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<SEC-DOCUMENT>0000950153-05-001422.txt : 20050614
<SEC-HEADER>0000950153-05-001422.hdr.sgml : 20050613
<ACCEPTANCE-DATETIME>20050614170606
ACCESSION NUMBER:		0000950153-05-001422
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		11
CONFORMED PERIOD OF REPORT:	20050509
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050614
DATE AS OF CHANGE:		20050614

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERCO /NV/
		CENTRAL INDEX KEY:			0000004457
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-AUTO RENTAL & LEASING (NO DRIVERS) [7510]
		IRS NUMBER:				880106815
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11255
		FILM NUMBER:		05895480

	BUSINESS ADDRESS:	
		STREET 1:		1325 AIRMOTIVE WAY STE 100
		CITY:			RENO
		STATE:			NV
		ZIP:			89502
		BUSINESS PHONE:		7756886300

	MAIL ADDRESS:	
		STREET 1:		1325 AIRMOTIVE WAY
		STREET 2:		SUITE 100
		CITY:			RENO
		STATE:			NV
		ZIP:			89502

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERCO
		DATE OF NAME CHANGE:	19770926

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			U HAUL INTERNATIONAL INC
		CENTRAL INDEX KEY:			0000004458
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-AUTOMOTIVE REPAIR, SERVICES & PARKING [7500]
		IRS NUMBER:				860663060
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	002-38498
		FILM NUMBER:		05895481

	BUSINESS ADDRESS:	
		STREET 1:		2727 N CENTRAL AVE
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85004
		BUSINESS PHONE:		6022636645

	MAIL ADDRESS:	
		STREET 1:		P.O. BOX 21502
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85036-1502

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERCO INC /OR/
		DATE OF NAME CHANGE:	19790319

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERCO INC
		DATE OF NAME CHANGE:	19770301

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ADVANCED MANAGEMENT ENGINEERING & RESEAR
		DATE OF NAME CHANGE:	19730830
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K/A
<SEQUENCE>1
<FILENAME>p70784e8vkza.htm
<DESCRIPTION>8-K/A
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vkza</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>


<P align="center" style="font-size: 10pt"><HR size="1" noshade width="15%" align="center" color="#000000">


<P align="center" style="font-size: 18pt"><B>FORM 8-K/A</B>


<P align="center" style="font-size: 12pt"><B>CURRENT REPORT</B>



<P align="center" style="font-size: 12pt"><B>Pursuant to Section&nbsp;13 or 15(d) of the<BR>
Securities Exchange Act of 1934</B>



<P align="center" style="font-size: 10pt">Date of Report (Date of
earliest event reported): June&nbsp;14, 2005<BR>
<DIV style="font-size: 10pt; margin-left:62%">(May&nbsp;9, 2005)</div>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Commission</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">Registrant, State of Incorporation,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">I.R.S. Employer</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">File Number</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Address and Telephone Number</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Identification Number</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">1-11255
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>AMERCO</B><BR>
(A Nevada Corporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">88-0106815</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1325 Airmotive Way, Ste. 100</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reno, Nevada 89502</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone: (775)&nbsp;688-6300</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">2-38498
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>U-Haul International, Inc.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">86-0663060</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(A Nevada Corporation)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2727 N. Central Avenue</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Phoenix, Arizona 85004</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone: (602)&nbsp;263-6645</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Check the appropriate box below if the Form&nbsp;8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT face="Wingdings">&#111;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Written communications pursuant to Rule&nbsp;425 under the Securities Act (17
CFR 230.425)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT face="Wingdings">&#111;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17
CFR 240.14a-12)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT face="Wingdings">&#111;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT face="Wingdings">&#111;</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>









<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">Item&nbsp;1.01. Entry into a Material Definitive Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">Item&nbsp;2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">Item&nbsp;8.01. Other Events</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">Item&nbsp;9.01. Financial Statements and Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w1.txt">EX-10.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w2.txt">EX-10.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w3.txt">EX-10.3</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w4.txt">EX-10.4</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w5.txt">EX-10.5</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w6.txt">EX-10.6</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w7.txt">EX-10.7</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv10w8.txt">EX-10.8</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv99w1.htm">EX-99.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="p70784exv99w2.htm">EX-99.2</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "Item&nbsp;1.01. Entry into a Material Definitive Agreement" -->
<DIV align="left"><A NAME="000"></A></DIV>


<P align="left" style="font-size: 10pt"><B>Item&nbsp;1.01. Entry into a Material Definitive Agreement.</B>

<!-- link1 "Item&nbsp;2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="left" style="font-size: 10pt; margin-left: 60px; text-indent: -60px"><B>Item&nbsp;2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of
a Registrant.</B>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;8, 2005, AMERCO (the &#147;Company&#148;) obtained approximately $945&nbsp;million in financing from
three separate asset-backed facilities to complete the Company&#146;s
refinancing that was previously announced on May&nbsp;9, 2005.
These facilities consist of a $240&nbsp;million senior mortgage loan funded by Merrill Lynch, a $465
million hybrid real estate-backed loan funded by Merrill Lynch and a $240&nbsp;million senior mortgage
loan funded by Morgan Stanley.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will use the proceeds from these facilities to repay existing indebtedness plus a
one-time pre-tax charge estimated to be $34&nbsp;million associated with early payment of the Company&#146;s existing
debt. The Company will use the remaining proceeds for its capital and operational needs.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The description of the foregoing matters is not complete and is qualified in its entirety by
the full text of the facility agreements, copies of certain of which are attached hereto as
Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and 10.8 and are incorporated herein by this
reference. A copy of the press release announcing the completion of the refinancing is attached
hereto as Exhibit&nbsp;99.1.

<!-- link1 "Item&nbsp;8.01. Other Events" -->
<DIV align="left"><A NAME="002"></A></DIV>
<P align="left" style="font-size: 10pt"><B>Item&nbsp;8.01. Other Events.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;9, 2005, the Company announced that the Arizona Department of Insurance signed an
Order releasing Republic Western Insurance Company from administrative supervision. A copy of the press release is
attached hereto as Exhibit&nbsp;99.2.

<!-- link1 "Item&nbsp;9.01. Financial Statements and Exhibits" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="left" style="font-size: 10pt"><B>Item&nbsp;9.01. Financial Statements and Exhibits.</B>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.1&nbsp;&nbsp;</TD>
    <TD>Amended and Restated Credit Agreement, dated June&nbsp;8, 2005, among Amerco
Real Estate Company, Amerco Real Estate Company of Texas, Inc., Amerco Real Estate
Company of Alabama, Inc., U-Haul Co. of Florida, Inc., U-Haul
International, Inc. and
Merrill Lynch Commercial Finance Corp.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.2&nbsp;&nbsp;</TD>
    <TD>Security Agreement, dated June&nbsp;8, 2005, by Amerco Real Estate
Company, Amerco Real Estate Company of Texas, Inc., Amerco Real Estate Company of
Alabama, Inc., U-Haul Co. of Florida, Inc., U-Haul International,
Inc. and the Marketing Grantors named therein in favor of Merrill Lynch Commercial Finance Corp.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.3&nbsp;&nbsp;</TD>
    <TD>Guarantee, dated June&nbsp;8, 2005, by U-Haul International,
Inc. in favor of
Merrill Lynch Commercial Finance Corp.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.4&nbsp;&nbsp;</TD>
    <TD>Promissory Note, dated June&nbsp;8, 2005 by Amerco Real Estate Company,
Amerco Real Estate Company of Texas, Inc., Amerco Real Estate Company of Alabama, Inc., U-Haul Co. of Florida, Inc. and U-Haul International, Inc.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">2
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.5&nbsp;&nbsp;</TD>
    <TD>Form of Mortgage, Security Agreement, Assignment of Rents and Fixture Filing,
dated June&nbsp;8, 2005, in favor of Morgan Stanley Mortgage Capital Inc.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.6&nbsp;&nbsp;</TD>
    <TD>Form of Promissory Note, dated June&nbsp;8, 2005, in favor of Morgan Stanley
Mortgage Capital Inc.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.7&nbsp;&nbsp;</TD>
    <TD>Form of Mortgage, Security Agreement, Assignment of Rents and Fixture Filing,
dated June&nbsp;8, 2005, in favor of Merrill Lynch Mortgage Lending, Inc.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">10.8&nbsp;&nbsp;</TD>
    <TD>Form of Promissory Note, dated June&nbsp;8, 2005, in favor of Merrill Lynch Mortgage
Lending, Inc.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">99.1&nbsp;&nbsp;</TD>
    <TD>Press Release dated June&nbsp;9, 2005 (regarding closing of refinancing).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">99.2&nbsp;&nbsp;</TD>
    <TD>Press Release dated June&nbsp;9, 2005 (regarding Arizona Department of Insurance
release).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">3
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center" style="font-size: 10pt">SIGNATURES



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated: June&nbsp;14, 2005

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AMERCO
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Edward J. Shoen</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Edward J. Shoen, President</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">U-Haul International, Inc.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Edward J. Shoen</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Edward J. Shoen, President</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">4
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>p70784exv10w1.txt
<DESCRIPTION>EX-10.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY

================================================================================

                              AMENDED AND RESTATED
                                CREDIT AGREEMENT

                                      AMONG

                           AMERCO REAL ESTATE COMPANY
                    AMERCO REAL ESTATE COMPANY OF TEXAS, INC.
                   AMERCO REAL ESTATE COMPANY OF ALABAMA, INC.
                           U-HAUL CO. OF FLORIDA, INC.
                                   BORROWERS,

                           U-HAUL INTERNATIONAL, INC.,
                                   GUARANTOR,

                                       AND

                     MERRILL LYNCH COMMERCIAL FINANCE CORP.,
                                    AS LENDER

                            DATED AS OF JUNE 8, 2005

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                         PAGE
                                                                         ----
<S>                                                                      <C>
SECTION 1.   DEFINITIONS..............................................    1

     1.1     Defined Terms............................................    1
     1.2     Other Definitional Provisions............................   15

SECTION 2.   AMOUNT AND TERMS OF COMMITMENT...........................   16

     2.1     Commitment...............................................   16
     2.2     Procedure for Borrowing..................................   16
     2.3     Non-Usage Fee............................................   16
     2.4     Mandatory Reduction of Commitment........................   16
     2.5     Extension of Termination Date............................   17
     2.6     Substitution of Eligible Properties......................   17

SECTION 3.   GENERAL PROVISIONS APPLICABLE TO LOANS...................   17

     3.1     Interest Rates and Payment Dates.........................   17
     3.2     Continuation.............................................   18
     3.3     [Reserved]...............................................   18
     3.4     Repayment of Loans; Evidence of Debt.....................   18
     3.5     Optional Prepayments.....................................   18
     3.6     Mandatory Prepayments....................................   19
     3.7     Computation of Interest and Fees.........................   19
     3.8     Inability to Determine Interest Rate.....................   19
     3.9     Payments.................................................   20
     3.10    Illegality...............................................   20
     3.11    Requirements of Law......................................   20
     3.12    Taxes....................................................   21
     3.13    Indemnity................................................   23
     3.14    Lending Offices; Change of Lending Office................   23

SECTION 4.   REPRESENTATIONS AND WARRANTIES...........................   23

     4.1     Financial Condition......................................   23
     4.2     No Change................................................   24
     4.3     Existence; Compliance with Law...........................   24
     4.4     Power; Authorization; Enforceable Obligations............   24
     4.5     No Legal Bar.............................................   24
     4.6     No Material Litigation...................................   24
     4.7     No Default...............................................   25
     4.8     Ownership of Property; Liens.............................   25
     4.9     Taxes....................................................   25
     4.10    Federal Regulations......................................   25
     4.11    ERISA....................................................   25
     4.12    Investment Company Act; Other Regulations................   26
     4.13    Subsidiaries, Corporate Structure........................   26
</TABLE>

                                  -i-
<PAGE>

<TABLE>
<S>                                                                      <C>
     4.14    Security Documents.......................................   26
     4.15    Accuracy and Completeness of Information.................   26
     4.16    Labor Relations..........................................   27
     4.17    Insurance................................................   27
     4.18    Solvency.................................................   27
     4.19    Purpose of Loans.........................................   27
     4.20    Environmental Matters....................................   27
     4.21    Eligible Properties......................................   29

SECTION 5.   CONDITIONS PRECEDENT.....................................   31

     5.1     Conditions to Initial Loans..............................   31
     5.2     Conditions to Each Loan..................................   34
     5.3     Conditions to Termination Date Extension.................   35

SECTION 6.   AFFIRMATIVE COVENANTS....................................   36

     6.1     Financial Statements.....................................   36
     6.2     Certificates; Other Information..........................   37
     6.3     Payment of Obligations...................................   37
     6.4     Conduct of Business and Maintenance of Existence.........   38
     6.5     Maintenance of Property; Insurance.......................   38
     6.6     Inspection of Property; Books and Records; Discussions...   38
     6.7     Notices..................................................   38
     6.8     Environmental Laws.......................................   39
     6.9     [Reserved]...............................................   41
     6.10    Bank Accounts............................................   41
     6.11    Post Closing Matters.....................................   42
     6.12    Continuation of Lines of Business........................   43

SECTION 7.   NEGATIVE COVENANTS.......................................   43

     7.1     Negative Pledge..........................................   43
     7.2     Limitation on Fundamental Changes........................   44
     7.3     Limitation on Modifications of Agreements................   44
     7.4     Sale of Eligible Properties and Collateral...............   44
     7.5     Governing Documents......................................   44

SECTION 8.   EVENTS OF DEFAULT........................................   44

SECTION 9.   MISCELLANEOUS............................................   47

     9.1     Amendments and Waivers...................................   47
     9.2     Notices..................................................   47
     9.3     No Waiver; Cumulative Remedies...........................   48
     9.4     Survival of Representations and Warranties...............   48
     9.5     Payment of Expenses and Taxes............................   48
     9.6     Successors and Assigns; Participations and Assignments...   49
     9.7     Set-off..................................................   49
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<S>                                                                 <C>
9.8     Counterparts............................................    49
9.9     Severability............................................    50
9.10    Integration.............................................    50
9.11    GOVERNING LAW...........................................    50
9.12    Submission To Jurisdiction; Waivers.....................    50
9.13    Acknowledgements........................................    50
9.14    WAIVERS OF JURY TRIAL...................................    51
9.15    Confidentiality.........................................    51
9.16    Guarantee Provisions; Joint and Several Liability.......    51
9.17    Cooperation by Lender...................................    53
</TABLE>

SCHEDULES

     Schedule 1.0      Maximum Initial Commitment and Applicable Lending Office
     Schedule 1.1      Initial Eligible Properties and Appraisals
     Schedule 1.3      Mandatory Reductions in Commitment, Amortization and
                       Rapid Amortization
     Schedule 1.4      Eligibility Criteria
     Schedule 1.5      CMBS Properties
     Schedule 4.4      Consents and Filings
     Schedule 4.14(b)  Filing Jurisdictions
     Schedule 4.20     Environmental Matters
     Schedule 5.1(k)   Local Counsel
     Schedule 6.5      Eligible Property Insurance

EXHIBITS

     Exhibit A         Form of Note
     Exhibit B         Form of Guarantee
     Exhibit C         Form of Security Agreement
     Exhibit D         Form of Existing Loan Assignment Agreement
     Exhibit E         Form of Non Bank Status Certificate
     Exhibit F         Form of Closing Certificate
     Exhibit G-1       Form of Opinion of Katten Muchin Rosenman LLP
     Exhibit G-2       Form of Opinion of Jennifer Settles, Esq.
     Exhibit G-3       Form of Opinion of Local Counsel
     Exhibit H-1       Form of CMBS Properties Excess Cash Flow Report
     Exhibit H-2       Form of NOI Report
     Exhibit H-3       Form of Debt Service Coverage Ratio Report
     Exhibit I         Form of Local Counsel Checklist

ANNEXES

     Annex I           Form of Notice of Borrowing
     Annex II          [Reserved ]
     Annex III         Form of Notice of Prepayment

                                      -iii-
<PAGE>

                      AMENDED AND RESTATED CREDIT AGREEMENT

            AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 8, 2005,
among AMERCO REAL ESTATE COMPANY, a Nevada corporation ("AMERCO Real Estate"),
AMERCO REAL ESTATE COMPANY OF TEXAS, INC., a Texas corporation ("AMERCO Texas"),
AMERCO REAL ESTATE COMPANY OF ALABAMA, INC., an Alabama corporation ("AMERCO
Alabama"), and U-HAUL CO. OF FLORIDA, INC., a Florida corporation ("U-Haul
Florida") (each, a "Borrower" and, individually and collectively, jointly and
severally, the "Borrowers"), U-HAUL INTERNATIONAL, INC., a Nevada corporation
("U-Haul International"), and MERRILL LYNCH COMMERCIAL FINANCE CORP., a Delaware
corporation (together with its permitted successors or assigns, the "Lender").

                                    RECITALS

            WHEREAS, pursuant to the Loan and Security Agreement, dated as of
March 1, 2004 (as amended, supplemented or otherwise modified prior to the date
hereof, the "Existing Loan Agreement"), among AMERCO, a Nevada corporation and
the parent corporation of the Borrowers ("AMERCO"), various subsidiaries of
AMERCO, including, but not limited to, AMERCO Texas, AMERCO Alabama, AMERCO Real
Estate, U-Haul Florida and U-Haul International, as borrowers (collectively, the
"Existing Borrowers"), the lenders identified therein (the "Existing Lenders")
and Wells Fargo Foothill, Inc., as lead arranger, administrative agent,
syndication agent and collateral agent for the Existing Lenders (the "Existing
Agent"), the Existing Agent and Existing Lenders provided the Existing Borrowers
with financing for the implementation of a reorganization plan and for other
general corporate purposes;

            WHEREAS, the Borrowers wish to refinance the indebtedness under the
Existing Loan Agreement, by the assignment of such indebtedness to the Lender
and the amendment and restatement of the Existing Loan Agreement, as set forth
in this Agreement; and

            WHEREAS, the Borrowers are the direct or indirect legal and
beneficial owners of the initial Eligible Properties (as herein defined) set
forth on Schedule 1.1,

            WHEREAS, the Borrowers have requested the Lender to make available
to the Borrowers additional loans as provided herein from time to time; and

            WHEREAS, on the date hereof, the Existing Creditors (as herein
defined) are assigning to the Lender (i) the Existing Loan Agreement and the
loans outstanding thereunder, pursuant to the Existing Loan Assignment Agreement
and (ii) certain mortgages encumbering the Eligible Properties pursuant to the
Mortgage Assignments (as herein defined);

            NOW THEREFORE, the parties hereto hereby agree that the Existing
Loan Agreement is amended and restated to read in its entirety as follows:

            SECTION 1. DEFINITIONS

            1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:

            "Account and Payment Instructions Certificate": a certificate, in
form satisfactory to the Lender and the Borrower, setting forth the account
numbers for certain deposit accounts and certain payment instructions, as
provided in this Agreement.

<PAGE>

            "Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person (including, with its correlative meanings, "controlled by"
and "under common control with") means the power, directly or indirectly, either
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting shares, partnership interests or other
Capital Stock or by contract or otherwise.

            "Aged Truck Intercreditor Agreement": an intercreditor agreement
which may be entered into among the Lender, the Aged Truck Lenders and Merrill
Lynch Commercial Finance Corp., as collateral agent for the Lender and the Aged
Truck Lenders if the Aged Truck Facility is provided, pursuant to which, among
other things, such collateral agent shall hold the collateral securing the Aged
Truck Facility and the Aged Truck Junior Collateral on behalf of both the Aged
Truck Lenders and the Lender, and pursuant to which the Aged Truck Lenders and
the Lender shall agree that the Aged Truck Lenders shall have a senior security
interest in such collateral to that of the Lender, and setting forth such other
terms and conditions as the parties thereto may agree.

            "Aged Truck Junior Collateral": if the Aged Truck Facility is
provided, the second-priority collateral security interest (junior to the
security interest of the Aged Truck Lenders) of the Lender in the collateral
securing the Aged Truck Facility

            "Aged Truck Junior Lien Documents": if the Aged Truck Facility is
provided, the security documents evidencing and governing the Aged Truck Junior
Collateral.

            "Aged Truck Lenders": if the Aged Truck Facility is provided, the
lender or lenders which make available the Aged Truck Facility.

            "Aged Truck Loan Documents": if the Aged Truck Facility is provided,
the credit and security documentation evidencing and governing the Aged Truck
Facility.

            "Aged Truck Facility": a revolving credit facility which may be made
available by the Aged Truck Lenders to AMERCO or a Subsidiary thereof, in a
maximum available principal amount of $150,000,000 and secured by a fleet of
trucks and trailers with an average age of approximately 10 years, embodying the
other terms set forth in the Proposed Summary of Terms and Conditions provided
by the Aged Truck Lenders to U-Haul International prior to the date hereof, and
on such other terms and conditions as may be mutually agreed by the Aged Truck
Lenders, the Lender and U-Haul International.

            "Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.

            "Alternate Rate": at any time, a rate per annum equal to the prime
rate announced to be in effect as of such time, as published as the average rate
in The Wall Street Journal.

            "Applicable Amortization Schedule": at any time that no Rapid
Amortization Event is in effect, the schedule attached hereto as Part I of
Schedule 1.3, and at any other time, the schedule attached hereto as Part II of
Schedule 1.3.

            "Applicable Lending Office": for the Lender, the lending office of
the Lender designated on Schedule 1.0 hereto (or any other lending office from
time to time notified to the Borrower by the Lender) as the office at which its
Loans are to be made and maintained.

                                       -2-
<PAGE>

            "Applicable Margin": for any Loan, (a) for the first Interest
Period, 2.75% per annum, and (b) for each Interest Period after the first
Interest Period, the applicable rate per annum set forth in the table below
opposite the NOI Ratio calculated by the Lender based upon the Combined NOI most
recently reported by the Borrowers prior to the first day of such Interest
Period pursuant to Section 6.2(b):

<TABLE>
<CAPTION>
                           NOI Ratio                              Applicable Margin
- --------------------------------------------------------------    -----------------
<S>                                                               <C>
Greater than or equal to 2.00 to 1.0                                     2.75%

Greater than or equal to 1.50 to 1.0 and less than 2.00 to 1.0           2.50%

Greater than or equal to 1.00 to 1.0 and less than 1.50 to 1.0           2.25%

Less than 1.00 to 1.0                                                    2.00%
</TABLE>

; provided that the NOI Ratio shall be deemed to be greater than or equal to
2.00 to 1.0 (A) at any time that an Event of Default has occurred and is
continuing or (B) at the option of the Lender, if the Borrowers fail to deliver
the report of Combined NOI with respect to all of the Eligible Properties
required to be delivered by it pursuant to Section 6.2(b), during the period
from the expiration of the time for delivery thereof until such report of
Combined NOI is delivered.

            "Appraised Value": with respect to any Property, (a) with respect to
the Properties listed on Schedule 1.1, the appraised value of such Property as
set forth in the appraisal thereof previously provided to the Lender by the
Borrowers and referenced on Schedule 1.1, and (b) with respect to any other
Property, the appraised value of such Property as set forth in the appraisal of
such Property by Cushman & Wakefield (or other appraiser satisfactory to the
Lender) existing as of the date hereof, or if the date of such existing is more
than 24 months prior to the date of determination, a new appraisal by an
appraiser, and in form and scope, satisfactory to the Lender.

            "Available Commitment": as to the Lender at any time, an amount
equal to the excess, if any, of (a) the amount of the Commitment at such time
over (b) the aggregate outstanding principal amount of Loans at such time.

            "Award": any compensation paid by any Governmental Authority in
connection with a Condemnation in respect of all or any part of a Property.

            "Bank Account": a deposit, custody, money-market or other similar
account (whether, in any case, time or demand or interest or non-interest
bearing) maintained by a Loan Party with a financial institution, which may at
any time hold any Collateral or Proceeds of Collateral, including without
limitation, the Concentration Account, the Collection Account and the Collection
Sub-Account.

            "Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).

            "Borrower": as defined in the heading to this Agreement.

                                       -3-
<PAGE>

            "Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.2 as a date on which the Borrower requests the Lender to make Loans
hereunder.

            "Business": as defined in Section 4.20(c).

            "Business Day": (i) for all purposes other than as covered by clause
(ii) of this definition, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City, are authorized or required by law to
close, and, (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day as described in clause (i) of this definition and which is
also a day on which dealings in Dollar deposits are carried out in the interbank
market.

            "Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
membership interests in a limited liability company, partnership interests in a
partnership, any and all similar ownership interests in a Person (other than a
corporation, limited liability company or partnership) and any and all warrants,
rights or options to purchase any of the foregoing.

            "CERCLA": as defined in the definition of "Environmental Laws".

            "Change of Control": (a) any "person" or "group" (within the meaning
of Section 13(d) and 14(d) of the Exchange Act), other than Permitted Holders,
that becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of 50%, or more, of the Capital Stock of
AMERCO having the right to vote for the election of members of the Board of
Directors or (b) a majority of the members of the Board of Directors do not
constitute Continuing Directors.

            "Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall be satisfied or waived.

            "CMBS Accounts": collectively, the Merrill Lynch CMBS Account and
the Morgan Stanley CMBS Account.

            "CMBS Banks": collectively, the Merrill Lynch CMBS Bank and the
Morgan Stanley CMBS Bank.

            "CMBS Bank Direction Letters": as defined in Section 6.10(b).

            "CMBS Documents": collectively, the Merrill Lynch CMBS Documents and
the Morgan Stanley CMBS Documents.

            "CMBS Mortgage Agreements": collectively, the Merrill Lynch CMBS
Mortgage Agreements and the Morgan Stanley CMBS Mortgage Agreements.

            "CMBS Primary Documents": collectively, the Merrill Lynch CMBS
Primary Documents and the Morgan Stanley CMBS Primary Documents.

            "CMBS Properties": as listed on Schedule 1.5 attached hereto.

            "CMBS Properties Excess Cash Flow": for any period, the sum of (a)
all amounts which are distributable to any of the "Borrowers" under and as
defined in any CMBS Mortgage Agreements

                                       -4-
<PAGE>

pursuant to Section 5.05 of such CMBS Mortgage Agreements for such period, and
(b) all other operating revenue of the CMBS Properties for such period.

            "CMBS Properties Excess Cash Flow Report": the monthly report to be
given by U-Haul International substantially in the form of Exhibit H-1 hereto.

            "Code": the Internal Revenue Code of 1986, as amended from time to
time.

            "Collateral": all property and interests in property of the Loan
Parties, now owned or hereinafter acquired, upon which a Lien is purported to be
created by any Security Document.

            "Collection Account": the deposit account designated as such in the
Account and Payment Instructions Certificate established at the Collection
Account Bank, in the name of U-Haul International and subject to the Collection
Account Control Agreement, or such other deposit account (located in the United
States) established by a Borrower with the written consent of the Lender.

            "Collection Account Bank": JPMorgan Chase Bank, N.A.

            "Collection Account Control Agreement": the control agreement, in
form and substance reasonably satisfactory to Lender, executed and delivered
from time to time by U-Haul International, the Lender and the Collection Account
Bank, with respect to the Collection Account.

            "Collection Sub-Account": the interest-bearing deposit account
designated as such in the Account and Payment Instructions Certificate
established at the Collection Sub-Account Bank, in the name of U-Haul
International and subject to the Collection Sub-Account Control Agreement, or
such other deposit account (located in the United States) established by a
Borrower with the written consent of the Lender.

            "Collection Sub-Account Bank": JPMorgan Chase Bank, N.A.

            "Collection Sub-Account Control Agreement": the control agreement,
in form and substance reasonably satisfactory to Lender, executed and delivered
from time to time by U-Haul International, the Lender and the Collection
Sub-Account Bank, with respect to the Collection Sub-Account.

            "Collection Sub-Account Deposit": for any calendar month, the
deposit to be made by U-Haul International into the Collection Sub-Account
pursuant to Section 6.10(c) for such month, consisting of an amount equal to the
sum of (i) the monthly principal amortization payment, if required, of the Loans
pursuant to the Applicable Amortization Schedule hereto required to be paid on
the Payment Date next following the end of such month, and (ii) the interest
which would be due to be paid on the Payment Date next following the end of such
month calculated assuming that applicable NOI Ratio at all times during such
month would result in the Loans bearing the highest possible interest rate
provided for under Section 3.1(a) at all times during such month.

            "Collection Sub-Account Failure": the failure of U-Haul
International to make the required Collection Sub-Account Deposit by the 21st
day of each calendar month (or, if unrestricted funds are already on deposit in
the Collection Sub-Account, the failure of U-Haul International to deposit an
amount sufficient such that the unrestricted funds on deposit in the Collection
Sub-Account by such 21st day of such calendar month is not less than the
Collection Sub-Account Deposit).

                                       -5-
<PAGE>

            "Combined NOI": for any period with respect to the Borrowers, the
NOI of all of the Eligible Properties owned by the Borrowers on a combined
basis.

            "Commitment": the obligation of the Lender to make Loans to the
Borrowers pursuant to Section 2.1 in an aggregate principal amount at any one
time outstanding not to exceed, during any month following the Closing Date, the
amount set forth opposite such month on the Applicable Amortization Schedule
under the caption "Maximum Aggregate Amount (beginning of month)", as such
amount may be changed from time to time in accordance with the provisions of
this Agreement. As of the Closing Date, the Commitment was $465,000,000.

            "Commitment Letter": the commitment letter dated May 9, 2005 between
the Lender and the Loan Parties.

            "Commitment Period": the period from and including the date hereof
to but not including the Termination Date or such earlier date on which the
Commitment shall terminate as provided herein.

            "Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414(b) or (c) of the Code
or, for purposes of the Code, Section 414(m) or (o) of the Code.

            "Concentration Account": the deposit account designated as such in
the Account and Payment Instructions Certificate in the name of U-Haul
International maintained at the Concentration Account Bank at Phoenix, Arizona
or such other deposit account (located in the United States) established by a
Borrower with the consent of the Lender.

            "Concentration Account Bank": JPMorgan Chase Bank, N.A.

            "Concentration Account Direction Letter": as defined in Section
6.10(b).

            "Condemnation": a temporary or permanent taking by any Governmental
Authority as the result, in lieu or in anticipation, of the exercise of the
right of condemnation or eminent domain, of all or any part of any Property, or
any interest therein or right accruing thereto, including any right of access
thereto affecting the Property or any part thereof.

            "Continuation", "Continuing" and "Continued" shall refer to the
continuation of a Eurodollar Loan from one Interest Period to the next Interest
Period.

            "Continuing Directors": the directors of AMERCO on the Closing Date
and each other director of AMERCO, if such other director's nomination for
election to the Board of Directors of AMERCO is recommended by a majority of the
then Continuing Directors.

            "Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

            "Debt Service Coverage Ratio": as of the last day of any fiscal
quarter of the Borrowers, the ratio of (a) the sum of (i) CMBS Properties Excess
Cash Flow for the period of twelve consecutive calendar months ended on the last
day of the month immediately preceding the month in which such day occurs
divided by four and (ii) Combined NOI for the period of twelve consecutive
calendar months

                                       -6-
<PAGE>

ended on the last day of the month immediately preceding the month in which such
day occurs, divided by four, to (b) the sum of (i) interest payable on the Loans
during the fiscal quarter ended on such day and (ii) payments of principal on
the Loans made during the fiscal quarter ended on such day; provided, that for
purposes of calculating such CMBS Properties Excess Cash Flow if less than
twelve months have elapsed since the closing of the transaction contemplated by
the CMBS Documents as to which the Borrowers have provided the reports
contemplated in Section 6.1, the amount in clause (a)(i) of this definition
shall be CMBS Properties Excess Cash Flow for the period from such closing of
the transaction contemplated by the CMBS Documents to such last day of the month
immediately preceding the month in which such last day of such fiscal quarter
occurs multiplied by a fraction, the numerator of which is 12 and the
denominator of which is the number of calendar months elapsed since the closing
of the transaction contemplated by the CMBS Documents as to which such reports
contemplated in Section 6.1 have been provided.

            "Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.

            "Direction Letters": as defined in Section 6.10(b).

            "Dollars" and "$": dollars in lawful currency of the United States
of America.

            "Eligible Property": any Property which satisfies the Eligibility
Criteria and is approved by the Lender in its reasonable discretion. The Lender
hereby acknowledges that the Properties listed on Schedule 1.1 are Eligible
Properties. The Lender acknowledges that, upon request of the Borrowers, other
Properties ("Substitute Properties") may be substituted for Eligible Properties,
so long as at the time of such substitution such Substitute Properties satisfy
the Eligibility Criteria and the representations set forth in Sections 4.20 and
4.21 shall be true and correct with respect to such Substitute Property.

            "Eligibility Criteria": with respect to any Property, the criteria
listed on Schedule 1.4.

            "Environmental Indemnity Agreement": the environmental indemnity
agreement to be executed and delivered by the Loan Parties in favor of the
Lender, in form and substance reasonably satisfactory to the Lender.

            "Environmental Laws": collectively, any civil or criminal, local,
state or federal law, rule or regulation ordinance, code, decree, judgment,
permit, license, agreement with Governmental Authorities, or other requirements
of law, including common law, pertaining to the environment, natural resources,
pollution, health, safety, clean-up, underground storage tanks and/or governing
the handling, use, presence, release, transportation, treatment, storage,
disposal, or exposure to hazardous substances including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery
Act of 1976 (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 5101 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Emergency Planning and Community Right
to Know Act (42 U.S.C. Section 11001 et seq.), the Occupational Safety and
Health Act (29 U.S.C. Section 651 et seq.), the Residential Lead-Based Paint
Hazard Reduction Act (42 U.S.C. Section 4851 et seq.), any analogous state or
local laws, any amendments thereto, and the regulations promulgated pursuant to
said laws, together with all amendments from time to time to any of the
foregoing.

            "Environmental Permits": as defined in Section 4.20(b).

                                       -7-
<PAGE>

            "Environmental Reports": as defined in the Environmental Indemnity
Agreement.

            "ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.

            "Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements current on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto), as now and from time to time hereafter in effect, dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
required to be maintained by the Lender.

            "Eurodollar Base Rate" shall mean with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, the rate per annum equal
to the corresponding rate appearing on page BBAM of Bloomberg L.P. as "LIBOR"
for such Interest Period two (2) Business Days prior to the beginning of such
Interest Period (and if such date is not a Business Day, the Eurodollar Rate in
effect on the Business Day immediately preceding such date), and if such rate
shall not be so quoted, the rate per annum at which the Lender is offered Dollar
deposits at or about 10:00 A.M., New York City time, two Business Days prior to
the beginning of such Interest Period by prime banks in the interbank eurodollar
market where the eurodollar and foreign currency exchange operations in respect
of its Loans are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Loans to be outstanding during such Interest
Period; provided, that, on any day during which the circumstances specified in
Section 3.8 or 3.10 are in existence, the Eurodollar Rate shall be the Alternate
Rate.

            "Eurodollar Loans": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.

            "Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upwards to the nearest 1/100th
of 1%):

                              Eurodollar Base Rate
                    ----------------------------------------
                    1.00 - Eurocurrency Reserve Requirements

            "Event of Default": any of the events specified in Section 8;
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.

            "Existing Creditors": the "Lenders", the "Issuing Lender" and the
"Agent" under, and each as defined in, the Existing Loan Agreement.

            "Existing Financing Documents": collectively, the Existing Loan
Agreement, the Existing Mortgages, and the other "Loan Documents" as defined in
the Existing Loan Agreement.

            "Existing Loan Agreement": as defined in the recitals hereto.

            "Existing Loan Assignment Agreement": the Assignment Agreement,
substantially in the form of Exhibit D, to be entered into among the Lender, the
Loan Parties and the Existing Creditors, as the same may be amended,
supplemented or otherwise modified from time to time.

                                       -8-
<PAGE>

            "Existing Mortgage": each of the duly recorded mortgages or deeds of
trust dated as of March 1, 2004 in respect of the Eligible Properties, made for
the benefit of Wells Fargo Foothill, Inc., as agent for the Existing Creditors.

            "Facility": the Commitment and the extensions of credit made
thereunder.

            "Family Member": with respect to any individual, the spouse and
lineal descendants (including children and grandchildren by adoption) of such
individual, the spouses of each such lineal descendants, and the lineal
descendants of such Persons.

            "Family Trusts": with respect to any individual, any trusts, limited
partnerships or other entities established for the primary benefit of, the
executor or administrator of the estate of, or other legal representative of,
such individual.

            "Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.

            "GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.

            "Governing Documents": as to any Person, its articles or certificate
of incorporation and by-laws, its partnership agreement, its certificate of
formation and operating agreement, and/or the other organizational or governing
documents of such Person.

            "Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

            "Guarantee": the Guarantee to be executed and delivered by U-Haul
International, substantially in the form of Exhibit B, as the same may be
amended, supplemented or otherwise modified from time to time.

            "Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection, non-recourse carve out guarantees, performance guarantees or
construction and completion guarantees, in each case in the ordinary course of
business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrowers in good faith.

                                      -9-
<PAGE>

            "Guarantor": U-Haul International.

            "Hazardous Substances": collectively, any hazardous, toxic or
harmful substances, wastes, materials, pollutants or contaminants (including,
without limitation, asbestos, polychlorinated biphenyls ("PCBs"), petroleum or
petroleum by-products or wastes, flammable explosives, radioactive materials,
infectious substances, mold, materials containing lead-based paint or raw
materials which include hazardous constituents) or any other substances or
materials which are identified under or regulated by Environmental Laws.

            "Hedge Agreement": any interest rate, cap or collar agreement or
similar arrangement entered into by any Borrower or any of its Subsidiaries
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations.

            "Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money (whether by loan or the
issuance and sale of debt securities) or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary practices),
(b) any other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person under
Financing Leases, (d) all obligations of such Person in respect of letters of
credit, acceptances or similar instruments issued or created for the account of
such Person, (e) all liabilities secured by (or for which the holder of such
obligations has an existing right, contingent or otherwise, to be secured by)
any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, (f) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (e) above, and (g) for the purposes of Section 8(e) only,
all obligations of such Person in respect of Hedge Agreements. The amount of any
Indebtedness under clause (e) shall be equal to the lesser of (A) the stated
amount of the relevant obligations and (B) the fair market value of the property
subject to the relevant Lien and under clause (g) shall be the net amount,
including any net termination payments, required to be paid to a counterparty,
calculated on a net aggregate basis assuming all such Hedge Agreements were
terminated at the same time, rather than the notional amount of the applicable
Hedge Agreement.

            "Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.

            "Insolvent": pertaining to a condition of Insolvency.

            "Interest Period": with respect to any Eurodollar Loan:

            (a) initially, the period commencing on the borrowing date with
respect to such Eurodollar Loan and ending on the next following Payment Date;
and

            (b) thereafter, each period commencing on the day following the last
day of the preceding Interest Period applicable to such Eurodollar Loan and
ending on the next following Payment Date;

provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:

            (1) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day; and

                                      -10-
<PAGE>

            (2) any Interest Period with respect to any Loan that would
otherwise extend beyond the Termination Date, shall end on the Termination Date.

            "Lender": as defined in the heading hereto.

            "Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever intended as a security device
(including, without limitation, any conditional sale or other title retention
agreement and any Financing Lease having substantially the same economic effect
as any of the foregoing), and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction in respect of any
of the foregoing to the extent intended as a security device or to give notice
of a security interest.

            "Loan Documents": this Agreement, the Note, the Existing Loan
Assignment Agreement, the Guarantee and the Security Documents.

            "Loan Parties": the Borrowers, the Guarantor and the Marketing
Grantors.

            "Loans": as defined in Section 2.1.

