and information
            reasonably related thereto) shall be deemed to constitute
            Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant


                                       5
<PAGE>
      under a Lease of such right to subordinate. No subordination referred to
      in this Section shall constitute a subordination to any lien or other
      encumbrance, whenever arising, or improve the right of any junior
      lienholder. Nothing herein shall be construed as subordinating this Deed
      of Trust to any Lease.

                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
      interest to secure payment and performance of all of the Secured
      Obligations, in all of Trustor's right, title and interest in and to the
      following described personal property in which Trustor now or at any time
      hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Colorado Uniform Commercial Code,
      as amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any


                                       6
<PAGE>
      obligation of Trustor to Beneficiary unless Beneficiary shall make an
      express written election of said remedy under the UCC or other applicable
      law.

4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble any or all of the Collateral and make it
            available to Beneficiary at a place reasonably designated by
            Beneficiary; (ii) without prior notice (to the extent permitted by
            law), enter upon the Property or other place where any of the
            Collateral may be located and take possession of, collect, sell,
            lease, license and otherwise dispose of the Collateral, and store
            the same at locations acceptable to Beneficiary at Trustor's
            expense; (iii) sell, assign and deliver the Collateral at any place
            or in any lawful manner and bid and become purchaser at any such
            sales. In the event of a foreclosure sale, whether made by the
            Trustee under the terms hereof or under judgment of a court; (iv)
            the Collateral may, at the option of the Beneficiary, be sold as a
            whole; (v) it shall not be necessary that Beneficiary take
            possession of the Collateral prior to the time any sale is conducted
            nor shall it be necessary that said Collateral be present at the
            location of such sale; and (vi) Beneficiary may designate any one or
            more persons as agent to perform any act necessary to any sale held
            by Beneficiary, including the sending of notices and the conduct of
            the sale, but in the name and on behalf of Beneficiary; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

      It is hereby agreed that to the extent permitted by law, all of the
      Collateral is to be deemed and held to be a part of and affixed to the
      Property. The foregoing security interest shall also cover Trustor's
      leasehold interest in any of the foregoing Collateral which is leased by
      Trustor. Notwithstanding the foregoing, all of the foregoing Collateral
      shall be owned by Trustor and no leasing or installment sales or other
      financing in connection therewith shall be permitted without the prior
      written approval of Beneficiary. All of the Collateral shall be kept at
      the location of the Land.

      Beneficiary shall give Trustor at least 10 Business Days' prior written
      notice of the time and place of any public sale of such Collateral or of
      the time of or after which any private sale or any other intended
      disposition thereof is to be made, and if such notice is sent to Trustor,
      as the same is provided for the mailing of notices herein, it is hereby
      deemed that such notice shall be and is reasonable notice to Trustor. No
      such notice is necessary for any such Collateral which is perishable,
      threatens to decline speedily in value or is of a type customarily sold on
      a recognized market.

      Trustor acknowledges and agrees that a disposition of the Collateral in
      accordance with Beneficiary's rights and remedies as heretofore provided
      shall be deemed to have been a public sale thereof in a commercially
      reasonable manner if held contemporaneously with the sale under power of
      sale (nonjudicial foreclosure) as provided in Section 7.3(c)(ii) hereof
      upon giving the same notice with respect to the sale of the Collateral
      hereunder as is required under said Section 7.3(c)(ii). Beneficiary shall
      have no obligation to process or prepare the Collateral for sale or other
      disposition. In disposing of the Collateral, Beneficiary may disclaim all
      warranties of title, possession, quiet enjoyment and the like. Any
      proceeds of any sale or other disposition of the Collateral may be applied
      by Beneficiary first to the reasonable expenses incurred by Beneficiary in
      connection therewith, including, without limitation, reasonable attorneys'
      fees and disbursements, and then to the payment of the Secured
      Obligations, in such order of application as Beneficiary may from time to
      time elect.


                                       7
<PAGE>
4.5   POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
      Trustor's attorney-in-fact (such agency being coupled with an interest),
      and as such attorney-in-fact, Beneficiary may, without the obligation to
      do so, in Beneficiary's name or in the name of Trustor, prepare, execute,
      file and record financing statements, continuation statements,
      applications for registration and like papers necessary to create, perfect
      or preserve any of Beneficiary's security interests and rights in or to
      the Collateral, and upon a Default, take any other action required of
      Trustor; provided, however, that Beneficiary as such attorney-in-fact
      shall be accountable only for such funds as are actually received by
      Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.

      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity.

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.


                                       8
<PAGE>
      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.

      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.


                                       9
<PAGE>
      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.

      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;


                                       10
<PAGE>
      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not engaged and will not engage in, seek or
            consent to any dissolution, winding up, liquidation, consolidation,
            merger, asset sale, transfer of partnership or membership interest,
            or amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;

      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            $1,000,000 in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;


                                       11
<PAGE>
      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;

      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not and will not identify its partners, members
            or shareholders, or any affiliates of any of the foregoing, as a
            division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this


                                       12
<PAGE>
            Section 5.2 and any such entity shall conduct its business and
            operations in strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" means the possession, directly or indirectly, of the power to
      direct or cause the direction of the management and policies of a person,
      whether through ownership of voting securities, by contract or otherwise.

                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property;


                                       13
<PAGE>
      (j) materially alter the type of occupancy or use of all or any part of
      the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.

      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous Materials Laws"), including, without limitation: the
            Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
            Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
            1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
            amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive
            Environmental Response, Compensation and Liability Act of 1980, as
            amended (including the Superfund Amendments and Reauthorization Act
            of 1986, "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic
            Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.;
            the Occupational Safety and Health Act, as amended, 29 U.S.C.
            Section 651; the Emergency Planning and Community Right-to-Know Act
            of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health
            Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
            Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all
            comparable state and local laws, laws of other jurisdictions or
            orders and regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery of any occurrence or condition on any real property
            adjoining or in the vicinity of the Property that could cause the
            Property or any part thereof to become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.


                                       14
<PAGE>
      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that: (i)
            this Hazardous Materials Section is intended as Beneficiary's
            written request for information (and Trustor's response) concerning
            the environmental condition of the real property security as
            required by California Code of Civil Procedure Section 726.5; and
            (ii) each representation and warranty and covenant in this Section
            (together with any indemnity applicable to a breach of any such
            representation and warranty) with respect to the environmental
            condition of the Property is intended by Beneficiary and Trustor to
            be an "environmental provision" for purposes of California Code of
            Civil Procedure Section 736.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened
      (in writing) litigation against Trustor or Borrower if the aggregate
      damage claims against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation,


                                       15
<PAGE>
      the preparation or review of amendments, assumptions, waivers, releases,
      reconveyances, estoppel certificates or statements of amounts owing under
      any Secured Obligation). In connection with appraisals and inspections,
      Trustor specifically (but not by way of limitation) acknowledges that:
      (aa) a formal written appraisal of the Property by a state certified or
      licensed appraiser may be required by federal regulatory reporting
      requirements on an annual or more frequent basis; and (bb) Beneficiary may
      require inspection of the Property by an independent supervising
      architect, a cost engineering specialist, or both. Trustor shall pay all
      indebtedness arising under this Section immediately upon demand by
      Beneficiary together with interest thereon following notice of such
      indebtedness at the rate of interest then applicable to the principal
      balance of the Note as specified therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, (a) Beneficiary, at Beneficiary's
      election, may only require flood insurance if all or any portion of the
      improvements located on the Property is or becomes located in a special
      flood hazard area, and (b) Beneficiary, at Beneficiary's election, may
      only require earthquake insurance if all or any portion of the Property is
      or becomes located in an earthquake fault zone. Trustor shall also carry
      public liability insurance and such other insurance as Beneficiary may
      reasonably require, including, without limitation, business interruption
      insurance or loss of rents insurance. Such policies shall contain a
      standard mortgage clause naming Beneficiary and its successors in interest
      as a loss payee and requiring at least 30 days prior notice to the holder
      at termination or cancellation. Trustor shall maintain all required
      insurance throughout the term of the Loan and while any liabilities of
      Borrower or Trustor to Beneficiary under any of the Loan Documents remain
      outstanding at Trustor's expense, with companies, and in substance and
      form satisfactory to Beneficiary. Neither Beneficiary nor Trustee, by
      reason of accepting, rejecting, approving or obtaining insurance shall
      incur any liability for: (c) the existence, nonexistence, form or legal
      sufficiency of any insurance; (d) the solvency of any insurer; or (e) the
      payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by


                                       16
<PAGE>
            reason of loss sustained to all or any part of the Property; and
            (iv) all interest which may accrue on any of the foregoing. Trustor
            shall give Beneficiary prompt written notice of the occurrence of
            any casualty affecting, or the institution of any proceedings for
            eminent domain or for the condemnation of, the Property or any
            portion thereof. So long as no Default has occurred and is
            continuing at the time, Trustor shall have the right to adjust,
            compromise and settle any Claim of $100,000 or less without the
            consent of Beneficiary, provided, however, all awards, proceeds and
            other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost
            breakdown for the work; (dd) if reasonably required by Beneficiary,
            a payment and performance bond for the work; (ee) evidence of the
            continuation of substantially all Leases unless consented to in
            writing by Beneficiary; (ff) evidence that, upon completion of the
            work, the size, capacity, value, and income coverage ratios for the
            Property will be at least as great as those which existed
            immediately before the damage or condemnation occurred; and (gg)
            evidence of the satisfaction of any additional conditions that
            Beneficiary may reasonably establish to protect Beneficiary's
            security. Trustor acknowledges that the specific conditions
            described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the


                                       17
<PAGE>
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.

6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower


                                       18
<PAGE>
      (other than the sale or exchange of a limited partnership interest or a
      non-managing membership interest). If any Transfer not expressly permitted
      in the Note or this Deed of Trust is made without the prior written
      consent of Beneficiary, Beneficiary shall have the absolute right at its
      option, without prior demand or notice, to declare all of the Secured
      Obligations immediately due and payable, except to the extent prohibited
      by law, and pursue its rights and remedies under Section 7.3 herein.
      Trustor agrees to pay any prepayment fee as set forth in the Note in the
      event the Secured Obligations are accelerated pursuant to the terms of
      this Section. Consent to one such Transfer shall not be deemed to be a
      waiver of the right to require the consent to future or successive
      Transfers. Except for Transfers expressly permitted under the Note,
      Beneficiary's consent to any Transfer may be withheld, conditioned or
      delayed in Beneficiary's sole and absolute discretion.

6.16  INTENTIONALLY OMITTED.

6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee compensation and
      reimbursement for services and expenses in the administration of this
      trust pursuant to C.R.S. Sections 38-37-102 et seq., including, without
      limitation, reasonable attorneys' fees. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Trustee or
      Beneficiary together with interest thereon from the date the indebtedness
      arises at the rate of interest then applicable to the principal balance of
      the Note as specified therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      the Beneficiary Group (as defined below) from and against any claim, loss,
      damage, cost, expense or liability directly or indirectly arising out of:
      (a) the making of the Loan, except for violations of banking laws or
      regulations by the Beneficiary Group; (b) this Deed of Trust; (c) the
      execution of this Deed of Trust or the performance of any act required or
      permitted hereunder or by law; (d) any failure of Trustor to perform
      Trustor's obligations under this Deed of Trust or the other Loan
      Documents; (e) any alleged obligation or undertaking on the Beneficiary
      Group's part to perform or discharge any of the representations,
      warranties, conditions, covenants or other obligations contained in any
      other document related to the Property; (f) any act or omission by Trustor
      or any contractor, agent, employee or representative of Trustor with
      respect to the Property; or (g) any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of: (i) the use, generation,
      manufacture, storage, treatment, release, threatened release, discharge,
      disposal, transportation or presence of any Hazardous Materials which are
      found in, on, under or about the Property (including, without limitation,
      underground contamination); or (ii) the breach of any covenant,
      representation or warranty of Trustor under Sections 5.1.p, 5.1.q, 5.1.r,
      or 6.2 above. The foregoing to the contrary notwithstanding, this
      indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group, or any claim,
      loss, damage, cost, expense or liability incurred by the Beneficiary Group
      arising from any act or incident on the Property occurring after the full
      reconveyance and release of the lien of this Deed of Trust on the
      Property, or with respect to the matters set forth in clause (g) above,
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group resulting from the introduction and initial release of
      Hazardous Materials on the Property occurring after the transfer of title
      to the Property at a foreclosure sale under this Deed of Trust, either
      pursuant to judicial decree or the power of sale, or by deed in lieu of
      such foreclosure. This indemnity shall include, without limitation: (aa)
      all consequential damages (including, without limitation, any third party
      tort claims or governmental claims, fines or penalties against the
      Beneficiary Group); (bb) all court costs and reasonable attorneys' fees
      (including, without limitation, expert witness fees) paid or incurred by
      the Beneficiary Group; and (cc) the costs, whether foreseeable or


                                       19
<PAGE>
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Beneficiary's demand any amounts owing under this indemnity together with
      interest from the date the indebtedness arises until paid at the rate of
      interest applicable to the principal balance of the Note as specified
      therein. Trustor agrees to use legal counsel reasonably acceptable to the
      Beneficiary Group in any action or proceeding arising under this
      indemnity. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE TERMINATION OF
      THIS DEED OF TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE
      SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE ENTITLED "BORROWER'S
      LIABILITY."

6.20  INTENTIONALLY OMITTED.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RELEASE OF DEED OF TRUST. If the principal and interest and all other sums
      due or to become due under the Note shall have been paid, then and in that
      event only, the estate, right, title and interest of Trustee and
      Beneficiary in the Property shall cease, and upon (a) written notice from
      Beneficiary that all of the Secured Obligations have been paid, (b)
      presentment of the original Note marked "cancelled," (c) surrender


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<PAGE>
      of this Deed of Trust and said cancelled Note to Trustee, (d) execution of
      the statutory form of request for release by Beneficiary and Trustee, in
      due form at Trustor's cost, and (e) payment of Trustee's fees and costs
      and all recording costs, Trustee shall release this Deed of Trust and the
      Property shall become wholly free of the liens, security interests,
      conveyances and assignments created and evidenced hereby. No release of
      this Deed of Trust or the lien hereof shall be valid unless executed by
      Beneficiary and Trustee.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if any, to Beneficiary or in connection with any of
                  the Loan Documents, or as an inducement to Beneficiary to make
                  the Loan, shall be false, incorrect, incomplete or misleading
                  in any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or


                                       21
<PAGE>
                  attachment of, or levy or execution upon any of the Property,
                  the Collateral or any other collateral provided by Borrower or
                  Trustor under any of the Loan Documents, or any material
                  portion of the other assets of Borrower or Trustor, which
                  sequestration, attachment, levy or execution is not released
                  or dismissed within 45 days after its occurrence; or the sale
                  of any assets affected by any of the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.


                                       22
<PAGE>
            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, either in person or by agent,
            with or without bringing any action or proceeding, or by a receiver
            appointed by a court and without regard to the adequacy of its
            security, and without becoming a mortgagee in possession, to enter
            upon the Property from time to time and to do such acts and things
            as Beneficiary or Trustee deem necessary or desirable in order to
            inspect, investigate, assess and protect the security hereof or to
            cure any Default, including, without limitation: (i) to take and
            possess all documents, books, records, papers and accounts of
            Trustor, Borrower or the then owner of the Property which relate to
            the Property; (ii) to make, terminate, enforce or modify leases of
            the Property upon such terms and conditions as Beneficiary deems
            proper; (iii) to make repairs, alterations and improvements to the
            Property necessary, in Trustee's or Beneficiary's reasonable
            judgment, to protect or enhance the security hereof; (iv) to appear
            in and defend any action or proceeding purporting to affect the
            security hereof or the rights or powers of Beneficiary or Trustee
            hereunder; (v) to pay, purchase, contest or compromise any
            encumbrance, charge, lien or claim of lien which, in the sole
            judgment of either Beneficiary or Trustee, is or may be senior in
            priority hereto, the judgment of Beneficiary or Trustee being
            conclusive as between the parties hereto; (vi) to obtain insurance;
            (vii) to pay any premiums or charges with respect to insurance
            required to be carried hereunder; (viii) to obtain a court order to
            enforce Beneficiary's right to enter and inspect the Property for
            Hazardous Materials in which regard the decision of Beneficiary as
            to whether there exists a release or threatened release of Hazardous
            Materials onto the Property shall be deemed reasonable and
            conclusive as between the parties hereto; (ix) to have a receiver
            appointed pursuant to applicable law to enforce Beneficiary's rights
            to enter and inspect the Property for Hazardous Materials; and/or
            (x) to employ legal counsel, accountants, engineers, consultants,
            contractors and other appropriate persons to assist them. All sums
            expended by Beneficiary in connection with such entry and
            possession, together with interest thereon at the Default Interest
            Rate, shall be immediately due and payable to Beneficiary by Trustor
            on demand and shall be secured hereby and by all of the other Loan
            Documents securing all or any part of the indebtedness evidenced by
            the Note;

      b.    APPOINTMENT OF RECEIVER. With or without notice to Trustor or
            Borrower and without a hearing, which are hereby waived by Trustor
            and Borrower, to ex parte to apply to a court of competent
            jurisdiction for and obtain appointment of a receiver of the
            Property as a matter of strict right and Beneficiary's right to
            collect Payments, and without regard to: (i) the adequacy of the
            security for the repayment of the Secured Obligations; or (ii) the
            existence of a declaration that the Secured Obligations are
            immediately due and payable; and Trustor hereby irrevocably consents
            to such appointment and waives any and all notices of and defenses
            to such appointment and agrees not to oppose any application
            therefor by Beneficiary, but nothing herein is to be construed to
            deprive Beneficiary of any other right, remedy or privilege
            Beneficiary may now have under the law to have a receiver appointed,
            provided, however, that, the appointment of such receiver, trustee
            or other appointee by virtue of any court order, statute or
            regulation shall not impair or in any manner prejudice the rights of
            Beneficiary to receive Payments under the Leases pursuant to other
            terms and provisions hereof. Any such receiver shall have all of the
            usual powers and duties of receivers in similar cases, including,
            without limitation, the full power to hold, develop, rent, lease,
            manage,


                                       23
<PAGE>
            maintain, operate and otherwise use or permit the use of the
            Property upon such terms and conditions as said receiver may deem to
            be prudent and reasonable. Such receivership shall, at the option of
            Beneficiary, continue until full payment of the Secured Obligations
            or until title to the Property shall be passed by foreclosure sale
            under this Deed of Trust or deed in lieu of foreclosure;

      c.    FORECLOSURE.

            (i)   JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain or
                  cause Trustee to commence and maintain an action or actions in
                  any court of competent jurisdiction to foreclose this
                  instrument as a mortgage or to obtain specific enforcement of
                  the covenants of Trustor hereunder, and Trustor agrees that
                  such covenants shall be specifically enforceable by injunction
                  or any other appropriate equitable remedy and that for the
                  purposes of any suit brought under this subparagraph, Trustor
                  waives the defense of laches and any applicable statute of
                  limitations;

            (ii)  NONJUDICIAL FORECLOSURE. To commence foreclosure proceedings
                  against the Property by exercise of the power of sale herein
                  contained and cause the Property to be sold in accordance with
                  the requirements and procedures provided by applicable law in
                  a single parcel or in several parcels at the option of
                  Beneficiary. Should Beneficiary elect to foreclose by exercise
                  of the power of sale herein contained, Beneficiary shall file
                  with Trustee a written notice of election and demand for sale
                  and all other documents, certificates and affidavits as are
                  required by applicable law. Thereupon, Trustee shall cause a
                  copy of the notice of election and demand for sale to be
                  recorded in the Clerk and Recorder's Office of the county in
                  which the Property is located. Trustee shall then give such
                  notices as are required by law and shall conduct the
                  foreclosure sale of the Property in accordance with applicable
                  law. Trustee shall sell and dispose of the Property (en masse
                  or in separate parcels, as Trustee may think best) and all the
                  right, title and interest of Trustor and its successors and
                  assigns therein, at public auction at any place permitted by
                  applicable law for the highest and best price the same will
                  bring in cash. Subject to compliance with applicable law,
                  Trustee may postpone the sale of all or any portion of the
                  Property by public announcement at the time and place of sale,
                  and from time to time thereafter may postpone such sale by
                  public announcement at the time fixed by the preceding
                  postponement. When the sale is held, Trustee shall execute and
                  deliver to the purchaser of the Property or portions thereof
                  at such sale a certificate of purchase as required by
                  applicable law. Thereafter, following the expiration of all
                  applicable redemption periods and satisfaction of any other
                  requirements prescribed by law, Trustee shall execute and
                  deliver a deed for the Property to the person entitled
                  thereto, which deed shall be in such form as is required by
                  law. Such sale and said deed shall be a perpetual bar, both in
                  law and equity, against Trustor and its successors and
                  assigns, and all other persons claiming the Property or any
                  part thereof by, through, from or under Trustor. Beneficiary
                  may purchase the Property, or any part thereof, and may bid in
                  any part or all of the Secured Obligations and it shall not be
                  obligatory upon the purchaser at any such sale to see to the
                  application of the purchase money;

            (iii) GENERAL. (aa) Beneficiary may, by following the procedures and
                  satisfying the requirements prescribed by applicable law,
                  judicially or nonjudicially foreclose on only a portion of the
                  Property and, in such event, said foreclosure shall not affect
                  the lien of this Deed of Trust on the remaining portion of the
                  Property not foreclosed. (bb) If a nonjudicial foreclosure
                  hereunder shall be commenced by Trustee, Beneficiary may at
                  any time before the sale of the Property direct Trustee to
                  abandon the sale, and may then institute suit for the
                  collection of the Note and the other Secured Obligations and
                  for the judicial foreclosure of this Deed of Trust. If
                  Beneficiary should institute a suit for the collection of the
                  Note or any other Secured Obligation and for the judicial
                  foreclosure of this Deed of Trust, Beneficiary may at any time
                  before the entry of a final judgment in said suit dismiss the
                  same, and require Trustee to sell


                                       24
<PAGE>
                  the Property in accordance with the provisions of this Deed of
                  Trust. (cc) Upon sale of the Property at any judicial or
                  nonjudicial foreclosure, Beneficiary may credit bid (as
                  determined by Beneficiary in its sole and absolute discretion)
                  all or any portion of the Secured Obligations. In determining
                  such credit bid, Beneficiary may, but is not obligated to,
                  take into account all or any of the following: (i) appraisals
                  of the Property as such appraisals may be discounted or
                  adjusted by Beneficiary in its sole and absolute underwriting
                  discretion; (ii) expenses and costs incurred by Beneficiary
                  with respect to the Property prior to foreclosure, provided
                  such amounts comprise a part of the Secured Obligations; (iii)
                  estimated reasonable expenses and costs, net of income of
                  holding, marketing and selling the Property, which Beneficiary
                  anticipates will be incurred with respect to the Property
                  after foreclosure, but prior to resale, including, without
                  limitation, costs of structural reports and other due
                  diligence, costs to carry the Property prior to resale, costs
                  of resale (e.g. commissions, attorneys' fees, and taxes),
                  costs of any Hazardous Materials clean-up and monitoring,
                  costs of deferred maintenance, repair, refurbishment and
                  retrofit, costs of defending or settling litigation affecting
                  the Property, (iv) the fact of additional collateral (if any),
                  for the Secured Obligations; and (v) such other factors or
                  matters that Beneficiary (in its sole and absolute discretion)
                  deems appropriate. In regard to the above, Trustor
                  acknowledges and agrees that: (vi) Beneficiary is not required
                  to use any or all of the foregoing factors to determine the
                  amount of its credit bid; (vii) this paragraph does not impose
                  upon Beneficiary any additional obligations that are not
                  imposed by law at the time the credit bid is made; (viii) the
                  amount of Beneficiary's credit bid need not have any relation
                  to any loan-to-value ratios specified in the Loan Documents or
                  previously discussed between Trustor and Beneficiary; and (ix)
                  Beneficiary's credit bid may be (at Beneficiary's sole and
                  absolute discretion) higher or lower than any appraised value
                  of the Property;

      d.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Trustee and
            Beneficiary or either of them determine in their sole discretion;

      e.    COLLECTION OF PAYMENTS. With or without taking possession of the
            Property, sue for or otherwise collect Payments under the Leases,
            including those past due and unpaid, and apply the same, less costs
            and expenses of operation and collection, including, without
            limitation, attorneys' fees, against the Secured Obligations in such
            order as Beneficiary may determine in its discretion, without in any
            way curing or waiving any default.

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and

      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal property or a
      fixture, as the case may be, and dispose of the same in accordance with
      applicable law, separate and apart from the sale of the Property. Any sale
      of Collateral hereunder shall be conducted in any manner permitted by the
      UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, Trustee shall apply the proceeds of such sale in the following
      order of priority: First, to the costs, fees and expenses of exercising
      the power of sale and of sale, including, without limitation, the payment
      of the Trustee's fees


                                       25
<PAGE>
      and attorneys' fees; Second, to the payment of the Secured Obligations
      which are secured by this Deed of Trust, in such order as Beneficiary
      shall determine in its sole discretion; Third, to satisfy the outstanding
      balance of obligations secured by any junior liens or encumbrances in the
      order of their priority; and Fourth, to the Trustor or the Trustor's
      successor in interest, or in the event the Property has been sold or
      transferred to another, to the vested owner of record at the time of the
      Trustee's sale.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      sale (unless all Secured Obligations then due have been paid or performed
      and Trustor has cured all other Defaults hereunder), or impair the status
      of the security, or prejudice Beneficiary in the exercise of any right or
      remedy, or be construed as an affirmation by Beneficiary of any tenancy,
      lease or option or a subordination of the lien of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.

7.10  DISCONTINUANCE OF PROCEEDINGS. If Beneficiary shall invoke any right,
      remedy or recourse permitted hereunder or under the other Loan Documents
      and shall thereafter elect to discontinue or abandon the same for any
      reason, Beneficiary shall have the unqualified right to do so and, in such
      an event, Trustor and Beneficiary shall be restored to their former
      positions with respect to the Secured Obligations, the Loan Documents, the
      Property and otherwise, and the rights, remedies, recourses and powers of
      Beneficiary shall continue as if the same had never been invoked.

                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The


                                       26
<PAGE>
      Loan Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses, reasonable attorneys' fees and court
      costs (including, without limitation, expert witness fees). As used herein
      the term "prevailing party" shall mean the party which obtains the
      principal relief it has sought, whether by compromise settlement or
      judgment. If the party which commenced or instituted the action, suit or
      proceeding shall dismiss or discontinue it without the concurrence of the
      other party, such other party shall be deemed the prevailing party.


                                       27
<PAGE>
8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledges and participants,
      of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem appropriate. The
      absolute assignment of rents and leases established by Article 3 is
      similarly independent of and separate from the deed of trust and the
      security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.


                                       28
<PAGE>
8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents shall be binding upon and inure to
      the benefit of the heirs, successors and assigns of the parties. The
      foregoing sentence shall not be construed to permit Trustor to assign the
      Loan except as otherwise permitted under the Note or the other Loan
      Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note and the other
      Loan Documents and the obligations arising hereunder and thereunder shall
      be governed by, and construed in accordance with, the laws of the state of
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder and the creation, perfection
      and enforcement of the security interests created pursuant hereto and
      pursuant to the other Loan Documents in any Collateral which is located in
      the state where the Property is located shall be governed by and construed
      according to the law of the state where the Property is located. Except as
      provided in the immediately preceding sentence, Trustor hereby
      unconditionally and irrevocably waives, to the fullest extent permitted by
      law, any claim to assert that the law of any jurisdiction other than
      California governs this Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the Property is located over any suit, action, or proceeding,
      brought by Beneficiary to exercise its STATUTORY POWER OF SALE under this
      Deed of Trust or any action brought by Beneficiary to enforce its rights
      with respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.


                                       29
<PAGE>
8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                       Trustor:
      ------------                       --------

      WELLS FARGO BANK, N.A.             MHC STAGECOACH, L.L.C.
      FAX No.: (925) 691-5947            FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                           Katz Randall Weinberg & Richmond
                           333 West Wacker Drive
                           Suite 1800
                           Chicago, Illinois 60606
                           Attention: Benjamin Randall
                           Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR.
      THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS
      DEED OF TRUST.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]


                                       30
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                   "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By: MHC-QRS STAGECOACH, INC.,
    a  Delaware corporation,
    its Managing Member


    By: /s/ John M. Zoeller
       -------------------------------------
    Name: John M. Zoeller
    Its: Vice President, Chief Financial
         Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL                )
                           )  SS:
COUNTY OF COOK             )

            The foregoing instrument was acknowledged before me this 8/1,
2001 by John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company.

WITNESS my hand and official seal.


                                                  /s/ Mary Dobronski
                                          -----------------------------------
                                          Print Name: Mary Dobronski

My Commission Expires:

     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A
                               DESCRIPTION OF LAND

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor", PUBLIC
TRUSTEE OF ADAMS COUNTY, STATE OF COLORADO, as "Trustee", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Adams, state of Colorado and more particularly known as Thornton,
Colorado and is described as follows:

Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of the
Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th P.M.,
County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.


                                    EXHIBIT A
<PAGE>
Recording Requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:      CMO Loan Admin.
Loan No. :      31-0900553R
Property Name:  Apollo Village

                                  DEED OF TRUST
                                       AND
                     ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
                                      AND
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001 are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, TRANSNATION TITLE
INSURANCE COMPANY ("Trustee"), with a mailing address at 234 N. Central Avenue,
Phoenix, Arizona, 85004 and WELLS FARGO BANK, NATIONAL ASSOCIATION
("Beneficiary"), with a mailing address at 1320 Willow Pass Road, Suite 205,
Concord, California 94520.

                                    RECITALS

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan.
      The maturity date of the Loan is September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, conveys and assigns to Trustee, in
      trust for the benefit of Beneficiary, with power of sale and right of
      entry and possession, all estate, right, title and interest which Trustor
      now has or may hereafter acquire in, to, under or derived from any or all
      of the following:


                                       1
<PAGE>
      a.    That real property ("Land") located in Peoria, county of Maricopa,
            state of Arizona, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock or interests, royalties, development
            rights and credits, air rights, minerals, oil rights, and gas
            rights, now or later used or useful in connection with, appurtenant
            to or related to the Land;

      c.    All buildings, structures, facilities, other improvements and
            fixtures now or hereafter located on the Land;

      d.    All apparatus, equipment, machinery and appliances and all
            accessions thereto and renewals and replacements thereof and
            substitutions therefor used in the operation or occupancy of the
            Land, it being intended by the parties that all such items shall be
            conclusively considered to be a part of the Land, whether or not
            attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust, including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for the benefit of Beneficiary, when the obligation is evidenced by
            a writing which recites that it is secured by this Deed of Trust;


                                       2
<PAGE>
      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.

               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to such notice. If and when no Default
      exists, Beneficiary shall re-confer the License upon Trustor until the
      occurrence of another Default.


                                       3
<PAGE>
3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise of or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      A.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants whom Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

           (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All such sums received by
            Beneficiary with respect to any Lease shall be deemed "Impounds" (as
            defined in Section 6.12b) and shall be deposited by Beneficiary into
            a pledged account in accordance with Section 6.12b. If no Default
            exists, Beneficiary shall release such Impounds to Trustor from time
            to time


                                       4
<PAGE>
            as necessary to pay or reimburse Trustor for such tenant
            improvements, brokerage commissions and other leasing costs as may
            be required to re-tenant the affected space; provided, however,
            Beneficiary shall have received and approved each of the following
            for each tenant for which such costs were incurred; (1) Trustor's
            written request for such release, including the name of the tenant,
            the location and net rentable area of the space and a description
            and cost breakdown of the tenant improvements or other leasing costs
            covered by the request; (2) Trustor's certification that any tenant
            improvements have been completed lien-free and in a workmanlike
            manner; (3) a fully executed Lease, or extension or renewal of the
            current Lease; (4) an estoppel certificate executed by the tenant
            including its acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4(a) or 3.4(b) within 10 Business Days after
            Beneficiary's receipt of such request (and all documents and
            information reasonably related thereto) shall be deemed to
            constitute Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant under a Lease of such right to
      subordinate. No subordination referred to in this Section shall constitute
      a subordination to any lien or other encumbrance, whenever arising, or
      improve the right of any junior lienholder. Nothing herein shall be
      construed as subordinating this Deed of Trust to any Lease.


                                       5
<PAGE>
                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
      interest to secure payment and performance of all of the Secured
      Obligations, in all of Trustor's right, title and interest in and to the
      following described personal property in which Trustor now or at any time
      hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Arizona Uniform Commercial Code, as
      amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any obligation of Trustor to Beneficiary unless
      Beneficiary shall make an express written election of said remedy under
      the UCC or other applicable law.


                                       6
<PAGE>
4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble the Collateral and make it available to
            Beneficiary at a place reasonably designated by Beneficiary; (ii)
            without prior notice (to the extent permitted by law), enter upon
            the Property or other place where the Collateral may be located and
            take possession of, collect, sell, lease, license and otherwise
            dispose of the Collateral, and store the same at locations
            acceptable to Beneficiary at Trustor's expense; or (iii) sell,
            assign and deliver the Collateral at any place or in any lawful
            manner and bid and become purchaser at any such sales; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

        Trustor acknowledges and agrees that a disposition of the Collateral in
        accordance with Beneficiary's rights and remedies as heretofore provided
        is a disposition thereof in a commercially reasonable manner and that 5
        Business Days prior notice of such disposition is commercially
        reasonable notice. Beneficiary shall have no obligation to process or
        prepare the Collateral for sale or other disposition. In disposing of
        the Collateral, Beneficiary may disclaim all warranties of title,
        possession, quiet enjoyment and the like. Any proceeds of any sale or
        other disposition of the Collateral may be applied by Beneficiary first
        to the reasonable expenses incurred by Beneficiary in connection
        therewith, including, without limitation, reasonable attorneys' fees and
        disbursements, and then to the payment of the Secured Obligations, in
        such order of application as Beneficiary may from time to time elect.

4.5     POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
        Trustor's attorney-in-fact (such agency being coupled with an interest),
        and as such attorney-in-fact, Beneficiary may, without the obligation to
        do so, in Beneficiary's name or in the name of Trustor, prepare,
        execute, file and record financing statements, continuation statements,
        applications for registration and like papers necessary to create,
        perfect or preserve any of Beneficiary's security interests and rights
        in or to the Collateral, and upon a Default, take any other action
        required of Trustor; provided, however, that Beneficiary as such
        attorney-in-fact shall be accountable only for such funds as are
        actually received by Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.


                                       7
<PAGE>
      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity .

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.

      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.


                                       8
<PAGE>
      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.

      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.


                                       9
<PAGE>
      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;

      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not and will not engage in, seek or consent to
            any dissolution, winding up, liquidation, consolidation, merger,
            asset sale, transfer of partnership or membership interest, or
            amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;


                                       10
<PAGE>
      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            ____________ in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;

      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;


                                       11
<PAGE>
      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not identified and will not identify its
            partners, members or shareholders, or any affiliates of any of the
            foregoing, as a division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this Section 5.2
            and any such entity shall conduct its business and operations in
            strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" means the possession, directly or indirectly, of the power to
      direct or cause the direction of the management and policies of a person,
      whether through ownership of voting securities, by contract or otherwise.


                                       12
<PAGE>
                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property; (j) materially alter the type of occupancy or use of all or any
      part of the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.

      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous


                                       13
<PAGE>
            Materials Laws"), including, without limitation: the Clean Air Act,
            as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water
            Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.;
            the Resource Conservation and Recovery Act of 1976, as amended, 42
            U.S.C. Section 6901 et seq.; the Comprehensive Environmental
            Response, Compensation and Liability Act of 1980, as amended
            (including the Superfund Amendments and Reauthorization Act of 1986,
            "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substances
            Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the
            Occupational Safety and Health Act, as amended, 29 U.S.C. Section
            651; the Emergency Planning and Community Right-to-Know Act of 1986,
            42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
            1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking
            Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state
            and local laws, laws of other jurisdictions or orders and
            regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery of any occurrence or condition on any real property
            adjoining or in the vicinity of the Property that could cause the
            Property or any part thereof to become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.

      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that: (i)
            this Hazardous Materials Section is intended as Beneficiary's
            written request for information (and Trustor's response) concerning
            the environmental condition of the real property security as
            required by California Code of Civil Procedure Section 726.5; and
            (ii) each representation and warranty and covenant in this Section
            (together with any indemnity applicable to a breach of any such
            representation and warranty) with respect to the environmental
            condition of the Property is intended by Beneficiary and Trustor to
            be an "environmental provision" for purposes of California Code of
            Civil Procedure Section 736.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened


                                       14
<PAGE>
      (in writing) litigation against Trustor or Borrower if the aggregate
      damage claims against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation, the preparation or
      review of amendments, assumptions, waivers, releases, reconveyances,
      estoppel certificates or statements of amounts owing under any Secured
      Obligation). In connection with appraisals and inspections, Trustor
      specifically (but not by way of limitation) acknowledges that: (aa) a
      formal written appraisal of the Property by a state certified or licensed
      appraiser may be required by federal regulatory reporting requirements on
      an annual or more frequent basis; and (bb) Beneficiary may require
      inspection of the Property by an independent supervising architect, a cost
      engineering specialist, or both. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Beneficiary together
      with interest thereon following notice of such indebtedness at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's


                                       15
<PAGE>
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, Beneficiary, at Beneficiary's election,
      may only require flood insurance if all or any portion of the improvements
      located on the Property is or becomes located in a special flood hazard
      area, and Beneficiary, at Beneficiary's election, may only require
      earthquake insurance if all or any portion of the Property is or becomes
      located in an earthquake fault zone. Trustor shall also carry public
      liability insurance and such other insurance as Beneficiary may reasonably
      require, including, without limitation, business interruption insurance or
      loss of rents insurance. Such policies shall contain a standard mortgage
      clause naming Beneficiary and its successors in interest as a loss payee
      and requiring at least 30 days prior notice to the holder at termination
      or cancellation. Trustor shall maintain all required insurance throughout
      the term of the Loan and while any liabilities of Borrower or Trustor to
      Beneficiary under any of the Loan Documents remain outstanding at
      Trustor's expense, with companies, and in substance and form satisfactory
      to Beneficiary. Neither Beneficiary nor Trustee, by reason of accepting,
      rejecting, approving or obtaining insurance shall incur any liability for:
      (a) the existence, nonexistence, form or legal sufficiency of any
      insurance; (b) the solvency of any insurer; or (c) the payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by reason of loss sustained to all or any part of
            the Property; and (iv) all interest which may accrue on any of the
            foregoing. Trustor shall give Beneficiary prompt written notice of
            the occurrence of any casualty affecting, or the institution of any
            proceedings for eminent domain or for the condemnation of, the
            Property or any portion thereof. So long as no Default has occurred
            and is continuing at the time, Trustor shall have the right to
            adjust, compromise and settle any Claim of $100,000 or less without
            the consent of Beneficiary, provided, however, all awards, proceeds
            and other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost


                                       16
<PAGE>
            breakdown for the work; (dd) if reasonably required by Beneficiary,
            a payment and performance bond for the work; (ee) evidence of the
            continuation of substantially all Leases unless consented to in
            writing by Beneficiary; (ff) evidence that, upon completion of the
            work, the size, capacity, value, and income coverage ratios for the
            Property will be at least as great as those which existed
            immediately before the damage or condemnation occurred; and (gg)
            evidence of the satisfaction of any additional conditions that
            Beneficiary may reasonably establish to protect Beneficiary's
            security. Trustor acknowledges that the specific conditions
            described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.


                                       17
<PAGE>
6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower (other than
      the sale or exchange of a limited partnership interest or a non-managing
      membership interest). If any Transfer not expressly permitted in the Note
      or this Deed of Trust is made without the prior written consent of
      Beneficiary, Beneficiary shall have the absolute right at its option,
      without prior demand or notice, to declare all of the Secured Obligations
      immediately due and payable, except to the extent prohibited by law, and
      pursue its rights and remedies under Section 7.3 herein. Trustor agrees to
      pay any prepayment fee as set forth in the Note in the event the Secured
      Obligations are accelerated pursuant to the terms of this Section. Consent
      to one such Transfer shall not be deemed to be a waiver of the right to
      require the consent to future or successive Transfers. Except for
      Transfers expressly permitted under the Note, Beneficiary's consent to any
      Transfer may be withheld, conditioned or delayed in Beneficiary's sole and
      absolute discretion.

6.16  ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
      trust when this Deed of Trust is recorded. From time to time and without
      affecting the personal liability of any person for payment of any
      indebtedness or performance of any Secured Obligation, Beneficiary, or
      Trustee at the direction of Beneficiary, may, without liability therefor
      and without notice: (a) reconvey all or any part of the Property; (b)
      consent to the making of any map or plat of the Property; (c) join with
      Trustor in granting any easement on the Property; (d) join with Trustor in
      any declaration of covenants and restrictions; or (e) join in any
      extension agreement or any agreement subordinating the lien or charge of
      this Deed of Trust. Nothing contained in the immediately preceding
      sentence shall be construed to limit, impair or otherwise affect the
      rights of Trustor in any respect. Except as may otherwise be required by
      applicable law, Trustee or Beneficiary may from time to time apply to any
      court of competent jurisdiction for aid and direction in the execution of
      the trusts hereunder and the enforcement of the rights and remedies
      available hereunder, and Trustee or Beneficiary may obtain orders or
      decrees directing or confirming or approving acts in the execution of said
      trusts and the enforcement of said remedies. Trustee has no obligation to
      notify any party of any pending sale or any action or proceeding
      (including, without limitation, actions in which Trustor, Beneficiary or
      Trustee shall be a party) unless held or commenced and maintained by
      Trustee under this Deed of Trust. Trustee shall not be obligated to
      perform any act required of it hereunder unless the performance of the act
      is requested in writing and Trustee is reasonably indemnified and held
      harmless against loss, cost, liability and expense.


                                       18
<PAGE>
6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
      compensation and reimbursement for services and expenses in the
      administration of this trust, including, without limitation, reasonable
      attorneys' fees. Trustor shall pay all indebtedness arising under this
      Section immediately upon demand by Trustee or Beneficiary together with
      interest thereon from the date the indebtedness arises at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      Trustee and the Beneficiary Group (as defined below) from and against any
      claim, loss, damage, cost, expense or liability directly or indirectly
      arising out of: (a) the making of the Loan, except for violations of
      banking laws or regulations by the Beneficiary Group; (b) this Deed of
      Trust; (c) the execution of this Deed of Trust or the performance of any
      act required or permitted hereunder or by law; (d) any failure of Trustor
      to perform Trustor's obligations under this Deed of Trust or the other
      Loan Documents; (e) any alleged obligation or undertaking on the
      Beneficiary Group's part to perform or discharge any of the
      representations, warranties, conditions, covenants or other obligations
      contained in any other document related to the Property; (f) any act or
      omission by Trustor or any contractor, agent, employee or representative
      of Trustor with respect to the Property; or (g) any claim, loss, damage,
      cost, expense or liability directly or indirectly arising out of: (i) the
      use, generation, manufacture, storage, treatment, release, threatened
      release, discharge, disposal, transportation or presence of any Hazardous
      Materials which are found in, on, under or about the Property (including,
      without limitation, underground contamination); or (ii) the breach of any
      covenant, representation or warranty of Trustor under Sections 5.1.p,
      5.1.q, 5.1.r, or 6.2 above. The foregoing to the contrary notwithstanding,
      this indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group or Trustee, or
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group or Trustee arising from any act or incident on the
      Property occurring after the full reconveyance and release of the lien of
      this Deed of Trust on the Property, or with respect to the matters set
      forth in clause (g) above, any claim, loss, damage, cost, expense or
      liability incurred by the Beneficiary Group resulting from the
      introduction and initial release of Hazardous Materials on the Property
      occurring after the transfer of title to the Property at a foreclosure
      sale under this Deed of Trust, either pursuant to judicial decree or the
      power of sale, or by deed in lieu of such foreclosure. This indemnity
      shall include, without limitation: (aa) all consequential damages
      (including, without limitation, any third party tort claims or
      governmental claims, fines or penalties against Trustee or the Beneficiary
      Group); (bb) all court costs and reasonable attorneys' fees (including,
      without limitation, expert witness fees) paid or incurred by Trustee or
      the Beneficiary Group; and (cc) the costs, whether foreseeable or
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Trustee's or Beneficiary's demand any amounts owing under this indemnity
      together with interest from the date the indebtedness arises until paid at
      the rate of interest applicable to the principal balance of the Note as
      specified therein. Trustor agrees to use legal counsel reasonably
      acceptable to Trustee and the Beneficiary Group in any action or
      proceeding arising under this indemnity. THE PROVISIONS OF THIS SECTION
      SHALL SURVIVE THE TERMINATION AND


                                       19
<PAGE>
      RECONVEYANCE OF THIS DEED OF TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS
      INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

6.20  SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
      acknowledged by Beneficiary, Beneficiary may appoint another trustee to
      act in the place and stead of Trustee or any successor. Such writing shall
      set forth any information required by law and shall be recorded in the
      Office of the Recorder of the County in which the Property is situated.
      Beneficiary shall give such additional notice as may be required by law.
      Such instrument of substitution and the compliance with any other
      requirements of applicable law shall discharge Trustee herein named and
      shall appoint the new trustee as the trustee hereunder with the same
      effect as if originally named trustee herein. A writing recorded pursuant
      to the provisions of this Section shall be conclusive proof of the proper
      substitution of such new trustee.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
      this Deed of Trust or certified copy thereof and any note, instrument or
      instruments setting forth all obligations secured hereby to Trustee for
      cancellation, Trustee shall reconvey, without warranty, the Property or
      that portion thereof then held hereunder. The recitals of any matters or
      facts in any reconveyance executed hereunder shall be conclusive proof of
      the truthfulness thereof. To the extent permitted by law, the reconveyance
      may describe the grantee as "the person or persons legally entitled
      thereto". Neither Beneficiary nor Trustee shall have any duty to determine
      the rights of persons claiming to be rightful grantees of any
      reconveyance. When the Property has been fully reconveyed,


                                       20
<PAGE>
      the last such reconveyance shall operate as a reassignment of all future
      rents, issues and profits of the Property to the person or persons legally
      entitled thereto.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  COMMUNITY FACILITIES DISTRICT. Without obtaining the prior written consent
      of Beneficiary, Trustor shall not consent to, or vote in favor of, the
      inclusion of all or any part of the Property in any Community Facilities
      District formed pursuant to the Community Facilities District Act, A.R.S.
      Section 48-701, et seq., as amended from time to time. Trustor shall
      immediately give notice to Beneficiary of any notification or advice that
      Trustor may receive from any municipality or other third party of any
      intent or proposal to include all or any part of the Property in a
      Community Facilities District. Beneficiary shall have the right to file a
      written objection to the inclusion of all or any part of the Property in a
      Community Facilities District, either in its own name or in the name of
      Trustor, and to appear at, and participate in, any hearing with respect to
      the formation of any such district.

6.26  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including, without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if


                                       21
<PAGE>
                  any, to Beneficiary or in connection with any of the Loan
                  Documents, or as an inducement to Beneficiary to make the
                  Loan, shall be false, incorrect, incomplete or misleading in
                  any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or attachment of, or levy or execution upon any
                  of the Property, the Collateral or any other collateral
                  provided by Borrower or Trustor under any of the Loan
                  Documents, or any material portion of the other assets of
                  Borrower or Trustor, which sequestration, attachment, levy or
                  execution is not released or dismissed within 45 days after
                  its occurrence; or the sale of any assets affected by any of
                  the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower


                                       22
<PAGE>
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, and without becoming a
            mortgagee in possession, to enter upon the Property from time to
            time and to do such acts and things as Beneficiary or Trustee deem
            necessary or desirable in order to inspect, investigate, assess and
            protect the security hereof or to cure any Default, including,
            without limitation: (i) to take and possess all documents, books,
            records, papers and accounts of Trustor, Borrower or the then owner
            of the Property which relate to the Property; (ii) to make,
            terminate, enforce or modify leases of the Property upon such terms
            and conditions as Beneficiary deems proper; (iii) to make repairs,
            alterations and improvements to the Property necessary, in Trustee's
            or Beneficiary's reasonable judgment, to protect or enhance the
            security hereof; (iv) to appear in and defend any action or
            proceeding purporting to affect the security hereof or the rights or
            powers of Beneficiary or Trustee hereunder; (v) to pay, purchase,
            contest or compromise any encumbrance, charge, lien or claim of lien
            which, in the sole judgment of either Beneficiary or Trustee, is or
            may be senior in priority hereto, the judgment of Beneficiary or
            Trustee being conclusive as between the parties hereto; (vi) to
            obtain insurance; (vii) to pay any premiums or charges with respect
            to insurance required to be carried hereunder; (viii) to obtain a
            court order to enforce Beneficiary's right to enter and inspect the
            Property for Hazardous Materials, in which regard the decision of
            Beneficiary as to whether there exists a release or threatened
            release of Hazardous Materials onto the Property shall be deemed
            reasonable and conclusive as between the parties hereto; (ix) to
            have a receiver appointed pursuant to applicable law to enforce
            Beneficiary's rights to enter and inspect the Property for Hazardous
            Materials; and/or (x) to employ legal counsel, accountants,
            engineers, consultants, contractors and other appropriate persons to
            assist them;

      b.    APPOINTMENT OF RECEIVER. With or without notice or hearing, to apply
            to a court of competent jurisdiction for and obtain appointment of a
            receiver, trustee, liquidator or conservator of the Property, for
            any purpose, including, without limitation, to enforce Beneficiary's
            right to collect Payments and to enter on and inspect the Property
            for Hazardous Materials, as a matter of strict right and without
            regard to: (i) the adequacy of the security for the repayment of the
            Secured Obligations; (ii) the existence of a declaration that the
            Secured Obligations are immediately due and payable; (iii) the
            filing of a notice of default; or (iv) the solvency of Trustor,
            Borrower or any guarantor or other person or entity in any manner
            obligated to Beneficiary under the Loan Documents;

      c.    JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain an action
            or actions in any court of competent jurisdiction to foreclose this
            instrument as a mortgage or to obtain specific enforcement of the
            covenants of Trustor hereunder, and Trustor agrees that such
            covenants shall be specifically enforceable by injunction or any
            other appropriate equitable remedy and that for the purposes of any
            suit brought under this subparagraph, Trustor waives the defense of
            laches and any applicable statute of limitations;


                                       23
<PAGE>
      d.    NONJUDICIAL FORECLOSURE. To give such notice of Default and of
            election to cause the Property to be sold as may be required by law
            or as may be necessary to cause the Trustee to exercise the power of
            sale granted herein. Trustee shall give and record such notice as
            the law then requires as a condition precedent to a trustee's sale.
            When the minimum period of time required by law after such notice
            has elapsed, Trustee, without notice to or demand upon Trustor
            except as required by law, shall sell the Property at the time and
            place of sale fixed by it in the notice of sale, at one or several
            sales, either as a whole or in separate parcels and in such manner
            and order, as directed by Beneficiary, or by Trustor to the extent
            required by law, at public auction to the highest bidder for cash,
            in lawful money of the United States, payable at time of sale.
            Except as required by law, neither Trustor nor any other person or
            entity other than Beneficiary shall have the right to direct the
            order in which the Property is sold. Subject to requirements and
            limits imposed by law, Trustee may, from time to time postpone sale
            of all or any portion of the Property by public announcement at such
            time and place of sale, and from time to time may postpone the sale
            by public announcement at the time and place fixed by the preceding
            postponement. A sale of less than the whole of the Property or any
            defective or irregular sale made hereunder shall not exhaust the
            power of sale provided for herein. Trustee shall deliver to the
            purchaser at such sale a deed conveying the Property or portion
            thereof so sold, but without any covenant or warranty, express or
            implied. The recitals in the deed of any matters or facts shall be
            conclusive proof of the truthfulness thereof. Any person, including
            Trustee, Trustor or Beneficiary, may purchase at the sale.

            Upon sale of the Property at any judicial or nonjudicial
            foreclosure, Beneficiary may credit bid (as determined by
            Beneficiary in its sole and absolute discretion) all or any portion
            of the Secured Obligations. In determining such credit bid,
            Beneficiary may, but is not obligated to, take into account all or
            any of the following: (i) appraisals of the Property as such
            appraisals may be discounted or adjusted by Beneficiary in its sole
            and absolute underwriting discretion; (ii) expenses and costs
            incurred by Beneficiary with respect to the Property prior to
            foreclosure; (iii) expenses and costs which Beneficiary anticipates
            will be incurred with respect to the Property after foreclosure, but
            prior to resale, including, without limitation, costs of structural
            reports and other due diligence, costs to carry the Property prior
            to resale, costs of resale (e.g. commissions, attorneys' fees, and
            taxes), costs of any Hazardous Materials clean-up and monitoring,
            costs of deferred maintenance, repair, refurbishment and retrofit,
            costs of defending or settling litigation affecting the Property,
            and lost opportunity costs (if any), including the time value of
            money during any anticipated holding period by Beneficiary; (iv)
            declining trends in real property values generally and with respect
            to properties similar to the Property; (v) anticipated discounts
            upon resale of the Property as a distressed or foreclosed property;
            (vi) the fact of additional collateral (if any), for the Secured
            Obligations; and (vii) such other factors or matters that
            Beneficiary (in its sole and absolute discretion) deems appropriate.
            In regard to the above, Trustor acknowledges and agrees that: (viii)
            Beneficiary is not required to use any or all of the foregoing
            factors to determine the amount of its credit bid; (ix) this
            paragraph does not impose upon Beneficiary any additional
            obligations that are not imposed by law at the time the credit bid
            is made; (x) the amount of Beneficiary's credit bid need not have
            any relation to any loan-to-value ratios specified in the Loan
            Documents or previously discussed between Trustor and Beneficiary;
            and (xi) Beneficiary's credit bid may be (at Beneficiary's sole and
            absolute discretion) higher or lower than any appraised value of the
            Property;

      e.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Beneficiary
            determines in its sole discretion;

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and


                                       24
<PAGE>
      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal property or a
      fixture, as the case may be, and dispose of the same in accordance with
      applicable law, separate and apart from the sale of the Property. Any sale
      of Collateral hereunder shall be conducted in any manner permitted by the
      UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, except as otherwise may be required by applicable law, Trustee
      shall apply the proceeds of such sale in the following order of priority:
      First, to the costs and expenses of exercising the power of sale and of
      sale, including the payment of the trustee's fees and reasonable
      attorneys' fees actually incurred; Second, to the payment of the contract
      or contracts secured; Third, to the payment of all other Secured
      Obligations; Fourth, to junior lienholders or encumbrancers in order of
      their priority; and Fifth, the remainder, if any, to the person or persons
      legally entitled thereto.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      default or sale (unless all Secured Obligations then due have been paid or
      performed and Trustor has cured all other Defaults hereunder), or impair
      the status of the security, or prejudice Beneficiary or Trustee in the
      exercise of any right or remedy, or be construed as an affirmation by
      Beneficiary of any tenancy, lease or option or a subordination of the lien
      of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.