            "Local Account": a Bank Account, associated with an Eligible
Property and into which the Borrowers shall deposit or cause to be deposited
daily all cash receipts and collections of Collateral relating to such Eligible
Property, listed as such in the Account and Payment Instructions Certificate.

            "Local Counsel Checklist": each checklist to be completed by local
counsel to the Borrowers with respect to an Eligible Property, in substantially
the form attached hereto as Exhibit I.

            "Marketing Grantors": as defined in the Security Agreement.

            "Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) of the Loan
Parties taken as a whole or (b) the validity or enforceability of this Agreement
or any of the other Loan Documents or the rights or remedies of the Lender or
the Lender hereunder or thereunder.

            "Merrill Lynch CMBS Account": the "Central Account" as defined in
the Merrill Lynch CMBS Mortgage Agreements, being the deposit account so
designated in the Account and Payment Instructions Certificate.

            "Merrill Lynch CMBS Bank": JPMorgan Chase Bank, N.A., as the bank at
which the Merrill Lynch CMBS Account is maintained.

            "Merrill Lynch CMBS Bank Direction Letter": as defined in Section
6.10(b).

            "Merrill Lynch CMBS Documents": all "Loan Documents" as defined in
the Merrill Lynch CMBS Mortgage Agreements.

            "Merrill Lynch CMBS Mortgage Agreement": each Mortgage, Security
Agreement, Assignment of Rents and Fixture Filing, dated as of June 8, 2005,
made by the respective borrowers named therein to Merrill Lynch Mortgage
Lending, Inc.

                                      -11-
<PAGE>

            "Merrill Lynch CMBS Primary Documents": the "Security Instrument",
the "Note", the "Assignment", each as defined in the Merrill Lynch CMBS Mortgage
Agreements, and the Guaranty, dated as of June 8, 2005, made by AMERCO Real
Estate Company, AMERCO Real Estate Company of Texas, U-Haul Company of Florida,
in favor of Merrill Lynch Mortgage Lending, Inc., in respect of the Merrill
Lynch CMBS Documents.

            "Mezzanine Financing": any "Mez Loan" as defined in a CMBS Mortgage
Agreement, or any other mezzanine debt financing incurred by any Loan Party of
any Affiliate of a Loan Party and entitled to any payment of any amounts prior
to the CMBS Properties Excess Cash Flow, whether pursuant to the "waterfall"
provisions of any CMBS Documents, pursuant to the corporate or capital structure
of the borrowers of such Mezzanine Financing and its Affiliates, or otherwise,
it being understood that the aggregate principal amount of such Mezzanine
Financings are not to exceed $50,000,000 at any time.

            "Morgan Stanley CMBS Account": the "Central Account" as defined in
the Morgan Stanley CMBS Mortgage Agreements, being the deposit account so
designated in the Account and Payment Instructions Certificate.

            "Morgan Stanley CMBS Bank": JPMorgan Chase Bank, N.A., as the bank
at which the Morgan Stanley CMBS Account is maintained.

            "Morgan Stanley CMBS Bank Direction Letter": as defined in Section
6.10(b).

            "Morgan Stanley CMBS Documents": all "Loan Documents" as defined in
the Morgan Stanley CMBS Mortgage Agreements.

            "Morgan Stanley CMBS Mortgage Agreement": each Mortgage, Security
Agreement, Assignment of Rents and Fixture Filing, dated as of June 8, 2005,
made by the respective borrowers named therein to Morgan Stanley Mortgage
Capital, Inc.

            "Morgan Stanley CMBS Primary Documents": the "Security Instrument",
the "Note", the "Assignment", as defined in the Morgan Stanley CMBS Mortgage
Agreements, and the Guaranty, dated as of June 8, 2005, made by AMERCO Real
Estate Company, AMERCO Real Estate Company of Texas, U-Haul Company of Florida,
in favor of Morgan Stanley Mortgage Capital, Inc., in respect of the Morgan
Stanley CMBS Documents.

            "Mortgage": any Existing Mortgage for any of the initial Eligible
Properties, as assigned and modified to secure the Loans under this Agreement
pursuant to a Mortgage Assignment, and any mortgage or deed of trust for any new
or substitute Eligible Properties on substantially the same terms and conditions
as such Existing Mortgages as so assigned and modified, or on such other terms
as shall be approved by the Lender in its sole discretion, as the same may be
amended, supplemented or otherwise modified from time to time.

            "Mortgage Assignment": each of the Mortgage Assignments to be
executed and delivered by a Loan Party which owns the applicable initial
Eligible Property, substantially in the form separately approved by the Lender
prior to the date hereof, as the same may be amended, supplemented or otherwise
modified from time to time.

            "Mortgage Documents": the Existing Mortgages, the Mortgage
Assignments, and each title insurance policy covering the same together with any
endorsements thereto.

                                      -12-
<PAGE>

            "Multiemployer Plan": a Plan which is a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA and which is subject to Title IV of
ERISA.

            "New Lending Office": as defined in Section 3.12(c).

            "NOI": with respect to any Property for any period of time, the
amount obtained by subtracting Operating Expenses for such Property for such
period from Operating Revenue for such Property for such period.

            "NOI Ratio": as of the last day of any monthly period ended on the
10th of a calendar month, the ratio of (a) the excess of (i) the average of the
aggregate outstanding principal amount of the Loans on each day during such
monthly period over (ii) 65% of the aggregate Appraised Values of all Eligible
Properties on the last day of such monthly period, to (b) the Combined NOI for
the period of twelve consecutive calendar months ended on the last day of the
calendar month immediately preceding the month most recently ended prior to such
day.

            "Non-Bank Status Certificate": as defined in Section 3.12(c)(2).

            "Non-Excluded Taxes": as defined in Section 3.12(a).

            "Non-US Lender": as defined in Section 3.12(c).

            "Non-Usage Amount": with respect to any Payment Date, the difference
(but not less than zero) between (a) 90% of the Commitment as in effect as of
the prior Payment Date and (b) the average daily outstanding principal amount of
the Loans for the period since the most recent prior Payment Date (or, if more
recent, the Closing Date).

            "Note": as defined in Section 3.4(e).

            "Obligations": the unpaid principal amount of, and interest
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to any Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) on the Loans, and all other obligations
and liabilities of the Loan Parties to the Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, or out of or in connection with this Agreement,
the Note, the Guarantee, the Security Documents, any other Loan Documents, and
any other document made, delivered or given in connection therewith or herewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Lender that are required to be paid by a Loan
Party pursuant to the terms of the Loan Documents) or otherwise.

            "Obligor": as the context may require, each Borrower, the Guarantor
and each other Person (other than the Lender or any Person that is not an
Affiliate of the Borrowers or the Guarantor) obligated under any Loan Document.

            "Operating Expenses": with respect to any Property for any period of
time, the total of all expenses actually paid or payable, computed on a cash
accounting basis consistent with prior practice, of whatever kind relating to
the operation, maintenance and management of the Property.

                                      -13-
<PAGE>

            "Operating Revenue": with respect to any Property for any period of
time, all revenue, computed on a cash accounting basis consistent with prior
practice, derived from the ownership and operation of the Property from whatever
source, including, without limitation, self-storage rental revenue, retail
income, rental equipment commissions and other miscellaneous income derived from
such Property.

            "Payment Date": the 10th day of each calendar month.

            "PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

            "Permitted Holder": Edward J. Shoen, Mark V. Shoen, James P. Shoen
and their Family Members, and their Family Trusts.

            "Permitted Liens": Liens permitted pursuant to the Negative Pledge
provision contained in Section 7.1 of this Agreement.

            "Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.

            "Plan": at a particular time, any employee benefit plan which is
covered by Title IV of ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.

            "Property": a parcel of real property, operated by a Borrower or an
Affiliate thereof as a moving center or self-storage facility, together with the
improvements and fixtures thereon and owned in fee directly by a Borrower,
together with all rights pertaining to such property and improvements.

            "Rapid Amortization Event": on any date of determination, a Rapid
Amortization Event shall exist if the Debt Service Coverage Ratio for the fiscal
quarter of any Borrower most recently ended on or prior to such date was less
than 1.25 to 1.

            "Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

            "Release": means any spilling, leaking, pumping, pouring, emitting,
emptying, leaching, discharging, injecting, escaping, leaching, dumping, or
disposing of a Hazardous Substance.

            "Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

            "Reportable Event": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period is
waived under Sections .21, .22, .23, .26, .27 or .28 of PBGC Reg. Section 4043.

            "Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or Governing Documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

                                      -14-
<PAGE>

            "Responsible Officer": with respect to any Loan Party, any officer
of such Loan Party or, with respect to financial matters, the chief financial
officer or treasurer of such Loan Party.

            "Security Documents": the collective reference to the Security
Agreement, the Mortgage Documents, Aged Truck Junior Lien Documents, and all
other security documents, if any, hereafter delivered to the Lender granting a
Lien on any asset or assets of any Person to secure any of the Obligations or to
secure any guarantee of any such Obligations.

            "Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.

            "Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.

            "Taxes": all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against the Property or part thereof.

            "Tenants": all tenants, lessees, subtenants and other occupants of
the Eligible Properties.

            "Termination Date": the earliest to occur of (a) June 10, 2010, as
such date may be extended pursuant to Section 2.5, and (b) the date of
termination of the Commitment pursuant to Sections 2.4, 2.5, 2.6 or 8.

            "Tranche": the collective reference to Eurodollar Loans of the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).

            "US Person": as defined in Section 3.12(c).

            1.2 Other Definitional Provisions.

            (a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Note or any other
Loan Documents or any certificate or other document made or delivered pursuant
hereto or thereto.

            (b) As used herein and in the Note, any other Loan Documents and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Guarantor, any Borrower and its Subsidiaries
not defined in Section 1.1 and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP.

            (c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

            (d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

                                      -15-
<PAGE>

            SECTION 2. AMOUNT AND TERMS OF COMMITMENT

            2.1 Commitment.

            (a) On the Closing Date, concurrently with the amendment and
restatement of the Existing Loan Agreement hereby, the Lender is acquiring the
outstanding loans under the Existing Loan Agreement as provided under the terms
of the Existing Loan Assignment Agreement, and such loans and the terms thereof
shall immediately be amended, restated and reconstituted as, and shall thereupon
for all purposes of the Loan Documents be, Loans outstanding under this
Agreement. Subject to the terms and conditions hereof, the Lender agrees to make
Loans ("Loans") to the Borrowers from time to time during the Commitment Period
in an aggregate principal amount at any one time outstanding not to exceed the
Commitment then in effect; provided, that the Commitments shall terminate at
6:00 p.m., New York City time, on June 8, 2005, if the initial Loans have not
been made prior to that time. During the Commitment Period the Borrower may use
the Commitments by borrowing, prepaying the Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.

            (b) The Loans hereunder shall be Eurodollar Loans.

            2.2 Procedure for Borrowing. The Borrower may borrow under the
Commitment during the Commitment Period on any Business Day, not to exceed four
times in a single month, in an aggregate principal amount not exceeding the
aggregate Available Commitment then in effect, provided that the Borrower shall
give the Lender irrevocable notice (which notice must be received by the Lender
prior to 2:00 p.m., New York City time, three Business Days prior to the
requested Borrowing Date) in the form of Annex I, duly completed, specifying (i)
the amount to be borrowed and (ii) the requested Borrowing Date. Each borrowing
under the Commitment shall be in an amount equal to $1,000,000 or a whole
multiple of $100,000 in excess thereof. The Lender will make such borrowing
available to the Borrowers by the Lender transferring funds relating to such
borrowing to such account of the Borrowers as the Borrowers may from time to
time designate (it being agreed that the initial Loans shall be funded at the
Borrowers' request by wire transfer in accordance with the instructions
separately certified to the Lender by the Borrowers in writing prior to the
Closing Date and specified as such in the Account and Payment Instructions
Certificate.

            2.3 Non-Usage Fee. The Borrower agrees to pay to the Lender for the
account of the Lender a non-usage fee for the period from and including the
first day of the Commitment Period to but not including the Termination Date,
computed at the rate of 0.375% per annum on the Non-Usage Amount for the Payment
Date for which payment is made, payable monthly in arrears on each Payment Date
and on the Termination Date or such earlier date as the Commitment shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof.

            2.4 Mandatory Reduction of Commitment. The Commitment shall
automatically be reduced on the dates and in the amounts (a) as set forth on the
Applicable Amortization Schedule, (b) as provided in the second sentence of
Section 3.6(b), (c) upon any sale, transfer, exchange or other disposition of
any Eligible Property or any interest (other than leases of or easements on any
such Eligible Property not prohibited hereby) therein, or upon any Eligible
Property ceasing to be an Eligible Property pursuant to Sections 6.11(b)(i)(B)
or 6.11(e), in an amount equal to 65% of the Appraised Value of such Eligible
Property, provided that, if in connection with such sale, transfer, exchange or
other disposition of an Eligible Property the Borrowers substitute a new
Eligible Property pursuant to Section 2.6, such amount of reduction of the
Commitment shall be limited to 65% of the excess, if any, of the Appraised Value
of the Eligible Property so being disposed of over the Appraised Value of the
new Eligible Property being substituted therefor, and (d) if any Loan Party or
Affiliate of any Loan Party shall at any time incur, assume or suffer to exist
Indebtedness under the Loan Documents, the CMBS Documents and

                                      -16-
<PAGE>

any Mezzanine Financing, in an aggregate outstanding principal amount at such
time in excess of $945,000,000 minus the amount of any scheduled repayments
required to be made thereunder prior to such date of determination, in an amount
equal to such excess; and in each such case the Borrowers shall prepay the Loans
and all other amounts owing under the Loan Documents as provided in Section
3.6(a).

            2.5 Extension of Termination Date. The Borrowers may, on not more
than two (2) occasions, request that the Termination Date (the "Existing
Termination Date") then in effect be extended to the date one (1) year following
such Existing Termination Date (the "Extension Date"). Such request shall be
made by written notice to the Lender not less than 90 days prior to the Existing
Termination Date. If such notice of request for extension is so timely made, and
all of the conditions precedent to the extension of the Termination Date set
forth in Section 5.3 shall have been satisfied or waived by the Lender, then,
the Lender may, in its sole discretion, approve such extension of the Existing
Termination Date by notice to the Borrowers, whereupon, effective as of the date
immediately prior to the Existing Termination Date, the Extension Date shall
become the "Termination Date" for all purposes of the Loan Documents, and the
Existing Termination Date shall cease to be the "Termination Date" for purposes
of the Loan Documents. If the Lender is at the time of such extension the holder
of a Note, the Borrowers shall execute and deliver to the Lender a substitute
Note setting forth such new Termination Date.

            2.6 Substitution of Eligible Properties. The Borrowers shall have
the right, upon not less than 30 days notice to the Lender, to substitute a new
Property for an Eligible Property included in the Collateral; provided, that (a)
such Property shall satisfy all of the Eligibility Criteria as an Eligible
Property, and the Borrowers shall provide the Lender with such information as
the Lender shall reasonably request to confirm the same; (b) all of the
conditions specified in Section 5.2(c) and (d) shall have been satisfied with
respect to such new Property and the environmental searches and reports required
under Section 6.8(f) shall have been performed and delivered; (c) the
representations and warranties specified in Sections 4.20 and 4.21 (with respect
to such new Property) shall be true and correct in all material respects after
giving effect to such requested substitution; (d) if the appraisal on such
Property is dated more than 24 months prior to the date of such requested
substitution, the Lender shall have the right to receive a new appraisal by an
appraiser, and in form, satisfactory to the Lender; (e) the sum of the Appraised
Value of such new Property, plus the amount of any concurrent reduction of the
Commitment made pursuant to Section 2.4(c) divided by 65%, shall be not less
than the Appraised Value of the Property being substituted; and (f) after giving
effect to such substitution, no Default or Event of Default shall have occurred
and be continuing; provided, further, however, that if such new Property is a
Property that has been released from the Lien of the CMBS Documents and would
not satisfy the requirements set forth in clause (b) and (c) of the immediately
preceding proviso solely because the representation in Section 4.21(b) would not
be true and correct, the Borrowers may nonetheless substitute such Eligible
Property for such new Property as long as the Borrowers prepay the Loans
pursuant to Section 3.5 not later than five Business Days following the date the
Borrowers receive any proceeds of any Award in respect of such new Property in
an amount equal to the greater of 65% of the Appraised Value of such new
Property and the amount of the Award received in respect of such new Property.
If the conditions specified in the immediately preceding sentence shall have
been satisfied, the substituted Eligible Property shall cease to be an Eligible
Property and the Lender shall release the substituted Eligible Property from the
Liens of the Mortgages, and the new Property shall thereafter be deemed to be an
Eligible Property for all purposes of the Loan Documents.

            SECTION 3. GENERAL PROVISIONS APPLICABLE TO LOANS

            3.1 Interest Rates and Payment Dates.

                                      -17-
<PAGE>

            (a) Each Eurodollar Loan shall bear interest for each day during
each Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin.

            (b) If any Event of Default shall have occurred and be continuing,
the principal of all Loans and any interest, non-usage fee or other amount then
due and payable hereunder shall bear interest at a rate per annum which is (x)
in the case of principal, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this Section plus 2.50% or (y) in the
case of any such overdue interest, non-usage fee or other amount, the rate
described in paragraph (a) of this Section plus 2.50%, in each case from the
date of such Event of Default until such Event of Default is cured or waived in
accordance with this Agreement (as well after as before judgment).

            (c) Interest shall be payable in arrears on each Payment Date,
provided that interest accruing pursuant to paragraph (b) of this Section shall
be payable from time to time on demand. 3.2 Continuation. Any Eurodollar Loans
shall be Continued as such upon the expiration of the then current Interest
Period with respect thereto.

            3.3 [Reserved].

            3.4 Repayment of Loans; Evidence of Debt.

            (a) Each of the Borrowers hereby unconditionally promises, jointly
and severally, to pay to the Lender the then unpaid principal amount of each
Loan on the Termination Date. Each of the Borrowers hereby further agrees,
jointly and severally, to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in Section 3.1.

            (b) The Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrowers to the Lender
resulting from each Loan from time to time, including the amounts of principal
and interest payable and paid to the Lender from time to time under this
Agreement.

            (c) The Borrowers agree that, upon the request by the Lender, the
Borrowers will execute and deliver to the Lender a promissory note of the
Borrowers evidencing the Loans of the Lender, substantially in the form of
Exhibit A, with appropriate insertions as to date and principal amount (a
"Note").

            3.5 Optional Prepayments. The Borrower may at any time prepay the
Loans, in whole or in part, upon irrevocable notice to the Lender (in the form
of Annex III) prior to 2:00 p.m., New York City time, at least three Business
Days prior thereto, specifying the date and amount of prepayment. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, (a) together with any amounts payable pursuant to
Section 3.13 and (b) if prepaid in full, a prepayment fee in an amount equal to
the present value (as calculated by the Lender based upon a discount rate based
upon the interpolated Eurodollar Rate for the period from the date of such
prepayment to the Termination Date, as determined by the Lender) of the
Non-Usage Amount for each month after the date of such prepayment until the
Termination Date, assuming that the outstanding principal amount of the Loans
would not be further optionally prepaid. Partial prepayments pursuant to this
Section shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $100,000 in excess thereof, exclusive of any fees or accrued
interest then due.

                                      -18-
<PAGE>

            3.6 Mandatory Prepayments.

            (a) If on any date the aggregate outstanding principal amount of the
Loans exceeds the Commitment, the Borrowers shall immediately prepay the Loans
in an amount equal to the amount of such excess.

            (b) If Aged Truck Facility is made available, and if on any date the
excess of the aggregate value of all "Collateral" (as defined in the Aged Truck
Loan Documents) (or similar definition) over the aggregate outstanding principal
amount of the loans under the Aged Truck Loan Documents is less than
$50,000,000, then the Borrowers shall within 90 days after such date prepay the
Loans such that the aggregate outstanding principal amount of the Loans shall
not exceed 75% of the aggregate initial Appraised Values of the Eligible
Properties. Concurrently with such prepayment, the Commitment shall, if then
greater than 75% of the aggregate initial Appraised Values of the Eligible
Properties, automatically be reduced upon such prepayment to an amount equal to
75% of the aggregate initial Appraised Values of the Eligible Properties.

            (c) Any prepayment of Loans and/or reduction of Commitment pursuant
to this Section, and the rights of the Lender in respect thereof, are subject to
the provisions of Section 3.9 and 3.12.

            3.7 Computation of Interest and Fees.

            (a) All non-usage fees and interest shall be calculated on the basis
of a 360-day year for the actual days elapsed. The Lender shall as soon as
practicable notify the Borrowers of each determination of a Eurodollar Rate. Any
change in the interest rate on a Loan resulting from a change in the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Lender shall as
soon as practicable notify the Borrowers, by facsimile transmission or
electronic mail, of the effective date and the amount of each such change in
interest rate.

            (b) Each determination of an interest rate by the Lender pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrowers
in the absence of manifest error. The Lender shall, at the request of the
Borrowers, deliver to the Borrowers a statement showing the quotations used by
the Lender in determining any interest rate pursuant to Section 3.1(a).

            3.8 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:

            (a) the Lender shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or

            (b) the Lender shall have determined that the Eurodollar Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to the Lender (as conclusively certified by the Lender)
of making or maintaining their affected Loans during such Interest Period,

the Lender shall give facsimile or electronic mail notice thereof to the
Borrowers as soon as practicable thereafter. If such notice is given and until
such notice has been withdrawn by the Lender the Eurodollar Base Rate shall be
determined as provided in the proviso to the definition of "Eurodollar Rate" in
Section

                                      -19-
<PAGE>

1.1. The Lender shall withdraw any such notice pursuant to clauses (a) or (b)
above if the Lender determines that the relevant circumstances have ceased to
exist.

            3.9 Payments.

            All payments (including prepayments) to be made by the Borrowers
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without set-off or counterclaim and shall be made prior to 5:00 p.m.,
New York City time, on the due date thereof to the Lender, in Dollars and in
immediately available funds, in accordance with the instructions designated in
the Account and Payment Instructions Certificate as the Lender payment
instructions, or as otherwise specified by the Lender; provided that the
Collection Sub-Account Deposits shall be paid and deposited into the Collection
Sub-Account. If any payment hereunder (other than payments on Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Loan becomes due and payable on a day other than
a Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.

            3.10 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for the Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, the Eurodollar Base Rate
shall be determined as provided in the proviso to the definition of "Eurodollar
Rate" in Section 1.1.

            3.11 Requirements of Law.

            (a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by the Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:

            (i) does or shall subject the Lender to any tax of any kind
      whatsoever with respect to this Agreement, any Note or any Eurodollar Loan
      made by it, or change the basis of taxation of payments to the Lender in
      respect thereof (except for Non-Excluded Taxes covered by Section 3.12 and
      changes in the rate of tax on the overall net income of the Lender);

            (ii) does or shall impose, modify or hold applicable any reserve,
      special deposit, compulsory loan or similar requirement against assets
      held by, deposits or other liabilities in or for the account of, advances,
      loans or other extensions of credit by, or any other acquisition of funds
      by, any office of the Lender which is not otherwise included in the
      determination of the Eurodollar Rate; or

            (iii) does or shall impose on the Lender any other condition;

and the result of any of the foregoing is to increase the cost to the Lender, by
an amount which the Lender deems to be material, of making, Continuing or
maintaining Eurodollar Loans or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrowers shall promptly, after

                                      -20-
<PAGE>

receiving notice as specified in clause (e) of this Section, pay the Lender such
additional amount or amounts as will compensate the Lender for such increased
cost or reduced amount receivable.

            (b) If claiming any additional amounts payable pursuant to this
Section 3.11 or Section 3.12, the Lender shall use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as, in its sole determination, such efforts would not be disadvantageous
to it) to file any certificate or document reasonably requested in writing by
the Borrowers if the making of such a filing would avoid the need for or reduce
the amount of any such additional amounts.

            (c) If the Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by the Lender or any
corporation controlling the Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which the Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration the Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by the Lender to
be material, then from time to time, the Borrowers shall promptly pay to the
Lender such additional amount or amounts as will compensate the Lender for such
reduction.

            (d) If the Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrowers of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section submitted by the Lender to the
Borrowers shall be conclusive in the absence of manifest error. The agreements
in this Section shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.

            3.12 Taxes.

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

                                      -21-
<PAGE>

may become payable by the Lender as a result of any such failure. The agreements
in this Section shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.

            (b) In addition, the Borrowers agree to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including, without limitation, mortgage recording taxes and
similar fees) imposed by any Governmental Authority that arise from any payment
made hereunder or under any Note, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any Note
("Other Taxes").

            (c) If the Lender is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Code (a "US Person")) for United States
federal income tax purposes (a "Non-US Lender"), it shall deliver or caused to
be delivered to the Borrower the following properly completed and duly executed
documents:

                  (1) two complete and executed (x) U.S. Internal Revenue Forms
      W-8BEN (or any successor form thereto) with respect to an income tax
      treaty providing for a zero rate of withholding tax on interest, or (y)
      U.S. Internal Revenue Service Forms W-8ECI (or any successor form
      thereto); or

                  (2) two complete and executed U.S. Internal Revenue Service
      Forms W-8BEN (or any successor form thereto), including all appropriate
      attachments, documenting the status of the Lender (or Transferee) as a
      Non-U.S. Lender and (y) a certificate substantially in the form of Exhibit
      E (a "Non-Bank Status Certificate").

Such documents shall be delivered by the Lender on or before the date it becomes
a party to this Agreement and on or before the date, if any, the Lender (or
Transferee) changes its applicable lending office by designating a different
lending office (a "New Lending Office"). In addition, the Lender shall deliver
or cause to be delivered such Forms and/or Certificates promptly upon or before
the expiration, obsolescence or invalidity of any document previously delivered
by the Lender. Notwithstanding any other provision of this Section 3.12(c), the
Lender shall not be required to deliver any document pursuant to this Section
3.12(c) that the Lender is not legally able to deliver.

            (d) The Borrowers shall not be required to indemnify the Lender or
to pay any additional amounts to the Lender in respect of any U.S. federal
income or withholding tax pursuant to paragraph (a) or (c) above to the extent
that:

            (i) the obligation to withhold any amounts with respect to U.S.
      federal income tax existed on the date the Lender became a party to this
      Agreement or, with respect to payments to a New Lending Office, the date
      the Lender designated such New Lending Office, provided, however, that
      this clause (i) of this paragraph (d) shall not apply (x) to any New
      Lending Office that becomes a New Lending Office as a result of an
      assignment, participation, transfer or designation made at the request of
      the Borrowers or (y) to the extent the indemnity payment or additional
      amounts the Lender, acting through a New Lending Office, would be entitled
      to receive (without regard to this paragraph (d)) do not exceed the
      indemnity payment or additional amounts that the person making the
      assignment, participation or transfer to the Lender or making the
      designation of such New Lending Office, would have been entitled to
      receive in the absence of such assignment, participation, transfer or
      designation, or

                                      -22-
<PAGE>

            (ii) the obligation to pay such indemnity payment or additional
      amounts would not have arisen but for a failure by the Lender to comply
      with the provisions of paragraph (c) above.

            (e) Nothing contained in this Section 3.12 shall require the Lender
to make available any of its tax returns or any other information that it deems
to be confidential or proprietary.

            3.13 Indemnity. The Borrowers agree to indemnify the Lender and to
hold the Lender harmless from any actual loss or expense which the Lender may
sustain or incur as a consequence of (a) default by any Borrower in making a
borrowing of or Continuation of Eurodollar Loans after any Borrower has given a
notice requesting the same in accordance with the provisions of this Agreement,
(b) default by any Borrower in making any prepayment after any Borrower has
given a notice thereof in accordance with the provisions of this Agreement or
(c) the making of a prepayment of Eurodollar Loans on a day which is not the
last day of an Interest Period with respect thereto. This covenant shall survive
the termination of this Agreement and the payment of Loans and all other amounts
payable hereunder.

            3.14 Lending Offices; Change of Lending Office.

            (a) Loans made by the Lender shall be made and maintained at the
Lender's Applicable Lending Office.

            (b) The Lender agrees that if it makes any demand for payment under
Section 3.11 or 3.12(a), or if any adoption or change of the type described in
Section 3.10 shall occur with respect to it, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrowers to make payments
under Section 3.11 or 3.12(a), or would eliminate or reduce the effect of any
adoption or change described in Section 3.10.

            SECTION 4. REPRESENTATIONS AND WARRANTIES

            To induce the Lender to enter into this Agreement and to make the
Loans, the Borrowers and U-Haul International hereby represent and warrant to
the Lender that:

            4.1 Financial Condition. The unaudited consolidated balance sheet of
AMERCO and its consolidated Subsidiaries as at December 31, 2004 and the related
unaudited consolidated statements of income and of cash flows for the nine-month
period ended on such date, copies of which have heretofore been furnished to the
Lender, are complete and correct and present fairly the consolidated financial
condition of U-Haul International and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their consolidated
cash flows for the nine-month period then ended (subject to normal year-end
audit adjustments). All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
Responsible Officer, and as disclosed therein). Neither AMERCO nor any of its
consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long term lease or unusual forward or long term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction or other financial derivative, which is not
reflected in the foregoing statements or in the notes thereto. During the period
from December 31, 2004 to and including the date hereof there has been no sale,
transfer or other disposition by AMERCO or any of its consolidated Subsidiaries
of any material part of its business or property and no purchase or other
acquisition of any business or property (including any Capital Stock of any
other Person) material in

                                      -23-
<PAGE>

relation to the consolidated financial condition of AMERCO and its consolidated
Subsidiaries at December 31, 2004.

            4.2 No Change. Since December 31, 2004 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.

            4.3 Existence; Compliance with Law. Each Loan Party (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign Person and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except where the failure to so
qualify could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

            4.4 Power; Authorization; Enforceable Obligations. Each Loan Party
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and, in the case of the Borrowers, to
borrow hereunder, and has taken all necessary action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in
the case of the Borrowers, to authorize the borrowings on the terms and
conditions of this Agreement and any Notes. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which any Loan Party is a party other
than the consents, authorizations, filings, notices and other acts listed on
Schedule 4.4, all of which have been obtained or made and are in full force and
effect. This Agreement has been, and each other Loan Document to which it is a
party will be, duly executed and delivered on behalf of the Loan Parties party
thereto. This Agreement constitutes, and each other Loan Document to which it is
a party when executed and delivered will constitute, a legal, valid and binding
obligation of the Loan Parties party thereto enforceable against such Loan
Parties in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

            4.5 No Legal Bar. The execution, delivery and performance of the
Loan Documents to which any Loan Party is a party, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation (except those with respect to which consents have been
obtained as listed on Schedule 4.4 and which are in full force and effect) of
any Loan Party or of any of their respective Subsidiaries and will not result
in, or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation (other than Liens created by the Security Documents in
favor of the Lender, and Liens created by the Aged Truck Loan Documents in favor
of the Aged Truck Lenders).

            4.6 No Material Litigation. Except as set forth on Schedule E
attached to the certificate of U-Haul International delivered pursuant to
Section 5.1(d), as of the date hereof, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Loan Parties, threatened by or against any Loan Party or
any of their respective Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) which could reasonably
be expected to have a Material Adverse Effect.

                                      -24-
<PAGE>

            4.7 No Default. Neither any Loan Party nor any of their respective
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.

            4.8 Ownership of Property; Liens. Each Loan Party has good record
and marketable title in fee simple to, or a valid leasehold interest in, all its
real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property to the extent the same constitutes
Collateral is subject to any Lien except Liens in favor of the Lender under the
Security Documents, other Permitted Liens and, prior to the consummation of the
transactions contemplated by the Existing Loan Assignment Agreement, the Liens
created under the Existing Financing Documents (including, without limitation,
the filings and recordings existing pursuant to the Existing Financing Documents
prior to the time the releases and terminations in respect thereof to be
provided pursuant to the Existing Loan Assignment Agreement have been made).

            4.9 Taxes. Each of the Loan Parties and their respective
Subsidiaries has filed or caused to be filed all tax returns which, to the
knowledge of the Loan Parties, are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the applicable Loan Party or its
Subsidiaries, as the case may be); no tax Lien has been filed, and, to the
knowledge of the Loan Parties, no claim is being asserted, with respect to any
such tax, fee or other charge.

            4.10 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect, or for any purpose which violates, or which would be inconsistent
with, the provisions of the regulations of such Board of Governors. If requested
by the Lender, the Borrowers will furnish to the Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form
U-1 referred to in said Regulation U.

            4.11 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan,
and each Plan (other than a Multiemployer Plan or a multiemployer welfare plan
maintained pursuant to a collective bargaining agreement) has complied in all
material respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred (other than a termination
described in Section 4041(b) of ERISA with respect to which any Loan Party has
incurred no liability (i) to the PBGC or (ii) in excess of $1,000,000), and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
Except to the extent that any such excess could not have a Material Adverse
Effect, the present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither any Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan for which
any withdrawal liability remains unpaid, and, to the knowledge of the Loan
Parties, any Borrower would not become subject to any material liability under
ERISA if any Borrower or any Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. To the
knowledge of the Loan Parties, no

                                      -25-
<PAGE>

such Multiemployer Plan is in Reorganization or Insolvent. Except to the extent
that any such excess could not have a Material Adverse Effect, the present value
(determined using actuarial and other assumptions which are reasonable in
respect of the benefits provided and the employees participating) of the
liability of the Borrowers and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA)
other than such liability disclosed in the financial statements of the Borrowers
does not, in the aggregate, exceed the assets under all such Plans allocable to
such benefits.

            4.12 Investment Company Act; Other Regulations. No Borrower is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No
Borrower is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.

            4.13 Subsidiaries, Corporate Structure. Schedule F attached to the
certificate delivered by U-Haul International pursuant to Section 5.1(d) sets
forth as of the date hereof the name of each Loan Party, the name of each Loan
Party which is a direct or indirect Subsidiary of a Loan Party, its form of
organization, its jurisdiction of organization and the percentage of all
outstanding shares or other interests of such class of Capital Stock held by the
immediate parent entity.

            4.14 Security Documents.

            (a) The provisions of each Security Document are effective to create
in favor of the Lender for the ratable benefit of the Lender a legal, valid and
enforceable security interest in all right, title and interest of the Loan Party
thereto in the "Collateral" described therein.

            (b) When proper financing statements have been filed in the offices
in the jurisdictions listed in Schedule 4.14(b), and the Collection Account
Control Agreement has been duly executed and delivered by the Collection Account
Bank, the Collection Sub-Account Control Agreement has been duly executed and
delivered by the Collection Sub-Account Bank, the Security Agreement shall
constitute a fully perfected first Lien (or, if the Aged Truck Facility is
provided, with respect to the Aged Truck Junior Collateral, second Lien) on, and
security interest in, all right, title and interest of the Loan Parties parties
thereto in the "Collateral" described therein.

            (c) When the Mortgage Assignments have been duly recorded in the
recording offices for the counties in which the respective Eligible Properties
are located, the Lender shall have a fully perfected first mortgage Lien on each
of the Eligible Properties listed on Schedule 1.1.

            4.15 Accuracy and Completeness of Information.

            (a) All factual information, reports and other papers and data with
respect to the Loan Parties (other than projections) furnished, and all factual
statements and representations made, to the Lender by a Loan Party, or on behalf
of a Loan Party, were, at the time the same were so furnished or made, when
taken together with all such other factual information, reports and other papers
and data previously so furnished and all such other factual statements and
representations previously so made, complete and correct in all material
respects, and did not, as of the date so furnished or made, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements contained therein not misleading in light of the
circumstances in which the same were made.

            (b) All projections with respect to the Loan Parties furnished by or
on behalf of a Loan Party to the Lender were prepared and presented in good
faith by or on behalf of such Loan Party.

                                      -26-
<PAGE>

No fact is known to a Loan Party which (so far as such Loan Party can reasonably
foresee) could reasonably be expected to have a Material Adverse Effect which
has not been set forth in the financial statements referred to in Section 4.1 or
in such information, reports, papers and data referred to in this Section 4.15
or otherwise disclosed in writing to the Lender prior to the Closing Date.

            4.16 Labor Relations. No Loan Party is engaged in any unfair labor
practice which could reasonably be expected to have a Material Adverse Effect.
As of the date hereof there is (a) no unfair labor practice complaint pending
or, to the best knowledge of each Loan Party and each of the Subsidiaries,
threatened against a Loan Party before the National Labor Relations Board which
could reasonably be expected to have a Material Adverse Effect and no grievance
or arbitration proceeding arising out of or under a collective bargaining
agreement is so pending or threatened; (b) no strike, labor dispute, slowdown or
stoppage pending or, to the best knowledge of each Loan Party, threatened
against a Loan Party; and (c) no union representation question existing with
respect to the employees of a Loan Party and no union organizing activities are
taking place with respect to any thereof.

            4.17 Insurance. As of the date hereof, each Loan Party has, with
respect to its properties and business, insurance covering the risks, in the
amounts, with the deductible or other retention amounts, as set forth on
Schedule 6.5 and meeting the requirements of Section 6.5 hereof as of the date
hereof and the Closing Date.

            4.18 Solvency. As of the date hereof, the Closing Date, and each
other date of determination, after giving effect to the Loans and the granting
of the mortgages on the Eligible Properties and the granting of the security
interests in the other Collateral to be made on or prior to such date, (i) the
amount of the "present fair saleable value" of the assets of the Borrowers,
taken as a whole, and of U-Haul International and its Subsidiaries, taken as a
whole, will, as of such date, exceed the amount of all "liabilities of the
Borrowers, taken as a whole, and of U-Haul International and its Subsidiaries,
taken as a whole, contingent or otherwise", as of such date, as such quoted
terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (ii) the present fair
saleable value of the assets of the Borrowers, taken as a whole, and of U-Haul
International and its Subsidiaries, taken as a whole, will, as of such date, be
greater than the amount that will be required to pay the liabilities of the
Borrowers, taken as a whole, and of U-Haul International and its Subsidiaries,
taken as a whole, on their respective debts as such debts become absolute and
matured, (iii) neither the Borrowers, taken as a whole, nor U-Haul International
and its Subsidiaries, taken as a whole, will have, as of such date, an
unreasonably small amount of capital with which to conduct their respective
businesses, and (iv) each of the Borrowers, taken as a whole, and U-Haul
International and its Subsidiaries, taken as a whole, will be able to pay their
respective debts as they mature. For purposes of this Section 4.18, "debt" means
"liability on a claim", "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, and (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.

            4.19 Purpose of Loans. The proceeds of the Loans shall be used by
the Borrowers to acquire by assignment all of the outstanding Indebtedness of
the Borrowers under the Existing Financing Documents, and for working capital
purposes in the ordinary course of business.

            4.20 Environmental Matters. Except as disclosed on Schedule 4.20,

            (a) The Eligible Properties, and all businesses or operations
conducted thereon are in compliance with all Environmental Laws;

                                      -27-
<PAGE>

            (b) The Borrowers and U-Haul International hold and have held all
permits, licenses, registrations and authorizations ("Environmental Permits")
required for their operations at the Eligible Properties and are and have been
in compliance with the Environmental Permits, except insofar as the absence of
or noncompliance with such Environmental Permits would not have a material
impact on the Borrowers and U-Haul International;

            (c) No Hazardous Substances have been disposed of on or released (as
used herein, "release" shall have the meaning provided in 42 U.S.C. Section
9601(22)) at, onto or under the Eligible Properties, by any Borrower or U-Haul
International or, to the Borrowers' and U-Haul International's best knowledge,
after due inquiry and investigation, by any other Person; and there is no
contamination at, in, on, or under or about the Eligible Properties or violation
of any Environmental Law with respect to the Eligible Properties or the business
operated by the Borrowers or U-Haul International or any entity owning any
Eligible Properties (the "Business") which could materially interfere with the
continued operation of the Eligible Properties, or materially impair the fair
saleable value thereof;

            (d) No Hazardous Substances are located in, on or under, or have
been handled, generated, stored, processed, released or discharged from the
Eligible Properties, by any Borrower or U-Haul International or, to the
Borrowers' and U-Haul International's best knowledge, after due inquiry and
investigation, by any other Person, except for those substances used by
Borrowers or Tenants in the ordinary course of their business in compliance with
all Environmental Laws and not reasonably expected to give rise to liability
under Environmental Laws;

            (e) The Eligible Properties, are not subject to any private or
governmental Lien or judicial or administrative notice or action relating to or
arising under Environmental Laws and there are no facts, circumstances, or
conditions that could reasonably be expected to restrict, encumber, or result in
the imposition of special conditions under any Environmental Law with respect to
the ownership, occupancy, development, use, or transferability of any Eligible
Properties;

            (f) There are no underground storage receptacles or surface
impoundments, landfills or dumps for Hazardous Substances on the Eligible
Properties;

            (g) The Borrowers and U-Haul International have received no notice
of, and to the best of the Borrowers' and U-Haul International's knowledge and
belief there exists no investigation, action, proceeding, claim, notice of
violation, consent decree, consent order, administrative order or other order by
any agency, authority or unit of government or by any third party which could
result in any material liability, penalty, sanction or judgment under any
Environmental Laws with respect to any condition, use or operation of the
Eligible Properties, nor do the Borrowers nor U-Haul International know of any
basis for any of the foregoing;

            (h) There is no known asbestos containing material, lead-based
paint, or PCBs, at any Eligible Properties that are not in compliance with
Environmental Laws, nor are there any endangered species' habitats or wetlands
at the Eligible Properties;

            (i) The Borrowers and U-Haul International have received no notice
that, and to the best of the Borrowers' and U-Haul International's knowledge and
belief, there has been no claim by any party that, any use, operation or
condition of the Eligible Properties, has caused any nuisance or any other
liability or adverse condition on any other property, nor do the Borrowers or
U-Haul International know of any basis for such a claim;

            (j) The Borrowers and U-Haul International have not knowingly waived
or released any Person's liability with regard to Hazardous Substances in, on,
under or around the Eligible Properties,

                                      -28-
<PAGE>

nor retained or assumed, contractually or otherwise, any other Person's
liability relative to Hazardous Substances or any claim, action or proceeding
relating thereto;

            (k) Neither the Eligible Properties, nor any other property, owned
by any Borrower (i) is included or, to the Borrowers' and U-Haul International's
knowledge, after due inquiry, proposed for inclusion on the National Priorities
List issued pursuant to CERCLA by the United States Environmental Protection
Agency (the "EPA") or on any of the inventories of other potential "Problem"
sites issued by the EPA or other applicable Governmental Authority nor (ii)
otherwise identified by the EPA as a potential CERCLA site or included or, to
the Borrowers' and U-Haul International's knowledge, after due inquiry, proposed
for inclusion on any such list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Authority; and

            (l) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, on behalf of, or which
are in the possession of the Borrowers or U-Haul International (or any
representatives thereof) with respect to any Eligible Properties which have not
been delivered to the Lender prior to execution of this Agreement.

            4.21 Eligible Properties. With respect to each of the Eligible
Properties, the Loan Parties hereby represent and warrant, as of the Borrowing
Date of the Loan in respect of which the such Eligible Properties were mortgaged
pursuant to the Mortgage Documents:

            (a) Compliance. To the Loan Parties' knowledge, each Borrower and
each Eligible Property, and the use and operation thereof, comply in all
material respects with all Requirements of Law applicable to such Eligible
Property, including, without limitation, building and zoning ordinances and
codes and the Americans with Disabilities Act except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. To
the Loan Parties' knowledge, none of the Borrowers is in default or violation in
any material respect of any order, writ, injunction, decree or demand of any
Governmental Authority in respect of such Eligible Property which default or
violation could reasonably be expected to have a Material Adverse Effect and no
Borrower has received a written notice of any such default or violation. There
has not been committed by any Borrower or, to the Loan Parties' knowledge, any
other Person in occupancy of or involved with the operation or use of any such
Eligible Property any act or omission affording any Governmental Authority the
right of forfeiture as against such Eligible Property or any part thereof or any
monies paid in performance of Borrowers' obligations under any of the Loan
Documents.

            (b) Condemnation. Except with respect to Eligible Properties which
have been substituted for other Eligible Properties pursuant to Section 2.6 and
by virtue of the second proviso thereto (and after giving effect to such
substitution), no Condemnation or other proceeding has been commenced or, to the
Loan Parties' knowledge, is threatened or contemplated with respect to all or
any portion of such Eligible Property or for the relocation of roadways
providing access to such Eligible Property, except where such Condemnation or
other proceeding could not reasonably be expected to have a Material Adverse
Effect.

            (c) Utilities And Public Access; Parking. Such Eligible Property has
adequate rights of access to public ways and is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service such Eligible Property for
full utilization of such Eligible Property for its current uses. All public
utilities necessary to the full use and enjoyment of such Eligible Property as
currently used and enjoyed are located either in the public right-of-way
abutting such Eligible Property (which are connected so as to serve such
Eligible Property without passing over other property) or in recorded easements
serving such Eligible Property. All roads necessary for the use of such Eligible
Property for its current purposes have been completed and dedicated to public
use and accepted by all Governmental Authorities.

                                      -29-
<PAGE>

Such Eligible Property has, or is served by, parking to the extent required to
comply with all Requirements of Law. The representations in this subsection (c)
only apply to a Eligible Property to the extent of improvements constructed and
completed.

            (d) Separate Lots. Such Eligible Property is assessed for real
estate tax purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not constituting a part of such lot or
lots, and no other land or improvements is assessed and taxed together with such
Eligible Property or any portion thereof.

            (e) Assessments. To the Loan Parties' knowledge after due inquiry,
there are no pending or proposed special or other assessments for public
improvements or otherwise affecting such Eligible Property, nor are there any
contemplated improvements to such Eligible Property that may result in such
special or other assessments.

            (f) Use Of Property. Such Eligible Property is primarily used as a
U-Haul moving center, or other moving storage facility.

            (g) Certificate Of Occupancy; Licenses. All certifications, permits,
licenses and approvals, including, without limitation, certificates of
completion or occupancy and any applicable liquor license (provided that the
permanent liquor license may not have been issued as of the date hereof)
required for the legal use, occupancy and operation of such Eligible Property as
of the date hereof, have been obtained and are valid and in full force and
effect except when the failure to obtain the same or for the same to be valid
and in full force and effect could not reasonably be expected to have a Material
Adverse Effect. Borrowers shall keep and maintain or cause to be kept and
maintained all licenses necessary for the operation of such Eligible Property
for the purpose intended herein, except to the extent so to keep and maintain
the same, or cause the same to be kept and maintained, could not reasonably be
expected to have a Material Adverse Effect. The use being made of such Eligible
Property is in conformity with the certificate of occupancy and any permits or
licenses issued for such Eligible Property, except to the extent that the
failure to be so in conformity could not reasonably be expected to have a
Material Adverse Effect.

            (h) Flood Zone. None of the improvements on such Eligible Property
are located in an area identified by the Federal Emergency Management Agency as
an area having special flood hazards, or, if any portion of the improvements is
located within such area, the Borrower owning such Eligible Property has
obtained the insurance prescribed in Schedule 6.5.

            (i) Physical Condition. To the Loan Parties' knowledge, such
Eligible Property, including, without limitation, all buildings, improvements,
parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,
HVAC systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, in each case to the extent constructed and completed, are in good
condition, order and repair in all material respects. To the Loan Parties'
knowledge, there exists no structural or other material defects or damages in
such Eligible Property, as a result of a casualty or otherwise, and whether
latent or otherwise. No Borrower has received notice from any insurance company
or bonding company of any defects or inadequacies in such Eligible Property, or
any part thereof, which would adversely affect the insurability of the same or
cause the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any policy of insurance or bond.

            (j) Boundaries. (a) None of the improvements which were included in
determining the appraised value of such Eligible Property lie outside the
boundaries and building restriction lines of such Eligible Property to any
material extent, and (b) no improvements on adjoining properties encroach

                                      -30-
<PAGE>

upon such Eligible Property and no easements or other encumbrances upon such
Eligible Property encroach upon any of the improvements so as to materially
affect the value or marketability of Eligible Property.

            (k) Illegal Activity. No portion of such Eligible Property has been
or will be purchased with proceeds of any illegal activity, and no part of the
proceeds of the Loans will be used in connection with any illegal activity.

            (l) Construction Expenses. To the Loan Parties' knowledge, all costs
and expenses of any and all labor, materials, supplies and equipment used in the
construction or repair of improvements on each Eligible Property have been paid
in full. To the Loan Parties' knowledge, no Liens for payment for work, labor or
materials affecting such Eligible Property have been filed.

            (m) Permitted Encumbrances. No Liens on such Eligible Property, not
prohibited hereunder, individually or in the aggregate, materially and adversely
affects the value of such Eligible Property, or impairs the intended use or the
operation of such Eligible Property.

            SECTION 5. CONDITIONS PRECEDENT

            5.1 Conditions to Initial Loans. The agreement of the Lender to take
assignment of the loans under the Existing Loan Agreement, to amend and restate
the Existing Loan Agreement as provided herein and to make the initial Loan
requested to be made by it is subject to the satisfaction, immediately prior to
or concurrently with the making of such Loan on the Closing Date, of the
following conditions precedent:

            (a) Loan Documents. The Lender shall have received:

            (i) this Agreement, executed and delivered by a duly authorized
      officer of each Loan Party, with a counterpart for the Lender;

            (ii) for the account of the Lender, if requested, a Note of the
      Borrowers conforming to the requirements hereof and executed by a duly
      authorized officer of the Borrowers;

            (iii) the Existing Loan Assignment Agreement, executed and delivered
      by a duly authorized officer of each Loan Party and the Agent under the
      Existing Loan Agreement, on behalf of the Existing Creditors;

            (iv) the Guarantee, executed and delivered by a duly authorized
      officer of U-Haul International, with a counterpart or a conformed copy
      for the Lender;

            (v) the Security Agreement, executed and delivered by a duly
      authorized officer of each Borrower, with a counterpart or conformed copy
      for the Lender;

            (vi) each of the Mortgage Assignments, executed and delivered by a
      duly authorized officer of each party thereto, with a counterpart or
      conformed copy for the Lender;

            (vii) the Collection Account Control Agreement, executed and
      delivered by a duly authorized officer of U-Haul International and the
      Collection Account Bank, with a counterpart or conformed copy for the
      Lender;

                                      -31-
<PAGE>

            (viii) the Collection Sub-Account Control Agreement, executed and
      delivered by a duly authorized officer of U-Haul International and the
      Collection Sub-Account Bank, with a counterpart or conformed copy for the
      Lender;

            (ix) the Concentration Account Direction Letter, executed and
      delivered by a duly authorized officer of each of the Loan Parties to the
      Concentration Account Bank;

            (x) the CMBS Direction Letter, executed and delivered by a duly
      authorized officer of each of the Loan Parties to the CMBS Bank;

            (xi) the Environmental Indemnity Agreement;

            (xii) the Account and Payment Instructions Certificate, duly
      executed and delivered by a Responsible Officer of each of the Borrowers
      and U-Haul International; and

            (xiii) a report and diagram of the cash flow structure for the
      transactions contemplated by this Agreement, such report and diagram to be
      certified as complete and correct by a Responsible Officer of each of the
      Loan Parties.

            (b) Related Agreements. The Lender shall have received, true and
correct copies, certified as to authenticity by the Borrowers, of the Governing
Documents of each Loan Party, and such other documents or instruments as may be
reasonably requested by the Lender.

            (c) Concurrent Transactions. All amounts owing to the Existing
Creditors under the Existing Financing Documents shall be assigned and
transferred to the Lender pursuant to the Existing Loan Assignment Agreement,
and any Liens created pursuant to the Existing Financing Documents shall be
released (except as to the Liens on the Eligible Properties and the other
Collateral, which shall be assigned to the Lender pursuant to the Mortgage
Assignments and the Existing Loan Assignment Agreement, and except to the extent
that the Existing Loan Assignment Agreement provides for such releases to be
provided subsequent to the Closing Date), and all other documents, instruments
and agreements required to be delivered, and all other actions required to be
taken for the Existing Loan Assignment Agreement to be effective shall have been
duly delivered or taken.

            (d) Secretary's Certificates. The Lender shall have received, with a
counterpart for the Lender, a certificate of each Loan Party, dated the Closing
Date, substantially in the form of Exhibit E, with appropriate insertions and
attachments, satisfactory in form and substance to the Lender, executed by the
Treasurer and the Secretary of such Loan Party.

            (e) Proceedings of the Loan Parties. The Lender shall have received,
with a counterpart for the Lender, a copy of the resolutions, in form and
substance satisfactory to the Lender, of the Board of Directors of each Loan
Party authorizing (i) the execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party, (ii) the borrowings
contemplated hereunder and (iii) the granting by it of the Liens created
pursuant to the Security Documents, certified by the Secretary or an Assistant
Secretary of such Loan Party as of the Closing Date, which certification shall
be included in the certificate delivered in respect of such Loan Party pursuant
to Section 5.1(d), shall be in form and substance satisfactory to the Lender and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.

            (f) Incumbency Certificates. The Lender shall have received, with a
counterpart for the Lender, a certificate of each Loan Party, dated the Closing
Date, as to the incumbency and signature of the officers of such Loan Party
executing any Loan Document, which certificate shall be included in

                                      -32-
<PAGE>

the certificate delivered in respect of such Loan Party pursuant to Section
5.1(d), shall be satisfactory in form and substance to the Lender, and shall be
executed by the President or any Vice President and the Secretary or any
Assistant Secretary of such Loan Party.

            (g) Governing Documents. The Lender shall have received, with a
counterpart for the Lender, true and complete copies of the Governing Documents
of each Loan Party, certified as of the Closing Date as complete and correct
copies thereof by the Secretary or an Assistant Secretary of such Loan Party,
which certification shall be included in the certificate delivered in respect of
such Loan Party pursuant to Section 5.1(d) and shall be in form and substance
satisfactory to the Lender.

            (h) Good Standing Certificates. The Lender shall have received, with
a copy for the Lender, certificates dated as of a recent date from the Secretary
of State or other appropriate authority, evidencing the good standing of each
Loan Party (i) in the jurisdiction of its organization and (ii) in each other
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires it to qualify as a foreign Person except, as to this
subclause (ii), where the failure to so qualify would not have a Material
Adverse Effect.

            (i) Consents, Licenses and Approvals. The Lender shall have
received, with a counterpart for the Lender, a certificate of a Responsible
Officer of the Borrowers (i) attaching copies of all consents, authorizations
and filings referred to in Section 4.4, and (ii) stating that such consents,
licenses and filings are in full force and effect, and each such consent,
authorization and filing shall be in form and substance satisfactory to the
Lender.

            (j) Fees. The Lender shall have received (i) a loan fee in an amount
equal to $8,900,000, (ii) an amount equal to $500,000 in respect of legal costs
related to the Facility and (iii) an amount equal to $200,000 in respect of
closing costs related to the Facility, provided, however, that any amounts
previously paid pursuant to the Commitment Letter in respect of such items shall
be credited thereto for purposes of this Section 5.1(j).

            (k) Legal Opinions. The Lender shall have received, with a
counterpart for the Lender, the executed legal opinions of Katten Muchin
Rosenman LLP, special counsel to the Borrowers and the other Loan Parties,
substantially in the form of Exhibit G-1, and Jennifer Settles, Esq.,
substantially in the form of Exhibit G-2, and the local counsel listed on
Schedule 5.1(k), substantially in the form of Exhibit G-3. Each such legal
opinion shall cover such other matters incident to the transactions contemplated
by this Agreement as the Lender may reasonably require.

            (l) Actions to Perfect Liens. The Lender shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the filing of
duly executed financing statements on form UCC-1, necessary or, in the opinion
of the Lender, desirable to perfect the Liens created by the Security Documents
shall have been completed.

            (m) Mortgage Assignments. With respect to each Eligible Property and
each Mortgage Assignment (it being agreed that with respect to the Eligible
Properties listed in Schedule 1.1 indicated by footnote stating that the
recorded Existing Mortgage with respect thereto has not yet been returned by the
local recording office with respect thereto, until such Existing Mortgage is so
returned the Borrowers shall not be obliged to provide executed Mortgage
Assignments and copy of recorded Existing Mortgage), the Lender shall have
received:

            (i) a Local Counsel Checklist with respect to such Eligible
      Property, duly completed by the applicable local counsel of the Borrowers
      with respect to such Eligible Property,

                                      -33-
<PAGE>

            (ii) a copy of the recorded Existing Mortgage on such Eligible
      Property in connection with the Existing Loan Agreement,

            (iii) a copy of the existing title policy issued in connection with
      such Existing Mortgage for such Eligible Property, and an endorsement
      thereto issued by the applicable title company endorsing such title policy
      in favor of the Lender, and

            (iv) a copy of the legal opinion issued in connection with such
      Existing Mortgage for such Eligible Property (or a new legal opinion with
      respect thereto);

and each such completed Local Counsel Checklist, and all items delivered to the
Lender in respect of such Eligible Property, shall be satisfactory to the Lender
and its counsel in all respects.

            (n) Lien Searches. The Lender shall have received the results of a
recent search by a Person satisfactory to the Lender of the Uniform Commercial
Code, judgment and tax lien filings which may have been filed with respect to
personal property of each Loan Party, and the results of such search shall be
satisfactory to the Lender.

            (o) Insurance. The Lender shall have received evidence in form and
substance satisfactory to it that all of the requirements of Section 6.5 hereof
shall have been satisfied.

            (p) Additional Matters. All partnership, corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be satisfactory in form and substance to the Lender, and
the Lender shall have received such other documents and legal opinions in
respect of any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.

            5.2 Conditions to Each Loan. The agreement of the Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan), to take assignment of the loans under the Existing Loan Agreement
on the Closing Date and to amend and restate the Existing Loan Agreement is
subject to the satisfaction of the following conditions precedent:

            (a) Representations and Warranties. Each of the representations and
warranties made by the Borrower and the other Loan Parties in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of
such date as if made on and as of such date (unless such representation and
warranty is made as of an earlier date in which case such representation and
warranty shall be true and correct as of such earlier date).

            (b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans requested to
be made on such date.

            (c) Mortgages. With respect to any Eligible Property to be subject
to a Mortgage (other than the initial Eligible Properties on the Closing Date to
be covered by the Mortgage Assignments and the Local Counsel Checklists pursuant
to Section 5.1(a)(vi) and (m)), the Lender shall have received:

            (i) Mortgages. The Lender shall have received a Mortgage covering
      such Eligible Property, executed and delivered by a duly authorized
      officer of the applicable Borrowers party thereto, with a counterpart or a
      conformed copy for each Lender.

            (ii) Surveys. The Lender shall have received, and the title
      insurance company issuing the policy referred to in Section 5.1(o) (the
      "Title Insurance Company") shall have

                                      -34-
<PAGE>

      received, copies of all existing maps or plats of as built surveys of the
      sites of the property covered by each Mortgage, to the extent the same are
      available; provided that if existing surveys do not exist, the Borrowers
      shall not be required to obtain new surveys.

            (iii) Title Insurance Policy. The Lender shall have received in
      respect of each parcel covered by each Mortgage a mortgagee's title policy
      (or policies) or marked up unconditional binder for such insurance dated
      the Closing Date. Each such policy shall (i) be in an amount satisfactory
      to the Lender; (ii) be issued at ordinary rates; (iii) insure that the
      Mortgage insured thereby creates a valid first Lien on such parcel free
      and clear of all defects and encumbrances, except such as may be approved
      by the Lender; (iv) name the Lender for the benefit of the Lenders as the
      insured thereunder; (v) be in the form of ALTA Loan Policy 1970 (Amended
      10/17/70); (vi) contain such endorsements and affirmative coverage as the
      Lender may request and (vii) be issued by title companies satisfactory to
      the Lender (including any such title companies acting as co-insurers or
      reinsurers, at the option of the Lender). The Lender shall have received
      evidence satisfactory to it that all premiums in respect of each such
      policy, and all charges for mortgage recording tax, if any, have been
      paid.

            (iv) Flood Insurance. If requested by the Lender, the Lender shall
      have received (i) a policy of flood insurance which (A) covers any parcel
      of improved real property which is encumbered by any Mortgage, (B) is
      written in an amount not less than the outstanding principal amount of the
      indebtedness secured by such Mortgage which is reasonably allocable to
      such real property or the maximum limit of coverage made available with
      respect to the particular type of property under the Act, whichever is
      less, and (C) has a term ending not later than the maturity of the
      indebtedness secured by such Mortgage and (ii) confirmation that the
      Company has received the notice required pursuant to Section 208(e)(3) of
      Regulation H of the Board of Governors of the Federal Reserve System.

            (v) Copies of Documents. The Lender shall have received a copy of
      all recorded documents referred to, or listed as exceptions to title in,
      the title policy or policies referred to in Section 5.1(o) and a copy,
      certified by such parties as the Lender may deem appropriate, of all other
      documents affecting the property covered by each Mortgage.

            (d) Actions to Perfect Liens. The Lender shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the filing of
duly executed financing statements on form UCC-1 and amendments to financing
statements on form UCC-3, necessary or, in the opinion of the Lender, desirable
to perfect the Liens created by the Security Documents in respect of all
Collateral granted to the Lender as of such Borrowing Date shall have been
completed.

Each borrowing by the Borrowers hereunder shall constitute a representation and
warranty by the Borrowers as of the date thereof that the conditions contained
in this Section 5.2 have been satisfied.

            5.3 Conditions to Termination Date Extension. The agreement of the
Lender to agree to the extension of the Termination Date pursuant to Section 2.5
at any time is subject to the satisfaction of the following conditions
precedent:

            (a) Request for Extension. The Lender shall have received a timely
request for extension of the Termination Date pursuant to Section 2.5.

            (b) Representations and Warranties. Each of the representations and
warranties made by the Borrowers and the other Loan Parties in or pursuant to
the Loan Documents shall be true and

                                      -35-
<PAGE>

correct in all material respects on and as of such date as if made on and as of
such date (unless such representation and warranty is made as of an earlier date
in which case such representation and warranty shall be true and correct as of
such earlier date).

            (c) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to any Loans requested to
be made on such date.

            (d) Actions to Perfect Liens. The Lender shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the filing of
duly executed financing statements on form UCC-1 and amendments to financing
statements on form UCC-3, necessary or, in the opinion of the Lender, desirable
to perfect the Liens created by the Security Documents in respect of all
Collateral granted to the Lender as of such date shall have been completed.

The request by the Borrowers hereunder to extend the Termination Date as
provided in Section 2.5 shall constitute a representation and warranty by the
Borrowers as of the date thereof that the conditions contained in this Section
5.3 have been satisfied.

            SECTION 6. AFFIRMATIVE COVENANTS

            Each Borrower and U-Haul International hereby agrees that, so long
as any of the Commitments remain in effect or any amount is owing to the Lender
or the Lender hereunder or under any other Loan Document, the Borrowers and
U-Haul International shall:

            6.1 Financial Statements. Furnish to the Lender:

            (a) as soon as available, but in any event within 90 days after the
end of each fiscal year of AMERCO, a copy of the audited consolidated balance
sheet of AMERCO and its consolidated Subsidiaries as at the end of such year and
the related audited consolidated statements of operations, stockholders' equity
and cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by BDO Seidman LLP or other independent certified public accountants of
nationally recognized standing; and

            (b) as soon as available, but in any event not later than 90 days
after the end of each fiscal year of each of AMERCO Real Estate Company and
U-Haul International, the unaudited consolidated and consolidating balance sheet
of each of AMERCO Real Estate Company and U-Haul International and their
respective Subsidiaries as at the end of such year and the related unaudited
consolidated and consolidating statements of operations, stockholders' equity
and cash flows of AMERCO Real Estate Company and U-Haul International and their
respective Subsidiaries for such year, certified by a Responsible Officer of
AMERCO Real Estate Company and U-Haul International as being fairly stated in
all material respects (subject to normal year-end audit adjustments);

            (c) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal year
of each of AMERCO Real Estate Company and U-Haul International, the unaudited
consolidated and consolidating balance sheet of each of AMERCO Real Estate
Company and U-Haul International and their respective Subsidiaries as at the end
of such quarter and the related unaudited consolidated and consolidating
statements of operations, stockholders' equity and cash flows of each of AMERCO
Real Estate Company and U-Haul International and their respective Subsidiaries
for such quarter and the portion of the fiscal year through the end of such
quarter, certified

                                      -36-
<PAGE>

by a Responsible Officer of AMERCO Real Estate Company and U-Haul International
as being fairly stated in all material respects (subject to normal year-end
audit adjustments);

all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and for the absence of footnotes on interim financial
statements).

            6.2 Certificates; Other Information. Furnish to the Lender:

            (a) concurrently with the delivery of the financial statements
referred to in Sections 6.1(a), (b) and (c), a certificate of a Responsible
Officer of such Loan Party (i) stating that, to the best of such Officer's
knowledge, such Loan Party during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition, contained in
this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate and (ii) showing in
detail the calculations of the ratios measured in Sections 3.6(b) and (iii)
showing a calculation of the Debt Service Coverage Ratio for the quarter then
ended;

            (b) to the extent not already delivered pursuant to Section 6.2(a),
not later than eight days following the last day of each month, a schedule,
substantially in the form of Exhibit H-2 or other form approved by the Lender,
showing (with reasonable detail as to the calculation thereof, and in any event
including a reconciliation of the revenue from Eligible Properties during such
month with the amount of funds deposited to the Collection Account during such
month) (i) for each Eligible Property, the NOI of such Eligible Property and
(ii) the Combined NOI for the period of twelve consecutive months ended on such
day, certified as complete and correct by a Responsible Officer of each Loan
Party;

            (c) concurrently with the delivery of the financial statements
referred to in Sections 6.1(a), (b) and (c), cash-flow accounting reports for
the Eligible Properties and the revenues derived therefrom in such format as is
reasonably approved by the Lender, each such report to be certified as complete
and correct by a Responsible Officer of the applicable Loan Party;

            (d) within 10 Business Days following the Closing Date, fully
executed or complete conformed copies of the CMBS Primary Documents, certified
as true and correct by a Responsible Officer;

            (e) on or prior to the eighth day of each month, either a CMBS
Properties Excess Cash Flow Report for the second preceding month prior to such
day, or online access to such information related to the CMBS Properties Excess
Cash Flow and the bank accounts related thereto as shall be reasonably
satisfactory to the Lender; and

            (f) not later than eight days following the last day of each fiscal
quarter of each fiscal year of the Loan Parties, a calculation, substantially in
the form of Exhibit H-3 or other form approved by the Lender in reasonable
detail of the Debt Service Coverage Ratio for such most recently ended fiscal
quarter.

            6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Loan Parties.

                                      -37-
<PAGE>

            6.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to Section 7.2; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.

            6.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and furnish to the Lender, upon written request, full
information as to the insurance carried.

            (b) In addition to the requirements specified in Section 6.5(a), the
Borrowers shall maintain, or cause to be maintained, insurance with respect to
the Eligible Properties as described on Schedule 6.5.

            6.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of the Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Loan Parties
with officers and employees of the applicable Loan Parties and with their
independent certified public accountants.

            6.7 Notices. Promptly give notice to the Lender and the Lender of:

            (a) the occurrence of any Default or Event of Default (specifying
whether the same constitutes a Rapid Amortization Event), or any Collection
Sub-Account Failure;

            (b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any Property Entity and any Governmental Authority, which in either case could
reasonably be expected to have a Material Adverse Effect;

            (c) (i) any litigation or proceeding affecting any Loan Party in
which the amount involved is $5,000,000 or more and not covered by insurance or
in which injunctive or similar relief is sought, or (ii) any litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority that is pending or, to the knowledge of any Loan Party, threatened by
or against any Loan Party or against any of its or their respective properties
or revenues (x) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (y) which could reasonably be
expected to have a Material Adverse Effect.;

            (d) of the occurrence of any transaction or occurrence referred to
in Section 3.6(a);

            (e) the following events, as soon as possible and in any event
within 30 days after any Loan Party knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,

                                      -38-
<PAGE>

Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;
and

            (f) any material adverse change in the business, operations,
property or condition (financial or otherwise) of the Loan Parties or the
Eligible Properties taken as a whole.

            Each notice pursuant to this Section 6.7 shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto.

            6.8 Environmental Laws.

            (a) The Borrowers and U-Haul International shall, and shall cause
all property, managers, agents, employees and Tenants to: (i) comply with all
applicable Environmental Laws applicable to the Eligible Properties, and obtain
and comply with Environmental Permits required under Environmental Law, (ii)
keep or cause the Eligible Properties, to be kept free from Hazardous Substances
(except those substances used by the Borrowers or Tenants in the ordinary course
of their business), in compliance in compliance with, and not likely to give
rise to liability under Environmental Laws, (iii) not install or use, or permit
the installation or use of, any underground receptacles containing Hazardous
Substances on the Eligible Properties, (iv) expressly prohibit the use,
generation, handling, storage, production, release, processing and disposal of
Hazardous Substances by all future Tenants (except those substances used by such
Tenants in the ordinary course of their business, in compliance with, and not
likely to give rise to liability under, Environmental Laws) and use all
reasonable efforts to prevent existing Tenants and other permitted occupants of
the Eligible Properties, from taking any such actions, (v) in any event, not
install on the Eligible Properties, or permit to be installed on the Eligible
Properties PCBs, urea formaldehyde insulation, asbestos or any substance
containing asbestos or any material containing lead based paint, (vi) prohibit
the disposal and/or release of any Hazardous Substances on, at, beneath, or near
the Eligible Properties; (vii) keep all Eligible Properties free from all Liens
under Environmental laws, unless being challenged in good faith with appropriate
proceedings and in accordance with Section 6.8(e) hereof; (viii) maintain
appropriate reserves, a bond, or, if the Aged Truck Facility has been provided,
unused availability under the Aged Truck Facility, with respect to liabilities
under or non compliance with Environmental Laws, in the amounts specified in
Schedule A hereto; (ix) satisfy all financial assurance requirements under
Environmental Laws; and (x) use best efforts to obtain funds or reimbursement
from State or Local underground storage tank funds, to the extent applicable or
available.

            (b) The Borrowers and U-Haul International promptly shall notify
Lender in writing should any of the Borrowers or U-Haul International become
aware of (i) any release of Hazardous Substances, or other actual or potential
environmental problem or liability, with respect to or affecting the Eligible
Properties, (ii) any Lien, notice of Lien, threatened Lien, action or notice of
violation or potential liability affecting the Eligible Properties, or any
Borrower arising under any Environmental Law, (iii) the institution of any
investigation, inquiry or proceeding concerning any Borrower or the Eligible
Properties, pursuant to any Environmental Law or otherwise relating to Hazardous
Substances, or (iv) the discovery of any occurrence, condition or state of facts
which would render any representation or warranty contained in Section 4.20 of
this Agreement incorrect in any respect if made at the time of such discovery.
The Borrowers and U-Haul International shall promptly transmit to Lender copies
of any and all citations, orders, notices or, upon written request of Lender,
other communications relating to any of the foregoing provisions of this
paragraph.

                                      -39-
<PAGE>

            (c) Regardless of the source of contamination, the Borrowers and
U-Haul International shall, at their own expense, promptly take or cause to be
taken all actions necessary or advisable for the clean-up of the Eligible
Properties, and other property, affected by contamination in, on, under or at
the Eligible Properties, including, without limitation, all investigative,
monitoring, removal, containment and remedial actions in accordance with the all
applicable Environmental Laws (and in all events in a manner satisfactory to the
applicable Governmental Authority and Lender). The Borrowers and U-Haul
International shall further pay or cause to be paid, at no expense to the
Lender, all clean-up, administrative and enforcement costs of applicable
governmental agencies which may be asserted against the Eligible Properties. In
the event the Borrowers and U-Haul International fail to do so, or following an
Event of Default, Lender may, at its sole election, cause the Eligible
Properties, or other affected property, to be lived from any Hazardous
Substances or otherwise brought into compliance with Environmental Laws and any
cost incurred in connection therewith shall be for the account of the Borrowers
under Section 9.5. Each Borrower hereby grants to Leader access to the Eligible
Properties, and an irrevocable license to remove any items determined by Lender
to be Hazardous Substances and to do all things Lender shall deem necessary to
bring the Eligible Properties, into compliance with Environmental Laws. However,
Lender shall have no obligation to inspect or clean up any Hazardous Substances.
Lender shall not be deemed a generator of any Hazardous Substances removed from
the Eligible Properties.

            (d) Upon the request of Lender, at any time (i) after the occurrence
and during the continuance of a Default or an Event of Default or (ii) Lender
has reasonable grounds to believe that (x) Hazardous Substances are or have been
released, stored or disposed of on or around the Eligible Properties, in
violation of Environmental Laws or (y) the Eligible Properties, may be in
violation of Environmental Laws, the Borrowers and U-Haul International shall
cause an investigation or audit of the Eligible Properties, to be undertaken by
a hydrogeologist or environmental engineer or other appropriate consultant
approved by Lender to determine whether any Hazardous Substances are located on,
at, beneath, or near the Eligible Properties, and/or whether the Eligible
Properties, are in compliance with Environmental Laws. The scope of any
investigation or audit shall be approved by Lender. If the Borrowers and U-Haul
International fail to provide reports of such investigation or audit within
thirty (30) days after such request, Lender may, but shall have to obligation
to, order the same. Borrowers hereby grants to Lender and Lender's contractors
access to the Eligible Properties, and an irrevocable license to undertake such
investigation or audit. All costs of any such investigation or audit shall be
for the account of the Borrowers and U-Haul International in accordance with the
terms of Section 9.5 hereof.

            (e) In the event that a Lien is filed against any Eligible Property,
pursuant to any Environmental Law, the Borrowers and U-Haul International shall,
within thirty (30) days from the date that any Borrower receives notice of such
Lien (but in any event ten (10) days prior to the date of any contemplated sale
pursuant to such Lien), (i) pay the claim and remove the Lien from the Eligible
Properties; (ii) furnish (A) a bond satisfactory to Lender in the amount of the
claim out of which the Lien arises, (B) a cash deposit in the amount of the
claim out of which the Lien arises, (C) other security reasonably satisfactory
to Lender in an amount sufficient to discharge the claim out of which the Lien
arises, or (D) if the Aged Truck Facility has been made available, evidence of
adequate unused availability under the Aged Truck Facility; or (E) security in a
form and amount satisfactory to the applicable Governmental Authority pursuant
to a valid consent or other order, and the Borrowers and U-Haul International
shall promptly arrange for the removal of the Lien; or (iii) in the event the
Borrowers and U-Haul International elect to contest such lien, provide Lender
with any of the forms of security identified in Section 6.8(e)(ii) above pending
resolution of the contest. Notwithstanding the foregoing, Borrowers and U-Haul
International shall prevent a sale pursuant to any Lien.

            (f) In the event that the Borrowers propose to substitute a Property
for an Eligible Property pursuant to Section 2.6, the Borrowers shall, at the
Borrowers' expense, cause an environmental

                                      -40-
<PAGE>

database search to be performed by a Person reasonably satisfactory to the
Lender, and, if such environmental database search discloses any condition that
in the Lender's reasonable judgment warrants such report, cause to be prepared,
by a Person reasonably satisfactory to the Lender, a Phase I or Phase II
environmental report with respect to such Property.

            6.9 [Reserved].

            6.10 Bank Accounts.

            (a) U-Haul International shall have established and shall maintain
the Collection Account and the Concentration Account. The Borrowers and U-Haul
International have established the Local Accounts listed in the Account and
Payment Instructions Certificate. The Loan Parties shall not change any Bank
Account, or open any new Bank Account, into which any revenues of the Loan
Parties related to the Eligible Properties may be deposited without, in the case
of Local Accounts, prior notice to the Lender, and in other cases, the prior
written consent of the Lender.

            (b) Each Borrower shall deposit or cause to be deposited all gross
collections, receipts and proceeds on any Collateral related to any Eligible
Properties (including, without limitation, amounts received in any Local
Accounts) into the Concentration Account, and pursuant to an irrevocable
direction letter to each of the Merrill Lynch CMBS Account Bank and the Morgan
Stanley CMBS Account Bank, each in form and substance satisfactory to the Lender
(such direction letter, as amended, supplemented or otherwise modified with the
consent of the Lender, the "Merrill Lynch CMBS Bank Direction Letter" or the
"Morgan Stanley CMBS Bank Direction Letter", as the case may be; and
collectively, the "CMBS Bank Direction Letters") each Loan Party shall direct
the CMBS Bank to transfer all CMBS Properties Excess Cash Flow to the Collection
Account, in each case within one Business Day of the receipt thereof. Pursuant
to an irrevocable direction letter by the Loan Parties to the Concentration
Account Bank, in form and substance satisfactory to the Lender (such direction
letter, as amended, supplemented or otherwise modified with the consent of the
Lender, the "Concentration Account Direction Letter"; collectively, the CMBS
Direction Letters and the Concentration Account Direction Letter are referred to
as the "Direction Letters"), the funds deposited in the Concentration Account
which are or shall be part of the Collateral shall be transferred daily into the
Collection Account, and no Loan Party shall instruct the Concentration Account
Bank in a manner inconsistent with the Direction Letters without the prior
written consent of the Lender. So long as no Default, Event of Default or
Collection Sub-Account Failure shall have then occurred and be continuing, the
funds deposited in the Collection Account pursuant to this Section 6.10(b) shall
be transferred on the same Business Day back to the Concentration Account.

            (c) U-Haul International shall deposit into the Collection
Sub-Account, not later than the 21st day of each calendar month, the Collection
Sub-Account Deposit for such month (or an amount sufficient so that after such
deposit, together with unrestricted funds already on deposit in the Collection
Sub-Account, the total amount of unrestricted funds on deposit in the Collection
Sub-Account would not be less than the Collection Sub-Account Deposit). The
Lender shall be entitled, and is hereby authorized and directed by the Loan
Parties, to withdraw the Collection Sub-Account Deposit from the Collection
Sub-Account on the next subsequent Payment Date and apply such Collection
Sub-Account Deposit to the payment of principal, interest and other Obligations
due on such Payment Date. So long as no Default, Event of Default or Collection
Sub-Account Failure shall have then occurred and be continuing, any excess funds
in the Collection Sub-Account after such Payment Date shall be transferred on
the same Business Day to the Concentration Account.

            (d) Upon the occurrence of an Event of Default or a Collection
Sub-Account Failure, the Lender may exercise its rights under the Collection
Account Control Agreement and Collection Sub-

                                      -41-
<PAGE>

Account Control Agreement, and thereafter, on any Payment Date (or at such times
as the Lender may choose in its sole discretion) any amounts in the Collection
Account and Collection Sub-Account shall be applied from the Collection Account
in the following order:

            (i) first, to Merrill Lynch Capital Services, Inc. for payment of
      all net amounts payable to it in respect of Hedge Agreements with any Loan
      Party;

            (ii) second, to the payment of all interest, fees and expenses due
      and payable under this Agreement and the other Loan Documents;

            (iii) third, to the payment of principal amortization of the Loans
      due pursuant to this Agreement pursuant to the Applicable Amortization
      Schedule, or, if all amounts of the Loans are then due and owing, to the
      payment of the principal of the Loans in full;

            (iv) fourth, to the payment in full of all other Obligations; and

            (v) fifth, any excess shall be remitted to the Borrowers or to such
      other Person as shall be entitled thereto.