                                       25
<PAGE>
                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The Loan
      Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses,


                                       26
<PAGE>
      reasonable attorneys' fees and court costs (including, without limitation,
      expert witness fees). Court costs and attorneys' fees shall be set by the
      court and not by a jury. As used herein the term "prevailing party" shall
      mean the party which obtains the principal relief it has sought, whether
      by compromise settlement or judgment. If the party which commenced or
      instituted the action, suit or proceeding shall dismiss or discontinue it
      without the concurrence of the other party, such other party shall be
      deemed the prevailing party.

8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledgees and
      participants, of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law. In addition, should this instrument be or
      become ineffective as a deed of trust, then these presents shall be
      construed and enforced as a realty mortgage with the Trustor being the
      mortgagor and Beneficiary being the mortgagee.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem


                                       27
<PAGE>
      appropriate. The absolute assignment of rents and leases established by
      Article 3 is similarly independent of and separate from the deed of trust
      and the security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.

8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents herein and in the other Loan
      Documents shall be binding upon and inure to the benefit of the heirs,
      successors and assigns of the parties. The foregoing sentence shall not be
      construed to permit Trustor to assign the Loan except as otherwise
      permitted under the Note or the other Loan Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note and the other
      Loan Documents and the obligations arising hereunder and thereunder shall
      be governed by, and construed in accordance with, the laws of the state of
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder and the creation, perfection
      and enforcement of the security interests created pursuant hereto and
      pursuant to the other Loan Documents in any Collateral which is located in
      the state where the Property is located shall be governed by and construed
      according to the law of the state where the Property is located. Except as
      provided in the immediately preceding sentence, Trustor hereby
      unconditionally and irrevocably waives, to the fullest extent permitted by
      law, any claim to assert that the law of any jurisdiction other than
      California governs this Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the


                                       28
<PAGE>
      Property is located over any suit, action, or proceeding, brought by
      Beneficiary to exercise its STATUTORY POWER OF SALE under this Deed of
      Trust or any action brought by Beneficiary to enforce its rights with
      respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.

8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                        Trustee:

      WELLS FARGO BANK, N.A.              TRANSNATION TITLE  INSURANCE  COMPANY
      FAX No.: (925) 691-5947             FAX No.: (602) 247-2694

      Trustor:

      MHC STAGECOACH, L.L.C.
      FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                              Katz Randall Weinberg & Richmond
                              333 West Wacker Drive
                              Suite 1800
                              Chicago, Illinois 60606
                              Attention: Benjamin Randall
                              Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER

                                       29
<PAGE>
ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS DEED OF TRUST.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]


                                       30
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                      "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member


      By: /s/ John M. Zoeller
         ----------------------------
      Name: John M. Zoeller
      Its:  Vice President, Chief Financial
            Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL             )
                        )  SS:
COUNTY OF COOK          )

            The foregoing instrument was acknowledged before me this 8/1,
2001 by John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company, on
behalf of the corporation.

WITNESS my hand and official seal.


                                           /s/ Mary Dobronski
                                           -------------------------------------
                                           Print Name: Mary Dobronski

My Commission Expires:


     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:_______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               Description Of Land

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor",
TRANSNATION TITLE INSURANCE COMPANY, as "Trustee", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Maricopa, state of Arizona and is described as follows:

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;
THENCE North 00(Degree) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;
THENCE South 89(Degree) 25' 45" East 65.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 25' 45" East 126.95 feet;
THENCE North 87(Degree) 23' 37" East 116.40 feet;
THENCE South 00(Degree) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;
THENCE South 00(Degree) 34' 44" West along the East line of said property 156.09
feet to a point on a line 500.00 feet North and parallel to the South line of
said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;
THENCE South 00(Degree) 27' 31" West 435.31 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE North 88(Degree) 16' 15" East along said line 51.93 feet;
THENCE North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 20' 40" East along said West line 807.45 feet to a point
on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;
THENCE South 86(Degree) 58' 05" West along said South line and the South line of
the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;
THENCE South 00(Degree) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;
THENCE North 89(Degree) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;
THENCE South 00(Degree) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;


                                   EXHIBIT A
<PAGE>
THENCE North 00(Degree) 27' 31" East 65.05 feet to the POINT OF BEGINNING;
THENCE continuing North 00(Degree) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;
THENCE North 87(Degree) 25' 34" East 36.52 feet;
THENCE South 02(Degree) 21' 45" East 308.14 feet;
THENCE South 00(Degree) 20' 35" West 127.50 feet to a point on a line 65.00 feet
North of and parallel to the South line of said Section 21;
THENCE South 88(Degree) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 08' 29" East (North 88(Degree) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;
THENCE North 00(Degree) 06' 45" East 669.32 feet ( North 00(Degree) 20' 40" East
669.45, record) along said West line to the POINT OF BEGINNING;
THENCE North 89(Degree) 47' 06" West (North 89(Degree) 39' 20" West, record)
115.00 feet;
THENCE North 16(Degree) 08' 00" East 325.00 feet;
THENCE North 52(Degree) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;
THENCE South 00(Degree) 06' 45" West (South 00(Degree) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;
THENCE North 88(Degree) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;
THENCE North 00(Degree) 20' 35" East 65.04 feet to a point on a line parallel to
and 65.00 feet North of the South line of said Section 21;
THENCE continuing North 00(Degree) 20' 35" East 127.50 feet;
THENCE North 02(Degree) 21' 45" West 308.14 feet;
THENCE North 88(Degree) 15' 20" East 445.27 feet;
THENCE North 21(Degree) 52' 10" East 195.00 feet;
THENCE South 89(Degree) 39' 20" East 21.00 feet to the POINT OF BEGINNING;
THENCE continuing South 89(Degree) 39' 20" East 55.00 feet;
THENCE North 00(Degree) 20' 40" East 40.00 feet;
THENCE North 89(Degree) 39' 20" West 55.00 feet;
THENCE South 00(Degree) 20' 40" West 40.00 feet to the POINT OF BEGINNING.


                                   EXHIBIT A
<PAGE>
Recording Requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:      CMO Loan Admin.
Loan No. :      31-0900553R
Property Name:  Casa del Sol III

                                  DEED OF TRUST
                                       and
                     ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
                                       and
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001 are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, TRANSNATION TITLE
INSURANCE COMPANY, an Arizona corporation ("Trustee"), with a mailing address at
234 N. Central Avenue, Phoenix, Arizona, 85004 and WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Beneficiary"), with a mailing address at 1320 Willow Pass Road,
Suite 205, Concord, California 94520.

                                    RECITALS

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan.
      The maturity date of the Loan is September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, conveys and assigns to Trustee, in
      trust for the benefit of Beneficiary, with power of sale and right of
      entry and possession, all estate, right, title and interest which Trustor
      now has or may hereafter acquire in, to, under or derived from any or all
      of the following:


                                       1
<PAGE>
      a.    That real property ("Land") located in Peoria, county of Maricopa,
            state of Arizona, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock or interests, royalties, development
            rights and credits, air rights, minerals, oil rights, and gas
            rights, now or later used or useful in connection with, appurtenant
            to or related to the Land;

      c.    All buildings, structures, facilities, other improvements and
            fixtures now or hereafter located on the Land;

      d.    All apparatus, equipment, machinery and appliances and all
            accessions thereto and renewals and replacements thereof and
            substitutions therefor used in the operation or occupancy of the
            Land, it being intended by the parties that all such items shall be
            conclusively considered to be a part of the Land, whether or not
            attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

      All of the property described above is hereinafter collectively defined as
      the "Property". The listing of specific rights or property shall not be
      interpreted as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust, including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for the benefit of Beneficiary, when the obligation is evidenced by
            a writing which recites that it is secured by this Deed of Trust;


                                       2
<PAGE>
      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.


               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to such notice. If and when no Default
      exists, Beneficiary shall re-confer the License upon Trustor until the
      occurrence of another Default.


                                       3
<PAGE>
3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise of or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      a.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants whom Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

           (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All such sums received by
            Beneficiary with respect to any Lease shall be deemed "Impounds" (as
            defined in Section 6.12b) and shall be deposited by Beneficiary into
            a pledged account in accordance with Section 6.12b. If no Default
            exists, Beneficiary shall release such Impounds to Trustor from time
            to time


                                       4
<PAGE>
            as necessary to pay or reimburse Trustor for such tenant
            improvements, brokerage commissions and other leasing costs as may
            be required to re-tenant the affected space; provided, however,
            Beneficiary shall have received and approved each of the following
            for each tenant for which such costs were incurred; (1) Trustor's
            written request for such release, including the name of the tenant,
            the location and net rentable area of the space and a description
            and cost breakdown of the tenant improvements or other leasing costs
            covered by the request; (2) Trustor's certification that any tenant
            improvements have been completed lien-free and in a workmanlike
            manner; (3) a fully executed Lease, or extension or renewal of the
            current Lease; (4) an estoppel certificate executed by the tenant
            including its acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4(a) or 3.4(b) within 10 Business Days after
            Beneficiary's receipt of such request (and all documents and
            information reasonably related thereto) shall be deemed to
            constitute Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant under a Lease of such right to
      subordinate. No subordination referred to in this Section shall constitute
      a subordination to any lien or other encumbrance, whenever arising, or
      improve the right of any junior lienholder. Nothing herein shall be
      construed as subordinating this Deed of Trust to any Lease.


                                       5
<PAGE>
                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
      interest to secure payment and performance of all of the Secured
      Obligations, in all of Trustor's right, title and interest in and to the
      following described personal property in which Trustor now or at any time
      hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Arizona Uniform Commercial Code, as
      amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any obligation of Trustor to Beneficiary unless
      Beneficiary shall make an express written election of said remedy under
      the UCC or other applicable law.


                                       6
<PAGE>
4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble the Collateral and make it available to
            Beneficiary at a place reasonably designated by Beneficiary; (ii)
            without prior notice (to the extent permitted by law), enter upon
            the Property or other place where the Collateral may be located and
            take possession of, collect, sell, lease, license and otherwise
            dispose of the Collateral, and store the same at locations
            acceptable to Beneficiary at Trustor's expense; or (iii) sell,
            assign and deliver the Collateral at any place or in any lawful
            manner and bid and become purchaser at any such sales; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

      Trustor acknowledges and agrees that a disposition of the Collateral in
      accordance with Beneficiary's rights and remedies as heretofore provided
      is a disposition thereof in a commercially reasonable manner and that 5
      Business Days prior notice of such disposition is commercially reasonable
      notice. Beneficiary shall have no obligation to process or prepare the
      Collateral for sale or other disposition. In disposing of the Collateral,
      Beneficiary may disclaim all warranties of title, possession, quiet
      enjoyment and the like. Any proceeds of any sale or other disposition of
      the Collateral may be applied by Beneficiary first to the reasonable
      expenses incurred by Beneficiary in connection therewith, including,
      without limitation, reasonable attorneys' fees and disbursements, and then
      to the payment of the Secured Obligations, in such order of application as
      Beneficiary may from time to time elect.

4.5   POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
      Trustor's attorney-in-fact (such agency being coupled with an interest),
      and as such attorney-in-fact, Beneficiary may, without the obligation to
      do so, in Beneficiary's name or in the name of Trustor, prepare, execute,
      file and record financing statements, continuation statements,
      applications for registration and like papers necessary to create, perfect
      or preserve any of Beneficiary's security interests and rights in or to
      the Collateral, and upon a Default, take any other action required of
      Trustor; provided, however, that Beneficiary as such attorney-in-fact
      shall be accountable only for such funds as are actually received by
      Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.


                                       7
<PAGE>
      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity .

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.

      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.


                                       8
<PAGE>
      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.

      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.


                                       9
<PAGE>
      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;

      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not and will not engage in, seek or consent to
            any dissolution, winding up, liquidation, consolidation, merger,
            asset sale, transfer of partnership or membership interest, or
            amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;


                                       10
<PAGE>
      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            $1,000,000 in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;

      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;


                                       11
<PAGE>
      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not identified and will not identify its
            partners, members or shareholders, or any affiliates of any of the
            foregoing, as a division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this Section 5.2
            and any such entity shall conduct its business and operations in
            strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" means the possession, directly or indirectly, of the power to
      direct or cause the direction of the management and policies of a person,
      whether through ownership of voting securities, by contract or otherwise.


                                       12
<PAGE>
                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property; (j) materially alter the type of occupancy or use of all or any
      part of the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.

      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous


                                       13
<PAGE>
            Materials Laws"), including, without limitation: the Clean Air Act,
            as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water
            Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.;
            the Resource Conservation and Recovery Act of 1976, as amended, 42
            U.S.C. Section 6901 et seq.; the Comprehensive Environmental
            Response, Compensation and Liability Act of 1980, as amended
            (including the Superfund Amendments and Reauthorization Act of 1986,
            "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substances
            Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the
            Occupational Safety and Health Act, as amended, 29 U.S.C. Section
            651; the Emergency Planning and Community Right-to-Know Act of 1986,
            42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
            1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking
            Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state
            and local laws, laws of other jurisdictions or orders and
            regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery of any occurrence or condition on any real property
            adjoining or in the vicinity of the Property that could cause the
            Property or any part thereof to become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.

      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that: (i)
            this Hazardous Materials Section is intended as Beneficiary's
            written request for information (and Trustor's response) concerning
            the environmental condition of the real property security as
            required by California Code of Civil Procedure Section 726.5; and
            (ii) each representation and warranty and covenant in this Section
            (together with any indemnity applicable to a breach of any such
            representation and warranty) with respect to the environmental
            condition of the Property is intended by Beneficiary and Trustor to
            be an "environmental provision" for purposes of California Code of
            Civil Procedure Section 736.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened
      (in writing)

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<PAGE>
      litigation against Trustor or Borrower if the aggregate damage claims
      against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation, the preparation or
      review of amendments, assumptions, waivers, releases, reconveyances,
      estoppel certificates or statements of amounts owing under any Secured
      Obligation). In connection with appraisals and inspections, Trustor
      specifically (but not by way of limitation) acknowledges that: (aa) a
      formal written appraisal of the Property by a state certified or licensed
      appraiser may be required by federal regulatory reporting requirements on
      an annual or more frequent basis; and (bb) Beneficiary may require
      inspection of the Property by an independent supervising architect, a cost
      engineering specialist, or both. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Beneficiary together
      with interest thereon following notice of such indebtedness at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's


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<PAGE>
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, Beneficiary, at Beneficiary's election,
      may only require flood insurance if all or any portion of the improvements
      located on the Property is or becomes located in a special flood hazard
      area, and Beneficiary, at Beneficiary's election, may only require
      earthquake insurance if all or any portion of the Property is or becomes
      located in an earthquake fault zone. Trustor shall also carry public
      liability insurance and such other insurance as Beneficiary may reasonably
      require, including, without limitation, business interruption insurance or
      loss of rents insurance. Such policies shall contain a standard mortgage
      clause naming Beneficiary and its successors in interest as a loss payee
      and requiring at least 30 days prior notice to the holder at termination
      or cancellation. Trustor shall maintain all required insurance throughout
      the term of the Loan and while any liabilities of Borrower or Trustor to
      Beneficiary under any of the Loan Documents remain outstanding at
      Trustor's expense, with companies, and in substance and form satisfactory
      to Beneficiary. Neither Beneficiary nor Trustee, by reason of accepting,
      rejecting, approving or obtaining insurance shall incur any liability for:
      (a) the existence, nonexistence, form or legal sufficiency of any
      insurance; (b) the solvency of any insurer; or (c) the payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by reason of loss sustained to all or any part of
            the Property; and (iv) all interest which may accrue on any of the
            foregoing. Trustor shall give Beneficiary prompt written notice of
            the occurrence of any casualty affecting, or the institution of any
            proceedings for eminent domain or for the condemnation of, the
            Property or any portion thereof. So long as no Default has occurred
            and is continuing at the time, Trustor shall have the right to
            adjust, compromise and settle any Claim of $100,000 or less without
            the consent of Beneficiary, provided, however, all awards, proceeds
            and other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost


                                       16
<PAGE>
            breakdown for the work; (dd) if reasonably required by Beneficiary,
            a payment and performance bond for the work; (ee) evidence of the
            continuation of substantially all Leases unless consented to in
            writing by Beneficiary; (ff) evidence that, upon completion of the
            work, the size, capacity, value, and income coverage ratios for the
            Property will be at least as great as those which existed
            immediately before the damage or condemnation occurred; and (gg)
            evidence of the satisfaction of any additional conditions that
            Beneficiary may reasonably establish to protect Beneficiary's
            security. Trustor acknowledges that the specific conditions
            described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.


                                       17
<PAGE>
6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower (other than
      the sale or exchange of a limited partnership interest or a non-managing
      membership interest). If any Transfer not expressly permitted in the Note
      or this Deed of Trust is made without the prior written consent of
      Beneficiary, Beneficiary shall have the absolute right at its option,
      without prior demand or notice, to declare all of the Secured Obligations
      immediately due and payable, except to the extent prohibited by law, and
      pursue its rights and remedies under Section 7.3 herein. Trustor agrees to
      pay any prepayment fee as set forth in the Note in the event the Secured
      Obligations are accelerated pursuant to the terms of this Section. Consent
      to one such Transfer shall not be deemed to be a waiver of the right to
      require the consent to future or successive Transfers. Except for
      Transfers expressly permitted under the Note, Beneficiary's consent to any
      Transfer may be withheld, conditioned or delayed in Beneficiary's sole and
      absolute discretion.

6.16  ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
      trust when this Deed of Trust is recorded. From time to time and without
      affecting the personal liability of any person for payment of any
      indebtedness or performance of any Secured Obligation, Beneficiary, or
      Trustee at the direction of Beneficiary, may, without liability therefor
      and without notice: (a) reconvey all or any part of the Property; (b)
      consent to the making of any map or plat of the Property; (c) join with
      Trustor in granting any easement on the Property; (d) join with Trustor in
      any declaration of covenants and restrictions; or (e) join in any
      extension agreement or any agreement subordinating the lien or charge of
      this Deed of Trust. Nothing contained in the immediately preceding
      sentence shall be construed to limit, impair or otherwise affect the
      rights of Trustor in any respect. Except as may otherwise be required by
      applicable law, Trustee or Beneficiary may from time to time apply to any
      court of competent jurisdiction for aid and direction in the execution of
      the trusts hereunder and the enforcement of the rights and remedies
      available hereunder, and Trustee or Beneficiary may obtain orders or
      decrees directing or confirming or approving acts in the execution of said
      trusts and the enforcement of said remedies. Trustee has no obligation to
      notify any party of any pending sale or any action or proceeding
      (including, without limitation, actions in which Trustor, Beneficiary or
      Trustee shall be a party) unless held or commenced and maintained by
      Trustee under this Deed of Trust. Trustee shall not be obligated to
      perform any act required of it hereunder unless the performance of the act
      is requested in writing and Trustee is reasonably indemnified and held
      harmless against loss, cost, liability and expense.


                                       18
<PAGE>
6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
      compensation and reimbursement for services and expenses in the
      administration of this trust, including, without limitation, reasonable
      attorneys' fees. Trustor shall pay all indebtedness arising under this
      Section immediately upon demand by Trustee or Beneficiary together with
      interest thereon from the date the indebtedness arises at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      Trustee and the Beneficiary Group (as defined below) from and against any
      claim, loss, damage, cost, expense or liability directly or indirectly
      arising out of: (a) the making of the Loan, except for violations of
      banking laws or regulations by the Beneficiary Group; (b) this Deed of
      Trust; (c) the execution of this Deed of Trust or the performance of any
      act required or permitted hereunder or by law; (d) any failure of Trustor
      to perform Trustor's obligations under this Deed of Trust or the other
      Loan Documents; (e) any alleged obligation or undertaking on the
      Beneficiary Group's part to perform or discharge any of the
      representations, warranties, conditions, covenants or other obligations
      contained in any other document related to the Property; (f) any act or
      omission by Trustor or any contractor, agent, employee or representative
      of Trustor with respect to the Property; or (g) any claim, loss, damage,
      cost, expense or liability directly or indirectly arising out of: (i) the
      use, generation, manufacture, storage, treatment, release, threatened
      release, discharge, disposal, transportation or presence of any Hazardous
      Materials which are found in, on, under or about the Property (including,
      without limitation, underground contamination); or (ii) the breach of any
      covenant, representation or warranty of Trustor under Sections 5.1.p,
      5.1.q, 5.1.r, or 6.2 above. The foregoing to the contrary notwithstanding,
      this indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group or Trustee, or
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group or Trustee arising from any act or incident on the
      Property occurring after the full reconveyance and release of the lien of
      this Deed of Trust on the Property, or with respect to the matters set
      forth in clause (g) above, any claim, loss, damage, cost, expense or
      liability incurred by the Beneficiary Group resulting from the
      introduction and initial release of Hazardous Materials on the Property
      occurring after the transfer of title to the Property at a foreclosure
      sale under this Deed of Trust, either pursuant to judicial decree or the
      power of sale, or by deed in lieu of such foreclosure. This indemnity
      shall include, without limitation: (aa) all consequential damages
      (including, without limitation, any third party tort claims or
      governmental claims, fines or penalties against Trustee or the Beneficiary
      Group); (bb) all court costs and reasonable attorneys' fees (including,
      without limitation, expert witness fees) paid or incurred by Trustee or
      the Beneficiary Group; and (cc) the costs, whether foreseeable or
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Trustee's or Beneficiary's demand any amounts owing under this indemnity
      together with interest from the date the indebtedness arises until paid at
      the rate of interest applicable to the principal balance of the Note as
      specified therein. Trustor agrees to use legal counsel reasonably
      acceptable to Trustee and the Beneficiary Group in any action or
      proceeding arising under this indemnity. THE PROVISIONS OF THIS SECTION
      SHALL SURVIVE THE TERMINATION AND


                                       19
<PAGE>
      RECONVEYANCE OF THIS DEED OF TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS
      INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

6.20  SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
      acknowledged by Beneficiary, Beneficiary may appoint another trustee to
      act in the place and stead of Trustee or any successor. Such writing shall
      set forth any information required by law and shall be recorded in the
      Office of the Recorder of the County in which the Property is situated.
      Beneficiary shall give such additional notice as may be required by law.
      Such instrument of substitution and the compliance with any other
      requirements of applicable law shall discharge Trustee herein named and
      shall appoint the new trustee as the trustee hereunder with the same
      effect as if originally named trustee herein. A writing recorded pursuant
      to the provisions of this Section shall be conclusive proof of the proper
      substitution of such new trustee.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
      this Deed of Trust or certified copy thereof and any note, instrument or
      instruments setting forth all obligations secured hereby to Trustee for
      cancellation, Trustee shall reconvey, without warranty, the Property or
      that portion thereof then held hereunder. The recitals of any matters or
      facts in any reconveyance executed hereunder shall be conclusive proof of
      the truthfulness thereof. To the extent permitted by law, the reconveyance
      may describe the grantee as "the person or persons legally entitled
      thereto". Neither Beneficiary nor Trustee shall have any duty to determine
      the rights of persons claiming to be rightful grantees of any
      reconveyance. When the Property has been fully reconveyed,


                                       20
<PAGE>
      the last such reconveyance shall operate as a reassignment of all future
      rents, issues and profits of the Property to the person or persons legally
      entitled thereto.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  COMMUNITY FACILITIES DISTRICT. Without obtaining the prior written consent
      of Beneficiary, Trustor shall not consent to, or vote in favor of, the
      inclusion of all or any part of the Property in any Community Facilities
      District formed pursuant to the Community Facilities District Act, A.R.S.
      Section 48-701, et seq., as amended from time to time. Trustor shall
      immediately give notice to Beneficiary of any notification or advice that
      Trustor may receive from any municipality or other third party of any
      intent or proposal to include all or any part of the Property in a
      Community Facilities District. Beneficiary shall have the right to file a
      written objection to the inclusion of all or any part of the Property in a
      Community Facilities District, either in its own name or in the name of
      Trustor, and to appear at, and participate in, any hearing with respect to
      the formation of any such district.

6.26  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including, without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if


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<PAGE>
                  any, to Beneficiary or in connection with any of the Loan
                  Documents, or as an inducement to Beneficiary to make the
                  Loan, shall be false, incorrect, incomplete or misleading in
                  any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or attachment of, or levy or execution upon any
                  of the Property, the Collateral or any other collateral
                  provided by Borrower or Trustor under any of the Loan
                  Documents, or any material portion of the other assets of
                  Borrower or Trustor, which sequestration, attachment, levy or
                  execution is not released or dismissed within 45 days after
                  its occurrence; or the sale of any assets affected by any of
                  the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower


                                       22
<PAGE>
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, and without becoming a
            mortgagee in possession, to enter upon the Property from time to
            time and to do such acts and things as Beneficiary or Trustee deem
            necessary or desirable in order to inspect, investigate, assess and
            protect the security hereof or to cure any Default, including,
            without limitation: (i) to take and possess all documents, books,
            records, papers and accounts of Trustor, Borrower or the then owner
            of the Property which relate to the Property; (ii) to make,
            terminate, enforce or modify leases of the Property upon such terms
            and conditions as Beneficiary deems proper; (iii) to make repairs,
            alterations and improvements to the Property necessary, in Trustee's
            or Beneficiary's reasonable judgment, to protect or enhance the
            security hereof; (iv) to appear in and defend any action or
            proceeding purporting to affect the security hereof or the rights or
            powers of Beneficiary or Trustee hereunder; (v) to pay, purchase,
            contest or compromise any encumbrance, charge, lien or claim of lien
            which, in the sole judgment of either Beneficiary or Trustee, is or
            may be senior in priority hereto, the judgment of Beneficiary or
            Trustee being conclusive as between the parties hereto; (vi) to
            obtain insurance; (vii) to pay any premiums or charges with respect
            to insurance required to be carried hereunder; (viii) to obtain a
            court order to enforce Beneficiary's right to enter and inspect the
            Property for Hazardous Materials, in which regard the decision of
            Beneficiary as to whether there exists a release or threatened
            release of Hazardous Materials onto the Property shall be deemed
            reasonable and conclusive as between the parties hereto; (ix) to
            have a receiver appointed pursuant to applicable law to enforce
            Beneficiary's rights to enter and inspect the Property for Hazardous
            Materials; and/or (x) to employ legal counsel, accountants,
            engineers, consultants, contractors and other appropriate persons to
            assist them;

      b.    APPOINTMENT OF RECEIVER. With or without notice or hearing, to apply
            to a court of competent jurisdiction for and obtain appointment of a
            receiver, trustee, liquidator or conservator of the Property, for
            any purpose, including, without limitation, to enforce Beneficiary's
            right to collect Payments and to enter on and inspect the Property
            for Hazardous Materials, as a matter of strict right and without
            regard to: (i) the adequacy of the security for the repayment of the
            Secured Obligations; (ii) the existence of a declaration that the
            Secured Obligations are immediately due and payable; (iii) the
            filing of a notice of default; or (iv) the solvency of Trustor,
            Borrower or any guarantor or other person or entity in any manner
            obligated to Beneficiary under the Loan Documents;

      c.    JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain an action
            or actions in any court of competent jurisdiction to foreclose this
            instrument as a mortgage or to obtain specific enforcement of the
            covenants of Trustor hereunder, and Trustor agrees that such
            covenants shall be specifically enforceable by injunction or any
            other appropriate equitable remedy and that for the purposes of any
            suit brought under this subparagraph, Trustor waives the defense of
            laches and any applicable statute of limitations;


                                       23
<PAGE>
      d.    NONJUDICIAL FORECLOSURE. To give such notice of Default and of
            election to cause the Property to be sold as may be required by law
            or as may be necessary to cause the Trustee to exercise the power of
            sale granted herein. Trustee shall give and record such notice as
            the law then requires as a condition precedent to a trustee's sale.
            When the minimum period of time required by law after such notice
            has elapsed, Trustee, without notice to or demand upon Trustor
            except as required by law, shall sell the Property at the time and
            place of sale fixed by it in the notice of sale, at one or several
            sales, either as a whole or in separate parcels and in such manner
            and order, as directed by Beneficiary, or by Trustor to the extent
            required by law, at public auction to the highest bidder for cash,
            in lawful money of the United States, payable at time of sale.
            Except as required by law, neither Trustor nor any other person or
            entity other than Beneficiary shall have the right to direct the
            order in which the Property is sold. Subject to requirements and
            limits imposed by law, Trustee may, from time to time postpone sale
            of all or any portion of the Property by public announcement at such
            time and place of sale, and from time to time may postpone the sale
            by public announcement at the time and place fixed by the preceding
            postponement. A sale of less than the whole of the Property or any
            defective or irregular sale made hereunder shall not exhaust the
            power of sale provided for herein. Trustee shall deliver to the
            purchaser at such sale a deed conveying the Property or portion
            thereof so sold, but without any covenant or warranty, express or
            implied. The recitals in the deed of any matters or facts shall be
            conclusive proof of the truthfulness thereof. Any person, including
            Trustee, Trustor or Beneficiary, may purchase at the sale.

            Upon sale of the Property at any judicial or nonjudicial
            foreclosure, Beneficiary may credit bid (as determined by
            Beneficiary in its sole and absolute discretion) all or any portion
            of the Secured Obligations. In determining such credit bid,
            Beneficiary may, but is not obligated to, take into account all or
            any of the following: (i) appraisals of the Property as such
            appraisals may be discounted or adjusted by Beneficiary in its sole
            and absolute underwriting discretion; (ii) expenses and costs
            incurred by Beneficiary with respect to the Property prior to
            foreclosure; (iii) expenses and costs which Beneficiary anticipates
            will be incurred with respect to the Property after foreclosure, but
            prior to resale, including, without limitation, costs of structural
            reports and other due diligence, costs to carry the Property prior
            to resale, costs of resale (e.g. commissions, attorneys' fees, and
            taxes), costs of any Hazardous Materials clean-up and monitoring,
            costs of deferred maintenance, repair, refurbishment and retrofit,
            costs of defending or settling litigation affecting the Property,
            and lost opportunity costs (if any), including the time value of
            money during any anticipated holding period by Beneficiary; (iv)
            declining trends in real property values generally and with respect
            to properties similar to the Property; (v) anticipated discounts
            upon resale of the Property as a distressed or foreclosed property;
            (vi) the fact of additional collateral (if any), for the Secured
            Obligations; and (vii) such other factors or matters that
            Beneficiary (in its sole and absolute discretion) deems appropriate.
            In regard to the above, Trustor acknowledges and agrees that: (viii)
            Beneficiary is not required to use any or all of the foregoing
            factors to determine the amount of its credit bid; (ix) this
            paragraph does not impose upon Beneficiary any additional
            obligations that are not imposed by law at the time the credit bid
            is made; (x) the amount of Beneficiary's credit bid need not have
            any relation to any loan-to-value ratios specified in the Loan
            Documents or previously discussed between Trustor and Beneficiary;
            and (xi) Beneficiary's credit bid may be (at Beneficiary's sole and
            absolute discretion) higher or lower than any appraised value of the
            Property;

      e.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Beneficiary
            determines in its sole discretion;

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and


                                       24
<PAGE>
      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal property or a
      fixture, as the case may be, and dispose of the same in accordance with
      applicable law, separate and apart from the sale of the Property. Any sale
      of Collateral hereunder shall be conducted in any manner permitted by the
      UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, except as otherwise may be required by applicable law, Trustee
      shall apply the proceeds of such sale in the following order of priority:
      First, to the costs and expenses of exercising the power of sale and of
      sale, including the payment of the trustee's fees and reasonable
      attorneys' fees actually incurred; Second, to the payment of the contract
      or contracts secured; Third, to the payment of all other Secured
      Obligations; Fourth, to junior lienholders or encumbrancers in order of
      their priority; and Fifth, the remainder, if any, to the person or persons
      legally entitled thereto.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      default or sale (unless all Secured Obligations then due have been paid or
      performed and Trustor has cured all other Defaults hereunder), or impair
      the status of the security, or prejudice Beneficiary or Trustee in the
      exercise of any right or remedy, or be construed as an affirmation by
      Beneficiary of any tenancy, lease or option or a subordination of the lien
      of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.


                                       25
<PAGE>
                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The Loan
      Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses,


                                       26
<PAGE>
      reasonable attorneys' fees and court costs (including, without limitation,
      expert witness fees). Court costs and attorneys' fees shall be set by the
      court and not by a jury. As used herein the term "prevailing party" shall
      mean the party which obtains the principal relief it has sought, whether
      by compromise settlement or judgment. If the party which commenced or
      instituted the action, suit or proceeding shall dismiss or discontinue it
      without the concurrence of the other party, such other party shall be
      deemed the prevailing party.

8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledgees and
      participants, of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law. In addition, should this instrument be or
      become ineffective as a deed of trust, then these presents shall be
      construed and enforced as a realty mortgage with the Trustor being the
      mortgagor and Beneficiary being the mortgagee.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem


                                       27
<PAGE>
      appropriate. The absolute assignment of rents and leases established by
      Article 3 is similarly independent of and separate from the deed of trust
      and the security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.

8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents herein and in the other Loan
      Documents shall be binding upon and inure to the benefit of the heirs,
      successors and assigns of the parties. The foregoing sentence shall not be
      construed to permit Trustor to assign the Loan except as otherwise
      permitted under the Note or the other Loan Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note and the other
      Loan Documents and the obligations arising hereunder and thereunder shall
      be governed by, and construed in accordance with, the laws of the state of
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder and the creation, perfection
      and enforcement of the security interests created pursuant hereto and
      pursuant to the other Loan Documents in any Collateral which is located in
      the state where the Property is located shall be governed by and construed
      according to the law of the state where the Property is located. Except as
      provided in the immediately preceding sentence, Trustor hereby
      unconditionally and irrevocably waives, to the fullest extent permitted by
      law, any claim to assert that the law of any jurisdiction other than
      California governs this Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the


                                       28
<PAGE>
      Property is located over any suit, action, or proceeding, brought by
      Beneficiary to exercise its STATUTORY POWER OF SALE under this Deed of
      Trust or any action brought by Beneficiary to enforce its rights with
      respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.

8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                          Trustee:

      WELLS FARGO BANK, N.A.                TRANSNATION TITLE INSURANCE COMPANY
      FAX No.: (925) 691-5947               FAX No.: (602) 247-2694

      Trustor:

      MHC STAGECOACH, L.L.C.
      FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                              Katz Randall Weinberg & Richmond
                              333 West Wacker Drive
                              Suite 1800
                              Chicago, Illinois 60606
                              Attention: Benjamin Randall
                              Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER


                                       29
<PAGE>
      ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR. THIS PROVISION IS A
      MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS DEED OF TRUST.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]


                                       30
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                      "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member


      By: /s/ John M. Zoeller
         -----------------------------
      Name: John M. Zoeller
      Its: Vice President, Chief Financial
           Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL               )
                          )  SS:
COUNTY OF COOK            )

      The foregoing instrument was acknowledged before me this 8/1, 2001 by
John M. Zoeller, as Vice President, Chief Financial Officer and Treasurer of
MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing member of MHC
STAGECOACH, L.L.C., a Delaware limited liability company, on behalf of the
corporation.

WITNESS my hand and official seal.


                                          /s/ Mary Dobronski
                                          -----------------------------------
                                          Print Name: Mary Dobronski

My Commission Expires:


     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:________________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               DESCRIPTION OF LAND

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor",
TRANSNATION TITLE INSURANCE COMPANY, as "Trustee", and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Maricopa, state of Arizona and is described as follows:

PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;
THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;
THENCE North 01(Degree) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;
THENCE West along said North line 627.98 feet;
THENCE North 45(Degree) 44' 20" East 28.64 feet;
THENCE North 01(Degree) 28' 40" East 307.70 feet;
THENCE North 45(Degree) 00' 00" East 149.61 feet;
THENCE North 32(Degree) 31' 59" West 76.22 feet;
THENCE North 01(Degree) 38' 30" East 420.00 feet;
THENCE North 89(Degree) 57' 50" East 11.71 feet;
THENCE North 01(Degree) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80(Degree) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23(Degree) 03'
59";
THENCE Northeasterly along said curve 575.86 feet;
THENCE North 01(Degree) 38' 30" East 84.00 feet;
THENCE North 89(Degree) 57' 50" East 738.38 feet;
THENCE South 01(Degree) 38' 30" West 1,407.21 feet;
THENCE West 200.00 feet;
THENCE South 01(Degree) 38' 30" West 300.11 feet to the TRUE POINT OF BEGINNING.

PARCEL NO. 2:

A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;
THENCE West 1,326.54 feet along the South line of said Section 24;
THENCE North 01(Degree) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;
THENCE North 01(Degree) 38' 30" East 306.11 feet;


                                   EXHIBIT A
<PAGE>
THENCE East 206.00 feet to the point of termination; and

BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,757.00 feet and
South 89(Degree) 57' 50" West 1,120.55 feet from the Southeast corner of said
Section 24;
THENCE South 89(Degree) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 3:

A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:

BEGINNING at a point which bears North 01(Degree) 38' 30" East 1,760.50 feet and
South 89(Degree) 57' 50" West 55.00 feet from the Southeast corner of Section
24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona;
THENCE South 89(Degree) 57' 50" West 1,833.37 feet to the point of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 4:

A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:

COMMENCING at the South quarter corner of Section 24;
THENCE North 01(Degree) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;
THENCE North 89(Degree) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;
THENCE continuing North 89(Degree) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;
THENCE South 01(Degree) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76(Degree) 55' 57" West;
THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19(Degree) 06' 47" an arc length of 477.16
feet;
THENCE South 89(Degree) 55' 44" West to a point 6.00 feet West of and
parallel to said Easterly and Westerly boundary lines to the beginning of a
curve concave Easterly and having a radius of 1,436.40 feet;
THENCE Northerly along said curve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19(Degree) 03'
50" an arc length of 477.93 feet;
THENCE North 01(Degree) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.


                                   EXHIBIT A
<PAGE>
RECORDING Requested by                                  APN:  161-16-301-006
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC # A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:      CMO Loan Admin.
Loan No. :      31-0900553R
Property Name:  Cabana

                                  DEED OF TRUST
                                       AND
                   ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
                               SECURITY AGREEMENT
                              (AND FIXTURE FILING)

The parties to this DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as of July
31, 2001, are MHC STAGECOACH, L.L.C., a Delaware limited liability company
("Trustor"), with a mailing address at c/o Manufactured Home Communities, Inc.,
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, AMERICAN
SECURITIES COMPANY OF NEVADA, a Nevada corporation ("Trustee"), with a mailing
address at 1320 Willow Pass Road, Suite 205, Concord, California 94520, and
WELLS FARGO BANK, NATIONAL ASSOCIATION ("Beneficiary"), with a mailing address
at 1320 Willow Pass Road, Suite 205, Concord, California 94520.

                                 R E C I T A L S

A.    MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
      proposes to borrow from Beneficiary, and Beneficiary proposes to lend to
      Borrower the principal sum of FIFTY MILLION AND NO/100THS DOLLARS
      ($50,000,000.00) ("Loan"). The Loan is evidenced by a promissory note
      ("Note") executed by Borrower, dated the date of this Deed of Trust,
      payable to the order of Beneficiary in the principal amount of the Loan.
      The maturity date of the Loan is September 1, 2011.

B.    The loan documents include this Deed of Trust, the Note and the other
      documents described in the Note as Loan Documents ("Loan Documents").

                            ARTICLE 1. DEED OF TRUST

1.1   GRANT. For the purposes of and upon the terms and conditions of this Deed
      of Trust, Trustor irrevocably grants, bargains, sells, conveys and assigns
      to Trustee, in trust for the benefit of Beneficiary, with power of sale
      and right of entry and possession, all estate, right, title and interest
      which Trustor now has or may hereafter acquire in, to, under or derived
      from any or all of the following:


                                       1
<PAGE>
      a.    That real property ("Land") located in Las Vegas, county of Clark,
            state of Nevada, and more particularly described on Exhibit A
            attached hereto;

      b.    All appurtenances, easements, rights of way, water and water rights,
            pumps, pipes, flumes and ditches and ditch rights, water stock,
            ditch and/or reservoir stock or interests, royalties, development
            rights and credits, air rights, minerals, oil rights, and gas
            rights, now or later used or useful in connection with, appurtenant
            to or related to the Land;

      c.    All buildings, structures, facilities, other improvements and
            fixtures now or hereafter located on the Land;

      d.    All apparatus, equipment, machinery and appliances and all
            accessions thereto and renewals and replacements thereof and
            substitutions therefor used in the operation or occupancy of the
            Land, it being intended by the parties that all such items shall be
            conclusively considered to be a part of the Land, whether or not
            attached or affixed to the Land;

      e.    All land lying in the right-of-way of any street, road, avenue,
            alley or right-of-way opened, proposed or vacated, and all
            sidewalks, strips and gores of land adjacent to or used in
            connection with the Land;

      f.    All additions and accretions to the property described above;

      g.    All licenses, authorizations, certificates, variances, consents,
            approvals and other permits now or hereafter pertaining to the Land
            and all estate, right, title and interest of Trustor in, to, under
            or derived from all tradenames or business names relating to the
            Land or the present or future development, construction, operation
            or use of the Land; and

      h.    All proceeds of any of the foregoing.

      All of the property described above is hereinafter collectively defined as
      the "Property". The listing of specific rights or property shall not be
      interpreted as a limitation of general terms.

                         ARTICLE 2. OBLIGATIONS SECURED

2.1   OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment for
      the purpose of securing the following obligations ("Secured Obligations"):

      a.    Full and punctual payment to Beneficiary of all sums at any time
            owing under the Note;

      b.    Payment and performance of all covenants and obligations of Trustor
            under this Deed of Trust including, without limitation,
            indemnification obligations and advances made to protect the
            Property;

      c.    Payment and performance of all additional covenants and obligations
            of Borrower and Trustor under the Loan Documents;

      d.    Payment and performance of all covenants and obligations, if any,
            which any rider attached as an exhibit to this Deed of Trust recites
            are secured hereby;

      e.    Payment and performance of all future advances and other obligations
            that the then record owner of all or part of the Property may agree
            to pay and/or perform (whether as principal, surety or guarantor)
            for the benefit of Beneficiary, when the obligation is evidenced by
            a writing which recites that it is secured by this Deed of Trust;


                                       2
<PAGE>
      f.    All interest and charges on all obligations secured hereby
            including, without limitation, prepayment charges, late charges and
            loan fees; and

      g.    All modifications, extensions and renewals of any of the obligations
            secured hereby, however evidenced, including, without limitation:
            (i) modifications of the required principal payment dates or
            interest payment dates or both, as the case may be, deferring or
            accelerating payment dates wholly or partly; and (ii) modifications,
            extensions or renewals at a different rate of interest whether or
            not any such modification, extension or renewal is evidenced by a
            new or additional promissory note or notes.

2.2   OBLIGATIONS. The term "obligations" is used herein in its broadest and
      most comprehensive sense and shall be deemed to include, without
      limitation, all interest and charges, prepayment charges, late charges and
      loan fees at any time accruing or assessed on any of the Secured
      Obligations.

2.3   INCORPORATION. All terms and conditions of the documents which evidence
      any of the Secured Obligations are incorporated herein by this reference.
      All persons who may have or acquire an interest in the Property shall be
      deemed to have notice of the terms of the Secured Obligations and to have
      notice that the rate of interest on one or more Secured Obligations may
      vary from time to time.

               ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

3.1   ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
      right, title and interest in, to and under: (a) all present and future
      leases of the Property or any portion thereof, all licenses and agreements
      relating to the management, leasing or operation of the Property or any
      portion thereof, and all other agreements of any kind relating to the use
      or occupancy of the Property or any portion thereof, whether such leases,
      licenses and agreements are now existing or entered into after the date
      hereof ("Leases"); and (b) the rents, issues, deposits and profits of the
      Property, including, without limitation, all amounts payable and all
      rights and benefits accruing to Trustor under the Leases ("Payments"). The
      term "Leases" shall also include all guarantees of and security for the
      tenants' performance thereunder, and all amendments, extensions, renewals
      or modifications thereto which are permitted hereunder. This is a present
      and absolute assignment, not an assignment for security purposes only, and
      Beneficiary's right to the Leases and Payments is not contingent upon, and
      may be exercised without possession of, the Property.

3.2   GRANT OF LICENSE. Notwithstanding the terms of contained in Section 3.1,
      Beneficiary confers upon Trustor a revocable license ("License") to
      collect and retain the Payments as they become due and payable, until the
      occurrence of a Default (as hereinafter defined). Upon a Default, the
      License shall be automatically revoked and Beneficiary may collect and
      apply the Payments pursuant to the terms hereof without notice and without
      taking possession of the Property. All Payments thereafter collected by
      Trustor shall be held by Trustor as trustee under a constructive trust for
      the benefit of Beneficiary. Trustor hereby irrevocably authorizes and
      directs the tenants under the Leases, upon notice of a Default from
      Beneficiary, to rely upon and comply with any notice or demand by
      Beneficiary for the payment to Beneficiary of any rental or other sums
      which may at any time become due under the Leases, or for the performance
      of any of the tenants' undertakings under the Leases, and the tenants
      shall have no right or duty to inquire as to whether any Default has
      actually occurred or is then existing. Trustor hereby relieves the tenants
      from any liability to Trustor by reason of relying upon and complying with
      any such notice or demand by Beneficiary. Beneficiary may apply, in its
      sole discretion, any Payments so collected by Beneficiary against any
      Secured Obligation or any other obligation of Borrower, Trustor or any
      other person or entity, under any document or instrument related to or
      executed in connection with the Loan Documents, whether existing on the
      date hereof or hereafter arising. Collection of any Payments by
      Beneficiary shall not cure or waive any Default or notice of Default or
      invalidate any acts done pursuant to such notice. If and when no Default
      exists, Beneficiary shall re-confer the License upon Trustor until the
      occurrence of another Default.


                                       3
<PAGE>
3.3   EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause
      Beneficiary to be: (a) a mortgagee in possession; (b) responsible or
      liable for the control, care, management or repair of the Property or for
      performing any of the terms, agreements, undertakings, obligations,
      representations, warranties, covenants and conditions of the Leases; (c)
      responsible or liable for any waste committed on the Property by the
      tenants under any of the Leases or by any other parties; for any dangerous
      or defective condition of the Property; or for any negligence in the
      management, upkeep, repair or control of the Property resulting in loss or
      injury or death to any tenant, licensee, employee, invitee or other
      person; or (d) responsible for or impose upon Beneficiary any duty to
      produce rents or profits. Beneficiary shall not directly or indirectly be
      liable to Trustor or any other person as a consequence of: (e) the
      exercise or failure to exercise any of the rights, remedies or powers
      granted to Beneficiary hereunder; or (f) the failure or refusal of
      Beneficiary to perform or discharge any obligation, duty or liability of
      Trustor arising under the Leases.

3.4   COVENANTS.

      a.    ALL LEASES. Trustor shall, at Trustor's sole cost and expense:

            (i)   perform all obligations of the landlord under the Leases and
                  use reasonable efforts to enforce performance by the tenants
                  of all obligations of the tenants under the Leases;

            (ii)  use reasonable efforts to keep the Property leased at all
                  times to tenants which Trustor reasonably and in good faith
                  believes are creditworthy at rents not less than the fair
                  market rental value (including, but not limited to, free or
                  discounted rents to the extent the market so requires);

            (iii) promptly upon Beneficiary's request, deliver to Beneficiary a
                  copy of each requested Lease and all amendments thereto and
                  waivers thereof; and

            (iv)  promptly upon Beneficiary's request, execute and record any
                  additional assignments of landlord's interest under any Lease
                  to Beneficiary and specific subordinations of any Lease to
                  this Deed of Trust, in form and substance satisfactory to
                  Beneficiary.

            Unless consented to in writing by Beneficiary or otherwise permitted
            under any other provision of the Loan Documents, Trustor shall not:

            (v)   grant any tenant under any Lease any option, right of first
                  refusal or other right to purchase all or any portion of the
                  Property under any circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent more
                  than 1 month in advance;

            (vii) except upon Beneficiary's request, execute any assignment of
                  landlord's interest in any Lease; or

           (viii) collect rent or other sums due under any Lease in advance,
                  other than to collect rent 1 month in advance of the time when
                  it becomes due.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            Trustor shall deposit with Beneficiary any sums received by Trustor
            in consideration of any termination, modification or amendment of
            any Lease or any release or discharge of any tenant under any Lease
            from any obligation thereunder and any such sums received by Trustor
            shall be held in trust by Trustor for such purpose. Notwithstanding
            the foregoing, so long as no Default exists, the portion of any such
            sum received by Trustor with respect to any Lease which is less than
            $50,000 shall be payable to Trustor. All such sums received by
            Beneficiary with respect to any Lease shall be deemed "Impounds" (as
            defined in Section 6.12b) and shall be deposited by Beneficiary into
            a pledged account in accordance with Section 6.12b. If no Default
            exists, Beneficiary shall release such Impounds to Trustor from time
            to time


                                       4
<PAGE>
            as necessary to pay or reimburse Trustor for such tenant
            improvements, brokerage commissions and other leasing costs as may
            be required to re-tenant the affected space; provided, however,
            Beneficiary shall have received and approved each of the following
            for each tenant for which such costs were incurred; (1) Trustor's
            written request for such release, including the name of the tenant,
            the location and net rentable area of the space and a description
            and cost breakdown of the tenant improvements or other leasing costs
            covered by the request; (2) Trustor's certification that any tenant
            improvements have been completed lien-free and in a workmanlike
            manner; (3) a fully executed Lease, or extension or renewal of the
            current Lease; (4) an estoppel certificate executed by the tenant
            including its acknowledgement that all tenant improvements have been
            satisfactorily completed; and (5) such other information with
            respect to such costs as Beneficiary may require. Following the
            re-tenanting of all affected space (including, without limitation,
            the completion of all tenant improvements), and provided no Default
            exists, Beneficiary shall release any remaining such Impounds
            relating to the affected space to Trustor. Trustor shall construct
            all tenant improvements in a workmanlike manner and in accordance
            with all applicable laws, ordinances, rules and regulations.

      b.    MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
            give Beneficiary prompt written notice of any material default by
            landlord or tenant under any Major Lease (as defined below). Unless
            consented to in writing by Beneficiary or otherwise permitted under
            any other provision of the Loan Documents, Trustor shall not:

            (i)   enter into any Major Lease which (aa) is not on fair market
                  terms (which terms may include free or discounted rent to the
                  extent the market so requires); (bb) does not contain a
                  provision requiring the tenant to execute and deliver to the
                  landlord an estoppel certificate in form and substance
                  satisfactory to the landlord promptly upon the landlord's
                  request; or (cc) allows the tenant to assign or sublet the
                  premises without the landlord's consent;

            (ii)  reduce any rent or other sums due from the tenant under any
                  Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv)  release or discharge the tenant or any guarantor under any
                  Major Lease from any material obligation thereunder.

            Any such attempted action in violation of the provisions of this
            Section shall be null and void.

            "Major Lease", as used herein, shall mean any Lease, which is, at
            any time: (1) a Lease of more than 20% of the total rentable area of
            the Property, as reasonably determined by Beneficiary; or (2) a
            Lease which generates a gross base monthly rent exceeding 20% of the
            total gross base monthly rent generated by all Leases (excluding all
            Leases under which the tenant is then in default), as reasonably
            determined by Beneficiary. Trustor's obligations with respect to
            Major Leases shall be governed by the provisions of Section 3.4a as
            well as by the provisions of this Section.

      c.    FAILURE TO DENY REQUEST. Beneficiary's failure to deny any written
            request by Trustor for Beneficiary's consent under the provisions of
            Sections 3.4(a) or 3.4(b) within 10 Business Days after
            Beneficiary's receipt of such request (and all documents and
            information reasonably related thereto) shall be deemed to
            constitute Beneficiary's consent to such request.

3.5   RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to time
      by specific written instrument intended for the purpose unilaterally
      subordinate the lien of this Deed of Trust to any Lease, without joinder
      or consent of, or notice to, Trustor, any tenant or any other person.
      Notice is hereby given to each tenant under a Lease of such right to
      subordinate. No subordination referred to in this Section shall constitute
      a subordination to any lien or other encumbrance, whenever arising, or
      improve the right of any junior lienholder. Nothing herein shall be
      construed as subordinating this Deed of Trust to any Lease.


                                       5
<PAGE>
                ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1   SECURITY INTEREST. Trustor pledges to Beneficiary and grants and assigns
      to Beneficiary a security interest to secure payment and performance of
      all of the Secured Obligations, in all of Trustor's right, title and
      interest in and to the following described personal property in which
      Trustor now or at any time hereafter has any interest ("Collateral"):

            All goods, building and other materials, supplies, work in process,
            equipment, machinery, fixtures, furniture, furnishings, signs and
            other personal property, wherever situated, which are or are to be
            incorporated into, used in connection with or appropriated for use
            on the Property; all rents, issues, deposits and profits of the
            Property (to the extent, if any, they are not subject to the
            Absolute Assignment of Rents and Leases); all inventory, accounts,
            cash receipts, deposit accounts, impounds, accounts receivable,
            contract rights, general intangibles, software, chattel paper,
            instruments, documents, promissory notes, drafts, letters of credit,
            letter of credit rights, supporting obligations, insurance policies,
            insurance and condemnation awards and proceeds, any other rights to
            the payment of money, trade names, trademarks and service marks
            arising from or related to the Property or any business now or
            hereafter conducted thereon by Trustor; all permits, consents,
            approvals, licenses, authorizations and other rights granted by,
            given by or obtained from, any governmental entity with respect to
            the Property; all deposits or other security now or hereafter made
            with or given to utility companies by Trustor with respect to the
            Property; all advance payments of insurance premiums made by Trustor
            with respect to the Property; all plans, drawings and specifications
            relating to the Property; all loan funds held by Beneficiary,
            whether or not disbursed; all funds deposited with Beneficiary
            pursuant to any Loan Document, all reserves, deferred payments,
            deposits, accounts, refunds, cost savings and payments of any kind
            related to the Property or any portion thereof, including, without
            limitation, all "Impounds" as defined herein; together with all
            replacements and proceeds of, and additions and accessions to, any
            of the foregoing, and all books, records and files relating to any
            of the foregoing.