            6.11 Post Closing Matters.

            (a) The Loan Parties shall use their reasonable best efforts to
cause the Mortgage Assignments to be recorded as soon as possible following the
Closing Date.

            (b) If the Lender, in its sole discretion, determines to permit the
Facility to close notwithstanding that all environmental and engineering due
diligence on any of the Eligible Properties is not completed prior to the
Closing Date, but continues environmental and engineering due diligence on such
Eligible Properties after the Closing Date, then

            (i) if such environmental and engineering due diligence discloses
      any matters which are not satisfactory to the Lender acting reasonably,
      then either (A) the Loan Parties shall provide the Lender within ten (10)
      Business Days with (1) satisfactory environmental or engineering insurance
      insuring the Lender in respect of such matters, and/or (2) satisfactory
      reserves, bond or other financial assurance, conforming to the
      requirements of Section 6.8(e)(ii), to account for any liability
      (including any contingent liability) arising therefrom, or (B) such
      Eligible Property shall cease to be an Eligible Property for purposes of
      this Agreement, and

            (ii) Schedule 4.20 shall be amended to reflect the results of such
      additional environmental and engineering due diligence.

            (c) If the Aged Truck Facility is provided to the Borrowers or
Affiliates thereof, the Loan Parties shall provide to the Lender, not later than
the date 45 days following the Closing Date, each of the Aged Truck Junior Lien
Documents and the Aged Truck Intercreditor Agreement, each executed and
delivered by a duly authorized officer of each party thereto, with a counterpart
or conformed copy for the Lender, or if the Aged Truck Facility is not so
provided to the Borrowers or Affiliates, collateral documentation satisfactory
to the Lender granting the additional Collateral referred to in Section 8(m)
within the time required therefor in such Section 8(m), as applicable.

            (d) If any Mezzanine Financing is consummated in a manner such that
any of the CMBS Bank Direction Letters no longer relates to the appropriate
deposit account from which CMBS Properties Excess Cash Flow would be remitted in
connection with the related CMBS Documents, the

                                      -42-
<PAGE>

Borrowers and U-Haul International shall cause a new direction letter to be
provided, in form and substance substantially identical to the existing CMBS
Bank Direction Letters and otherwise satisfactory to the Lender, related to such
new appropriate deposit account, and thereupon such direction letter shall
constitute a CMBS Bank Direction Letter hereunder and such new appropriate
deposit account shall constitute a CMBS Account in connection with such CMBS
Documents.

            (e) With respect to the Eligible Properties listed on Schedule 1.1
designated with property numbers 751054, 791031, 837070, 806025 and 802026, the
Borrowers and U-Haul International shall cause to be delivered to the Lender,
within 30 days following the Closing Date, each of the items listed in Section
5.1(m)(i), (ii), (iii) and (iv) and an executed Mortgage Assignment (in each
case properly referencing the correct Existing Mortgage), or if an Existing
Mortgage does not exist with respect to such Eligible Property, a new Mortgage
securing an amount satisfactory to the Lender together with each of the items
listed in Section 5.2(c)(i), (ii), (iii), (iv) and (v); and in the case of such
Mortgage Assignments or Mortgages, the Borrowers and U-Haul International shall
cause such Mortgage Assignments and Mortgages to have been submitted for
recording. If such items with respect to any such Eligible Property are not
provided to the Lender and submitted for recording within such 30-day period,
such Eligible Property shall cease to be an Eligible Property for purposes of
this Agreement.

            6.12 Continuation of Lines of Business. Continue to engage in the
businesses in which the Loan Parties are engaged in on the date of this
Agreement at the Eligible Properties, except (a) to the extent that the failure
to so continue to engage in any such business at any Eligible Property resulted
from circumstances not subject to the control of the Borrowers or U-Haul
International, or (b) to the extent that the failure to so continue to engage in
any such business or businesses at the applicable Eligible Properties would not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.

            SECTION 7. NEGATIVE COVENANTS

            The Borrowers and U-Haul International hereby agree that, so long as
any of the Commitments remain in effect or any amount is owing to the Lender
hereunder or under any other Loan Document, each Borrower and U-Haul
International shall not, directly or indirectly:

            7.1 Negative Pledge. Create, incur, assume or suffer to exist any
Lien upon any Eligible Property or any Collateral, except for:

            (a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrowers or their respective
Subsidiaries, as the case may be, in conformity with GAAP;

            (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue or which are being contested in good faith by appropriate
proceedings;

            (c) easements, rights of way, restrictions and other similar
encumbrances incurred in the ordinary course of business;

            (d) Liens on the Eligible Properties reflected on the title
insurance policies with respect thereto; and

            (e) Liens created pursuant to the Security Documents.

                                      -43-
<PAGE>

            7.2 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:

            (a) any Subsidiary of a Loan Party may be merged or consolidated
with or into such Loan Party (provided that such Loan Party shall be the
continuing or surviving corporation); or

            (b) any merger, consolidation or amalgamation, or liquidation,
winding up or dissolution that would not reasonably be expected (i) to
materially and adversely affect the rights of the Lender hereunder, or (ii) to
have a Material Adverse Effect.

            7.3 Limitation on Modifications of Agreements. Amend, modify or
change, or consent or agree to any amendment, modification or change to, any of
the terms relating to the payment or prepayment or principal of or interest on,
any Indebtedness under the Aged Truck Loan Documents or the CMBS Documents,
other than:

            (a) any such amendment, modification or change which would not
reasonably be expected to change the allocation of revenues thereunder.

            7.4 Sale of Eligible Properties and Collateral. Sell, exchange,
transfer or otherwise dispose of any interest in any of the Eligible Properties
or any of the other Collateral, except:

            (a) as provided in Section 2.6 of this Agreement with respect to
substitution of Eligible Properties;

            (b) sales of Eligible Properties so long as, concurrently with such
sale and giving effect to the reduction of the Commitment resulting therefrom
under Section 2.4(c), the Loans shall be prepaid in the amount, if any, required
under Section 3.6(a); and

            (c) leases of Eligible Properties in the ordinary course of
business, and easements on the Eligible Properties not prohibited by Section
7.1.

            7.5 Governing Documents. Amend its certificate of incorporation
(except to increase or decrease the number of authorized shares of common stock,
to authorize the issuance of any preferred stock, to amend or expand its
directors' and officers' indemnification provisions, or to change the size of
the board of directors), partnership agreement or other Governing Documents,
without the prior written consent of the Lender, which shall not be unreasonably
withheld or delayed.

            SECTION 8. EVENTS OF DEFAULT

            If any of the following events shall occur and be continuing:

            (a) The Borrowers shall fail to pay any principal of any Loan when
due in accordance with the terms thereof or hereof; or the Borrowers shall fail
to pay any interest on any Loan, or any other amount payable hereunder or under
the other Loan Documents, within one day after any such interest or other amount
becomes due in accordance with the terms thereof or hereof; or

            (b) Any representation or warranty made or deemed made by any
Borrower or any other Loan Party herein or in any other Loan Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or

                                      -44-
<PAGE>

any such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or

            (c) Any Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Sections 3.6, 6.10, 6.12
or 7 of this Agreement, or Section 5 of the Security Agreement; or

            (d) Any Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this Agreement or
any other Loan Document (other than as provided in paragraphs (a) through (c) of
this Section), and such default shall continue unremedied for a period of 30
days after written notice thereof has been given by the Lender to the Borrower,
or, with respect to defaults relating to real property only and to the extent
that such default is not capable of being remedied within such period, 90 days
so long as such remedy have been commenced within such 30 day period and is
being prosecuted in good faith; or

            (e) Any Borrower, or any other Loan Party or any Affiliate shall (i)
default in any payment of principal of or interest of any Indebtedness (other
than any Excluded Indebtedness (as defined below in this Section 8(e)) owing by
any Loan Party or any Affiliate thereof to the Lender or any Affiliate thereof,
or in the payment of any Guarantee Obligation owing by any Loan Party or any
Affiliate thereof to the Lender or any Affiliate thereof, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness or Guarantee Obligation was created; or (ii)
default in the observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or a
trustee or Lender on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or (iii) any "Event of Default" shall occur under
the Aged Truck Loan Documents; as used in this Section 8(e), "Excluded
Indebtedness" means the Loans and any non-recourse Indebtedness of any Loan
Party or any Affiliate thereof (including, without limitation, the non-recourse
Indebtedness issued under the CMBS Documents); or

            (f) (i) Any Loan Party shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Borrower, any Loan Party
or any Property Entity of any Eligible Property shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against any
Loan Party any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against any
Loan Party any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) any Loan Party
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) any Loan Party shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or

                                      -45-
<PAGE>

            (g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of any Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lender, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lender is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or

            (h) One or more judgments or decrees shall be entered against any
Loan Party involving in the aggregate a liability (not paid or fully covered by
insurance) of $5,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; or

            (i) (i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect, or any Loan Party which is a party to any of the
Security Documents shall so assert or (ii) the Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or

            (j) The Guarantee shall cease, for any reason, to be in full force
and effect or any Guarantor shall so assert; or

            (k) Any Change of Control shall occur; or

            (l) Unless the Borrowers have given the notice specified in Section
8(m) prior to the date 45 days following the Closing Date, in which case Section
8(m) shall apply, the closing date of the Aged Truck Facility shall not occur
within 45 days of the Closing Date; or

            (m) (i) The Aged Truck Facility has not been provided to the
Borrowers or Affiliates thereof prior to the date 45 days following the Closing
Date, (ii) the Borrowers have notified the Lender in writing on or prior to such
45th day that this Section 8(m) shall be applicable, and (iii) the Loan Parties
have not prior to the date 90 days following the Closing Date caused U-Haul
Leasing & Sales Co. to grant to the Lender, as additional Collateral for the
Secured Obligations (as defined in the Security Agreement), but without U-Haul
Leasing & Sales Co. assuming any recourse on the Secured Obligations beyond such
additional Collateral, fully perfected first Liens on trucks, equipment or other
property of U-Haul Leasing & Sales Co. having a fair market value, as reasonably
determined by the Lender, of not less than $50,000,000, or, at all times during
the period from the date of such notice under clause (ii) of this Section 8(m)
to the date such Liens on such additional Collateral are granted, U-Haul Leasing
& Sales Co. shall fail to keep available, unencumbered by any other Liens,
property appropriate to be subject to such Liens as such additional Collateral
with a value of at least $50,000,000;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to any
Borrower, automatically the Commitment shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts

                                      -46-
<PAGE>

owing under this Agreement shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) the Lender may, by notice to the Borrowers, declare
the Commitment to be terminated forthwith, whereupon the Commitment shall
immediately terminate; and (ii) the Lender may, by notice to the Borrowers,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement to be due and payable forthwith, whereupon
the same shall immediately become due and payable.

            SECTION 9. MISCELLANEOUS

            9.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. The
Lender may, from time to time, (a) enter into with the Borrowers written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lender or of the Borrowers
hereunder or thereunder or (b) waive, on such terms and conditions as the Lender
may specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences.
Any such waiver and any such amendment, supplement or modification shall apply
to the Lender and shall be binding upon the Borrowers, the Lender, and all
future holders of the Loans. In the case of any waiver, the Borrowers and the
Lender shall be restored to their former positions and rights hereunder and
under the other Loan Documents, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.

            9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three Business Days after
being deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission and electronic mail, when sent and receipt has been
electronically confirmed, addressed as follows, or to such other address as may
be hereafter notified by the respective parties hereto:

The Borrowers:                  Carlos Vizcarra
                                AMERCO Real Estate Company
                                AMERCO Real Estate Company of Texas, Inc.
                                AMERCO Real Estate Company of Alabama, Inc.,
                                U-Haul Co. of Florida, Inc.
                                2727 North Central Avenue
                                Phoenix, Arizona 85004
                                email: Carlos_Vizcarra@uhaul.com

The Guarantor:                  John Taylor
                                U-Haul International, Inc.
                                2727 North Central Avenue
                                Phoenix, Arizona 85004
                                email: JT@uhaul.com

        with a copy to:         Jennifer Settles, Esq.
                                U-Haul International, Inc.
                                2727 North Central Avenue

                                      -47-
<PAGE>

                                Phoenix, Arizona 85004
                                email: jennifer_settles@uhaul.com

The Lender:                     Merrill Lynch Commercial Finance Corp.
                                4 World Financial Center, 33rd Floor
                                New York, New York 10080
                                Attention: Paul Tufaro
                                Telephone:        212-449-1656
                                Fax:              212-738-1070
                                email: Paul_Tufaro@ml.com

        with a copy to:         Merrill Lynch Global Asset Based Finance
                                Securitization and Principal Transactions
                                4 World Financial Center, 10th Floor
                                New York, New York 10080
                                Attention: Mr. Joshua Green
                                Telephone:        212-449-7330
                                Fax:              212-449-6673
                                email: Josh_Green@ml.com

provided that any notice, request or demand to or upon the Lender pursuant to
Section 2.2, 3.2, 3.5 or 3.6 shall not be effective until received.

            9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Lender or the Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

            9.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.

            9.5 Payment of Expenses and Taxes. The Borrowers agree (a) to pay or
reimburse the Lender for all its out-of-pocket costs and expenses reasonably
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Lender, (b) to pay or reimburse the Lender for
all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel to the Lender, (c) to pay, indemnify, and hold the
Lender harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, (d) to
pay or reimburse the Lender for all of its ongoing

                                      -48-
<PAGE>

out-of-pocket due diligence and monitoring expenses, provided that, so long as
no Default or Event of Default has occurred during such year, the amount of such
expenses for which the Loan Parties shall be responsible under this clause (d)
shall not exceed $25,000 during any year, and (e) to pay, indemnify, and hold
the Lender and each of its officers, employees, directors, trustees, agents,
advisors, affiliates and controlling persons (each, an "Indemnitee"), harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents or
the use of the proceeds of the Loans, and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability or potential liability under, any Environmental
Law applicable to the operations of each Borrower, any of its Subsidiaries, or
any of the Properties (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"); provided, that no Borrower shall have any obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities (i) to the
extent such Indemnified Liabilities are found by a court of competent
jurisdiction (which finding has not been modified, reversed or withdrawn) to
have resulted from the gross negligence or willful misconduct of such Indemnitee
or to arise out of a breach by the Lender of its obligations hereunder or under
any other Loan Document, (ii) to the extent such Borrower is the prevailing
party in any such legal proceedings, or (iii) legal proceedings commenced
against an Indemnitee by any security holder or creditor thereof arising out of
and based upon rights afforded any such security holder or creditor solely in
its capacity as such. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.

            9.6 Successors and Assigns; Participations and Assignments. This
Agreement shall be binding upon and inure to the benefit of each Borrower,
U-Haul International, the Lender and their respective successors and assigns,
except that (a) no Loan Party may assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the Lender
(and any purported such assignment or transfer by a Loan Party without such
consent of the Lender shall be null and void) and (b) the Lender may not assign
or transfer any of its rights or obligations under this Agreement, except to an
Affiliate of the Lender, without the prior written consent of each Borrower,
which consent of each Borrower shall not be unreasonably withheld or delayed,
provided that no such consent of such Borrower shall be required at any time any
Default or Event of Default is then existing.

            9.7 Set-off. In addition to any rights and remedies of the Lender
provided by law, the Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. The Lender agrees
promptly to notify the Borrowers after any such set-off and application made by
the Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.

            9.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission of signature pages hereto), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrowers and the Lender.

                                      -49-
<PAGE>

            9.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

            9.10 Integration. This Agreement and the other Loan Documents
represent the agreement of each Borrower and the Lender with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Lender relative to subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.

            9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

            9.12 Submission To Jurisdiction; Waivers. Each Borrower hereby
irrevocably and unconditionally:

            (a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;

            (b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

            (c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 9.2 or at such other address of which the Lender
shall have been notified pursuant thereto;

            (d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and

            (e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.

            9.13 Acknowledgements. Each Borrower and U-Haul International hereby
acknowledges that:

            (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;

            (b) the Lender does not have any fiduciary relationship with or duty
to the Borrower or U-Haul International arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Borrower and the other Loan Parties, on one hand, and the Lender, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

                                      -50-
<PAGE>

            (c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
between the Borrower and the Lender.

            9.14 WAIVERS OF JURY TRIAL. EACH BORROWER AND THE LENDER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

            9.15 Confidentiality. The Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its affiliates' directors, officers and
employees, including accountants, legal counsel and other advisors (it being
understood that the parties to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) in connection with any suit, action
or proceeding relating to this Agreement, (e) subject to a written agreement
containing provisions substantially the same as those of this Section, or (f)
with the consent of the Borrowers. For the purposes of this Section 9.15,
"Information" means all information received from any Borrower relating to its
business, other than any such information that is available to Borrower on a
non-confidential basis prior to disclosure by such Borrower. Notwithstanding
anything to the contrary contained in this Agreement or any other Loan Document,
all persons may disclose to any and all persons, without limitation of any kind,
the federal income tax treatment or structure of the Loans and other
Obligations, any fact relevant to understanding the federal tax treatment or
structure of the Loans and other Obligations, and all materials of any kind
(including opinions or other tax analyses) relating to such federal tax
treatment or structure.

            9.16 Guarantee Provisions; Joint and Several Liability. Each
Borrower acknowledges and agrees that, whether or not specifically indicated as
such in a Loan Document, all Obligations shall be joint and several Obligations
of each individual Borrower, and in furtherance of such joint and several
Obligations, each Borrower hereby irrevocably guarantees the payment of all
Obligations of each other Borrower as set forth below:

            (a) Guarantee. Each Borrower hereby jointly and severally,
absolutely, unconditionally and irrevocably guarantees the full and punctual
payment when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all Obligations; provided,
however, that each Borrower shall only be liable under this Agreement for the
maximum amount of such liability that can be hereby incurred without rendering
this Agreement, as it relates to such Borrower, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount. This guarantee constitutes a guaranty of payment when due and
not of collection, and each Borrower specifically agrees that it shall not be
necessary or required that the Lender exercise any right, assert any claim or
demand or enforce any remedy whatsoever against any Obligor or any other Person
before or as a condition to the obligations of such Borrower hereunder.

            (b) Guarantee Absolute, etc. The guarantee agreed to above shall in
all respects be a continuing, absolute, unconditional and irrevocable guarantee
of payment, and shall remain in full force and effect until the Termination
Date. Each Borrower jointly and severally guarantees that the Obligations shall
be paid strictly in accordance with the terms of each Loan Document under which
such Obligations arise, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Lender with respect thereto. The liability of each Borrower under
this Agreement shall be joint and several, absolute, unconditional and
irrevocable irrespective of (i) any lack of validity, legality or enforceability
of any Loan Document; (ii) the failure of the Lender (A) to assert any claim or
demand or to enforce any right or remedy against any Obligor or

                                      -51-
<PAGE>

any other Person (including any other guarantor) under the provisions of any
Loan Document or otherwise, or (B) to exercise any right or remedy against any
other guarantor (including any Obligor) of, or collateral securing, any
Obligations; (iii) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligation; (iv) any reduction, limitation,
impairment or termination of any Obligations for any reason, including any claim
of waiver, release, surrender, alteration or compromise, and shall not be
subject to (and each Borrower hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Obligations or otherwise; (v) any
amendment to, rescission, waiver, or other modification of, or any consent to or
departure from, any of the terms of any Loan Document; (vi) any addition,
exchange, release, surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition of, or consent to or departure
from, any other guarantee held by the Lender securing any of the Obligations; or
(vii) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Obligor, any surety or
any guarantor.

            (c) Reinstatement, etc. Each Borrower agrees that its guarantee
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations is rescinded or
must otherwise be restored by the Lender, upon the insolvency, bankruptcy or
reorganization of any other Borrower, any other Obligor or otherwise, all as
though such payment had not been made.

            (d) Waiver, etc. Each Borrower hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
and this Agreement and any requirement that the Lender protect, secure, perfect
or insure any Lien, or any property subject thereto, or exhaust any right or
take any action against any other Obligor or any other Person (including any
other guarantor) or entity or any collateral securing the Obligations, as the
case may be.

            (e) Postponement of Subrogation, etc. Each Borrower agrees that it
shall not exercise any rights which it may acquire by way of rights of
subrogation under any Loan Document to which it is a party, nor shall any
Borrower seek or be entitled to seek any contribution or reimbursement from any
Obligor, in respect of any payment made hereunder, under any other Loan Document
or otherwise, until following the Termination Date. Any amount paid to any
Borrower on account of any such subrogation rights prior to the Termination Date
shall be held in trust for the benefit of the Lender and shall immediately be
paid and turned over to the Lender in the exact form received by such Borrower
(duly endorsed in favor of the Lender, if required), to be credited and applied
against the Obligations, whether matured or unmatured; provided, however, that
if (i) any Borrower has made payment to the Lender of all or any part of the
Obligations; and (ii) the Termination Date has occurred; then at such Borrower's
request, the Lender shall, at the expense of such Borrower, execute and deliver
to such Borrower appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Borrower of an interest in the Obligations resulting from such payment. In
furtherance of the foregoing, at all times prior to the Termination Date, each
Borrower shall refrain from taking any action or commencing any proceeding
against any Obligor (or its successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in the respect of
payments made under any Loan Document to the Lender.

            (f) Right of Contribution. Each Borrower hereby agrees that, to the
extent that a Borrower shall have paid more than its proportionate share of any
payment made hereunder or in respect of the Obligations, such Borrower shall be
entitled to seek and receive contribution from and against the other Borrower
hereunder which has not paid its proportionate share of such payment. The
provisions of

                                      -52-
<PAGE>

this Section shall in no respect limit the obligations and liabilities of any
Borrower to the Lender, and each Borrower shall remain liable to the Lender for
the full amount guaranteed by it hereunder.

            (g) Each Borrower hereby acknowledges and agrees that such Borrower
shall be jointly and severally liable to the Lender for all representations,
warranties, covenants, obligations and indemnities of the Borrowers hereunder.

            9.17 Cooperation by Lender.9.18 The Lender agrees that, in the case
that the Borrowers notify the Lender that the Loans are to be paid in full or
refinanced (including by assignment of all Loans for a price not less than all
outstanding Obligations), in a manner not prohibited by this Agreement, the
Lender shall cooperate with the Borrowers to provide to the Borrowers, in
connection with such payment or refinancing or assignment (and subject to the
payment in full of the Obligations and such other terms as the Lender may
reasonably require), to use its reasonable efforts to execute and deliver such
releases, termination statements, mortgage satisfactions and other similar
instruments, prepared by the Borrowers and reasonably acceptable to the Lender,
all at the Borrowers' expense, as the Borrowers may reasonably request in
connection with such repayment or refinancing or assignment.

                            [Signature Pages Follow]

                                      -53-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.

                               AMERCO REAL ESTATE COMPANY,

                               AMERCO REAL ESTATE COMPANY OF TEXAS, INC.,

                               AMERCO REAL ESTATE COMPANY OF ALABAMA, INC.,

                               U-HAUL CO. OF FLORIDA, INC.,

                               U-HAUL INTERNATIONAL, INC.

                               By: /s/ Gary B. Horton
                                   ---------------------------------------------
                                   Name: Gary B. Horton
                                   Title: Treasurer

                               MERRILL LYNCH COMMERCIAL FINANCE CORP., as Lender

                               By: /s/ Joshua A. Green
                                   ---------------------------------------------
                                   Name: Joshua A. Green
                                   Title: Director

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>p70784exv10w2.txt
<DESCRIPTION>EX-10.2
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                               SECURITY AGREEMENT

            SECURITY AGREEMENT, dated as of June 8, 2005, made by AMERCO REAL
ESTATE COMPANY, a Nevada corporation, AMERCO REAL ESTATE COMPANY OF TEXAS, INC.,
a Texas corporation, AMERCO REAL ESTATE COMPANY OF ALABAMA, INC., an Alabama
corporation, U-HAUL CO. OF FLORIDA, INC. , a Florida corporation, (each a
"Borrower", collectively the "Borrowers"), U-HAUL INTERNATIONAL, INC., a Nevada
corporation ("Guarantor"), and each of the entities listed on the signature
pages hereto as a Marketing Grantor (each, a "Marketing Grantor" and,
collectively, the "Marketing Grantors", and, together with the Borrowers, the
Guarantor and with each Person which may, from time to time, become party hereto
as a Grantor, collectively the "Grantors" and each a "Grantor"), in favor of
MERRILL LYNCH COMMERCIAL FINANCE CORP., as lender (the "Lender").

                                    RECITALS

            Pursuant to the Amended and Restated Credit Agreement, dated as of
June 8, 2005 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among the Borrowers, Guarantor, as guarantor, and the
Lender, the Lender has agreed to make loans to the Borrowers upon the terms and
subject to the conditions set forth therein. It is a condition precedent to the
obligation of the Lender to make its loans to the Borrower under the Credit
Agreement that each Grantor shall have executed and delivered this Security
Agreement to the Lender.

            NOW, THEREFORE, in consideration of the premises and to induce the
Lender to enter into the Credit Agreement and make the loans to the Borrowers
under the Credit Agreement, each Grantor hereby agrees with the Lender as
follows:

            1. Defined Terms.

            (a) Unless otherwise defined herein, capitalized terms which are
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement; the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Certificated Security, Chattel Paper,
Documents, Equipment, Farm Products, General Intangibles, Instruments,
Inventory, Investment Property, Letter-of-Credit Rights, Proceeds, Security,
Securities Account and Supporting Obligations; and the following terms shall
have the following meanings:

            "Account Control Agreement": with respect to any Pledged Deposit
Account, a control agreement in a form substantially identical to the Collection
Account Control Agreement or other form approved by the Lender, as amended,
supplemented or otherwise modified from time to time.

            "CMBS Properties Excess Cash Flow Collateral": collectively, all
right, title and interest of any Grantor in and to any cash or right to receive
cash, or any Accounts, Chattel Paper, General Intangibles, Instruments,
Receivables, Securities, Securities Accounts, Security Entitlements, or other
property, comprising, evidencing or arising from, in whole or in part, any CMBS
Properties Excess Cash Flow, and all products and Proceeds thereof.

            "CMBS Parties": any parties, other than the Grantors, to any CMBS
Document.

            "Collateral": as defined in Section 2 of this Security Agreement.

<PAGE>

            "Deposit Account": a "deposit account" as defined in the Uniform
Commercial Code of any applicable jurisdiction and, in any event, including
without limitation any demand, time, savings, passbook or like account
maintained with any depositary institution.

            "Excluded Assets": all Vehicles (but not the Grantor's interest in
truck and other vehicle rental revenue related to the Eligible Properties), and
any property of any Grantor to the extent not comprising any part of, or arising
or derived from, or otherwise related to, any of the Eligible Properties,
including, without limitation, the property listed on Schedule II.

            "Pledged Deposit Accounts": the Collection Account and the
Collection Account Sub-Account.

            "Pledged Revenue": all revenue (including, without limitation,
rental income, proceeds of sales of goods and commission income) comprising or
arising from any activity of a Grantor at or in respect of any Eligible
Property, including, without limitation, all amounts and property which would be
designated as self-storage rental revenue, retail revenue, rental equipment
commissions or other miscellaneous revenue, or other similar items, on an income
statement of such Grantor prepared on a cash accounting basis from time to time,
and whether or not consisting of cash or the like, rights to receive cash or the
like, Accounts, Chattel Paper, General Intangibles, Instruments, Receivables,
Securities, Securities Accounts or Security Entitlements, and all Proceeds and
products thereof.

            "Pledged Revenue Obligations": all agreements, contracts or other
arrangements which give rise to any Pledged Revenue.

            "Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).

            "Secured Obligations": the collective reference to (a) the
Obligations, and (b) all obligations and liabilities of each Grantor to the
Lender, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of or in
connection with any Hedge Agreement entered into by any Grantor with any Lender
or any Affiliate thereof and any other document made, delivered or given in
connection therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without limitation,
all fees and disbursements of counsel to the Lender or such Affiliate that are
required to be paid by any Grantor pursuant to the terms of such Hedge Agreement
or other documents) or otherwise.

            "Security Agreement": this Security Agreement, as amended,
supplemented or otherwise modified from time to time.

            "UCC": the Uniform Commercial Code as from time to time in effect in
the State of New York.

            "Vehicles": all cars, trucks, trailers, tow dollies, construction
and earth moving equipment and other vehicles covered by a certificate of title
law of any State and all tires and other appurtenances to any of the foregoing.

            (b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Security Agreement shall refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement, and Section, Schedule. Annex, and Exhibit references are

                                      -2-
<PAGE>

to this Security Agreement unless otherwise specified. The meanings given to
terms defined herein shall be equally applicable to both the singular and plural
forms of such terms.

            2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Secured Obligations, each Grantor hereby
grants to the Lender a security interest in all of the following property now
owned or at any time hereafter acquired by such Grantor or in which such Grantor
now has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"):

                  (i)   all Pledged Revenue;

                  (ii)  all Pledged Revenue Obligations;

                  (iii) all Pledged Deposit Accounts;

                  (iv)  all CMBS Properties Excess Cash Flow Collateral;

                  (v)   all books and records pertaining to the Collateral; and

                  (vi)  to the extent not otherwise included, all Proceeds and
                        products of any and all of the foregoing, all Supporting
                        Obligations in respect of any of the foregoing, and all
                        collateral security and guarantees given by any Person
                        with respect to any of the foregoing;

provided, that, in any event, the Collateral shall not include the Excluded
Assets.

            3. Certain Matters Respecting Pledged Revenue Obligations, CMBS
Properties Excess Cash Flow Collateral; Tracing.

            (a) Grantors Remain Liable under Pledged Revenue Obligations and
CMBS Documents. Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Pledged Revenue Obligations and CMBS
Documents to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of each such Pledged Revenue Obligation or CMBS
Document. The Lender shall have no obligation nor liability under any Pledged
Revenue Obligations or CMBS Document by reason of or arising out of this
Security Agreement or the receipt by the Lender of any payment relating to any
Pledged Revenue or CMBS Properties Excess Cash Flow Collateral pursuant hereto,
nor shall the Lender be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Pledged Revenue Obligation
or CMBS Document, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Pledged Revenue Obligation or CMBS Document,
to present or file any claim, to take any action to enforce any performance or
to collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.

            (b) Analysis of Pledged Revenue and CMBS Properties Excess Cash
Flow. The Lender may in its own name or in the name of others communicate with
(i) if an Event of Default shall have occurred and be continuing, the parties to
any Pledged Revenue Obligations or (ii) the CMBS Parties to verify with them to
its satisfaction the existence, amount and terms of any Pledged Revenue or CMBS
Properties Excess Cash Flow, or Pledged Revenue Obligations or CMBS Documents.

            (c) Collections on Pledged Revenue. The Lender hereby authorizes
each Grantor to collect the Pledged Revenue and the Lender may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Lender at any time when
an Event of Default shall have occurred and be continuing, any payments of
Pledged Revenue, when collected by any Grantor, shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor (or, in the case of
credit card receipts, if required by the Lender at any time an

                                      -3-
<PAGE>

Event of Default has occurred and is continuing, by a substitute servicer
appointed by the Lender to service such credit card receipts), in the Collection
Account pursuant to Section 6.10 of the Credit Agreement, and, until so
deposited, shall be held by such Grantor in trust for the Lender, segregated
from other funds of the Grantors. All Proceeds constituting collections of
Pledged Revenue while held in the Concentration Account (or by any Grantor (or
servicer) in trust for the Lender) shall continue to be collateral security for
all of the Secured Obligations and shall not constitute payment thereof until
applied as hereinafter provided.

            (d) Tracing of Collateral; Information Systems. All amounts held in
any Local Account or the Concentration Account shall be identified by the
applicable Grantor by source in a manner sufficient to trace all such amounts
and to identify amounts constituting Collateral and amounts not constituting
Collateral. Such tracing and identification shall include, without limitation,
whether any amounts held in any Local Account or Concentration Account: (i)
constitutes Collateral or does not constitute Collateral, (ii) derives from
U-Move Income, Storage Income or Sales Income, (iii) whether such amounts derive
from operations at Eligible Properties, or locations not constituting Eligible
Properties, and (iv) whether such amounts derive from amounts paid pursuant to
the CMBS Documents and whether the same constitute CMBS Properties Excess Cash
Flow. The Grantors represent and warrant that the Grantors' information systems
in existence as of the Closing Date have adequate capability to perform such
tracing and identification, and the Lender hereby confirms its satisfaction with
such existing information systems. The Grantors shall maintain all such
information systems in good working order, and shall not discontinue such
tracing and identification at any time. No material modification of the
Grantors' information systems shall be made unless such modification would not
result in any diminution in the ability of the Grantors to accurately so trace
and identify the amounts in the Local Accounts and Concentration Account by
source. The Grantors shall promptly provide to the Lender notice of any material
modification to such information systems, and shall provide to the Lender such
information with respect to such modification as the Lender may reasonably
request.

            4. Representations and Warranties. Each Grantor hereby represents
and warrants that:

            (a) Title; No Other Liens. Except for the Liens granted to the
Lender pursuant to this Security Agreement, and the other Liens permitted to
exist on the Collateral pursuant to the Credit Agreement, each Grantor owns each
item of the Collateral free and clear of any and all Liens or claims of others.
No security agreement, financing statement or other public notice with respect
to all or any part of the Collateral is on file or of record in any public
office, except such as may have been filed in favor of the Lender, pursuant to
this Security Agreement or as may be permitted pursuant to the Credit Agreement.

            (b) Perfected First Priority Liens. When financing statements have
been filed in the offices in the jurisdictions listed in Schedule 4.14(b) to the
Credit Agreement and the Collection Account Control Agreement and the Collection
Sub-Account Control Agreement have been executed and delivered, the Liens
granted pursuant to this Security Agreement will constitute perfected Liens in
favor of the Lender, in the Collateral as collateral security for the Secured
Obligations, which Liens are prior to all other Liens on the Collateral created
by the Grantors and in existence on the date hereof and which are enforceable as
such against all creditors of and purchasers from any Grantor.

            (c) Pledged Revenue; Receivables. No Pledged Revenue is owned by any
Person other than a Grantor. No amount payable to any Grantor under or in
connection with any Pledged Revenue is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Lender. The place where each Grantor
keeps its records concerning the Pledged Revenue is 2721 N. Central Avenue,
Phoenix, AZ 85004. Receivables do not comprise more than 2.00% of the Pledged
Revenue.

                                       -4-
<PAGE>

            (d) CMBS Documents. No consent of any party (other than the
Grantors) to any CMBS Document is required, or purports to be required, in
connection with the execution, delivery and performance of this Security
Agreement. Each CMBS Document is in full force and effect and constitutes a
valid and legally enforceable obligation of the parties thereto, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the enforcement of
creditor's rights generally and general equitable principles (whether considered
in a proceeding in equity or at law). No consent or authorization of, filing
with or other act by or in respect of any Governmental Authority is required in
connection with the execution, delivery, performance, validity or enforceability
of any of the CMBS Documents by any party thereto other than those which have
been duly obtained, made or performed, are in full force and effect and do not
subject the scope of any such CMBS Document to any material adverse limitation,
either specific or general in nature. Neither any Grantor nor (to the best of
each Grantor's knowledge) any other party to any CMBS Document is in default or
is likely to become in default in the performance or observance or any of the
terms thereof in any manner that, in the aggregate, could reasonably be expected
to have a Material Adverse Effect. Each Grantor has fully performed all its
obligations under each CMBS Document. The right, title and interest of each
Grantor in, to and under the CMBS Properties Excess Cash Flow are not subject to
any defense, offset, counterclaim or claim which could reasonably be expected to
have a Material Adverse Effect, nor have any of the foregoing been asserted or
alleged against any Grantor. Each Grantor has delivered to the Lender a complete
and correct copy of each CMBS Document, including all amendments, supplements
and other modifications thereto. No amount payable to any Grantor under or in
connection with any CMBS Properties Excess Cash Flow is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Lender.

            (e) Chief Executive Office. Each Grantor's chief executive office
and chief place of business is, and for the four (4) months preceding the date
has been, located at the place specified for such Grantor on Schedule I.

            (f) Jurisdiction of Organization. Each Grantor is a "registered
organization" as defined in the UCC, and is organized as the type of entity, and
under the laws of the jurisdiction, specified for such Grantor on Schedule I.

            (g) Name. (i) The exact legal name of each Grantor is as specified
for such Grantor on Schedule I; and (ii) no Grantor has done business under a
previous name, assumed name or trade name.

            (h) Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

            (i) Insurance Policies. None of the Collateral constitutes an
interest or claim in or under any policy of insurance or contract for annuity,
except to the extent the same constitutes Proceeds.

            (j) Governmental Obligors. None of the obligors on any Receivables
included in the Collateral, and none of the parties to any CMBS Documents, is a
Governmental Authority.

            (k) Pledged Deposit Accounts. All Pledged Deposit Accounts are
listed on Schedule III, including the institution at which such account is
established, the purpose thereof, the name thereon, and the account number
thereof.

            5. Covenants. Each Grantor covenants and agrees with the Lender
that, from and after the date of this Security Agreement until the Secured
Obligations are paid in full and the Commitment has expired or been terminated:

                                      -5-
<PAGE>

            (a) Maintenance of Perfected Security Interests; Further
Documentation; Pledge of Instruments and Chattel Paper. Each Grantor shall
maintain the security interest created by this Security Agreement as a perfected
security interest having at least the priority described in Section 4(b) hereof
and shall defend such security interest against the claims and demands of all
Persons whomsoever. At any time and from time to time, upon the written request
of the Lender, and at the sole expense of the Grantors, each Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Lender may reasonably request for the purpose of
obtaining or preserving the full benefits of this Security Agreement and of the
rights and powers herein granted, including, without limitation, (i) the filing
of any financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the Liens created hereby and (ii) in
the case of any Pledged Deposit Accounts and any other relevant Collateral,
taking any actions (including, without limitation, entering into, and using its
best efforts to cause any relevant third party to enter into, one or more
Account Control Agreements) necessary to enable the Lender to obtain "control"
(within the meaning of the applicable Uniform Commercial Code) with respect
thereto. Each Grantor also hereby authorizes the Lender to file any such
financing or continuation statement without the signature of such Grantor to the
extent permitted by applicable law. A carbon, photographic or other reproduction
of this Security Agreement shall be sufficient as a financing statement for
filing in any jurisdiction. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any Instrument, Chattel
Paper or Certificated Security, such Instrument, Chattel Paper or Certificated
Security shall be immediately delivered to the Lender, duly endorsed in a manner
satisfactory to the Lender, to be held as Collateral pursuant to this Security
Agreement.

            (b) Indemnification. Each Grantor agrees, jointly and severally, to
pay, and to save the Lender harmless from, any and all liabilities, costs and
expenses (including, without limitation, legal fees and expenses) (i) with
respect to, or resulting from, any delay in paying, any and all excise, sales or
other taxes which may be payable or determined to be payable with respect to any
of the Collateral, (ii) with respect to, or resulting from, any delay in
complying with any Requirement of Law applicable to any of the Collateral or
(iii) in connection with any of the transactions contemplated by this Security
Agreement. In any suit, proceeding or action brought by the Lender under any
CMBS Document for any sum owing thereunder in respect of the CMBS Properties
Excess Cash Flow, or to enforce any provisions of any CMBS Document, each
Grantor will save, indemnify and keep the Lender harmless from and against all
expense, loss or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction or liability whatsoever of the account debtor or obligor
thereunder, arising out of a breach by any Grantor of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to or in favor of such account debtor or obligor or its successors from
any Grantor.

            (c) Maintenance of Records. Each Grantor will keep and maintain at
its own cost and expense or cause to kept and maintained on its behalf by U-Haul
International satisfactory and complete records of the Collateral, including,
without limitation, a record of all payments received and all credits granted
with respect to the Collateral, and such records shall comply with the
requirements of Section 3(c) hereof. Each Grantor will mark its books and
records pertaining to the Collateral or will cause U-Haul International to mark
on its behalf its books and records to evidence this Security Agreement and the
security interests granted hereby. Upon the occurrence and during the
continuance of an Event of Default, each Grantor shall turn over or cause U-Haul
International to turn over, as the case may be, any books and records pertaining
to the Collateral to the Lender or to its representatives during normal business
hours at the request of the Lender.

            (d) Right of Inspection. The Lender shall at all times have full and
free access during normal business hours to all the books, correspondence and
records of each Grantor, and the Lender or their respective representatives may
examine the same, take extracts therefrom and make

                                       -6-
<PAGE>

photocopies thereof, and each Grantor agrees to render to the Lender at the
Grantors' cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto.

            (e) Compliance with Laws, etc. Each Grantor will comply in all
material respects with all Requirements of Law applicable to the Collateral or
any part thereof or to the operation of such Grantor's business; provided,
however, that each Grantor may contest any Requirement of Law in any reasonable
manner which shall not, in the sole opinion of the Lender, adversely affect the
Lender's rights or the priority of its Liens on the Collateral.

            (f) CMBS Documents. To the extent that any Grantor or any Subsidiary
thereof is a party to any CMBS Documents, such Grantor shall, or cause any such
Subsidiary to, perform and comply with its obligations under the CMBS Documents
to the extent that failure by such Grantor or such Subsidiary to so comply could
result in the failure to distribute any amount of, or reduce the distributable
amount of, CMBS Properties Excess Cash Flow.

            (g) Payment of Obligations. Each Grantor will pay promptly when due
all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if (i) the validity thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any material
danger of the sale, forfeiture or loss of any of the Collateral or any interest
therein and (iii) such charge is adequately reserved against on such Grantor's
books in accordance with GAAP.

            (h) Limitation on Liens on Collateral, Certain other Property.

            (i) No Grantor will create, incur or permit to exist, will defend
      the Collateral against, and will take such other action as is necessary to
      remove, any Lien or claim on or to the Collateral, other than the Liens
      created hereby and Liens permitted under the Credit Agreement, and will
      defend the right, title and interest of the Lender in and to any of the
      Collateral against the claims and demands of all Persons whomsoever.

            (ii) No Grantor shall create, incur, assume or suffer to exist any
      Lien on or security interest in any Inventory located at, used in the
      operation of, or otherwise related to, any of the Eligible Properties, or
      any Pledged Revenue Obligations or other property giving rise to any
      Pledged Revenue.

            (iii) For the avoidance of doubt, nothing in this Section 5(h) shall
      be construed as prohibiting the Grantors from creating, incurring or
      permitting to exist any Liens on any Equipment or other fixed or capital
      assets not constituting Collateral securing Indebtedness of any Grantor
      incurred to finance the acquisition thereof, or any Liens on any property
      of the Grantors not constituting Collateral and not covered by clause (ii)
      of this Section 5(h).

            (i) Limitations on Dispositions of Collateral. No Grantor will sell,
transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer
or contract to do so except for sales, transfers and other dispositions of
Collateral to the extent permitted under the Credit Agreement.

            (j) Limitations on Modifications of CMBS Documents; Exercise of
Rights; Notices. No Grantor will (i) amend, modify, terminate or waive any
provision of any CMBS Document except as permitted under the Credit Agreement,
(ii) fail to exercise promptly and diligently each and every material right
which it may have under each CMBS Document to ensure the timely payment of any

                                      -7-
<PAGE>

CMBS Properties Excess Cash Flow or (iii) fail to deliver to the Lender a copy
of each material demand, notice or document received by it relating in any way
to any CMBS Document that questions the validity or enforceability of such CMBS
Document.

            (k) Limitations on Discounts, Compromises, Extensions of Pledged
Revenue Obligations. Other than in the ordinary course of business consistent
with its past practice, no Grantor will (i) grant any extension of the time of
payment of any Pledged Revenue Obligation, (ii) compromise, compound or settle
any Pledged Revenue Obligation for less than the full amount thereof, (iii)
release, wholly or partially, any Person liable for the payment of any Pledged
Revenue, or (iv) allow any credit or discount whatsoever on any Pledged Revenue
Obligation.

            (l) Further Identification of Collateral. Each Grantor will furnish
to the Lender from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Lender may reasonably request, all in reasonable detail.

            (m) Notices. Each Grantor will advise the Lender promptly, in
reasonable detail, at its address set forth in the Credit Agreement, (i) of any
Lien (other than Liens created hereby or permitted under the Credit Agreement)
on, or claim asserted against, any of the Collateral and (ii) of the occurrence
of any other event which could reasonably be expected to have a material adverse
effect on the aggregate value of the Collateral or on the Liens created
hereunder.

            (n) Changes in Locations, Name, etc. (i) Without thirty (30) days
prior written notice to the Lender, no Grantor will (A) change the location of
its jurisdiction of organization from that specified in Section 4(f), (B) remove
its books and records concerning the Pledged Revenue from the location specified
in Section 4(c) or (C) change its name; and (ii) no Grantor shall at any time
(A) cease to be a "registered organization", as defined in the Uniform
Commercial Code of any relevant jurisdiction, (ii) change its identity or
corporate structure or (iii) reorganize under the laws of another jurisdiction
or as a different type of entity.

            6. Agent's Appointment as Attorney-in-Fact.

            (a) Powers. Each Grantor hereby irrevocably constitutes and appoints
the Lender and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of each Grantor and in the name of each Grantor or in its
own name, from time to time in the Lender's discretion, for the purpose of
carrying out the terms of this Security Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Security
Agreement (any of which rights under the power of attorney provided for in this
Section the Lender agrees not to exercise unless an Event of Default has
occurred and is continuing), and, without limiting the generality of the
foregoing, each Grantor hereby gives the Lender the power and right, on behalf
of each Grantor, without notice to or assent by any Grantor, to do the
following:

            (i) in the name of each Grantor or its own name, or otherwise, to
      take possession of and endorse and collect any checks, drafts, notes,
      acceptances or other instruments for the payment of moneys due under any
      Account, Receivable, Instrument, Chattel Paper, General Intangible or CMBS
      Document constituting Collateral and to file any claim or to take any
      other action or proceeding in any court of law or equity or otherwise
      deemed appropriate by the Lender for the purpose of collecting any and all
      such moneys due under any Account, Receivable, Instrument, Chattel Paper,
      General Intangible or CMBS Document constituting Collateral herein, or
      with respect to any other Collateral whenever payable;

                                      -8-
<PAGE>

            (ii) to pay or discharge taxes and Liens levied or placed on or
      threatened against the Collateral, to effect any repairs or any insurance
      called for by the terms of this Security Agreement and to pay all or any
      part of the premiums therefor and the costs thereof;

            (iii) to execute, in connection with any sale provided for in
      Section 9 hereof, any indorsements, assignments or other instruments of
      conveyance or transfer with respect to the Collateral; and

            (iv) (A) to direct any party liable for any payment under any of the
      Collateral to make payment of any and all moneys due or to become due
      thereunder directly to the Lender or as the Lender shall direct; (B) to
      ask or demand for, collect, receive payment of and receipt for, any and
      all moneys, claims and other amounts due or to become due at any time in
      respect of or arising out of any Collateral; (C) to sign and endorse any
      invoices, freight or express bills, bills of lading, storage or warehouse
      receipts, drafts against debtors, assignments, verifications, notices and
      other documents in connection with any of the Collateral; (D) to commence
      and prosecute any suits, actions or proceedings at law or in equity in any
      court of competent jurisdiction to collect the Collateral or any thereof
      and to enforce any other right in respect of any Collateral; (E) to defend
      any suit, action or proceeding brought against any Grantor with respect to
      any Collateral; (F) to settle, compromise or adjust any such suit, action
      or proceeding and, in connection therewith, to give such discharges or
      releases as the Lender may deem appropriate; and (G) generally, to sell,
      transfer, pledge and make any agreement with respect to or otherwise deal
      with any of the Collateral as fully and completely as though the Lender
      were the absolute owner thereof for all purposes, and to do, at the
      Lender's option and the Grantors' expense, at any time, or from time to
      time, all acts and things which the Lender deems necessary to protect,
      preserve or realize upon the Collateral and the Lender's, Liens thereon
      and to effect the intent of this Security Agreement, all as fully and
      effectively as the Grantors might do.

Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

            (b) No Duty on Lender's Part. The powers conferred on the Lender
hereunder are solely to protect the Lender's interests in the Collateral and
shall not impose any duty upon Lender to exercise any such powers. The Lender
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for its own gross negligence or willful
misconduct.

            7. Performance by Lender of Grantors' Obligations. If any Grantor
fails to perform or comply with any of its agreements contained herein, the
Lender, at its option, but without any obligation to do so, may itself perform
or comply, or otherwise cause performance or compliance, with such agreement.
The expenses of the Lender incurred in connection with such performance or
compliance, together with interest thereon at a rate per annum equal to the rate
specified in Section 3.1(b)(y) of the Credit Agreement, shall be payable,
jointly and severally, by the Grantors to the Lender on demand and shall
constitute Secured Obligations secured hereby.

            8. Proceeds.

            (a) In addition to the rights of the Lender specified in Section
3(c) with respect to payments of Pledged Revenue, it is agreed that all Proceeds
received by any Grantor consisting of cash, checks and other near-cash items
shall be held by the Grantors in trust for the Lender, and shall, forthwith upon
receipt by any Grantor, be deposited into a Local Account and, pursuant to
Section 6.10(b) of the

                                      -9-
<PAGE>

Credit Agreement, be transferred into the Concentration Account, for further
application as provided in Section 6.10 of the Credit Agreement; provided that,
if any Event of Default has occurred and is continuing, such Proceeds shall be
turned over to the Lender in the exact form received by such Grantor (duly
endorsed by such Grantor to the Lender, if required), and deposited by the
Lender in the Collection Account for application as provided in Section 6.10 of
the Credit Agreement. Any and all such Proceeds held in the Concentration
Account, in the Collection Account, by the Lender or by any Grantor in trust for
the Lender shall continue to be held as collateral security for the Secured
Obligations and shall not constitute payment thereof until applied as provided
in this Section and the Credit Agreement.

            (b) At such intervals as may be agreed upon between the Lender and
the Grantors or, if an Event of Default shall have occurred and be continuing,
at any time at the Lender's election, the Lender may apply all or any part of
the Proceeds constituting Collateral, whether or not held in any Pledged
Account, and any Proceeds of the Guarantee or any other Loan Document, or
otherwise received by the Lender, against the Secured Obligations (whether
matured or unmatured), in such order as provided in Section 6.10 of the Credit
Agreement. Any balance of such Proceeds remaining after the Secured Obligations
shall have been paid in full, and the Commitment shall have expired or been
terminated, shall be paid over to the Grantors or to whomsoever may be lawfully
entitled to receive the same in accordance with Section 6.10 of the Credit
Agreement.

            9. Remedies. If an Event of Default shall occur and be continuing,
the Lender may exercise, in addition to all other rights and remedies granted to
it in this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies of a
secured party under the UCC. Without limiting the generality of the foregoing,
the Lender, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Lender or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. The Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived or released. Each Grantor
further agrees, at the Lender's request, to assemble the Collateral and make it
available to the Lender at places which the Lender shall reasonably select,
whether at any Grantor's premises or elsewhere. The Lender shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Lender
arising out of the exercise by the Lender hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Secured Obligations, in such order as the Lender may
elect, and only after such application and after the payment by the Lender of
any other amount required by any provision of law, including, without
limitation, Section 9-615 of the UCC, need the Lender account for the surplus,
if any, to the Grantors. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands it may acquire against the Lender arising
out of the exercise by the Lender of any of its rights hereunder. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Secured Obligations and the fees and disbursements
of any attorneys employed by Lender to collect such deficiency.

                                      -10-
<PAGE>

            10. Limitation on Duties Regarding Presentation of Collateral. The
Lender's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as the Lender deals
with similar property for its own account. Neither the Lender nor any of its
respective directors, officers, employees, agents or advisors shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any Grantor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof. The powers conferred on the Lender hereunder are solely to
protect the Lender's interests in the Collateral and shall not impose any duty
upon Lender to exercise any such powers. The Lender shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees, agents
or advisors shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

            11. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.

            12. Notices. Notices, requests and demands to or upon the Lender or
any Grantor hereunder shall be effected in the manner set forth in Section 9.2
of the Credit Agreement.

            13. Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

            14. Paragraph Headings. The paragraph headings used in this Security
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

            15. No Waiver; Cumulative Remedies. The Lender shall not, by any act
(except by a written instrument pursuant to Section 16 hereof), delay,
indulgence, omission or otherwise, be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Lender of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Lender would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.

            16. Waivers and Amendments; Successors and Assigns; Governing Law.
None of the terms or provisions of this Security Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by each Grantor and the Lender, provided that any provision of this
Security Agreement may be waived by the Lender in a written instrument executed
by the Lender. This Security Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Lender and its
respective successors and assigns. This Security Agreement shall be governed by,
and construed and interpreted in accordance with, the laws of the State of New
York.

                                      -11-
<PAGE>

            17. Marketing Entity Grantors.

            (a) The Lender acknowledges and agrees that the Marketing Entity
Grantors have not guaranteed, assumed or otherwise become directly liable for
the Loans, and that the Lender's rights as against the Marketing Entity Grantors
hereunder are limited to the Collateral.

            (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of Marketing Entity Grantor hereunder
shall in no event exceed the amount which can be guaranteed by such Marketing
Entity Grantor under applicable federal and state laws relating to the
insolvency of debtors.

            (c) Each Marketing Entity Grantor agrees that the Obligations may at
any time and from time to time exceed the amount of the liability of such
Marketing Entity Grantor hereunder without impairing this Security Agreement or
affecting the rights and remedies of the Lender hereunder.

            (d) Each Marketing Entity Grantor hereby agrees that, to the extent
a Marketing Entity Grantor shall have paid more than its proportionate share of
any payment made hereunder or in respect of the Obligations, such Marketing
Entity Grantor shall be entitled to seek and receive contribution from and
against any other Grantor hereunder which has not paid its proportionate share
of such payment. The provisions of this Section 17(d) shall be subject to the
terms and conditions of Section 17(__). The provisions of this Section 17(d)
shall in no respect limit the obligations and liabilities of any Marketing
Entity Grantor to the Lender, and each Marketing Entity Grantor shall remain
liable to the Lender for the full amount of its obligations hereunder.

            (e) Notwithstanding any payment or payments made by the Marketing
Entity Grantors hereunder or any set-off or application of funds of any
Marketing Entity Grantor by the Lender, no Marketing Entity Grantor shall be
entitled to be subrogated to any of the rights of the Lender against any
Borrower, U-Haul International or any other Marketing Entity Grantor or any
collateral security or guarantee or right of offset held by the Lender for the
payment of the Obligations, nor shall any Marketing Entity Grantor seek or be
entitled to seek any contribution or reimbursement from any Borrower, U-Haul
International or any other Marketing Entity Grantor in respect of payments made
by any Marketing Entity Grantor hereunder, until all amounts owing to the Lender
by the Borrowers on account of the Obligations are paid in full and the
Commitment is terminated. If any amount shall be paid to any Marketing Entity
Grantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Marketing Entity Grantor in trust for the Lender, segregated from other funds of
the Marketing Entity Grantors, and shall, forthwith upon receipt by such
Marketing Entity Grantor, be turned over to the Lender in the exact form
received by such Marketing Entity Grantor (duly indorsed by such Marketing
Entity Grantor to the Lender, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Lender may
determine in accordance with the Loan Documents.

            (f) Each Marketing Entity Grantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against such Marketing
Entity Grantor and without notice to or further assent by such Marketing Entity
Grantor, any demand for payment of any of the Obligations made by the Lender may
be rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Lender, and the Credit Agreement, the Notes and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Lender may deem advisable from time to time, and any collateral security,
guarantee or

                                      -12-
<PAGE>

right of offset at any time held by the Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. The Lender
shall not have any obligation to protect, secure, perfect or insure any Lien at
any time held by it as security for the Obligations or any property subject
thereto. When making any demand hereunder against any Marketing Entity Grantor,
the Lender may, but shall be under no obligation to, make a similar demand on
any Borrower, the Guarantor or any other Marketing Entity Grantor, and any
failure by the Lender to make any such demand or to collect any payments from
any Borrower or the Guarantor or any such other Marketing Entity Grantor or any
release of any Borrower or the Guarantor or such other Marketing Entity Grantor
shall not relieve any Marketing Entity Grantor of its obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Lender against such Marketing Entity
Grantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.

            (g) Each Marketing Entity Grantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of
or proof of reliance by the Lender upon this Security Agreement or acceptance of
this Security Agreement, the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Security Agreement; and all dealings
between the Borrowers, the Guarantor and the Marketing Entity Grantors, on the
one hand, and the Lender, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Security
Agreement. Each Marketing Entity Grantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon any Borrower
or the Guarantor or any other Marketing Entity Grantor with respect to the
Obligations. Each Marketing Entity Grantor understands and agrees that this
Security Agreement shall be continuing, absolute and unconditional, without
regard to (i) the validity, regularity or enforceability of the Credit
Agreement, any Note or any other Loan Document, any of the Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Lender, (ii) any defense,
set-off or counterclaim (other than a defense of payment of performance) which
may at any time be available to or be asserted by any Borrower or the Guarantor
against the Lender, or (iii) any other circumstance whatsoever (with or without
notice to or knowledge of any Borrower or any Guarantor or any Marketing Entity
Grantor) which constitutes, or might be construed to constitute, an equitable or
legal discharge of any Borrower or any Guarantor for the Obligations, or of any
Marketing Entity Grantor under this Security Agreement, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against any
Marketing Entity Grantor, the Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against any Borrower, the
Guarantor or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any failure
by the Lender to pursue such other rights or remedies or to collect any payments
from any Borrower, the Guarantor or any such other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of any Borrower, the Guarantor or any such other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Marketing Entity Grantor of any liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Lender against any Marketing Entity Grantor. This Security
Agreement shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon each Marketing Entity Grantor and the
successors and assigns thereof, and shall inure to be benefit of the Lender, and
their respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of each Marketing Entity Grantor under this
Security Agreement shall have been satisfied by payment in full and the
Commitment shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrowers may be free from any Obligations.

            (h) In addition to any rights and remedies of the Lender provided by
law, the Lender shall have the right, without prior notice to the Marketing
Entity Grantors, any such notice being expressly waived by the Marketing Entity
Grantors to the extent permitted by applicable law, to set off

                                      -13-
<PAGE>

and appropriate and apply against and on account of the obligations and
liabilities of the Marketing Entity Grantors to the Lender hereunder, upon any
amount becoming due and payable by the Marketing Entity Grantors hereunder
(whether at the stated maturity, by acceleration or otherwise), any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Lender or any branch or agency
thereof to or for the credit or the account of the Marketing Entity Grantor. The
Lender agrees promptly to notify the Marketing Entity Grantors after any such
set off and application made by the Lender, provided that the failure to give
such notice shall not affect the validity of such set off and application.

            18. Additional Grantors. Each Subsidiary of a Grantor which becomes
a party to the Credit Agreement as a Borrower or a Guarantor shall be required
to become party to this Security Agreement and become a Grantor for all purposes
of this Security Agreement upon execution and delivery by such Subsidiary of a
Supplement in the form of Annex E hereto.

                            [SIGNATURE PAGE FOLLOWS]

                                      -14-
<PAGE>

                                                                  EXECUTION COPY

            IN WITNESS WHEREOF, each Grantor has caused this Security Agreement
to be duly executed and delivered as of the date first above written.

                                            AMERCO REAL ESTATE COMPANY,

                                            AMERCO REAL ESTATE COMPANY OF TEXAS,
                                              INC.,

                                            AMERCO REAL ESTATE COMPANY OF
                                                ALABAMA, INC.,

                                            U-HAUL CO. OF FLORIDA, INC.,

                                            U-HAUL INTERNATIONAL, INC.

                                            By /s/ Gary B. Horton
                                                --------------------------------
                                               Name: Gary B. Horton
                                               Title: Treasurer

<PAGE>

                                     U-HAUL CO. OF ALABAMA, INC.
                                     U-HAUL CO. OF ALASKA
                                     U-HAUL CO. OF ARIZONA
                                     U-HAUL CO. OF CALIFORNIA
                                     U-HAUL CO. OF COLORADO
                                     U-HAUL CO. OF CONNECTICUT
                                     U-HAUL CO. OF GEORGIA
                                     U-HAUL CO. OF IDAHO, INC.
                                     U-HAUL CO. OF ILLINOIS, INC.
                                     U-HAUL CO. OF INDIANA, INC.
                                     U-HAUL CO. OF IOWA, INC.
                                     U-HAUL CO. OF KANSAS, INC.
                                     U-HAUL CO. OF KENTUCKY
                                     U-HAUL CO. OF LOUISIANA
                                     U-HAUL CO. OF MAINE, INC.
                                     U-HAUL CO. OF MARYLAND, INC.
                                     U-HAUL CO. OF MASSACHUSETTS AND OHIO, INC.
                                     U-HAUL CO. OF MICHIGAN
                                     U-HAUL CO. OF MINNESOTA
                                     U-HAUL CO. OF MISSISSIPPI
                                     U-HAUL CO. OF MONTANA, INC.
                                     U-HAUL CO. OF NEBRASKA
                                     U-HAUL CO. OF NEVADA, INC.
                                     U-HAUL CO. OF NEW HAMPSHIRE, INC.
                                     U-HAUL CO. OF NEW JERSEY, INC.
                                     U-HAUL CO. OF NEW MEXICO, INC.
                                     U-HAUL CO. OF NEW YORK AND VERMONT, INC.
                                     U-HAUL CO. OF NORTH CAROLINA
                                     U-HAUL CO. OF NORTH DAKOTA
                                     U-HAUL CO. OF OKLAHOMA, INC.
                                     U-HAUL CO. OF OREGON
                                     U-HAUL CO. OF PENNSYLVANIA
                                     U-HAUL CO. OF RHODE ISLAND
                                     U-HAUL CO. OF SOUTH CAROLINA, INC.
                                     U-HAUL CO. OF SOUTH DAKOTA, INC.
                                     U-HAUL CO. OF TENNESSEE
                                     U-HAUL CO. OF TEXAS
                                     U-HAUL CO. OF UTAH
                                     U-HAUL CO. OF VIRGINIA
                                     U-HAUL CO. OF WASHINGTON
                                     U-HAUL CO. OF WEST VIRGINIA
                                     U-HAUL CO. OF WISCONSIN, INC.
                                      as Marketing Grantors

                                     By /s/ Gary B. Horton
                                        ----------------------------------------
                                        Name:  Gary B. Horton
                                        Title: Treasurer

                                      VII-2
<PAGE>

ACCEPTED AND AGREED:

MERRILL LYNCH COMMERCIAL FINANCE CORP.

By: /s/ Joshua A. Green
    ----------------------
    Name: Joshua A. Green
    Title: Director

                                      VII-3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>p70784exv10w3.txt
<DESCRIPTION>EX-10.3
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

                                    GUARANTEE

            GUARANTEE, dated as of June 8, 2005, made by U-HAUL INTERNATIONAL,
INC. (the "Guarantor"), in favor of MERRILL LYNCH COMMERCIAL FINANCE CORP., as
lender (the "Lender"), parties to the Credit Agreement referred to below.

                                    RECITALS

            Pursuant to the Amended and Restated Credit Agreement, dated as of
June 8, 2005 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among AMERCO REAL ESTATE COMPANY, AMERCO REAL ESTATE
COMPANY OF TEXAS, INC., AMERCO REAL ESTATE COMPANY OF ALABAMA, INC. and U-HAUL
CO. OF FLORIDA, INC. (each a "Borrower", collectively the "Borrowers"), the
Guarantor and the Lender, the Lender has agreed to make loans to the Borrowers
upon the terms and subject to the conditions set forth therein, such loans to be
evidenced by the Notes issued by the Borrowers thereunder. The Borrowers are
members of an affiliated group of corporations that includes the Guarantor. The
Borrowers and the Guarantor are engaged in related businesses, and the Guarantor
will derive substantial direct and indirect benefit from the making of the
loans. It is a condition precedent to the obligation of the Lender to make the
loans to the Borrowers under the Credit Agreement that the Guarantor hereto
shall have executed and delivered this Guarantee to the Lender.

            NOW, THEREFORE, in consideration of the premises and to induce the
Lender to enter into the Credit Agreement and make the loans to the Borrowers,
under the Credit Agreement, the Guarantor hereby agrees with the Lender as
follows:

      1.    Defined Terms.

            (a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.

            (b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee, and section and
paragraph references are to this Guarantee unless otherwise specified.

            (c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

      2. Guarantee.

      (a) The Guarantor hereby, unconditionally and irrevocably, guarantees to
the Lender and its respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by each Borrower of its
obligations under the Loan Documents, whether at stated maturity, by
acceleration or otherwise.

      (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of the Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by the Guarantor under applicable federal and state laws relating to the
insolvency of debtors.

      (c) The Guarantor further agrees to pay any and all expenses (including,
without limitation, all fees and disbursements of counsel) which may be paid or
incurred by the Lender in enforcing, or

<PAGE>

obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, the Guarantor under this Guarantee. This
Guarantee shall remain in full force and effect until the Obligations are paid
in full and the Commitments are terminated, notwithstanding that from time to
time prior thereto the Borrowers, individually or collectively, may be free from
any Obligations.

      (d) The Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of the Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Lender hereunder.

      (e) No payment or payments made by any Borrower, the Guarantor, any other
guarantor or any other Person or received or collected by the Lender from any
Borrower, the Guarantor, any other guarantor or any other Person by virtue of
any action or proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment or payments
other than payments made by the Guarantor in respect of the Obligations or
payments received or collected from the Guarantor in respect of the Obligations,
remain liable for the Obligations up to the maximum liability of the Guarantor
hereunder until the Obligations are paid in full and the Commitments are
terminated.

      (f) The Guarantor agrees that whenever, at any time, or from time to time,
it shall make any payment to the Lender on account of its liability hereunder,
it will notify the Lender in writing that such payment is made under this
Guarantee for such purpose.

      3. Right of Set-off. The Guarantor hereby irrevocably authorizes the
Lender at any time and from time to time without notice to the Guarantor, any
such notice being expressly waived by the Guarantor, to set-off and appropriate
and apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Lender to or for the
credit or the account of the Guarantor, or any part thereof in such amounts as
the Lender may elect, against and on account of the obligations and liabilities
of the Guarantor to the Lender hereunder and claims of every nature and
description of the Lender against the Guarantor, in any currency, whether
arising hereunder, under the Credit Agreement, any Note, any Loan Documents or
otherwise, as the Lender may elect, whether or not the Lender has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Lender shall notify the Guarantor promptly of any
such set-off and the application made by the Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender a under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have.

      4. No Subrogation. Notwithstanding any payment or payments made by the
Guarantor hereunder or any set-off or application of funds of the Guarantor by
the Lender, the Guarantor shall not be entitled to be subrogated to any of the
rights of the Lender against the Borrowers or any other guarantor or any
collateral security or guarantee or right of offset held by any Lender for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from the Borrowers or any other guarantor in
respect of payments made by the Guarantor hereunder, until all amounts owing to
the Lender by the Borrowers on account of the Obligations are paid in full and
the Commitments are terminated. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by the Guarantor in trust
for the Lender, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Lender in the
exact form received by

                                       -2-
<PAGE>

the Guarantor (duly indorsed by the Guarantor to the Lender, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Lender may determine.

      5. Amendments, etc. with respect to the Obligations; Waiver of Rights. The
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Lender may be rescinded by such party and any of the Obligations
continued, and the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Lender, and the Credit Agreement, the Notes and
the other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Lender may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the Lender
for the payment of the Obligations may be sold, exchanged, waived, surrendered
or released. The Lender shall not have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the
Obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against the Guarantor, the Lender may, but shall be under
no obligation to, make a similar demand on the Borrowers or any other guarantor,
and any failure by the Lender to make any such demand or to collect any payments
from the Borrowers or any such other guarantor or any release of a Borrower or
such other guarantor shall not relieve the Guarantor of its obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Lender against the Guarantor.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.

      6. Guarantee Absolute and Unconditional. The Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Lender upon this Guarantee or
acceptance of this Guarantee, the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon this Guarantee; and all dealings
between the Borrowers and the Guarantor, on the one hand, and the Lender and the
Borrowers, on the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon this Guarantee. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrowers or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, any Note or any other Loan Document, any of the Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment of performance) which
may at any time be available to or be asserted by the Borrowers against the
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of any Borrower or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of any Borrower for the
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Lender may, but shall be under no obligation to, pursue such
rights and remedies as it may have against any Borrower or any other Person or
against any collateral security or guarantee for the Obligations or any right of
offset with respect thereto, and any failure by the Lender to pursue such other
rights or remedies or to collect any payments from any Borrower or any such
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of a Borrower or any such
other Person or any such collateral security, guarantee or right of offset,
shall not relieve the Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as a
matter of law, of the Lender against the Guarantor. This Guarantee shall remain
in full force and effect and be

                                      -3-
<PAGE>

binding in accordance with and to the extent of its terms upon the Guarantor and
the successors and assigns thereof, and shall inure to be benefit of the Lender,
and its respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of the Guarantor under this Guarantee shall have
been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrowers, individually or collectively, may be free from any Obligations.

      7. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Borrower or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Borrower or the Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.

      8. Not Affected by Bankruptcy. Notwithstanding any modification, discharge
or extension of the Obligations or any amendment, modification, stay or cure of
the Lender's rights which may occur in any bankruptcy or reorganization case or
proceeding against any Borrower, whether permanent or temporary, and whether or
not assented to by the Lender, the Guarantor hereby agrees that it shall be
obligated hereunder to pay and perform the Obligations and discharge their other
obligations in accordance with the terms of the Obligations and the terms of
this Guarantee. The Guarantor understands and acknowledges that, by virtue of
this Guarantee, it has specifically assumed any and all risks of a bankruptcy or
reorganization case or proceeding with respect to any or all Borrowers. Without
in any way limiting the generality of the foregoing, any subsequent modification
of the Obligations in any reorganization case concerning any Borrower shall not
affect the obligation of the Guarantor to pay and perform the Obligations in
accordance with the original terms thereof.

      9. Payments. The Guarantor hereby guarantees that payments hereunder will
be paid to the Lender without set-off or counterclaim in U.S. Dollars at the
office of the Lender specified in Section 9.02 of the Credit Agreement.

      10. Notices. All notices, requests and demands to or upon the Lender, or
the Guarantor to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (1) when delivered by hand or (2) if given by mail, when deposited
in the mails by certified mail, return receipt requested, or (3) if by telex,
fax or similar electronic transfer, when sent and receipt has been confirmed,
addressed as follows:

      (a) if to the Lender, at its address or transmission number for notices
provided in Section ___ of the Credit Agreement; and

      (b) if to the Guarantor, at its address or transmission number for notices
set forth under its signature below.

            The Lender and the Guarantor may change its address and transmission
numbers for notices by notice in the manner provided in this Section.

      11. Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

                                      -4-
<PAGE>

      12. Integration. This Guarantee represents the agreement of the Guarantor
with respect to the subject matter hereof and there are no promises or
representations by the Lender relative to the subject matter hereof not
reflected herein.

      13. Amendments in Writing; No Waiver; Cumulative Remedies.

      (a) None of the terms or provisions of this Guarantee may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Guarantor and the Lender, provided that any provision of this
Guarantee may be waived by the Lender in a letter or agreement executed by the
Lender or by telex or facsimile transmission from the Lender.

      (b) The Lender shall not by any act (except by a written instrument
pursuant to Section 18(a) hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
default or Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of the
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Lender would otherwise have on any future occasion.

            The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

      14. Section Headings. The section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

      15. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of the Guarantor and shall inure to the benefit of the
Lender and its successors and assigns.

      16. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

      17. Submission To Jurisdiction; Waivers. The Guarantor hereby irrevocably
and unconditionally:

      (a) submits for itself and its property in any legal action or proceeding
relating to this Guarantee and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

      (b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

      (c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage

                                      -5-
<PAGE>

prepaid, to the Guarantor at its address set forth under its signature
below or at such other address of which the Lender shall have been notified
pursuant hereto;

      (d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

      (e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

      18. Acknowledgments. The Guarantor hereby acknowledges that:

      (a) it has been advised by counsel in the negotiation, execution and
delivery of this Guarantee and the other Loan Documents to which it is a party;

      (b) The Lender has no fiduciary relationship with nor duty to the
Guarantor arising out of or in connection with this Guarantee or any of the
other Loan Documents to which it is a party, and the relationship between the
Guarantor and the Borrowers on the one hand, and Guarantor and Lender , on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

      (c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Guarantor, the Borrowers and the Lender .

      19. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                                      -6-
<PAGE>

            IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.

                                                      U-HAUL INTERNATIONAL, INC.

                                                      By: /s/ Gary B. Horton
                                                          ----------------------
                                                          Name: Gary B. Horton
                                                          Title: Treasurer

                                                      Address for Notices:

                                                       2727 North Central Avenue
                                                       Phoenix, Arizona 85004
                                                       Tel:      (775) 688-6300
                                                       Fax:      (775) 688-6338

ACCEPTED AND AGREED:

MERRILL LYNCH COMMERCIAL FINANCE CORP.

By: /s/ Joshua A. Green
    ------------------------
    Name: Joshua A. Green
    Title:  Director

                                   Guarantee
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>p70784exv10w4.txt
<DESCRIPTION>EX-10.4
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.4

                                      NOTE

$465,000,000                                                        June 8, 2005
                                                              New York, New York

            FOR VALUE RECEIVED, AMERCO REAL ESTATE COMPANY, a Nevada
corporation, AMERCO REAL ESTATE COMPANY OF TEXAS, INC., a Texas corporation,
AMERCO REAL ESTATE COMPANY OF ALABAMA, INC., an Alabama corporation, and U-HAUL
CO. OF FLORIDA, INC., a Florida corporation (each, a "Borrower" and,
individually and collectively, jointly and severally, the "Borrowers") hereby
jointly and severally promise to pay to the order of MERRILL LYNCH COMMERCIAL
FINANCE CORP. (the "Lender"), at the principal office of the Lender at 4 World
Financial Center, 10th Floor, New York, New York 10080, in lawful money of the
United States, and in immediately available funds, the principal sum of FOUR
HUNDRED AND SIXTY-FIVE MILLION DOLLARS ($465,000,000) (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Loans made by the
Lender to the Borrowers under the Credit Agreement (as defined below)), on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of such Loan until
such Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.

            The date, amount and interest rate of each Loan made by the Lender
to the Borrowers, and each payment made on account of the principal thereof,
shall be recorded by the Lender on its books and, prior to any transfer of this
Note, endorsed by the Lender on the schedule attached hereto or any continuation
thereof; provided, that the failure of the Lender to make any such recordation
or endorsement shall not affect the obligations of the Borrowers to make a
payment when due of any amount owing under the Credit Agreement or hereunder in
respect of the Loans made by the Lender.

            This Note is the Note referred to in the Amended and Restated Credit
Agreement dated as of June 8, 2005 (as amended, restated, supplemented or
otherwise modified and in effect from time to time, the "Credit Agreement")
between the Borrowers and the Lender, and evidences Loans made by the Lender
thereunder. Terms used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.

            The Borrowers agree, jointly and severally, to pay all the Lender's
costs of collection and enforcement (including reasonable attorneys' fees and
disbursements of Lender's counsel) in respect of this Note in accordance with
the Credit Agreement, including, without limitation, reasonable attorneys' fees
through appellate proceedings.

            Notwithstanding the pledge of the Collateral, each Borrower hereby
acknowledges, admits and agrees that the Borrowers' obligations under this Note
include recourse obligations of the Borrowers to which each Borrower pledges its
full faith and credit.

            Each Borrower, and any endorsers or guarantors hereof, (a) severally
waive diligence, presentment, protest and demand and also notice of protest,
demand, dishonor and nonpayments of this Note, (b) expressly agree that this
Note, or any payment hereunder, may be

<PAGE>

extended from time to time, and consent to the acceptance of further Collateral,
the release of any Collateral for this Note, the release of any party primarily
or secondarily liable hereon, and (c) expressly agree that it will not be
necessary for the Lender, in order to enforce payment of this Note, to first
institute or exhaust the Lender's remedies against the Borrowers or any other
party liable hereon or against any Collateral for this Note. No extension of
time for the payment of this Note, or any installment hereof, made by agreement
by the Lender with any person now or hereafter liable for the payment of this
Note, shall affect the liability under this Note of any Borrower, even if such
Borrower is not a party to such agreement; provided, however, that the Lender
and each Borrower, by written agreement between them, may affect the liability
of the Borrowers.

            Any reference herein to the Lender shall be deemed to include and
apply to every subsequent holder of this Note. Reference is made to the Credit
Agreement for provisions concerning optional and mandatory prepayments,
Collateral, guarantees, acceleration and other material terms affecting this
Note.

            Each Borrower hereby acknowledges and agrees that such Borrower
shall be jointly and severally liable to the maximum extent permitted by
applicable law for all representations, warranties, covenants, obligations and
indemnities of the Borrowers under the Loan Documents.

            THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CHOICE
OF LAW DOCTRINE) WHOSE LAWS EACH BORROWER EXPRESSLY ELECTS TO APPLY TO THIS
NOTE. EACH BORROWER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE OR
ARISING OUT OF THIS NOTE MAY BE COMMENCED IN THE SUPREME COURT OF THE STATE OF
NEW YORK, BOROUGH OF MANHATTAN, OR IN THE DISTRICT COURT OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK.

                                    AMERCO REAL ESTATE COMPANY

                                    By:  /s/ Gary B. Horton
                                         ---------------------------------------
                                         Name:  Gary B. Horton
                                         Title: Treasurer

                                    AMERCO REAL ESTATE COMPANY OF TEXAS, INC.

                                    By:  /s/ Gary B. Horton
                                         ---------------------------------------
                                         Name:  Gary B. Horton
                                         Title: Treasurer

<PAGE>

                                    AMERCO REAL ESTATE COMPANY OF ALABAMA, INC.

                                    By:  /s/ Gary B. Horton
                                         ---------------------------------------
                                         Name:  Gary B. Horton
                                         Title: Treasurer

                                    U-HAUL CO. OF FLORIDA, INC.