      As to all of the above described personal property which is or which
      hereafter becomes a "fixture" under applicable law, this Deed of Trust
      constitutes a fixture filing under the Uniform Commercial Code, as enacted
      in the State of Nevada, Chapters 104 and 104A of the Nevada Revised
      Statutes, as amended or recodified from time to time ("UCC").

4.2   COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
      Beneficiary reasonably deems necessary to create, perfect and continue the
      security interests contemplated hereby; (b) not to change its name, and,
      as applicable, its chief executive offices, its principal residence or the
      jurisdiction in which it is organized without giving Beneficiary at least
      30 days' prior written notice thereof; and (c) to cooperate with
      Beneficiary in perfecting all security interests granted herein and in
      obtaining such agreements from third parties as Beneficiary deems
      necessary, proper or convenient in connection with the preservation,
      perfection or enforcement of any of Beneficiary's rights hereunder.

4.3   RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
      Party" under the UCC, Beneficiary may, but shall not be obligated to, at
      any time without notice and at the expense of Trustor: (a) give notice to
      any person of Beneficiary's rights hereunder and enforce such rights at
      law or in equity; (b) insure, protect, defend and preserve the Collateral
      or any rights or interests of Beneficiary therein; and (c) inspect the
      Collateral during normal business hours upon reasonable prior written
      notice, provided, however, that such notice shall not be required in the
      event of an emergency. Notwithstanding the above, in no event shall
      Beneficiary be deemed to have accepted any property other than cash in
      satisfaction of any obligation of Trustor to Beneficiary unless
      Beneficiary shall make an express written election of said remedy under
      the UCC or other applicable law.


                                       6
<PAGE>
4.4   ADDITIONAL RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a
      Default, then in addition to all of Beneficiary's rights as a "Secured
      Party" under the UCC or otherwise at law:

      a.    DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written notice,
            require Trustor to assemble the Collateral and make it available to
            Beneficiary at a place reasonably designated by Beneficiary; (ii)
            without prior notice (to the extent permitted by law), enter upon
            the Property or other place where the Collateral may be located and
            take possession of, collect, sell, lease, license and otherwise
            dispose of the Collateral, and store the same at locations
            acceptable to Beneficiary at Trustor's expense; or (iii) sell,
            assign and deliver the Collateral at any place or in any lawful
            manner and bid and become purchaser at any such sales; and

      b.    OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
            Trustor's expense: (i) operate, use, consume, sell, lease, license
            or otherwise dispose of the Collateral as Beneficiary reasonably
            deems appropriate for the purpose of performing any or all of the
            Secured Obligations; (ii) enter into any agreement, compromise or
            settlement including insurance claims, which Beneficiary may
            reasonably deem desirable or proper with respect to the Collateral;
            and (iii) endorse and deliver evidences of title for, and receive,
            enforce and collect by legal action or otherwise, all indebtedness
            and obligations now or hereafter owing to Trustor in connection with
            or on account of the Collateral.

      Trustor acknowledges and agrees that a disposition of the Collateral in
      accordance with Beneficiary's rights and remedies as heretofore provided
      is a disposition thereof in a commercially reasonable manner and that 5
      Business Days prior notice of such disposition is commercially reasonable
      notice. Beneficiary shall have no obligation to process or prepare the
      Collateral for sale or other disposition. In disposing of the Collateral,
      Beneficiary may disclaim all warranties of title, possession, quiet
      enjoyment and the like. Any proceeds of any sale or other disposition of
      the Collateral may be applied by Beneficiary first to the reasonable
      expenses incurred by Beneficiary in connection therewith, including,
      without limitation, reasonable attorneys' fees and disbursements, and then
      to the payment of the Secured Obligations, in such order of application as
      Beneficiary may from time to time elect.

4.5   POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as
      Trustor's attorney-in-fact (such agency being coupled with an interest),
      and as such attorney-in-fact, Beneficiary may, without the obligation to
      do so, in Beneficiary's name or in the name of Trustor, prepare, execute,
      file and record financing statements, continuation statements,
      applications for registration and like papers necessary to create, perfect
      or preserve any of Beneficiary's security interests and rights in or to
      the Collateral, and upon a Default, take any other action required of
      Trustor; provided, however, that Beneficiary as such attorney-in-fact
      shall be accountable only for such funds as are actually received by
      Beneficiary.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

5.1   REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
      Beneficiary that, to Trustor's current actual knowledge after reasonable
      investigation and inquiry, the following statements are true and correct
      as of the Effective Date:

      a.    LEGAL STATUS. Trustor and Borrower are duly organized and existing
            and in good standing under the laws of the state(s) in which Trustor
            and Borrower are organized. Trustor and Borrower are qualified or
            licensed to do business in all jurisdictions in which such
            qualification or licensing is required.

      b.    PERMITS. Trustor and Borrower possess all permits, franchises and
            licenses and all rights to all trademarks, trade names, patents and
            fictitious names, if any, necessary to enable Trustor and Borrower
            to conduct the business(es) in which Trustor and Borrower are now
            engaged in compliance with applicable law.


                                       7
<PAGE>
      c.    AUTHORIZATION AND VALIDITY. The execution and delivery of the Loan
            Documents have been duly authorized and the Loan Documents
            constitute valid and binding obligations of Trustor, Borrower or the
            party which executed the same, enforceable in accordance with their
            respective terms, except as such enforcement may be limited by
            bankruptcy, insolvency, moratorium or other laws affecting the
            enforcement of creditors' rights, or by the application of rules of
            equity .

      d.    VIOLATIONS. The execution, delivery and performance by Trustor and
            Borrower of each of the Loan Documents do not violate any provision
            of any law or regulation, or result in any breach or default under
            any contract, obligation, indenture or other instrument to which
            Trustor or Borrower is a party or by which Trustor or Borrower is
            bound.

      e.    LITIGATION. There are no pending or threatened actions, claims,
            investigations, suits or proceedings before any governmental
            authority, court or administrative agency which may adversely affect
            the financial condition or operations of Trustor or Borrower other
            than those previously disclosed in writing by Trustor or Borrower to
            Beneficiary.

      f.    FINANCIAL STATEMENTS. The financial statements of Trustor and
            Borrower, of each general partner (if Trustor or Borrower is a
            partnership), of each member (if Trustor or Borrower is a limited
            liability company) and of each guarantor, if any, previously
            delivered by Trustor or Borrower to Beneficiary: (i) are materially
            complete and correct; (ii) present fairly the financial condition of
            such party; and (iii) have been prepared in accordance with the same
            accounting standard used by Trustor or Borrower to prepare the
            financial statements delivered to and approved by Beneficiary in
            connection with the making of the Loan, or other accounting
            standards approved by Beneficiary. Since the date of such financial
            statements, there has been no material adverse change in such
            financial condition, nor have any assets or properties reflected on
            such financial statements been sold, transferred, assigned,
            mortgaged, pledged or encumbered except as previously disclosed in
            writing by Trustor or Borrower to Beneficiary and approved in
            writing by Beneficiary.

      g.    REPORTS. All reports, documents, instruments and information
            delivered to Beneficiary in connection with the Loan: (i) are
            correct in all material respects and sufficiently complete to give
            Beneficiary accurate knowledge of their subject matter; and (ii) do
            not contain any misrepresentation of a material fact or omission of
            a material fact which omission makes the provided information
            misleading.

      h.    INCOME TAXES. There are no material pending assessments or
            adjustments of Trustor's or Borrower's income tax payable with
            respect to any year.

      i.    SUBORDINATION. There is no agreement or instrument to which Borrower
            is a party or by which Borrower is bound that would require the
            subordination in right of payment of any of Borrower's obligations
            under the Note to an obligation owed to another party.

      j.    TITLE. Trustor lawfully holds and possesses fee simple title to the
            Property, without limitation on the right to encumber same. This
            Deed of Trust is a first lien on the Property prior and superior to
            all other liens and encumbrances on the Property except: (i) liens
            for real estate taxes and assessments not yet due and payable; (ii)
            senior exceptions previously approved by Beneficiary and shown in
            the title insurance policy insuring the lien of this Deed of Trust;
            and (iii) other matters, if any, previously disclosed to Beneficiary
            by Trustor in a writing specifically referring to this
            representation and warranty.

      k.    MECHANICS' LIENS. There are no mechanics' or similar liens or claims
            which have been filed for work, labor or material (and no rights are
            outstanding that under law could give rise to any such liens)
            affecting the Property which are or may be prior to or equal to the
            lien of this Deed of Trust, other than those (if any) previously
            approved by Beneficiary and shown on the title insurance policy
            insuring the lien of this Deed of Trust.


                                       8
<PAGE>
      l.    ENCROACHMENTS. Except as shown in the survey, if any, previously
            delivered to Beneficiary, none of the buildings or other
            improvements which were included for the purpose of determining the
            appraised value of the Property lies outside of the boundaries or
            building restriction lines of the Property and no buildings or other
            improvements located on adjoining properties encroach upon the
            Property.

      m.    LEASES. All existing Leases are in full force and effect and are
            enforceable in accordance with their respective terms. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no material breach or default by any party, or event which
            would constitute a material breach or default by any party after
            notice or the passage of time, or both, exists under any existing
            Lease. None of the landlord's interests under any of the Leases,
            including, but not limited to, rents, additional rents, charges,
            issues or profits, has been transferred or assigned. Except as
            disclosed on a rent roll provided to Beneficiary prior to the date
            hereof, no rent or other payment under any existing Lease has been
            paid by any tenant for more than 1 month in advance.

      n.    COLLATERAL. Trustor has good title to the existing Collateral, free
            and clear of all liens and encumbrances except those, if any,
            previously disclosed to Beneficiary by Trustor in writing
            specifically referring to this representation and warranty.
            Trustor's chief executive office (or residence, if applicable) is
            located at the address shown on page one of this Deed of Trust.
            Trustor is an organization organized solely under the laws of the
            State of Delaware. All organizational documents of Trustor delivered
            to Beneficiary are complete and accurate in every respect. Trustor's
            legal name is exactly as shown on page one of this Deed of Trust.

      o.    CONDITION OF PROPERTY. Except as shown in the property condition
            survey or other engineering reports, if any, previously delivered to
            or obtained by Beneficiary, the Property is in good condition and
            repair and is free from any damage that would materially and
            adversely affect the value of the Property as security for the Loan
            or the intended use of the Property.

      p.    HAZARDOUS MATERIALS. Except as shown in the environmental assessment
            report(s), if any, previously delivered to or obtained by
            Beneficiary, the Property is not and has not been a site for the
            use, generation, manufacture, storage, treatment, release,
            threatened release, discharge, disposal, transportation or presence
            of Hazardous Materials (as hereinafter defined) in violation of
            Hazardous Materials Laws (as hereinafter defined) except as
            otherwise previously disclosed in writing by Trustor to Beneficiary.

      q.    HAZARDOUS MATERIALS LAWS. The Property complies with all Hazardous
            Materials Laws.

      r.    HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
            Hazardous Materials Claims (as hereinafter defined).

      s.    WETLANDS. No part of the Property consists of or is classified as
            wetlands, tidelands or swamp and overflow lands.

      t.    COMPLIANCE WITH LAWS. All federal, state and local laws, rules and
            regulations applicable to the Property, including, without
            limitation, all zoning and building requirements and all
            requirements of the Americans With Disabilities Act of 1990, as
            amended from time to time (42 U. S. C. Section 12101 et seq.) have
            been satisfied or complied with. Trustor is in possession of all
            certificates of occupancy and all other licenses, permits and other
            authorizations required by applicable law for the existing use of
            the Property. All such certificates of occupancy and other licenses,
            permits and authorizations are valid and in full force and effect.

      u.    PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
            assessments, insurance premiums, water, sewer and municipal charges,
            and ground rents, if any, which previously became due and owing in
            respect of the Property have been paid.


                                       9
<PAGE>
      v.    CONDEMNATION. There is no proceeding pending or threatened for the
            total or partial condemnation of the Property.

      w.    HOMESTEAD. There is no homestead or other exemption available to
            Trustor which would materially interfere with the right to sell the
            Property at a trustee's sale or the right to foreclose this Deed of
            Trust.

      x.    SOLVENCY. None of the transactions contemplated by the Loan will be
            or have been made with an actual intent to hinder, delay or defraud
            any present or future creditors of Trustor, and Trustor, on the
            Effective Date, will have received fair and reasonably equivalent
            value in good faith for the grant of the liens or security interests
            effected by the Loan Documents. On the Effective Date, Trustor will
            be solvent and will not be rendered insolvent by the transactions
            contemplated by the Loan Documents. Trustor is able to pay its debts
            as they become due.

      y.    SEPARATE TAX PARCEL(S). The Property is assessed for real estate tax
            purposes as one or more wholly independent tax parcels, separate
            from any other real property, and no other real property is assessed
            and taxed together with the Property or any portion thereof.

5.2   REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL V SPE).
      Trustor hereby represents, warrants and covenants to Beneficiary that with
      respect to both Trustor and MHC-QRS STAGECOACH, INC., a Delaware
      corporation, the managing member of Trustor:

      a.    each such entity was organized solely for the purpose of (i) owning
            the Properties (as defined in the Note); (ii) acting as a general
            partner of a limited partnership which owns the Properties; or (iii)
            acting as a managing member of a limited liability company which
            owns the Properties;

      b.    each such entity has not engaged and will not engage in any business
            unrelated to (i) the ownership of the Properties; (ii) acting as
            general partner of a limited partnership which owns the Properties;
            or (iii) acting as a managing member of a limited liability company
            which owns the Properties;

      c.    each such entity has not had and will not have any assets other than
            the Properties (and personal property incidental to the ownership
            and operation of the Properties) or its partnership or membership
            interest in the limited partnership or limited liability company
            which owns the Properties, as applicable;

      d.    each such entity has not and will not engage in, seek or consent to
            any dissolution, winding up, liquidation, consolidation, merger,
            asset sale, transfer of partnership or membership interest, or
            amendment of its articles of incorporation, articles of
            organization, certificate of formation, operating agreement or
            limited partnership agreement, as applicable;

      e.    if any such entity is a limited partnership, all of its general
            partners are corporations that satisfy the requirements set forth in
            this Section 5.2;

      f.    if any such entity is a limited liability company, it has at least
            one managing member that is a corporation that satisfies the
            requirements set forth in this Section 5.2;

      g.    each such entity, without the unanimous consent of all of its
            general partners, directors or members, as applicable, shall not
            file or consent to the filing of any bankruptcy or insolvency
            petition or otherwise institute insolvency proceedings with respect
            to itself or any other entity in which it has a direct or indirect
            legal or beneficial ownership interest;


                                       10
<PAGE>
      h.    each such entity has no indebtedness (and will have no indebtedness)
            other than (i) the Loan (to the extent it is liable under the terms
            of the Loan Documents); and (ii) unsecured trade debt not to exceed
            $1,000,000 in the aggregate with respect to Trustor or $10,000 in
            the aggregate with respect to its managing member, which is not
            evidenced by a note and is incurred in the ordinary course of its
            business in connection with owning, operating and maintaining the
            Property (or its interest in Trustor, as applicable) and is paid
            within thirty (30) days from the date incurred;

      i.    each such entity has not failed and will not fail to correct any
            known misunderstanding regarding the separate identity of such
            entity;

      j.    each such entity has maintained and will maintain its accounts,
            books and records separate from any other person or entity;

      k.    each such entity has maintained and will maintain its books,
            records, resolutions and agreements as official records;

      l.    each such entity (i) has not commingled and will not commingle its
            funds or assets with those of any other entity; and (ii) has held
            and will hold its assets in its own name;

      m.    each such entity has conducted and will conduct its business in its
            own name or in a registered trade name;

      n.    each such entity has maintained and will maintain its accounting
            records and other entity documents separate from any other person or
            entity;

      o.    each such entity has prepared and will prepare separate tax returns
            and financial statements, or if part of a consolidated group, is
            shown as a separate member of such group;

      p.    each such entity has paid and will pay its own liabilities and
            expenses out of its own funds and assets;

      q.    each such entity has held and will hold regular meetings, as
            appropriate, to conducts its business and has observed and will
            observe all corporate, partnership or limited liability company
            formalities and record keeping, as applicable;

      r.    each such entity has not assumed or guaranteed and will not assume
            or guarantee or become obligated for the debts of any other entity
            or hold out its credit as being available to satisfy the obligations
            of any other entity;

      s.    each such entity has not acquired and will not acquire obligations
            or securities of its partners, members or shareholders;

      t.    each such entity has allocated and will allocate fairly and
            reasonably the costs associated with common employees and any
            overhead for shared office space and each such entity has used and
            will use separate stationery, invoices and checks under its own name
            or under its registered trade name;

      u.    each such entity has not pledged and will not pledge its assets for
            the benefit of any other person or entity;

      v.    each such entity has held out and identified itself and will hold
            itself out and identify itself as a separate and distinct entity
            under its own name or under its registered trade name and not as a
            division or part of any other person or entity;


                                       11
<PAGE>
      w.    each such entity has not made and will not make loans to any person
            or entity;

      x.    each such entity has not identified and will not identify its
            partners, members or shareholders, or any affiliates of any of the
            foregoing, as a division or part of it;

      y.    each such entity has not entered into and will not enter into or be
            a party to, any transaction with its partners, members,
            shareholders, or any affiliates of any of the foregoing, except in
            the ordinary course of its business pursuant to written agreements
            and on terms which are intrinsically fair and are no less favorable
            to it than would be obtained in a comparable arm's-length
            transaction with an unrelated third party;

      z.    if any such entity is a corporation, the directors of such entity
            shall consider the interests of the creditors of such entity in
            connection with all corporate action;

      aa.   each such entity has paid and will pay the salaries of its own
            employees and has maintained and will maintain a sufficient number
            of employees in light of its contemplated business operations;

      bb.   each such entity has maintained and will maintain adequate capital
            in light of its contemplated business operations;

      cc.   if any such entity is a limited partnership with more than one
            general partner, its limited partnership agreement requires the
            remaining partners to continue the partnership as long as one
            solvent general partner exists;

      dd.   if any such entity is a limited liability company, its operating
            agreement, if any such entity is a limited partnership, its limited
            partnership agreement, and if any such entity is a corporation, to
            the full extent permitted by applicable law, its articles of
            incorporation, contain the provisions set forth in this Section 5.2
            and any such entity shall conduct its business and operations in
            strict compliance with the terms contained therein;

      ee.   each such entity will, as a condition to the closing of the Loan,
            deliver to Beneficiary a nonconsolidation opinion in form and
            substance acceptable to Beneficiary;

      ff.   if any such entity is a corporation, it has maintained and will
            continue to maintain at least one Independent Director (as
            hereinafter defined); and

      gg.   if any such entity is a corporation, it has not caused or allowed
            and will not cause or allow the board of directors of such entity to
            take any action requiring the unanimous affirmative vote of 100% of
            the members of the board of directors unless an Independent Director
            shall have participated in such vote.

      An "Independent Director" shall be an individual who, except in his or her
      capacity as an Independent Director of the corporation is not, and has not
      been during the five (5) years immediately before such individual's
      appointment as an Independent Director: (i) a stockholder, director,
      partner, officer or employee of the corporation or its Affiliates; (ii)
      affiliated with a customer or supplier of the corporation or its
      Affiliates; or (iii) a spouse, parent, sibling, child or other family
      relative of any person described by (i) or (ii) above.

      As used herein, the term "Affiliate" shall mean any person or entity other
      than the corporation (i) which owns beneficially, directly or indirectly,
      any outstanding shares of the corporation's stock, or (ii) which controls,
      is controlled by or is under common control with the corporation. The term
      "control" means the possession, directly or indirectly, of the power to
      direct or cause the direction of the management and policies of a person,
      whether through ownership of voting securities, by contract or otherwise.


                                       12
<PAGE>
                   ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES

6.1   MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall, or shall
      cause the property manager to: (a) keep the Property in good condition and
      repair; (b) complete or restore promptly and in workmanlike manner the
      Property or any part thereof which may be damaged or destroyed (unless, if
      and to the extent permitted under Section 6.11, Beneficiary elects to
      require that insurance proceeds be used to reduce the Secured Obligations
      and after such repayment the ratio of Secured Obligations to the value of
      the Property, as reasonably determined by Beneficiary is the same as or
      lower than it was immediately before the loss or taking occurred); (c)
      comply and cause the Property to comply with (i) all laws, ordinances,
      regulations and standards, (ii) all covenants, conditions, restrictions
      and equitable servitudes, whether public or private, of every kind and
      character and (iii) all requirements of insurance companies and any bureau
      or agency which establishes standards of insurability, which laws,
      covenants or requirements affect the Property and pertain to acts
      committed or conditions existing thereon, including, without limitation,
      any work of alteration, improvement or demolition as such laws, covenants
      or requirements mandate; (d) operate and manage the Property at all times
      in a professional manner and do all other acts which from the character or
      use of the Property may be reasonably necessary to maintain and preserve
      its value; (e) promptly after execution, deliver to Beneficiary a copy of
      any management agreement concerning the Property and all amendments
      thereto and waivers thereof; and (f) execute and acknowledge all further
      documents, instruments and other papers as Beneficiary or Trustee
      reasonably deems necessary or appropriate to preserve, continue, perfect
      and enjoy the benefits of this Deed of Trust and perform Trustor's
      obligations, including, without limitation, statements of the amount
      secured hereby then owing and statements of no offset. Trustor shall not,
      without Beneficiary's prior written consent: (g) remove or demolish all or
      any material part of the Property; (h) alter either (i) the exterior of
      the Property in a manner which materially and adversely affects the value
      of the Property or (ii) the roof or other structural elements of the
      Property in a manner which requires a building permit except for tenant
      improvements required under the Leases; (i) initiate or acquiesce in any
      change in any zoning or other land classification which affects the
      Property; (j) materially alter the type of occupancy or use of all or any
      part of the Property; or (k) commit or permit waste of the Property.

6.2   HAZARDOUS MATERIALS. Without limiting any other provision of this Deed of
      Trust, Trustor agrees as follows:

      a.    PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
            Property to be used as a site for the use, generation, manufacture,
            storage, treatment, release, discharge, disposal, transportation or
            presence of any oil or other petroleum products, flammable
            explosives, asbestos, urea formaldehyde insulation, radioactive
            materials, hazardous wastes, toxic or contaminated substances or
            similar materials, including, without limitation, any substances
            which are "hazardous substances," "hazardous wastes," "hazardous
            materials" or "toxic substances" under the Hazardous Materials Laws
            (defined below) and/or other applicable environmental laws,
            ordinances or regulations ("Hazardous Materials").

            The foregoing to the contrary notwithstanding, (i) Trustor may
            store, maintain and use on the Property janitorial and maintenance
            supplies, paint and other Hazardous Materials of a type and in a
            quantity readily available for purchase by the general public and
            normally stored, maintained and used by owners and managers of
            properties of a type similar to the Property; and (ii) tenants of
            the Property may store, maintain and use on the Property (and, if
            any tenant is a retail business, hold in inventory and sell in the
            ordinary course of such tenant's business) household and consumer
            cleaning supplies and other Hazardous Materials of a type and
            quantity readily available for purchase by the general public and
            normally stored, maintained and used (and, if tenant is a retail
            business, sold) by tenants of properties similar to the Property or
            in similar lines of business on properties similar to the Property.


                                       13
<PAGE>
      b.    HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
            Property to comply with all federal, state and local laws,
            ordinances and regulations relating to Hazardous Materials
            ("Hazardous Materials Laws"), including, without limitation: the
            Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the
            Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
            1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
            amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive
            Environmental Response, Compensation and Liability Act of 1980, as
            amended (including the Superfund Amendments and Reauthorization Act
            of 1986, "CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic
            Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.;
            the Occupational Safety and Health Act, as amended, 29 U.S.C.
            Section 651; the Emergency Planning and Community Right-to-Know Act
            of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health
            Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
            Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all
            comparable state and local laws, laws of other jurisdictions or
            orders and regulations.

      c.    NOTICES. Trustor shall immediately notify Beneficiary in writing of:
            (i) the discovery of any Hazardous Materials on, under or about the
            Property (other than Hazardous Materials permitted under Section
            6.2(a)); (ii) any knowledge by Trustor that the Property does not
            comply with any Hazardous Materials Laws; (iii) any claims or
            actions ("Hazardous Materials Claims") pending or threatened in
            writing against Trustor or the Property by any governmental entity
            or agency or any other person or entity relating to Hazardous
            Materials or pursuant to the Hazardous Materials Laws; and (iv) the
            discovery of any occurrence or condition on any real property
            adjoining or in the vicinity of the Property that could cause the
            Property or any part thereof to become contaminated with Hazardous
            Materials.

      d.    REMEDIAL ACTION. In response to knowledge or notification to Trustor
            of the presence of any Hazardous Materials on, under or about the
            Property, Trustor shall immediately take, at Trustor's sole expense,
            all remedial action required by any Hazardous Materials Laws or any
            judgment, consent decree, settlement or compromise in respect to any
            Hazardous Materials Claims.

      e.    INSPECTION BY BENEFICIARY. Upon reasonable prior notice to Trustor
            (except in the case of an emergency) and during normal business
            hours, Beneficiary, its employees and agents, may from time to time
            (whether before or after the commencement of a nonjudicial or
            judicial foreclosure proceeding), enter and inspect the Property for
            the purpose of determining the existence, location, nature and
            magnitude of any past or present release or threatened release of
            any Hazardous Materials into, onto, beneath or from the Property.

      f.    LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that each
            representation and warranty and covenant in this Section (together
            with any indemnity applicable to a breach of any such representation
            and warranty) with respect to the environmental condition of the
            Property is intended by Beneficiary and Trustor to be an
            "environmental provision" for purposes of Nevada Revised Statutes
            Section 40.502.

6.3   COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
      local laws, rules and regulations applicable to the Property, including,
      without limitation, all zoning and building requirements and all
      requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
      Section 12101 et seq.), as amended from time to time. Trustor shall
      possess and maintain or cause Borrower to possess and maintain in full
      force and effect at all times (a) all certificates of occupancy and other
      licenses, permits and authorizations required by applicable law for the
      existing use of the Property and (b) all permits, franchises and licenses
      and all rights to all trademarks, trade names, patents and fictitious
      names, if any, required by applicable law for Trustor and Borrower to
      conduct the business(es) in which Trustor and Borrower are now engaged.

6.4   LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
      litigation pending or threatened in writing against Trustor or Borrower
      claiming damages in excess of $100,000 and of all pending or threatened


                                       14
<PAGE>
      (in writing) litigation against Trustor or Borrower if the aggregate
      damage claims against Trustor or Borrower exceed $500,000.

6.5   MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge or
      consolidate with any other entity or permit Borrower to merge or
      consolidate with any other entity; (b) make any substantial change in the
      nature of Trustor's business or structure or permit Borrower to make any
      substantial change in the nature of Borrower's business or structure; (c)
      acquire all or substantially all of the assets of any other entity or
      permit Borrower to acquire all or substantially all of the assets of any
      other entity; or (d) sell, lease, assign, transfer or otherwise dispose of
      a material part of Trustor's assets except in the ordinary course of
      Trustor's business or permit Borrower to sell, lease, assign, transfer or
      otherwise dispose of a material part of Borrower's assets except in the
      ordinary course of Borrower's business.

6.6   ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to maintain
      adequate books and records in accordance with the same accounting standard
      used by Trustor or Borrower to prepare the financial statements delivered
      to and approved by Beneficiary in connection with the making of the Loan
      or other accounting standards approved by Beneficiary. Trustor shall
      permit and shall cause Borrower to permit any representative of
      Beneficiary, at any reasonable time and from time to time, upon reasonable
      prior notice to Trustor, to inspect, audit and examine such books and
      records and make copies of same.

6.7   COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary the
      full amount of all costs and expenses, including, without limitation,
      reasonable attorneys' fees and expenses of Beneficiary's in-house or
      outside counsel, incurred by Beneficiary in connection with: (a)
      appraisals and inspections of the Property or Collateral required by
      Beneficiary as a result of (i) a Transfer or proposed Transfer (as defined
      below), or (ii) a Default; (b) appraisals and inspections of the Property
      or Collateral required by applicable law, including, without limitation,
      federal or state regulatory reporting requirements; and (c) any acts
      performed by Beneficiary at Trustor's request or wholly or partially for
      the benefit of Trustor (including, without limitation, the preparation or
      review of amendments, assumptions, waivers, releases, reconveyances,
      estoppel certificates or statements of amounts owing under any Secured
      Obligation). In connection with appraisals and inspections, Trustor
      specifically (but not by way of limitation) acknowledges that: (aa) a
      formal written appraisal of the Property by a state certified or licensed
      appraiser may be required by federal regulatory reporting requirements on
      an annual or more frequent basis; and (bb) Beneficiary may require
      inspection of the Property by an independent supervising architect, a cost
      engineering specialist, or both. Trustor shall pay all indebtedness
      arising under this Section immediately upon demand by Beneficiary together
      with interest thereon following notice of such indebtedness at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.8   LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section 8.4,
      Trustor shall immediately discharge by bonding or otherwise any lien,
      charge or other encumbrance which attaches to the Property in violation of
      Section 6.15. Subject to Trustor's right to contest such matters under
      this Deed of Trust or as expressly permitted in the Loan Documents,
      Trustor shall pay when due all obligations secured by or reducible to
      liens and encumbrances which shall now or hereafter encumber or appear to
      encumber all or any part of the Property or any interest therein, whether
      senior or subordinate hereto, including, without limitation, all claims
      for work or labor performed, or materials or supplies furnished, in
      connection with any work of demolition, alteration, repair, improvement or
      construction of or upon the Property, except such as Trustor may in good
      faith contest or as to which a bona fide dispute may arise (provided
      provision is made to the satisfaction of Beneficiary for eventual payment
      thereof in the event that Trustor is obligated to make such payment and
      that any recorded claim of lien, charge or other encumbrance against the
      Property is immediately discharged by bonding or otherwise).

6.9   TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due any
      and all indebtedness, obligations, assessments and taxes, both real and
      personal and including federal and state income taxes and state and local
      property taxes and assessments. Trustor shall promptly provide to
      Beneficiary copies of all tax and assessment notices pertaining to the
      Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's


                                       15
<PAGE>
      expense, a tax service contract which shall provide tax information on the
      Property to Beneficiary for the term of the Loan and any extensions or
      renewals of the Loan.

6.10  INSURANCE COVERAGE. Trustor shall insure the Property against loss or
      damage by fire and such other hazards as Beneficiary shall from time to
      time require; provided, however, (a) Beneficiary, at Beneficiary's
      election, may only require flood insurance if all or any portion of the
      improvements located on the Property is or becomes located in a special
      flood hazard area, and (b) Beneficiary, at Beneficiary's election, may
      only require earthquake insurance if all or any portion of the Property is
      or becomes located in an earthquake fault zone. Trustor shall also carry
      public liability insurance and such other insurance as Beneficiary may
      reasonably require, including, without limitation, business interruption
      insurance or loss of rents insurance. Such policies shall contain a
      standard mortgage clause naming Beneficiary and its successors in interest
      as a loss payee and requiring at least 30 days prior notice to the holder
      at termination or cancellation. Trustor shall maintain all required
      insurance throughout the term of the Loan and while any liabilities of
      Borrower or Trustor to Beneficiary under any of the Loan Documents remain
      outstanding at Trustor's expense, with companies, and in substance and
      form satisfactory to Beneficiary. Neither Beneficiary nor Trustee, by
      reason of accepting, rejecting, approving or obtaining insurance shall
      incur any liability for: (c) the existence, nonexistence, form or legal
      sufficiency of any insurance; (d) the solvency of any insurer; or (e) the
      payment of claims.

6.11  CONDEMNATION AND INSURANCE PROCEEDS.

      a.    ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns to
            Beneficiary all of the following rights, claims and amounts
            (collectively, "Claims"), all of which shall be paid to Beneficiary:
            (i) all awards of damages and all other compensation payable
            directly or indirectly by reason of a condemnation or proposed
            condemnation for public or private use affecting all or any part of,
            or any interest in, the Property; (ii) all other claims and awards
            for damages to or decrease in value of all or any part of, or any
            interest in, the Property; (iii) all proceeds of any insurance
            policies payable by reason of loss sustained to all or any part of
            the Property; and (iv) all interest which may accrue on any of the
            foregoing. Trustor shall give Beneficiary prompt written notice of
            the occurrence of any casualty affecting, or the institution of any
            proceedings for eminent domain or for the condemnation of, the
            Property or any portion thereof. So long as no Default has occurred
            and is continuing at the time, Trustor shall have the right to
            adjust, compromise and settle any Claim of $100,000 or less without
            the consent of Beneficiary, provided, however, all awards, proceeds
            and other sums described herein shall continue to be payable to
            Beneficiary. Beneficiary may commence, appear in, defend or
            prosecute any Claim exceeding $100,000, and may adjust, compromise
            and settle all Claims (except for Claims which Trustor may settle as
            provided herein), but shall not be responsible for any failure to
            commence, appear in, defend, prosecute or collect any such Claim
            regardless of the cause of the failure. All awards, proceeds and
            other sums described herein shall be payable to Beneficiary.

      b.    APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
            occurred and is continuing at the time of Beneficiary's receipt of
            the proceeds of the Claims ("Proceeds") and no Default occurs
            thereafter, Beneficiary shall apply the Proceeds in the following
            order of priority: First, to Beneficiary's expenses in settling,
            prosecuting or defending the Claims; Second, to the repair or
            restoration of the Property; and Third, to Trustor if the repair or
            restoration of the Property has been completed, but to the Secured
            Obligations in any order without suspending, extending or reducing
            any obligation of Trustor to make installment payments if the repair
            or restoration of the Property has not been completed.
            Notwithstanding the foregoing, Beneficiary shall have no obligation
            to make any Proceeds available for the repair or restoration of the
            Property unless and until all the following conditions have been
            satisfied: (i) delivery to Beneficiary of the Proceeds plus any
            additional amount which is needed to pay all costs of the repair or
            restoration (including, without limitation, taxes, financing
            charges, insurance and rent during the repair period); (ii)
            establishment of an arrangement for lien releases and disbursement
            of funds acceptable to Beneficiary; (iii) delivery to Beneficiary in
            form and content acceptable to Beneficiary of all of the following:
            (aa) plans and specifications for the work; (bb) a contract for the
            work, signed by a contractor acceptable to Beneficiary; (cc) a cost
            breakdown for the work; (dd) if


                                       16
<PAGE>
            reasonably required by Beneficiary, a payment and performance bond
            for the work; (ee) evidence of the continuation of substantially all
            Leases unless consented to in writing by Beneficiary; (ff) evidence
            that, upon completion of the work, the size, capacity, value, and
            income coverage ratios for the Property will be at least as great as
            those which existed immediately before the damage or condemnation
            occurred; and (gg) evidence of the satisfaction of any additional
            conditions that Beneficiary may reasonably establish to protect
            Beneficiary's security. Trustor acknowledges that the specific
            conditions described above are reasonable.

      c.    APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and is
            continuing at the time of Beneficiary's receipt of the Proceeds or
            if a Default occurs at any time thereafter, Beneficiary may, at
            Beneficiary's absolute discretion and regardless of any impairment
            of security or lack of impairment of security, but subject to
            applicable law governing use of the Proceeds, if any, apply all or
            any of the Proceeds to Beneficiary's expenses in settling,
            prosecuting or defending the Claims and then apply the balance to
            the Secured Obligations in any order without suspending, extending
            or reducing any obligation of Trustor to make installment payments,
            and may release all or any part of the Proceeds to Trustor upon any
            conditions Beneficiary chooses.

6.12  IMPOUNDS.

      a.    POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time after
            a Default occurs (and regardless of whether such Default is
            thereafter cured), Trustor shall deposit with Beneficiary such
            amounts ("Post-Default Impounds") on such dates (determined by
            Beneficiary as provided below) as will be sufficient to pay any or
            all "Costs" (as defined below) specified by Beneficiary. Beneficiary
            in its reasonable discretion shall estimate the amount of such Costs
            that will be payable or required during any period selected by
            Beneficiary not exceeding 1 year and shall determine the fractional
            portion thereof that Trustor shall deposit with Beneficiary on each
            date specified by Beneficiary during such period. If the
            Post-Default Impounds paid by Trustor are not sufficient to pay the
            related Costs, Trustor shall deposit with Beneficiary upon demand an
            amount equal to the deficiency. All Post-Default Impounds shall be
            payable by Trustor in addition to (but without duplication of) any
            other Impounds (as defined below).

      b.    ALL IMPOUNDS. Post-Default Impounds and any other impounds that may
            be payable by Borrower under the Note are collectively called
            "Impounds". All Impounds shall be deposited into one or more
            segregated or commingled accounts maintained by Beneficiary or its
            servicing agent. Except as otherwise provided in the Note, such
            account(s) shall not bear interest. Beneficiary shall not be a
            trustee, special depository or other fiduciary for Trustor with
            respect to such account, and the existence of such account shall not
            limit Beneficiary's rights under this Deed of Trust, any other
            agreement or any provision of law. If no Default exists, Beneficiary
            shall apply all Impounds to the payment of the related Costs, or in
            Beneficiary's sole discretion may release any or all Impounds to
            Trustor for application to and payment of such Costs. If a Default
            exists, Beneficiary may apply any or all Impounds to any Secured
            Obligation and/or to cure such Default, whereupon Trustor shall
            restore all Impounds so applied and cure all Defaults not cured by
            such application. The obligations of Trustor hereunder shall not be
            diminished by deposits of Impounds made by Trustor, except to the
            extent that such obligations have actually been met by application
            of such Impounds. Upon any assignment of this Deed of Trust,
            Beneficiary may assign all Impounds in its possession to
            Beneficiary's assignee, whereupon Beneficiary and Trustee shall be
            released from all liability with respect to such Impounds. Within 60
            days following full repayment of the Secured Obligations (other than
            as a consequence of foreclosure or conveyance in lieu of
            foreclosure) or at such earlier time as Beneficiary may elect,
            Beneficiary shall pay to Trustor all Impounds in its possession, and
            no other party shall have any right or claim thereto. "Costs" means
            (i) all taxes and other liabilities payable by Trustor under Section
            6.9, (ii) all insurance premiums payable by Trustor under Section
            6.10, (iii) all other costs and expenses for which Impounds are
            required under the Note, and/or (iv) all other amounts that will be
            required to preserve the value of the Property. Trustor shall
            deliver to Beneficiary, promptly upon receipt, all bills for Costs
            for which Beneficiary has required Post-Default Impounds.


                                       17
<PAGE>
6.13  DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
      preserve and defend the Property and title to and right of possession of
      the Property, the security of this Deed of Trust and the rights and powers
      of Beneficiary and Trustee hereunder at Trustor's sole expense against all
      adverse claims, whether the claim: (a) is against a possessory or
      non-possessory interest; (b) arose prior or subsequent to the Effective
      Date; or (c) is senior or junior to Trustor's or Beneficiary's rights.
      Trustor shall give Beneficiary and Trustee prompt notice in writing of the
      assertion of any claim, of the filing of any action or proceeding, of the
      occurrence of any damage to the Property and of any condemnation offer or
      action.

6.14  RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
      and employees may enter the Property from time to time at any reasonable
      time upon reasonable prior notice to Trustor (except that such notice
      shall not be required in the event of an emergency) for the purpose of
      inspecting the Property and ascertaining Trustor's compliance with the
      terms of this Deed of Trust. Beneficiary shall use reasonable efforts to
      assure that Beneficiary's entry upon and inspection of the Property shall
      not materially and unreasonably interfere with the business or operations
      of Trustor or Trustor's tenants on the Property.

6.15  PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Trustor
      acknowledges that Beneficiary has relied upon the principals of Trustor
      and Borrower and their experience in owning and operating properties
      similar to the Property in connection with the closing of the Loan.
      Accordingly, except with the prior written consent of Beneficiary or as
      otherwise expressly permitted in the Note, Trustor shall not: (a) cause or
      permit any sale, exchange, mortgage, pledge, hypothecation, assignment,
      encumbrance or other transfer, conveyance or disposition, whether
      voluntarily, involuntarily or by operation of law ("Transfer") of all or
      any part of, or all or any direct or indirect interest in, the Property or
      the Collateral (except for equipment and inventory in the ordinary course
      of its business); or (b) cause or permit a Transfer of any direct or
      indirect interest in any partnership, limited liability company,
      corporation, trust, or other entity comprising all or any portion of or
      holding any direct or indirect interest in Trustor or Borrower (other than
      the sale or exchange of a limited partnership interest or a non-managing
      membership interest). If any Transfer not expressly permitted in the Note
      or this Deed of Trust is made without the prior written consent of
      Beneficiary, Beneficiary shall have the absolute right at its option,
      without prior demand or notice, to declare all of the Secured Obligations
      immediately due and payable, except to the extent prohibited by law, and
      pursue its rights and remedies under Section 7.3 herein. Trustor agrees to
      pay any prepayment fee as set forth in the Note in the event the Secured
      Obligations are accelerated pursuant to the terms of this Section. Consent
      to one such Transfer shall not be deemed to be a waiver of the right to
      require the consent to future or successive Transfers. Except for
      Transfers expressly permitted under the Note, Beneficiary's consent to any
      Transfer may be withheld, conditioned or delayed in Beneficiary's sole and
      absolute discretion.

6.16  ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
      trust when this Deed of Trust is recorded. From time to time upon written
      request of Beneficiary and presentation of this Deed of Trust, or a
      certified copy thereof, for endorsement, and without affecting the
      personal liability of any person for payment of any indebtedness or
      performance of any Secured Obligation, Trustee may, without liability
      therefor and without notice: (a) reconvey all or any part of the Property;
      (b) consent to the making of any map or plat of the Property; (c) join
      with Trustor in granting any easement on the Property; (d) join with
      Trustor in any declaration of covenants and restrictions; or (e) join in
      any extension agreement or any agreement subordinating the lien or charge
      of this Deed of Trust. Nothing contained in the immediately preceding
      sentence shall be construed to limit, impair or otherwise affect the
      rights of Trustor in any respect. Except as may otherwise be required by
      applicable law, Trustee or Beneficiary may from time to time apply to any
      court of competent jurisdiction for aid and direction in the execution of
      the trusts hereunder and the enforcement of the rights and remedies
      available hereunder, and Trustee or Beneficiary may obtain orders or
      decrees directing or confirming or approving acts in the execution of said
      trusts and the enforcement of said remedies. Trustee has no obligation to
      notify any party of any pending sale or any action or proceeding
      (including, without limitation, actions in which Trustor, Beneficiary or
      Trustee shall be a party) unless held or commenced and maintained by
      Trustee under this Deed of Trust. Trustee shall not be obligated to
      perform any act required of it hereunder


                                       18
<PAGE>
      unless the performance of the act is requested in writing and Trustee is
      reasonably indemnified and held harmless against loss, cost, liability and
      expense.

6.17  COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
      compensation and reimbursement for services and expenses in the
      administration of this trust, including, without limitation, reasonable
      attorneys' fees. Trustor shall pay all indebtedness arising under this
      Section immediately upon demand by Trustee or Beneficiary together with
      interest thereon from the date the indebtedness arises at the rate of
      interest then applicable to the principal balance of the Note as specified
      therein.

6.18  EXCULPATION. Beneficiary shall not directly or indirectly be liable to
      Trustor or any other person as a consequence of: (a) the exercise of the
      rights, remedies or powers granted to Beneficiary in this Deed of Trust;
      (b) the failure or refusal of Beneficiary to perform or discharge any
      obligation or liability of Trustor under any agreement related to the
      Property or under this Deed of Trust; or (c) any loss sustained by Trustor
      or any third party resulting from Beneficiary's failure to lease the
      Property after a Default or from any other act or omission of Beneficiary
      in managing the Property after a Default unless the loss is caused by the
      willful misconduct and bad faith of Beneficiary and no such liability
      shall be asserted or enforced against Beneficiary, all such liability
      being expressly waived and released by Trustor.

6.19  INDEMNITY. Without in any way limiting any other indemnity contained in
      this Deed of Trust, Trustor agrees to defend, indemnify and hold harmless
      Trustee and the Beneficiary Group (as defined below) from and against any
      claim, loss, damage, cost, expense or liability directly or indirectly
      arising out of: (a) the making of the Loan, except for violations of
      banking laws or regulations by the Beneficiary Group; (b) this Deed of
      Trust; (c) the execution of this Deed of Trust or the performance of any
      act required or permitted hereunder or by law; (d) any failure of Trustor
      to perform Trustor's obligations under this Deed of Trust or the other
      Loan Documents; (e) any alleged obligation or undertaking on the
      Beneficiary Group's part to perform or discharge any of the
      representations, warranties, conditions, covenants or other obligations
      contained in any other document related to the Property; (f) any act or
      omission by Trustor or any contractor, agent, employee or representative
      of Trustor with respect to the Property; or (g) any claim, loss, damage,
      cost, expense or liability directly or indirectly arising out of: (i) the
      use, generation, manufacture, storage, treatment, release, threatened
      release, discharge, disposal, transportation or presence of any Hazardous
      Materials which are found in, on, under or about the Property (including,
      without limitation, underground contamination); or (ii) the breach of any
      covenant, representation or warranty of Trustor under Sections 5.1.p,
      5.1.q, 5.1.r, or 6.2 above. The foregoing to the contrary notwithstanding,
      this indemnity shall not include any claim, loss, damage, cost, expense or
      liability directly or indirectly arising out of the gross negligence or
      willful misconduct of any member of the Beneficiary Group or Trustee, or
      any claim, loss, damage, cost, expense or liability incurred by the
      Beneficiary Group or Trustee arising from any act or incident on the
      Property occurring after the full reconveyance and release of the lien of
      this Deed of Trust on the Property, or with respect to the matters set
      forth in clause (g) above, any claim, loss, damage, cost, expense or
      liability incurred by the Beneficiary Group resulting from the
      introduction and initial release of Hazardous Materials on the Property
      occurring after the transfer of title to the Property at a foreclosure
      sale under this Deed of Trust, either pursuant to judicial decree or the
      power of sale, or by deed in lieu of such foreclosure. This indemnity
      shall include, without limitation: (aa) all consequential damages
      (including, without limitation, any third party tort claims or
      governmental claims, fines or penalties against Trustee or the Beneficiary
      Group); (bb) all court costs and reasonable attorneys' fees (including,
      without limitation, expert witness fees) paid or incurred by Trustee or
      the Beneficiary Group; and (cc) the costs, whether foreseeable or
      unforeseeable, of any investigation, repair, cleanup or detoxification of
      the Property which is required by any governmental entity or is otherwise
      necessary to render the Property in compliance with all laws and
      regulations pertaining to Hazardous Materials. "Beneficiary Group", as
      used herein, shall mean (1) Beneficiary (including, without limitation,
      any participant in the Loan), (2) any entity controlling, controlled by or
      under common control with Beneficiary, (3) the directors, officers,
      employees and agents of Beneficiary and such other entities, and (4) the
      successors, heirs and assigns of the entities and persons described in
      foregoing clauses (1) through (3). Trustor shall pay immediately upon
      Trustee's or Beneficiary's demand any amounts owing under this indemnity
      together with interest from the date the indebtedness arises until paid at
      the rate of interest applicable to the principal balance of the Note as
      specified therein. Trustor agrees to use legal


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<PAGE>
      counsel reasonably acceptable to Trustee and the Beneficiary Group in any
      action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
      SECTION SHALL SURVIVE THE TERMINATION AND RECONVEYANCE OF THIS DEED OF
      TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO
      THE PROVISIONS OF THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

6.20  SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
      acknowledged by Beneficiary and recorded in the Office of the Recorder of
      the County in which the Property is situated, Beneficiary may appoint
      another trustee to act in the place and stead of Trustee or any successor.
      Such writing shall set forth any information required by law. The
      recordation of such instrument of substitution shall discharge Trustee
      herein named and shall appoint the new trustee as the trustee hereunder
      with the same effect as if originally named trustee herein. A writing
      recorded pursuant to the provisions of this Section shall be conclusive
      proof of the proper substitution of such new trustee.

6.21  RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
      notice to or the consent, approval or agreement of any persons or entities
      having any interest at any time in the Property or in any manner obligated
      under the Secured Obligations ("Interested Parties"), Beneficiary may,
      from time to time: (a) fully or partially release any person or entity
      from liability for the payment or performance of any Secured Obligation;
      (b) extend the maturity of any Secured Obligation; (c) make any agreement
      with Borrower increasing the amount or otherwise altering the terms of any
      Secured Obligation; (d) accept additional security for any Secured
      Obligation; or (e) release all or any portion of the Property, Collateral
      and other security for any Secured Obligation. None of the foregoing
      actions shall release or reduce the personal liability of any of said
      Interested Parties, or release or impair the priority of the lien of this
      Deed of Trust upon the Property.

6.22  SALE OR PARTICIPATION OF LOAN. Trustor agrees that Beneficiary may at any
      time sell, assign, participate or securitize all or any portion of
      Beneficiary's rights and obligations under the Loan Documents, and that
      any such sale, assignment, participation or securitization may be to one
      or more financial institutions or other entities, to private investors,
      and/or into the public securities market, in Beneficiary's sole
      discretion. Trustor further agrees that Beneficiary may disseminate to any
      such actual or potential purchaser(s), assignee(s) or participant(s) all
      documents and financial and other information heretofore or hereafter
      provided to or known to Beneficiary with respect to: (a) the Property and
      its operation; and/or (b) any party connected with the Loan (including,
      without limitation, Trustor, any partner or member of Trustor, any
      constituent partner or member of Trustor, any guarantor and any
      nonborrower trustor). In the event of any such sale, assignment,
      participation or securitization, Beneficiary and the other parties to the
      same shall share in the rights and obligations of Beneficiary set forth in
      the Loan Documents as and to the extent they shall agree among themselves.
      In connection with any such sale, assignment, participation or
      securitization, Trustor further agrees that the Loan Documents shall be
      sufficient evidence of the obligations of Trustor to each purchaser,
      assignee or participant, and Trustor shall, within 15 days after request
      by Beneficiary, (x) deliver an estoppel certificate verifying for the
      benefit of Beneficiary and any other party designated by Beneficiary the
      status and the terms and provisions of the Loan in form and substance
      acceptable to Beneficiary, (y) provide any information, legal opinions or
      documents regarding Trustor, Guarantor (as defined in the Loan Documents),
      the Property and any tenants of the Property as Beneficiary or
      Beneficiary's rating agencies may reasonably request, and (z) enter into
      such amendments or modifications to the Loan Documents or the
      organizational documents of Trustor as may be reasonably required in order
      to facilitate any such sale, assignment, participation or securitization
      without impairing Trustor's rights or increasing Trustor's obligations.
      The indemnity obligations of Trustor under the Loan Documents shall also
      apply with respect to any purchaser, assignee or participant.

6.23  RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
      this Deed of Trust or certified copy thereof and any note, instrument or
      instruments setting forth all obligations secured hereby to Trustee for
      cancellation, Trustee shall reconvey, without warranty, the Property or
      that portion thereof then held hereunder. The recitals of any matters or
      facts in any reconveyance executed hereunder shall be conclusive proof of
      the truthfulness thereof. To the extent permitted by law, the reconveyance
      may describe the grantee as "the person or persons legally entitled
      thereto". Neither Beneficiary nor Trustee shall have any duty to determine
      the rights


                                       20
<PAGE>
      of persons claiming to be rightful grantees of any reconveyance. When the
      Property has been fully reconveyed, the last such reconveyance shall
      operate as a reassignment of all future rents, issues and profits of the
      Property to the person or persons legally entitled thereto.

6.24  SUBROGATION. Beneficiary shall be subrogated to the lien of all
      encumbrances, whether released of record or not, paid in whole or in part
      by Beneficiary pursuant to this Deed of Trust or by the proceeds of any
      loan secured by this Deed of Trust.

6.25  MANAGEMENT AGREEMENTS. Without the prior written consent of Beneficiary,
      Trustor shall not terminate, modify, amend or enter into any agreement
      providing for the management, leasing or operation of the Property.
      Trustor represents, warrants and covenants that any existing management
      agreement includes, and any future management agreement entered into by
      Trustor shall include, a provision which provides that the management
      agreement is automatically terminated upon the transfer of the Property by
      Trustor, either by sale, foreclosure, deed in lieu of foreclosure, or
      otherwise, to Beneficiary or any other purchaser of the Property. Upon a
      Default under the Loan Documents or a default under any management
      agreement then in effect, which default is not cured within any applicable
      grace or cure period, Beneficiary shall have the right to terminate, or to
      direct Trustor to terminate, such management agreement upon thirty (30)
      days' written notice and to retain, or to direct Trustor to retain, a new
      management agent approved by Beneficiary.

                               ARTICLE 7. DEFAULT

7.1   DEFAULT. For all purposes hereof, "Default" shall mean either an "Optional
      Default" (as defined below) or an "Automatic Default" (as defined below).

      a.    OPTIONAL DEFAULT. An "Optional Default" shall occur, at
            Beneficiary's option, upon the occurrence of any of the following
            events:

            (i)   MONETARY. Borrower or Trustor shall fail to (aa) pay when due
                  any sums payable under the Loan Documents which by their
                  express terms require immediate payment without any grace
                  period or sums which are payable on the Maturity Date, or (bb)
                  pay within 5 days when due any other sums payable under the
                  Note, this Deed of Trust or any of the other Loan Documents,
                  including without limitation, any monthly payment due under
                  the Note.

            (ii)  FAILURE TO PERFORM. Borrower or Trustor shall fail to observe,
                  perform or discharge any of Borrower's or Trustor's
                  obligations, covenants, conditions or agreements, other than
                  Borrower's or Trustor's payment obligations, under the Note,
                  this Deed of Trust or any of the other Loan Documents, and
                  (aa) such failure shall remain uncured for 30 days after
                  written notice thereof shall have been given to Borrower or
                  Trustor, as the case may be, by Beneficiary or (bb) if such
                  failure is of such a nature that it cannot be cured within
                  such 30 day period, Borrower or Trustor shall fail to commence
                  to cure such failure within such 30 day period or shall fail
                  to diligently prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
                  certificate or other statement (financial or otherwise) made
                  or furnished by or on behalf of Borrower, Trustor, or a
                  guarantor, if any, to Beneficiary or in connection with any of
                  the Loan Documents, or as an inducement to Beneficiary to make
                  the Loan, shall be false, incorrect, incomplete or misleading
                  in any material respect when made or furnished.

            (iv)  CONDEMNATION; ATTACHMENT. The condemnation, seizure or
                  appropriation of any material portion (as reasonably
                  determined by Beneficiary) of the Property; or the
                  sequestration or attachment of, or levy or execution upon any
                  of the Property, the Collateral or any other collateral
                  provided by Borrower or Trustor under any of the Loan
                  Documents, or any material portion of


                                       21
<PAGE>
                  the other assets of Borrower or Trustor, which sequestration,
                  attachment, levy or execution is not released or dismissed
                  within 45 days after its occurrence; or the sale of any assets
                  affected by any of the foregoing.

            (v)   UNINSURED CASUALTY. The occurrence of an uninsured casualty
                  with respect to any material portion (as reasonably determined
                  by Beneficiary) of the Property unless: (aa) no other Default
                  has occurred and is continuing at the time of such casualty or
                  occurs thereafter; (bb) Trustor promptly notifies Beneficiary
                  of the occurrence of such casualty; and (cc) not more than 45
                  days after the occurrence of such casualty, Trustor delivers
                  to Beneficiary immediately available funds in an amount
                  sufficient, in Beneficiary's reasonable opinion, to pay all
                  costs of the repair or restoration (including, without
                  limitation, taxes, financing charges, insurance and rent
                  during the repair period). So long as no Default has occurred
                  and is continuing at the time of Beneficiary's receipt of such
                  funds and no Default occurs thereafter, Beneficiary shall make
                  such funds available for the repair or restoration of the
                  Property. Notwithstanding the foregoing, Beneficiary shall
                  have no obligation to make any funds available for repair or
                  restoration of the Property unless and until all the
                  conditions set forth in clauses (ii) and (iii) of the second
                  sentence of Section 6.11(b) of this Deed of Trust have been
                  satisfied. Trustor acknowledges that the specific conditions
                  described above are reasonable.

            (vi)  ADVERSE FINANCIAL CHANGE. Any material adverse change in the
                  financial condition of Borrower or any general partner or
                  managing member of Borrower, any guarantor, or any other
                  person or entity from the condition shown on the financial
                  statement(s) submitted to Beneficiary and relied upon by
                  Beneficiary in making the Loan, and which change Beneficiary
                  reasonably determines will have a material adverse effect on
                  (aa) the business, operations or condition of the Property; or
                  (bb) the ability of Borrower or Trustor to pay or perform
                  Borrower's or Trustor's obligations in accordance with the
                  terms of the Note, this Deed of Trust, and the other Loan
                  Documents.

      b.    AUTOMATIC DEFAULT. An "Automatic Default" shall occur automatically
            upon the occurrence of any of the following events:

            (i)   VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
                  filing a petition for relief under the Bankruptcy Reform Act
                  of 1978, as amended or recodified ("Bankruptcy Code"), or
                  under any other present or future state or federal law
                  regarding bankruptcy, reorganization or other relief to
                  debtors (collectively, "Debtor Relief Law"); or (bb)
                  Borrower's filing any pleading in any involuntary proceeding
                  under the Bankruptcy Code or other Debtor Relief Law which
                  admits the jurisdiction of a court to regulate Borrower or the
                  Property or the petition's material allegations regarding
                  Borrower's insolvency; or (cc) Borrower's making a general
                  assignment for the benefit of creditors; or (dd) Borrower's
                  applying for, or the appointment of, a receiver, trustee,
                  custodian or liquidator of Borrower or any of its property; or
                  (ee) the filing by Borrower of a petition seeking the
                  liquidation or dissolution of Borrower or the commencement of
                  any other procedure to liquidate or dissolve Borrower.

            (ii)  INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
                  dismissal of any involuntary petition under the Bankruptcy
                  Code or other Debtor Relief Law that is filed against Borrower
                  or in any way restrains or limits Borrower or Beneficiary
                  regarding the Loan or the Property, prior to the earlier of
                  the entry of any order granting relief sought in the
                  involuntary petition or 45 days after the date of filing of
                  the petition.


                                       22
<PAGE>
            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
                  clauses (i) or (ii) as to Trustor, any general partner or
                  managing member of Borrower or Trustor, or any guarantor or
                  other person or entity in any manner obligated to Beneficiary
                  under the Loan Documents.

7.2   ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary may,
      at its option, declare all sums owing to Beneficiary under the Note and
      the other Loan Documents immediately due and payable. Upon the occurrence
      of an Automatic Default, all sums owing to Beneficiary under the Note and
      the other Loan Documents shall automatically become immediately due and
      payable.

7.3   RIGHTS AND REMEDIES. In addition to the rights and remedies in Section 7.2
      above, at any time after a Default, Beneficiary shall have all of the
      following rights and remedies:

      a.    ENTRY ON PROPERTY. With or without notice, and without releasing
            Trustor from any Secured Obligation, and without becoming a
            mortgagee in possession, to enter upon the Property from time to
            time and to do such acts and things as Beneficiary or Trustee deem
            necessary or desirable in order to inspect, investigate, assess and
            protect the security hereof or to cure any Default, including,
            without limitation: (i) to take and possess all documents, books,
            records, papers and accounts of Trustor, Borrower or the then owner
            of the Property which relate to the Property; (ii) to make,
            terminate, enforce or modify leases of the Property upon such terms
            and conditions as Beneficiary deems proper; (iii) to make repairs,
            alterations and improvements to the Property necessary, in Trustee's
            or Beneficiary's reasonable judgment, to protect or enhance the
            security hereof; (iv) to appear in and defend any action or
            proceeding purporting to affect the security hereof or the rights or
            powers of Beneficiary or Trustee hereunder; (v) to pay, purchase,
            contest or compromise any encumbrance, charge, lien or claim of lien
            which, in the sole judgment of either Beneficiary or Trustee, is or
            may be senior in priority hereto, the judgment of Beneficiary or
            Trustee being conclusive as between the parties hereto; (vi) to
            obtain insurance; (vii) to pay any premiums or charges with respect
            to insurance required to be carried hereunder; (viii) to obtain a
            court order to enforce Beneficiary's right to enter and inspect the
            Property for Hazardous Materials, in which regard the decision of
            Beneficiary as to whether there exists a release or threatened
            release of Hazardous Materials onto the Property shall be deemed
            reasonable and conclusive as between the parties hereto; (ix) to
            have a receiver appointed pursuant to applicable law to enforce
            Beneficiary's rights to enter and inspect the Property for Hazardous
            Materials; and/or (x) to employ legal counsel, accountants,
            engineers, consultants, contractors and other appropriate persons to
            assist them;

      b.    APPOINTMENT OF RECEIVER. With or without notice or hearing, to apply
            to a court of competent jurisdiction for and obtain appointment of a
            receiver, trustee, liquidator or conservator of the Property, for
            any purpose, including, without limitation, to enforce Beneficiary's
            right to collect Payments and to enter on and inspect the Property
            for Hazardous Materials, as a matter of strict right and without
            regard to: (i) the adequacy of the security for the repayment of the
            Secured Obligations; (ii) the existence of a declaration that the
            Secured Obligations are immediately due and payable; (iii) the
            filing of a notice of default; or (iv) the solvency of Trustor,
            Borrower or any guarantor or other person or entity in any manner
            obligated to Beneficiary under the Loan Documents;

      c.    JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain an action
            or actions in any court of competent jurisdiction to foreclose this
            instrument as a mortgage or to obtain specific enforcement of the
            covenants of Trustor hereunder, and Trustor agrees that such
            covenants shall be specifically enforceable by injunction or any
            other appropriate equitable remedy and that for the purposes of any
            suit brought under this subparagraph, Trustor waives the defense of
            laches and any applicable statute of limitations;

      d.    NONJUDICIAL FORECLOSURE. To execute a written notice of such Default
            and of the election to cause the Property to be sold to satisfy the
            Secured Obligations. Trustee shall give and record such notice as
            the law then requires as a condition precedent to a trustee's sale.
            When the minimum period of time required by law after such notice
            has elapsed, Trustee, without notice to or demand upon Trustor
            except as


                                       23
<PAGE>
            required by law, shall sell the Property at the time and place of
            sale fixed by it in the notice of sale, at one or several sales,
            either as a whole or in separate parcels and in such manner and
            order, all as Beneficiary in its sole discretion may determine, at
            public auction to the highest bidder for cash, in lawful money of
            the United States, payable at time of sale. Neither Trustor nor any
            other person or entity other than Beneficiary shall have the right
            to direct the order in which the Property is sold. Subject to
            requirements and limits imposed by law, Trustee may, from time to
            time postpone sale of all or any portion of the Property by public
            announcement at such time and place of sale, and from time to time
            may postpone the sale by public announcement at the time and place
            fixed by the preceding postponement. A sale of less than the whole
            of the Property or any defective or irregular sale made hereunder
            shall not exhaust the power of sale provided for herein. Trustee
            shall deliver to the purchaser at such sale a deed conveying the
            Property or portion thereof so sold, but without any covenant or
            warranty, express or implied. The recitals in the deed of any
            matters or facts shall be conclusive proof of the truthfulness
            thereof. Any person, including Trustee, Trustor or Beneficiary may
            purchase at the sale;

            Upon sale of the Property at any judicial or nonjudicial
            foreclosure, Beneficiary may credit bid (as determined by
            Beneficiary in its sole and absolute discretion) all or any portion
            of the Secured Obligations. In determining such credit bid,
            Beneficiary may, but is not obligated to, take into account all or
            any of the following: (i) appraisals of the Property as such
            appraisals may be discounted or adjusted by Beneficiary in its sole
            and absolute underwriting discretion; (ii) expenses and costs
            incurred by Beneficiary with respect to the Property prior to
            foreclosure; (iii) expenses and costs which Beneficiary anticipates
            will be incurred with respect to the Property after foreclosure, but
            prior to resale, including, without limitation, costs of structural
            reports and other due diligence, costs to carry the Property prior
            to resale, costs of resale (e.g. commissions, attorneys' fees, and
            taxes), costs of any Hazardous Materials clean-up and monitoring,
            costs of deferred maintenance, repair, refurbishment and retrofit,
            costs of defending or settling litigation affecting the Property,
            and lost opportunity costs (if any), including the time value of
            money during any anticipated holding period by Beneficiary; (iv)
            declining trends in real property values generally and with respect
            to properties similar to the Property; (v) anticipated discounts
            upon resale of the Property as a distressed or foreclosed property;
            (vi) the fact of additional collateral (if any), for the Secured
            Obligations; and (vii) such other factors or matters that
            Beneficiary (in its sole and absolute discretion) deems appropriate.
            In regard to the above, Trustor acknowledges and agrees that: (viii)
            Beneficiary is not required to use any or all of the foregoing
            factors to determine the amount of its credit bid; (ix) this
            paragraph does not impose upon Beneficiary any additional
            obligations that are not imposed by law at the time the credit bid
            is made; (x) the amount of Beneficiary's credit bid need not have
            any relation to any loan-to-value ratios specified in the Loan
            Documents or previously discussed between Trustor and Beneficiary;
            and (xi) Beneficiary's credit bid may be (at Beneficiary's sole and
            absolute discretion) higher or lower than any appraised value of the
            Property;

      e.    MULTIPLE FORECLOSURES. To resort to and realize upon the security
            hereunder and any other security now or later held by Beneficiary
            concurrently or successively and in one or several consolidated or
            independent judicial actions or lawfully taken nonjudicial
            proceedings, or both, and to apply the proceeds received upon the
            Secured Obligations all in such order and manner as Trustee and
            Beneficiary or either of them determine in their sole discretion;

      f.    RIGHTS TO COLLATERAL. To exercise all rights Trustee or Beneficiary
            may have with respect to the Collateral under this Deed of Trust,
            the UCC or otherwise at law; and

      g.    OTHER RIGHTS. To exercise such other rights as Trustee or
            Beneficiary may have at law or in equity or pursuant to the terms
            and conditions of this Deed of Trust or any of the other Loan
            Documents.

      In connection with any sale or sales hereunder, Beneficiary may elect to
      treat any of the Property which consists of a right in action or which is
      property that can be severed from the Property (including, without
      limitation, any improvements forming a part thereof) without causing
      structural damage thereto as if the same were personal


                                       24
<PAGE>
      property or a fixture, as the case may be, and dispose of the same in
      accordance with applicable law, separate and apart from the sale of the
      Property. Any sale of Collateral hereunder shall be conducted in any
      manner permitted by the UCC.

7.4   APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
      effected, Trustee shall apply the proceeds of such sale in the following
      order of priority: First, to the costs, fees and expenses of exercising
      the power of sale and of sale, including, without limitation, the payment
      of reasonable Trustee's fees and attorneys' fees; Second, to the payment
      of the Secured Obligations which are secured by this Deed of Trust, in
      such order as Beneficiary shall determine in its sole discretion; Third,
      to satisfy the outstanding balance of obligations secured by any junior
      liens or encumbrances in the order of their priority; and Fourth, to the
      Trustor or the Trustor's successor in interest, or in the event the
      Property has been sold or transferred to another, to the vested owner of
      record at the time of the Trustee's sale.

7.5   WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
      claiming through or under Trustor, and for all parties who may acquire a
      lien on or interest in the Property, hereby waives all rights to have the
      Property and/or any other property, including, without limitation, the
      Collateral, which is now or later may be security for any Secured
      Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
      foreclosure of any other security for any of the Secured Obligations.

7.6   NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any receiver's
      entry upon and taking possession of all or any part of the Property, nor
      any collection of rents, issues, profits, insurance proceeds, condemnation
      proceeds or damages, other security or proceeds of other security, or
      other sums, nor the application of any collected sum to any Secured
      Obligation, nor the exercise of any other right or remedy by Beneficiary
      or Trustee or any receiver shall cure or waive any Default or notice of
      default under this Deed of Trust, or nullify the effect of any notice of
      default or sale (unless all Secured Obligations then due have been paid or
      performed and Trustor has cured all other Defaults hereunder), or impair
      the status of the security, or prejudice Beneficiary or Trustee in the
      exercise of any right or remedy, or be construed as an affirmation by
      Beneficiary of any tenancy, lease or option or a subordination of the lien
      of this Deed of Trust.

7.7   PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
      Beneficiary immediately and upon demand all costs and expenses incurred by
      Trustee and Beneficiary in the enforcement of the terms and conditions of
      this Deed of Trust (including, without limitation, statutory trustee's
      fees, court costs and attorneys' fees, whether incurred in litigation or
      not) with interest from the date of expenditure until said sums have been
      paid at the rate of interest applicable to the principal balance of the
      Note as specified therein.

7.8   POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
      appoints Beneficiary and its successors and assigns, as its
      attorney-in-fact, which agency is coupled with an interest, to perform any
      obligation of Trustor hereunder upon the occurrence of an event, act or
      omission which, with notice or passage of time or both, would constitute a
      Default, provided, however, that: (a) Beneficiary as such attorney-in-fact
      shall only be accountable for such funds as are actually received by
      Beneficiary; and (b) Beneficiary shall not be liable to Trustor or any
      other person or entity for any failure to act under this Section.

7.9   REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
      under this Deed of Trust and the other Loan Documents are cumulative and
      are in addition to all rights and remedies provided by applicable law
      (including specifically that of foreclosure of this Deed of Trust as
      though it were a mortgage). Beneficiary may enforce any one or more
      remedies or rights under the Loan Documents either successively or
      concurrently.

                       ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1   ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
      reference the entire agreement of the parties with respect to matters
      contemplated herein and supersede all prior negotiations. The


                                       25
<PAGE>
      Loan Documents grant further rights to Beneficiary and contain further
      agreements and affirmative and negative covenants by Trustor which apply
      to this Deed of Trust and to the Property and such further rights and
      agreements are incorporated herein by this reference. THE OBLIGATIONS AND
      LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
      DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
      ENTITLED "BORROWER'S LIABILITY."

8.2   NON-WAIVER. By accepting payment of any amount secured hereby after its
      due date or late performance of any other Secured Obligation, Beneficiary
      shall not waive its right against any person obligated directly or
      indirectly hereunder or on any Secured Obligation, either to require
      prompt payment or performance when due of all other sums and obligations
      so secured or to declare default for failure to make such prompt payment
      or performance. No exercise of any right or remedy by Beneficiary or
      Trustee hereunder shall constitute a waiver of any other right or remedy
      herein contained or provided by law. No failure by Beneficiary or Trustee
      to exercise any right or remedy hereunder arising upon any Default shall
      be construed to prejudice Beneficiary's or Trustee's rights or remedies
      upon the occurrence of any other or subsequent Default. No delay by
      Beneficiary or Trustee in exercising any such right or remedy shall be
      construed to preclude Beneficiary or Trustee from the exercise thereof at
      any time while that Default is continuing. No notice to nor demand on
      Trustor shall of itself entitle Trustor to any other or further notice or
      demand in similar or other circumstances.

8.3   CONSENTS, APPROVALS AND EXPENSES. Wherever Beneficiary's consent,
      approval, acceptance or satisfaction is required under any provision of
      this Deed of Trust or any of the other Loan Documents, such consent,
      approval, acceptance or satisfaction shall not be unreasonably withheld,
      conditioned or delayed by Beneficiary unless such provision expressly so
      provides. Wherever costs or expenses are required to be paid under any
      provision of this Deed of Trust or any of the other Loan Documents, such
      costs or expenses shall be reasonable.

8.4   PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor may
      contest, by appropriate legal or other proceedings conducted in good faith
      and with due diligence, the amount, validity or application, in whole or
      in part, of any lien, levy, tax or assessment, or any lien of any laborer,
      mechanic, materialman, supplier or vendor, or the application to Trustor
      or the Property of any law or the validity thereof, the assertion or
      imposition of which, or the failure to pay when due, would constitute a
      Default; provided that (a) Trustor pursues the contest diligently, in a
      manner which Beneficiary determines is not prejudicial to Beneficiary, and
      does not impair the lien of this Deed of Trust; (b) the Property, or any
      part hereof or estate or interest therein, shall not be in any danger of
      being sold, forfeited or lost by reason of such proceedings; (c) in the
      case of the contest of any law or other legal requirement, Beneficiary
      shall not be in any danger of any civil or criminal liability; and (d) if
      required by Beneficiary, Trustor deposits with Beneficiary any funds or
      other forms of assurance (including a bond or letter of credit)
      satisfactory to Beneficiary to protect Beneficiary from the consequences
      of the contest being unsuccessful. Trustor's right to contest pursuant to
      the terms of this provision shall in no way relieve Trustor or Borrower of
      its obligations under the Loan or to make payments to Beneficiary as and
      when due.

8.5   FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or Trustee,
      execute, acknowledge (if appropriate) and deliver any and all documents
      and instruments and do or cause to be done all further acts reasonably
      necessary or appropriate to effectuate the purposes of the Loan Documents
      and to perfect any assignments contained therein.

8.6   ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
      between Trustor and Beneficiary regarding their respective rights and
      obligations under this Deed of Trust or any of the other Loan Documents,
      the prevailing party shall be entitled to recover, in addition to damages
      or other relief, costs and expenses, reasonable attorneys' fees and court
      costs (including, without limitation, expert witness fees). As used herein
      the term "prevailing party" shall mean the party which obtains the
      principal relief it has sought, whether by compromise settlement or
      judgment. If the party which commenced or instituted the action, suit or
      proceeding shall dismiss or discontinue it without the concurrence of the
      other party, such other party shall be deemed the prevailing party.


                                       26
<PAGE>
8.7   TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
      original Trustor and any subsequent owner or owners of any of the
      Property, and the term "Beneficiary" includes the original Beneficiary and
      any future owner or holder, including assignees, pledges and participants,
      of the Note or any interest therein.

8.8   DISCLAIMERS.

      a.    RELATIONSHIP. The relationship of Trustor and Beneficiary under this
            Deed of Trust and the other Loan Documents is, and shall at all
            times remain, solely that of borrower and lender; and Beneficiary
            neither undertakes nor assumes any responsibility or duty to Trustor
            or to any third party with respect to the Property. Notwithstanding
            any other provisions of this Deed of Trust and the other Loan
            Documents: (i) Beneficiary is not, and shall not be construed to be,
            a partner, joint venturer, member, alter ego, manager, controlling
            person or other business associate or participant of any kind of
            Trustor, and Beneficiary does not intend to ever assume such status;
            (ii) Beneficiary's activities in connection with this Deed of Trust
            and the other Loan Documents shall not be "outside the scope of
            activities of a lender of money" within the meaning of California
            Civil Code Section 3434, as amended or recodified from time to time,
            and Beneficiary does not intend to ever assume any responsibility to
            any person for the quality, suitability, safety or condition of the
            Property; and (iii) Beneficiary shall not be deemed responsible for
            or a participant in any acts, omissions or decisions of Trustor.

      b.    NO LIABILITY. Beneficiary shall not be directly or indirectly liable
            or responsible for any loss, claim, cause of action, liability,
            indebtedness, damage or injury of any kind or character to any
            person or property arising from any construction on, or occupancy or
            use of, the Property, whether caused by or arising from: (i) any
            defect in any building, structure, grading, fill, landscaping or
            other improvements thereon or in any on-site or off-site improvement
            or other facility therein or thereon; (ii) any act or omission of
            Trustor or any of Trustor's agents, employees, independent
            contractors, licensees or invitees; (iii) any accident in or on the
            Property or any fire, flood or other casualty or hazard thereon;
            (iv) the failure of Trustor or any of Trustor's licensees,
            employees, invitees, agents, independent contractors or other
            representatives to maintain the Property in a safe condition; or (v)
            any nuisance made or suffered on any part of the Property.

8.9   SEVERABILITY. If any term of this Deed of Trust or any other Loan
      Document, or the application thereof to any person or circumstances,
      shall, to any extent, be invalid or unenforceable, the remainder of this
      Deed of Trust or such other Loan Document, or the application of such term
      to persons or circumstances other than those as to which it is invalid or
      unenforceable, shall not be affected thereby, and each term of this Deed
      of Trust or such other Loan Document shall be valid and enforceable to the
      fullest extent permitted by law.

8.10  RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
      Beneficiary under the deed of trust established by Article 1 and the
      security agreement established by Article 4 are independent and
      cumulative, and there shall be no merger of any lien created by the deed
      of trust with any security interest created by the security agreement.
      Beneficiary may elect to exercise or enforce any of its rights, remedies
      or interests under either or both the deed of trust or the security
      agreement as Beneficiary may from time to time deem appropriate. The
      absolute assignment of rents and leases established by Article 3 is
      similarly independent of and separate from the deed of trust and the
      security agreement.

8.11  MERGER. No merger shall occur as a result of Beneficiary's acquiring any
      other estate in, or any other lien on, the Property unless Beneficiary
      consents to a merger in writing.

8.12  OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
      executed this Deed of Trust as "Trustor", the obligations of all such
      persons hereunder shall be joint and several.


                                       27
<PAGE>
8.13  SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this Deed
      of Trust as a "Trustor" agrees that any money judgment which Beneficiary
      or Trustee obtains pursuant to the terms of this Deed of Trust or any
      other obligation of that married person secured by this Deed of Trust may
      be collected by execution upon any separate property or community property
      of that person.

8.14  INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
      incorporate by reference the entire agreement of the parties with respect
      to the matters contemplated therein and supersede all prior negotiations
      or agreements, written or oral. The Loan Documents shall not be modified
      except by written instrument executed by all parties. Any reference in any
      of the Loan Documents to the Property or Collateral shall include all or
      any part of the Property or Collateral. Any reference to the Loan
      Documents includes any amendments, renewals or extensions now or hereafter
      approved by Beneficiary in writing. When the identity of the parties or
      other circumstances make it appropriate, the masculine gender includes the
      feminine and/or neuter, and the singular number includes the plural.

8.15  CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
      have the meanings set forth in the Note.

8.16  SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
      herein and in the other Loan Documents shall be binding upon and inure to
      the benefit of the heirs, successors and assigns of the parties. The
      foregoing sentence shall not be construed to permit Trustor to assign the
      Loan except as otherwise permitted under the Note or the other Loan
      Documents.

8.17  GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the state
      of California and the proceeds of the Note secured hereby were disbursed
      from the state of California, which state the parties agree has a
      substantial relationship to the parties and to the underlying transaction
      embodied hereby. Accordingly, in all respects, including, without limiting
      the generality of the foregoing, matters of construction, validity,
      enforceability and performance, this Deed of Trust, the Note and the other
      Loan Documents and the obligations arising hereunder and thereunder shall
      be governed by, and construed in accordance with, the laws of the state of
      California applicable to contracts made and performed in such state and
      any applicable law of the United States of America, except that at all
      times the provisions for enforcement of Beneficiary's STATUTORY POWER OF
      SALE and all other remedies granted hereunder, Beneficiary's rights under
      Section 6.2 above, and the creation, perfection and enforcement of the
      security interests created pursuant hereto and pursuant to the other Loan
      Documents in any Collateral which is located in the state where the
      Property is located shall be governed by and construed according to the
      law of the state where the Property is located. Except as provided in the
      immediately preceding sentence, Trustor hereby unconditionally and
      irrevocably waives, to the fullest extent permitted by law, any claim to
      assert that the law of any jurisdiction other than California governs this
      Deed of Trust, the Note and other Loan Documents.

8.18  CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
      of: (a) any state or federal court sitting in the state of California over
      any suit, action, or proceeding, brought by Trustor against Beneficiary,
      arising out of or relating to this Deed of Trust, the Note or the Loan;
      (b) any state or federal court sitting in the state where the Property is
      located or the state in which Trustor's principal place of business is
      located over any suit, action or proceeding, brought by Beneficiary
      against Trustor, arising out of or relating to this Deed of Trust, the
      Note or the Loan; and (c) any state court sitting in the county of the
      state where the Property is located over any suit, action, or proceeding,
      brought by Beneficiary to exercise its STATUTORY POWER OF SALE under this
      Deed of Trust or any action brought by Beneficiary to enforce its rights
      with respect to the Collateral. Trustor irrevocably waives, to the fullest
      extent permitted by law, any objection that Trustor may now or hereafter
      have to the laying of venue of any such suit, action, or proceeding
      brought in any such court and any claim that any such suit, action, or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

8.19  EXHIBITS. Exhibit A is incorporated into this Deed of Trust by this
      reference.


                                       28
<PAGE>
8.20  ADDRESSES; REQUEST FOR NOTICE. All notices and other communications that
      are required or permitted to be given to a party under this Deed of Trust
      or the other Loan Documents shall be in writing, refer to the Loan number,
      and shall be sent to such party, either by personal delivery, by overnight
      delivery service, by certified first class mail, return receipt requested,
      or by facsimile transmission to the addressee or facsimile number below.
      All such notices and communications shall be effective upon receipt of
      such delivery or facsimile transmission, together with a printed receipt
      of the successful delivery of such facsimile transmission. The addresses
      of the parties are set forth on page 1 of this Deed of Trust and the
      facsimile numbers for the parties are as follows:

      Beneficiary:                         Trustee:

      WELLS FARGO BANK, N.A.               AMERICAN SECURITIES COMPANY
      FAX No.: (925) 691-5947              OF NEVADA
                                           FAX No.: (925) 691-5947

      Trustor:

      MHC STAGECOACH, L.L.C.
      FAX No.: (312) 279-1715

      Trustor's principal place of business is at the address set forth on page
      1 of this Deed of Trust. A copy of any notice to Trustor shall be sent as
      follows:

                                    Katz Randall Weinberg & Richmond
                                    333 West Wacker Drive
                                    Suite 1800
                                    Chicago, Illinois 60606
                                    Attention: Benjamin Randall
                                    Facsimile: (312) 807-3903

      Any Trustor whose address is set forth on page 1 of this Deed of Trust
      hereby requests that a copy of notice of default and notice of sale be
      delivered to it at that address. Failure to insert an address shall
      constitute a designation of Trustor's last known address as the address
      for such notice. Any party shall have the right to change its address for
      notice hereunder to any other location within the continental United
      States by giving 30 days notice to the other parties in the manner set
      forth above.

8.21  COUNTERPARTS. This Deed of Trust may be executed in any number of
      counterparts, each of which, when executed and delivered, will be deemed
      an original and all of which taken together, will be deemed to be one and
      the same instrument.

8.22  WAIVER OF JURY TRIAL. BENEFICIARY (BY ITS ACCEPTANCE HEREOF) AND TRUSTOR
      HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
      HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
      ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY
      OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR.
      THIS PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS
      DEED OF TRUST.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]


                                       29
<PAGE>
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.

                      "TRUSTOR"

MHC STAGECOACH, L.L.C.,
a Delaware limited liability company

By:   MHC-QRS STAGECOACH, INC.,
      a  Delaware corporation,
      its Managing Member


      By: /s/ John M. Zoeller
         -------------------------
      Name:  John M. Zoeller
      Its:   Vice President, Chief Financial
             Officer and Treasurer

(ALL SIGNATURES MUST BE ACKNOWLEDGED)
<PAGE>
STATE OF IL                )
                           )  SS:
COUNTY OF COOK             )

            This instrument was acknowledged before me on 8/1, 2001 by
John M. Zoeller, as Vice President, Chief Financial Officer and Treasurer of
MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing member of MHC
STAGECOACH, L.L.C., a Delaware limited liability company.

WITNESS my hand and official seal.


                                             /s/ Mary Dobronski
                                             ------------------------------
                                             Print Name: Mary Dobronski

My Commission Expires:


     11/3/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:_______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               DESCRIPTION OF LAND

Exhibit A to DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between MHC
STAGECOACH, L.L.C., a Delaware limited liability company, as "Trustor", AMERICAN
SECURITIES COMPANY OF NEVADA, as "Trustee", and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as "Beneficiary".

Description of Land. The Land referred to in this Deed of Trust is situated in
the county of Clark, state of Nevada and is described as follows:

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16,
Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01(Degree) 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89(Degree) 09' 31" East, along said Southerly right of way of Twain Avenue
a distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89(Degree) 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01(Degree) 22' 27" East along said Westerly right of way line of
Cabana Drive a distance of 1238.26 feet; thence South 88(Degree) 17' 57" West a
distance of 1271.25 feet; thence North 01(Degree) 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.


                                    EXHIBIT A
<PAGE>
Recording requested by
and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC #A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:  CMO Loan Admin.
Loan No.: 31-0900553R
Property Name:  Indian Oaks

Prepared by:

Lee M. Smolen
Sidley Austin Brown & Wood
10 South Dearborn
Chicago, Illinois 60603



                  MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND
               LEASES AND SECURITY AGREEMENT (AND FIXTURE FILING)


                                                                   July 31, 2001

THIS MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(AND FIXTURE FILING) (the "Mortgage") is made and entered into by and among MHC
STAGECOACH, L.L.C., a Delaware limited liability company ("Mortgagor"), having
an address at c/o Manufactured Home Communities, Inc., Two North Riverside
Plaza, Suite 800, Chicago, Illinois 60606, and WELLS FARGO NATIONAL BANK,
NATIONAL ASSOCIATION ("Lender" or "Mortgagee").

THIS MORTGAGE EVIDENCES A MULTI-STATE LOAN WHICH IS SECURED BY REAL PROPERTY
LOCATED OUTSIDE THE STATE OF FLORIDA AND REAL PROPERTY LOCATED IN BREVARD,
VOLUSIA, AND MANATEE COUNTIES, FLORIDA. FLORIDA DOCUMENTARY STAMP TAX IN THE
AMOUNT OF $61,250.00 AND FLORIDA NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX
IN THE AMOUNT OF $35,000.00 ARE BEING PAID UPON RECORDATION OF ONE OF THE
FLORIDA MORTGAGES IN THE PUBLIC RECORDS OF VOLUSIA COUNTY, FLORIDA. ATTACHED
HERETO AS EXHIBIT B IS A DESCRIPTION OF THE CALCULATION OF LIABILITY FOR
DOCUMENTARY STAMP TAX AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX.


                                     Page 1
<PAGE>
                                 R E C I T A L S


A. MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
   proposes to borrow from Mortgagee, and Mortgagee proposes to lend to Borrower
   the principal sum of FIFTY MILLION AND NO/100THS DOLLARS ($50,000,000.00)
   ("Loan"). The Loan is evidenced by a promissory note ("Note") executed by
   Borrower, dated the date of this Mortgage, payable to the order of Mortgagee
   in the principal amount of the Loan. The maturity date of the Loan is
   September 1, 2011.

B. The loan documents include this Mortgage, the Note and the other documents
   described in the Note as Loan Documents ("Loan Documents").

                              ARTICLE I. MORTGAGE

            1.1 GRANT. For the purposes of and upon the terms and conditions of
this Mortgage, Mortgagor irrevocably mortgages, grants, bargains, sells,
conveys, transfers, pledges, sets over and assigns, and grants a security
interest to Mortgagee, its successors and assign, with right of entry and
possession, all of Mortgagor's right, title and interest, whether now owned or
hereafter acquired, in or to all of the following:

            (a) That real property ("Land") located in Rockledge, county of
Brevard, state of Florida, and more particularly described on Exhibit A attached
hereto;

            (b) All appurtenances, easements, rights of way, water and water
rights, pumps, pipes, flumes and ditches and ditch rights, water stock, ditch
and/or reservoir stock or interests, royalties, development rights and credits,
air rights, minerals, oil rights, all sewer capacity rights, and gas rights, now
or later used or useful in connection with, appurtenant to or related to the
Land;

            (c) All buildings, structures, facilities, other improvements and
fixtures now or hereafter located on the Land;

            (d) All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and substitutions
therefor used in the operation or occupancy of the Land, it being intended by
the parties that all such items shall be conclusively considered to be a part of
the Land, whether or not attached or affixed to the Land;

            (e) All land lying in the right-of-way of any street, road, avenue,
alley or right-of-way opened, proposed or vacated, and all sidewalks, strips and
gores of land adjacent to or used in connection with the Land;

            (f) All additions and accretions to the property described above;

            (g) All licenses, authorizations, certificates, variances, consents,
approvals and other permits now or hereafter pertaining to the Land and all
estate, right, title and interest of Mortgagor in, to, under or derived from all
tradenames or business names relating to the Land or the present or future
development, construction, operation or use of the Land; and


                                     Page 2
<PAGE>
            (h) All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.

                        ARTICLE II. OBLIGATIONS SECURED


            2.1 OBLIGATIONS SECURED. Mortgagor makes the foregoing grant and
assignment for the purpose of securing the following obligations ("Secured
Obligations"):

            (a) Full and punctual payment to Mortgagee of all sums at any time
owing under the Note;

            (b) Payment and performance of all covenants and obligations of
Mortgagor under this Mortgage, including, without limitation, indemnification
obligations and advances made to protect the Property;

            (c) Payment and performance of all additional covenants and
obligations of Borrower and Mortgagor under the Loan Documents;

            (d) Payment and performance of all covenants and obligations, if
any, which any rider attached as an exhibit to this Mortgage recites are secured
hereby;

            (e) Payment and performance of all future advances and other
obligations that the then record owner of all or part of the Property may agree
to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Mortgagee, when the obligation is evidenced by a writing which
recites that it is secured by this Mortgage;

            (f) All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges and loan fees;
and

            (g) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without limitation:
(i) modifications of the required principal payment dates or interest payment
dates or both, as the case may be, deferring or accelerating payment dates
wholly or partly; and (ii) modifications, extensions or renewals at a different
rate of interest whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

            2.2 FUTURE ADVANCES. This Mortgage is given to secure not only the
Secured Obligations, but also such future advances, whether such advances are
obligatory or are to be made at the option of Mortgagee or the holder hereof, or
otherwise as are made within twenty years from the date hereof, to the same
extent as if such future advances were made on the date of the execution of this
Mortgage. The total amount of Secured Obligations that may be so secured by this
Mortgage may be increased or decreased from time to time, but the total unpaid
balance so secured at any one time shall not exceed twice the face amount of the
Note, plus interest thereon, and any disbursements made under this Mortgage for
the payment of impositions, taxes, assessments, levies, insurance, or otherwise
with interest on such disbursements as provided for

                                     Page 3
<PAGE>
herein, plus any increases in the principal balance as the result of negative
amortization or deferred interest, if any. It is agreed that any additional sum
or sums advanced by Mortgagee pursuant to the terms hereof shall be equally
secured with and have the same priority as the original Secured Obligations and
shall be subject to all of the terms, provisions and conditions of this
Mortgage, whether or not such additional loans or advances are evidenced by
other promissory notes or other guaranties of Mortgagor and whether or not
identified by a recital that it or they are secured by this Mortgage. It is
further agreed that any additional promissory note or guaranty or promissory
notes or guaranties executed and delivered pursuant to this paragraph shall
automatically be deemed to be included in the term "Note" wherever it appears in
the context of this Mortgage. Without the prior written consent of Mortgagee,
which Mortgagee may grant or withhold in its sole discretion, Mortgagor shall
not file for record any notice limiting the maximum principal amount that may be
secured by this Mortgage to a sum less than the maximum principal amount set
forth in this paragraph.

            2.3 OBLIGATIONS. The term "obligations" is used herein in its
broadest and most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges and loan
fees at any time accruing or assessed on any of the Secured Obligations.

            2.4 MATURITY DATE. The maturity date of the Note is September 1,
2011.

            2.5 INCORPORATION. All terms and conditions of the documents which
evidence any of the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall
be deemed to have notice of the terms of the Secured Obligations and to have
notice that the rate of interest on one or more Secured Obligations may vary
from time to time.

              ARTICLE III. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

            3.1 ASSIGNMENT. Mortgagor irrevocably assigns to Mortgagee all of
Mortgagor's right, title and interest in, to and under: (a) all present and
future leases of the Property or any portion thereof, all licenses and
agreements relating to the management, leasing or operation of the Property or
any portion thereof, and all other agreements of any kind relating to the use or
occupancy of the Property or any portion thereof, whether such leases, licenses
and agreements are now existing or entered into after the date hereof
("Leases"); and (b) the rents, issues, deposits and profits of the Property,
including, without limitation, all amounts payable and all rights and benefits
accruing to Mortgagor under the Leases ("Payments"). The term "Leases" shall
also include all guarantees of and security for the tenants' performance
thereunder, and all amendments, extensions, renewals or modifications thereto
which are permitted hereunder. This is a present and absolute assignment, not an
assignment for security purposes only, and Mortgagee's right to the Leases and
Payments is not contingent upon, and may be exercised without possession of, the
Property.

            3.2 GRANT OF LICENSE. Notwithstanding the terms contained in Section
3.1, Mortgagee confers upon Mortgagor a revocable license ("License") to collect
and retain the Payments as they become due and payable, until the occurrence of
a Default (as hereinafter defined). Upon a Default, the License shall be
automatically revoked and Mortgagee may collect

                                     Page 4
<PAGE>
and apply the Payments pursuant to the terms hereof without notice and without
taking possession of the Property. Upon Mortgagor's cure of the Default,
Mortgagee shall re-confer upon Mortgagor a revocable license to collect and
retain the Payments as they become due and payable, until the occurrence of a
Default. All Payments thereafter collected by Mortgagor shall be held by
Mortgagor as trustee under a constructive trust for the benefit of Mortgagee.
Mortgagor hereby irrevocably authorizes and directs the tenants under the
Leases, upon notice of a Default from Mortgagee, to rely upon and comply with
any notice or demand by Mortgagee for the payment to Mortgagee of any rental or
other sums which may at any time become due under the Leases, or for the
performance of any of the tenants' undertakings under the Leases, and the
tenants shall have no right or duty to inquire as to whether any Default has
actually occurred or is then existing. Mortgagor hereby relieves the tenants
from any liability to Mortgagor by reason of relying upon and complying with any
such notice or demand by Mortgagee. Mortgagee may apply, in its sole discretion,
any Payments so collected by Mortgagee against any Secured Obligation or any
other obligation of Borrower, Mortgagor or any other person or entity, under any
document or instrument related to or executed in connection with the Loan
Documents, whether existing on the date hereof or hereafter arising. Collection
of any Payments by Mortgagee shall not cure or waive any Default or notice of
Default or invalidate any acts done pursuant to such notice.

            3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the tenants
under any of the Leases or by any other parties; for any dangerous or defective
condition of the Property; or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee, invitee or other person; or (d) responsible for or
impose upon Mortgagee any duty to produce rents or profits. Mortgagee shall not
directly or indirectly be liable to Mortgagor or any other person as a
consequence of: (e) the exercise of or failure to exercise any of the rights,
remedies or powers granted to Mortgagee hereunder; or (f) the failure or refusal
of Mortgagee to perform or discharge any obligation, duty or liability of
Mortgagor arising under the Leases.

            3.4 COVENANTS.

            (a) ALL LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense:

            (i) perform all obligations of the landlord under the Leases and use
reasonable efforts to enforce performance by the tenants of all obligations of
the tenants under the Leases;

            (ii) use reasonable efforts to keep the Property leased at all times
to tenants whom Mortgagor reasonably and in good faith believes are creditworthy
at rents not less than the fair market rental value (including, but not limited
to, free or discounted rents to the extent the market so requires);

            (iii) promptly upon Mortgagee's request, deliver to Mortgagee a copy
of each requested Lease and all amendments thereto and waivers thereof; and


                                     Page 5
<PAGE>
            (iv) promptly upon Mortgagee's request, execute and record any
additional assignments of landlord's interest under any Lease to Mortgagee and
specific subordinations of any Lease to this Mortgage, in form and substance
satisfactory to Mortgagee.

Unless consented to in writing by Mortgagee or otherwise permitted under any
other provision of the Loan Documents, Mortgagor shall not:

            (v) grant any tenant under any Lease any option, right of first
refusal or other right to purchase all or any portion of the Property under any
circumstances;

            (vi) grant any tenant under any Lease any right to prepay rent more
than 1 month in advance;


            (vii) except upon Mortgagee's request, execute any assignment of
landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
other than to collect rent 1 month in advance of the time when it becomes due.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

Mortgagor shall deposit with Mortgagee any sums received by Mortgagor in
consideration of any termination, modification or amendment of any Lease or any
release or discharge of any tenant under any Lease from any obligation
thereunder and any such sums received by Mortgagor shall be held in trust by
Mortgagor for such purpose. Notwithstanding the foregoing, so long as no Default
exists, the portion of any such sum received by Mortgagor with respect to any
Lease which is less than $50,000 shall be payable to Mortgagor. All such sums
received by Mortgagee with respect to any Lease shall be deemed "Impounds" (as
defined in Section 6.12) and shall be deposited by Mortgagee into a pledged
account in accordance with Section 6.12. If no Default exists, Mortgagee shall
release such Impounds to Mortgagor from time to time as necessary to pay or
reimburse Mortgagor for such tenant improvements, brokerage commissions and
other leasing costs as may be required to re-tenant the affected space;
provided, however, Mortgagee shall have received and approved each of the
following for each tenant for which such costs were incurred; (1) Mortgagor's
written request for such release, including the name of the tenant, the location
and net rentable area of the space and a description and cost breakdown of the
tenant improvements or other leasing costs covered by the request; (2)
Mortgagor's certification that any tenant improvements have been completed
lien-free and in a workmanlike manner; (3) a fully executed Lease, or extension
or renewal of the current Lease; (4) an estoppel certificate executed by the
tenant including its acknowledgement that all tenant improvements have been
satisfactorily completed; and (5) such other information with respect to such
costs as Mortgagee may require. Following the re-tenanting of all affected space
(including, without limitation, the completion of all tenant improvements), and
provided no Default exists, Mortgagee shall release any remaining such Impounds
relating to the affected space to Mortgagor. Mortgagor shall construct all
tenant improvements in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations.

            (b) MAJOR LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense, give Mortgagee prompt written notice of any material default by
landlord or tenant under any

                                     Page 6
<PAGE>
Major Lease (as defined below). Unless consented to in writing by Mortgagee or
otherwise permitted under any other provision of the Loan Documents, Mortgagor
shall not:

            (i) enter into any Major Lease which (aa) is not on fair market
terms (which terms may include free or discounted rent to the extent the market
so requires); (bb) does not contain a provision requiring the tenant to execute
and deliver to the landlord an estoppel certificate in form and substance
satisfactory to the landlord promptly upon the landlord's request; or (cc)
allows the tenant to assign or sublet the premises without the landlord's
consent;

            (ii) materially reduce any rent or other sums due from the tenant
under any Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv) release or discharge the tenant or any guarantor under any
Major Lease from any material obligation thereunder.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

"Major Lease", as used herein, shall mean any Lease, which is, at any time: (1)
a Lease of more than 20% of the total rentable area of the Property, as
reasonably determined by Mortgagee; or (2) a Lease which generates a gross base
monthly rent exceeding 20% of the total gross base monthly rent generated by all
Leases (excluding all Leases under which the tenant is then in default), as
reasonably determined by Mortgagee. Mortgagor's obligations with respect to
Major Leases shall be governed by the provisions of Section 3.4(a) as well as by
the provisions of this Section.

            (c) FAILURE TO DENY REQUEST Mortgagee's failure to deny any written
request by Mortgagor for Mortgagee's consent under the provisions of Sections
3.4(a) or 3.4(b) within 10 Business Days after Mortgagee's receipt of such
request (and all documents and information reasonably related thereto) shall be
deemed to constitute Mortgagee's consent to such request.

            3.5 RIGHT OF SUBORDINATION. Mortgagee may at any time and from time
to time by specific written instrument intended for the purpose unilaterally
subordinate the lien of this Mortgage to any Lease, without joinder or consent
of, or notice to, Mortgagor, any tenant or any other person. Notice is hereby
given to each tenant under a Lease of such right to subordinate. No
subordination referred to in this Section shall constitute a subordination to
any lien or other encumbrance, whenever arising, or improve the right of any
junior lienholder. Nothing herein shall be construed as subordinating this
Mortgage to any Lease.

               ARTICLE IV. SECURITY AGREEMENT AND FIXTURE FILING

            4.1 SECURITY INTEREST. Mortgagor grants and assigns to Mortgagee a
security interest to secure payment and performance of all of the Secured
Obligations, in all of Mortgagor's right, title and interest in and to the
following described personal property in which Mortgagor now or at any time
hereafter has any interest ("Collateral"):


                                     Page 7
<PAGE>
      All goods, building and other materials, supplies, work in process,
      equipment, machinery, fixtures, furniture, furnishings, signs and other
      personal property, wherever situated, which are or are to be incorporated
      into, used in connection with or appropriated for use on the Property; all
      rents, issues, deposits and profits of the Property (to the extent, if
      any, they are not subject to the Absolute Assignment of Rents and Leases);
      all inventory, accounts, cash receipts, deposit accounts, impounds,
      accounts receivable, contract rights, general intangibles, software,
      chattel paper, instruments, documents, promissory notes, drafts, letters
      of credit, letter of credit rights, supporting obligations, insurance
      policies, insurance and condemnation awards and proceeds, any other rights
      to the payment of money, trade names, trademarks and service marks arising
      from or related to the Property or any business now or hereafter conducted
      thereon by Mortgagor; all permits, consents, approvals, licenses,
      authorizations and other rights granted by, given by or obtained from, any
      governmental entity with respect to the Property; all deposits or other
      security now or hereafter made with or given to utility companies by
      Mortgagor with respect to the Property; all advance payments of insurance
      premiums made by Mortgagor with respect to the Property; all plans,
      drawings and specifications relating to the Property; all loan funds held
      by Mortgagee, whether or not disbursed; all funds deposited with Mortgagee
      pursuant to any Loan Document, all reserves, deferred payments, deposits,
      accounts, refunds, cost savings and payments of any kind related to the
      Property or any portion thereof, including, without limitation, all
      "Impounds" as defined herein; together with all replacements and proceeds
      of, and additions and accessions to, any of the foregoing, and all books,
      records and files relating to any of the foregoing.

            As to all of the above described personal property which is or which
hereafter becomes a "fixture" under the Florida Uniform Commercial Code (the
"UCC"), this Mortgage constitutes a fixture filing under Florida Statutes
Section 679.313 and 679.402, as amended and recodified from time to time, this
Mortgage shall constitute a fixture filing recorded in the real estate records.
Notwithstanding the foregoing, nothing herein shall be deemed to create any lien
or interest in favor of Mortgagee under this Mortgage in any such Collateral
which is not a fixture, and the purpose of this Article IV is to create a
fixture filing under Florida Statutes Section 679.313 and 679.402, as amended or
recodified from time to time.

            4.2 COVENANTS. Mortgagor agrees: (a) to execute and deliver such
documents as Mortgagee reasonably deems necessary to create, perfect and
continue the security interests contemplated hereby; (b) not to change its name,
and, as applicable, its chief executive offices, its principal residence or the
jurisdiction in which it is organized without giving Mortgagee at least 30 days'
prior written notice thereof; and (c) to cooperate with Mortgagee in perfecting
all security interests granted herein and in obtaining such agreements from
third parties as Mortgagee deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of Mortgagee's rights
hereunder.

            4.3 RIGHTS OF MORTGAGEE. In addition to Mortgagee's rights as a
"Secured Party" under the UCC, Mortgagee may, but shall not be obligated to, at
any time without notice and at the expense of Mortgagor: (a) give notice to any
person of Mortgagee's rights hereunder and enforce such rights at law or in
equity; (b) insure, protect, defend and

                                     Page 8
<PAGE>
preserve the Collateral or any rights or interests of Mortgagee therein; and (c)
inspect the Collateral during normal business hours upon reasonable prior
written notice, provided, however, that such notice shall not be required in the
event of an emergency. Notwithstanding the above, in no event shall Mortgagee be
deemed to have accepted any property other than cash in satisfaction of any
obligation of Mortgagor to Mortgagee unless Mortgagee shall make an express
written election of said remedy under the UCC or other applicable law.

            4.4 ADDITIONAL RIGHTS OF MORTGAGEE UPON DEFAULT. Upon the occurrence
of a Default, then in addition to all of Mortgagee's rights as a "Secured Party"
under the UCC or otherwise at law:

            (a) DISPOSITION OF COLLATERAL. Mortgagee may: (i) upon written
notice, require Mortgagor to assemble the Collateral and make it available to
Mortgagee at a place reasonably designated by Mortgagee; (ii) without prior
notice (to the extent permitted by law), enter upon the Property or other place
where the Collateral may be located and take possession of, collect, sell,
lease, license and otherwise dispose of the Collateral, and store the same at
locations acceptable to Mortgagee at Mortgagor's expense; or (iii) sell, assign
and deliver the Collateral at any place or in any lawful manner and bid and
become purchaser at any such sales; and

            (b) OTHER RIGHTS. Mortgagee may, for the account of Mortgagor and at
Mortgagor's expense: (i) operate, use, consume, sell, lease, license or
otherwise dispose of the Collateral as Mortgagee reasonably deems appropriate
for the purpose of performing any or all of the Secured Obligations; (ii) enter
into any agreement, compromise or settlement including insurance claims, which
Mortgagee may reasonably deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title for, and receive,
enforce and collect by legal action or otherwise, all indebtedness and
obligations now or hereafter owing to Mortgagor in connection with or on account
of the Collateral.

            Mortgagor acknowledges and agrees that a disposition of the
Collateral in accordance with Mortgagee's rights and remedies as heretofore
provided is a disposition thereof in a commercially reasonable manner and that 5
Business Days prior notice of such disposition is commercially reasonable
notice. Mortgagee shall have no obligation to process or prepare the Collateral
for sale or other disposition. In disposing of the Collateral, Mortgagee may
disclaim all warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any sale or other disposition of the Collateral may be applied by
Mortgagee first to the reasonable expenses incurred by Mortgagee in connection
therewith, including, without limitation, reasonable attorneys' fees and
disbursements, and then to the payment of the Secured Obligations, in such order
of application as Mortgagee may from time to time elect.

            4.5 POWER OF ATTORNEY. Mortgagor hereby irrevocably appoints
Mortgagee as Mortgagor's attorney-in-fact (such agency being coupled with an
interest), and as such attorney-in-fact, Mortgagee may, without the obligation
to do so, in Mortgagee's name or in the name of Mortgagor, prepare, execute,
file and record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve any of
Mortgagee's security interests and rights in or to the Collateral, and upon a
Default, take

                                     Page 9
<PAGE>
any other action required of Mortgagor; provided, however, that Mortgagee as
such attorney-in-fact shall be accountable only for such funds as are actually
received by Mortgagee.

                   ARTICLE V. REPRESENTATIONS AND WARRANTIES

            5.1 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and
warrants to Mortgagee that, to Mortgagor's current actual knowledge after
reasonable investigation and inquiry, the following statements are true and
correct as of the Effective Date:

            (a) LEGAL STATUS. Mortgagor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in which Mortgagor
and Borrower are organized. Mortgagor and Borrower are qualified or licensed to
do business in all jurisdictions in which such qualification or licensing is
required.

            (b) PERMITS. Mortgagor and Borrower possess all permits, franchises
and licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, necessary to enable Mortgagor and Borrower to conduct
the business(es) in which Mortgagor and Borrower are now engaged in compliance
with applicable law.

            (c) AUTHORIZATION AND VALIDITY. The execution and delivery of the
Loan Documents have been duly authorized and the Loan Documents constitute valid
and binding obligations of Mortgagor, Borrower or the party which executed the
same, enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights, or by the application of rules
of equity.

            (d) VIOLATIONS. The execution, delivery and performance by Mortgagor
and Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or result in any breach or default under any contract,
obligation, indenture or other instrument to which Mortgagor or Borrower is a
party or by which Mortgagor or Borrower is bound.