                                    By:  /s/ Gary B. Horton
                                         ---------------------------------------
                                         Name:  Gary B. Horton
                                         Title: Treasurer

                                    U-HAUL INTERNATIONAL, INC., as Guarantor

                                    By:  /s/ Gary B. Horton
                                         ---------------------------------------
                                         Name:  Gary B. Horton
                                         Title: Treasurer

<PAGE>

                                SCHEDULE OF LOANS

            This Note evidences Loans made under the within-described Credit
Agreement to the Borrower, on the dates, in the principal amounts and bearing
interest at the rates set forth below, and subject to the payments and
prepayments of principal set forth below:

<TABLE>
<CAPTION>
             PRINCIPAL                  UNPAID
              AMOUNT     AMOUNT PAID   PRINCIPAL   NOTATION
DATE MADE     OF LOAN    OR PREPAID     AMOUNT      MADE BY
- ---------    ---------   -----------   ---------   --------
<S>          <C>         <C>           <C>         <C>
- ---------    ---------   -----------   ---------   --------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

- ---------    ---------   -----------   ---------   --------
</TABLE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>p70784exv10w5.txt
<DESCRIPTION>EX-10.5
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.5

                        SCHEDULE OF ADDITIONAL AGREEMENTS

      On June 8, 2005, additional agreements in substantially the same form as
the below agreement were signed by the following entities:

<TABLE>
<CAPTION>
Agreement       Borrowing Entities
- ---------       ------------------
<S>             <C>
    1           AREC 9, LLC
                UHIL 9, LLC

    2           AREC 10, LLC
                UHIL 10, LLC

    3           AREC 11, LLC
                UHIL 11, LLC

    4           AREC 12, LLC
                UHIL 12, LLC

    5           AREC 13, LLC
                UHIL 13, LLC
</TABLE>

<PAGE>

U-Haul Grande
MSMCI Loan No.:  05-20270
================================================================================

                                   AREC 8, LLC

                                       and

                                  UHIL 8, LLC,

                                   as Borrower

                                       to

                      MORGAN STANLEY MORTGAGE CAPITAL INC.,

                                    as Lender

                          MORTGAGE, SECURITY AGREEMENT,
                     ASSIGNMENT OF RENTS AND FIXTURE FILING

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

                           Dated:  June 8, 2005

                           PREPARED BY AND UPON RECORDATION RETURN TO:

                           Proskauer Rose LLP
                           1585 Broadway
                           New York, New York  10036

                           Attention:  David J. Weinberger, Esq.

================================================================================

<PAGE>

      THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE FILING
(the"Security Instrument") is made as of the 8th day of June, 2005, by AREC 8,
LLC ("Fee Owner") and UHIL 8, LLC ("Lessee" and together with Fee Owner,
hereinafter collectively referred to as "Borrower"), each having its chief
executive office at 2727 North Central Avenue, Phoenix, Arizona 85004, to MORGAN
STANLEY MORTGAGE CAPITAL INC. having an address at 1221 Avenue of the Americas,
27th Floor, New York, New York 10020 (hereinafter referred to as "Lender").

                              W I T N E S S E T H:

      WHEREAS, Lender has authorized and made a loan (hereinafter referred to as
the "Loan") to Borrower in the maximum principal sum of TWO HUNDRED FORTY
MILLION AND NO/100 DOLLARS ($240,000,000.00) (hereinafter referred to as the
"Loan Amount"), which Loan is evidenced by one or more promissory notes or
amended, restated and consolidated promissory notes, as applicable, dated the
date hereof (together with any supplements, amendments, modifications,
replacements or extensions thereof, hereinafter collectively referred to as the
"Note") given by Borrower and certain Affiliates of Borrower (the
"Cross-collateralized Borrowers"), as maker, to Lender, as payee;

      WHEREAS, in consideration of the Loan, the Cross-collateralized Borrowers
have agreed to make payments in amounts sufficient to pay and redeem, and
provide for the payment and redemption of the principal of, premium, if any, and
interest on the Note when due;

      WHEREAS, Borrower desires by this Security Instrument to provide for,
among other things, the issuance of the Note and for the deposit, deed and
pledge by Borrower with, and the creation of a security interest in favor of,
Lender, as security for the Cross-collateralized Borrowers' obligations to
Lender from time to time pursuant to the Note and the other Loan Documents;

      WHEREAS, Borrower and Lender intend these recitals to be a material part
of this Security Instrument; and

      WHEREAS, all things necessary to make this Security Instrument the valid
and legally binding obligation of Borrower in accordance with its terms, for the
uses and purposes herein set forth, have been done and performed.

      NOW THEREFORE, to secure the payment of the principal of, prepayment
premium (if any) and interest on the Note, and all other obligations,
liabilities or sums due or to become due under this Security Instrument, the
Note or any other Loan Document, including, without limitation, interest on said
obligations, liabilities or sums (said principal, premium, interest and other
sums being hereinafter referred to as the "Debt"), and the performance of all
other covenants, obligations and liabilities of the Cross-collateralized
Borrowers pursuant to the Loan Documents, Borrower has executed and delivered
this Security Instrument; and Borrower has irrevocably granted, and by these
presents and by the execution and delivery hereof does hereby irrevocably grant,
bargain, sell, alien, demise, release, convey, assign, transfer, deed,
hypothecate, pledge, set over, warrant, mortgage and confirm to Lender, forever
with power of sale, all right, title and interest of Borrower in and to all of
the following property, rights, interests and estates:

<PAGE>

            (a) the plot(s), piece(s) or parcel(s) of real property described in
      EXHIBIT A attached hereto and made a part hereof (individually and
      collectively, hereinafter referred to as the "Premises");

            (b) (i) all buildings, foundations, structures, fixtures, additions,
      enlargements, extensions, modifications, repairs, replacements and
      improvements of every kind or nature now or hereafter located on the
      Premises (hereinafter collectively referred to as the "Improvements"); and
      (ii) to the extent permitted by law, the name or names, if any, as may now
      or hereafter be used for any of the Improvements, and the goodwill
      associated therewith;

            (c) all easements, servitudes, rights-of-way, strips and gores of
      land, streets, ways, alleys, passages, sewer rights, water, water courses,
      water rights and powers, ditches, ditch rights, reservoirs and reservoir
      rights, air rights and development rights, lateral support, drainage, gas,
      oil and mineral rights, tenements, hereditaments and appurtenances of any
      nature whatsoever, in any way belonging, relating or pertaining to the
      Premises or the Improvements and the reversion and reversions, remainder
      and remainders, whether existing or hereafter acquired, and all land lying
      in the bed of any street, road or avenue, opened or proposed, in front of
      or adjoining the Premises to the center line thereof and any and all
      sidewalks, drives, curbs, passageways, streets, spaces and alleys adjacent
      to or used in connection with the Premises and/or Improvements and all the
      estates, rights, titles, interests, property, possession, claim and demand
      whatsoever, both in law and in equity, of Borrower of, in and to the
      Premises and Improvements and every part and parcel thereof, with the
      appurtenances thereto;

            (d) all machinery, equipment, fittings, apparatus, appliances,
      furniture, furnishings, tools, fixtures (including, but not limited to,
      all heating, air conditioning, ventilating, waste disposal, sprinkler and
      fire and theft protection equipment, plumbing, lighting, communications
      and elevator fixtures) and other property of every kind and nature
      whatsoever owned by Borrower, or in which Borrower has or shall have an
      interest, now or hereafter located upon, or in, and used in connection
      with the Premises or the Improvements, or appurtenant thereto, and all
      building equipment, materials and supplies of any nature whatsoever owned
      by Borrower, or in which Borrower has or shall have an interest, now or
      hereafter located upon, or in, and used in connection with the Premises or
      the Improvements or appurtenant thereto (hereinafter, all of the foregoing
      items described in this paragraph (d) are collectively called the
      "Equipment"), all of which, and any replacements, modifications,
      alterations and additions thereto, to the extent permitted by applicable
      law, shall be deemed to constitute fixtures (together with all "fixtures"
      (as defined in the UCC) hereafter located on the Premises or the
      Improvements, the "Fixtures"), and are part of the real estate and
      security for the payment of the Debt and the performance of Borrower's
      obligations. For specificity, the parties acknowledge that U-Haul's truck,
      van and wagon rental fleet shall not constitute Equipment hereunder. To
      the extent any portion of the Equipment is not real property or Fixtures
      under applicable law, it shall be deemed to be personal property, and this
      Security Instrument shall constitute a security agreement creating a
      security interest therein in favor of Lender under the UCC;

            (e) all awards or payments, including interest thereon, which may
      hereafter be made with respect to the Premises, the Improvements, the
      Fixtures, or the Equipment, whether from the exercise of the right of
      eminent domain (including but not limited to any transfer made in lieu of
      or in anticipation of the exercise of said right), or for a change of
      grade, or for any other injury to or decrease in the value of the
      Premises, the Improvements or the Equipment or refunds with respect to the
      payment of property taxes and assessments, and all other proceeds of the
      conversion, voluntary or involuntary, of the Premises, Improvements,
      Equipment, Fixtures or any other Property or part thereof into cash or
      liquidated claims;

            (f) all leases, tenancies, licenses and other agreements affecting
      the use, enjoyment or occupancy of the Premises, the Improvements, the
      Fixtures, or the Equipment or any portion thereof now or hereafter entered
      into, whether before or after the filing by or against Borrower of any
      petition for relief under the Bankruptcy Code and all reciprocal easement
      agreements, license agreements and other agreements with Pad Owners
      (hereinafter collectively referred to as the "Leases"), together with all
      cash or security deposits, lease termination payments, advance rentals and
      payments of similar nature and guarantees or other security held by, or
      issued in favor of, Borrower in connection therewith to the extent of

                                       2
<PAGE>

      Borrower's right or interest therein and all remainders, reversions and
      other rights and estates appurtenant thereto, and all base, fixed,
      percentage or additional rents, and other rents, oil and gas or other
      mineral royalties, and bonuses, issues, profits and rebates and refunds or
      other payments made by any Governmental Authority from or relating to the
      Premises, the Improvements, the Fixtures or the Equipment plus all rents,
      receipts, common area charges and other payments now existing or hereafter
      arising, whether paid or accruing before or after the filing by or against
      Borrower of any petition for relief under the Bankruptcy Code (the
      "Rents") and all proceeds from the sale or other disposition of the Leases
      and the right to receive and apply the Rents to the payment of the Debt;

            (g) all proceeds of and any unearned premiums on any insurance
      policies covering the Premises, the Improvements, the Fixtures, the Rents
      or the Equipment, including, without limitation, the right to receive and
      apply the proceeds of any insurance, judgments, or settlements made in
      lieu thereof, for damage to the Premises, the Improvements, the Fixtures
      or the Equipment and all refunds or rebates of Impositions, and interest
      paid or payable with respect thereto;

            (h) all deposit accounts, securities accounts, funds or other
      accounts maintained or deposited with Lender, or its assigns, in
      connection herewith, including, without limitation, the Security Deposit
      Account (to the extent permitted by law), the Engineering Escrow
      Sub-Account, the Rent Account, the Central Account, the Basic Carrying
      Costs Sub-Account, the Debt Service Payment Sub-Account, the Operation and
      Maintenance Expense Sub-Account, the Mez Payment Sub-Account and the
      Recurring Replacement Reserve Sub-Account and all monies and investments
      deposited or to be deposited in such accounts;

            (i) all accounts receivable, contract rights, franchises, interests,
      estate or other claims, both at law and in equity, now existing or
      hereafter arising, and relating to the Premises, the Improvements, the
      Fixtures or the Equipment, not included in Rents;

            (j) all now existing or hereafter arising claims against any Person
      with respect to any damage to the Premises, the Improvements, the Fixtures
      or the Equipment, including, without limitation, damage arising from any
      defect in or with respect to the design or construction of the
      Improvements, the Fixtures or the Equipment and any damage resulting
      therefrom;

            (k) all deposits or other security or advance payments, including
      rental payments now or hereafter made by or on behalf of Borrower to
      others, with respect to (i) insurance policies, (ii) utility services,
      (iii) cleaning, maintenance, repair or similar services, (iv) refuse
      removal or sewer service, (v) parking or similar services or rights and
      (vi) rental of Equipment, if any, relating to or otherwise used in the
      operation of the Premises, the Improvements, the Fixtures or the
      Equipment;

            (l) intangible property now or hereafter relating to the Premises,
      the Improvements, the Fixtures or the Equipment or its operation,
      including, without limitation, software, letter of credit rights, trade
      names, trademarks (including, without limitation, any licenses of or
      agreements to license trade names or trademarks now or hereafter entered
      into by Borrower), logos, building names and goodwill;

            (m) all now existing or hereafter arising advertising material,
      guaranties, warranties, building permits, other permits, licenses, plans
      and specifications, shop and working drawings, soil tests, appraisals and
      other documents, materials and/or personal property of any kind now or
      hereafter existing in or relating to the Premises, the Improvements, the
      Fixtures, and the Equipment;

            (n) all now existing or hereafter arising drawings, designs, plans
      and specifications prepared by architects, engineers, interior designers,
      landscape designers and any other consultants or professionals for the
      design, development, construction, repair and/or improvement of the
      Property, as amended from time to time;

                                       3
<PAGE>

            (o) the right, in the name of and on behalf of Borrower, to appear
      in and defend any now existing or hereafter arising action or proceeding
      brought with respect to the Premises, the Improvements, the Fixtures or
      the Equipment and to commence any action or proceeding to protect the
      interest of Lender in the Premises, the Improvements, the Fixtures or the
      Equipment; and

            (p) all proceeds, products, substitutions and accessions (including
      claims and demands therefor) of each of the foregoing.

      All of the foregoing items (a) through (p), together with all of the
right, title and interest of Borrower therein, are collectively referred to as
the "Property".

      TO HAVE AND TO HOLD the above granted and described Property unto Lender,
and the successors and assigns of Lender in fee simple, forever.

      PROVIDED, ALWAYS, and these presents are upon this express condition, if
Borrower shall well and truly pay and discharge the Debt and perform and observe
the terms, covenants and conditions set forth in the Loan Documents, then these
presents and the estate hereby granted shall cease and be void.

      AND Borrower covenants with and warrants to Lender that:

                             ARTICLE I: DEFINITIONS

      Section 1.01. Certain Definitions.

      For all purposes of this Security Instrument, except as otherwise
expressly provided or unless the context clearly indicates a contrary intent:

            (i) the capitalized terms defined in this Section have the meanings
      assigned to them in this Section, and include the plural as well as the
      singular;

            (ii) all accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with GAAP; and

            (iii) the words "herein", "hereof", and "hereunder" and other words
      of similar import refer to this Security Instrument as a whole and not to
      any particular Section or other subdivision.

      "Affiliate" of any specified Person shall mean any other Person directly
or indirectly Controlling or Controlled by or under direct or indirect common
Control with such specified Person.

      "Aggregate Debt Service Coverage" shall mean the quotient obtained by
dividing the aggregate Net Operating Income for all of the Cross-collateralized
Properties for the specified period by the aggregate payments of interest and
principal (not including the amount of principal payable upon Maturity) due for
such specified period under the Note (determined as of the date the calculation
of Aggregate Debt Service Coverage is required or requested hereunder).

      "Allocated Loan Amount" shall mean the Initial Allocated Loan Amount of
each Cross-collateralized Property as such amount may be adjusted from time to
time as hereinafter set forth. Upon each adjustment of the Principal Amount
(each a "Total Adjustment"), whether as a result of amortization, defeasance or
prepayment or as otherwise expressly provided herein or in any other Loan
Document, each Allocated Loan Amount shall be increased or decreased, as the
case may be, by an amount equal to the product of (a) the Total Adjustment, and
(b) a fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
Principal Amount prior to the adjustment to the Principal Amount which results
in the recalculation of the Allocated Loan Amount. However, when the Principal
Amount is reduced as a result of Lender's receipt of (a) a Release Price or, in
connection with a Release, funds sufficient to prepay a portion of the

                                       4
<PAGE>

Principal Amount in the amount of the Release Price, the Allocated Loan Amount
for the Cross-collateralized Property being released and discharged from the
encumbrance of the applicable Cross-collateralized Mortgage and related Loan
Documents shall be reduced to zero (the amount by which such Allocated Loan
Amount is reduced being referred to as the "Released Allocated Amount"), and
each other Allocated Loan Amount shall be decreased by an amount equal to the
product of (i) the excess of (A) the Release Price over (B) the Released
Allocated Amount and (ii) a fraction, the numerator of which is the applicable
Allocated Loan Amount (prior to the adjustment in question) and the denominator
of which is the aggregate of all of the Allocated Loan Amounts other than the
Allocated Loan Amount applicable to the Cross-collateralized Property for which
the Release Price was paid , or (b) Net Proceeds, the Allocated Loan Amount for
the Cross-collateralized Property with respect to which the Net Proceeds were
received shall be reduced to zero (the amount by which such Allocated Loan
Amount is reduced being referred to as the "Foreclosed Allocated Amount") and
each other Allocated Loan Amount shall (A) if the Net Proceeds exceed the
Foreclosed Allocated Amount (such excess being referred to as the "Surplus Net
Proceeds"), be decreased by an amount equal to the product of (i) the Surplus
Net Proceeds and (ii) a fraction, the numerator of which is the applicable
Allocated Loan Amount (prior to the adjustment in question) and the denominator
of which is the aggregate of all of the Allocated Loan Amounts (prior to the
adjustment in question) other than the Allocated Loan Amount applicable to the
Cross-collateralized Property with respect to which the Net Proceeds were
received (such fraction being referred to as the "Net Proceeds Adjustment
Fraction"), (B) if the Foreclosed Allocated Amount exceeds the Net Proceeds
(such excess being referred to as the "Net Proceeds Deficiency"), be increased
by an amount equal to the product of (i) the Net Proceeds Deficiency and (ii)
the Net Proceeds Adjustment Fraction, or (C) if the Net Proceeds equal the
Foreclosed Allocated Amount, remain unadjusted, or (c) Loss Proceeds or partial
prepayments or defeasances, as applicable, made in accordance with Section 15.01
hereof, the Allocated Loan Amount for the Cross-collateralized Property with
respect to which the Loss Proceeds or partial prepayments or defeasances, as
applicable, were received shall be decreased by an amount equal to the sum of
(i) with respect to Loss Proceeds, Loss Proceeds which are applied towards the
reduction of the Principal Amount as set forth in Article III hereof, if any,
and (ii) with respect to partial prepayments or defeasances, as applicable, the
amount of any such partial prepayment which is applied towards the reduction of
the Principal Amount in accordance with the provisions of the Note, if any, but
in no event shall the Allocated Loan Amount for the Cross-collateralized
Property with respect to which the Loss Proceeds or partial prepayments or
defeasances, as applicable, were received be reduced to an amount less than zero
(the amount by which such Allocated Loan Amount is reduced being referred to as
the "Loss Proceeds or Prepayment Allocated Amount") and each other Allocated
Loan Amount shall be decreased by an amount equal to the product of (i) the
excess of (A) the Loss Proceeds or such partial prepayments or defeasances, as
applicable, over (B) the Loss Proceeds or Prepayment Allocated Amount, and (ii)
a fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
aggregate of all of the Allocated Loan Amounts (prior to the adjustment in
question) other than the Allocated Loan Amount applicable to the
Cross-collateralized Property to which such Loss Proceeds or partial prepayments
or defeasances, as applicable, were applied.

      "Annual Budget" shall mean an annual budget submitted by Borrower to
Lender in accordance with the terms of Section 2.09 hereof.

      "Appraisal" shall mean the appraisal of the Property and all supplemental
reports or updates thereto previously delivered to Lender in connection with the
Loan.

      "Appraiser" shall mean the Person who prepared the Appraisal.

      "Approved Annual Budget" shall mean each Annual Budget approved by Lender
in accordance with terms hereof or, if there is no Annual Budget approved by
Lender, the actual expenses set forth in the cash flow statements delivered to
Lender pursuant to Section 2.09(c) hereof with respect to the prior Fiscal Year
adjusted to reflect increases in Basic Carrying Costs and to delete
non-recurring expenses.

      "Approved Manager Standard" shall mean the standard of business
operations, practices and procedures customarily employed by entities having a
senior executive with at least seven (7) years' experience in the management of
self-storage and retail properties which manage not less than 1,000,000 square
feet of gross leasable area,

                                       5
<PAGE>

including, without limitation, certain properties which contain more than
100,000 square feet of gross leasable area.

      "Architect" shall have the meaning set forth in Section 3.04(b)(i) hereof.

      "Assignment" shall mean the Assignment of Leases and Rents and Security
Deposits of even date herewith relating to the Property given by Borrower to
Lender, as the same may be modified, amended or supplemented from time to time.

      "Bank" shall mean the bank, trust company, savings and loan association or
savings bank designated by Lender, in its sole and absolute discretion, in which
the Central Account shall be located.

      "Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., as amended
from time to time.

      "Basic Carrying Costs" shall mean the sum of the following costs
associated with the Property: (a) Impositions and (b) insurance premiums.

      "Basic Carrying Costs Monthly Installment" shall mean Lender's estimate of
one-twelfth (1/12th) of the annual amount for Basic Carrying Costs. "Basic
Carrying Costs Monthly Installment" shall also include, if required by Lender, a
sum of money which, together with such monthly installments, will be sufficient
to make the payment of each such Basic Carrying Cost at least thirty (30) days
prior to the date initially due. Should such Basic Carrying Costs not be
ascertainable at the time any monthly deposit is required to be made, the Basic
Carrying Costs Monthly Installment shall be determined by Lender in its
reasonable discretion on the basis of the aggregate Basic Carrying Costs for the
prior Fiscal Year or month or the prior payment period for such cost. As soon as
the Basic Carrying Costs are fixed for the then current Fiscal Year, month or
period, the next ensuing Basic Carrying Costs Monthly Installment shall be
adjusted to reflect any deficiency or surplus in prior monthly payments. If at
any time during the term of the Loan Lender determines that there will be
insufficient funds in the Basic Carrying Costs Sub-Account to make payments when
they become due and payable, Lender shall have the right to adjust the Basic
Carrying Costs Monthly Installment such that there will be sufficient funds to
make such payments. Notwithstanding the foregoing, provided that no Trigger
Event has occurred and is continuing, that a sum equal to not less than the
Initial Basic Carrying Costs Deposit is on deposit in the Basic Carrying Costs
Sub-Account and Borrower has delivered to Lender evidence of payment of all
Basic Carrying Costs within fifteen (15) days of the date such sums were due and
payable, the Basic Carrying Costs Monthly Installment shall be $0.

      "Basic Carrying Costs Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.06 hereof.

      "Borrower" shall mean Borrower named herein and any successor to the
obligations of Borrower.

      "Borrower Account" shall mean an Eligible Account maintained in the name
of Borrower.

      "Business Day" shall mean any day other than (a) a Saturday or Sunday, or
(b) a day on which banking and savings and loan institutions in the State of New
York are authorized or obligated by law or executive order to be closed, or at
any time during which the Loan is an asset of a Securitization, the cities,
states and/or commonwealths used in the comparable definition of "Business Day"
in the Securitization documents.

      "Capital Expenditures" shall mean for any period, the amount expended for
items capitalized under GAAP including expenditures for building improvements or
major repairs, leasing commissions and tenant improvements.

      "Cash Expenses" shall mean for any period, the operating expenses for the
Property as set forth in an Approved Annual Budget to the extent that such
expenses are actually incurred by Borrower minus payments into the Basic
Carrying Costs Sub-Account, the Debt Service Payment Sub-Account and the
Recurring Replacement Reserve Sub-Account.

                                       6
<PAGE>

      "Central Account" shall mean an Eligible Account, maintained at the Bank,
in the name of Lender or its successors or assigns (as secured party) as may be
designated by Lender.

      "Closing Date" shall mean the date of the Note.

      "Code" shall mean the Internal Revenue Code of 1986, as amended and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto.

      "Collection Account" shall mean a demand deposit account designated by
Lender, which shall be an Eligible Account, to which payments of Debt are
transferred.

      "Condemnation Proceeds" shall mean all of the proceeds in respect of any
Taking or purchase in lieu thereof.

      "Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.

      "Control" means, when used with respect to any specific Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person whether through
ownership of voting securities, beneficial interests, by contract or otherwise.
The definition is to be construed to apply equally to variations of the word
"Control" including "Controlled," "Controlling" or "Controlled by."

      "CPI" shall mean "The Consumer Price Index (New Series) (Base Period
1982-84=100) (all items for all urban consumers)" issued by the Bureau of Labor
Statistics of the United States Department of Labor (the "Bureau"). If the CPI
ceases to use the 1982-84 average equaling 100 as the basis of calculation, or
if a change is made in the term, components or number of items contained in said
index, or if the index is altered, modified, converted or revised in any other
way, then the index shall be adjusted to the figure that would have been arrived
at had the change in the manner of computing the index in effect at the date of
this Security Instrument not been made. If at any time during the term of this
Security Instrument the CPI shall no longer be published by the Bureau, then any
comparable index issued by the Bureau or similar agency of the United States
issuing similar indices shall be used in lieu of the CPI.

      "Cross-collateralization Agreement" shall mean that certain
Cross-collateralization Agreement of even date herewith among Borrower, the
Cross-collateralized Borrowers and Lender.

      "Cross-collateralized Mortgage" shall mean each mortgage, deed of trust,
deed to secure debt, security agreement, assignment of rents and fixture filing
as originally executed or as same may hereafter from time to time be
supplemented, amended, modified or extended by one or more indentures
supplemental thereto granted by a Cross-collateralized Borrower to Lender as
security for the Note.

      "Cross-collateralized Property" shall mean each parcel or parcels of real
property encumbered by a Cross-collateralized Mortgage as identified on EXHIBIT
F attached hereto and made a part hereof; provided, however, at such time, if
any, that a Cross-collateralized Mortgage is released by Lender, the property
which was encumbered by such Cross-collateralized Property shall no longer
constitute a Cross-collateralized Property.

      "Debt" shall have the meaning set forth in the Recitals hereto.

      "Debt Service" shall mean the amount of interest and principal payments
due and payable in accordance with the Note during an applicable period.

      "Debt Service Coverage" shall mean the quotient obtained by dividing Net
Operating Income for the specified period by the sum of the (a) aggregate
payments of interest, principal and all other sums due for such

                                       7
<PAGE>

specified period under the Note (determined as of the date the calculation of
Debt Service Coverage is required or requested hereunder) and (b) aggregate
payments of interest, principal and all other sums due for such specified period
pursuant to the terms of subordinate or mezzanine financing, if any, then
affecting the Property or, if Debt Service Coverage is being calculated in
connection with a request for consent to any subordinate financing, then
proposed.

      "Debt Service Payment Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.07 hereof for the purposes of making Debt Service
payments.

      "Default" shall mean any Event of Default or event which would constitute
an Event of Default if all requirements in connection therewith for the giving
of notice, the lapse of time, and the happening of any further condition, event
or act, had been satisfied.

      "Default Rate" shall mean the lesser of (a) the highest rate allowable at
law and (b) five percent (5%) above the interest rate set forth in the Note.

      "Default Rate Interest" shall mean, to the extent the Default Rate becomes
applicable, interest in excess of the interest which would have accrued on (a)
the Principal Amount and (b) any accrued but unpaid interest, if the Default
Rate was not applicable.

      "Defeasance Deposit" shall mean an amount equal to the total cost incurred
or to be incurred in the purchase on behalf of Borrower of Federal Obligations
necessary to meet the Scheduled Defeasance Payments.

      "Defeased Note" shall have the meaning set forth in Section 15.01 hereof.

      "Development Laws" shall mean all applicable subdivision, zoning,
environmental protection, wetlands protection, or land use laws or ordinances,
and any and all applicable rules and regulations of any Governmental Authority
promulgated thereunder or related thereto.

      "Eligible Account" shall mean a segregated account which is either (a) an
account or accounts maintained with a federal or state chartered depository
institution or trust company the long term unsecured debt obligations of which
are rated by each of the Rating Agencies (or, if not rated by Fitch, Inc.
("Fitch"), otherwise acceptable to Fitch, as confirmed in writing that such
account would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) in its highest rating category at all times
(or, in the case of the Basic Carrying Costs Sub-Account, the long term
unsecured debt obligations of which are rated at least "AA" (or its equivalent))
by each of the Rating Agencies (or, if not rated by Fitch, otherwise acceptable
to Fitch, as confirmed in writing that such account would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to any certificates issued in connection with a Securitization) or, if
the funds in such account are to be held in such account for less than thirty
(30) days, the short term obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as confirmed
in writing that such account would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any
certificates issued in connection with a Securitization) in its highest rating
category at all times or (b) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company acting
in its fiduciary capacity which, in the case of a state chartered depository
institution is subject to regulations substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination by federal and state
authority, or otherwise acceptable (as evidenced by a written confirmation from
each Rating Agency that such account would not, in and of itself, cause a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) to each Rating
Agency, which may be an account maintained by Lender or its agents. Eligible
Accounts may bear interest. The title of each Eligible Account shall indicate
that the funds held therein are held in trust for the uses and purposes set
forth herein.

                                       8
<PAGE>

      "Engineer" shall have the meaning set forth in Section 3.04(b)(i) hereof.

      "Engineering Escrow Sub-Account" shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof, maintained pursuant to
Section 5.12 hereof and funded on the Closing Date relating to payments for any
Required Engineering Work.

      "Environmental Problem" shall mean any of the following:

            (a) the presence of any Hazardous Material on, in, under, or above
      all or any portion of the Property except those Hazardous Materials used
      in the ordinary course of Borrower's business, in compliance with, and not
      likely to give rise to liability under, Environmental Statutes;

            (b) the release or threatened release of any Hazardous Material from
      or onto the Property;

            (c) the violation or threatened violation of any Environmental
      Statute with respect to the Property; or

            (d) the failure to obtain or to abide by the terms or conditions of
      any permit or approval required under any Environmental Statute with
      respect to the Property.

A condition described above shall be an Environmental Problem regardless of
whether or not any Governmental Authority has taken any action in connection
with the condition and regardless of whether that condition was in existence on
or before the date hereof.

      "Environmental Report" shall mean the environmental audit report for the
Property and any supplements or updates thereto, previously delivered to Lender
in connection with the Loan.

      "Environmental Statute" shall mean any federal, state or local statute,
ordinance, rule or regulation, any judicial or administrative order (whether or
not on consent) or judgment applicable to Borrower or the Property including,
without limitation, any judgment or settlement based on common law theories, and
any provisions or condition of any permit, license or other authorization
binding on Borrower relating to (a) the protection of the environment, the
safety and health of persons (including employees) or the public welfare from
actual or potential exposure (or effects of exposure) to any actual or potential
release, discharge, disposal or emission (whether past or present) of any
Hazardous Materials or (b) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous Materials,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq., the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42
U.S.C. Section 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. Section 1251 et seq., the Toxic
Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 1101 et
seq., the Clean Air Act of 1966, as amended, 42 U.S.C. Section 7401 et seq., the
National Environmental Policy Act of 1975, 42 U.S.C. Section 4321, the Rivers
and Harbors Act of 1899, 33 U.S.C. Section 401 et seq., the Endangered Species
Act of 1973, as amended, 16 U.S.C. Section 1531 et seq., the Occupational Safety
and Health Act of 1970, as amended, 29 U.S.C. Section 651 et seq., and the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq., and
all rules, regulations and guidance documents promulgated or published
thereunder.

      "Equipment" shall have the meaning set forth in granting clause (d) of
this Security Instrument.

      "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Security
Instrument and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.

                                       9
<PAGE>

      "ERISA Affiliate" shall mean any corporation or trade or business that is
a member of any group of organizations (a) described in Section 414(b) or (c) of
the Code of which Borrower or Guarantor is a member and (b) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which
Borrower or Guarantor is a member.

      "Event of Default" shall have the meaning set forth in Section 13.01
hereof.

      "Extraordinary Expense" shall mean an extraordinary operating expense or
capital expense not set forth in the Approved Annual Budget or allotted for in
the Recurring Replacement Reserve Sub-Account.

      "Federal Obligations" shall mean non-callable direct obligations of, or
obligations fully guaranteed as to payment of principal and interest by, the
United States of America or any agency or instrumentality thereof provided that
such obligations are backed by the full faith and credit of the United States of
America as chosen by Borrower, subject to the approval of Lender.

      "First Interest Accrual Period" shall mean the period commencing on the
Closing Date and ending on the last day of the month in which the Closing Date
occurs.

      "First Payment Date" shall mean the Payment Date in the month following
the month in which the Loan is initially funded.

      "Fiscal Year" shall mean the twelve (12) month period commencing on April
1 and ending on March 31 during each year of the term of this Security
Instrument, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior written consent of Lender.

      "Fixtures" shall have the meaning set forth in granting clause (d) of this
Security Instrument.

      "Force Majeure" shall mean an unavoidable delay caused by general strikes,
lockouts or labor disputes, wars (declared or undeclared), terrorist attacks,
natural disasters such as fires, storms, floods or earthquakes, power outages or
other utility interruptions or other material extraordinary events not
reasonably foreseeable by the parties hereto, and which such interruption causes
a delay in the performance of any material obligation hereunder.

      "GAAP" shall mean generally accepted accounting principles in the United
States of America, as of the date of the applicable financial report,
consistently applied.

      "General Partner" shall mean, if Borrower is a partnership, each general
partner of Borrower and, if Borrower is a limited liability company, each
managing member of Borrower and in each case, if applicable, each general
partner or managing member of such general partner or managing member. In the
event that Borrower or any General Partner is a single member limited liability
company, the term "General Partner" shall include such single member.

      "Governmental Authority" shall mean, with respect to any Person, any
federal or State government or other political subdivision thereof and any
entity, including any regulatory or administrative authority or court,
exercising executive, legislative, judicial, regulatory or administrative or
quasi-administrative functions of or pertaining to government, and any
arbitration board or tribunal, in each case having jurisdiction over such
applicable Person or such Person's property and any stock exchange on which
shares of capital stock of such Person are listed or admitted for trading.

      "Guarantor" shall mean any Person guaranteeing, in whole or in part, the
obligations of Borrower under the Loan Documents.

      "Hazardous Material" shall mean any flammable, explosive or radioactive
materials, hazardous materials or wastes, hazardous or toxic substances,
pollutants or related materials, asbestos or any material containing asbestos,

                                       10
<PAGE>

molds, spores and fungus which may pose a risk to human health or the
environment or any other substance or material as defined in or regulated by any
Environmental Statutes.

      "Impositions" shall mean all taxes (including, without limitation, all
real estate, ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible, transaction, privilege
or license or similar taxes), assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Security Instrument), ground rents, water, sewer or
other rents and charges, excises, levies, fees (including, without limitation,
license, permit, inspection, authorization and similar fees), and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Property and/or any Rent (including all interest and penalties thereon), which
at any time prior to, during or in respect of the term hereof may be assessed or
imposed on or in respect of or be a lien upon (a) Borrower (including, without
limitation, all franchise, single business or other taxes imposed on Borrower
for the privilege of doing business in the jurisdiction in which the Property or
any other collateral delivered or pledged to Lender in connection with the Loan
is located) or Lender, (b) the Property or any part thereof or any Rents
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property, or any part thereof, or the leasing or use of the
Property, or any part thereof, or the acquisition or financing of the
acquisition of the Property, or any part thereof, by Borrower.

      "Improvements" shall have the meaning set forth in granting clause (b) of
this Security Instrument.

      "Indemnified Parties" shall have the meaning set forth in Section 12.01
hereof.

      "Independent" shall mean, when used with respect to any Person, a Person
who (a) is in fact independent, (b) does not have any direct financial interest
or any material indirect financial interest in Borrower, or in any Affiliate of
Borrower or any constituent partner, shareholder, member or beneficiary of
Borrower, (c) is not connected with Borrower or any Affiliate of Borrower or any
constituent partner, shareholder, member or beneficiary of Borrower as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions and (d) is not a member of the immediate family of
a Person defined in (b) or (c) above. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be provided, such opinion or
certificate shall state that the Person executing the same has read this
definition and is Independent within the meaning hereof.

      "Initial Allocated Loan Amount" shall mean the portion of the Loan Amount
allocated to each Cross-collateralized Property as set forth on EXHIBIT C
attached hereto and made a part hereof.

      "Initial Basic Carrying Cost Deposit" shall equal the amount set forth on
EXHIBIT B attached hereto and made a part hereof.

      "Initial Engineering Deposit" shall equal the amount set forth on EXHIBIT
B attached hereto and made a part hereof.

      "Initial Recurring Replacement Reserve Deposit" shall equal the amount set
forth on EXHIBIT B attached hereto and made a part hereof.

      "Institutional Lender" shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company or pension
and/or annuity company, (d) any fraternal benefit society, (e) any pension,
retirement or profit sharing trust or fund within the meaning of Title I of
ERISA or for which any bank, trust company, national banking association or
investment adviser registered under the Investment Advisers Act of 1940, as
amended, is acting as trustee or agent, (f) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any

                                       11
<PAGE>

broker or dealer registered under the Securities Exchange Act of 1934, as
amended, or any investment adviser registered under the Investment Adviser Act
of 1940, as amended, (i) any government, any public employees' pension or
retirement system, or any other government agency supervising the investment of
public funds, or (j) any other entity all of the equity owners of which are
Institutional Lenders; provided that each of said Persons shall have net assets
in excess of $1,000,000,000 and a net worth in excess of $500,000,000, be in the
business of making commercial mortgage loans, secured by properties of like
type, size and value as the Property and have a long term credit rating which is
not less than "BBB-" (or its equivalent) from each Rating Agency.

      "Insurance Proceeds" shall mean all of the proceeds received under the
insurance policies required to be maintained by Borrower pursuant to Article III
hereof.

      "Insurance Requirements" shall mean all terms of any insurance policy
required by this Security Instrument, all requirements of the issuer of any such
policy, and all regulations and then current standards applicable to or
affecting the Property or any use or condition thereof, which may, at any time,
be recommended by the Board of Fire Underwriters, if any, having jurisdiction
over the Property, or such other Person exercising similar functions.

      "Interest Accrual Period" shall mean the First Interest Accrual Period
and, thereafter, each one (1) month period, which shall be a calendar month.

      "Interest Rate" shall have the meaning set forth in the Note.

      "Interest Shortfall" shall mean any shortfall in the amount of interest
required to be paid with respect to the Loan Amount on any Payment Date.

      "Late Charge" shall have the meaning set forth in Section 13.09 hereof.

      "Leases" shall have the meaning set forth in granting clause (f) of this
Security Instrument.

      "Legal Requirement" shall mean as to any Person, the certificate of
incorporation, by-laws, certificate of limited partnership, agreement of limited
partnership or other organization or governing documents of such Person, and any
law, statute, order, ordinance, judgement, decree, injunction, treaty, rule or
regulation (including, without limitation, Environmental Statutes, Development
Laws and Use Requirements) or determination of an arbitrator or a court or other
Governmental Authority and all covenants, agreements, restrictions and
encumbrances contained in any instruments, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

      "Lender" shall mean the Lender named herein and its successors or assigns.

      "Loan" shall have the meaning set forth in the Recitals hereto.

      "Loan Amount" shall have the meaning set forth in the Recitals hereto.

      "Loan Documents" shall mean this Security Instrument, the Note, the
Assignment, and any and all other agreements, instruments, certificates or
documents executed and delivered by Borrower, any of the Cross-collateralized
Borrowers or any Affiliate of Borrower in connection with the Loan.

      "Loan Year" shall mean each 365 day period (or 366 day period if the month
of February in a leap year is included) commencing on the first day of the month
following the Closing Date (provided, however, that the first Loan Year shall
also include the period from the Closing Date to the end of the month in which
the Closing Date occurs).

      "Loss Proceeds" shall mean, collectively, all Insurance Proceeds and all
Condemnation Proceeds.

                                       12
<PAGE>

      "Major Space Lease" shall mean any Space Lease of a tenant or Affiliate of
such tenant where such tenant or such Affiliate leases, in the aggregate, five
percent (5%) or more of the Total GLA.

      "Management Agreement" shall have the meaning set forth in Section 7.02
hereof.

      "Manager" shall mean the Person, other than Borrower, which manages the
Property on behalf of Borrower, which Person shall be subject to the review and
approval of Lender. If the Property is self managed, "Manager" shall mean
Borrower.

      "Manager Certification" shall have the meaning set forth in Section 2.09
hereof.

      "Material Adverse Effect" shall mean any event or condition that has a
material adverse effect on (a) the Property, (b) the business, prospects,
profits, management, operations or condition (financial or otherwise) of
Borrower, (c) the enforceability, validity, perfection or priority of the lien
of any Loan Document or (d) the ability of Borrower to perform any obligations
under any Loan Document.

      "Maturity", when used with respect to the Note, shall mean the Maturity
Date set forth in the Note or such other date pursuant to the Note on which the
final payment of principal, and premium, if any, on the Note becomes due and
payable as therein or herein provided, whether at Stated Maturity or by
declaration of acceleration, or otherwise.

      "Maturity Date" shall mean the Maturity Date set forth in the Note.

      "Mez Loan" shall mean a certain mezzanine loan in the original principal
sum of $20,000,000 and, provided that the aggregate debt service coverage and
loan-to-value ratio for all of the Cross-collateralized Properties and other
properties in which the borrower under such mezzanine loan holds a direct or
indirect ownership interest, in each case as determined by Lender in its
reasonable discretion utilizing its then current underwriting standards and
assuming that the principal balance of the Mez Loan is increased to the
requested amount, is 1.15:1.0 or greater and 85% or lower, respectively, a
maximum principal sum of $50,000,000, which is evidenced or to be evidenced by a
certain promissory note, secured by, among other things, a first priority pledge
of the direct or indirect ownership interest in Borrower and which matures no
earlier than the Maturity Date. In the event that the Mez Loan does not close as
of the Closing Date, such loan must be consented to in writing by Lender, which
consent shall not be unreasonably withheld and may be conditioned upon, among
other things, receipt by Lender of an executed intercreditor agreement, in form
and substance reasonably acceptable to Lender between the lender of the proposed
Mez Loan and Lender and receipt of written confirmation from each Rating Agency
that any rating issued by the Rating Agency in connection with a Securitization
will not, as a result of the proposed Mez Loan be downgraded from the then
current ratings thereof, qualified or withdrawn.

      "Mez Payment Amount" shall mean, as of any Payment Date, the amount of
interest and principal then due and payable pursuant to the terms of the Mez
Loan.

      "Mez Payment Sub-Account" shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof and maintained pursuant to
Section 5.14 hereof.

      "Monthly Debt Service Payment" shall mean a monthly payment of principal
and interest in an amount equal to that which is required pursuant to the Note.

      "Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been, or were required to
have been, made by Borrower, Guarantor or any ERISA Affiliate and which is
covered by Title IV of ERISA.

      "Net Capital Expenditures" shall mean for any period the amount by which
Capital Expenditures during such period exceeds reimbursements for such items
during such period from any fund established pursuant to the Loan Documents.

                                       13
<PAGE>

      "Net Operating Income" shall mean in each Fiscal Year or portion thereof
during the term hereof, Operating Income less Operating Expenses.

      "Net Proceeds" shall mean the excess of (a)(i) the purchase price (at
foreclosure or otherwise) actually received by Lender with respect to the
Property as a result of the exercise by Lender of its rights, powers, privileges
and other remedies after the occurrence of an Event of Default, or (ii) in the
event that Lender (or Lender's nominee) is the purchaser at foreclosure by
credit bid, then the amount of such credit bid, in either case, over (b) all
costs and expenses, including, without limitation, all reasonable attorneys'
fees and disbursements and any brokerage fees, if applicable, incurred by Lender
in connection with the exercise of such remedies, including the sale of such
Property after a foreclosure against the Property.

      "Note" shall have the meaning set forth in the Recitals hereto.

      "OFAC List" means the list of specially designated nationals and blocked
persons subject to financial sanctions that is maintained by the U.S. Treasury
Department, Office of Foreign Assets Control and accessible through the internet
website www.treas.gov/ofac/t11sdn.pdf.

      "Officer's Certificate" shall mean a certificate delivered to Lender by
Borrower which is signed on behalf of Borrower by an authorized representative
of Borrower which states that the items set forth in such certificate are true,
accurate and complete in all respects.

      "Operating Expenses" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all expenses directly attributable to the operation,
repair and/or maintenance of the Property including, without limitation, (a)
Impositions, (b) insurance premiums, (c) management fees, whether or not
actually paid, equal to the greater of the actual management fees and five
percent (5%) of annual "base" or "fixed" Rent due under the Leases and (d) costs
attributable to the operation, repair and maintenance of the systems for
heating, ventilating and air conditioning the Improvements and actually paid for
by Borrower. Operating Expenses shall not include interest, principal and
premium, if any, due under the Note or otherwise in connection with the Debt,
income taxes, extraordinary capital improvement costs, any non-cash charge or
expense such as depreciation or amortization.

      "Operating Income" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all revenue derived by Borrower arising from the
Property including, without limitation, rental revenues (whether denominated as
basic rent, additional rent, escalation payments, electrical payments or
otherwise) and other fees and charges payable pursuant to Leases or otherwise in
connection with the Property, and business interruption, rent or other similar
insurance proceeds. Operating Income shall not include (a) Insurance Proceeds
(other than proceeds of rent, business interruption or other similar insurance
allocable to the applicable period) and Condemnation Proceeds (other than
Condemnation Proceeds arising from a temporary taking or the use and occupancy
of all or part of the applicable Property allocable to the applicable period),
or interest accrued on such Condemnation Proceeds, (b) proceeds of any
financing, (c) proceeds of any sale, exchange or transfer of the Property or any
part thereof or interest therein, (d) capital contributions or loans to Borrower
or an Affiliate of Borrower, (e) any item of income otherwise includable in
Operating Income but paid directly by any tenant to a Person other than Borrower
except for real estate taxes paid directly to any taxing authority by any
tenant, (f) any other extraordinary, non-recurring revenues, (g) Rent paid by or
on behalf of any lessee under a Space Lease which is the subject of any
proceeding or action relating to its bankruptcy, reorganization or other
arrangement pursuant to the Bankruptcy Code or any similar federal or state law
or which has been adjudicated a bankrupt or insolvent unless such Space Lease
has been affirmed by the trustee in such proceeding or action, (h) Rent paid by
or on behalf of any lessee under a Space Lease the demised premises of which are
not occupied either by such lessee or by a sublessee thereof (i) Rent paid by or
on behalf of any lessee under a Space Lease in whole or partial consideration
for the termination of any Space Lease, or (j) sales tax rebates from any
Governmental Authority.

      "Operation and Maintenance Expense Sub-Account" shall mean the Sub-Account
of the Central Account established pursuant to Section 5.02 hereof and
maintained pursuant to Section 5.09 hereof relating to the payment of Operating
Expenses (exclusive of Basic Carrying Costs).

                                       14
<PAGE>

      "Pad Owners" shall mean any owner of any fee interest in property
contiguous to or surrounded by the Property who has entered into or is subject
to a reciprocal easement agreement or other agreement or agreements with
Borrower either (a) in connection with an existing or potential improvement on
such property or (b) relating to or affecting the Property.

      "Payment Date" shall mean, with respect to each month, the first (1st)
calendar day in such month, or if such day is not a Business Day, the next
following Business Day.

      "PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.

      "Permitted Encumbrances" shall have the meaning set forth in Section
2.05(a) hereof.

      "Person" shall mean any individual, corporation, limited liability
company, 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.

      "Plan" shall mean an employee benefit or other plan established or
maintained by Borrower, Guarantor or any ERISA Affiliate during the five-year
period ended prior to the date of this Security Instrument or to which Borrower,
Guarantor or any ERISA Affiliate makes, is obligated to make or has, within the
five year period ended prior to the date of this Security Instrument, been
required to make contributions (whether or not covered by Title IV of ERISA or
Section 302 of ERISA or Section 401(a) or 412 of the Code), other than a
Multiemployer Plan.

      "Premises" shall have the meaning set forth in granting clause (a) of this
Security Instrument.

      "Principal Amount" shall mean the Loan Amount as such amount may be
reduced from time to time pursuant to the terms of this Security Instrument, the
Note or the other Loan Documents.

      "Principal Payments" shall mean all payments of principal made pursuant to
the terms of the Note.

      "Prohibited Person" means any Person identified on the OFAC List or any
other Person or foreign country or agency thereof with whom a U.S. Person may
not conduct business or transactions by prohibition of Federal law or Executive
Order of the President of the United States of America.

      "Property" shall have the meaning set forth in the granting clauses of
this Security Instrument.

      "Property Agreements" shall mean all agreements, grants of easements
and/or rights-of-way, reciprocal easement agreements, permits, declarations of
covenants, conditions and restrictions, disposition and development agreements,
planned unit development agreements, management or parking agreements, party
wall agreements or other instruments affecting the Property, including, without
limitation any agreements with Pad Owners, but not including any brokerage
agreements, management agreements, service contracts, Space Leases or the Loan
Documents.

      "Rating Agency" shall mean each of Standard & Poor's Ratings Services,
Inc., a division of The McGraw-Hill Company, Inc. ("Standard & Poor's"), Fitch,
Inc., and Moody's Investors Service, Inc. ("Moody's"), and any successor to any
of them; provided, however, that at any time after a Securitization, "Rating
Agency" shall mean those of the foregoing rating agencies that from time to time
rate the securities issued in connection with such Securitization.

      "Realty" shall have the meaning set forth in Section 2.05(b) hereof.

      "Recurring Replacement Expenditures" shall mean expenditures related to
capital repairs, replacements and improvements performed at the Property from
time to time.

                                       15
<PAGE>

      "Recurring Replacement Reserve Monthly Installment" shall mean the amount
per month set forth on EXHIBIT B attached hereto and made a part hereof.
Notwithstanding the foregoing, provided that no Trigger Event has occurred and
is continuing and that a sum equal to not less than the Initial Recurring
Replacement Reserve Deposit is on deposit in the Recurring Replacement Reserve
Sub-Account, the Recurring Replacement Reserve Monthly Installment shall be $0.

      "Recurring Replacement Reserve Sub-Account" shall mean the Sub-Account of
the Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.08 hereof relating to the payment of Recurring Replacement
Expenditures.

      "Release" shall mean a release of this Security Instrument in recordable
form with respect to the Property.

      "Release Price" shall mean an amount equal to the sum of (i) one hundred
percent (100%) of the Allocated Loan Amount, plus (ii) twenty-five percent (25%)
of the Initial Allocated Loan Amount.

      "Rent Account" shall mean an Eligible Account, maintained at the Rent
Account Bank, in the joint names of Lessee and Lender or its successors or
assigns (as secured party) as may be designated by Lender.

      "Rent Account Bank" shall mean the bank in which the Rent Account is
located.

      "Rents" shall have the meaning set forth in granting clause (f) of this
Security Instrument.

      "Rent Roll" shall have the meaning set forth in Section 2.05 (o) hereof.

      "Required Debt Service Coverage" shall mean a Debt Service Coverage of not
less than 1.10:1.

      "Required Debt Service Payment" shall mean, as of any Payment Date, the
amount of interest and principal then due and payable pursuant to the Note,
together with any other sums due thereunder, including, without limitation, any
prepayments required to be made or for which notice has been given under this
Security Instrument, Default Rate Interest and premium, if any, paid in
accordance therewith.

      "Required Engineering Work" shall have the meaning set forth in Section
5.02 hereof.

      "Retention Amount" shall have the meaning set forth in Section
3.04(b)(vii) hereof.

      "Scheduled Defeasance Payments" shall mean:

            (a) with respect to a defeasance of the Loan in whole, payments on
      or prior to, but as close as possible to (i) each scheduled Payment Date,
      after the date of defeasance and through and including the Maturity Date,
      upon which interest payments or interest and Principal Payments are
      required under the Loan Documents and in amounts equal to the scheduled
      payments due on such dates under the Loan Documents and (ii) the Maturity
      Date, of the Principal Amount and any accrued and unpaid interest thereon;
      or

            (b) with respect to any defeasance of the Loan in part, payments on
      or prior to, but as close as possible to, (i) each scheduled Payment Date
      after the date of defeasance through and including the Maturity Date, of a
      proportionate share (based on the percentage of outstanding principal
      prior to the defeasance represented by the amount of principal defeased)
      of the monthly installments of principal and interest due on such dates
      under the Loan Documents and (ii) the Maturity Date, of the unpaid portion
      of the portion of the Principal Amount so defeased and any accrued and
      unpaid interest thereon.

      "Securities Act" shall mean the Securities Act of 1933, as the same shall
      be amended from time to time.

                                       16
<PAGE>

      "Securitization" shall mean a public or private offering of securities by
Lender or any of its Affiliates or their respective successors and assigns which
are collateralized, in whole or in part, by this Security Instrument.

      "Security Agreement" shall have the meaning set forth in Section 15.01
hereof.

      "Security Deposit Account" shall have the meaning set forth in Section
5.01 hereof.

      "Security Instrument" shall mean this Security Instrument as originally
executed or as it may hereafter from time to time be supplemented, amended,
modified or extended by one or more indentures supplemental hereto.

      "Single Purpose Entity" shall mean a corporation, partnership, joint
venture, limited liability company, trust or unincorporated association, which
is formed or organized solely for the purpose of holding, directly, an ownership
interest in the Property and the other properties encumbered by the
Cross-collateralized Mortgages or, with respect to General Partner, holding an
ownership interest in and managing a Person which holds an ownership interest in
the Property, does not engage in any business unrelated to the Property, does
not have any assets other than those related to its interest in the Property or
any indebtedness other than as permitted by this Security Instrument or the
other Loan Documents, has its own separate books and records and has its own
accounts, in each case which are separate and apart from the books and records
and accounts of any other Person, holds itself out as being a Person separate
and apart from any other Person and which otherwise satisfies the criteria of
the Rating Agency, as in effect on the Closing Date, for a special-purpose
bankruptcy-remote entity.

      "Solvent" shall mean, as to any Person, that (a) the sum of the assets of
such Person, at a fair valuation, exceeds its liabilities, including contingent
liabilities, (b) such Person has sufficient capital with which to conduct its
business as presently conducted and as proposed to be conducted and (c) such
Person has not incurred debts, and does not intend to incur debts, beyond its
ability to pay such debts as they mature. For purposes of this definition,
"debt" means any liability on a claim, and "claim" means (a) a right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured, or (b) a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured, or unsecured. With respect to any such
contingent liabilities, such liabilities shall be computed in accordance with
GAAP at the amount which, in light of all the facts and circumstances existing
at the time, represents the amount which can reasonably be expected to become an
actual or matured liability.

      "Space Leases" shall mean any Lease or sublease thereunder (including,
without limitation, any Major Space Lease) or any other agreement providing for
the use and occupancy of a portion of the Property as the same may be amended,
renewed or supplemented.

      "State" shall mean any of the states which are members of the United
States of America.

      "Stated Maturity", when used with respect to the Note or any installment
of interest and/or principal payment thereunder, shall mean the date specified
in the Note as the fixed date on which a payment of all or any portion of
principal and/or interest is due and payable.

      "Sub-Accounts" shall have the meaning set forth in Section 5.02 hereof.

      "Substantial Casualty" shall have the meaning set forth in Section 3.04
hereof.

      "Taking" shall mean a condemnation or taking pursuant to the lawful
exercise of the power of eminent domain.

      "Total GLA" shall mean the total gross leasable area of the Property,
including all Space Leases.

                                       17
<PAGE>

      "Transfer" shall mean the conveyance, assignment, sale, mortgaging,
encumbrance, pledging, hypothecation, granting of a security interest in,
granting of options with respect to, or other disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) all or any portion of any legal
or beneficial interest (a) in all or any portion of the Property (other than
easements that do not have a Material Adverse Effect and which are entered into
in accordance with the terms of this Security Instrument and Leases entered into
by Borrower in the ordinary course of Borrower's business); (b) if Borrower or,
if Borrower is a partnership, any General Partner, is a corporation, in the
stock of Borrower or any General Partner; (c) in Borrower (or any trust of which
Borrower is a trustee); or (d) if Borrower is a limited or general partnership,
joint venture, limited liability company, trust, nominee trust, tenancy in
common or other unincorporated form of business association or form of ownership
interest, in any Person having a legal or beneficial ownership in Borrower,
excluding any legal or beneficial interest in any constituent limited partner,
if Borrower is a limited partnership, or in any non-managing member, if Borrower
is a limited liability company, unless such interest would, or together with all
other direct or indirect interests in Borrower which were previously
transferred, aggregate 49% or more of the partnership or membership, as
applicable, interest in Borrower or would result in any Person who, as of the
Closing Date, did not own, directly or indirectly, 49% or more of the
partnership or membership, as applicable, interest in Borrower owning, directly
or indirectly, 49% or more of the partnership or membership, as applicable,
interest in Borrower and excluding any legal or beneficial interest in any
General Partner unless such interest would, or together with all other direct or
indirect interest in the General Partner which were previously transferred,
aggregate 49% or more of the partnership or membership, as applicable, interest
in the General Partner (or result in a change in control of the management of
the General Partner from the individuals exercising such control immediately
prior to the conveyance or other disposition of such legal or beneficial
interest) and shall also include, without limitation to the foregoing, the
following: an installment sales agreement wherein Borrower agrees to sell the
Property or any part thereof or any interest therein for a price to be paid in
installments; an agreement by Borrower leasing all or substantially all of the
Property to one or more Persons pursuant to a single or related transactions, or
a sale, assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rent; any
instrument subjecting the Property to a condominium regime or transferring
ownership to a cooperative corporation; and the dissolution or termination of
Borrower or the merger or consolidation of Borrower with any other Person;
provided, however that "Transfer" shall not include (a) transfers made by devise
or descent or by operation of law upon the death of a partner, member or
shareholder of Borrower or General Partner or any Person owning a direct or
indirect legal or beneficial interest in Borrower or General Partner if (i)
written notice of any transfer pursuant to this proviso is given to Lender
together with such documents relating to the transfer as Lender may reasonably
require, (ii) control over the management and operation of the Property is
retained by AMERCO (the "Original Principals", whether one or more) and (iii) no
such transfer, death or other event has any adverse effect either on the Single
Purpose Entity status of Borrower under the requirements of any Rating Agency or
on the status of Borrower as a continuing legal entity liable for the payment of
the Debt and the performance of all other obligations secured hereby, nor (b)
subject to the provisions of clauses (i) through (iii) above and provided, that
(i) any inter vivos transfer of all or any portion of the Property or any inter
vivos transfer or issuance of capital stock (or other ownership interests) in
Borrower or General Partner is made in connection with Original Principals' bona
fide, good faith estate planning, (ii) Original Principals do not transfer in
excess of 49% of their direct or indirect ownership interest in Borrower and
(iii) the Person(s) with Control of Borrower or the management of the Property
are (x) the same Person(s) who had such Control and management rights
immediately prior to the transfer in question, or (y) reasonably acceptable to
Lender, (i) an inter vivos or testamentary transfer of all or any portion of the
ownership interest in Borrower to one or more family members of Original
Principals or a trust in which all of the beneficial interest is held by one or
more family members of Original Principals or a partnership, limited liability
company, corporation or other legal entity in which a majority of the capital
and profits interests are held by one or more family members of Original
Principals, or (ii) any inter vivos or testamentary transfer or issuance of
capital stock (or other ownership interests) in the General Partner to one or
more family members of Original Principals, a trust in which all of the
beneficial interest is held by one or more family members of Original Principals
or a partnership, limited liability company, corporation or other legal entity
in which a majority of the capital and profits interests are held by one or more
family members of Original Principals. As used herein, "family members" shall
include spouses, children and grandchildren and any lineal descendants.

      "Treasury Constant Maturity Yield Index" shall mean the average yield for
"This Week" as reported by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519).

                                       18
<PAGE>

      "Trigger Event" shall mean the earliest to occur of (a) an Event of
Default or (b) the date on which the Aggregate Debt Service Coverage, as
determined by Lender in its sole and absolute discretion, shall fall below
1.15:1.0 for the trailing twelve (12) month period.

      "UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State in which the Realty is located.

      "Undefeased Note" shall have the meaning set forth in Section 15.01
hereof.

      "Unscheduled Payments" shall mean (a) all Loss Proceeds that Borrower has
elected or is required to apply to the repayment of the Debt pursuant to this
Security Instrument, the Note or any other Loan Documents, (b) any funds
representing a voluntary or involuntary principal prepayment other than
scheduled Principal Payments and (c) any Net Proceeds

      "Use Requirements" shall mean any and all building codes, permits,
certificates of occupancy or compliance, laws, regulations, or ordinances
(including, without limitation, health, pollution, fire protection, medical and
day-care facilities, waste product and sewage disposal regulations),
restrictions of record, easements, reciprocal easements, declarations or other
agreements affecting the use of the Property or any part thereof.

      "Welfare Plan" shall mean an employee welfare benefit plan as defined in
Section 3(1) of ERISA established or maintained by Borrower, Guarantor or any
ERISA Affiliate or that covers any current or former employee of Borrower,
Guarantor or any ERISA Affiliate.

      "Work" shall have the meaning set forth in Section 3.04(a)(i) hereof.

                       ARTICLE II: COVENANTS, WARRANTIES
                        AND REPRESENTATIONS OF BORROWER

      Section 2.01. Payment of Debt. Borrower will pay the Debt at the time and
in the manner provided in the Note and the other Loan Documents, all in lawful
money of the United States of America in immediately available funds.

      Section 2.02. Representations, Warranties and Covenants of Borrower.
Borrower represents and warrants to and covenants with Lender:

      (a) Organization and Authority. Borrower (i) is a limited liability
company, general partnership, limited partnership or corporation, as the case
may be, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation, (ii) has all requisite power and authority
and all necessary licenses and permits to own and operate the Property and to
carry on its business as now conducted and as presently proposed to be conducted
and (iii) is duly qualified, authorized to do business and in good standing in
the jurisdiction where the Property is located and in each other jurisdiction
where the conduct of its business or the nature of its activities makes such
qualification necessary, or if not qualified or authorized to do business under
such jurisdictions, will become qualified and authorized in such jurisdictions
within ninety (90) days of the date hereof. If Borrower is a limited liability
company, limited partnership or general partnership, each general partner or
managing member, as applicable, of Borrower which is a corporation is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.

      (b) Power. Borrower and, if applicable, each General Partner has full
power and authority to execute, deliver and perform, as applicable, the Loan
Documents to which it is a party, to make the borrowings thereunder, to execute
and deliver the Note and to grant to Lender a first, prior, perfected and
continuing lien on and security interest in the Property, subject only to the
Permitted Encumbrances.

                                       19
<PAGE>

      (c) Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents to which Borrower is a party, the making of the borrowings
thereunder, the execution and delivery of the Note, the grant of the liens on
the Property pursuant to the Loan Documents to which Borrower is a party and the
consummation of the Loan are within the powers of Borrower and have been duly
authorized by Borrower and, if applicable, the General Partners, by all
requisite action (and Borrower hereby represents that no approval or action of
any member, limited partner or shareholder, as applicable, of Borrower is
required to authorize any of the Loan Documents to which Borrower is a party)
and will constitute the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with their terms, except as
enforcement may be stayed or limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in proceedings at law or in equity) and
will not (i) violate any provision of its partnership agreement or partnership
certificate or certificate of incorporation or by-laws, or operating agreement,
certificate of formation or articles of organization, as applicable, or, to its
knowledge, any law, judgment, order, rule or regulation of any court,
arbitration panel or other Governmental Authority, domestic or foreign, or other
Person affecting or binding upon Borrower or the Property, or (ii) violate any
provision of any indenture, agreement, mortgage, deed of trust, contract or
other instrument to which Borrower or, if applicable, any General Partner is a
party or by which any of their respective property, assets or revenues are
bound, or be in conflict with, result in an acceleration of any obligation or a
breach of or constitute (with notice or lapse of time or both) a default or
require any payment or prepayment under, any such indenture, agreement,
mortgage, deed of trust, contract or other instrument, or (iii) result in the
creation or imposition of any lien, except those in favor of Lender as provided
in the Loan Documents to which it is a party.

      (d) Consent. Neither Borrower nor, if applicable, any General Partner, is
required to obtain any consent, approval or authorization from, or to file any
declaration or statement with, any Governmental Authority or other agency in
connection with or as a condition to the execution, delivery or performance of
this Security Instrument, the Note or the other Loan Documents which has not
been so obtained or filed.

      (e) Intentionally Omitted.

      (f) Other Agreements. Borrower is not a party to nor is otherwise bound by
any agreements or instruments which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect. Neither Borrower nor, if
applicable, any General Partner, is in violation of its organizational documents
or other restriction or any agreement or instrument by which it is bound, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
Governmental Authority, or any Legal Requirement, in each case, applicable to
Borrower or the Property, except for such violations that would not,
individually or in the aggregate, have a Material Adverse Effect.

      (g) Maintenance of Existence. (i) Borrower and, if applicable, each
General Partner at all times since their formation have been duly formed and
existing and shall preserve and keep in full force and effect their existence as
a Single Purpose Entity.

            (ii) Borrower and, if applicable, each General Partner, at all times
      since their organization have complied, and will continue to comply, with
      the provisions of its certificate and agreement of partnership or
      certificate of incorporation and by-laws or articles of organization,
      certificate of formation and operating agreement, as applicable, and the
      laws of its jurisdiction of organization relating to partnerships,
      corporations or limited liability companies, as applicable.

            (iii) Borrower and, if applicable, each General Partner have done or
      caused to be done and will do all things necessary to observe
      organizational formalities and preserve their existence and Borrower and,
      if applicable, each General Partner will not amend, modify or otherwise
      change the certificate and agreement of partnership or certificate of
      incorporation and by-laws or articles of organization, certificate of
      formation and operating agreement, as applicable, or other organizational
      documents of Borrower and, if applicable, each General Partner without the
      prior written consent of Lender.

                                       20
<PAGE>

            (iv) Borrower and, if applicable, each General Partner, have at all
      times accurately maintained, and will continue to accurately maintain,
      their respective financial statements, accounting records and other
      partnership, company or corporate documents separate from those of any
      other Person and Borrower will file its own tax returns or, if Borrower
      and/or, if applicable, General Partner is part of a consolidated group for
      purposes of filing tax returns, Borrower and, General Partner, as
      applicable will be shown as separate members of such group. Borrower and,
      if applicable, each General Partner have not at any time since their
      formation commingled, and will not commingle, their respective assets with
      those of any other Person, other than funds deposited into the "U-Haul
      Concentration Account" and funds deposited into local bank accounts,
      provided that the Insolvency Opinion has concluded that such commingling
      will not result in a substantive consolidation of Borrower with any other
      Person, and will maintain on a ledger basis their assets in such a manner
      such that it will not be costly or difficult to segregate, ascertain or
      identify their individual assets from those of any other Person. Borrower
      and, if applicable, each General Partner have at all times since their
      formation accurately maintained and utilized, and will continue to
      accurately maintain and utilize, their own separate bank accounts (unless
      the Insolvency Opinion has concluded that the failure to have separate
      bank accounts will not result in a substantive consolidation of Borrower
      with any other Person), payroll and separate books of account, stationery,
      invoices and checks, if any.

            (v) Borrower and, if applicable, each General Partner, have at all
      times paid, and will continue to pay, their own liabilities from their own
      separate assets and shall each allocate and charge fairly and reasonably
      any overhead which Borrower and, if applicable, any General Partner,
      shares with any other Person, including, without limitation, for office
      space and services performed by any employee of another Person.

            (vi) Borrower and, if applicable, each General Partner, have at all
      times identified themselves, and will continue to identify themselves, in
      all dealings with the public, under their own names and as separate and
      distinct entities and shall correct any known misunderstanding regarding
      their status as separate and distinct entities. Borrower and, if
      applicable, each General Partner, have not at any time identified
      themselves, and will not identify themselves, as being a division of any
      other Person.

            (vii) Borrower and, if applicable, each General Partner, have been
      at all times, and will continue to be, adequately capitalized in light of
      the nature of their respective businesses.

            (viii) Borrower and, if applicable, each General Partner, (A) have
      not owned, do not own and will not own any assets or property other than,
      with respect to Borrower, the Property and any incidental personal
      property necessary for the ownership, management or operation of the
      Property and, with respect to General Partner, if applicable, its interest
      in Borrower, (B) have not engaged and will not engage in any business
      other than the ownership, management and operation of the Property or,
      with respect to General Partner, if applicable, its interest in Borrower,
      (C) have not incurred and will not incur any debt, secured or unsecured,
      direct or contingent (including guaranteeing any obligation), other than
      (X) the Loan, (Y) unsecured trade and operational debt which (1) is not
      evidenced by a note, (2) is incurred in the ordinary course of the
      operation of the Property, (3) does not exceed in the aggregate three
      percent (3%) of the Allocated Loan Amount for the Property and (4) is,
      unless being contested in accordance with the terms of this Security
      Instrument, paid prior to the earlier to occur of the thirtieth (30th) day
      after the date incurred and the date when due, and (Z) with respect to the
      General Partner, the Mez Loan, (D) have not pledged and will not pledge
      their assets for the benefit of any other Person other than, with respect
      to the Mez Loan, the pledge by each General Partner of its interest in
      Borrower, and (E) have not made and will not make any loans or advances to
      any Person (including any Affiliate).

            (ix) Neither Borrower nor, if applicable, any General Partner will
      change its name or principal place of business.

            (x) Neither Borrower nor, if applicable, any General Partner has,
      and neither of such Persons will have, any subsidiaries.

                                       21
<PAGE>

            (xi) Borrower will preserve and maintain its existence as a Delaware
      limited liability company and all material rights, privileges, tradenames
      and franchises.

            (xii) Neither Borrower, nor, if applicable, any General Partner,
      will merge or consolidate with, or sell all or substantially all of its
      respective assets to any Person, or liquidate, wind up or dissolve itself
      (or suffer any liquidation, winding up or dissolution). Neither Borrower,
      nor, if applicable, any General Partner will acquire any business or
      assets from, or capital stock or other ownership interest of, or be a
      party to any acquisition of, any Person.

            (xiii) Borrower and, if applicable, each General Partner, have not
      at any time since their formation assumed, guaranteed or held themselves
      out to be responsible for, and will not assume, guarantee or hold
      themselves out to be responsible for the liabilities or the decisions or
      actions respecting the daily business affairs of their partners,
      shareholders or members or any predecessor company, corporation or
      partnership, each as applicable, any Affiliates, or any other Persons.
      Borrower has not at any time since its formation acquired, and will not
      acquire, obligations or securities of its partners or shareholders,
      members or any predecessor company, corporation or partnership, each as
      applicable, or any Affiliates. Borrower and, if applicable, each General
      Partner, have not at any time since their formation made, and will not
      make, loans to its partners, members or shareholders or any predecessor
      company, corporation or partnership, each as applicable, or any Affiliates
      of any of such Persons. Borrower and, if applicable, each General Partner,
      have no known contingent liabilities nor do they have any material
      financial liabilities under any indenture, mortgage, deed of trust, loan
      agreement or other agreement or instrument to which such Person is a party
      or by which it is otherwise bound other than under the Loan Documents and,
      with respect to each General Partner, the Mez Loan.

            (xiv) Borrower has not at any time since its formation entered into
      and was not a party to, and, will not enter into or be a party to, any
      transaction with its Affiliates, members, partners or shareholders, as
      applicable, or any Affiliates thereof except in the ordinary course of
      business of Borrower on terms which are no less favorable to Borrower than
      would be obtained in a comparable arm's length transaction with an
      unrelated third party.

            (xv) If Borrower is a limited partnership or a limited liability
      company, the General Partner shall be a corporation or limited liability
      company whose sole asset is its interest in Borrower and the General
      Partner will at all times comply, and will cause Borrower to comply, with
      each of the representations, warranties, and covenants contained in this
      Section 2.02(g) as if such representation, warranty or covenant was made
      directly by such General Partner.

            (xvi) Borrower shall at all times cause there to be at least one (1)
      duly appointed member of the board of directors or board of managers or
      other governing board or body, as applicable (an "Independent Director"),
      of, if Borrower is a corporation, Borrower, and, if Borrower is a limited
      partnership or limited liability company, of the General Partner,
      reasonably satisfactory to Lender who shall not have been at the time of
      such individual's appointment, and may not be or have been at any time (A)
      a shareholder, officer, director, attorney, counsel, partner, member or
      employee of Borrower or any of the foregoing Persons or Affiliates
      thereof, (B) a customer or creditor of, or supplier or service provider
      to, Borrower or any of its shareholders, partners, members or their
      Affiliates, (C) a member of the immediate family of any Person referred to
      in (A) or (B) above or (D) a Person Controlling, Controlled by or under
      common Control with any Person referred to in (A) through (C) above. A
      natural person who otherwise satisfies the foregoing definition except for
      being the Independent Director of a Single Purpose Entity Affiliated with
      Borrower or General Partner shall not be disqualified from serving as an
      Independent Director if such individual is at the time of initial
      appointment, or at any time while serving as the Independent Director, an
      Independent Director of a Single Purpose Entity Affiliated with Borrower
      or General Partner if such individual is an independent director provided
      by a nationally-recognized company that provides professional independent
      directors.

                                       22
<PAGE>

            (xvii) Borrower and, if applicable, each General Partner, shall not
      cause or permit the board of directors or board of managers or other
      governing board or body, as applicable, of Borrower or, if applicable,
      each General Partner, to take any action which, under the terms of any
      certificate of incorporation, by-laws or articles of organization with
      respect to any common stock, requires a vote of the board of directors of
      Borrower, or, if applicable, the General Partner, unless at the time of
      such action there shall be at least one member who is an Independent
      Director.

            (xviii) Borrower and, if applicable, each General Partner shall pay
      the salaries of their own employees and maintain a sufficient number of
      employees in light of their contemplated business operations.

            (xix) Borrower shall, and shall cause its Affiliates to, conduct its
      business so that the assumptions made with respect to Borrower in that
      certain opinion letter relating to substantive non-consolidation dated the
      date hereof (the "Insolvency Opinion") delivered in connection with the
      Loan shall be true and correct in all respects.

Notwithstanding anything to the contrary contained in this Section 2.02(g),
provided Borrower is a Delaware single member limited liability company which
satisfies the single purpose bankruptcy remote entity requirements of each
Rating Agency for a single member limited liability company, the foregoing
provisions of this Section 2.02(g) shall not apply to the General Partner.

      (h) No Defaults. No Default or Event of Default has occurred and is
continuing or would occur as a result of the consummation of the transactions
contemplated by the Loan Documents. Borrower is not in default in the payment or
performance of any of its Contractual Obligations in any respect.

      (i) Consents and Approvals. Borrower and, if applicable, each General
Partner, have obtained or made all necessary (i) consents, approvals and
authorizations, and registrations and filings of or with all Governmental
Authorities and (ii) consents, approvals, waivers and notifications of partners,
stockholders, members creditors, lessors and other nongovernmental Persons, in
each case, which are required to be obtained or made by Borrower or, if
applicable, the General Partner, in connection with the execution and delivery
of, and the performance by Borrower of its obligations under, the Loan
Documents.

      (j) Investment Company Act Status, etc. Borrower is not (i) an "investment
company," or a company "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (iii) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.

      (k) Compliance with Law. Borrower is in compliance in all material
respects with all Legal Requirements to which it or the Property is subject,
including, without limitation, all Environmental Statutes, the Occupational
Safety and Health Act of 1970, the Americans with Disabilities Act and ERISA. No
portion of the Property has been or will be purchased, improved, fixtured,
equipped or furnished with proceeds of any illegal activity and to the best of
Borrower's knowledge, no illegal activities are being conducted at or from the
Property.

      (l) Financial Information. All financial data that has been delivered by
Borrower to Lender (i) is true, complete and correct in all material respects,
(ii) accurately represents the financial condition and results of operations of
the Persons covered thereby as of the date on which the same shall have been
furnished, and (iii) has been prepared in accordance with GAAP (or such other
accounting basis as is reasonably acceptable to Lender) throughout the periods
covered thereby. As of the date hereof, neither Borrower nor, if applicable, any
General Partner, has any contingent liability, liability for taxes or other
unusual or forward commitment not reflected in such financial statements
delivered to Lender. Since the date of the last financial statements delivered
by Borrower to Lender except as otherwise disclosed in such financial statements
or notes thereto, there has been no change in the assets, liabilities or
financial position of Borrower nor, if applicable, any General Partner, or in
the results of

                                       23
<PAGE>

operations of Borrower which would have a Material Adverse Effect. Neither
Borrower nor, if applicable, any General Partner, has incurred any obligation or
liability, contingent or otherwise not reflected in such financial statements
which would have a Material Adverse Effect.

      (m) Transaction Brokerage Fees. Borrower has not dealt with any financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Security Instrument. All
brokerage fees, commissions and other expenses payable in connection with the
transactions contemplated by the Loan Documents have been paid in full by
Borrower contemporaneously with the execution of the Loan Documents and the
funding of the Loan. Borrower hereby agrees to indemnify and hold Lender
harmless for, from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from (i) a claim by any
Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein or (ii) any breach of the foregoing
representation. The provisions of this subsection (m) shall survive the
repayment of the Debt.

      (n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of "purchasing" or "carrying" any "margin stock" within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulations T, U or X or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and conditions
of the Loan Documents.

      (o) Pending Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Borrower, threatened against or affecting Borrower
or the Property in any court or before any Governmental Authority which if
adversely determined either individually or collectively has or is reasonably
likely to have a Material Adverse Effect.

      (p) Solvency; No Bankruptcy. Each of Borrower and, if applicable, the
General Partner, (i) is and has at all times been Solvent and will remain
Solvent immediately upon the consummation of the transactions contemplated by
the Loan Documents and (ii) is free from bankruptcy, reorganization or
arrangement proceedings or a general assignment for the benefit of creditors and
is not contemplating the filing of a petition under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
such Person's assets or property and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it or, if applicable, the
General Partner. None of the transactions contemplated hereby will be or have
been made with an intent to hinder, delay or defraud any present or future
creditors of Borrower and Borrower has received reasonably equivalent value in
exchange for its obligations under the Loan Documents. Borrower's assets do not,
and immediately upon consummation of the transaction contemplated in the Loan
Documents will not, constitute unreasonably small capital to carry out its
business as presently conducted or as proposed to be conducted. Borrower does
not intend to, nor believe that it will, incur debts and liabilities beyond its
ability to pay such debts as they may mature.

      (q) Use of Proceeds. The proceeds of the Loan shall be applied by Borrower
to, inter alia, (i) satisfy certain mortgage loans presently encumbering all or
a part of the Property, (ii) pay certain transaction costs incurred by Borrower
in connection with the Loan and (iii) for operating capital. No portion of the
proceeds of the Loan will be used for family, personal, agricultural or
household use.

      (r) Tax Filings. Borrower and, if applicable, each General Partner, have
filed all federal, state and local tax returns required to be filed and have
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Borrower and, if applicable, the
General Partners. Borrower and, if applicable, the General Partners, believe
that their respective tax returns properly reflect the income and taxes of
Borrower and said General Partner, if any, for the periods covered thereby,
subject only to reasonable adjustments required by the Internal Revenue Service
or other applicable tax authority upon audit.

      (s) Not Foreign Person. Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.