            (e) LITIGATION. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental authority, court or
administrative agency which may adversely affect the financial condition or
operations of Mortgagor or Borrower other than those previously disclosed in
writing by Mortgagor or Borrower to Mortgagee.

            (f) FINANCIAL STATEMENTS. The financial statements of Mortgagor and
Borrower, of each general partner (if Mortgagor or Borrower is a partnership),
of each member (if Mortgagor or Borrower is a limited liability company) and of
each guarantor, if any, previously delivered by Mortgagor or Borrower to
Mortgagee: (i) are materially complete and correct; (ii) present fairly the
financial condition of such party; and (iii) have been prepared in accordance
with the same accounting standard used by Mortgagor or Borrower to prepare the
financial statements delivered to and approved by Mortgagee in connection with
the making of the Loan, or other accounting standards approved by Mortgagee.
Since the date of such financial statements, there has been no material adverse
change in such financial condition, nor have any assets or properties reflected
on such financial statements been sold, transferred, assigned, mortgaged,


                                    Page 10
<PAGE>
pledged or encumbered except as previously disclosed in writing by Mortgagor or
Borrower to Mortgagee and approved in writing by Mortgagee.

            (g) REPORTS. All reports, documents, instruments and information
delivered to Mortgagee in connection with the Loan: (i) are correct in all
material respects and sufficiently complete to give Mortgagee accurate knowledge
of their subject matter; and (ii) do not contain any misrepresentation of a
material fact or omission of a material fact which omission makes the provided
information misleading.

            (h) INCOME TAXES. There are no material pending assessments or
adjustments of Mortgagor's or Borrower's income tax payable with respect to any
year.

            (i) SUBORDINATION. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would require the
subordination in right of payment of any of Borrower's obligations under the
Note to an obligation owed to another party.

            (j) TITLE. Mortgagor lawfully holds and possesses fee simple title
to the Property, without limitation on the right to encumber same. This Mortgage
is a first lien on the Property prior and superior to all other liens and
encumbrances on the Property except: (i) liens for real estate taxes and
assessments not yet due and payable; (ii) senior exceptions previously approved
by Mortgagee and shown in the title insurance policy insuring the lien of this
Mortgage; and (iii) other matters, if any, previously disclosed to Mortgagee by
Mortgagor in a writing specifically referring to this representation and
warranty.

            (k) MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to any such liens) affecting the
Property which are or may be prior to or equal to the lien of this Mortgage,
other than those (if any) previously approved by Mortgagee and shown in the
title insurance policy insuring the lien of this Mortgage.

            (l) ENCROACHMENTS. Except as shown in the survey, if any, previously
delivered to Mortgagee, none of the buildings or other improvements which were
included for the purpose of determining the appraised value of the Property lies
outside of the boundaries or building restriction lines of the Property and no
buildings or other improvements located on adjoining properties encroach upon
the Property.

            (m) LEASES. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. Except as disclosed on a
rent roll provided to Mortgagee prior to the date hereof, no material breach or
default by any party, or event which would constitute a material breach or
default by any party after notice or the passage of time, or both, exists under
any existing Lease. None of the landlord's interests under any of the Leases,
including, but not limited to, rents, additional rents, charges, issues or
profits, has been transferred or assigned. Except as disclosed on a rent roll
provided to Mortgagee prior to the date hereof, no rent or other payment under
any existing Lease has been paid by any tenant for more than 1 month in advance.

            (n) COLLATERAL. Mortgagor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if any, previously
disclosed to Mortgagee by Mortgagor in writing specifically referring to this
representation and warranty. Mortgagor's chief

                                    Page 11
<PAGE>
executive office (or principal residence, if applicable) is located at the
address shown on page one of this Mortgage. Mortgagor is an organization
organized solely under the laws of the State of Delaware. All organizational
documents of Mortgagor delivered to Mortgagee are complete and accurate in every
respect. Mortgagor's legal name is exactly as shown on page one of this
Mortgage.

            (o) CONDITION OF PROPERTY. Except as shown in the property condition
survey or other engineering reports, if any, previously delivered to or obtained
by Mortgagee, the Property is in good condition and repair and is free from any
damage that would materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.

            (p) HAZARDOUS MATERIALS. Except as shown in the environmental
assessment report(s), if any, previously delivered to or obtained by Mortgagee,
the Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of Hazardous Materials (as hereinafter
defined) in violation of Hazardous Materials Laws (as hereinafter defined)
except as otherwise previously disclosed in writing by Mortgagor to Mortgagee.

            (q) HAZARDOUS MATERIALS LAWS. The Property complies with all
Hazardous Materials Laws.

            (r) HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
Hazardous Materials Claims (as hereinafter defined).

            (s) WETLANDS. No part of the Property consists of or is classified
as wetlands, tidelands or swamp and overflow lands.

            (t) COMPLIANCE WITH LAWS. All federal, state and local laws, rules
and regulations applicable to the Property, including, without limitation, all
zoning and building requirements and all requirements of the Americans With
Disabilities Act of 1990, as amended from time to time (42 U. S. C. Section
12101 et seq.) have been satisfied or complied with. Mortgagor is in possession
of all certificates of occupancy and all other licenses, permits and other
authorizations required by applicable law for the existing use of the Property.
All such certificates of occupancy and other licenses, permits and
authorizations are valid and in full force and effect.

            (u) PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, and ground
rents, if any, which previously became due and owing in respect of the Property
have been paid.

            (v) CONDEMNATION. There is no proceeding pending or threatened for
the total or partial condemnation of the Property.

            (w) HOMESTEAD. There is no homestead or other exemption available to
Mortgagor which would materially interfere with the right to sell the Property
or the right to foreclose this Mortgage.

            (x) SOLVENCY. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or defraud any
present or future creditors

                                    Page 12
<PAGE>
of Mortgagor, and Mortgagor, on the Effective Date, will have received fair and
reasonably equivalent value in good faith for the grant of the liens or security
interests effected by the Loan Documents. On the Effective Date, Mortgagor will
be solvent and will not be rendered insolvent by the transactions contemplated
by the Loan Documents. Mortgagor is able to pay its debts as they become due.

            (y) SEPARATE TAX PARCEL(S). The Property is assessed for real estate
tax purposes as one or more wholly independent tax parcels, separate from any
other real property, and no other real property is assessed and taxed together
with the Property or any portion thereof.

            5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS
(LEVEL V SPE). Mortgagor hereby represents, warrants and covenants to Mortgagee
that with respect to both Mortgagor and MHC-QRS STAGECOACH, INC., a Delaware
corporation, the managing member of Mortgagor:

      (a) each such entity was organized solely for the purpose of (i) owning
the Properties (as defined in the Note); (ii) acting as a general partner of a
limited partnership which owns the Properties; or (iii) acting as a managing
member of a limited liability company which owns the Properties;

      (b) each such entity has not engaged and will not engage in any business
unrelated to (i) the ownership of the Properties; (ii) acting as general partner
of a limited partnership which owns the Properties; or (iii) acting as a
managing member of a limited liability company which owns the Properties;

      (c) each such entity has not had and will not have any assets other than
the Properties (and personal property incidental to the ownership and operation
of the Properties) or its partnership or membership interest in the limited
partnership or limited liability company which owns the Properties, as
applicable;

      (d) each such entity has not and will not engage in, seek or consent to
any dissolution, winding up, liquidation, consolidation, merger, asset sale,
transfer of partnership or membership interest, or amendment of its articles of
incorporation, articles of organization, certificate of formation, operating
agreement or limited partnership agreement, as applicable;

      (e) if any such entity is a limited partnership, all of its general
partners are corporations that satisfy the requirements set forth in this
Section 5.2;

      (f) if any such entity is a limited liability company, it has at least one
managing member that is a corporation that satisfies the requirements set forth
in this Section 5.2;

      (g) each such entity, without the unanimous consent of all of its general
partners, directors or members, as applicable, shall not file or consent to the
filing of any bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or any other entity in which it
has a direct or indirect legal or beneficial ownership interest;

      (h) each such entity has no indebtedness (and will have no indebtedness)
other than (i) the Loan (to the extent it is liable under the terms of the Loan
Documents); and (ii) unsecured

                                    Page 13
<PAGE>
trade debt not to exceed $1,000,000 in the aggregate with respect to Mortgagor
or $10,000 in the aggregate with respect to its managing member, which is not
evidenced by a note and is incurred in the ordinary course of its business in
connection with owning, operating and maintaining the Property (or its interest
in Mortgagor, as applicable) and is paid within thirty (30) days from the date
incurred;

      (i) each such entity has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;

      (j) each such entity has maintained and will maintain its accounts, books
and records separate from any other person or entity;

      (k) each such entity has maintained and will maintain its books, records,
resolutions and agreements as official records;

      (l) each such entity (i) has not commingled and will not commingle its
funds or assets with those of any other entity; and (ii) has held and will hold
its assets in its own name;

      (m) each such entity has conducted and will conduct its business in its
own name or in a registered trade name;

      (n) each such entity has maintained and will maintain its accounting
records and other entity documents separate from any other person or entity;

      (o) each such entity has prepared and will prepare separate tax returns
and financial statements, or if part of a consolidated group, is shown as a
separate member of such group;

      (p) each such entity has paid and will pay its own liabilities and
expenses out of its own funds and assets;

      (q) each such entity has held and will hold regular meetings, as
appropriate, to conduct its business and has observed and will observe all
corporate, partnership or limited liability company formalities and record
keeping, as applicable;

      (r) each such entity has not assumed or guaranteed and will not assume or
guarantee or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity;

      (s) each such entity has not acquired and will not acquire obligations or
securities of its partners, members or shareholders;

      (t) each such entity has allocated and will allocate fairly and reasonably
the costs associated with common employees and any overhead for shared office
space and each such entity has used and will use separate stationery, invoices
and checks under its own name or under its registered trade name;

      (u) each such entity has not pledged and will not pledge its assets for
the benefit of any other person or entity;


                                    Page 14
<PAGE>
      (v) each such entity has held out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its own
name or under its registered trade name and not as a division or part of any
other person or entity;

      (w) each such entity has not made and will not make loans to any person or
entity;

      (x) each such entity has not identified and will not identify its
partners, members or shareholders, or any affiliates of any of the foregoing, as
a division or part of it;

      (y) each such entity has not entered into and will not enter into or be a
party to, any transaction with its partners, members, shareholders, or any
affiliates of any of the foregoing, except in the ordinary course of its
business pursuant to written agreements and on terms which are intrinsically
fair and are no less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;

      (z) if any such entity is a corporation, the directors of such entity
shall consider the interests of the creditors of such entity in connection with
all corporate action;

      (aa) each such entity has paid and will pay the salaries of its own
employees and has maintained and will maintain a sufficient number of employees
in light of its contemplated business operations;

      (bb)  each  such entity has maintained and will maintain adequate
capital in light of its contemplated business operations;

      (cc) if any such entity is a limited partnership with more than one
general partner, its limited partnership agreement requires the remaining
partners to continue the partnership as long as one solvent general partner
exists;

      (dd) if any such entity is a limited liability company, its operating
agreement, if any such entity is a limited partnership, its limited partnership
agreement, and if any such entity is a corporation, to the full extent permitted
by applicable law, its articles of incorporation, contain the provisions set
forth in this Section 5.2 and any such entity shall conduct its business and
operations in strict compliance with the terms contained therein;

      (ee) each such entity will, as a condition to the closing of the Loan,
deliver to Mortgagee a nonconsolidation opinion in form and substance acceptable
to Mortgagee;

      (ff)  if any such entity is a corporation, it has maintained and will
continue to maintain at least one Independent Director (as hereinafter
defined); and

      (gg) if any such entity is a corporation, it has not caused or allowed and
will not cause or allow the board of directors of such entity to take any action
requiring the unanimous affirmative vote of 100% of the members of the board of
directors unless an Independent Director shall have participated in such vote.

An "Independent Director" shall be an individual who, except in his or her
capacity as an Independent Director of the corporation is not, and has not been
during the five (5) years

                                    Page 15
<PAGE>
immediately before such individual's appointment as an Independent Director: (i)
a stockholder, director, partner, officer or employee of the corporation or its
Affiliates; (ii) affiliated with a customer or supplier of the corporation or
its Affiliates; or (iii) a spouse, parent, sibling, child or other family
relative of any person described by (i) or (ii) above.

As used herein, the term "Affiliate" shall mean any person or entity other than
the corporation (i) which owns beneficially, directly or indirectly, any
outstanding shares of the corporation's stock, or (ii) which controls, is
controlled by or is under common control with the corporation. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through ownership of voting securities, by contract or otherwise.

            5.3 COMMERCIAL LOAN. Borrower warrants that the loan evidenced by
this Note is being made solely to acquire or carry on a business or commercial
enterprise, and/or Borrower is a business or commercial organization. Borrower
further warrants that all of the proceeds of the Note shall be used for
commercial purposes and stipulates that the loan evidenced by the Note shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family or household purposes.

                  ARTICLE VI. RIGHTS AND DUTIES OF THE PARTIES

            6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Mortgagor shall,
or shall cause the property manager to: (a) keep the Property in good condition
and repair; (b) complete or restore promptly and in workmanlike manner the
Property or any part thereof which may be damaged or destroyed (unless, if and
to the extent permitted under Section 6.11, Mortgagee elects to require that
insurance proceeds be used to reduce the Secured Obligations and after such
repayment the ratio of Secured Obligations to the value of the Property, as
reasonably determined by Mortgagee is the same as or lower than it was
immediately before the loss or taking occurred); (c) comply and cause the
Property to comply with (i) all laws, ordinances, regulations and standards,
(ii) all covenants, conditions, restrictions and equitable servitudes, whether
public or private, of every kind and character and (iii) all requirements of
insurance companies and any bureau or agency which establishes standards of
insurability, which laws, covenants or requirements affect the Property and
pertain to acts committed or conditions existing thereon, including, without
limitation, any work of alteration, improvement or demolition as such laws,
covenants or requirements mandate; (d) operate and manage the Property at all
times in a professional manner and do all other acts which from the character or
use of the Property may be reasonably necessary to maintain and preserve its
value; (e) promptly after execution, deliver to Mortgagee a copy of any
management agreement concerning the Property and all amendments thereto and
waivers thereof; and (f) execute and acknowledge all further documents,
instruments and other papers as Mortgagee reasonably deems necessary or
appropriate to preserve, continue, perfect and enjoy the benefits of this
Mortgage and perform Mortgagor's obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no offset.
Mortgagor shall not, without Mortgagee's prior written consent: (g) remove or
demolish all or any material part of the Property; (h) alter either (i) the
exterior of the Property in a manner which materially and adversely affects the
value of the Property or (ii) the roof or other structural elements of the

                                    Page 16
<PAGE>
Property in a manner which requires a building permit except for tenant
improvements required under the Leases; (i) initiate or acquiesce in any change
in any zoning or other land classification which affects the Property; (j)
materially alter the type of occupancy or use of all or any part of the
Property; or (k) commit or permit physical waste of the Property.

            6.2 HAZARDOUS MATERIALS. Without limiting any other provision of
this Mortgage, Mortgagor agrees as follows:

            (a) PROHIBITED ACTIVITIES. Mortgagor shall not cause or permit the
Property to be used as a site for the use, generation, manufacture, storage,
treatment, release, discharge, disposal, transportation or presence of any oil
or other petroleum products, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are "hazardous substances," "hazardous wastes," "hazardous materials" or
"toxic substances" under the Hazardous Materials Laws (defined below) and/or
other applicable environmental laws, ordinances or regulations ("Hazardous
Materials").

            The foregoing to the contrary notwithstanding, (i) Mortgagor may
store, maintain and use on the Property janitorial and maintenance supplies,
paint and other Hazardous Materials of a type and in a quantity readily
available for purchase by the general public and normally stored, maintained and
used by owners and managers of properties of a type similar to the Property; and
(ii) tenants of the Property may store, maintain and use on the Property (and,
if any tenant is a retail business, hold in inventory and sell in the ordinary
course of such tenant's business) household and consumer cleaning supplies and
other Hazardous Materials of a type and quantity readily available for purchase
by the general public and normally stored, maintained and used (and, if tenant
is a retail business, sold) by tenants of properties similar to the Property or
in similar lines of business on properties similar to the Property.

            (b) HAZARDOUS MATERIALS LAWS. Mortgagor shall comply and cause the
Property to comply with all federal, state and local laws, ordinances and
regulations relating to Hazardous Materials ("Hazardous Materials Laws"),
including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of
other jurisdictions or orders and regulations.

            (c) NOTICES. Mortgagor shall immediately notify Mortgagee in writing
of: (i) the discovery of any Hazardous Materials on, under or about the Property
(other than Hazardous Materials permitted under Section 6.2(a)); (ii) any
knowledge by Mortgagor that the Property does not comply with any Hazardous
Materials Laws; (iii) any claims or actions ("Hazardous Materials

                                    Page 17
<PAGE>
Claims") pending or threatened in writing against Mortgagor or the Property by
any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to the Hazardous Materials Laws; and (iv) the
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Property that could cause the Property or any part thereof
to become contaminated by or with Hazardous Materials.

            (d) REMEDIAL ACTION. In response to knowledge of or notification to
Mortgagor of the presence of any Hazardous Materials on, under or about the
Property, Mortgagor shall immediately take, at Mortgagor's sole expense, all
remedial action required of Mortgagor by any Hazardous Materials Laws or any
judgment, consent decree, settlement or compromise in respect to any Hazardous
Materials Claims.

            (e) INSPECTION BY MORTGAGEE. Upon reasonable prior notice to
Mortgagor (except in the event of an emergency) and during normal business
hours, Mortgagee, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Property for the purpose of determining the
existence, location, nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto, beneath or from the
Property.

            (f) LEGAL EFFECT OF SECTION. Mortgagor and Mortgagee agree that: (i)
this Hazardous Materials Section is intended as Mortgagee's written request for
information (and Mortgagor's response) concerning the environmental condition of
the real property security as required by California Code of Civil Procedure
Section 726.5, or any other applicable law; and (ii) each representation and
warranty and covenant in this Section (together with any indemnity applicable to
a breach of any such representation and warranty) with respect to the
environmental condition of the Property is intended by Mortgagee and Mortgagor
to be an "environmental provision" for purposes of California Code of Civil
Procedure Section 736, or any other applicable law.

            6.3 COMPLIANCE WITH LAWS. Mortgagor shall comply with all federal,
state and local laws, rules and regulations applicable to the Property,
including, without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C. Section
12101 et seq.), as amended from time to time. Mortgagor shall possess and
maintain or cause Borrower to possess and maintain in full force and effect at
all times (a) all certificates of occupancy and other licenses, permits and
authorizations required by applicable law for the existing use of the Property
and (b) all permits, franchises and licenses and all rights to all trademarks,
trade names, patents and fictitious names, if any, required by applicable law
for Mortgagor and Borrower to conduct the business(es) in which Mortgagor and
Borrower are now engaged.

            6.4 LITIGATION. Mortgagor shall promptly notify Mortgagee in writing
of any litigation pending or threatened in writing against Mortgagor or Borrower
claiming damages in excess of $100,000 and of all pending or threatened (in
writing) litigation against Mortgagor or Borrower if the aggregate damage claims
against Mortgagor or Borrower exceed $500,000.

            6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Mortgagor shall not:
(a) merge or consolidate with any other entity or permit Borrower to merge or


                                    Page 18
<PAGE>
consolidate with any other entity; (b) make any substantial change in the nature
of Mortgagor's business or structure or permit Borrower to make any substantial
change in the nature of Borrower's business or structure; (c) acquire all or
substantially all of the assets of any other entity or permit Borrower to
acquire all or substantially all of the assets of any other entity; or (d) sell,
lease, assign, transfer or otherwise dispose of a material part of Mortgagor's
assets except in the ordinary course of Mortgagor's business or permit Borrower
to sell, lease, assign, transfer or otherwise dispose of a material part of
Borrower's assets except in the ordinary course of Borrower's business.

            6.6 ACCOUNTING RECORDS. Mortgagor shall maintain and cause Borrower
to maintain adequate books and records in accordance with the same accounting
standard used by Mortgagor or Borrower to prepare the financial statements
delivered to and approved by Mortgagee in connection with the making of the Loan
or other accounting standards approved by Mortgagee. Mortgagor shall permit and
shall cause Borrower to permit any representative of Mortgagee, at any
reasonable time and from time to time, upon reasonable prior notice to
Mortgagor, to inspect, audit and examine such books and records and make copies
of same.

            6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor shall pay to
Mortgagee the full amount of all costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses of Mortgagee's in-house or
outside counsel, incurred by Mortgagee in connection with: (a) appraisals and
inspections of the Property or Collateral required by Mortgagee as a result of
(i) a Transfer or proposed Transfer (as defined below), or (ii) a Default; (b)
appraisals and inspections of the Property or Collateral required by applicable
law, including, without limitation, federal or state regulatory reporting
requirements; and (c) any acts performed by Mortgagee at Mortgagor's request or
wholly or partially for the benefit of Mortgagor (including, without limitation,
the preparation or review of amendments, assumptions, waivers, releases,
reconveyances, estoppel certificates or statements of amounts owing under any
Secured Obligation). In connection with appraisals and inspections, Mortgagor
specifically (but not by way of limitation) acknowledges that: (aa) a formal
written appraisal of the Property by a state certified or licensed appraiser may
be required by federal regulatory reporting requirements on an annual or more
frequent basis; and (bb) Mortgagee may require inspection of the Property by an
independent supervising architect, a cost engineering specialist, or both.
Mortgagor shall pay all indebtedness arising under this Section immediately upon
demand by Mortgagee together with interest thereon following notice of such
indebtedness at the rate of interest then applicable to the principal balance of
the Note as specified therein.

            6.8 LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section
8.4, Mortgagor shall immediately discharge by bonding or otherwise any lien,
charge or other encumbrance which attaches to the Property in violation of
Section 6.15. Subject to Mortgagor's right to contest such matters under this
Mortgage or as expressly permitted in the Loan Documents, Mortgagor shall pay
when due all obligations secured by or reducible to liens and encumbrances which
shall now or hereafter encumber or appear to encumber all or any part of the
Property or any interest therein, whether senior or subordinate hereto,
including, without limitation, all claims for work or labor performed, or
materials or supplies furnished, in connection with any work of demolition,
alteration, repair, improvement or construction of or upon the Property, except
such as Mortgagor may in good faith contest or as to which a bona fide dispute
may arise (provided provision is made to the satisfaction of Mortgagee for
eventual payment thereof in the

                                    Page 19
<PAGE>
event that Mortgagor is obligated to make such payment and that any recorded
claim of lien, charge or other encumbrance against the Property is immediately
discharged by bonding or otherwise).

            6.9 TAXES AND OTHER LIABILITIES. Mortgagor shall pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and local
property taxes and assessments. Mortgagor shall promptly provide to Mortgagee
copies of all tax and assessment notices pertaining to the Property. Mortgagor
hereby authorizes Mortgagee to obtain, at Mortgagor's expense, a tax service
contract which shall provide tax information on the Property to Mortgagee for
the term of the Loan and any extensions or renewals of the Loan.

            6.10 INSURANCE COVERAGE. Mortgagor shall insure the Property against
loss or damage by fire and such other hazards as Mortgagee shall from time to
time require; provided, however, (a) Mortgagee, at Mortgagee's election, may
only require flood insurance if all or any portion of the improvements located
on the Property is or becomes located in a special flood hazard area, and (b)
Mortgagee, at Mortgagee's election, may only require earthquake insurance if all
or any portion of the Property is or becomes located in an earthquake fault
zone. Mortgagor shall also carry public liability insurance and such other
insurance as Mortgagee may reasonably require, including, without limitation,
business interruption insurance or loss of rents insurance. Such policies shall
contain a standard mortgage clause naming Mortgagee and its successors in
interest as a loss payee and requiring at least 30 days prior notice to the
holder at termination or cancellation. Mortgagor shall maintain all required
insurance throughout the term of the Loan and while any liabilities of Borrower
or Mortgagor to Mortgagee under any of the Loan Documents remain outstanding at
Mortgagor's expense, with companies, and in substance and form satisfactory to
Mortgagee. Mortgagee, by reason of accepting, rejecting, approving or obtaining
insurance shall not incur any liability for: (c) the existence, nonexistence,
form or legal sufficiency of any insurance; (d) the solvency of any insurer; or
(e) the payment of claims.

            6.11 INSURANCE AND CONDEMNATION PROCEEDS.

            (a) ASSIGNMENT OF CLAIMS. Mortgagor absolutely and irrevocably
assigns to Mortgagee all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid to Mortgagee: (i) all
awards of damages and all other compensation payable directly or indirectly by
reason of a condemnation or proposed condemnation for public or private use
affecting all or any part of, or any interest in, the Property; (ii) all other
claims and awards for damages to or decrease in value of all or any part of, or
any interest in, the Property; (iii) all proceeds of any insurance policies
payable by reason of loss sustained to all or any part of the Property; and (iv)
all interest which may accrue on any of the foregoing. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty affecting, or
the institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof. So long as no Default has occurred and
is continuing at the time, Mortgagor shall have the right to adjust, compromise
and settle any Claim of $100,000 or less without the consent of Mortgagee,
provided, however, all awards, proceeds and other sums described herein shall
continue to be payable to Mortgagee. Mortgagee may commence, appear in, defend
or prosecute any Claim exceeding $100,000, and may adjust, compromise and settle
all Claims (except for Claims which Mortgagor may settle as provided herein),
but shall not be responsible

                                    Page 20
<PAGE>
for any failure to commence, appear in, defend, prosecute or collect any such
Claim regardless of the cause of the failure. All awards, proceeds and other
sums described herein shall be payable to Mortgagee.

            (b) APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
occurred and is continuing at the time of Mortgagee's receipt of the proceeds of
the Claims ("Proceeds") and no Default occurs thereafter, Mortgagee shall apply
the Proceeds in the following order of priority: First, to Mortgagee's expenses
in settling, prosecuting or defending the Claims; Second, to the repair or
restoration of the Property; and Third, to Mortgagor if the repair or
restoration of the Property has been completed, but to the Secured Obligations
in any order without suspending, extending or reducing any obligation of
Mortgagor to make installment payments if the repair or restoration of the
Property has not been completed. Notwithstanding the foregoing, Mortgagee shall
have no obligation to make any Proceeds available for the repair or restoration
of the Property unless and until all the following conditions have been
satisfied: (i) delivery to Mortgagee of the Proceeds plus any additional amount
which is needed to pay all costs of the repair or restoration (including,
without limitation, taxes, financing charges, insurance and rent during the
repair period); (ii) establishment of an arrangement for lien releases and
disbursement of funds acceptable to Mortgagee; (iii) delivery to Mortgagee in
form and content acceptable to Mortgagee of all of the following: (aa) plans and
specifications for the work; (bb) a contract for the work, signed by a
contractor acceptable to Mortgagee; (cc) a cost breakdown for the work; (dd) if
reasonably required by Mortgagee, a payment and performance bond for the work;
(ee) evidence of the continuation of substantially all Leases unless consented
to in writing by Mortgagee; (ff) evidence that, upon completion of the work, the
size, capacity, value, and income coverage ratios for the Property will be at
least as great as those which existed immediately before the damage or
condemnation occurred; and (gg) evidence of the satisfaction of any additional
conditions that Mortgagee may reasonably establish to protect Mortgagee's
security. Mortgagor acknowledges that the specific conditions described above
are reasonable.

            (c) APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and
is continuing at the time of Mortgagee's receipt of the Proceeds or if a Default
occurs at any time thereafter, Mortgagee may, at Mortgagee's absolute discretion
and regardless of any impairment of security or lack of impairment of security,
but subject to applicable law governing use of the Proceeds, if any, apply all
or any of the Proceeds to Mortgagee's expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured Obligations in
any order without suspending, extending or reducing any obligation of Mortgagor
to make installment payments, and may release all or any part of the Proceeds to
Mortgagor upon any conditions Mortgagee chooses.

            6.12 IMPOUNDS.

            (a) POST-DEFAULT IMPOUNDS. If required by Mortgagee at any time
after a Default occurs (and regardless of whether such Default is thereafter
cured), Mortgagor shall deposit with Mortgagee such amounts ("Post-Default
Impounds") on such dates (determined by Mortgagee as provided below) as will be
sufficient to pay any or all "Costs" (as defined below) specified by Mortgagee.
Mortgagee in its reasonable discretion shall estimate the amount of such Costs
that will be payable or required during any period selected by Mortgagee not
exceeding 1 year and shall determine the fractional portion thereof that
Mortgagor shall deposit with Mortgagee

                                    Page 21
<PAGE>
on each date specified by Mortgagee during such period. If the Post-Default
Impounds paid by Mortgagor are not sufficient to pay the related Costs,
Mortgagor shall deposit with Mortgagee upon demand an amount equal to the
deficiency. All Post-Default Impounds shall be payable by Mortgagor in addition
to (but without duplication of) any other Impounds (as defined below).

            (b) ALL IMPOUNDS. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively called "Impounds".
All Impounds shall be deposited into one or more segregated or commingled
accounts maintained by Mortgagee or its servicing agent. Except as otherwise
provided in the Note, such account(s) shall not bear interest. Mortgagee shall
not be a trustee, special depository or other fiduciary for Mortgagor with
respect to such account, and the existence of such account shall not limit
Mortgagee's rights under this Mortgage, any other agreement or any provision of
law. If no Default exists, Mortgagee shall apply all Impounds to the payment of
the related Costs, or in Mortgagee's sole discretion may release any or all
Impounds to Mortgagor for application to and payment of such Costs. If a Default
exists, Mortgagee may apply any or all Impounds to any Secured Obligation and/or
to cure such Default, whereupon Mortgagor shall restore all Impounds so applied
and cure all Defaults not cured by such application. The obligations of
Mortgagor hereunder shall not be diminished by deposits of Impounds made by
Mortgagor, except to the extent that such obligations have actually been met by
application of such Impounds. Upon any assignment of this Mortgage, Mortgagee
may assign all Impounds in its possession to Mortgagee's assignee, whereupon
Mortgagee shall be released from all liability with respect to such Impounds.
Within 60 days following full repayment of the Secured Obligations (other than
as a consequence of foreclosure or conveyance in lieu of foreclosure) or at such
earlier time as Mortgagee may elect, Mortgagee shall pay to Mortgagor all
Impounds in its possession, and no other party shall have any right or claim
thereto. "Costs" means (i) all taxes and other liabilities payable by Mortgagor
under Section 6.9, (ii) all insurance premiums payable by Mortgagor under
Section 6.10, (iii) all other costs and expenses for which Impounds are required
under the Note, and/or (iv) all other amounts that will be required to preserve
the value of the Property. Mortgagor shall deliver to Mortgagee, promptly upon
receipt, all bills for Costs for which Mortgagee has required Post-Default
Impounds.

            6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Mortgagor
shall protect, preserve and defend the Property and title to and right of
possession of the Property, the security of this Mortgage and the rights and
powers of Mortgagee hereunder at Mortgagor's sole expense against all adverse
claims, whether the claim: (a) is against a possessory or non-possessory
interest; (b) arose prior or subsequent to the Effective Date; or (c) is senior
or junior to Mortgagor's or Mortgagee's rights. Mortgagor shall give Mortgagee
prompt notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to the Property and of any
condemnation offer or action.

            6.14 RIGHT OF INSPECTION. Mortgagee and its independent contractors,
agents and employees may enter the Property from time to time at any reasonable
time upon reasonable prior notice to Mortgagor (except that such notice shall
not be required in the event of an emergency) for the purpose of inspecting the
Property and ascertaining Mortgagor's compliance with the terms of this
Mortgage. Mortgagee shall use reasonable efforts to assure that Mortgagee's
entry upon and inspection of the Property shall not materially and unreasonably
interfere with the business or operations of Mortgagor or Mortgagor's tenants on
the Property.


                                    Page 22
<PAGE>
            6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN MORTGAGOR.
Mortgagor acknowledges that Mortgagee has relied upon the principals of
Mortgagor and Borrower and their experience in owning and operating properties
similar to the Property in connection with the closing of the Loan. Accordingly,
except with the prior written consent of Mortgagee or as otherwise expressly
permitted in the Note, Mortgagor shall not cause or permit any sale, exchange,
mortgage, pledge, hypothecation, assignment, encumbrance or other transfer,
conveyance or disposition, whether voluntarily, involuntarily or by operation of
law ("Transfer") of all or any part of, or all or any direct or indirect
interest in, the Property or the Collateral (except for equipment and inventory
in the ordinary course of its business), or cause or permit a Transfer of any
direct or indirect interest (whether general partnership interest, stock,
non-managing member limited liability company interest, trust, or otherwise) in
Mortgagor or Borrower. In the event of any Transfer that is not expressly
permitted in the Note and is without the prior written consent of Mortgagee,
Mortgagee shall have the absolute right at its option, without prior demand or
notice, to declare all of the Secured Obligations immediately due and payable,
except to the extent prohibited by law, and pursue its rights and remedies under
Section 7.3 herein. Mortgagor agrees to pay any prepayment fee as set forth in
the Note in the event the Secured Obligations are accelerated pursuant to the
terms of this Section. Consent to one such Transfer shall not be deemed to be a
waiver of the right to require the consent to future or successive Transfers.
Except for Transfers expressly permitted under the Note, Mortgagee's consent to
any Transfer may be withheld, conditioned or delayed in Mortgagee's sole and
absolute discretion.

            6.16 INTENTIONALLY OMITTED.

            6.17 INTENTIONALLY OMITTED.

            6.18 EXCULPATION. Mortgagee shall not directly or indirectly be
liable to Mortgagor or any other person as a consequence of: (a) the exercise of
the rights, remedies or powers granted to Mortgagee in this Mortgage; (b) the
failure or refusal of Mortgagee to perform or discharge any obligation or
liability of Mortgagor under any agreement related to the Property or under this
Mortgage; or (c) any loss sustained by Mortgagor or any third party resulting
from Mortgagee's failure to lease the Property after a Default or from any other
act or omission of Mortgagee in managing the Property after a Default unless the
loss is caused by the willful misconduct and bad faith of Mortgagee and no such
liability shall be asserted or enforced against Mortgagee, all such liability
being expressly waived and released by Mortgagor.

            6.19 INDEMNITY. Without in any way limiting any other indemnity
contained in this Mortgage, Mortgagor agrees to defend, indemnify and hold
harmless the Mortgagee Group (as hereinafter defined) from and against any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of: (a) the making of the Loan, except for violations of banking laws or
regulations by the Mortgagee Group; (b) this Mortgage; (c) the execution of this
Mortgage or the performance of any act required or permitted hereunder or by
law; (d) any failure of Mortgagor to perform Mortgagor's obligations under this
Mortgage or the other Loan Documents; (e) any alleged obligation or undertaking
on the Mortgagee Group's part to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations
contained in any other document related to the Property; (f) any act or omission
by Mortgagor or any contractor, agent, employee or representative of Mortgagor
with respect to the Property; or (g) any claim, loss,

                                    Page 23
<PAGE>
damage, cost, expense or liability directly or indirectly arising out of: (i)
the use, generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any Hazardous
Materials which are found in, on, under or about the Property (including,
without limitation, underground contamination); or (ii) the breach of any
covenant, representation or warranty of Mortgagor under Section 6.2 above. The
foregoing to the contrary notwithstanding, this indemnity shall not include any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of the gross negligence or willful misconduct of any member of the Mortgagee
Group, or any claim, loss, damage, cost, expense or liability incurred by the
Mortgagee Group arising from any act or incident on the Property occurring after
the full reconveyance and release of the lien of this Mortgage on the Property,
or with respect to the matters set forth in clause (g) above, any claim, loss,
damage, cost, expense or liability incurred by the Mortgagee Group resulting
from the introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure sale
under this Mortgage, either pursuant to judicial decree or the power of sale, or
by deed in lieu of such foreclosure. This indemnity shall include, without
limitation: (aa) all consequential damages (including, without limitation, any
third party tort claims or governmental claims, fines or penalties against the
Mortgagee Group); (bb) all court costs and reasonable attorneys' fees
(including, without limitation, expert witness fees) paid or incurred by the
Mortgagee Group; and (cc) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Property which is
required by any governmental entity or is otherwise necessary to render the
Property in compliance with all laws and regulations pertaining to Hazardous
Materials. "Mortgagee Group", as used herein, shall mean (1) Mortgagee
(including, without limitation, any participant in the Loan), (2) any entity
controlling, controlled by or under common control with Mortgagee, (3) the
directors, officers, employees and agents of Mortgagee and such other entities,
and (4) the successors, heirs and assigns of the entities and persons described
in foregoing clauses (1) through (3). Mortgagor shall pay immediately upon
Mortgagee's demand any amounts owing under this indemnity together with interest
from the date the indebtedness arises until paid at the rate of interest
applicable to the principal balance of the Note as specified therein. Mortgagor
agrees to use legal counsel reasonably acceptable to the Mortgagee Group in any
action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
SECTION SHALL SURVIVE THE SATISFACTION AND RELEASE OF THIS MORTGAGE, BUT
MORTGAGOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF
THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            6.20 INTENTIONALLY OMITTED.

            6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
Without notice to or the consent, approval or agreement of any persons or
entities having any interest at any time in the Property or in any manner
obligated under the Secured Obligations ("Interested Parties"), Mortgagee may,
from time to time: (a) fully or partially release any person or entity from
liability for the payment or performance of any Secured Obligation; (b) extend
the maturity of any Secured Obligation; (c) make any agreement with Borrower
increasing the amount or otherwise altering the terms of any Secured Obligation;
(d) accept additional security for any Secured Obligation; or (e) release all or
any portion of the Property, Collateral and other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the personal
liability of any of said Interested Parties, or release or impair the priority
of the lien of this Mortgage upon the Property.


                                    Page 24
<PAGE>
            6.22 SALE OR PARTICIPATION OF LOAN. Mortgagor agrees that Mortgagee
may at any time sell, assign, participate or securitize all or any portion of
Mortgagee's rights and obligations under the Loan Documents, and that any such
sale, assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, and/or into the
public securities market, in Mortgagee's sole discretion. Mortgagor further
agrees that Mortgagee may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and financial and
other information heretofore or hereafter provided to or known to Mortgagee with
respect to: (a) the Property and its operation; and/or (b) any party connected
with the Loan (including, without limitation, Mortgagor, any partner or member
of Mortgagor, any constituent partner or member of Mortgagor, any guarantor and
any nonborrower mortgagor). In the event of any such sale, assignment,
participation or securitization, Mortgagee and the other parties to the same
shall share in the rights and obligations of Mortgagee set forth in the Loan
Documents as and to the extent they shall agree among themselves. In connection
with any such sale, assignment, participation or securitization, Mortgagor
further agrees that the Loan Documents shall be sufficient evidence of the
obligations of Mortgagor to each purchaser, assignee or participant, and
Mortgagor shall, within 15 days after request by Mortgagee, (x) deliver an
estoppel certificate verifying for the benefit of Mortgagee and any other party
designated by Mortgagee the status and the terms and provisions of the Loan in
form and substance acceptable to Mortgagee, (y) provide any information, legal
opinions or documents regarding Mortgagor, Guarantor (as defined in the Loan
Documents), the Property and any tenants of the Property as Mortgagee or
Mortgagee's rating agencies may reasonably request, and (z) enter into such
amendments or modifications to the Loan Documents or the organizational
documents of Mortgagor as may be reasonably required in order to facilitate any
such sale, assignment, participation or securitization without impairing
Mortgagor's rights or increasing Mortgagor's obligations. The indemnity
obligations of Mortgagor under the Loan Documents shall also apply with respect
to any purchaser, assignee or participant.

            6.23 RELEASE. Upon payment in full of the Secured Obligations, and
satisfaction of all of the covenants, warranties, undertakings and agreements
made in this Mortgage and in the other Loan Documents (including, without
limitation, repayment in full of all principal, interest and other amounts owing
under the Note) are kept and performed, and all obligations, if any, of
Mortgagee for further advances have been terminated, then, and in that event
only, Mortgagee shall release, without warranty, the Property or that portion
thereof then held hereunder. The recitals of any matters or facts in any release
executed hereunder shall be conclusive proof of the truthfulness thereof. To the
extent permitted by law, the release may describe the grantee as "the person or
persons legally entitled thereto". Mortgagee shall have no duty to determine the
rights of persons claiming to be rightful grantees of any release. When the
Property has been fully released, the last such release shall operate as a
reassignment of all future rents, issues and profits of the Property to the
person or persons legally entitled thereto.

            6.24 SUBROGATION. Mortgagee shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole or in part by
Mortgagee pursuant to this Mortgage or by the proceeds of any loan secured by
this Mortgage.

            6.25 MANAGEMENT AGREEMENTS. Without the prior written consent of
Mortgagee, Mortgagor shall not terminate, modify, amend or enter into any
agreement providing for the management, leasing or operation of the Property.
Mortgagor represents,

                                    Page 25
<PAGE>
warrants and covenants that any existing management agreement includes, and any
future management agreement entered into by Mortgagor shall include, a provision
which provides that the management agreement is automatically terminated upon
the transfer of the Property by Mortgagor, either by sale, foreclosure, deed in
lieu of foreclosure, or otherwise, to Mortgagee or any other purchaser of the
Property. Upon a Default under the Loan Documents or a default under any
management agreement then in effect, which default is not cured within any
applicable grace or cure period, Mortgagee shall have the right to terminate, or
to direct Mortgagor to terminate, such management agreement upon thirty (30)
days' written notice and to retain, or to direct Mortgagor to retain, a new
management agent approved by Mortgagee.

                              ARTICLE VII. DEFAULT

            7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as defined
below).

            (a) OPTIONAL DEFAULT. An "Optional Default" shall occur, at
Mortgagee's option, upon the occurrence of any of the following events:

      (i) MONETARY. Borrower or Mortgagor shall fail to (aa) pay when due any
sums payable under the Loan Documents which by their express terms require
immediate payment without any grace period or sums which are payable on the
Maturity Date, or (bb) pay within 5 days when due any other sums payable under
the Note, this Mortgage or any of the other Loan Documents, including, without
limitation, any monthly payment due under the Note.

      (ii) FAILURE TO PERFORM. Borrower or Mortgagor shall fail to observe,
perform or discharge any of Borrower's or Mortgagor's obligations, covenants,
conditions or agreements, other than Borrower's or Mortgagor's payment
obligations, under the Note, this Mortgage or any of the other Loan Documents,
and (aa) such failure shall remain uncured for 30 days after written notice
thereof shall have been given to Borrower or Mortgagor, as the case may be, by
Mortgagee or (bb) if such failure is of such a nature that it cannot be cured
within such 30 day period, Borrower or Mortgagor shall fail to commence to cure
such failure within such 30 day period or shall fail to diligently prosecute
such curative action thereafter.

      (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certificate or other statement (financial or otherwise) made or furnished by or
on behalf of Borrower, Mortgagor, or a guarantor, if any, to Mortgagee or in
connection with any of the Loan Documents, or as an inducement to Mortgagee to
make the Loan, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished.

      (iv) CONDEMNATION; ATTACHMENT. The condemnation, seizure or appropriation
of any material portion (as reasonably determined by Mortgagee) of the Property;
or the sequestration or attachment of, or levy or execution upon any of the
Property, the Collateral or any other collateral provided by Borrower or
Mortgagor under any of the Loan Documents, or any material portion of the other
assets of Borrower or Mortgagor, which sequestration, attachment, levy or
execution is not released or dismissed within 45 days after its occurrence; or
the sale of any assets affected by any of the foregoing.

                                    Page 26
<PAGE>
      (v) UNINSURED CASUALTY. The occurrence of an uninsured casualty with
respect to any material portion (as reasonably determined by Mortgagee) of the
Property unless: (aa) no other Default has occurred and is continuing at the
time of such casualty or occurs thereafter; (bb) Mortgagor promptly notifies
Mortgagee of the occurrence of such casualty; and (cc) not more than 45 days
after the occurrence of such casualty, Mortgagor delivers to Mortgagee
immediately available funds in an amount sufficient, in Mortgagee's reasonable
opinion, to pay all costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent during the repair
period). So long as no Default has occurred and is continuing at the time of
Mortgagee's receipt of such funds and no Default occurs thereafter, Mortgagee
shall make such funds available for the repair or restoration of the Property.
Notwithstanding the foregoing, Mortgagee shall have no obligation to make any
funds available for repair or restoration of the Property unless and until all
the conditions set forth in clauses (ii) and (iii) of the second sentence of
Section 6.11(b) of this Mortgage have been satisfied. Mortgagor acknowledges
that the specific conditions described above are reasonable.

      (vi) ADVERSE FINANCIAL CHANGE. Any material adverse change in the
financial condition of Borrower or any general partner or managing member of
Borrower, any guarantor, or any other person or entity from the condition shown
on the financial statement(s) submitted to Mortgagee and relied upon by
Mortgagee in making the Loan, and which change Mortgagee reasonably determines
will have a material adverse effect on (aa) the business, operations or
condition of the Property; or (bb) the ability of Borrower or Mortgagor to pay
or perform Borrower's or Mortgagor's obligations in accordance with the terms of
the Note, this Mortgage, and the other Loan Documents.

            (b) AUTOMATIC DEFAULT. An "Automatic Default" shall occur
automatically upon the occurrence of any of the following events:

      (i) VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's filing
a petition for relief under the Bankruptcy Reform Act of 1978, as amended or
recodified ("Bankruptcy Code"), or under any other present or future state or
federal law regarding bankruptcy, reorganization or other relief to debtors
(collectively, "Debtor Relief Law"); or (bb) Borrower's filing any pleading in
any involuntary proceeding under the Bankruptcy Code or other Debtor Relief Law
which admits the jurisdiction of a court to regulate Borrower or the Property or
the petition's material allegations regarding Borrower's insolvency; or (cc)
Borrower's making a general assignment for the benefit of creditors; or (dd)
Borrower's applying for, or the appointment of, a receiver, trustee, custodian
or liquidator of Borrower or any of its property; or (ee) the filing by Borrower
of a petition seeking the liquidation or dissolution of Borrower or the
commencement of any other procedure to liquidate or dissolve Borrower.

      (ii) INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full dismissal
of any involuntary petition under the Bankruptcy Code or other Debtor Relief Law
that is filed against Borrower or in any way restrains or limits Borrower or
Mortgagee regarding the Loan or the Property, prior to the earlier of the entry
of any order granting relief sought in the involuntary petition or 45 days after
the date of filing of the petition.

      (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
clauses (i) or (ii) as to Mortgagor, any general partner or managing member of
Borrower or Mortgagor,

                                    Page 27
<PAGE>
or any guarantor or other person or entity in any manner obligated to Mortgagee
under the Loan Documents.

            7.2 ACCELERATION. Upon the occurrence of an Optional Default,
Mortgagee may, at its option, declare all sums owing to Mortgagee under the Note
and the other Loan Documents immediately due and payable. Upon the occurrence of
an Automatic Default, all sums owing to Mortgagee under the Note and the other
Loan Documents shall automatically become immediately due and payable.

            7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in
Section 7.2 above, at any time after a Default, Mortgagee shall have all of the
following rights and remedies:

            (a) ENTRY ON PROPERTY. With or without notice, and without releasing
Mortgagor from any Secured Obligation, and without becoming a mortgagee in
possession, to enter upon the Property from time to time and to do such acts and
things as Mortgagee deems necessary or desirable in order to inspect,
investigate, assess and protect the security hereof or to cure any Default,
including, without limitation: (i) to take and possess all documents, books,
records, papers and accounts of Mortgagor, Borrower or the then owner of the
Property which relate to the Property; (ii) to make, terminate, enforce or
modify leases of the Property upon such terms and conditions as Mortgagee deems
proper; (iii) to make repairs, alterations and improvements to the Property
necessary, in Mortgagee's reasonable judgment, to protect or enhance the
security hereof; (iv) to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Mortgagee
hereunder; (v) to pay, purchase, contest or compromise any encumbrance, charge,
lien or claim of lien which, in the sole judgment of Mortgagee, is or may be
senior in priority hereto, the judgment of Mortgagee being conclusive as between
the parties hereto; (vi) to obtain insurance; (vii) to pay any premiums or
charges with respect to insurance required to be carried hereunder; (viii) to
obtain a court order to enforce Mortgagee's right to enter and inspect the
Property for Hazardous Materials, in which regard the decision of Mortgagee as
to whether there exists a release or threatened release of Hazardous Materials
onto the Property shall be deemed reasonable and conclusive as between the
parties hereto; (ix) to have a receiver appointed pursuant to applicable law to
enforce Mortgagee's rights to enter and inspect the Property for Hazardous
Materials; and/or (x) to employ legal counsel, accountants, engineers,
consultants, contractors and other appropriate persons to assist them;

            (b) APPOINTMENT OF RECEIVER. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain appointment of a
receiver, trustee, liquidator or conservator of the Property, for any purpose,
including, without limitation, to enforce Mortgagee's rights to collect Payments
and to enter on and inspect the Property for Hazardous Materials, as a matter of
strict right and without regard to: (i) the adequacy of the security for the
repayment of the Secured Obligations; (ii) the existence of a declaration that
the Secured Obligations are immediately due and payable; (iii) the filing of a
notice of default; or (iv) the solvency of Mortgagor, Borrower or any guarantor
or other person or entity in any manner obligated to Mortgagee under the Loan
Documents;


                                    Page 28
<PAGE>
            (c) INJUNCTION. To commence and maintain an action or actions in any
court of competent jurisdiction to obtain specific enforcement of the covenants
of Mortgagor hereunder, and Mortgagor agrees that such covenants shall be
specifically enforceable by injunction or any other appropriate equitable remedy
and that for the purposes of any suit brought under this subparagraph, Mortgagor
waives the defense of laches and any applicable statute of limitations;

            (d) FORECLOSURE. Immediately commence an action to foreclose this
Mortgage or to specifically enforce its provisions or any of the indebtedness
secured hereby pursuant to the statutes in such case made and provided and sell
the Property or cause the Property to be sold in accordance with the
requirements and procedures provided by said statutes in a single parcel or in
several parcels at the option of Mortgagee.

      (i) In the event foreclosure proceedings are filed by Mortgagee, all
expenses incident to such proceeding, including, but not limited to, reasonable
attorneys' fees and costs, shall be paid by Mortgagor and secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. The secured indebtedness and all other
obligations secured by this Mortgage, including, without limitation, interest at
the Default Rate (as defined in the Note), any prepayment charge, fee or premium
required to be paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys' fees and any other amounts
due and unpaid to Mortgagee under the Loan Documents, may be bid by Mortgagee in
the event of a foreclosure sale hereunder. In the event of a judicial sale
pursuant to a foreclosure decree, it is understood and agreed that Mortgagee or
its assigns may become the purchaser of the Property or any part thereof.

      (ii) Mortgagee may, by following the procedures and satisfying the
requirements prescribed by applicable law, foreclose on only a portion of the
Property and, in such event, said foreclosure shall not affect the lien of this
Mortgage on the remaining portion of the Property foreclosed.

            Upon sale of the Property at any foreclosure, Mortgagee may credit
bid (as determined by Mortgagee in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Mortgagee
may, but is not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or adjusted by
Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and
costs incurred by Mortgagee with respect to the Property prior to foreclosure;
(iii) expenses and costs which Mortgagee anticipates will be incurred with
respect to the Property after foreclosure, but prior to resale, including,
without limitation, costs of structural reports and other due diligence, costs
to carry the Property prior to resale, costs of resale (e.g. commissions,
attorneys' fees, and taxes), costs of any Hazardous Materials clean-up and
monitoring, costs of deferred maintenance, repair, refurbishment and retrofit,
costs of defending or settling litigation affecting the Property, and lost
opportunity costs (if any), including the time value of money during any
anticipated holding period by Mortgagee; (iv) declining trends in real property
values generally and with respect to properties similar to the Property; (v)
anticipated discounts upon resale of the Property as a distressed or foreclosed
property; (vi) the fact of additional collateral (if any), for the Secured
Obligations; and (vii) such other factors or matters that Mortgagee (in its sole
and absolute discretion) deems appropriate. In regard to the above, Mortgagor
acknowledges and

                                    Page 29
<PAGE>
agrees that: (viii) Mortgagee is not required to use any or all of the foregoing
factors to determine the amount of its credit bid; (ix) this paragraph does not
impose upon Mortgagee any additional obligations that are not imposed by law at
the time the credit bid is made; (x) the amount of Mortgagee's credit bid need
not have any relation to any loan-to-value ratios specified in the Loan
Documents or previously discussed between Mortgagor and Mortgagee; and (xi)
Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion)
higher or lower than any appraised value of the Property;

            (e) MULTIPLE FORECLOSURES. To resort to and realize upon the
security hereunder and any other security now or later held by Mortgagee
concurrently or successively and in one or several consolidated or independent
judicial actions and to apply the proceeds received upon the Secured Obligations
all in such order and manner as Mortgagee determines in its sole discretion;

            (f) RIGHTS TO COLLATERAL. To exercise all rights Mortgagee may have
with respect to the Collateral under this Mortgage, the UCC or otherwise at law;
and

            (g) OTHER RIGHTS. To exercise such other rights as Mortgagee may
have at law or in equity or pursuant to the terms and conditions of this
Mortgage or any of the other Loan Documents.

            In connection with any sale or sales hereunder, Mortgagee may elect
to treat any of the Property which consists of a right in action or which is
property that can be severed from the Property (including, without limitation,
any improvements forming a part thereof) without causing structural damage
thereto as if the same were personal property or a fixture, as the case may be,
and dispose of the same in accordance with applicable law, separate and apart
from the sale of the Property. Any sale of Collateral hereunder shall be
conducted in any manner permitted by the UCC.

            7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. To the fullest extent
permitted by law, proceeds of any sale under this Mortgage shall be applied to
the extent funds are so available to the following items in such order as
Mortgagee in its discretion may determine:

            (a) To payment of the costs, expenses and fees of taking possession
of the Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee's right and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers' fees, court costs, reasonable
attorneys', accountants', appraisers', managers', and other professional fees,
title charges and transfer taxes.

            (b) To payment of all sums expended by Mortgagee under the terms of
any of the Loan Documents and not yet repaid, together with interest on such
sums at the Default Rate.

            (c) To payment of the secured indebtedness and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Rate and, to the extent permitted by applicable law, any prepayment fee, charge
or premium required to be paid under the Note in order to prepay principal, in
any order that Mortgagee chooses in its sole discretion.

                                    Page 30
<PAGE>
            7.5 WAIVER OF MARSHALING RIGHTS. Mortgagor, for itself and for all
parties claiming through or under Mortgagor, and for all parties who may acquire
a lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property, including, without limitation, the
Collateral, which is now or later may be security for any Secured Obligation,
marshaled upon any foreclosure of this Mortgage or on a foreclosure of any other
security for any of the Secured Obligations.

            7.6 NO CURE OR WAIVER. Neither Mortgagee's nor any receiver's entry
upon and taking possession of all or any part of the Property, nor any
collection of rents, issues, profits, insurance proceeds, condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation, nor the exercise of
any other right or remedy by Mortgagee or any receiver shall cure or waive any
Default or notice of default under this Mortgage, or nullify the effect of any
notice of default or sale (unless all Secured Obligations then due have been
paid or performed and Mortgagor has cured all other Defaults hereunder), or
impair the status of the security, or prejudice Mortgagee in the exercise of any
right or remedy, or be construed as an affirmation by Mortgagee of any tenancy,
lease or option or a subordination of the lien of this Mortgage.

            7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor agrees
to pay to Mortgagee immediately and upon demand all costs and expenses incurred
by Mortgagee in the enforcement of the terms and conditions of this Mortgage
(including, without limitation, court costs and attorneys' fees, whether
incurred in litigation or not) with interest from the date of expenditure until
said sums have been paid at the rate of interest applicable to the principal
balance of the Note as specified therein.

            7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Mortgagor hereby
irrevocably appoints Mortgagee and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest, to perform any
obligation of Mortgagor hereunder upon the occurrence of an event, act or
omission which, with notice or passage of time or both, would constitute a
Default, provided, however, that: (a) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(b) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to act under this Section.

            7.9 REMEDIES CUMULATIVE. All rights and remedies of Mortgagee
provided hereunder are cumulative and are in addition to all rights and remedies
provided by applicable law (including specifically that of foreclosure of this
instrument as though it were a mortgage) or in any other agreements between
Mortgagor and Mortgagee. Mortgagee may enforce any one or more remedies or
rights hereunder successively or concurrently.

                     ARTICLE VIII. MISCELLANEOUS PROVISIONS

            8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
by reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan Documents
grant further rights to Mortgagee and contain further agreements and affirmative
and negative covenants by Mortgagor which apply to this Mortgage and to the
Property and such further rights and agreements are incorporated herein by this
reference. THE OBLIGATIONS AND LIABILITIES OF MORTGAGOR UNDER THIS

                                    Page 31
<PAGE>
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE
SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            8.2 NON-WAIVER. By accepting payment of any amount secured hereby
after its due date or late performance of any other Secured Obligation,
Mortgagee shall not waive its right against any person obligated directly or
indirectly hereunder or on any Secured Obligation, either to require prompt
payment or performance when due of all other sums and obligations so secured or
to declare default for failure to make such prompt payment or performance. No
exercise of any right or remedy by Mortgagee hereunder shall constitute a waiver
of any other right or remedy herein contained or provided by law. No failure by
Mortgagee to exercise any right or remedy hereunder arising upon any Default
shall be construed to prejudice Mortgagee's rights or remedies upon the
occurrence of any other or subsequent Default. No delay by Mortgagee in
exercising any such right or remedy shall be construed to preclude Mortgagee
from the exercise thereof at any time while that Default is continuing. No
notice to nor demand on Mortgagor shall of itself entitle Mortgagor to any other
or further notice or demand in similar or other circumstances.

            8.3 CONSENTS, APPROVALS AND EXPENSES. Wherever Mortgagee's consent,
approval, acceptance or satisfaction is required under any provision of this
Mortgage or any of the other Loan Documents, such consent, approval, acceptance
or satisfaction shall not be unreasonably withheld, conditioned or delayed by
Mortgagee unless such provision expressly so provides. Wherever costs or
expenses are required to be paid under any provision of this Mortgage or any of
the other Loan Documents, such costs or expenses shall be reasonable.

            8.4 PERMITTED CONTESTS. After prior written notice to Mortgagee,
Mortgagor may contest, by appropriate legal or other proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any lien, levy, tax or assessment, or any lien of any laborer,
mechanic, materialman, supplier or vendor, or the application to Mortgagor or
the Property of any law or the validity thereof, the assertion or imposition of
which, or the failure to pay when due, would constitute a Default; provided that
(a) Mortgagor pursues the contest diligently, in a manner which Mortgagee
determines is not prejudicial to Mortgagee, and does not impair the lien of this
Mortgage; (b) the Property, or any part hereof or estate or interest therein,
shall not be in any danger of being sold, forfeited or lost by reason of such
proceedings; (c) in the case of the contest of any law or other legal
requirement, Mortgagee shall not be in any danger of any civil or criminal
liability; and (d) if required by Mortgagee, Mortgagor deposits with Mortgagee
any funds or other forms of assurance (including a bond or letter of credit)
satisfactory to Mortgagee to protect Mortgagee from the consequences of the
contest being unsuccessful. Mortgagor's right to contest pursuant to the terms
of this provision shall in no way relieve Mortgagor or Borrower of its
obligations under the Loan or to make payments to Mortgagee as and when due.

            8.5 FURTHER ASSURANCES. Mortgagor shall, upon demand by Mortgagee,
execute, acknowledge (if appropriate) and deliver any and all documents and
instruments and do or cause to be done all further acts reasonably necessary or
appropriate to effectuate the provisions hereof.


                                    Page 32
<PAGE>
            8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is
commenced between Mortgagor and Mortgagee regarding their respective rights and
obligations under this Mortgage or any of the other Loan Documents, the
prevailing party shall be entitled to recover, in addition to damages or other
relief, costs and expenses, reasonable attorneys' fees and court costs
(including, without limitation, expert witness fees). As used herein the term
"prevailing party" shall mean the party which obtains the principal relief it
has sought, whether by compromise settlement or judgment. If the party which
commenced or instituted the action, suit or proceeding shall dismiss or
discontinue it without the concurrence of the other party, such other party
shall be deemed the prevailing party.

            8.7 MORTGAGOR AND MORTGAGEE DEFINED. The term "Mortgagor" includes
both the original Mortgagor and any subsequent owner or owners of any of the
Property, and the term "Mortgagee" includes the original Mortgagee and any
future owner or holder, including assignees, pledgees and participants, of the
Note or any interest therein.

            8.8 DISCLAIMERS.

            (a) RELATIONSHIP. The relationship of Mortgagor and Mortgagee under
this Mortgage and the other Loan Documents is, and shall at all times remain,
solely that of borrower and lender; and Mortgagee neither undertakes nor assumes
any responsibility or duty to Mortgagor or to any third party with respect to
the Property. Notwithstanding any other provisions of this Mortgage and the
other Loan Documents: (i) Mortgagee is not, and shall not be construed to be, a
partner, joint venturer, member, alter ego, manager, controlling person or other
business associate or participant of any kind of Mortgagor, and Mortgagee does
not intend to ever assume such status; (ii) Mortgagee's activities in connection
with this Mortgage and the other Loan Documents shall not be "outside the scope
of activities of a lender of money" within the meaning of California Civil Code
Section 3434, as amended or recodified from time to time, and Mortgagee does not
intend to ever assume any responsibility to any person for the quality,
suitability, safety or condition of the Property; and (iii) Mortgagee shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Mortgagor.

            (b) NO LIABILITY. Mortgagee shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action, liability,
indebtedness, damage or injury of any kind or character to any person or
property arising from any construction on, or occupancy or use of, the Property,
whether caused by or arising from: (i) any defect in any building, structure,
grading, fill, landscaping or other improvements thereon or in any on-site or
off-site improvement or other facility therein or thereon; (ii) any act or
omission of Mortgagor or any of Mortgagor's agents, employees, independent
contractors, licensees or invitees; (iii) any accident in or on the Property or
any fire, flood or other casualty or hazard thereon; (iv) the failure of
Mortgagor or any of Mortgagor's licensees, employees, invitees, agents,
independent contractors or other representatives to maintain the Property in a
safe condition; or (v) any nuisance made or suffered on any part of the
Property.

            8.9 SEVERABILITY. If any term of this Mortgage, or the application
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Mortgage, or the application of such term
to persons or circumstances other than those as to

                                    Page 33
<PAGE>
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Mortgage shall be valid and enforceable to the fullest extent
permitted by law.

            8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Mortgagee under the Mortgage established by Article 1 and the security agreement
established by Article 4 are independent and cumulative, and there shall be no
merger of any lien created by the Mortgage with any security interest created by
the security agreement. Mortgagee may elect to exercise or enforce any of its
rights, remedies or interests under either or both the Mortgage or the security
agreement as Mortgagee may from time to time deem appropriate. The absolute
assignment of rents and leases established by Article 3 is similarly independent
of and separate from the Mortgage and the security agreement.

            8.11 MERGER. No merger shall occur as a result of Mortgagee's
acquiring any other estate in, or any other lien on, the Property unless
Mortgagee consents to a merger in writing.

            8.12 OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL. If more than one
person has executed this Mortgage as "Mortgagor", the obligations of all such
persons hereunder shall be joint and several.

            8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who
executes this Mortgage as a Mortgagor agrees that any money judgment which
Mortgagee obtains pursuant to the terms of this Mortgage or any other obligation
of that married person secured by this Mortgage may be collected by execution
upon any separate property or community property of that person.

            8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or
expressly incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior negotiations
or agreements, written or oral. The Loan Documents shall not be modified except
by written instrument executed by all parties. Any reference in any of the Loan
Documents to the Property or Collateral shall include all or any part of the
Property or Collateral. Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Mortgagee in
writing. When the identity of the parties or other circumstances make it
appropriate, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.

            8.15 CAPITALIZED TERMS. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Note.

            8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions
herein contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence shall not
be construed to permit Mortgagor to assign the Loan except as otherwise
permitted under the Note or the other Loan Documents.

            8.17 GOVERNING LAW. This Mortgage was accepted by Mortgagee in the
state of California and the proceeds of the Note secured hereby were disbursed
from the state of California, which state the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality of the
foregoing, matters of construction, validity, enforceability and

                                    Page 34
<PAGE>
performance, this Mortgage, the Note and the other Loan Documents and the
obligations arising hereunder and thereunder shall be governed by, and construed
in accordance with, the laws of the state of California applicable to contracts
made and performed in such state and any applicable law of the United States of
America, except that at all times the provisions for the creation, perfection
and enforcement of the liens and security interests created pursuant thereto and
pursuant to the other Loan Documents shall be governed by and construed
according to the law of the state where the Property is located. Except as
provided in the immediately preceding sentence, Mortgagor hereby unconditionally
and irrevocably waives, to the fullest extent permitted by law, any claim to
assert that the law of any jurisdiction other than California governs this
Mortgage, the Note and other Loan Documents.

            8.18 CONSENT TO JURISDICTION. Mortgagor irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Mortgagor against
Mortgagee, arising out of or relating to this Mortgage, the Note or the Loan;
(b) any state or federal court sitting in the state where the Property is
located or the state in which Mortgagor's principal place of business is located
over any suit, action or proceeding, brought by Mortgagee against Mortgagor,
arising out of or relating to this Mortgage, the Note or the Loan; and (c) any
state court sitting in the county of the state where the Property is located
over any suit, action, or proceeding, brought by Mortgagee to foreclose this
Mortgage or any action brought by Mortgagee to enforce its rights with respect
to the Collateral. Mortgagor irrevocably waives, to the fullest extent permitted
by law, any objection that Mortgagor may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such court and any
claim that any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum.

            8.19 EXHIBITS. Exhibit A is incorporated into this Mortgage by this
reference.

            8.20 ADDRESSES; REQUEST FOR NOTICE. All requests, demands, notices
and other communications that are required or permitted to be given to a party
under this Mortgage shall be in writing, refer to the Loan number, and shall be
sent to such party, either by personal delivery, by overnight delivery service,
by certified first class mail, return receipt requested, or by facsimile
transmission to the addressee or facsimile number below. All such notices and
communications shall be effective upon receipt of such delivery or facsimile
transmission, together with a printed receipt of the successful delivery of such
facsimile transmission. The addresses of the parties are set forth on page 1 of
this Mortgage and the facsimile numbers for the parties are as follows:

            Mortgagee:  WELLS FARGO BANK, N.A.
                        FAX NO.: (925) 691-5947

            Mortgagor:  MHC STAGECOACH, L.L.C.
                        FAX NO.: (312) 279-1715

      Mortgagor's principal place of business is at the address set forth on
page 1 of this Mortgage. A copy of any notice to Mortgagor shall be sent as
follows:


                                    Page 35
<PAGE>
                        Katz Randall Weinberg & Richmond
                        333 West Wacker Drive
                        Suite 1800
                        Chicago, Illinois 60606
                        Attention: Benjamin Randall
                        Facsimile: (312) 807-3903

      Any Mortgagor whose address is set forth on page 1 of this Mortgage hereby
requests that a copy of notice of default and notice of sale be delivered to it
at that address. Failure to insert an address shall constitute a designation of
Mortgagor's last known address as the address for such notice. Any party shall
have the right to change its address for notice hereunder to any other location
within the continental United States by giving 30 days notice to the other
parties in the manner set forth above.


            8.21 COUNTERPARTS. This Mortgage may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed an
original and all of which taken together, will be deemed to be one and the same
instrument.

            8.22 WAIVER OF JURY TRIAL. MORTGAGEE (BY ITS ACCEPTANCE HEREOF) AND
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF MORTGAGEE OR MORTGAGOR. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGEE TO ENTER INTO THIS MORTGAGE.



                                    Page 36
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage as of the
day and year first above written.

WITNESS/ATTEST:                    MORTGAGOR:

                                   MHC STAGECOACH, L.L.C., a Delaware
                                   limited liability company



/s/ Lawrence M. Gritton            By:   MHC-QRS STAGECOACH, INC.,
Print Name: Lawrence M. Gritton          a  Delaware corporation,
                                         its Managing Member

/s/ Benjamin J. Randall                  By: /s/ John M. Zoeller
Print Name: Benjamin J. Randall              -------------------------
                                               Name: John M. Zoeller
                                         Its:  Vice President, Chief Financial
                                               Officer and Treasurer
<PAGE>
STATE OF IL          )
                     )  SS:
COUNTY OF COOK       )

            On 8/1, 2001 before me, Jennifer Usher, Notary Public, personally
appeared John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company,
personally known to me to be the person whose name is subscribed in the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument, the person or the entity
upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

                                    /s/ Jennifer Usher
                                    ---------------------------
                                    Print Name: Jennifer Usher

My Commission Expires:

     1/6/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL
Serial No., if any:__________________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A

                               DESCRIPTION OF LAND

Exhibit A to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Land referred to in this Mortgage is situated in the
county of Brevard, state of Florida and is described as follows:

PARCEL A:

A parcel of land lying in the Northwest 1/4 of Section 21, Township 25 South,
Range 36 East, Brevard County, Florida, being more particularly described as
follows:

Commence at the Northwest corner of said Section 21, and run North 89(degrees)
50' 50" East, along the North line of said Section 21, a distance of 330.04 feet
to the Point of Beginning; thence continue North 89(degrees) 50' 50" East, along
said North line, a distance of 816.83 feet; thence South 05(degrees) 47' 10"
West, a distance of 2488.78 feet; thence North 89(degrees) 53' 00" West, a
distance of 419.86 feet; thence South 01(degrees) 04' 00" East, a distance of
150.00 feet, to a point on the North Right of Way line of Barnes Boulevard (a
100 foot Right of Way); thence North 89(degrees) 53' 00" West, along said North
Right of Way line, a distance of 100.02 feet; thence North 01(degrees) 04' 00"
West, parallel to the West line of said Northwest 1/4, a distance of 2623.29
feet, to the Point of Beginning.

PARCEL B:

A perpetual non-exclusive easement for the benefit of Parcel A for surface water
runoff from "Pod #2" through a weir on said land eastward to an existing
drainage ditch as set forth in Grant of Easement from George M. Green, Jr. and
Sandie J. Green in favor of The Indian Oaks Corporation, dated July 27, 1987,
recorded August 4, 1987, in the Public Records of Brevard County, Florida, at
Official Records Book 2826, page 2681; and modified by Stipulated Settlement in
Civil Action No. 87-9785-CA-C, The Indian Oaks Corporation, a Florida
corporation, Plaintiffs, vs. George M. Green, Jr. and Sandie J. Green, his wife,
Defendants, dated July 27, 1987, recorded August 20, 1987, in the Public Records
of Brevard County, Florida, at Official Records Book 2831, page 2211, more
particularly described as follows:

Beginning at the approximate Southwest corner of land to the East as described
in Deed recorded in Official Records Book 2471, page 2094, Public Records of
Brevard County, Florida, said point being on the public drainage ditch on the
north side of Barnes Boulevard; thence north along an existing approximately
twenty (20) foot wide drainage ditch on the westerly boundary of the land
described in said Deed for an approximate distance of 844.00 feet to an outlet
pipe which extends easterly into said drainage ditch from a Type "C" inlet weir
located on "Pod #2" of Parcel A.



                                    EXHIBIT A
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT B

    CALCULATION OF DOCUMENTARY STAMP AND INTANGIBLE PERSONAL PROPERTY TAX

Exhibit B to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

      This Mortgage is part of an out-of-state loan transaction which only
partially secures the loan. This Mortgage encumbers the property described on
Exhibit A, and separate mortgages are being executed and delivered by Mortgagor
encumbering certain other property located in Florida and in other states (such
other property being further described on Exhibit C and being referred to as the
"Other Property"). The Florida collateral is located in Brevard, Volusia and
Manatee Counties, and three (3) separate mortgages (the Florida Mortgages")
encumbering three (3) properties are being executed and delivered by Mortgagor
for simultaneous recording in the various Florida counties described above. The
total indebtedness secured by this Mortgage equals $50,000,000.00, as evidenced
by one (1) promissory note in the aggregate original principal amount of
$50,000,000.00 (the "Note"). The Note was made, executed and delivered outside
the State of Florida. The value of the Florida property encumbered by the
Florida Mortgages equals $27,200,000.00. The aggregate value of all other
property securing the loan and located outside the State of Florida equals
$50,400,000.00. Thus, the total aggregate value of all property securing the
loan equals $77,600,000.00. The property encumbered by the Florida Mortgages and
located in Florida represents thirty-five (35%) percent [$27,200,000.00 /
$77,600,000.00] of the total value of all property securing the loan. In
accordance with Florida Statutes, Section 201.08, and Florida Administrative
Code, Rule 12B-4.053(32)(b), documentary stamp tax is computed based upon the
percentage of indebtedness which the value of the mortgaged property located in
Florida bears to the total value of all mortgaged property (which, in this case,
equals $17,500,000.00). Accordingly, documentary stamp tax in the amount of
$61,250.00 is due upon the recording of the Florida Mortgages in the Florida
counties listed above. Pursuant to Chapter 199, Florida Statutes, non-recurring
intangible personal property tax is computed and payable based upon that portion
of the indebtedness which bears the same relation as the value of the mortgaged
property located in Florida bears to the total value of all mortgaged property,
which, in this case, equals [$50,000,000.00 x ($27,200,000.00 /
$77,600,000.00)]. Thus, non-recurring intangible personal property tax in the
amount of $35,000.00 is due and payable upon recording of the Florida Mortgages
in the Florida counties listed above.



                                    EXHIBIT B
<PAGE>
                                    EXHIBIT C

                          DESCRIPTION OF OTHER PROPERTY

Exhibit C to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Other Property referred to in this Mortgage is
described as follows:

                                 CABANA PROPERTY

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section
16, Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01 degree 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89 degrees 09' 31" East, along said Southerly right of way of Twain Avenue
a distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89 degrees 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01 degree 22' 27" East along said Westerly right of way line of
Cabana Drive a distance of 1238.26 feet; thence South 88 degrees 17' 57" West a
distance of 1271.25 feet; thence North 01 degree 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.



                                    EXHIBIT C
<PAGE>
                             WOODLAND HILLS PROPERTY

Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of
the Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th
P.M., County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.



                                    EXHIBIT C
<PAGE>
                                WINDMILL PROPERTY

PARCEL A:

Begin at the Northwest corner of the Southeast 1/4 of the Northeast 1/4 of
Section 16, Township 35 South, Range 18 East, Manatee County, Florida; thence
South 00(degrees) 14' 17" East, 1327.25 feet to the Southwest corner of the
Southeast 1/4 of the Northeast 1/4 of the aforementioned Section 16; thence
North 89(degrees) 58' 09" East, 1322.53 feet to the Southeast corner of the
Southeast 1/4 of the Northeast 1/4 of Section 16; thence South 00(degrees) 24'
10" East, 137.28 feet; thence North 89(degrees) 40' 44" East, 1269.21 feet;
thence North 00(degrees) 15' 02" West, 137.28 feet; thence North 89(degrees) 40'
56" East, 42.00 feet along the South line of the Southwest 1/4 of the Northwest
1/4 of Section 15, Township 35 South, Range 18 East, Manatee County, Florida to
a point, said point being the Southwest corner of the Easterly 8.00 feet of the
Southwest 1/4 of the Northwest 1/4 of Section 15; thence North 00(degrees) 15'
02" West along the West line of said Easterly 8.00 feet, 529.06 feet; thence
North 89(degrees) 54' 48" West, 352.77 feet; thence North 83(degrees) 03' 14"
West, 41.33 feet; North 89(degrees) 58' 10" West, 384.29 feet; thence North
64(degrees) 05' 35" West, 45.06 feet; thence North 89(degrees) 49' 37" West,
69.63 feet; thence North 00(degrees) 27' 02" West, 39.77 feet; thence South
89(degrees) 57' 27" West, 229.20 feet; thence South 00(degrees) 34' 37" West,
52.86 feet; thence South 89(degrees) 50' 04" West, 69.88 feet; thence North
68(degrees) 46' 00" West, 42.84 feet; thence North 89(degrees) 02' 58" West,
70.09 feet; thence North 00(degrees) 46' 23" West, 36.15 feet; thence South
89(degrees) 58' 50" West, 204.28 feet; thence South 01(degrees) 06' 03" West,
34.82 feet; thence North 89(degrees) 55' 45" West, 69.61 feet; thence North
61(degrees) 14' 43" West, 46.29 feet; thence North 89(degrees) 47' 56" West,
49.68 feet; thence North 01(degrees) 06' 00" West, 14.20 feet; thence South
89(degrees) 37' 41" West, 244.94 feet; thence North 14(degrees) 02' 42" West,
20.66 feet; thence North 00(degrees) 04' 49" East, 50.12 feet; thence North
07(degrees) 13' 20" West, 40.26 feet; thence North 00(degrees) 29' 42" West,
229.78 feet; thence North 89(degrees) 19' 18" East, 21.87 feet; thence North
00(degrees) 01' 05" East, 69.28 feet; thence North 16(degrees) 42' 43" West,
41.53 feet; thence North 00(degrees) 18' 37" East, 70.77 feet; thence North
90(degrees) 00' 00" West, 443.35 feet; thence North 02(degrees) 07' 48" West,
80.67 feet; thence North 25(degrees) 58' 34" East, 33.85 feet; thence North
00(degrees) 07' 24" East, 93.96 feet; thence South 89(degrees) 59' 49" West,
295.60 feet to the Point of Beginning.

PARCEL B:

Perpetual non-exclusive rights-of-way and easements as contained in Agreements
recorded January 13, 1939, in Deed Book 159, page 331, and rerecorded February
16, 1939, in Deed Book 160, page 23; recorded October 30, 1939, in Deed Book
164, page 340; and recorded May 31, 1974, in Official Records Book 673, page
646, all of the Public Records of Manatee County, Florida.


                                    EXHIBIT C
<PAGE>
                            PICKWICK VILLAGE PROPERTY

PARCEL A:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East, also a portion of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East, Volusia
County, Florida being more particularly described as follows:

As a point of reference begin at the Southwest corner of Section 6, Township 16
South, Range 33 East, thence along the South line of Section 6 South 89 degrees
35 minutes 25 seconds East a distance of 3300.00 feet to the Point of Beginning;
thence North 00 degrees 24 minutes 35 seconds East a distance of 330.00 feet;
thence North 89 degrees 35 minutes 25 seconds West a distance of 660.00 feet;
thence North 00 degrees 24 minutes 35 seconds East a distance of 200.00 feet;
thence South 89 degrees 35 minutes 25 seconds East a distance of 612.36 feet to
a point on the Southerly right-of-way line of Clyde Morris Blvd. (a 100.00 foot
right-of-way as now laid out and used); thence South 41 degrees 06 minutes 50
seconds East along the Southerly right-of-way line of said Clyde Morris Blvd. a
distance of 1067.45 feet to a point on the East line of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East; thence
South 00 degrees 24 minutes 35 seconds West along the said East line of the West
one-half of the Northeast one-quarter of said Section 7 a distance of 2370.82
feet; thence North 89 degrees 35 minutes 25 seconds West a distance of 1320.00
feet to a point in the West line of the West one-half of the Northeast
one-quarter of Section 7; thence North 00 degrees 24 minutes 35 seconds East
along the West line of the West one-half of the Northeast one-quarter of Section
7 a distance of 1650.00 feet; thence South 89 degrees 35 minutes 25 seconds East
a distance of 660.00 feet; thence North 00 degrees 24 minutes 35 seconds East a
distance of 990.00 feet to the Point of Beginning of this description.

PARCEL B:

A portion of the Northwest one-quarter of Section 7, Township 16 South, Range 33
East, Volusia County, Florida, being more particularly described as follows: As
a point of reference, commence at a concrete monument marking the Northwest
corner of Willow Run Subdivision, Unit 2, as per map recorded September 17,
1979, in Map Book 36, Pages 16 and 17 of the Public Records of Volusia County,
Florida; thence run North 00 degrees 41 minutes 47 seconds West along a
Northerly extension of the Westerly line of said Willow Run Subdivision, Unit 2,
a distance of 230.08 feet to a point in the North line of 230.00 foot Florida
Power and Light Company right-of-way as described in instrument recorded October
5, 1973, in Official Records Book 1664, Pages 448-450, of the Public Records of
Volusia County, Florida, said point also being in the Southerly line of Pickwick
Village Mobile Home Park, an unrecorded subdivision; thence run South 89 degrees
35 minutes 24 seconds West along the North line of said Florida Power and Light
Company right-of-way, being also the Southerly line of Pickwick Village, a
distance of 1.13 feet to a concrete monument marking the Southwest corner of
said Pickwick Village; thence North 00 degrees 24 minutes 10 seconds West, a
distance of 400.00 feet to the Point of Beginning; thence North 89 degrees 45
minutes 45 seconds West, a distance of 440.02 feet to the center line of an
80.00 foot drainage ditch easement as described in instrument
<PAGE>
recorded June 28, 1966, in Official Records Book 847, Pages 429 through 444, of
the Public Records of Volusia County, Florida; thence North 00 degrees 24
minutes 10 seconds West along the center line of said drainage ditch easement, a
distance of 1250.34 feet; thence South 89 degrees 45 minutes 45 seconds East, a
distance of 440.02 feet to a point on the Westerly line of said Pickwick Village
Subdivision; thence South 00 degrees 24 minutes 10 seconds East along said
Westerly line, a distance of 1250.34 feet to the Point of Beginning.

SAID PROPERTY ALSO BEING DESCRIBED AS FOLLOWS:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East; also a portion of the West one-half of the
Northeast one-quarter and a portion of the Northwest one-quarter, all lying in
Section 7, Township 16 South, Range 33 East in Volusia County, Florida, being
more particularly described as follows: Commence at the Southwest corner of said
Section 6, Township 16 South, Range 33 East and run South 89(degrees) 35' 25"
East along the South line of the Southwest one-quarter a distance of 2635.46
feet to the Southwest corner of the Southeast one-quarter of said Section 6;
thence North 01(degrees) 17' 05" East along the West line of the Southeast
one-quarter of said Section 6 a distance of 328.72 feet to an iron pipe labeled
LS 2048 and the Point of Beginning of this description; from said Point of
Beginning, continue North 01(degrees) 17' 05" East along the West line of the
Southeast one-quarter a distance of 201.23 feet to an iron pipe labeled LS 2048;
thence South 89(degrees) 35' 25" East, 619.16 feet to an iron pipe labeled LS
2048, said point being on the Southwesterly right-of-way line of Clyde Morris
Boulevard; thence South 40(degrees) 56' 13" East along the Southwesterly
right-of-way line of said Clyde Morris Boulevard a distance of 1061.80 feet to
an iron pipe labeled LS 2048, said point being on the East line of the West
one-half of the Northeast one-quarter of the aforementioned Section 7, Township
16 South, Range 33 East; thence South 00(degrees) 34' 32" West along the East
line of the West one-half of the Northeast one-quarter of said Section 7, a
distance of 2362.20 feet to an iron pin labeled LB 707, said point being on the
North line of the 230 foot wide Florida Power and Light Company right-of-way, as
described in Official Records Book 1664, Pages 448, 449, and 450 of the Public
Records of Volusia County, Florida; thence North 89(degrees) 13' 53" West along
the North line of the 230 foot wide Florida Power and Light Company right-of-way
a distance of 1321.12 feet to an iron pipe labeled LS 2048, said point being on
the West line of the West one-half of the Northeast one-quarter of the
aforementioned Section 7; thence North 00(degrees) 23' 35" East along the West
line of the West one-half of the Northeast one-quarter a distance of 400.00 feet
to an iron pipe labeled LS 2048; thence North 89(degrees) 13' 53" West, 440.02
feet to an iron pipe labeled LS 2048, said point being the centerline of a
drainage ditch; thence North 00(degrees) 23' 35" East along said drainage ditch
centerline a distance of 1250.34 feet to an iron pipe labeled LS 2048; thence
South 89(degrees) 13' 53" East, 440.02 feet to an iron pipe labeled LS 2048,
said point being on the West line of the West one-half of the Northeast
one-quarter of the aforementioned Section 7; thence South 00(degrees) 23' 35"
West along the West line of the West one-half of the Northeast one-quarter a
distance of 12.16 feet to an iron pipe labeled LS 2048; thence South 89(degrees)
27' 21" East, 661.65 feet to an iron pipe labeled LS 2048; thence North
00(degrees) 25' 26" East, 984.46 feet to an iron pipe labeled LS 2048; thence
North 01(degrees) 14' 43" East, 328.45 feet to a nail in disk in pavement
labeled LB 707; thence North 89(degrees) 33' 59" West, 661.95 feet to the Point
of Beginning.


                                    EXHIBIT C
<PAGE>

                             APOLLO VILLAGE PROPERTY

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;

THENCE North 00(degrees) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;

THENCE South 89(degrees) 25' 45" East 65.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89(degrees) 25' 45" East 126.95 feet;

THENCE North 87(degrees) 23' 37" East 116.40 feet;

THENCE South 00(degrees) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;

THENCE South 00(degrees) 34' 44" West along the East line of said property
156.09 feet to a point on a line 500.00 feet North and parallel to the South
line of said Section 21;

THENCE North 88(degrees) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;

THENCE South 00(degrees) 27' 31" West 435.31 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE North 88(degrees) 16' 15" East along said line 51.93 feet;

THENCE North 00(degrees) 20' 35" East 127.50 feet;

THENCE North 02(degrees) 21' 45" West 308.14 feet;

THENCE North 88(degrees) 15' 20" East 445.27 feet;

THENCE North 21(degrees) 52' 10" East 195.00 feet;

THENCE South 89(degrees) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00(degrees) 20' 40" East along said West line 807.45 feet to a
point on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;

THENCE South 86(degrees) 58' 05" West along said South line and the South line
of the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;

THENCE South 00(degrees) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;

THENCE North 89(degrees) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;

THENCE South 00(degrees) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;


EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88(degrees) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;

THENCE North 00(degrees) 27' 31" East 65.05 feet to the POINT OF BEGINNING;

THENCE continuing North 00(degrees) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;

THENCE North 87(degrees) 25' 34" East 36.52 feet;

THENCE South 02(degrees) 21' 45" East 308.14 feet;


                                   EXHIBIT C
<PAGE>
THENCE South 00(degrees) 20' 35" West 127.50 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE South 88(degrees) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and


EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88(degrees) 08' 29" East (North 88(degrees) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00(degrees) 06' 45" East 669.32 feet ( North 00(degrees) 20' 40"
East 669.45, record) along said West line to the POINT OF BEGINNING;

THENCE North 89(degrees) 47' 06" West (North 89(degrees) 39' 20" West, record)
115.00 feet;

THENCE North 16(degrees) 08' 00" East 325.00 feet;

THENCE North 52(degrees) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;

THENCE South 00(degrees) 06' 45" West (South 00(degrees) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and


EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88(degrees) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;

THENCE North 00(degrees) 20' 35" East 65.04 feet to a point on a line parallel
to and 65.00 feet North of the South line of said Section 21;

THENCE continuing North 00(degrees) 20' 35" East 127.50 feet;

THENCE North 02(degrees) 21' 45" West 308.14 feet;

THENCE North 88(degrees) 15' 20" East 445.27 feet;

THENCE North 21(degrees) 52' 10" East 195.00 feet;

THENCE South 89(degrees) 39' 20" East 21.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89(degrees) 39' 20" East 55.00 feet;

THENCE North 00(degrees) 20' 40" East 40.00 feet;

THENCE North 89(degrees) 39' 20" West 55.00 feet;

THENCE South 00(degrees) 20' 40" West 40.00 feet to the POINT OF BEGINNING.


                                   EXHIBIT C
<PAGE>
                            CASA DEL SOL III PROPERTY


PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;

THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;

THENCE North 01(degrees) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;

THENCE West along said North line 627.98 feet;

THENCE North 45(degrees) 44' 20" East 28.64 feet;

THENCE North 01(degrees) 28' 40" East 307.70 feet;

THENCE North 45(degrees) 00' 00" East 149.61 feet;

THENCE North 32(degrees) 31' 59" West 76.22 feet;

THENCE North 01(degrees) 38' 30" East 420.00 feet;

THENCE North 89(degrees) 57' 50" East 11.71 feet;

THENCE North 01(degrees) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80(degrees) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23(degrees) 03'
59";

THENCE Northeasterly along said curve 575.86 feet;

THENCE North 01(degrees) 38' 30" East 84.00 feet;

THENCE North 89(degrees) 57' 50" East 738.38 feet;

THENCE South 01(degrees) 38' 30" West 1,407.21 feet;

THENCE West 200.00 feet;

THENCE South 01(degrees) 38' 30" West 300.11 feet to the TRUE POINT OF
BEGINNING.


PARCEL NO. 2:


A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;

THENCE West 1,326.54 feet along the South line of said Section 24;

THENCE North 01(degrees) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;

THENCE North 01(degrees) 38' 30" East 306.11 feet;

THENCE East 206.00 feet to the point of termination; and


                                   EXHIBIT C
<PAGE>
BEGINNING at a point which bears North 01(degrees) 38' 30" East 1,757.00 feet
and South 89(degrees) 57' 50" West 1,120.55 feet from the Southeast corner of
said Section 24;

THENCE South 89(degrees) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;


EXCEPT any portion lying within Parcel No. 1.


PARCEL NO. 3:


A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:


BEGINNING at a point which bears North 01(degrees) 38' 30" East 1,760.50 feet
and South 89(degrees) 57' 50" West 55.00 feet from the Southeast corner of
Section 24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona;

THENCE South 89(degrees) 57' 50" West 1,833.37 feet to the point of termination;


EXCEPT any portion lying within Parcel No. 1.


PARCEL NO. 4:


A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:


A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:


COMMENCING at the South quarter corner of Section 24;

THENCE North 01(degrees) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;

THENCE North 89(degrees) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;

THENCE continuing North 89(degrees) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;

THENCE South 01(degrees) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76(degrees) 55' 57" West;

THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19(degrees) 06' 47" an arc length of 477.16
feet;


                                   EXHIBIT C
<PAGE>
THENCE South 89(degrees) 55' 44" West to a point 6.00 feet West of and parallel
to said Easterly and Westerly boundary lines to the beginning of a curve concave
Easterly and having a radius of 1,436.40 feet;

THENCE Northerly along said curve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19(degrees) 03'
50" an arc length of 477.93 feet;

THENCE North 01(degrees) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.


                                   EXHIBIT C



<PAGE>
Recording requested by and when recorded return to:

WELLS FARGO BANK, N.A.
Commercial Mortgage Origination
MAC #A0194-093
45 Fremont Street, 9th Floor
San Francisco, California 94105

Attention:  CMO Loan Admin.
Loan No.: 31-0900553R
Property Name:  Pickwick Village

Prepared by:

Lee M. Smolen
Sidley Austin Brown & Wood
10 South Dearborn
Chicago, Illinois 60603





                MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND
              LEASES AND SECURITY AGREEMENT (AND FIXTURE FILING)


                                                                   July 31, 2001

THIS MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(AND FIXTURE FILING) (the "Mortgage") is made and entered into by and among MHC
STAGECOACH, L.L.C., a Delaware limited liability company ("Mortgagor"), having
an address at c/o Manufactured Home Communities, Inc., Two North Riverside
Plaza, Suite 800, Chicago, Illinois 60606, and WELLS FARGO NATIONAL BANK,
NATIONAL ASSOCIATION ("Lender" or "Mortgagee").


THIS MORTGAGE EVIDENCES A MULTI-STATE LOAN WHICH IS SECURED BY REAL PROPERTY
LOCATED OUTSIDE THE STATE OF FLORIDA AND REAL PROPERTY LOCATED IN BREVARD,
VOLUSIA, AND MANATEE COUNTIES, FLORIDA. FLORIDA DOCUMENTARY STAMP TAX IN THE
AMOUNT OF $61,250.00 AND FLORIDA NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX
IN THE AMOUNT OF $35,000.00 ARE BEING PAID UPON RECORDATION OF ONE OF THE
FLORIDA MORTGAGES IN THE PUBLIC RECORDS OF VOLUSIA COUNTY, FLORIDA. ATTACHED
HERETO AS EXHIBIT B IS A DESCRIPTION OF THE CALCULATION OF LIABILITY FOR
DOCUMENTARY STAMP TAX AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX.


                                     Page 1
<PAGE>
                               R E C I T A L S


A. MHC STAGECOACH, L.L.C., a Delaware limited liability company ("Borrower")
   proposes to borrow from Mortgagee, and Mortgagee proposes to lend to Borrower
   the principal sum of FIFTY MILLION AND NO/100THS DOLLARS ($50,000,000.00)
   ("Loan"). The Loan is evidenced by a promissory note ("Note") executed by
   Borrower, dated the date of this Mortgage, payable to the order of Mortgagee
   in the principal amount of the Loan. The maturity date of the Loan is
   September 1, 2011.

B. The loan documents include this Mortgage, the Note and the other documents
   described in the Note as Loan Documents ("Loan Documents").


                             ARTICLE I. MORTGAGE

            1.1 GRANT. For the purposes of and upon the terms and conditions of
this Mortgage, Mortgagor irrevocably mortgages, grants, bargains, sells,
conveys, transfers, pledges, sets over and assigns, and grants a security
interest to Mortgagee, its successors and assign, with right of entry and
possession, all of Mortgagor's right, title and interest, whether now owned or
hereafter acquired, in or to all of the following:

            (a) That real property ("Land") located in Port Orange, county of
Volusia, state of Florida, and more particularly described on Exhibit A attached
hereto;

            (b) All appurtenances, easements, rights of way, water and water
rights, pumps, pipes, flumes and ditches and ditch rights, water stock, ditch
and/or reservoir stock or interests, royalties, development rights and credits,
air rights, minerals, oil rights, all sewer capacity rights, and gas rights, now
or later used or useful in connection with, appurtenant to or related to the
Land;

            (c) All buildings, structures, facilities, other improvements and
fixtures now or hereafter located on the Land;

            (d) All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and substitutions
therefor used in the operation or occupancy of the Land, it being intended by
the parties that all such items shall be conclusively considered to be a part of
the Land, whether or not attached or affixed to the Land;

            (e) All land lying in the right-of-way of any street, road, avenue,
alley or right-of-way opened, proposed or vacated, and all sidewalks, strips and
gores of land adjacent to or used in connection with the Land;

            (f) All additions and accretions to the property described above;

            (g) All licenses, authorizations, certificates, variances, consents,
approvals and other permits now or hereafter pertaining to the Land and all
estate, right, title and interest of Mortgagor in, to, under or derived from all
tradenames or business names relating to the Land or the present or future
development, construction, operation or use of the Land; and


                                     Page 2
<PAGE>
            (h) All proceeds of any of the foregoing.

All of the property described above is hereinafter collectively defined as the
"Property". The listing of specific rights or property shall not be interpreted
as a limitation of general terms.


                         ARTICLE II. OBLIGATIONS SECURED

            2.1 OBLIGATIONS SECURED. Mortgagor makes the foregoing grant and
assignment for the purpose of securing the following obligations ("Secured
Obligations"):

            (a) Full and punctual payment to Mortgagee of all sums at any time
owing under the Note;

            (b) Payment and performance of all covenants and obligations of
Mortgagor under this Mortgage, including, without limitation, indemnification
obligations and advances made to protect the Property;

            (c) Payment and performance of all additional covenants and
obligations of Borrower and Mortgagor under the Loan Documents;

            (d) Payment and performance of all covenants and obligations, if
any, which any rider attached as an exhibit to this Mortgage recites are secured
hereby;

            (e) Payment and performance of all future advances and other
obligations that the then record owner of all or part of the Property may agree
to pay and/or perform (whether as principal, surety or guarantor) for the
benefit of Mortgagee, when the obligation is evidenced by a writing which
recites that it is secured by this Mortgage;

            (f) All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges and loan fees;
and

            (g) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without limitation:
(i) modifications of the required principal payment dates or interest payment
dates or both, as the case may be, deferring or accelerating payment dates
wholly or partly; and (ii) modifications, extensions or renewals at a different
rate of interest whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

            2.2 FUTURE ADVANCES. This Mortgage is given to secure not only the
Secured Obligations, but also such future advances, whether such advances are
obligatory or are to be made at the option of Mortgagee or the holder hereof, or
otherwise as are made within twenty years from the date hereof, to the same
extent as if such future advances were made on the date of the execution of this
Mortgage. The total amount of Secured Obligations that may be so secured by this
Mortgage may be increased or decreased from time to time, but the total unpaid
balance so secured at any one time shall not exceed twice the face amount of the
Note, plus interest thereon, and any disbursements made under this Mortgage for
the payment of impositions, taxes, assessments, levies, insurance, or otherwise
with interest on such disbursements as provided for


                                     Page 3
<PAGE>
herein, plus any increases in the principal balance as the result of negative
amortization or deferred interest, if any. It is agreed that any additional sum
or sums advanced by Mortgagee pursuant to the terms hereof shall be equally
secured with and have the same priority as the original Secured Obligations and
shall be subject to all of the terms, provisions and conditions of this
Mortgage, whether or not such additional loans or advances are evidenced by
other promissory notes or other guaranties of Mortgagor and whether or not
identified by a recital that it or they are secured by this Mortgage. It is
further agreed that any additional promissory note or guaranty or promissory
notes or guaranties executed and delivered pursuant to this paragraph shall
automatically be deemed to be included in the term "Note" wherever it appears in
the context of this Mortgage. Without the prior written consent of Mortgagee,
which Mortgagee may grant or withhold in its sole discretion, Mortgagor shall
not file for record any notice limiting the maximum principal amount that may be
secured by this Mortgage to a sum less than the maximum principal amount set
forth in this paragraph.

            2.3 OBLIGATIONS. The term "obligations" is used herein in its
broadest and most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges and loan
fees at any time accruing or assessed on any of the Secured Obligations.

            2.4 MATURITY DATE. The maturity date of the Note is September 1,
2011.

            2.5 INCORPORATION. All terms and conditions of the documents which
evidence any of the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the Property shall
be deemed to have notice of the terms of the Secured Obligations and to have
notice that the rate of interest on one or more Secured Obligations may vary
from time to time.


             ARTICLE III. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES

            3.1 ASSIGNMENT. Mortgagor irrevocably assigns to Mortgagee all of
Mortgagor's right, title and interest in, to and under: (a) all present and
future leases of the Property or any portion thereof, all licenses and
agreements relating to the management, leasing or operation of the Property or
any portion thereof, and all other agreements of any kind relating to the use or
occupancy of the Property or any portion thereof, whether such leases, licenses
and agreements are now existing or entered into after the date hereof
("Leases"); and (b) the rents, issues, deposits and profits of the Property,
including, without limitation, all amounts payable and all rights and benefits
accruing to Mortgagor under the Leases ("Payments"). The term "Leases" shall
also include all guarantees of and security for the tenants' performance
thereunder, and all amendments, extensions, renewals or modifications thereto
which are permitted hereunder. This is a present and absolute assignment, not an
assignment for security purposes only, and Mortgagee's right to the Leases and
Payments is not contingent upon, and may be exercised without possession of, the
Property.

            3.2 GRANT OF LICENSE. Notwithstanding the terms contained in Section
3.1, Mortgagee confers upon Mortgagor a revocable license ("License") to collect
and retain the Payments as they become due and payable, until the occurrence of
a Default (as hereinafter defined). Upon a Default, the License shall be
automatically revoked and Mortgagee may collect


                                     Page 4
<PAGE>
and apply the Payments pursuant to the terms hereof without notice and without
taking possession of the Property. Upon Mortgagor's cure of the Default,
Mortgagee shall re-confer upon Mortgagor a revocable license to collect and
retain the Payments as they become due and payable, until the occurrence of a
Default. All Payments thereafter collected by Mortgagor shall be held by
Mortgagor as trustee under a constructive trust for the benefit of Mortgagee.
Mortgagor hereby irrevocably authorizes and directs the tenants under the
Leases, upon notice of a Default from Mortgagee, to rely upon and comply with
any notice or demand by Mortgagee for the payment to Mortgagee of any rental or
other sums which may at any time become due under the Leases, or for the
performance of any of the tenants' undertakings under the Leases, and the
tenants shall have no right or duty to inquire as to whether any Default has
actually occurred or is then existing. Mortgagor hereby relieves the tenants
from any liability to Mortgagor by reason of relying upon and complying with any
such notice or demand by Mortgagee. Mortgagee may apply, in its sole discretion,
any Payments so collected by Mortgagee against any Secured Obligation or any
other obligation of Borrower, Mortgagor or any other person or entity, under any
document or instrument related to or executed in connection with the Loan
Documents, whether existing on the date hereof or hereafter arising. Collection
of any Payments by Mortgagee shall not cure or waive any Default or notice of
Default or invalidate any acts done pursuant to such notice.

            3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall
not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or for
performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the tenants
under any of the Leases or by any other parties; for any dangerous or defective
condition of the Property; or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee, invitee or other person; or (d) responsible for or
impose upon Mortgagee any duty to produce rents or profits. Mortgagee shall not
directly or indirectly be liable to Mortgagor or any other person as a
consequence of: (e) the exercise of or failure to exercise any of the rights,
remedies or powers granted to Mortgagee hereunder; or (f) the failure or refusal
of Mortgagee to perform or discharge any obligation, duty or liability of
Mortgagor arising under the Leases.

            3.4 COVENANTS.

            (a) ALL LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense:

            (i) perform all obligations of the landlord under the Leases and use
reasonable efforts to enforce performance by the tenants of all obligations of
the tenants under the Leases;

            (ii) use reasonable efforts to keep the Property leased at all times
to tenants whom Mortgagor reasonably and in good faith believes are creditworthy
at rents not less than the fair market rental value (including, but not limited
to, free or discounted rents to the extent the market so requires);

            (iii) promptly upon Mortgagee's request, deliver to Mortgagee a copy
of each requested Lease and all amendments thereto and waivers thereof; and


                                     Page 5
<PAGE>
            (iv) promptly upon Mortgagee's request, execute and record any
additional assignments of landlord's interest under any Lease to Mortgagee and
specific subordinations of any Lease to this Mortgage, in form and substance
satisfactory to Mortgagee.

Unless consented to in writing by Mortgagee or otherwise permitted under any
other provision of the Loan Documents, Mortgagor shall not:

            (v) grant any tenant under any Lease any option, right of first
refusal or other right to purchase all or any portion of the Property under any
circumstances;

            (vi)  grant any tenant under any Lease any right to prepay rent
more than 1 month in advance;

            (vii) except upon Mortgagee's request, execute any assignment of
landlord's interest in any Lease; or

            (viii) collect rent or other sums due under any Lease in advance,
other than to collect rent 1 month in advance of the time when it becomes due.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

Mortgagor shall deposit with Mortgagee any sums received by Mortgagor in
consideration of any termination, modification or amendment of any Lease or any
release or discharge of any tenant under any Lease from any obligation
thereunder and any such sums received by Mortgagor shall be held in trust by
Mortgagor for such purpose. Notwithstanding the foregoing, so long as no Default
exists, the portion of any such sum received by Mortgagor with respect to any
Lease which is less than $50,000 shall be payable to Mortgagor. All such sums
received by Mortgagee with respect to any Lease shall be deemed "Impounds" (as
defined in Section 6.12) and shall be deposited by Mortgagee into a pledged
account in accordance with Section 6.12. If no Default exists, Mortgagee shall
release such Impounds to Mortgagor from time to time as necessary to pay or
reimburse Mortgagor for such tenant improvements, brokerage commissions and
other leasing costs as may be required to re-tenant the affected space;
provided, however, Mortgagee shall have received and approved each of the
following for each tenant for which such costs were incurred; (1) Mortgagor's
written request for such release, including the name of the tenant, the location
and net rentable area of the space and a description and cost breakdown of the
tenant improvements or other leasing costs covered by the request; (2)
Mortgagor's certification that any tenant improvements have been completed
lien-free and in a workmanlike manner; (3) a fully executed Lease, or extension
or renewal of the current Lease; (4) an estoppel certificate executed by the
tenant including its acknowledgement that all tenant improvements have been
satisfactorily completed; and (5) such other information with respect to such
costs as Mortgagee may require. Following the re-tenanting of all affected space
(including, without limitation, the completion of all tenant improvements), and
provided no Default exists, Mortgagee shall release any remaining such Impounds
relating to the affected space to Mortgagor. Mortgagor shall construct all
tenant improvements in a workmanlike manner and in accordance with all
applicable laws, ordinances, rules and regulations.

            (b) MAJOR LEASES. Mortgagor shall, at Mortgagor's sole cost and
expense, give Mortgagee prompt written notice of any material default by
landlord or tenant under any


                                     Page 6
<PAGE>
Major Lease (as defined below). Unless consented to in writing by Mortgagee or
otherwise permitted under any other provision of the Loan Documents, Mortgagor
shall not:

            (i) enter into any Major Lease which (aa) is not on fair market
terms (which terms may include free or discounted rent to the extent the market
so requires); (bb) does not contain a provision requiring the tenant to execute
and deliver to the landlord an estoppel certificate in form and substance
satisfactory to the landlord promptly upon the landlord's request; or (cc)
allows the tenant to assign or sublet the premises without the landlord's
consent;

            (ii) materially reduce any rent or other sums due from the tenant
under any Major Lease;

            (iii) terminate or materially modify or amend any Major Lease; or

            (iv) release or discharge the tenant or any guarantor under any
Major Lease from any material obligation thereunder.

Any such attempted action in violation of the provisions of this Section shall
be null and void.

"Major Lease", as used herein, shall mean any Lease, which is, at any time: (1)
a Lease of more than 20% of the total rentable area of the Property, as
reasonably determined by Mortgagee; or (2) a Lease which generates a gross base
monthly rent exceeding 20% of the total gross base monthly rent generated by all
Leases (excluding all Leases under which the tenant is then in default), as
reasonably determined by Mortgagee. Mortgagor's obligations with respect to
Major Leases shall be governed by the provisions of Section 3.40 as well as by
the provisions of this Section.

            (c) FAILURE TO DENY REQUEST Mortgagee's failure to deny any written
request by Mortgagor for Mortgagee's consent under the provisions of Sections
3.4(a) or 3.4(b) within 10 Business Days after Mortgagee's receipt of such
request (and all documents and information reasonably related thereto) shall be
deemed to constitute Mortgagee's consent to such request.

            3.5 RIGHT OF SUBORDINATION. Mortgagee may at any time and from time
to time by specific written instrument intended for the purpose unilaterally
subordinate the lien of this Mortgage to any Lease, without joinder or consent
of, or notice to, Mortgagor, any tenant or any other person. Notice is hereby
given to each tenant under a Lease of such right to subordinate. No
subordination referred to in this Section shall constitute a subordination to
any lien or other encumbrance, whenever arising, or improve the right of any
junior lienholder. Nothing herein shall be construed as subordinating this
Mortgage to any Lease.


              ARTICLE IV. SECURITY AGREEMENT AND FIXTURE FILING

            4.1 SECURITY INTEREST. Mortgagor grants and assigns to Mortgagee a
security interest to secure payment and performance of all of the Secured
Obligations, in all of Mortgagor's right, title and interest in and to the
following described personal property in which Mortgagor now or at any time
hereafter has any interest ("Collateral"):


                                     Page 7
<PAGE>
      All goods, building and other materials, supplies, work in process,
      equipment, machinery, fixtures, furniture, furnishings, signs and other
      personal property, wherever situated, which are or are to be incorporated
      into, used in connection with or appropriated for use on the Property; all
      rents, issues, deposits and profits of the Property (to the extent, if
      any, they are not subject to the Absolute Assignment of Rents and Leases);
      all inventory, accounts, cash receipts, deposit accounts, impounds,
      accounts receivable, contract rights, general intangibles, software,
      chattel paper, instruments, documents, promissory notes, drafts, letters
      of credit, letter of credit rights, supporting obligations, insurance
      policies, insurance and condemnation awards and proceeds, any other rights
      to the payment of money, trade names, trademarks and service marks arising
      from or related to the Property or any business now or hereafter conducted
      thereon by Mortgagor; all permits, consents, approvals, licenses,
      authorizations and other rights granted by, given by or obtained from, any
      governmental entity with respect to the Property; all deposits or other
      security now or hereafter made with or given to utility companies by
      Mortgagor with respect to the Property; all advance payments of insurance
      premiums made by Mortgagor with respect to the Property; all plans,
      drawings and specifications relating to the Property; all loan funds held
      by Mortgagee, whether or not disbursed; all funds deposited with Mortgagee
      pursuant to any Loan Document, all reserves, deferred payments, deposits,
      accounts, refunds, cost savings and payments of any kind related to the
      Property or any portion thereof, including, without limitation, all
      "Impounds" as defined herein; together with all replacements and proceeds
      of, and additions and accessions to, any of the foregoing, and all books,
      records and files relating to any of the foregoing.

            As to all of the above described personal property which is or which
hereafter becomes a "fixture" under the Florida Uniform Commercial Code (the
"UCC"), this Mortgage constitutes a fixture filing under Florida Statutes
Section 679.313 and 679.402, as amended and recodified from time to time, this
Mortgage shall constitute a fixture filing recorded in the real estate records.
Notwithstanding the foregoing, nothing herein shall be deemed to create any lien
or interest in favor of Mortgagee under this Mortgage in any such Collateral
which is not a fixture, and the purpose of this Article IV is to create a
fixture filing under Florida Statutes Section 679.313 and 679.402, as amended or
recodified from time to time.

            4.2 COVENANTS. Mortgagor agrees: (a) to execute and deliver such
documents as Mortgagee reasonably deems necessary to create, perfect and
continue the security interests contemplated hereby; (b) not to change its name,
and, as applicable, its chief executive offices, its principal residence or the
jurisdiction in which it is organized without giving Mortgagee at least 30 days'
prior written notice thereof; and (c) to cooperate with Mortgagee in perfecting
all security interests granted herein and in obtaining such agreements from
third parties as Mortgagee deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of Mortgagee's rights
hereunder.

            4.3 RIGHTS OF MORTGAGEE. In addition to Mortgagee's rights as a
"Secured Party" under the UCC, Mortgagee may, but shall not be obligated to, at
any time without notice and at the expense of Mortgagor: (a) give notice to any
person of Mortgagee's rights hereunder and enforce such rights at law or in
equity; (b) insure, protect, defend and


                                     Page 8
<PAGE>
preserve the Collateral or any rights or interests of Mortgagee therein; and (c)
inspect the Collateral during normal business hours upon reasonable prior
written notice, provided, however, that such notice shall not be required in the
event of an emergency. Notwithstanding the above, in no event shall Mortgagee be
deemed to have accepted any property other than cash in satisfaction of any
obligation of Mortgagor to Mortgagee unless Mortgagee shall make an express
written election of said remedy under the UCC or other applicable law.

            4.4 ADDITIONAL RIGHTS OF MORTGAGEE UPON DEFAULT. Upon the occurrence
of a Default, then in addition to all of Mortgagee's rights as a "Secured Party"
under the UCC or otherwise at law:

            (a) DISPOSITION OF COLLATERAL. Mortgagee may: (i) upon written
notice, require Mortgagor to assemble the Collateral and make it available to
Mortgagee at a place reasonably designated by Mortgagee; (ii) without prior
notice (to the extent permitted by law), enter upon the Property or other place
where the Collateral may be located and take possession of, collect, sell,
lease, license and otherwise dispose of the Collateral, and store the same at
locations acceptable to Mortgagee at Mortgagor's expense; or (iii) sell, assign
and deliver the Collateral at any place or in any lawful manner and bid and
become purchaser at any such sales; and

            (b) OTHER RIGHTS. Mortgagee may, for the account of Mortgagor and at
Mortgagor's expense: (i) operate, use, consume, sell, lease, license or
otherwise dispose of the Collateral as Mortgagee reasonably deems appropriate
for the purpose of performing any or all of the Secured Obligations; (ii) enter
into any agreement, compromise or settlement including insurance claims, which
Mortgagee may reasonably deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title for, and receive,
enforce and collect by legal action or otherwise, all indebtedness and
obligations now or hereafter owing to Mortgagor in connection with or on account
of the Collateral.

            Mortgagor acknowledges and agrees that a disposition of the
Collateral in accordance with Mortgagee's rights and remedies as heretofore
provided is a disposition thereof in a commercially reasonable manner and that 5
Business Days prior notice of such disposition is commercially reasonable
notice. Mortgagee shall have no obligation to process or prepare the Collateral
for sale or other disposition. In disposing of the Collateral, Mortgagee may
disclaim all warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any sale or other disposition of the Collateral may be applied by
Mortgagee first to the reasonable expenses incurred by Mortgagee in connection
therewith, including, without limitation, reasonable attorneys' fees and
disbursements, and then to the payment of the Secured Obligations, in such order
of application as Mortgagee may from time to time elect..

            4.5 POWER OF ATTORNEY. Mortgagor hereby irrevocably appoints
Mortgagee as Mortgagor's attorney-in-fact (such agency being coupled with an
interest), and as such attorney-in-fact, Mortgagee may, without the obligation
to do so, in Mortgagee's name or in the name of Mortgagor, prepare, execute,
file and record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve any of
Mortgagee's security interests and rights in or to the Collateral, and upon a
Default, take


                                     Page 9
<PAGE>
any other action required of Mortgagor; provided, however, that Mortgagee as
such attorney-in-fact shall be accountable only for such funds as are actually
received by Mortgagee.


                  ARTICLE V. REPRESENTATIONS AND WARRANTIES

            5.1 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and
warrants to Mortgagee that, to Mortgagor's current actual knowledge after
reasonable investigation and inquiry, the following statements are true and
correct as of the Effective Date:

            (a) LEGAL STATUS. Mortgagor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in which Mortgagor
and Borrower are organized. Mortgagor and Borrower are qualified or licensed to
do business in all jurisdictions in which such qualification or licensing is
required.

            (b) PERMITS. Mortgagor and Borrower possess all permits, franchises
and licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, necessary to enable Mortgagor and Borrower to conduct
the business(es) in which Mortgagor and Borrower are now engaged in compliance
with applicable law.

            (c) AUTHORIZATION AND VALIDITY. The execution and delivery of the
Loan Documents have been duly authorized and the Loan Documents constitute valid
and binding obligations of Mortgagor, Borrower or the party which executed the
same, enforceable in accordance with their respective terms, except as such
enforcement may be limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights, or by the application of rules
of equity.

            (d) VIOLATIONS. The execution, delivery and performance by Mortgagor
and Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or result in any breach or default under any contract,
obligation, indenture or other instrument to which Mortgagor or Borrower is a
party or by which Mortgagor or Borrower is bound.

            (e) LITIGATION. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental authority, court or
administrative agency which may adversely affect the financial condition or
operations of Mortgagor or Borrower other than those previously disclosed in
writing by Mortgagor or Borrower to Mortgagee.

            (f) FINANCIAL STATEMENTS. The financial statements of Mortgagor and
Borrower, of each general partner (if Mortgagor or Borrower is a partnership),
of each member (if Mortgagor or Borrower is a limited liability company) and of
each guarantor, if any, previously delivered by Mortgagor or Borrower to
Mortgagee: (i) are materially complete and correct; (ii) present fairly the
financial condition of such party; and (iii) have been prepared in accordance
with the same accounting standard used by Mortgagor or Borrower to prepare the
financial statements delivered to and approved by Mortgagee in connection with
the making of the Loan, or other accounting standards approved by Mortgagee.
Since the date of such financial statements, there has been no material adverse
change in such financial condition, nor have any assets or properties reflected
on such financial statements been sold, transferred, assigned, mortgaged,


                                    Page 10
<PAGE>
pledged or encumbered except as previously disclosed in writing by Mortgagor or
Borrower to Mortgagee and approved in writing by Mortgagee.

            (g) REPORTS. All reports, documents, instruments and information
delivered to Mortgagee in connection with the Loan: (i) are correct in all
material respects and sufficiently complete to give Mortgagee accurate knowledge
of their subject matter; and (ii) do not contain any misrepresentation of a
material fact or omission of a material fact which omission makes the provided
information misleading.

            (h)         INCOME TAXES.  There are no material pending
assessments or adjustments of Mortgagor's or Borrower's income tax payable
with respect to any year.

            (i) SUBORDINATION. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would require the
subordination in right of payment of any of Borrower's obligations under the
Note to an obligation owed to another party.

            (j) TITLE. Mortgagor lawfully holds and possesses fee simple title
to the Property, without limitation on the right to encumber same. This Mortgage
is a first lien on the Property prior and superior to all other liens and
encumbrances on the Property except: (i) liens for real estate taxes and
assessments not yet due and payable; (ii) senior exceptions previously approved
by Mortgagee and shown in the title insurance policy insuring the lien of this
Mortgage; and (iii) other matters, if any, previously disclosed to Mortgagee by
Mortgagor in a writing specifically referring to this representation and
warranty.

            (k) MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to any such liens) affecting the
Property which are or may be prior to or equal to the lien of this Mortgage,
other than those (if any) previously approved by Mortgagee and shown in the
title insurance policy insuring the lien of this Mortgage.

            (l) ENCROACHMENTS. Except as shown in the survey, if any, previously
delivered to Mortgagee, none of the buildings or other improvements which were
included for the purpose of determining the appraised value of the Property lies
outside of the boundaries or building restriction lines of the Property and no
buildings or other improvements located on adjoining properties encroach upon
the Property.

            (m) LEASES. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. Except as disclosed on a
rent roll provided to Mortgagee prior to the date hereof, no material breach or
default by any party, or event which would constitute a material breach or
default by any party after notice or the passage of time, or both, exists under
any existing Lease. None of the landlord's interests under any of the Leases,
including, but not limited to, rents, additional rents, charges, issues or
profits, has been transferred or assigned. Except as disclosed on a rent roll
provided to Mortgagee prior to the date hereof, no rent or other payment under
any existing Lease has been paid by any tenant for more than 1 month in advance.

            (n) COLLATERAL. Mortgagor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if any, previously
disclosed to Mortgagee by Mortgagor in writing specifically referring to this
representation and warranty. Mortgagor's chief


                                    Page 11
<PAGE>
executive office (or principal residence, if applicable) is located at the
address shown on page one of this Mortgage. Mortgagor is an organization
organized solely under the laws of the State of Delaware. All organizational
documents of Mortgagor delivered to Mortgagee are complete and accurate in every
respect. Mortgagor's legal name is exactly as shown on page one of this
Mortgage.

            (o) CONDITION OF PROPERTY. Except as shown in the property condition
survey or other engineering reports, if any, previously delivered to or obtained
by Mortgagee, the Property is in good condition and repair and is free from any
damage that would materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.

            (p) HAZARDOUS MATERIALS. Except as shown in the environmental
assessment report(s), if any, previously delivered to or obtained by Mortgagee,
the Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, release, threatened release, discharge,
disposal, transportation or presence of Hazardous Materials (as hereinafter
defined) in violation of Hazardous Materials Laws (as hereinafter defined)
except as otherwise previously disclosed in writing by Mortgagor to Mortgagee.

            (q)         HAZARDOUS MATERIALS LAWS.  The Property complies with
all Hazardous Materials Laws.

            (r)         HAZARDOUS MATERIALS CLAIMS.  There are no pending or
threatened Hazardous Materials Claims (as hereinafter defined).

            (s)         WETLANDS.  No part of the Property consists of or is
classified as wetlands, tidelands or swamp and overflow lands.

            (t)         COMPLIANCE WITH LAWS.  All federal, state and local
laws, rules and regulations applicable to the Property, including, without
limitation, all zoning and building requirements  and all requirements of the
Americans With Disabilities Act of 1990, as amended from time to time (42 U.
S. C. Section 12101 et seq.) have been satisfied or complied with.  Mortgagor
is in possession of all certificates of occupancy and all other licenses,
permits and other authorizations required by applicable law for the existing
use of the Property.  All such certificates of occupancy and other  licenses,
permits and authorizations are valid and in full force and effect.

            (u) PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, and ground
rents, if any, which previously became due and owing in respect of the Property
have been paid.

            (v)         CONDEMNATION.  There is no proceeding pending or
threatened for the total or partial condemnation of the Property.

            (w) HOMESTEAD. There is no homestead or other exemption available to
Mortgagor which would materially interfere with the right to sell the Property
or the right to foreclose this Mortgage.

            (x) SOLVENCY. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or defraud any
present or future creditors


                                    Page 12
<PAGE>
of Mortgagor, and Mortgagor, on the Effective Date, will have received fair and
reasonably equivalent value in good faith for the grant of the liens or security
interests effected by the Loan Documents. On the Effective Date, Mortgagor will
be solvent and will not be rendered insolvent by the transactions contemplated
by the Loan Documents. Mortgagor is able to pay its debts as they become due.

            (y) SEPARATE TAX PARCEL(S). The Property is assessed for real estate
tax purposes as one or more wholly independent tax parcels, separate from any
other real property, and no other real property is assessed and taxed together
with the Property or any portion thereof.

            5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS
(LEVEL V SPE). Mortgagor hereby represents, warrants and covenants to Mortgagee
that with respect to both Mortgagor and MHC-QRS STAGECOACH, INC., a Delaware
corporation, the managing member of Mortgagor:

      (a) each such entity was organized solely for the purpose of (i) owning
the Properties (as defined in the Note); (ii) acting as a general partner of a
limited partnership which owns the Properties; or (iii) acting as a managing
member of a limited liability company which owns the Properties;

      (b) each such entity has not engaged and will not engage in any business
unrelated to (i) the ownership of the Properties; (ii) acting as general partner
of a limited partnership which owns the Properties; or (iii) acting as a
managing member of a limited liability company which owns the Properties;

      (c) each such entity has not had and will not have any assets other than
the Properties (and personal property incidental to the ownership and operation
of the Properties) or its partnership or membership interest in the limited
partnership or limited liability company which owns the Properties, as
applicable;

      (d) each such entity has not and will not engage in, seek or consent to
any dissolution, winding up, liquidation, consolidation, merger, asset sale,
transfer of partnership or membership interest, or amendment of its articles of
incorporation, articles of organization, certificate of formation, operating
agreement or limited partnership agreement, as applicable;

      (e) if any such entity is a limited partnership, all of its general
partners are corporations that satisfy the requirements set forth in this
Section 5.2;

      (f) if any such entity is a limited liability company, it has at least one
managing member that is a corporation that satisfies the requirements set forth
in this Section 5.2;

      (g) each such entity, without the unanimous consent of all of its general
partners, directors or members, as applicable, shall not file or consent to the
filing of any bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to itself or any other entity in which it
has a direct or indirect legal or beneficial ownership interest;

      (h) each such entity has no indebtedness (and will have no indebtedness)
other than (i) the Loan (to the extent it is liable under the terms of the Loan
Documents); and (ii) unsecured


                                    Page 13
<PAGE>
trade debt not to exceed $1,000,000 in the aggregate with respect to Mortgagor
or $10,000 in the aggregate with respect to its managing member, which is not
evidenced by a note and is incurred in the ordinary course of its business in
connection with owning, operating and maintaining the Property (or its interest
in Mortgagor, as applicable) and is paid within thirty (30) days from the date
incurred;

      (i) each such entity has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;

      (j) each such entity has maintained and will maintain its accounts, books
and records separate from any other person or entity;

      (k) each such entity has maintained and will maintain its books, records,
resolutions and agreements as official records;

      (l) each such entity (i) has not commingled and will not commingle its
funds or assets with those of any other entity; and (ii) has held and will hold
its assets in its own name;

      (m) each such entity has conducted and will conduct its business in its
own name or in a registered trade name;

      (n) each such entity has maintained and will maintain its accounting
records and other entity documents separate from any other person or entity;

      (o) each such entity has prepared and will prepare separate tax returns
and financial statements, or if part of a consolidated group, is shown as a
separate member of such group;

      (p) each such entity has paid and will pay its own liabilities and
expenses out of its own funds and assets;

      (q) each such entity has held and will hold regular meetings, as
appropriate, to conduct its business and has observed and will observe all
corporate, partnership or limited liability company formalities and record
keeping, as applicable;

      (r) each such entity has not assumed or guaranteed and will not assume or
guarantee or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity;

      (s) each such entity has not acquired and will not acquire obligations or
securities of its partners, members or shareholders;

      (t) each such entity has allocated and will allocate fairly and reasonably
the costs associated with common employees and any overhead for shared office
space and each such entity has used and will use separate stationery, invoices
and checks under its own name or under its registered trade name;

      (u)   each such entity has not pledged and will not pledge its assets
for the benefit of any other person or entity;


                                    Page 14
<PAGE>
      (v) each such entity has held out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its own
name or under its registered trade name and not as a division or part of any
other person or entity;

      (w) each such entity has not made and will not make loans to any person or
entity;

      (x) each such entity has not identified and will not identify its
partners, members or shareholders, or any affiliates of any of the foregoing, as
a division or part of it;

      (y) each such entity has not entered into and will not enter into or be a
party to, any transaction with its partners, members, shareholders, or any
affiliates of any of the foregoing, except in the ordinary course of its
business pursuant to written agreements and on terms which are intrinsically
fair and are no less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;

      (z) if any such entity is a corporation, the directors of such entity
shall consider the interests of the creditors of such entity in connection with
all corporate action;

      (aa) each such entity has paid and will pay the salaries of its own
employees and has maintained and will maintain a sufficient number of employees
in light of its contemplated business operations;

      (bb)  each  such entity has maintained and will maintain adequate
capital in light of its contemplated business operations;

      (cc) if any such entity is a limited partnership with more than one
general partner, its limited partnership agreement requires the remaining
partners to continue the partnership as long as one solvent general partner
exists;

      (dd) if any such entity is a limited liability company, its operating
agreement, if any such entity is a limited partnership, its limited partnership
agreement, and if any such entity is a corporation, to the full extent permitted
by applicable law, its articles of incorporation, contain the provisions set
forth in this Section 5.2 and any such entity shall conduct its business and
operations in strict compliance with the terms contained therein;

      (ee) each such entity will, as a condition to the closing of the Loan,
deliver to Mortgagee a nonconsolidation opinion in form and substance acceptable
to Mortgagee;

      (ff) if any such entity is a corporation, it has maintained and will
continue to maintain at least one Independent Director (as hereinafter defined);
and

      (gg) if any such entity is a corporation, it has not caused or allowed and
will not cause or allow the board of directors of such entity to take any action
requiring the unanimous affirmative vote of 100% of the members of the board of
directors unless an Independent Director shall have participated in such vote.

An "Independent Director" shall be an individual who, except in his or her
capacity as an Independent Director of the corporation is not, and has not been
during the five (5) years


                                    Page 15
<PAGE>
immediately before such individual's appointment as an Independent Director: (i)
a stockholder, director, partner, officer or employee of the corporation or its
Affiliates; (ii) affiliated with a customer or supplier of the corporation or
its Affiliates; or (iii) a spouse, parent, sibling, child or other family
relative of any person described by (i) or (ii) above.

As used herein, the term "Affiliate" shall mean any person or entity other than
the corporation (i) which owns beneficially, directly or indirectly, any
outstanding shares of the corporation's stock, or (ii) which controls, is
controlled by or is under common control with the corporation. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through ownership of voting securities, by contract or otherwise.

            5.3 COMMERCIAL LOAN. Borrower warrants that the loan evidenced by
this Note is being made solely to acquire or carry on a business or commercial
enterprise, and/or Borrower is a business or commercial organization. Borrower
further warrants that all of the proceeds of the Note shall be used for
commercial purposes and stipulates that the loan evidenced by the Note shall be
construed for all purposes as a commercial loan, and is made for other than
personal, family or household purposes.


                  ARTICLE VI. RIGHTS AND DUTIES OF THE PARTIES

            6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Mortgagor shall,
or shall cause the property manager to: (a) keep the Property in good condition
and repair; (b) complete or restore promptly and in workmanlike manner the
Property or any part thereof which may be damaged or destroyed (unless, if and
to the extent permitted under Section 0, Mortgagee elects to require that
insurance proceeds be used to reduce the Secured Obligations and after such
repayment the ratio of Secured Obligations to the value of the Property, as
reasonably determined by Mortgagee is the same as or lower than it was
immediately before the loss or taking occurred); (c) comply and cause the
Property to comply with (i) all laws, ordinances, regulations and standards,
(ii) all covenants, conditions, restrictions and equitable servitudes, whether
public or private, of every kind and character and (iii) all requirements of
insurance companies and any bureau or agency which establishes standards of
insurability, which laws, covenants or requirements affect the Property and
pertain to acts committed or conditions existing thereon, including, without
limitation, any work of alteration, improvement or demolition as such laws,
covenants or requirements mandate; (d) operate and manage the Property at all
times in a professional manner and do all other acts which from the character or
use of the Property may be reasonably necessary to maintain and preserve its
value; (e) promptly after execution, deliver to Mortgagee a copy of any
management agreement concerning the Property and all amendments thereto and
waivers thereof; and (f) execute and acknowledge all further documents,
instruments and other papers as Mortgagee reasonably deems necessary or
appropriate to preserve, continue, perfect and enjoy the benefits of this
Mortgage and perform Mortgagor's obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no offset.
Mortgagor shall not, without Mortgagee's prior written consent: (g) remove or
demolish all or any material part of the Property; (h) alter either (i) the
exterior of the Property in a manner which materially and adversely affects the
value of the Property or (ii) the roof or other structural elements of the


                                    Page 16
<PAGE>
Property in a manner which requires a building permit except for tenant
improvements required under the Leases; (i) initiate or acquiesce in any change
in any zoning or other land classification which affects the Property; (j)
materially alter the type of occupancy or use of all or any part of the
Property; or (k) commit or permit physical waste of the Property.

            6.2 HAZARDOUS MATERIALS. Without limiting any other provision of
this Mortgage, Mortgagor agrees as follows:

            (a) PROHIBITED ACTIVITIES. Mortgagor shall not cause or permit the
Property to be used as a site for the use, generation, manufacture, storage,
treatment, release, discharge, disposal, transportation or presence of any oil
or other petroleum products, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are "hazardous substances," "hazardous wastes," "hazardous materials" or
"toxic substances" under the Hazardous Materials Laws (defined below) and/or
other applicable environmental laws, ordinances or regulations ("Hazardous
Materials").

            The foregoing to the contrary notwithstanding, (i) Mortgagor may
store, maintain and use on the Property janitorial and maintenance supplies,
paint and other Hazardous Materials of a type and in a quantity readily
available for purchase by the general public and normally stored, maintained and
used by owners and managers of properties of a type similar to the Property; and
(ii) tenants of the Property may store, maintain and use on the Property (and,
if any tenant is a retail business, hold in inventory and sell in the ordinary
course of such tenant's business) household and consumer cleaning supplies and
other Hazardous Materials of a type and quantity readily available for purchase
by the general public and normally stored, maintained and used (and, if tenant
is a retail business, sold) by tenants of properties similar to the Property or
in similar lines of business on properties similar to the Property.

            (b) HAZARDOUS MATERIALS LAWS. Mortgagor shall comply and cause the
Property to comply with all federal, state and local laws, ordinances and
regulations relating to Hazardous Materials ("Hazardous Materials Laws"),
including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of
other jurisdictions or orders and regulations.

            (c) NOTICES. Mortgagor shall immediately notify Mortgagee in writing
of: (i) the discovery of any Hazardous Materials on, under or about the Property
(other than Hazardous Materials permitted under Section 00); (ii) any knowledge
by Mortgagor that the Property does not comply with any Hazardous Materials
Laws; (iii) any claims or actions ("Hazardous Materials


                                    Page 17
<PAGE>
Claims") pending or threatened in writing against Mortgagor or the Property by
any governmental entity or agency or any other person or entity relating to
Hazardous Materials or pursuant to the Hazardous Materials Laws; and (iv) the
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Property that could cause the Property or any part thereof
to become contaminated by or with Hazardous Materials.

            (d) REMEDIAL ACTION. In response to knowledge of or notification to
Mortgagor of the presence of any Hazardous Materials on, under or about the
Property, Mortgagor shall immediately take, at Mortgagor's sole expense, all
remedial action required of Mortgagor by any Hazardous Materials Laws or any
judgment, consent decree, settlement or compromise in respect to any Hazardous
Materials Claims.

            (e) INSPECTION BY MORTGAGEE. Upon reasonable prior notice to
Mortgagor (except in the event of an emergency) and during normal business
hours, Mortgagee, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Property for the purpose of determining the
existence, location, nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto, beneath or from the
Property.

            (f) LEGAL EFFECT OF SECTION. Mortgagor and Mortgagee agree that: (i)
this Hazardous Materials Section is intended as Mortgagee's written request for
information (and Mortgagor's response) concerning the environmental condition of
the real property security as required by California Code of Civil Procedure
Section 726.5, or any other applicable law; and (ii) each representation and
warranty and covenant in this Section (together with any indemnity applicable to
a breach of any such representation and warranty) with respect to the
environmental condition of the Property is intended by Mortgagee and Mortgagor
to be an "environmental provision" for purposes of California Code of Civil
Procedure Section 736, or any other applicable law.

            6.3 COMPLIANCE WITH LAWS. Mortgagor shall comply with all federal,
state and local laws, rules and regulations applicable to the Property,
including, without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C. Section
12101 et seq.), as amended from time to time. Mortgagor shall possess and
maintain or cause Borrower to possess and maintain in full force and effect at
all times (a) all certificates of occupancy and other licenses, permits and
authorizations required by applicable law for the existing use of the Property
and (b) all permits, franchises and licenses and all rights to all trademarks,
trade names, patents and fictitious names, if any, required by applicable law
for Mortgagor and Borrower to conduct the business(es) in which Mortgagor and
Borrower are now engaged.

            6.4 LITIGATION. Mortgagor shall promptly notify Mortgagee in writing
of any litigation pending or threatened in writing against Mortgagor or Borrower
claiming damages in excess of $100,000 and of all pending or threatened (in
writing) litigation against Mortgagor or Borrower if the aggregate damage claims
against Mortgagor or Borrower exceed $500,000.

            6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Mortgagor shall not:
(a) merge or consolidate with any other entity or permit Borrower to merge or


                                    Page 18
<PAGE>
consolidate with any other entity; (b) make any substantial change in the nature
of Mortgagor's business or structure or permit Borrower to make any substantial
change in the nature of Borrower's business or structure; (c) acquire all or
substantially all of the assets of any other entity or permit Borrower to
acquire all or substantially all of the assets of any other entity; or (d) sell,
lease, assign, transfer or otherwise dispose of a material part of Mortgagor's
assets except in the ordinary course of Mortgagor's business or permit Borrower
to sell, lease, assign, transfer or otherwise dispose of a material part of
Borrower's assets except in the ordinary course of Borrower's business.

            6.6 ACCOUNTING RECORDS. Mortgagor shall maintain and cause Borrower
to maintain adequate books and records in accordance with the same accounting
standard used by Mortgagor or Borrower to prepare the financial statements
delivered to and approved by Mortgagee in connection with the making of the Loan
or other accounting standards approved by Mortgagee. Mortgagor shall permit and
shall cause Borrower to permit any representative of Mortgagee, at any
reasonable time and from time to time, upon reasonable prior notice to
Mortgagor, to inspect, audit and examine such books and records and make copies
of same.

            6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor shall pay to
Mortgagee the full amount of all costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses of Mortgagee's in-house or
outside counsel, incurred by Mortgagee in connection with: (a) appraisals and
inspections of the Property or Collateral required by Mortgagee as a result of
(i) a Transfer or proposed Transfer (as defined below), or (ii) a Default; (b)
appraisals and inspections of the Property or Collateral required by applicable
law, including, without limitation, federal or state regulatory reporting
requirements; and (c) any acts performed by Mortgagee at Mortgagor's request or
wholly or partially for the benefit of Mortgagor (including, without limitation,
the preparation or review of amendments, assumptions, waivers, releases,
reconveyances, estoppel certificates or statements of amounts owing under any
Secured Obligation). In connection with appraisals and inspections, Mortgagor
specifically (but not by way of limitation) acknowledges that: (aa) a formal
written appraisal of the Property by a state certified or licensed appraiser may
be required by federal regulatory reporting requirements on an annual or more
frequent basis; and (bb) Mortgagee may require inspection of the Property by an
independent supervising architect, a cost engineering specialist, or both.
Mortgagor shall pay all indebtedness arising under this Section immediately upon
demand by Mortgagee together with interest thereon following notice of such
indebtedness at the rate of interest then applicable to the principal balance of
the Note as specified therein.

            6.8 LIENS, ENCUMBRANCES AND CHARGES. Subject to the terms of Section
8.4, Mortgagor shall immediately discharge by bonding or otherwise any lien,
charge or other encumbrance which attaches to the Property in violation of
Section 0. Subject to Mortgagor's right to contest such matters under this
Mortgage or as expressly permitted in the Loan Documents, Mortgagor shall pay
when due all obligations secured by or reducible to liens and encumbrances which
shall now or hereafter encumber or appear to encumber all or any part of the
Property or any interest therein, whether senior or subordinate hereto,
including, without limitation, all claims for work or labor performed, or
materials or supplies furnished, in connection with any work of demolition,
alteration, repair, improvement or construction of or upon the Property, except
such as Mortgagor may in good faith contest or as to which a bona fide dispute
may arise (provided provision is made to the satisfaction of Mortgagee for
eventual payment thereof in the


                                    Page 19
<PAGE>
event that Mortgagor is obligated to make such payment and that any recorded
claim of lien, charge or other encumbrance against the Property is immediately
discharged by bonding or otherwise).

            6.9 TAXES AND OTHER LIABILITIES. Mortgagor shall pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and local
property taxes and assessments. Mortgagor shall promptly provide to Mortgagee
copies of all tax and assessment notices pertaining to the Property. Mortgagor
hereby authorizes Mortgagee to obtain, at Mortgagor's expense, a tax service
contract which shall provide tax information on the Property to Mortgagee for
the term of the Loan and any extensions or renewals of the Loan.

            6.10 INSURANCE COVERAGE. Mortgagor shall insure the Property against
loss or damage by fire and such other hazards as Mortgagee shall from time to
time require; provided, however, (a) Mortgagee, at Mortgagee's election, may
only require flood insurance if all or any portion of the improvements located
on the Property is or becomes located in a special flood hazard area, and (b)
Mortgagee, at Mortgagee's election, may only require earthquake insurance if all
or any portion of the Property is or becomes located in an earthquake fault
zone. Mortgagor shall also carry public liability insurance and such other
insurance as Mortgagee may reasonably require, including, without limitation,
business interruption insurance or loss of rents insurance. Such policies shall
contain a standard mortgage clause naming Mortgagee and its successors in
interest as a loss payee and requiring at least 30 days prior notice to the
holder at termination or cancellation. Mortgagor shall maintain all required
insurance throughout the term of the Loan and while any liabilities of Borrower
or Mortgagor to Mortgagee under any of the Loan Documents remain outstanding at
Mortgagor's expense, with companies, and in substance and form satisfactory to
Mortgagee. Mortgagee, by reason of accepting, rejecting, approving or obtaining
insurance shall not incur any liability for: (c) the existence, nonexistence,
form or legal sufficiency of any insurance; (d) the solvency of any insurer; or
(e) the payment of claims.

            6.11  INSURANCE AND CONDEMNATION PROCEEDS.

            (a) ASSIGNMENT OF CLAIMS. Mortgagor absolutely and irrevocably
assigns to Mortgagee all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid to Mortgagee: (i) all
awards of damages and all other compensation payable directly or indirectly by
reason of a condemnation or proposed condemnation for public or private use
affecting all or any part of, or any interest in, the Property; (ii) all other
claims and awards for damages to or decrease in value of all or any part of, or
any interest in, the Property; (iii) all proceeds of any insurance policies
payable by reason of loss sustained to all or any part of the Property; and (iv)
all interest which may accrue on any of the foregoing. Mortgagor shall give
Mortgagee prompt written notice of the occurrence of any casualty affecting, or
the institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof. So long as no Default has occurred and
is continuing at the time, Mortgagor shall have the right to adjust, compromise
and settle any Claim of $100,000 or less without the consent of Mortgagee,
provided, however, all awards, proceeds and other sums described herein shall
continue to be payable to Mortgagee. Mortgagee may commence, appear in, defend
or prosecute any Claim exceeding $100,000, and may adjust, compromise and settle
all Claims (except for Claims which Mortgagor may settle as provided herein),
but shall not be responsible


                                    Page 20
<PAGE>
for any failure to commence, appear in, defend, prosecute or collect any such
Claim regardless of the cause of the failure. All awards, proceeds and other
sums described herein shall be payable to Mortgagee.

            (b) APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
occurred and is continuing at the time of Mortgagee's receipt of the proceeds of
the Claims ("Proceeds") and no Default occurs thereafter, Mortgagee shall apply
the Proceeds in the following order of priority: First, to Mortgagee's expenses
in settling, prosecuting or defending the Claims; Second, to the repair or
restoration of the Property; and Third, to Mortgagor if the repair or
restoration of the Property has been completed, but to the Secured Obligations
in any order without suspending, extending or reducing any obligation of
Mortgagor to make installment payments if the repair or restoration of the
Property has not been completed. Notwithstanding the foregoing, Mortgagee shall
have no obligation to make any Proceeds available for the repair or restoration
of the Property unless and until all the following conditions have been
satisfied: (i) delivery to Mortgagee of the Proceeds plus any additional amount
which is needed to pay all costs of the repair or restoration (including,
without limitation, taxes, financing charges, insurance and rent during the
repair period); (ii) establishment of an arrangement for lien releases and
disbursement of funds acceptable to Mortgagee; (iii) delivery to Mortgagee in
form and content acceptable to Mortgagee of all of the following: (aa) plans and
specifications for the work; (bb) a contract for the work, signed by a
contractor acceptable to Mortgagee; (cc) a cost breakdown for the work; (dd) if
reasonably required by Mortgagee, a payment and performance bond for the work;
(ee) evidence of the continuation of substantially all Leases unless consented
to in writing by Mortgagee; (ff) evidence that, upon completion of the work, the
size, capacity, value, and income coverage ratios for the Property will be at
least as great as those which existed immediately before the damage or
condemnation occurred; and (gg) evidence of the satisfaction of any additional
conditions that Mortgagee may reasonably establish to protect Mortgagee's
security. Mortgagor acknowledges that the specific conditions described above
are reasonable.

            (c) APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and
is continuing at the time of Mortgagee's receipt of the Proceeds or if a Default
occurs at any time thereafter, Mortgagee may, at Mortgagee's absolute discretion
and regardless of any impairment of security or lack of impairment of security,
but subject to applicable law governing use of the Proceeds, if any, apply all
or any of the Proceeds to Mortgagee's expenses in settling, prosecuting or
defending the Claims and then apply the balance to the Secured Obligations in
any order without suspending, extending or reducing any obligation of Mortgagor
to make installment payments, and may release all or any part of the Proceeds to
Mortgagor upon any conditions Mortgagee chooses.

            6.12  IMPOUNDS.

            (a) POST-DEFAULT IMPOUNDS. If required by Mortgagee at any time
after a Default occurs (and regardless of whether such Default is thereafter
cured), Mortgagor shall deposit with Mortgagee such amounts ("Post-Default
Impounds") on such dates (determined by Mortgagee as provided below) as will be
sufficient to pay any or all "Costs" (as defined below) specified by Mortgagee.
Mortgagee in its reasonable discretion shall estimate the amount of such Costs
that will be payable or required during any period selected by Mortgagee not
exceeding 1 year and shall determine the fractional portion thereof that
Mortgagor shall deposit with Mortgagee


                                    Page 21
<PAGE>
on each date specified by Mortgagee during such period. If the Post-Default
Impounds paid by Mortgagor are not sufficient to pay the related Costs,
Mortgagor shall deposit with Mortgagee upon demand an amount equal to the
deficiency. All Post-Default Impounds shall be payable by Mortgagor in addition
to (but without duplication of) any other Impounds (as defined below).

            (b) ALL IMPOUNDS. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively called "Impounds".
All Impounds shall be deposited into one or more segregated or commingled
accounts maintained by Mortgagee or its servicing agent. Except as otherwise
provided in the Note, such account(s) shall not bear interest. Mortgagee shall
not be a trustee, special depository or other fiduciary for Mortgagor with
respect to such account, and the existence of such account shall not limit
Mortgagee's rights under this Mortgage, any other agreement or any provision of
law. If no Default exists, Mortgagee shall apply all Impounds to the payment of
the related Costs, or in Mortgagee's sole discretion may release any or all
Impounds to Mortgagor for application to and payment of such Costs. If a Default
exists, Mortgagee may apply any or all Impounds to any Secured Obligation and/or
to cure such Default, whereupon Mortgagor shall restore all Impounds so applied
and cure all Defaults not cured by such application. The obligations of
Mortgagor hereunder shall not be diminished by deposits of Impounds made by
Mortgagor, except to the extent that such obligations have actually been met by
application of such Impounds. Upon any assignment of this Mortgage, Mortgagee
may assign all Impounds in its possession to Mortgagee's assignee, whereupon
Mortgagee shall be released from all liability with respect to such Impounds.
Within 60 days following full repayment of the Secured Obligations (other than
as a consequence of foreclosure or conveyance in lieu of foreclosure) or at such
earlier time as Mortgagee may elect, Mortgagee shall pay to Mortgagor all
Impounds in its possession, and no other party shall have any right or claim
thereto. "Costs" means (i) all taxes and other liabilities payable by Mortgagor
under Section 0, (ii) all insurance premiums payable by Mortgagor under Section
0, (iii) all other costs and expenses for which Impounds are required under the
Note, and/or (iv) all other amounts that will be required to preserve the value
of the Property. Mortgagor shall deliver to Mortgagee, promptly upon receipt,
all bills for Costs for which Mortgagee has required Post-Default Impounds.

            6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Mortgagor
shall protect, preserve and defend the Property and title to and right of
possession of the Property, the security of this Mortgage and the rights and
powers of Mortgagee hereunder at Mortgagor's sole expense against all adverse
claims, whether the claim: (a) is against a possessory or non-possessory
interest; (b) arose prior or subsequent to the Effective Date; or (c) is senior
or junior to Mortgagor's or Mortgagee's rights. Mortgagor shall give Mortgagee
prompt notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to the Property and of any
condemnation offer or action.

            6.14 RIGHT OF INSPECTION. Mortgagee and its independent contractors,
agents and employees may enter the Property from time to time at any reasonable
time upon reasonable prior notice to Mortgagor (except that such notice shall
not be required in the event of an emergency) for the purpose of inspecting the
Property and ascertaining Mortgagor's compliance with the terms of this
Mortgage. Mortgagee shall use reasonable efforts to assure that Mortgagee's
entry upon and inspection of the Property shall not materially and unreasonably
interfere with the business or operations of Mortgagor or Mortgagor's tenants on
the Property.


                                    Page 22
<PAGE>
            6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN MORTGAGOR.
Mortgagor acknowledges that Mortgagee has relied upon the principals of
Mortgagor and Borrower and their experience in owning and operating properties
similar to the Property in connection with the closing of the Loan. Accordingly,
except with the prior written consent of Mortgagee or as otherwise expressly
permitted in the Note, Mortgagor shall not cause or permit any sale, exchange,
mortgage, pledge, hypothecation, assignment, encumbrance or other transfer,
conveyance or disposition, whether voluntarily, involuntarily or by operation of
law ("Transfer") of all or any part of, or all or any direct or indirect
interest in, the Property or the Collateral (except for equipment and inventory
in the ordinary course of its business), or cause or permit a Transfer of any
direct or indirect interest (whether general partnership interest, stock,
non-managing member limited liability company interest, trust, or otherwise) in
Mortgagor or Borrower. In the event of any Transfer that is not expressly
permitted in the Note and is without the prior written consent of Mortgagee,
Mortgagee shall have the absolute right at its option, without prior demand or
notice, to declare all of the Secured Obligations immediately due and payable,
except to the extent prohibited by law, and pursue its rights and remedies under
Section 0 herein. Mortgagor agrees to pay any prepayment fee as set forth in the
Note in the event the Secured Obligations are accelerated pursuant to the terms
of this Section. Consent to one such Transfer shall not be deemed to be a waiver
of the right to require the consent to future or successive Transfers. Except
for Transfers expressly permitted under the Note, Mortgagee's consent to any
Transfer may be withheld, conditioned or delayed in Mortgagee's sole and
absolute discretion.

            6.16 INTENTIONALLY OMITTED.

            6.17 INTENTIONALLY OMITTED.

            6.18 EXCULPATION. Mortgagee shall not directly or indirectly be
liable to Mortgagor or any other person as a consequence of: (a) the exercise of
the rights, remedies or powers granted to Mortgagee in this Mortgage; (b) the
failure or refusal of Mortgagee to perform or discharge any obligation or
liability of Mortgagor under any agreement related to the Property or under this
Mortgage; or (c) any loss sustained by Mortgagor or any third party resulting
from Mortgagee's failure to lease the Property after a Default or from any other
act or omission of Mortgagee in managing the Property after a Default unless the
loss is caused by the willful misconduct and bad faith of Mortgagee and no such
liability shall be asserted or enforced against Mortgagee, all such liability
being expressly waived and released by Mortgagor.

            6.19 INDEMNITY. Without in any way limiting any other indemnity
contained in this Mortgage, Mortgagor agrees to defend, indemnify and hold
harmless the Mortgagee Group (as hereinafter defined) from and against any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of: (a) the making of the Loan, except for violations of banking laws or
regulations by the Mortgagee Group; (b) this Mortgage; (c) the execution of this
Mortgage or the performance of any act required or permitted hereunder or by
law; (d) any failure of Mortgagor to perform Mortgagor's obligations under this
Mortgage or the other Loan Documents; (e) any alleged obligation or undertaking
on the Mortgagee Group's part to perform or discharge any of the
representations, warranties, conditions, covenants or other obligations
contained in any other document related to the Property; (f) any act or omission
by Mortgagor or any contractor, agent, employee or representative of Mortgagor
with respect to the Property; or (g) any claim, loss,


                                    Page 23
<PAGE>
damage, cost, expense or liability directly or indirectly arising out of: (i)
the use, generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any Hazardous
Materials which are found in, on, under or about the Property (including,
without limitation, underground contamination); or (ii) the breach of any
covenant, representation or warranty of Mortgagor under Section 0 above. The
foregoing to the contrary notwithstanding, this indemnity shall not include any
claim, loss, damage, cost, expense or liability directly or indirectly arising
out of the gross negligence or willful misconduct of any member of the Mortgagee
Group, or any claim, loss, damage, cost, expense or liability incurred by the
Mortgagee Group arising from any act or incident on the Property occurring after
the full reconveyance and release of the lien of this Mortgage on the Property,
or with respect to the matters set forth in clause (g) above, any claim, loss,
damage, cost, expense or liability incurred by the Mortgagee Group resulting
from the introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure sale
under this Mortgage, either pursuant to judicial decree or the power of sale, or
by deed in lieu of such foreclosure. This indemnity shall include, without
limitation: (aa) all consequential damages (including, without limitation, any
third party tort claims or governmental claims, fines or penalties against the
Mortgagee Group); (bb) all court costs and reasonable attorneys' fees
(including, without limitation, expert witness fees) paid or incurred by the
Mortgagee Group; and (cc) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Property which is
required by any governmental entity or is otherwise necessary to render the
Property in compliance with all laws and regulations pertaining to Hazardous
Materials. "Mortgagee Group", as used herein, shall mean (1) Mortgagee
(including, without limitation, any participant in the Loan), (2) any entity
controlling, controlled by or under common control with Mortgagee, (3) the
directors, officers, employees and agents of Mortgagee and such other entities,
and (4) the successors, heirs and assigns of the entities and persons described
in foregoing clauses (1) through (3). Mortgagor shall pay immediately upon
Mortgagee's demand any amounts owing under this indemnity together with interest
from the date the indebtedness arises until paid at the rate of interest
applicable to the principal balance of the Note as specified therein. Mortgagor
agrees to use legal counsel reasonably acceptable to the Mortgagee Group in any
action or proceeding arising under this indemnity. THE PROVISIONS OF THIS
SECTION SHALL SURVIVE THE SATISFACTION AND RELEASE OF THIS MORTGAGE, BUT
MORTGAGOR'S LIABILITY UNDER THIS INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF
THE SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            6.20 INTENTIONALLY OMITTED.

            6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
Without notice to or the consent, approval or agreement of any persons or
entities having any interest at any time in the Property or in any manner
obligated under the Secured Obligations ("Interested Parties"), Mortgagee may,
from time to time: (a) fully or partially release any person or entity from
liability for the payment or performance of any Secured Obligation; (b) extend
the maturity of any Secured Obligation; (c) make any agreement with Borrower
increasing the amount or otherwise altering the terms of any Secured Obligation;
(d) accept additional security for any Secured Obligation; or (e) release all or
any portion of the Property, Collateral and other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the personal
liability of any of said Interested Parties, or release or impair the priority
of the lien of this Mortgage upon the Property.


                                    Page 24
<PAGE>
            6.22 SALE OR PARTICIPATION OF LOAN. Mortgagor agrees that Mortgagee
may at any time sell, assign, participate or securitize all or any portion of
Mortgagee's rights and obligations under the Loan Documents, and that any such
sale, assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, and/or into the
public securities market, in Mortgagee's sole discretion. Mortgagor further
agrees that Mortgagee may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and financial and
other information heretofore or hereafter provided to or known to Mortgagee with
respect to: (a) the Property and its operation; and/or (b) any party connected
with the Loan (including, without limitation, Mortgagor, any partner or member
of Mortgagor, any constituent partner or member of Mortgagor, any guarantor and
any nonborrower mortgagor). In the event of any such sale, assignment,
participation or securitization, Mortgagee and the other parties to the same
shall share in the rights and obligations of Mortgagee set forth in the Loan
Documents as and to the extent they shall agree among themselves. In connection
with any such sale, assignment, participation or securitization, Mortgagor
further agrees that the Loan Documents shall be sufficient evidence of the
obligations of Mortgagor to each purchaser, assignee or participant, and
Mortgagor shall, within 15 days after request by Mortgagee, (x) deliver an
estoppel certificate verifying for the benefit of Mortgagee and any other party
designated by Mortgagee the status and the terms and provisions of the Loan in
form and substance acceptable to Mortgagee, (y) provide any information, legal
opinions or documents regarding Mortgagor, Guarantor (as defined in the Loan
Documents), the Property and any tenants of the Property as Mortgagee or
Mortgagee's rating agencies may reasonably request, and (z) enter into such
amendments or modifications to the Loan Documents or the organizational
documents of Mortgagor as may be reasonably required in order to facilitate any
such sale, assignment, participation or securitization without impairing
Mortgagor's rights or increasing Mortgagor's obligations. The indemnity
obligations of Mortgagor under the Loan Documents shall also apply with respect
to any purchaser, assignee or participant.

            6.23 RELEASE. Upon payment in full of the Secured Obligations, and
satisfaction of all of the covenants, warranties, undertakings and agreements
made in this Mortgage and in the other Loan Documents (including, without
limitation, repayment in full of all principal, interest and other amounts owing
under the Note) are kept and performed, and all obligations, if any, of
Mortgagee for further advances have been terminated, then, and in that event
only, Mortgagee shall release, without warranty, the Property or that portion
thereof then held hereunder. The recitals of any matters or facts in any release
executed hereunder shall be conclusive proof of the truthfulness thereof. To the
extent permitted by law, the release may describe the grantee as "the person or
persons legally entitled thereto". Mortgagee shall have no duty to determine the
rights of persons claiming to be rightful grantees of any release. When the
Property has been fully released, the last such release shall operate as a
reassignment of all future rents, issues and profits of the Property to the
person or persons legally entitled thereto.

            6.24 SUBROGATION. Mortgagee shall be subrogated to the lien of all
encumbrances, whether released of record or not, paid in whole or in part by
Mortgagee pursuant to this Mortgage or by the proceeds of any loan secured by
this Mortgage.

            6.25 MANAGEMENT AGREEMENTS. Without the prior written consent of
Mortgagee, Mortgagor shall not terminate, modify, amend or enter into any
agreement providing for the management, leasing or operation of the Property.
Mortgagor represents,


                                    Page 25
<PAGE>
warrants and covenants that any existing management agreement includes, and any
future management agreement entered into by Mortgagor shall include, a provision
which provides that the management agreement is automatically terminated upon
the transfer of the Property by Mortgagor, either by sale, foreclosure, deed in
lieu of foreclosure, or otherwise, to Mortgagee or any other purchaser of the
Property. Upon a Default under the Loan Documents or a default under any
management agreement then in effect, which default is not cured within any
applicable grace or cure period, Mortgagee shall have the right to terminate, or
to direct Mortgagor to terminate, such management agreement upon thirty (30)
days' written notice and to retain, or to direct Mortgagor to retain, a new
management agent approved by Mortgagee.


                             ARTICLE VII. DEFAULT

            7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as defined
below).

            (a) OPTIONAL DEFAULT. An "Optional Default" shall occur, at
Mortgagee's option, upon the occurrence of any of the following events:

            (i) MONETARY. Borrower or Mortgagor shall fail to (aa) pay when due
any sums payable under the Loan Documents which by their express terms require
immediate payment without any grace period or sums which are payable on the
Maturity Date, or (bb) pay within 5 days when due any other sums payable under
the Note, this Mortgage or any of the other Loan Documents, including, without
limitation, any monthly payment due under the Note.

            (ii) FAILURE TO PERFORM. Borrower or Mortgagor shall fail to
observe, perform or discharge any of Borrower's or Mortgagor's obligations,
covenants, conditions or agreements, other than Borrower's or Mortgagor's
payment obligations, under the Note, this Mortgage or any of the other Loan
Documents, and (aa) such failure shall remain uncured for 30 days after written
notice thereof shall have been given to Borrower or Mortgagor, as the case may
be, by Mortgagee or (bb) if such failure is of such a nature that it cannot be
cured within such 30 day period, Borrower or Mortgagor shall fail to commence to
cure such failure within such 30 day period or shall fail to diligently
prosecute such curative action thereafter.

            (iii) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certificate or other statement (financial or otherwise) made or furnished by or
on behalf of Borrower, Mortgagor, or a guarantor, if any, to Mortgagee or in
connection with any of the Loan Documents, or as an inducement to Mortgagee to
make the Loan, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished.

            (iv) CONDEMNATION; ATTACHMENT. The condemnation, seizure or
appropriation of any material portion (as reasonably determined by Mortgagee) of
the Property; or the sequestration or attachment of, or levy or execution upon
any of the Property, the Collateral or any other collateral provided by Borrower
or Mortgagor under any of the Loan Documents, or any material portion of the
other assets of Borrower or Mortgagor, which sequestration, attachment, levy or
execution is not released or dismissed within 45 days after its occurrence; or
the sale of any assets affected by any of the foregoing.


                                    Page 26
<PAGE>
            (v) UNINSURED CASUALTY. The occurrence of an uninsured casualty with
respect to any material portion (as reasonably determined by Mortgagee) of the
Property unless: (aa) no other Default has occurred and is continuing at the
time of such casualty or occurs thereafter; (bb) Mortgagor promptly notifies
Mortgagee of the occurrence of such casualty; and (cc) not more than 45 days
after the occurrence of such casualty, Mortgagor delivers to Mortgagee
immediately available funds in an amount sufficient, in Mortgagee's reasonable
opinion, to pay all costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent during the repair
period). So long as no Default has occurred and is continuing at the time of
Mortgagee's receipt of such funds and no Default occurs thereafter, Mortgagee
shall make such funds available for the repair or restoration of the Property.
Notwithstanding the foregoing, Mortgagee shall have no obligation to make any
funds available for repair or restoration of the Property unless and until all
the conditions set forth in clauses (ii) and (iii) of the second sentence of
Section 6.11(b) of this Mortgage have been satisfied. Mortgagor acknowledges
that the specific conditions described above are reasonable.

            (vi) ADVERSE FINANCIAL CHANGE. Any material adverse change in the
financial condition of Borrower or any general partner or managing member of
Borrower, any guarantor, or any other person or entity from the condition shown
on the financial statement(s) submitted to Mortgagee and relied upon by
Mortgagee in making the Loan, and which change Mortgagee reasonably determines
will have a material adverse effect on (aa) the business, operations or
condition of the Property; or (bb) the ability of Borrower or Mortgagor to pay
or perform Borrower's or Mortgagor's obligations in accordance with the terms of
the Note, this Mortgage, and the other Loan Documents.

            (b) AUTOMATIC DEFAULT.  An "Automatic Default" shall occur
automatically upon the occurrence of any of the following events:

            (i) VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa) Borrower's
filing a petition for relief under the Bankruptcy Reform Act of 1978, as amended
or recodified ("Bankruptcy Code"), or under any other present or future state or
federal law regarding bankruptcy, reorganization or other relief to debtors
(collectively, "Debtor Relief Law"); or (bb) Borrower's filing any pleading in
any involuntary proceeding under the Bankruptcy Code or other Debtor Relief Law
which admits the jurisdiction of a court to regulate Borrower or the Property or
the petition's material allegations regarding Borrower's insolvency; or (cc)
Borrower's making a general assignment for the benefit of creditors; or (dd)
Borrower's applying for, or the appointment of, a receiver, trustee, custodian
or liquidator of Borrower or any of its property; or (ee) the filing by Borrower
of a petition seeking the liquidation or dissolution of Borrower or the
commencement of any other procedure to liquidate or dissolve Borrower.

            (ii) INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a full
dismissal of any involuntary petition under the Bankruptcy Code or other Debtor
Relief Law that is filed against Borrower or in any way restrains or limits
Borrower or Mortgagee regarding the Loan or the Property, prior to the earlier
of the entry of any order granting relief sought in the involuntary petition or
45 days after the date of filing of the petition.

            (iii) PARTNERS, GUARANTORS. The occurrence of an event specified in
clauses (i) or (ii) as to Mortgagor, any general partner or managing member of
Borrower or Mortgagor,


                                    Page 27
<PAGE>
or any guarantor or other person or entity in any manner obligated to Mortgagee
under the Loan Documents.

            7.2 ACCELERATION. Upon the occurrence of an Optional Default,
Mortgagee may, at its option, declare all sums owing to Mortgagee under the Note
and the other Loan Documents immediately due and payable. Upon the occurrence of
an Automatic Default, all sums owing to Mortgagee under the Note and the other
Loan Documents shall automatically become immediately due and payable.

            7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in
Section 0 above, at any time after a Default, Mortgagee shall have all of the
following rights and remedies:

            (a) ENTRY ON PROPERTY. With or without notice, and without releasing
Mortgagor from any Secured Obligation, and without becoming a mortgagee in
possession, to enter upon the Property from time to time and to do such acts and
things as Mortgagee deems necessary or desirable in order to inspect,
investigate, assess and protect the security hereof or to cure any Default,
including, without limitation: (i) to take and possess all documents, books,
records, papers and accounts of Mortgagor, Borrower or the then owner of the
Property which relate to the Property; (ii) to make, terminate, enforce or
modify leases of the Property upon such terms and conditions as Mortgagee deems
proper; (iii) to make repairs, alterations and improvements to the Property
necessary, in Mortgagee's reasonable judgment, to protect or enhance the
security hereof; (iv) to appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers of Mortgagee
hereunder; (v) to pay, purchase, contest or compromise any encumbrance, charge,
lien or claim of lien which, in the sole judgment of Mortgagee, is or may be
senior in priority hereto, the judgment of Mortgagee being conclusive as between
the parties hereto; (vi) to obtain insurance; (vii) to pay any premiums or
charges with respect to insurance required to be carried hereunder; (viii) to
obtain a court order to enforce Mortgagee's right to enter and inspect the
Property for Hazardous Materials, in which regard the decision of Mortgagee as
to whether there exists a release or threatened release of Hazardous Materials
onto the Property shall be deemed reasonable and conclusive as between the
parties hereto; (ix) to have a receiver appointed pursuant to applicable law to
enforce Mortgagee's rights to enter and inspect the Property for Hazardous
Materials; and/or (x) to employ legal counsel, accountants, engineers,
consultants, contractors and other appropriate persons to assist them;

            (b) APPOINTMENT OF RECEIVER. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain appointment of a
receiver, trustee, liquidator or conservator of the Property, for any purpose,
including, without limitation, to enforce Mortgagee's rights to collect Payments
and to enter on and inspect the Property for Hazardous Materials, as a matter of
strict right and without regard to: (i) the adequacy of the security for the
repayment of the Secured Obligations; (ii) the existence of a declaration that
the Secured Obligations are immediately due and payable; (iii) the filing of a
notice of default; or (iv) the solvency of Mortgagor, Borrower or any guarantor
or other person or entity in any manner obligated to Mortgagee under the Loan
Documents;


                                    Page 28
<PAGE>
            (c) INJUNCTION. To commence and maintain an action or actions in any
court of competent jurisdiction to obtain specific enforcement of the covenants
of Mortgagor hereunder, and Mortgagor agrees that such covenants shall be
specifically enforceable by injunction or any other appropriate equitable remedy
and that for the purposes of any suit brought under this subparagraph, Mortgagor
waives the defense of laches and any applicable statute of limitations;

            (d) FORECLOSURE. Immediately commence an action to foreclose this
Mortgage or to specifically enforce its provisions or any of the indebtedness
secured hereby pursuant to the statutes in such case made and provided and sell
the Property or cause the Property to be sold in accordance with the
requirements and procedures provided by said statutes in a single parcel or in
several parcels at the option of Mortgagee.

            (i) In the event foreclosure proceedings are filed by Mortgagee, all
expenses incident to such proceeding, including, but not limited to, reasonable
attorneys' fees and costs, shall be paid by Mortgagor and secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. The secured indebtedness and all other
obligations secured by this Mortgage, including, without limitation, interest at
the Default Rate (as defined in the Note), any prepayment charge, fee or premium
required to be paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys' fees and any other amounts
due and unpaid to Mortgagee under the Loan Documents, may be bid by Mortgagee in
the event of a foreclosure sale hereunder. In the event of a judicial sale
pursuant to a foreclosure decree, it is understood and agreed that Mortgagee or
its assigns may become the purchaser of the Property or any part thereof.

            (ii) Mortgagee may, by following the procedures and satisfying the
requirements prescribed by applicable law, foreclose on only a portion of the
Property and, in such event, said foreclosure shall not affect the lien of this
Mortgage on the remaining portion of the Property foreclosed.

            Upon sale of the Property at any foreclosure, Mortgagee may credit
bid (as determined by Mortgagee in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Mortgagee
may, but is not obligated to, take into account all or any of the following: (i)
appraisals of the Property as such appraisals may be discounted or adjusted by
Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and
costs incurred by Mortgagee with respect to the Property prior to foreclosure;
(iii) expenses and costs which Mortgagee anticipates will be incurred with
respect to the Property after foreclosure, but prior to resale, including,
without limitation, costs of structural reports and other due diligence, costs
to carry the Property prior to resale, costs of resale (e.g. commissions,
attorneys' fees, and taxes), costs of any Hazardous Materials clean-up and
monitoring, costs of deferred maintenance, repair, refurbishment and retrofit,
costs of defending or settling litigation affecting the Property, and lost
opportunity costs (if any), including the time value of money during any
anticipated holding period by Mortgagee; (iv) declining trends in real property
values generally and with respect to properties similar to the Property; (v)
anticipated discounts upon resale of the Property as a distressed or foreclosed
property; (vi) the fact of additional collateral (if any), for the Secured
Obligations; and (vii) such other factors or matters that Mortgagee (in its sole
and absolute discretion) deems appropriate. In regard to the above, Mortgagor
acknowledges and


                                    Page 29
<PAGE>
agrees that: (viii) Mortgagee is not required to use any or all of the foregoing
factors to determine the amount of its credit bid; (ix) this paragraph does not
impose upon Mortgagee any additional obligations that are not imposed by law at
the time the credit bid is made; (x) the amount of Mortgagee's credit bid need
not have any relation to any loan-to-value ratios specified in the Loan
Documents or previously discussed between Mortgagor and Mortgagee; and (xi)
Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion)
higher or lower than any appraised value of the Property;

            (e) MULTIPLE FORECLOSURES. To resort to and realize upon the
security hereunder and any other security now or later held by Mortgagee
concurrently or successively and in one or several consolidated or independent
judicial actions and to apply the proceeds received upon the Secured Obligations
all in such order and manner as Mortgagee determines in its sole discretion;

            (f) RIGHTS TO COLLATERAL.  To exercise all rights Mortgagee may have
with respect to the Collateral under this Mortgage, the UCC or otherwise at law;
and

            (g) OTHER RIGHTS.  To exercise such other rights as Mortgagee may
have at law or in equity or pursuant to the terms and conditions of this
Mortgage or any of the other Loan Documents.

            In connection with any sale or sales hereunder, Mortgagee may elect
to treat any of the Property which consists of a right in action or which is
property that can be severed from the Property (including, without limitation,
any improvements forming a part thereof) without causing structural damage
thereto as if the same were personal property or a fixture, as the case may be,
and dispose of the same in accordance with applicable law, separate and apart
from the sale of the Property. Any sale of Collateral hereunder shall be
conducted in any manner permitted by the UCC.

            7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. To the fullest extent
permitted by law, proceeds of any sale under this Mortgage shall be applied to
the extent funds are so available to the following items in such order as
Mortgagee in its discretion may determine:

            (a) To payment of the costs, expenses and fees of taking possession
of the Property, and of holding, operating, maintaining, using, leasing,
repairing, improving, marketing and selling the same and of otherwise enforcing
Mortgagee's right and remedies hereunder and under the other Loan Documents,
including, but not limited to, receivers' fees, court costs, reasonable
attorneys', accountants', appraisers', managers', and other professional fees,
title charges and transfer taxes.

            (b) To payment of all sums expended by Mortgagee under the terms of
any of the Loan Documents and not yet repaid, together with interest on such
sums at the Default Rate.

            (c) To payment of the secured indebtedness and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Rate and, to the extent permitted by applicable law, any prepayment fee, charge
or premium required to be paid under the Note in order to prepay principal, in
any order that Mortgagee chooses in its sole discretion.


                                    Page 30
<PAGE>
            7.5 WAIVER OF MARSHALING RIGHTS. Mortgagor, for itself and for all
parties claiming through or under Mortgagor, and for all parties who may acquire
a lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property, including, without limitation, the
Collateral, which is now or later may be security for any Secured Obligation,
marshaled upon any foreclosure of this Mortgage or on a foreclosure of any other
security for any of the Secured Obligations.

            7.6 NO CURE OR WAIVER. Neither Mortgagee's nor any receiver's entry
upon and taking possession of all or any part of the Property, nor any
collection of rents, issues, profits, insurance proceeds, condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation, nor the exercise of
any other right or remedy by Mortgagee or any receiver shall cure or waive any
Default or notice of default under this Mortgage, or nullify the effect of any
notice of default or sale (unless all Secured Obligations then due have been
paid or performed and Mortgagor has cured all other Defaults hereunder), or
impair the status of the security, or prejudice Mortgagee in the exercise of any
right or remedy, or be construed as an affirmation by Mortgagee of any tenancy,
lease or option or a subordination of the lien of this Mortgage.

            7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Mortgagor agrees
to pay to Mortgagee immediately and upon demand all costs and expenses incurred
by Mortgagee in the enforcement of the terms and conditions of this Mortgage
(including, without limitation, court costs and attorneys' fees, whether
incurred in litigation or not) with interest from the date of expenditure until
said sums have been paid at the rate of interest applicable to the principal
balance of the Note as specified therein.

            7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Mortgagor hereby
irrevocably appoints Mortgagee and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest, to perform any
obligation of Mortgagor hereunder upon the occurrence of an event, act or
omission which, with notice or passage of time or both, would constitute a
Default, provided, however, that: (a) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(b) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to act under this Section.

            7.9 REMEDIES CUMULATIVE. All rights and remedies of Mortgagee
provided hereunder are cumulative and are in addition to all rights and remedies
provided by applicable law (including specifically that of foreclosure of this
instrument as though it were a mortgage) or in any other agreements between
Mortgagor and Mortgagee. Mortgagee may enforce any one or more remedies or
rights hereunder successively or concurrently.


                    ARTICLE VIII. MISCELLANEOUS PROVISIONS

            8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate
by reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan Documents
grant further rights to Mortgagee and contain further agreements and affirmative
and negative covenants by Mortgagor which apply to this Mortgage and to the
Property and such further rights and agreements are incorporated herein by this
reference. THE OBLIGATIONS AND LIABILITIES OF MORTGAGOR UNDER THIS


                                    Page 31
<PAGE>
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE
SECTION IN THE NOTE ENTITLED "BORROWER'S LIABILITY."

            8.2 NON-WAIVER. By accepting payment of any amount secured hereby
after its due date or late performance of any other Secured Obligation,
Mortgagee shall not waive its right against any person obligated directly or
indirectly hereunder or on any Secured Obligation, either to require prompt
payment or performance when due of all other sums and obligations so secured or
to declare default for failure to make such prompt payment or performance. No
exercise of any right or remedy by Mortgagee hereunder shall constitute a waiver
of any other right or remedy herein contained or provided by law. No failure by
Mortgagee to exercise any right or remedy hereunder arising upon any Default
shall be construed to prejudice Mortgagee's rights or remedies upon the
occurrence of any other or subsequent Default. No delay by Mortgagee in
exercising any such right or remedy shall be construed to preclude Mortgagee
from the exercise thereof at any time while that Default is continuing. No
notice to nor demand on Mortgagor shall of itself entitle Mortgagor to any other
or further notice or demand in similar or other circumstances.

            8.3 CONSENTS, APPROVALS AND EXPENSES. Wherever Mortgagee's consent,
approval, acceptance or satisfaction is required under any provision of this
Mortgage or any of the other Loan Documents, such consent, approval, acceptance
or satisfaction shall not be unreasonably withheld, conditioned or delayed by
Mortgagee unless such provision expressly so provides. Wherever costs or
expenses are required to be paid under any provision of this Mortgage or any of
the other Loan Documents, such costs or expenses shall be reasonable.

            8.4 PERMITTED CONTESTS. After prior written notice to Mortgagee,
Mortgagor may contest, by appropriate legal or other proceedings conducted in
good faith and with due diligence, the amount, validity or application, in whole
or in part, of any lien, levy, tax or assessment, or any lien of any laborer,
mechanic, materialman, supplier or vendor, or the application to Mortgagor or
the Property of any law or the validity thereof, the assertion or imposition of
which, or the failure to pay when due, would constitute a Default; provided that
(a) Mortgagor pursues the contest diligently, in a manner which Mortgagee
determines is not prejudicial to Mortgagee, and does not impair the lien of this
Mortgage; (b) the Property, or any part hereof or estate or interest therein,
shall not be in any danger of being sold, forfeited or lost by reason of such
proceedings; (c) in the case of the contest of any law or other legal
requirement, Mortgagee shall not be in any danger of any civil or criminal
liability; and (d) if required by Mortgagee, Mortgagor deposits with Mortgagee
any funds or other forms of assurance (including a bond or letter of credit)
satisfactory to Mortgagee to protect Mortgagee from the consequences of the
contest being unsuccessful. Mortgagor's right to contest pursuant to the terms
of this provision shall in no way relieve Mortgagor or Borrower of its
obligations under the Loan or to make payments to Mortgagee as and when due.

            8.5 FURTHER ASSURANCES. Mortgagor shall, upon demand by Mortgagee,
execute, acknowledge (if appropriate) and deliver any and all documents and
instruments and do or cause to be done all further acts reasonably necessary or
appropriate to effectuate the provisions hereof.


                                    Page 32
<PAGE>
            8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is
commenced between Mortgagor and Mortgagee regarding their respective rights and
obligations under this Mortgage or any of the other Loan Documents, the
prevailing party shall be entitled to recover, in addition to damages or other
relief, costs and expenses, reasonable attorneys' fees and court costs
(including, without limitation, expert witness fees). As used herein the term
"prevailing party" shall mean the party which obtains the principal relief it
has sought, whether by compromise settlement or judgment. If the party which
commenced or instituted the action, suit or proceeding shall dismiss or
discontinue it without the concurrence of the other party, such other party
shall be deemed the prevailing party.

            8.7 MORTGAGOR AND MORTGAGEE DEFINED. The term "Mortgagor" includes
both the original Mortgagor and any subsequent owner or owners of any of the
Property, and the term "Mortgagee" includes the original Mortgagee and any
future owner or holder, including assignees, pledgees and participants, of the
Note or any interest therein.

            8.8 DISCLAIMERS.

            (a) RELATIONSHIP. The relationship of Mortgagor and Mortgagee under
this Mortgage and the other Loan Documents is, and shall at all times remain,
solely that of borrower and lender; and Mortgagee neither undertakes nor assumes
any responsibility or duty to Mortgagor or to any third party with respect to
the Property. Notwithstanding any other provisions of this Mortgage and the
other Loan Documents: (i) Mortgagee is not, and shall not be construed to be, a
partner, joint venturer, member, alter ego, manager, controlling person or other
business associate or participant of any kind of Mortgagor, and Mortgagee does
not intend to ever assume such status; (ii) Mortgagee's activities in connection
with this Mortgage and the other Loan Documents shall not be "outside the scope
of activities of a lender of money" within the meaning of California Civil Code
Section 3434, as amended or recodified from time to time, and Mortgagee does not
intend to ever assume any responsibility to any person for the quality,
suitability, safety or condition of the Property; and (iii) Mortgagee shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Mortgagor.

            (b) NO LIABILITY. Mortgagee shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action, liability,
indebtedness, damage or injury of any kind or character to any person or
property arising from any construction on, or occupancy or use of, the Property,
whether caused by or arising from: (i) any defect in any building, structure,
grading, fill, landscaping or other improvements thereon or in any on-site or
off-site improvement or other facility therein or thereon; (ii) any act or
omission of Mortgagor or any of Mortgagor's agents, employees, independent
contractors, licensees or invitees; (iii) any accident in or on the Property or
any fire, flood or other casualty or hazard thereon; (iv) the failure of
Mortgagor or any of Mortgagor's licensees, employees, invitees, agents,
independent contractors or other representatives to maintain the Property in a
safe condition; or (v) any nuisance made or suffered on any part of the
Property.

            8.9 SEVERABILITY. If any term of this Mortgage, or the application
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Mortgage, or the application of such term
to persons or circumstances other than those as to


                                    Page 33
<PAGE>
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Mortgage shall be valid and enforceable to the fullest extent
permitted by law.

            8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Mortgagee under the Mortgage established by Article 1 and the security agreement
established by Article 4 are independent and cumulative, and there shall be no
merger of any lien created by the Mortgage with any security interest created by
the security agreement. Mortgagee may elect to exercise or enforce any of its
rights, remedies or interests under either or both the Mortgage or the security
agreement as Mortgagee may from time to time deem appropriate. The absolute
assignment of rents and leases established by Article 3 is similarly independent
of and separate from the Mortgage and the security agreement.

            8.11 MERGER. No merger shall occur as a result of Mortgagee's
acquiring any other estate in, or any other lien on, the Property unless
Mortgagee consents to a merger in writing.

            8.12  OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL.  If more than
one person has executed this Mortgage as "Mortgagor", the obligations of all
such persons hereunder shall be joint and several.

            8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who
executes this Mortgage as a Mortgagor agrees that any money judgment which
Mortgagee obtains pursuant to the terms of this Mortgage or any other obligation
of that married person secured by this Mortgage may be collected by execution
upon any separate property or community property of that person.

            8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or
expressly incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior negotiations
or agreements, written or oral. The Loan Documents shall not be modified except
by written instrument executed by all parties. Any reference in any of the Loan
Documents to the Property or Collateral shall include all or any part of the
Property or Collateral. Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Mortgagee in
writing. When the identity of the parties or other circumstances make it
appropriate, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.

            8.15  CAPITALIZED TERMS.  Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Note.

            8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions
herein contained shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto. The foregoing sentence shall not
be construed to permit Mortgagor to assign the Loan except as otherwise
permitted under the Note or the other Loan Documents.

            8.17 GOVERNING LAW. This Mortgage was accepted by Mortgagee in the
state of California and the proceeds of the Note secured hereby were disbursed
from the state of California, which state the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality of the
foregoing, matters of construction, validity, enforceability and


                                    Page 34
<PAGE>
performance, this Mortgage, the Note and the other Loan Documents and the
obligations arising hereunder and thereunder shall be governed by, and construed
in accordance with, the laws of the state of California applicable to contracts
made and performed in such state and any applicable law of the United States of
America, except that at all times the provisions for the creation, perfection
and enforcement of the liens and security interests created pursuant thereto and
pursuant to the other Loan Documents shall be governed by and construed
according to the law of the state where the Property is located. Except as
provided in the immediately preceding sentence, Mortgagor hereby unconditionally
and irrevocably waives, to the fullest extent permitted by law, any claim to
assert that the law of any jurisdiction other than California governs this
Mortgage, the Note and other Loan Documents.

            8.18 CONSENT TO JURISDICTION. Mortgagor irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Mortgagor against
Mortgagee, arising out of or relating to this Mortgage, the Note or the Loan;
(b) any state or federal court sitting in the state where the Property is
located or the state in which Mortgagor's principal place of business is located
over any suit, action or proceeding, brought by Mortgagee against Mortgagor,
arising out of or relating to this Mortgage, the Note or the Loan; and (c) any
state court sitting in the county of the state where the Property is located
over any suit, action, or proceeding, brought by Mortgagee to foreclose this
Mortgage or any action brought by Mortgagee to enforce its rights with respect
to the Collateral. Mortgagor irrevocably waives, to the fullest extent permitted
by law, any objection that Mortgagor may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such court and any
claim that any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum.

            8.19  EXHIBITS.  Exhibit A is incorporated into this Mortgage by
this reference.

            8.20 ADDRESSES; REQUEST FOR NOTICE. All requests, demands, notices
and other communications that are required or permitted to be given to a party
under this Mortgage shall be in writing, refer to the Loan number, and shall be
sent to such party, either by personal delivery, by overnight delivery service,
by certified first class mail, return receipt requested, or by facsimile
transmission to the addressee or facsimile number below. All such notices and
communications shall be effective upon receipt of such delivery or facsimile
transmission, together with a printed receipt of the successful delivery of such
facsimile transmission. The addresses of the parties are set forth on page 1 of
this Mortgage and the facsimile numbers for the parties are as follows:

            Mortgagee:  WELLS FARGO BANK, N.A.
                        FAX NO.: (925) 691-5947

            Mortgagor:  MHC STAGECOACH, L.L.C.
                        FAX NO.: (312) 279-1715

      Mortgagor's principal place of business is at the address set forth on
page 1 of this Mortgage. A copy of any notice to Mortgagor shall be sent as
follows:


                                    Page 35
<PAGE>
                        Katz Randall Weinberg & Richmond
                        333 West Wacker Drive
                        Suite 1800
                        Chicago, Illinois 60606
                        Attention: Benjamin Randall
                        Facsimile: (312) 807-3903

      Any Mortgagor whose address is set forth on page 1 of this Mortgage hereby
requests that a copy of notice of default and notice of sale be delivered to it
at that address. Failure to insert an address shall constitute a designation of
Mortgagor's last known address as the address for such notice. Any party shall
have the right to change its address for notice hereunder to any other location
within the continental United States by giving 30 days notice to the other
parties in the manner set forth above.

            8.21 COUNTERPARTS. This Mortgage may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed an
original and all of which taken together, will be deemed to be one and the same
instrument.

            8.22 WAIVER OF JURY TRIAL. MORTGAGEE (BY ITS ACCEPTANCE HEREOF) AND
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF MORTGAGEE OR MORTGAGOR. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGEE TO ENTER INTO THIS MORTGAGE.


                                    Page 36
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage as of the
day and year first above written.


WITNESS/ATTEST:                     MORTGAGOR:


                                    MHC STAGECOACH, L.L.C., a Delaware
                                    limited liability company

/s/ Lawrence M. Gritton
-------------------------------     By:   MHC-QRS STAGECOACH, INC.,
Print Name: Lawrence M. Gritton           a  Delaware corporation,
                                          its Managing Member
/s/ Benjamin J. Randall
-------------------------------           By: /s/ John M. Zoeller
Print Name: Benjamin J. Randall              --------------------------
                                                Name: John M. Zoeller
                                          Its:  Vice President, Chief Financial
                                                Officer and Treasurer
<PAGE>
STATE OF IL            )
                       )  SS:
COUNTY OF COOK         )

            On 8/1, 2001 before me, Jennifer Usher, Notary Public, personally
appeared John M. Zoeller, as Vice President, Chief Financial Officer and
Treasurer of MHC-QRS STAGECOACH, INC., a Delaware corporation, the managing
member of MHC STAGECOACH, L.L.C., a Delaware limited liability company,
personally known to me to be the person whose name is subscribed in the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument, the person or the entity
upon behalf of which the person acted, executed the instrument.


WITNESS my hand and official seal.


                                    /s/ Jennifer Usher
                                    ------------------------------------------
                                    Print Name: Jennifer Usher

My Commission Expires:

     1/6/03
 [NOTARIAL SEAL]

NOTARY PUBLIC, State of IL

Serial No., if any:_______________
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT A
                               DESCRIPTION OF LAND

Exhibit A to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

Description of Land. The Land referred to in this Mortgage is situated in the
county of Volusia, state of Florida and is described as follows:

PARCEL A:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East, also a portion of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East, Volusia
County, Florida being more particularly described as follows:

As a point of reference begin at the Southwest corner of Section 6, Township 16
South, Range 33 East, thence along the South line of Section 6 South 89 degrees
35 minutes 25 seconds East a distance of 3300.00 feet to the Point of Beginning;
thence North 00 degrees 24 minutes 35 seconds East a distance of 330.00 feet;
thence North 89 degrees 35 minutes 25 seconds West a distance of 660.00 feet;
thence North 00 degrees 24 minutes 35 seconds East a distance of 200.00 feet;
thence South 89 degrees 35 minutes 25 seconds East a distance of 612.36 feet to
a point on the Southerly right-of-way line of Clyde Morris Blvd. (a 100.00 foot
right-of-way as now laid out and used); thence South 41 degrees 06 minutes 50
seconds East along the Southerly right-of-way line of said Clyde Morris Blvd. a
distance of 1067.45 feet to a point on the East line of the West one-half of the
Northeast one-quarter of Section 7, Township 16 South, Range 33 East; thence
South 00 degrees 24 minutes 35 seconds West along the said East line of the West
one-half of the Northeast one-quarter of said Section 7 a distance of 2370.82
feet; thence North 89 degrees 35 minutes 25 seconds West a distance of 1320.00
feet to a point in the West line of the West one-half of the Northeast
one-quarter of Section 7; thence North 00 degrees 24 minutes 35 seconds East
along the West line of the West one-half of the Northeast one-quarter of Section
7 a distance of 1650.00 feet; thence South 89 degrees 35 minutes 25 seconds East
a distance of 660.00 feet; thence North 00 degrees 24 minutes 35 seconds East a
distance of 990.00 feet to the Point of Beginning of this description.

PARCEL B:

A portion of the Northwest one-quarter of Section 7, Township 16 South, Range 33
East, Volusia County, Florida, being more particularly described as follows: As
a point of reference, commence at a concrete monument marking the Northwest
corner of Willow Run Subdivision, Unit 2, as per map recorded September 17,
1979, in Map Book 36, Pages 16 and 17 of the Public Records of Volusia County,
Florida; thence run North 00 degrees 41 minutes 47 seconds West along a
Northerly extension of the Westerly line of said Willow Run Subdivision, Unit
2, a


                                    EXHIBIT A
<PAGE>
distance of 230.08 feet to a point in the North line of 230.00 foot Florida
Power and Light Company right-of-way as described in instrument recorded October
5, 1973, in Official Records Book 1664, Pages 448-450, of the Public Records of
Volusia County, Florida, said point also being in the Southerly line of Pickwick
Village Mobile Home Park, an unrecorded subdivision; thence run South 89 degrees
35 minutes 24 seconds West along the North line of said Florida Power and Light
Company right-of-way, being also the Southerly line of Pickwick Village, a
distance of 1.13 feet to a concrete monument marking the Southwest corner of
said Pickwick Village; thence North 00 degrees 24 minutes 10 seconds West, a
distance of 400.00 feet to the Point of Beginning; thence North 89 degrees 45
minutes 45 seconds West, a distance of 440.02 feet to the center line of an
80.00 foot drainage ditch easement as described in instrument recorded June 28,
1966, in Official Records Book 847, Pages 429 through 444, of the Public Records
of Volusia County, Florida; thence North 00 degrees 24 minutes 10 seconds West
along the center line of said drainage ditch easement, a distance of 1250.34
feet; thence South 89 degrees 45 minutes 45 seconds East, a distance of 440.02
feet to a point on the Westerly line of said Pickwick Village Subdivision;
thence South 00 degrees 24 minutes 10 seconds East along said Westerly line, a
distance of 1250.34 feet to the Point of Beginning.

SAID PROPERTY ALSO BEING DESCRIBED AS FOLLOWS:

A portion of the Southwest one-quarter of the Southeast one-quarter of Section
6, Township 16 South, Range 33 East; also a portion of the West one-half of the
Northeast one-quarter and a portion of the Northwest one-quarter, all lying in
Section 7, Township 16 South, Range 33 East in Volusia County, Florida, being
more particularly described as follows: Commence at the Southwest corner of said
Section 6, Township 16 South, Range 33 East and run South 89 degree 35' 25" East
along the South line of the Southwest one-quarter a distance of 2635.46 feet to
the Southwest corner of the Southeast one-quarter of said Section 6; thence
North 01 degree 17' 05" East along the West line of the Southeast one-quarter of
said Section 6 a distance of 328.72 feet to an iron pipe labeled LS 2048 and the
Point of Beginning of this description; from said Point of Beginning, continue
North 01 degree 17' 05" East along the West line of the Southeast one-quarter a
distance of 201.23 feet to an iron pipe labeled LS 2048; thence South 89 degree
35' 25" East, 619.16 feet to an iron pipe labeled LS 2048, said point being on
the Southwesterly right-of-way line of Clyde Morris Boulevard; thence South 40
degree 56' 13" East along the Southwesterly right-of-way line of said Clyde
Morris Boulevard a distance of 1061.80 feet to an iron pipe labeled LS 2048,
said point being on the East line of the West one-half of the Northeast
one-quarter of the aforementioned Section 7, Township 16 South, Range 33 East;
thence South 00 degree 34' 32" West along the East line of the West one-half of
the Northeast one-quarter of said Section 7, a distance of 2362.20 feet to an
iron pin labeled LB 707, said point being on the North line of the 230 foot wide
Florida Power and Light Company right-of-way, as described in Official Records
Book 1664, Pages 448, 449, and 450 of the Public Records of Volusia County,
Florida; thence North 89 degree 13' 53" West along the North line of the 230
foot wide Florida Power and Light Company right-of-way a distance of 1321.12
feet to an iron pipe labeled LS 2048, said point being on the West line of the
West one-half of the Northeast one-quarter of the aforementioned Section 7;
thence North 00 degree 23' 35" East along the West line of the West one-half of
the Northeast one-quarter a distance of 400.00 feet to an iron pipe labeled LS
2048; thence North 89 degree 13' 53" West, 440.02 feet to an iron pipe labeled
LS 2048, said point being the centerline of a drainage ditch; thence North 00
degree 23' 35" East along said drainage ditch centerline a distance of 1250.34
feet to


                                    EXHIBIT A
<PAGE>
an iron pipe labeled LS 2048; thence South 89 degrees 13' 53" East, 440.02 feet
to an iron pipe labeled LS 2048, said point being on the West line of the West
one-half of the Northeast one-quarter of the aforementioned Section 7; thence
South 00 degrees 23' 35" West along the West line of the West one-half of the
Northeast one-quarter a distance of 12.16 feet to an iron pipe labeled LS 2048;
thence South 89 degrees 27' 21" East, 661.65 feet to an iron pipe labeled LS
2048; thence North 00 degrees 25' 26" East, 984.46 feet to an iron pipe labeled
LS 2048; thence North 01 degrees 14' 43" East, 328.45 feet to a nail in disk in
pavement labeled LB 707; thence North 89 degrees 33' 59" West, 661.95 feet to
the Point of Beginning.


                                    EXHIBIT A
<PAGE>
                                                            Loan No. 31-0900553R

                                    EXHIBIT B
    CALCULATION OF DOCUMENTARY STAMP AND INTANGIBLE PERSONAL PROPERTY TAX

Exhibit B to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."

      This Mortgage is part of an out-of-state loan transaction which only
partially secures the loan. This Mortgage encumbers the property described on
Exhibit A, and separate mortgages are being executed and delivered by Mortgagor
encumbering certain other property located in Florida and in other states (such
other property being further described on Exhibit C and being referred to as the
"Other Property"). The Florida collateral is located in Brevard, Volusia and
Manatee Counties, and three (3) separate mortgages (the Florida Mortgages")
encumbering three (3) properties are being executed and delivered by Mortgagor
for simultaneous recording in the various Florida counties described above. The
total indebtedness secured by this Mortgage equals $50,000,000.00, as evidenced
by one (1) promissory note in the aggregate original principal amount of
$50,000,000.00 (the "Note"). The Note was made, executed and delivered outside
the State of Florida. The value of the Florida property encumbered by the
Florida Mortgages equals $27,200,000.00. The aggregate value of all other
property securing the loan and located outside the State of Florida equals
$50,400,000.00. Thus, the total aggregate value of all property securing the
loan equals $77,600,000.00. The property encumbered by the Florida Mortgages and
located in Florida represents thirty-five (35%) percent [$27,200,000.00 /
$77,600,000.00] of the total value of all property securing the loan. In
accordance with Florida Statutes, Section 201.08, and Florida Administrative
Code, Rule 12B-4.053(32)(b), documentary stamp tax is computed based upon the
percentage of indebtedness which the value of the mortgaged property located in
Florida bears to the total value of all mortgaged property (which, in this case,
equals $17,500,000.00). Accordingly, documentary stamp tax in the amount of
$61,250.00 is due upon the recording of the Florida Mortgages in the Florida
counties listed above. Pursuant to Chapter 199, Florida Statutes, non-recurring
intangible personal property tax is computed and payable based upon that portion
of the indebtedness which bears the same relation as the value of the mortgaged
property located in Florida bears to the total value of all mortgaged property,
which, in this case, equals [$50,000,000.00 x ($27,200,000.00 /
$77,600,000.00)]. Thus, non-recurring intangible personal property tax in the
amount of $35,000.00 is due and payable upon recording of the Florida Mortgages
in the Florida counties listed above.


                                    EXHIBIT B
<PAGE>
                                    EXHIBIT C

                          DESCRIPTION OF OTHER PROPERTY


Exhibit C to MORTGAGE AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (AND FIXTURE FILING) ("Mortgage") between MHC STAGECOACH, L.L.C., a
Delaware limited liability company, as "Mortgagor," and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as "Mortgagee."


Description of Land. The Other Property referred to in this Mortgage is
described as follows:

                                 CABANA PROPERTY

The Northeast Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16,
Township 21 South, Range 62 East, M.D.B. & M., Clark County, Nevada.

EXCEPTING THEREFROM the described premises:

The North Forty feet (40.00') and the East Forty feet (40.00') of the Northeast
Quarter (NE 1/4) of the Southwest Quarter (SW 1/4) of Section 16, Township 21
South, Range 62 East, M.D.B. & M., Clark County, Nevada; together with the
certain spandrel area in the Northeast Quarter corner thereof, also being the
Southwest corner of the intersection of East Twain Avenue and Cabana Drive,
bounded as follows: on the North by the South line of the North Forty feet
(40.00'); on the East by the West line of the East Forty feet (40.00'), and on
the Southwest by the arc of a curve concave Southwesterly, having a radius of
Twenty five feet (25.00') that is tangent to the South line of said North Forty
feet (40.00') is tangent to the South line of said North Forty feet (40.00') and
tangent to the West line of said Forty feet (40.00').

ALSO BEING described as that portion of the Northeast Quarter (NE 1/4) of the
Southwest Quarter (SW 1/4) of Section 16, Township 21 South, Range 62 East,
M.D.B. & M., Clark County, Nevada, more particularly described as follows:

COMMENCING at the Northwest corner of the Northeast Quarter (NE 1/4) of the
Southwest Quarter of said Section 16; thence South 01 degree 55' 58" East a
distance of 40.01 feet to a point on the Southerly right of way line of Twain
Avenue (80.00 feet wide) said point being the TRUE POINT OF BEGINNING; thence
North 89 degrees 09' 31" East, along said Southerly right of way of Twain Avenue
a distance of 1259.02 feet to a point of tangent curve concave to the Southwest
having a radius of 25.00 feet; thence Southeasterly along the arc of said curve
through a central angle of 89 degrees 28' 02" an arc length of 39.04 feet to a
point on the Westerly right of way line of Cabana Drive (80.00 feet wide);
thence South 01 degree 22' 27" East along said Westerly right of way line of
Cabana Drive a distance of 1238.26 feet; thence South 88 degrees 17' 57" West a
distance of 1271.25 feet; thence North 01 degree 55' 58" West a distance of
1282.27 feet to the TRUE POINT OF BEGINNING.


                                    EXHIBIT C
<PAGE>
                             WOODLAND HILLS PROPERTY


Northwest 1/4 of the Southeast 1/4 and the North 1/2 of the Southwest 1/4 of
the Southeast 1/4 of Section 21, Township 2 South, Range 68 West of the 6th
P.M., County of Adams, State of Colorado,

EXCEPT portions dedicated for County roads;

AND EXCEPT that part described as follows:

Beginning at the center of Section 21, Township 2 South, Range 68 West of the
6th P.M., thence South 89 degrees 53 minutes East along the North line of the
Southeast 1/4, Section 21, a distance of 40.00 feet; thence South parallel to
the West line of the Southeast 1/4 of said Section, 30.00 feet to the True Point
of Beginning; thence South 89 degrees 53 minutes East parallel to the North line
of the Southeast 1/4 a distance of 180.00 feet; thence South parallel to the
West line of the Southeast 1/4, 150.00 feet; thence North 89 degrees 53 minutes
West parallel to the North line of the Southeast 1/4, 180.00 feet; thence North
parallel to the West line of the Southeast 1/4, 150.00 feet to the True Point of
Beginning, being in the City of Thornton, County of Adams, State of Colorado;

AND EXCEPT that part described as follows:

A part of the Southeast 1/4 of Section 21, Township 2 South, Range 68 West, of
the 6th P.M., County of Adams, State of Colorado, described as follows:
Beginning at a point 220.00 feet East and 180.00 feet South of the Northwest
corner of said Southeast 1/4; thence Southerly and parallel to the West line of
said Southeast 1/4 a distance of 393.93 feet; thence on an angle to the right of
90 degrees a distance of 180.00 feet to a point 40 feet East of the West line of
said Southeast 1/4; thence on an angle to the right of 90 degrees and parallel
to said West line a distance of 394.76 feet to a point 180.00 feet South of the
North line of said Southeast 1/4; thence on an angle to the right 90 degrees 16
minutes 40 seconds and parallel to said North line a distance of 180.00 feet to
the Point of Beginning, County of Adams, State of Colorado.


                                    EXHIBIT C




<PAGE>
                                WINDMILL PROPERTY

PARCEL A:

Begin at the Northwest corner of the Southeast 1/4 of the Northeast 1/4 of
Section 16, Township 35 South, Range 18 East, Manatee County, Florida; thence
South 00 (degrees) 14' 17" East, 1327.25 feet to the Southwest corner of the
Southeast 1/4 of the Northeast 1/4 of the aforementioned Section 16; thence
North 89 (degrees) 58' 09" East, 1322.53 feet to the Southeast corner of the
Southeast 1/4 of the Northeast 1/4 of Section 16; thence South 00 (degrees) 24'
10" East, 137.28 feet; thence North 89 (degrees) 40' 44" East, 1269.21 feet;
thence North 00 (degrees) 15' 02" West, 137.28 feet; thence North 89 (degrees)
40' 56" East, 42.00 feet along the South line of the Southwest 1/4 of the
Northwest 1/4 of Section 15, Township 35 South, Range 18 East, Manatee County,
Florida to a point, said point being the Southwest corner of the Easterly 8.00
feet of the Southwest 1/4 of the Northwest 1/4 of Section 15; thence North 00
(degrees) 15' 02" West along the West line of said Easterly 8.00 feet, 529.06
feet; thence North 89 (degrees) 54' 48" West, 352.77 feet; thence North 83
(degrees) 03' 14" West, 41.33 feet; North 89 (degrees) 58' 10" West, 384.29
feet; thence North 64 (degrees) 05' 35" West, 45.06 feet; thence North 89
(degrees) 49' 37" West, 69.63 feet; thence North 00 (degrees) 27' 02" West,
39.77 feet; thence South 89 (degrees) 57' 27" West, 229.20 feet; thence South 00
(degrees) 34' 37" West, 52.86 feet; thence South 89 (degrees) 50' 04" West,
69.88 feet; thence North 68 (degrees) 46' 00" West, 42.84 feet; thence North 89
(degrees) 02' 58" West, 70.09 feet; thence North 00 (degrees) 46' 23" West,
36.15 feet; thence South 89 (degrees) 58' 50" West, 204.28 feet; thence South 01
(degrees) 06' 03" West, 34.82 feet; thence North 89 (degrees) 55' 45" West,
69.61 feet; thence North 61 (degrees) 14' 43" West, 46.29 feet; thence North 89
(degrees) 47' 56" West, 49.68 feet; thence North 01 (degrees) 06' 00" West,
14.20 feet; thence South 89 (degrees) 37' 41" West, 244.94 feet; thence North 14
(degrees) 02' 42" West, 20.66 feet; thence North 00 (degrees) 04' 49" East,
50.12 feet; thence North 07 (degrees) 13' 20" West, 40.26 feet; thence North 00
(degrees) 29' 42" West, 229.78 feet; thence North 89 (degrees) 19' 18" East,
21.87 feet; thence North 00 (degrees) 01' 05" East, 69.28 feet; thence North 16
(degrees) 42' 43" West, 41.53 feet; thence North 00 (degrees) 18' 37" East,
70.77 feet; thence North 90 (degrees) 00' 00" West, 443.35 feet; thence North 02
(degrees) 07' 48" West, 80.67 feet; thence North 25 (degrees) 58' 34" East,
33.85 feet; thence North 00 (degrees) 07' 24" East, 93.96 feet; thence South 89
(degrees) 59' 49" West, 295.60 feet to the Point of Beginning.

PARCEL B:

Perpetual non-exclusive rights-of-way and easements as contained in Agreements
recorded January 13, 1939, in Deed Book 159, page 331, and rerecorded February
16, 1939, in Deed Book 160, page 23; recorded October 30, 1939, in Deed Book
164, page 340; and recorded May 31, 1974, in Official Records Book 673, page
646, all of the Public Records of Manatee County, Florida.


                                    EXHIBIT C
<PAGE>
                              INDIAN OAKS PROPERTY

PARCEL A:

A parcel of land lying in the Northwest 1/4 of Section 21, Township 25 South,
Range 36 East, Brevard County, Florida, being more particularly described as
follows:

Commence at the Northwest corner of said Section 21, and run North 89 (degrees)
50' 50" East, along the North line of said Section 21, a distance of 330.04 feet
to the Point of Beginning; thence continue North 89 (degrees) 50' 50" East,
along said North line, a distance of 816.83 feet; thence South 05 (degrees) 47'
10" West, a distance of 2488.78 feet; thence North 89 (degrees) 53' 00" West, a
distance of 419.86 feet; thence South 01 (degrees) 04' 00" East, a distance of
150.00 feet, to a point on the North Right of Way line of Barnes Boulevard (a
100 foot Right of Way); thence North 89 (degrees) 53' 00" West, along said North
Right of Way line, a distance of 100.02 feet; thence North 01 (degrees) 04' 00"
West, parallel to the West line of said Northwest 1/4, a distance of 2623.29
feet, to the Point of Beginning.

PARCEL B:

A perpetual non-exclusive easement for the benefit of Parcel A for surface water
runoff from "Pod #2" through a weir on said land eastward to an existing
drainage ditch as set forth in Grant of Easement from George M. Green, Jr. and
Sandie J. Green in favor of The Indian Oaks Corporation, dated July 27, 1987,
recorded August 4, 1987, in the Public Records of Brevard County, Florida, at
Official Records Book 2826, page 2681; and modified by Stipulated Settlement in
Civil Action No. 87-9785-CA-C, The Indian Oaks Corporation, a Florida
corporation, Plaintiffs, vs. George M. Green, Jr. and Sandie J. Green, his wife,
Defendants, dated July 27, 1987, recorded August 20, 1987, in the Public Records
of Brevard County, Florida, at Official Records Book 2831, page 2211, more
particularly described as follows:

Beginning at the approximate Southwest corner of land to the East as described
in Deed recorded in Official Records Book 2471, page 2094, Public Records of
Brevard County, Florida, said point being on the public drainage ditch on the
north side of Barnes Boulevard; thence north along an existing approximately
twenty (20) foot wide drainage ditch on the westerly boundary of the land
described in said Deed for an approximate distance of 844.00 feet to an outlet
pipe which extends easterly into said drainage ditch from a Type "C" inlet weir
located on "Pod #2" of Parcel A.


                                    EXHIBIT C
<PAGE>
                             APOLLO VILLAGE PROPERTY

That portion of the Southwest quarter of Section 21, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

COMMENCING at the Southwest corner of said Section 21;

THENCE North 00 (DEGREE) 34' 15" East (assumed bearing) along the West line of
said Section 21, a distance of 786.55 feet;

THENCE South 89 (DEGREE) 25' 45" East 65.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89 (DEGREE) 25' 45" East 126.95 feet;

THENCE North 87 (DEGREE) 23' 37" East 116.40 feet;

THENCE South 00 (DEGREE) 30' 51" West 124.13 feet to the Northeast corner of the
property described in Docket 10568, page 613, records of Maricopa County,
Arizona;

THENCE South 00 (DEGREE) 34' 44" West along the East line of said property
156.09 feet to a point on a line 500.00 feet North and parallel to the South
line of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East along said line 530.61 feet to the
Northeast corner of the property described in Docket 6785, page 268, records of
Maricopa County, Arizona;

THENCE South 00 (DEGREE) 27' 31" West 435.31 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East along said line 51.93 feet;

THENCE North 00 (DEGREE) 20' 35" East 127.50 feet;

THENCE North 02 (DEGREE) 21' 45" West 308.14 feet;

THENCE North 88 (DEGREE) 15' 20" East 445.27 feet;

THENCE North 21 (DEGREE) 52' 10" East 195.00 feet;

THENCE South 89 (DEGREE) 39' 20" East 285.57 feet to a point on the West line of
the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00 (DEGREE) 20' 40" East along said West line 807.45 feet to a
point on the Southerly line of the property described in Docket 15563, page 420,
records of Maricopa County, Arizona;

THENCE South 86 (DEGREE) 58' 05" West along said South line and the South line
of the property described in Docket 15133, page 167, records of Maricopa County,
Arizona, 1,366.81 feet to a point 309.53 feet East of the West line of said
Section 21;

THENCE South 00 (DEGREE) 37' 00" West 616.40 feet (620.95 feet, record) to the
North line of the property described in Docket 6099, page 277, records of
Maricopa County, Arizona;

THENCE North 89 (DEGREE) 25' 45" West along said North line 243.43 feet to a
point on a line 65.00 feet East of and parallel to the West line of said Section
21;

THENCE South 00 (DEGREE) 34' 15" West along said line 55.48 feet to the POINT OF
BEGINNING;

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East (an assumed bearing) along the South line
of said Section 21, a distance of 840.11 feet;

THENCE North 00 (DEGREE) 27' 31" East 65.05 feet to the POINT OF BEGINNING;

THENCE continuing North 00 (DEGREE) 27' 31" East along the East line of the
property described in Docket 6785, page 259, records of Maricopa County,
Arizona, 435.31 feet;

THENCE North 87 (DEGREE) 25' 34" East 36.52 feet;

THENCE South 02 (DEGREE) 21' 45" East 308.14 feet;


                                    EXHIBIT C
<PAGE>
THENCE South 00 (DEGREE) 20' 35" West 127.50 feet to a point on a line 65.00
feet North of and parallel to the South line of said Section 21;

THENCE South 88 (DEGREE) 16' 15" West along said line 51.93 feet to the POINT OF
BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88 (DEGREE) 08' 29" East (North 88 (DEGREE) 16' 15" East, record)
along the South line of said Section 21, a distance of 1,684.02 feet to the West
line of the East 60 acres of the Southwest quarter of said Section 21;

THENCE North 00 (DEGREE) 06' 45" East 669.32 feet (North 00 (DEGREE) 20' 40"
East 669.45, record) along said West line to the POINT OF BEGINNING;

THENCE North 89 (DEGREE) 47' 06" West (North 89 (DEGREE) 39' 20" West, record)
115.00 feet;

THENCE North 16 (DEGREE) 08' 00" East 325.00 feet;

THENCE North 52 (DEGREE) 29' 10" East 31.95 feet to the West line of the East 60
acres of the Southwest quarter of said Section 21;

THENCE South 00 (DEGREE) 06' 45" West (South 00 (DEGREE) 20' 40" West, record)
along said West line 332.09 feet to the POINT OF BEGINNING; and

EXCEPT COMMENCING at the Southwest corner of said Section 21;

THENCE North 88 (DEGREE) 16' 15" East along the South line of said Section 21, a
distance of 892.17 feet;

THENCE North 00 (DEGREE) 20' 35" East 65.04 feet to a point on a line parallel
to and 65.00 feet North of the South line of said Section 21;

THENCE continuing North 00 (DEGREE) 20' 35" East 127.50 feet;

THENCE North 02 (DEGREE) 21' 45" West 308.14 feet;

THENCE North 88 (DEGREE) 15' 20" East 445.27 feet;

THENCE North 21 (DEGREE) 52' 10" East 195.00 feet;

THENCE South 89 (DEGREE) 39' 20" East 21.00 feet to the POINT OF BEGINNING;

THENCE continuing South 89 (DEGREE) 39' 20" East 55.00 feet;

THENCE North 00 (DEGREE) 20' 40" East 40.00 feet;

THENCE North 89 (DEGREE) 39' 20" West 55.00 feet;

THENCE South 00 (DEGREE) 20' 40" West 40.00 feet to the POINT OF BEGINNING.


                                    EXHIBIT C
<PAGE>
                            CASA DEL SOL III PROPERTY

PARCEL NO. 1:

That part of Lot 3, A Subdivision of the East half of Section 24, Township 3
North, Range 1 East, of the Gila and Salt River Base and Meridian, Maricopa
County, Arizona, according to Book 11 of Maps, page 30, records of Maricopa
County, Arizona, described as follows:

BEGINNING at the Southeast corner of said Section 24;

THENCE West along the South line of said Section 24, a distance of 1,320.54
feet;

THENCE North 01 (DEGREE) 38' 30" East 55.02 feet to a point on a line that is
55.00 feet North of and parallel to said South line said line being the North
line of Peoria Avenue and the TRUE POINT OF BEGINNING;

THENCE West along said North line 627.98 feet;

THENCE North 45 (DEGREE) 44' 20" East 28.64 feet;

THENCE North 01 (DEGREE) 28' 40" East 307.70 feet;

THENCE North 45 (DEGREE) 00' 00" East 149.61 feet;

THENCE North 32 (DEGREE) 31' 59" West 76.22 feet;

THENCE North 01 (DEGREE) 38' 30" East 420.00 feet;

THENCE North 89 (DEGREE) 57' 50" East 11.71 feet;

THENCE North 01 (DEGREE) 38' 30" East 133.00 feet to a point on a non-tangent
curve concave to the East the center of which bears North 80 (DEGREE) 00' 01"
East having a radius of 1,430.40 feet and an interior angle of 23 (DEGREE) 03'
59";

THENCE Northeasterly along said curve 575.86 feet;

THENCE North 01 (DEGREE) 38' 30" East 84.00 feet;

THENCE North 89 (DEGREE) 57' 50" East 738.38 feet;

THENCE South 01 (DEGREE) 38' 30" West 1,407.21 feet;

THENCE West 200.00 feet;

THENCE South 01 (DEGREE) 38' 30" West 300.11 feet to the TRUE POINT OF
BEGINNING.

PARCEL NO. 2:

A perpetual easement for the installation and maintenance of private utility
lines and drainage, as created in instrument recorded in Docket 12335, page
1213, records of Maricopa County, Arizona, being 12.00 feet in width, being 6.00
feet on each side of the centerlines described as follows:

BEGINNING at the Southeast corner of Section 24, Township 3 North, Range 1 East,
of the Gila and Salt River Base and Meridian, Maricopa County, Arizona;

THENCE West 1,326.54 feet along the South line of said Section 24;

THENCE North 01 (DEGREE) 38' 30" East 55.00 feet to the TRUE POINT OF BEGINNING;

THENCE North 01 (DEGREE) 38' 30" East 306.11 feet;

THENCE East 206.00 feet to the point of termination; and


                                    EXHIBIT C
<PAGE>
BEGINNING at a point which bears North 01(DEGREE)38' 30" East 1,757.00 feet and
South 89 (DEGREE) 57' 50" West 1,120.55 feet from the Southeast corner of said
Section 24;

THENCE South 89 (DEGREE) 57' 50" West 1,498.24 feet to a point on the East line
of the West 40.00 feet of the Southeast quarter of said Section 24 and the point
of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 3:

A perpetual easement for irrigation purposes and for the use, construction and
maintenance of an irrigation lateral, as created in instrument recorded in
Docket 12335, page 1215, records of Maricopa County, Arizona, being 5.00 feet in
width, being 2.50 feet on each side of the centerline described as follows:

BEGINNING at a point which bears North 01 (DEGREE) 38' 30" East 1,760.50 feet
and South 89 (DEGREE) 57' 50" West 55.00 feet from the Southeast corner of
Section 24, Township 3 North, Range 1 East, of the Gila and Salt River Base and
Meridian, Maricopa County, Arizona; THENCE South 89 (DEGREE) 57' 50" West
1,833.37 feet to the point of termination;

EXCEPT any portion lying within Parcel No. 1.

PARCEL NO. 4:

A portion of the Southeast quarter of Section 24, Township 3 North, Range 1
East, of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows:

A strip of land 6.00 feet in width located West of and parallel to the Easterly
boundary line of that certain Special Warranty Deed recorded in Document No.
99-439307, records of Maricopa County, Arizona, described as follows:

COMMENCING at the South quarter corner of Section 24;

THENCE North 01 (DEGREE) 28' 40" East along the West line of the Southeast
quarter of said Section 24, 1,760.87 feet to a point on the South line of Lot 2
as shown in Book 11 of Maps, page 30, records of Maricopa County, Arizona;

THENCE North 89 (DEGREE) 55' 44" East along said South line 794.70 feet to a
point 6.00 feet West of and parallel to said Easterly boundary line of said
Special Warranty Deed recorded in Document No. 99-439307, records of Maricopa
County, Arizona and the POINT OF BEGINNING;

THENCE continuing North 89 (DEGREE) 55' 44" East, along said South line, 6.00
feet to the Northeast corner of said Special Warranty Deed recorded in Document
No. 99-439307, records of Maricopa County, Arizona and the Northwest corner of
Quit Claim Deed Recorded in Document No. 95-388831, records of Maricopa County,
Arizona;

THENCE South 01 (DEGREE) 38' 36" West, along the Easterly boundary line of said
Special Warranty Deed and the Westerly boundary line of said Quit Claim Deed,
84.00 feet to the beginning of a non-tangent curve concave Easterly and having a
radial bearing of North 76 (degree) 55' 57" West;

THENCE Southerly along said curve and along said Easterly and Westerly boundary
lines and through a central angle of 19 (DEGREE) 06' 47" an arc length of 477.16
feet;

                                    EXHIBIT C
<PAGE>
THENCE South 89 (DEGREE) 55' 44" West to a point 6.00 feet West of and parallel
to said Easterly and Westerly boundary lines to the beginning of a curve concave
Easterly and having a radius of 1,436.40 feet;

THENCE Northerly along said cur ve 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines through a central angle of 19 (DEGREE) 03'
50" an arc length of 477.93 feet;

THENCE North 01 (DEGREE) 38' 36" East 6.00 feet West of and parallel to said
Easterly and Westerly boundary lines 83.22 feet to the POINT OF BEGINNING.


                                    EXHIBIT C


</TEXT>
</DOCUMENT>