                                       24
<PAGE>

      (t) ERISA. (i) The assets of Borrower and Guarantor are not and will not
become treated as "plan assets", whether by operation of law or under
regulations promulgated under ERISA. Each Plan and Welfare Plan, and, to the
knowledge of Borrower, each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, its terms and the applicable provisions of ERISA, the Code and any other
applicable Legal Requirement, and no event or condition has occurred and is
continuing as to which Borrower would be under an obligation to furnish a report
to Lender under clause (ii)(A) of this Section. Other than an application for a
favorable determination letter with respect to a Plan, there are no pending
issues or claims before the Internal Revenue Service, the United States
Department of Labor or any court of competent jurisdiction related to any Plan
or Welfare Plan under which Borrower, Guarantor or any ERISA Affiliate, directly
or indirectly (through an indemnification agreement or otherwise), could be
subject to any material risk of liability under Section 409 or 502(i) of ERISA
or Section 4975 of the Code. No Welfare Plan provides or will provide benefits,
including, without limitation, death or medical benefits (whether or not
insured) with respect to any current or former employee of Borrower, Guarantor
or any ERISA Affiliate beyond his or her retirement or other termination of
service other than (A) coverage mandated by applicable law, (B) death or
disability benefits that have been fully provided for by fully paid up insurance
or (C) severance benefits.

            (ii) Borrower will furnish to Lender as soon as possible, and in any
      event within ten (10) days after Borrower knows or has reason to believe
      that any of the events or conditions specified below with respect to any
      Plan, Welfare Plan or Multiemployer Plan has occurred or exists, an
      Officer's Certificate setting forth details respecting such event or
      condition and the action, if any, that Borrower or its ERISA Affiliate
      proposes to take with respect thereto (and a copy of any report or notice
      required to be filed with or given to PBGC (or any other relevant
      Governmental Authority)) by Borrower or an ERISA Affiliate with respect to
      such event or condition, if such report or notice is required to be filed
      with the PBGC or any other relevant Governmental Authority:

                  (A) any reportable event, as defined in Section 4043 of ERISA
            and the regulations issued thereunder, with respect to a Plan, as to
            which PBGC has not by regulation waived the requirement of Section
            4043(a) of ERISA that it be notified within thirty (30) days of the
            occurrence of such event (provided that a failure to meet the
            minimum funding standard of Section 412 of the Code and of Section
            302 of ERISA, including, without limitation, the failure to make on
            or before its due date a required installment under Section 412(m)
            of the Code and of Section 302(e) of ERISA, shall be a reportable
            event regardless of the issuance of any waivers in accordance with
            Section 412(d) of the Code), and any request for a waiver under
            Section 412(d) of the Code for any Plan;

                  (B) the distribution under Section 4041 of ERISA of a notice
            of intent to terminate any Plan or any action taken by Borrower or
            an ERISA Affiliate to terminate any Plan;

                  (C) the institution by PBGC of proceedings under Section 4042
            of ERISA for the termination of, or the appointment of a trustee to
            administer, any Plan, or the receipt by Borrower or any ERISA
            Affiliate of a notice from a Multiemployer Plan that such action has
            been taken by PBGC with respect to such Multiemployer Plan;

                  (D) the complete or partial withdrawal from a Multiemployer
            Plan by Borrower or any ERISA Affiliate that results in liability
            under Section 4201 or 4204 of ERISA (including the obligation to
            satisfy secondary liability as a result of a purchaser default) or
            the receipt by Borrower or any ERISA Affiliate of notice from a
            Multiemployer Plan that it is in reorganization or insolvency
            pursuant to Section 4241 or 4245 of ERISA or that it intends to
            terminate or has terminated under Section 4041A of ERISA;

                  (E) the institution of a proceeding by a fiduciary of any
            Multiemployer Plan against Borrower or any ERISA Affiliate to
            enforce Section 515 of ERISA, which proceeding is not dismissed
            within thirty (30) days;

                                       25
<PAGE>

                  (F) the adoption of an amendment to any Plan that, pursuant to
            Section 401(a)(29) of the Code or Section 307 of ERISA, would result
            in the loss of tax-exempt status of the trust of which such Plan is
            a part if Borrower or an ERISA Affiliate fails to timely provide
            security to the Plan in accordance with the provisions of said
            Sections; or

                  (G) the imposition of a lien or a security interest in
            connection with a Plan.

            (iii) Borrower shall not knowingly engage in or permit any
      transaction in connection with which Borrower, Guarantor or any ERISA
      Affiliate could be subject to either a civil penalty or tax assessed
      pursuant to Section 502(i) or 502(l) of ERISA or Section 4975 of the Code,
      permit any Welfare Plan to provide benefits, including without limitation,
      medical benefits (whether or not insured), with respect to any current or
      former employee of Borrower, Guarantor or any ERISA Affiliate beyond his
      or her retirement or other termination of service other than (A) coverage
      mandated by applicable law, (B) death or disability benefits that have
      been fully provided for by paid up insurance or otherwise or (C) severance
      benefits, permit the assets of Borrower or Guarantor to become "plan
      assets", whether by operation of law or under regulations promulgated
      under ERISA or adopt, amend (except as may be required by applicable law)
      or increase the amount of any benefit or amount payable under, or permit
      any ERISA Affiliate to adopt, amend (except as may be required by
      applicable law) or increase the amount of any benefit or amount payable
      under, any employee benefit plan (including, without limitation, any
      employee welfare benefit plan) or other plan, policy or arrangement,
      except for normal increases in the ordinary course of business consistent
      with past practice that, in the aggregate, do not result in a material
      increase in benefits expense to Borrower, Guarantor or any ERISA
      Affiliate.

      (u) Labor Matters. No organized work stoppage or labor strike is pending
or threatened by employees or other laborers at the Property and (i) Borrower
(A) is not involved in or threatened with any labor dispute, grievance or
litigation relating to labor matters involving any employees and other laborers
at the Property, including, without limitation, violation of any federal, state
or local labor, safety or employment laws (domestic or foreign) and/or charges
of unfair labor practices or discrimination complaints; (B) has not engaged in
any unfair labor practices within the meaning of the National Labor Relations
Act or the Railway Labor Act; and (C) is not a party to, or bound by, any
collective bargaining agreement or union contract with respect to employees and
other laborers at the Property and no such agreement or contract is currently
being negotiated by Borrower, Manager or any of their Affiliates; and (ii)
Manager (A) is not involved in or threatened with any labor dispute, grievance
or litigation relating to labor matters involving any employees and other
laborers at the Property, including, without limitation, violation of any
federal, state or local labor, safety or employment laws (domestic or foreign)
and/or charges of unfair labor practices or discrimination complaints; (B) has
not engaged in any unfair labor practices at the Property within the meaning of
the National Labor Relations Act or the Railway Labor Act; and (C) is not a
party to, or bound by, any collective bargaining agreement or union contract
with respect to employees and other laborers at the Property and no such
agreement or contract is currently being negotiated by Borrower, Manager or any
of their Affiliates.

      (v) Borrower's Legal Status. Borrower's exact legal name that is indicated
on the signature page hereto, organizational identification number and place of
business or, if more than one, its chief executive office, as well as Borrower's
mailing address, if different, which were identified by Borrower to Lender and
contained in this Security Instrument, are true, accurate and complete. Borrower
(i) will not change its name, its place of business or, if more than one place
of business, its chief executive office, or its mailing address or
organizational identification number if it has one without giving Lender at
least thirty (30) days prior written notice of such change, (ii) if Borrower
does not have an organizational identification number and later obtains one,
Borrower shall promptly notify Lender of such organizational identification
number and (iii) Borrower will not change its type of organization, jurisdiction
of organization or other legal structure.

      (w) Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering
Laws. (i) None of Borrower, General Partner, any Guarantor, or any Person who
owns any equity interest in or Controls Borrower, General Partner or any
Guarantor currently is identified on the OFAC List or otherwise qualifies as a
Prohibited Person, and Borrower has implemented procedures, approved by General
Partner, to ensure that no Person who now

                                       26
<PAGE>

or hereafter owns an equity interest in Borrower or General Partner is a
Prohibited Person or Controlled by a Prohibited Person, (ii) no proceeds of the
Loan will be used to fund any operations in, finance any investments or
activities in or make any payments to, Prohibited Persons, and (iii) none of
Borrower, General Partner, or any Guarantor are in violation of any Legal
Requirements relating to anti-money laundering or anti-terrorism, including,
without limitation, Legal Requirements related to transacting business with
Prohibited Persons or the requirements of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder,
including temporary regulations, all as amended from time to time. No tenant at
the Property currently is identified on the OFAC List or otherwise qualifies as
a Prohibited Person, and, to the best of Borrower's knowledge, no tenant at the
Property is owned or Controlled by a Prohibited Person. Borrower has determined
that Manager has implemented procedures, approved by Borrower, to ensure that no
tenant at the Property is a Prohibited Person or owned or Controlled by a
Prohibited Person.

      Section 2.03. Further Acts, etc. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages or deeds of trust, as
applicable, assignments, notices of assignments, transfers and assurances as
Lender shall, from time to time, reasonably require for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned and hypothecated, or which Borrower may
be or may hereafter become bound to convey or assign to Lender, or for carrying
out or facilitating the performance of the terms of this Security Instrument or
for filing, registering or recording this Security Instrument and, on demand,
will execute and deliver and hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements, chattel mortgages or comparable
security instruments to evidence more effectively the lien hereof upon the
Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of protecting, perfecting, preserving and
realizing upon the interests granted pursuant to this Security Instrument and to
effect the intent hereof, all as fully and effectually as Borrower might or
could do; and Borrower hereby ratifies all that Lender shall lawfully do or
cause to be done by virtue hereof. Upon receipt of an affidavit of an officer of
Lender as to the loss, theft, destruction or mutilation of the Note or any other
Loan Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or other applicable
Loan Document, Borrower will issue, in lieu thereof, a replacement Note or other
applicable Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Loan Document in the same principal amount thereof and
otherwise of like tenor.

      Section 2.04. Recording of Security Instrument, etc. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, will cause this Security Instrument, and any security instrument
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully protect the lien or security
interest hereof upon, and the interest of Lender in, the Property. Borrower will
pay all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Security Instrument, any
mortgage or deed of trust, as applicable, supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and all federal, state, county and municipal, taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Security Instrument, any mortgage or deed of trust, as
applicable, supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, except where prohibited by law
to do so, in which event Lender may declare the Debt to be immediately due and
payable. Borrower shall hold harmless and indemnify Lender and its successors
and assigns, against any liability incurred as a result of the imposition of any
tax on the making and recording of this Security Instrument.

      Section 2.05. Representations, Warranties and Covenants Relating to the
Property. Borrower represents and warrants to and covenants with Lender with
respect to the Property as follows:

      (a) Lien Priority. This Security Instrument is a valid and enforceable
first lien on the Property, free and clear of all encumbrances and liens having
priority over the lien of this Security Instrument, except for office

                                       27
<PAGE>

equipment such as computers, facsimile machines and copiers leased in the normal
course of Borrower's business, with an aggregate value not to exceed $5,000 and
except for the items set forth as exceptions to or subordinate matters in the
title insurance policy insuring the lien of this Security Instrument and other
items disclosed to Lender in a disclosure statement delivered by Borrower to
Lender in connection with the origination of the Loan, none of which,
individually or in the aggregate, materially interfere with the benefits of the
security intended to be provided by this Security Instrument, materially affect
the value or marketability of the Property, impair the use or operation of the
Property for the use currently being made thereof or impair Borrower's ability
to pay its obligations in a timely manner (such items being the "Permitted
Encumbrances").

      (b) Title. Fee Owner has, subject only to the Permitted Encumbrances,
good, insurable and marketable fee simple title to the Premises, Improvements
and Fixtures (collectively, the "Realty") and Lessee has, subject only to
Permitted Encumbrances, good, insurable and marketable leasehold title to the
Realty and, in each case, to all easements and rights benefiting the Realty and
has the right, power and authority to mortgage, encumber, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, pledge, assign, and hypothecate the
Property. Borrower will preserve its interest in and title to the Property and
will forever warrant and defend the same to Lender against any and all claims
made by, through or under Borrower and will forever warrant and defend the
validity and priority of the lien and security interest created herein against
the claims of all Persons whomsoever claiming by, through or under Borrower. The
foregoing warranty of title shall survive the foreclosure of this Security
Instrument and shall inure to the benefit of and be enforceable by Lender in the
event Lender acquires title to the Property pursuant to any foreclosure. In
addition, there are no outstanding options or rights of first refusal to
purchase the Property or Borrower's ownership thereof.

      (c) Taxes and Impositions. All taxes and other Impositions and
governmental assessments due and owing in respect of, and affecting, the
Property have been paid. Borrower has paid all Impositions which constitute
special governmental assessments in full, except for those assessments which are
permitted by applicable Legal Requirements to be paid in installments, in which
case all installments which are due and payable have been paid in full. There
are no pending, or to Borrower's best knowledge, proposed special or other
assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such
special or other assessments.

      (d) Casualty; Flood Zone. The Realty is in good repair and free and clear
of any damage, destruction or casualty (whether or not covered by insurance)
that would materially affect the value of the Realty or the use for which the
Realty was intended, there exists no structural or other material defects or
damages in or to the Property and Borrower has not received any written notice
from any insurance company or bonding company of any material defect or
inadequacies in the Property, or any part thereof, which would materially and
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond. No portion of the Premises is
located in an "area of special flood hazard," as that term is defined in the
regulations of the Federal Insurance Administration, Department of Housing and
Urban Development, under the National Flood Insurance Act of 1968, as amended
(24 CFR Section 1909.1) or Borrower has obtained the flood insurance required by
Section 3.01(a)(vi) hereof. The Premises either does not lie in a 100 year flood
plain that has been identified by the Secretary of Housing and Urban Development
or any other Governmental Authority or, if it does, Borrower has obtained the
flood insurance required by Section 3.01(a)(vi) hereof.

      (e) Completion; Encroachment. All Improvements necessary for the efficient
use and operation of the Premises, including, without limitation, all
Improvements which were included for purposes of determining the appraised value
of the Property in the Appraisal, have been completed and none of said
Improvements lie outside the boundaries and building restriction lines of the
Premises except for de-minimis encroachments on adjoining properties as
disclosed in the survey provided to Lender in connection with the origination of
the Loan. Except as set forth in the title insurance policy insuring the lien of
this Security Instrument, no improvements on adjoining properties encroach upon
the Premises.

      (f) Separate Lot. The Premises are taxed separately without regard to any
other real estate and constitute a legally subdivided lot under all applicable
Legal Requirements (or, if not subdivided, no subdivision or

                                       28
<PAGE>

platting of the Premises is required under applicable Legal Requirements), and
for all purposes may be mortgaged, encumbered, conveyed or otherwise dealt with
as an independent parcel. The Property does not benefit from any tax abatement
or exemption.

      (g) Use. The existence of all Improvements, the present use and operation
thereof and the access of the Premises and the Improvements to all of the
utilities and other items referred to in paragraph (k) below are in compliance
in all material respects with all Leases affecting the Property and all
applicable Legal Requirements, including, without limitation, Environmental
Statutes, Development Laws and Use Requirements. Borrower has not received any
notice from any Governmental Authority alleging any uncured violation relating
to the Property of any applicable Legal Requirements.

      (h) Licenses and Permits. Borrower currently holds and will continue to
hold all certificates of occupancy, licenses, registrations, permits, consents,
franchises and approvals of any Governmental Authority or any other Person which
are material for the lawful occupancy and operation of the Realty or which are
material to the ownership or operation of the Property or the conduct of
Borrower's business. All such certificates of occupancy, licenses,
registrations, permits, consents, franchises and approvals are current and in
full force and effect.

      (i) Environmental Matters. Borrower has received and reviewed the
Environmental Report and has no reason to believe that the Environmental Report
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein or herein, in light of
the circumstances under which such statements were made, not misleading.

      (j) Property Proceedings. There are no actions, suits or proceedings
pending or threatened in any court or before any Governmental Authority or
arbitration board or tribunal (i) relating to (A) the zoning of the Premises or
any part thereof, (B) any certificates of occupancy, licenses, registrations,
permits, consents or approvals issued with respect to the Property or any part
thereof, (C) except as otherwise disclosed in writing to Lender, the
condemnation of the Property or any part thereof, or (D) the condemnation or
relocation of any roadways abutting the Premises required for access or the
denial or limitation of access to the Premises or any part thereof from any
point of access to the Premises, (ii) asserting that (A) any such zoning,
certificates of occupancy, licenses, registrations, permits, consents and/or
approvals do not permit the operation of any material portion of the Realty as
presently being conducted, (B) any material improvements located on the Property
or any part thereof cannot be located thereon or operated with their intended
use or (C) the operation of the Property or any part thereof is in violation in
any material respect of any Environmental Statutes, Development Laws or other
Legal Requirements or Space Leases or Property Agreements or (iii) which might
(A) affect the validity or priority of any Loan Document or (B) have a Material
Adverse Effect. Borrower is not aware of any facts or circumstances which may
give rise to any actions, suits or proceedings described in the preceding
sentence.

      (k) Utilities. The Premises has all necessary legal access to water, gas
and electrical supply, storm and sanitary sewerage facilities, other required
public utilities (with respect to each of the aforementioned items, by means of
either a direct connection to the source of such utilities or through
connections available on publicly dedicated roadways directly abutting the
Premises or through permanent insurable easements benefiting the Premises), fire
and police protection, parking, and means of direct access between the Premises
and public highways over recognized curb cuts (or such access to public highways
is through private roadways which may be used for ingress and egress pursuant to
permanent insurable easements).

      (l) Mechanics' Liens. The Property is free and clear of any mechanics'
liens or liens in the nature thereof, and no rights are outstanding that under
law could give rise to any such liens, any of which liens are or may be prior
to, or equal with, the lien of this Security Instrument, except those which are
insured against by the title insurance policy insuring the lien of this Security
Instrument.

      (m) Title Insurance. Lender has received a lender's title insurance policy
insuring this Security Instrument as a first lien on the Realty subject only to
Permitted Encumbrances.

                                       29
<PAGE>

      (n) Insurance. The Property is insured in accordance with the requirements
set forth in Article III hereof.

      (o) Space Leases.

            (i) Borrower has delivered a true, correct and complete schedule of
      all Space Leases as of the date hereof, which accurately and completely
      sets forth in all material respects, for each such Space Lease, the
      matters set forth therein (collectively, the "Rent Roll").

            (ii) Each Space Lease constitutes the legal, valid and binding
      obligation of Borrower and, to the knowledge of Borrower, is enforceable
      against the tenant thereof. No default exists, or with the passing of time
      or the giving of notice would exist, (A) under any Major Space Lease or
      (B) under any other Space Leases which would, in the aggregate, have a
      Material Adverse Effect.

            (iii) No tenant under any Space Lease has, as of the date hereof,
      paid Rent more than thirty (30) days in advance except for Rent
      aggregating not more than five percent (5%) of the Rent receivable for
      such period, and the Rents under such Space Leases have not been waived,
      released, or otherwise discharged or compromised.

            (iv) All work to be performed by Borrower under the Space Leases has
      been substantially performed, all contributions to be made by Borrower to
      the tenants thereunder have been made except for any held-back amounts,
      and all other conditions precedent to each such tenant's obligations
      thereunder have been satisfied.

            (v) Except as previously disclosed to Lender in writing, there are
      no options to terminate any Major Space Lease.

            (vi) Each tenant under a Major Space Lease or such tenant's
      authorized subtenant is currently occupying the space demised by such
      Major Space Lease.

            (vii) Borrower has delivered to Lender true, correct and complete
      copies of all Major Space Leases described in the Rent Roll.

            (viii) Each Space Lease is in full force and effect and (except as
      disclosed on the Rent Roll) has not been assigned, modified, supplemented
      or amended in any way.

            (ix) Each tenant under each Major Space Lease is free from
      bankruptcy, reorganization or arrangement proceedings or a general
      assignment for the benefit of creditors.

            (x) No Space Lease provides any party with the right to obtain a
      lien or encumbrance upon the Property superior to the lien of this
      Security Instrument.

      (p) Property Agreements.

            (i) Each Property Agreement other than the lease between Fee Owner
      and Lessee (which is terminable upon the occurrence of an Event of
      Default) and Permitted Encumbrances is terminable with or without cause on
      not less than thirty (30) days notice and is otherwise on commercially
      reasonable terms and consistent with the Approved Manager Standard.

            (ii) No Property Agreement provides any party with the right to
      obtain a lien or encumbrance upon the Property superior to the lien of
      this Security Instrument.

                                       30
<PAGE>

            (iii) No default exists or with the passing of time or the giving of
      notice or both would exist under any Property Agreement which would,
      individually or in the aggregate, have a Material Adverse Effect.

            (iv) Borrower has not received or given any written communication
      which alleges that a default exists or, with the giving of notice or the
      lapse of time, or both, would exist under the provisions of any Property
      Agreement.

            (v) No condition exists whereby Borrower or any future owner of the
      Property may be required to purchase any other parcel of land which is
      subject to any Property Agreement or which gives any Person a right to
      purchase, or right of first refusal with respect to, the Property.

            (vi) To the best knowledge of Borrower, no offset or any right of
      offset exists respecting continued contributions to be made by any party
      to any Property Agreement except as expressly set forth therein. Except as
      previously disclosed to Lender in writing, no material exclusions or
      restrictions on the utilization, leasing or improvement of the Property
      (including non-compete agreements) exists in any Property Agreement.

            (vii) All "pre-opening" requirements contained in all Property
      Agreements (including, but not limited to, all off-site and on-site
      construction requirements), if any, have been fulfilled, and, to the best
      of Borrower's knowledge, no condition now exists whereby any party to any
      such Property Agreement could refuse to honor its obligations thereunder.

            (viii) All work, if any, to be performed by Borrower under each of
      the Property Agreements has been substantially performed, all
      contributions to be made by Borrower to any party to such Property
      Agreements have been made, and all other conditions to such party's
      obligations thereunder have been satisfied.

      (q) Personal Property. Borrower has delivered to Lender a true, correct
and complete schedule of all personal property, if any, owned by Borrower and
located upon the Property or used in connection with the use or operation of the
Realty or, in lieu thereof, an Officer's Certificate stating that the aggregate
value of any such personal property does not exceed $5,000 and Borrower
represents that it has good and marketable title to all such personal property,
free and clear of any liens, except for liens created under the Loan Documents
and liens which describe the equipment and other personal property owned by
tenants.

      (r) Leasing Brokerage and Management Fees. Except as previously disclosed
to Lender in writing, there are no brokerage fees or commissions payable by
Borrower with respect to the leasing of space at the Property and there are no
management fees payable by Borrower with respect to the management of the
Property.

      (s) Security Deposits. Borrower is in compliance with all Legal
Requirements relating to all security deposits as to which failure to comply
might, individually or in the aggregate, have a Material Adverse Effect.

      (t) Loan to Value Ratio. To the best knowledge of Borrower, based on the
substantial real estate expertise of Borrower, Borrower's familiarity with the
Property, and the Appraisal (which Borrower believes to contain a reasonable
assessment of the fair market value of the Property), the Initial Allocated Loan
Amount does not exceed one hundred twenty-five percent (125%) of the fair market
value of the Property as of the Closing Date. For the purposes of this clause
(t), the term "fair market value" shall be reduced by (i) the amount of any
indebtedness secured by a lien affecting the Property that is prior to, or on a
parity with, the lien of this Security Instrument, and (ii) the value of any
property that is not "real property" within the meaning of Treas. Reg. Sections
1.860G-2 and 1.856-3(d).

      (u) Representations Generally. The representations and warranties
contained in this Security Instrument, and the review and inquiry made on behalf
of Borrower therefor, have all been made by Persons having the requisite
expertise and knowledge to provide such representations and warranties. No
representation, warranty

                                       31
<PAGE>

or statement of fact made by or on behalf of Borrower in this Security
Instrument or in any certificate, document or schedule furnished to Lender
pursuant hereto, contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained therein or herein
not misleading (which may be to Borrower's best knowledge where so provided
herein). There are no facts presently known to Borrower which have not been
disclosed to Lender which would, individually or in the aggregate, have a
Material Adverse Effect nor as far as Borrower can foresee might, individually
or in the aggregate, have a Material Adverse Effect.

      Section 2.06. Removal of Lien. (a) Borrower shall, at its expense,
maintain this Security Instrument as a first lien on the Property and shall keep
the Property free and clear of all liens and encumbrances of any kind and nature
other than the Permitted Encumbrances. Borrower shall, within thirty (30) days
of being served with notice thereof, promptly discharge of record, by bond or
otherwise, any such liens and, promptly upon request by Lender, shall deliver to
Lender evidence reasonably satisfactory to Lender of the discharge thereof.

      (b) Without limitation to the provisions of Section 2.06(a) hereof,
Borrower shall (i) pay, from time to time when the same shall become due, all
claims and demands of mechanics, materialmen, laborers, and others which, if
unpaid, might result in, or permit the creation of, a lien on the Property or
any part thereof, (ii) cause to be removed of record (by payment or posting of
bond or settlement or otherwise) any mechanics', materialmens', laborers' or
other lien on the Property, or any part thereof, or on the revenues, rents,
issues, income or profit arising therefrom, and (iii) in general, do or cause to
be done, without expense to Lender, everything reasonably necessary to preserve
in full the lien of this Security Instrument. If Borrower fails to comply with
the requirements of this Section 2.06(b), then, upon five (5) Business Days'
prior notice to Borrower, Lender may, but shall not be obligated to, pay any
such lien, and Borrower shall, within five (5) Business Days after Lender's
demand therefor, reimburse Lender for all sums so expended, together with
interest thereon at the Default Rate from the date advanced, all of which shall
be deemed part of the Debt. Nothing contained herein shall be deemed a consent
or request of Lender, express or implied, by inference or otherwise, to the
performance of any alteration, repair or other work by any contractor,
subcontractor or laborer or the furnishing of any materials by any materialmen
in connection therewith.

      (c) Notwithstanding the foregoing, Borrower may contest any lien (other
than a lien relating to non-payment of Impositions, the contest of which shall
be governed by Section 4.04 hereof) of the type set forth in subparagraph
(b)(ii) of this Section 2.06 provided that, following prior notice to Lender (i)
Borrower is contesting the validity of such lien with due diligence and in good
faith and by appropriate proceedings, without cost or expense to Lender or any
of its agents, employees, officers, or directors, (ii) Borrower shall preclude
the collection of, or other realization upon, any contested amount from the
Property or any revenues from or interest in the Property, (iii) neither the
Property nor any part thereof nor interest therein, shall be in any danger of
being sold, forfeited or lost by reason of such contest by Borrower, (iv) such
contest by Borrower shall not affect the ownership, use or occupancy of the
Property, (v) such contest by Borrower shall not subject Lender or Borrower to
the risk of civil or criminal liability (other than the civil liability of
Borrower for the amount of the lien in question), (vi) such lien is subordinate
to the lien of this Security Instrument, (vii) Borrower has not consented to
such lien, (viii) Borrower has given Lender prompt notice of the filing of such
lien and the bonding thereof by Borrower and, upon request by Lender from time
to time, notice of the status of such contest by Borrower and/or confirmation of
the continuing satisfaction of the conditions set forth in this Section 2.06(c),
(ix) Borrower shall promptly pay the obligation secured by such lien upon a
final determination of Borrower's liability therefor, and (x) in the event any
such lien exceeds $25,000 or at any time after and during the occurrence of a
Default, Borrower shall deliver to Lender cash, a bond or other security
acceptable to Lender equal to 125% of the contested amount pursuant to
collateral arrangements reasonably satisfactory to Lender.

      Section 2.07. Cost of Defending and Upholding this Security Instrument
Lien. If any action or proceeding is commenced to which Lender is made a party
relating to the Loan Documents and/or the Property or Lender's interest therein
or in which it becomes necessary to defend or uphold the lien of this Security
Instrument or any other Loan Document, Borrower shall, on demand, reimburse
Lender for all expenses (including, without limitation, reasonable attorneys'
fees and disbursements) incurred by Lender in connection therewith, and such
sum, together with interest thereon at the Default Rate from and after such
demand until fully paid, shall constitute a part of the Debt.

                                       32
<PAGE>

      Section 2.08. Use of the Property. Borrower will use, or cause to be used,
the Property for such use as is permitted pursuant to applicable Legal
Requirements including, without limitation, under the certificate of occupancy
applicable to the Property, and which is required by the Loan Documents.
Borrower shall not suffer or permit the Property or any portion thereof to be
used by the public, any tenant, or any Person not subject to a Lease, in a
manner as is reasonably likely to impair Borrower's title to the Property, or in
such manner as may give rise to a claim or claims of adverse usage or adverse
possession by the public, or of implied dedication of the Property or any part
thereof.

      Section 2.09. Financial Reports. (a) Borrower will keep and maintain or
will cause to be kept and maintained on a Fiscal Year basis, in accordance with
GAAP (or such other accounting basis reasonably acceptable to Lender)
consistently applied, proper and accurate books, tax returns, records and
accounts reflecting (i) all of the financial affairs of Borrower and Guarantor
and (ii) all items of income and expense in connection with the operation of the
Property or in connection with any services, equipment or furnishings provided
in connection with the operation thereof, whether such income or expense may be
realized by Borrower or by any other Person whatsoever, excepting lessees
unrelated to and unaffiliated with Borrower who have leased from Borrower
portions of the Premises for the purpose of occupying the same. Lender shall
have the right from time to time at all times during normal business hours upon
reasonable notice to examine such books, tax returns, records and accounts at
the office of Borrower or other Person maintaining such books, tax returns,
records and accounts and to make such copies or extracts thereof as Lender shall
desire. After the occurrence of an Event of Default, Borrower shall pay any
costs and expenses incurred by Lender to examine Borrower's and Guarantor's
accounting records with respect to the Property, as Lender shall determine to be
necessary or appropriate in the protection of Lender's interest.

      (b) Borrower will furnish Lender (i) annually, within seventy-five (75)
days following the end of each Fiscal Year of AMERCO with a complete copy of
AMERCO's financial statements audited by AMERCO's Independent auditors; (ii)
quarterly with forty (40) days following the end of each fiscal quarter of
AMERCO with a complete copy of AMERCO's quarterly financial statements reviewed
by AMERCO's Independent auditors; (iii) annually within seventy-five (75) days
following the end of each Fiscal Year of AMERCO with a complete copy of each
Guarantor's financial statements, prepared in accordance with GAAP by an
in-house certified public accountant and certified by Borrower; and (iv)
quarterly within forty (40) days following the end of each fiscal quarter of
AMERCO with a complete copy of each Guarantor's financial statements, prepared
in accordance with GAAP by an in-house certified public accountant and certified
by Borrower. Together with such financial statements, Borrower shall deliver
Borrower's financial statements prepared in accordance with GAAP (or such other
accounting basis reasonably acceptable to Lender) consistently applied covering
(i) all of the financial affairs of Borrower and (ii) the operation of the
Property for such Fiscal Year or fiscal quarter, as applicable, and containing a
statement of revenues and expenses, a statement of assets and liabilities and a
statement of Borrower's equity and Borrower shall furnish to Lender an Officer's
Certificate certifying as of the date thereof (1) that the financial statements
accurately represent the results of operations and financial condition of
Borrower and the Property all in accordance with GAAP (or such other accounting
basis reasonably acceptable to Lender) consistently applied, and (2) whether
there exists an event or circumstance which constitutes, or which upon notice or
lapse of time or both would constitute, a Default under the Note or any other
Loan Document executed and delivered by Borrower, and if such event or
circumstance exists, the nature thereof, the period of time it has existed and
the action then being taken to remedy such event or circumstance.

      (c) Borrower will furnish Lender monthly, within sixty (60) days following
the end of each month, with a true, complete and correct cash flow statement
with respect to the Property in the form attached hereto as EXHIBIT E and made a
part hereof, showing (i) all cash receipts of any kind whatsoever and all cash
payments and disbursements, and (ii) year-to-date summaries of such cash
receipts, payments and disbursements together with a certification of Manager
stating that such cash flow statement is true, complete and correct and a list
of all litigation and proceedings affecting Borrower or the Property in which
the amount involved is $250,000 or more, if not covered by insurance (or
$1,000,000 or more whether or not covered by insurance).

      (d) Borrower will furnish Lender monthly, within sixty (60) days following
the end of each month, with a certification of Manager stating that all
Operating Expenses with respect to the Property which had accrued as of the last
day of the month preceding the delivery of the cash flow statement referred to
in clause (c) above have

                                       33
<PAGE>

been fully paid or otherwise reserved or provided for by Manager (any such
certification or any certification furnished by a Manager pursuant to clause (c)
above, a "Manager Certification").

      (e) Borrower will furnish Lender annually, upon request by Lender
therefor, within forty-five (45) days following receipt of such request, with a
true, complete and correct (i) "unitmix" report for the Property which notes the
number of self-storage units that are rented on the basis of the size of the
unit and includes the security deposit, if any, held by Borrower, the space
covered and the arrearages for such tenant, if any, and (ii) rent roll for the
Property with respect to all commercial tenants, including a list of which
tenants are in default under their respective Leases, dated as of the date of
Lender's request, identifying each tenant, the monthly rent and additional rent,
if any, payable by such tenant, the expiration date of such tenant's Lease, the
security deposit, if any, held by Borrower under the Lease, the space covered by
the Lease, and the arrearages for such tenant, if any, and each such "unitmix"
report and rent roll shall be accompanied by an Officer's Certificate, dated as
of the date of the delivery of such "unitmix" report or rent roll, certifying
that such "unitmix" report or rent roll is true, correct and complete in all
material respects as of its date.

      (f) Borrower shall furnish to Lender, within the later of sixty (60) days
after Lender's request therefor and five (5) days following the date on which
such item is available, with such further detailed information with respect to
the operation of the Property and the financial affairs of Borrower as may be
reasonably requested by Lender.

      (g) Borrower shall cause Manager to furnish to Lender, within forty-five
(45) days after receipt of Lender's written request, a schedule of tenant
security deposits, together with a certification of Manager as to the balance in
the Security Deposit Account and that such tenant security deposits are being
held in accordance with all Legal Requirements.

      (h) Borrower will furnish Lender annually, within one hundred and twenty
(120) days after the end of each Fiscal Year, with a report setting forth (i)
the Net Operating Income for such Fiscal Year, (ii) the average occupancy rate
of the Property during such Fiscal Year, (iii) the capital repairs, replacements
and improvements performed at the Property during such Fiscal Year and the
aggregate Recurring Replacement Expenditures made in connection therewith, and
(iv) the balance contained in each of the Sub-Accounts as of the end of such
Fiscal Year (which balance Lender shall provide upon Borrower's written request
therefor).

      (i) Borrower shall and shall cause Guarantor to furnish to Lender
annually, within sixty (60) days of filing, its respective tax return, a copy of
such tax return.

      (j) If a Trigger Event has occurred and is continuing, Borrower shall
submit to Lender for Lender's written approval an Annual Budget not later than
sixty (60) days prior to the commencement of each Fiscal Year or, if a Trigger
Event occurs subsequent to a date which is sixty (60) days prior to the
commencement of a Fiscal Year, within sixty (60) days of the occurrence of the
Trigger Event, in form satisfactory to Lender setting forth in reasonable detail
budgeted monthly operating income and monthly operating capital and other
expenses for the Property. Each Annual Budget shall contain, among other things,
limitations on management fees, third party service fees, and other expenses as
Borrower may reasonably determine. Lender shall have the right to approve such
Annual Budget which approval shall not be unreasonably withheld, and in the
event that Lender objects to the proposed Annual Budget submitted by Borrower,
Lender shall advise Borrower of such objections within fifteen (15) days after
receipt thereof (and deliver to Borrower a reasonably detailed description of
such objections) and Borrower shall, within three (3) days after receipt of
notice of any such objections, revise such Annual Budget and resubmit the same
to Lender. Lender shall advise Borrower of any objections to such revised Annual
Budget within ten (10) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections) and Borrower shall revise
the same in accordance with the process described herein until Lender approves
an Annual Budget, provided, however, that if Lender shall not advise Borrower of
its objections to any proposed Annual Budget within the applicable time period
set forth in this Section, then such proposed Annual Budget shall be deemed
approved by Lender. Until such time that Lender approves a proposed Annual
Budget, the most recently Approved Annual Budget shall apply; provided that,
such Approved Annual Budget shall be adjusted to reflect

                                       34
<PAGE>

actual increases in Basic Carrying Costs and to delete any non-recurring
expenses and provided, further, if there is no approved Annual Budget for the
prior Fiscal Year, Lender shall utilize the actual expenses set forth in the
cash flow statements delivered to Lender pursuant to Section 2.09(c) with
respect to the prior Fiscal Year adjusted to reflect actual increases in Basic
Carrying Costs and to delete non-recurring expenses. In the event that Borrower
must incur an Extraordinary Expense, then Borrower shall promptly deliver to
Lender a reasonably detailed explanation of such proposed Extraordinary Expense
for Lender's approval, which approval may be granted or denied in Lender's sole
and absolute discretion.

      (k) In the event that Borrower fails to deliver any of the financial
statements, reports or other information required to be delivered to Lender
pursuant to this Section 2.09 on or prior to their due dates, if any such
failure shall continue for ten (10) days following notice thereof from Lender,
Borrower shall pay to Lender on each Payment Date for each month or portion
thereof that any such financial statement, report or other information remains
undelivered, an administrative fee in the amount of Five Thousand Dollars
($5,000) multiplied by the number of undelivered statements, reports or other
items. Borrower agrees that such administrative fee (i) is a fair and reasonable
fee necessary to compensate Lender for its additional administrative costs and
increased costs relating to Borrower's failure to deliver the aforementioned
statements, reports or other items as and when required hereunder and (ii) is
not a penalty.

      (l) Borrower may, with respect to the information requested in Section
2.09(a)-(j), (i) to the extent permitted by law, provide consolidated tax
returns and consolidated financial statements and (ii) permit its assets to be
listed on the financial statements of an Affiliate if permitted by GAAP;
provided, however, that any consolidated financial statement shall indicate that
its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated entity.

      Section 2.10. Litigation. Borrower will give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened (in
writing) against Borrower which might have a Material Adverse Effect.

      Section 2.11. Updates of Representations. Borrower shall deliver to Lender
within ten (10) days of the request of Lender an Officer's Certificate updating
all of the representations and warranties contained in this Security Instrument
and the other Loan Documents and certifying that all of the representations and
warranties contained in this Security Instrument and the other Loan Documents,
as updated pursuant to such Officer's Certificate, are true, accurate and
complete as of the date of such Officer's Certificate.

                ARTICLE III: INSURANCE AND CASUALTY RESTORATION

      Section 3.01. Insurance Coverage. (a) Borrower shall, at its expense,
maintain or cause to be maintained the following insurance coverages with
respect to the Property during the term of this Security Instrument:

            (i) Insurance against loss or damage by fire, casualty and other
      hazards included in an "all-risk" extended coverage endorsement or its
      equivalent, with such endorsements as Lender may from time to time
      reasonably require and which are customarily required by Institutional
      Lenders of similar properties similarly situated, including, without
      limitation, if the Property constitutes a legal non-conforming use, an
      ordinance of law coverage endorsement which contains "Demolition Cost",
      "Loss Due to Operation of Law" and "Increased Cost of Construction"
      coverages, covering the Property in an amount not less than the greater of
      (A) 100% of the insurable replacement value of the Property (exclusive of
      the Premises and footings and foundations) and (B) such other amount as is
      necessary to prevent any reduction in such policy by reason of and to
      prevent Borrower, Lender or any other insured thereunder from being deemed
      to be a co-insurer. Not less frequently than once every three (3) years,
      Borrower, at its option, shall either (A) have the Appraisal updated or
      obtain a new appraisal of the Property, (B) have a valuation of the
      Property made by or for its insurance carrier conducted by an appraiser
      experienced in valuing properties of similar type to that of the Property
      which are in the geographical area in which the Property is located or (C)

                                       35
<PAGE>

      provide such other evidence as will, in Lender's sole judgment, enable
      Lender to determine whether there shall have been an increase in the
      insurable value of the Property and Borrower shall deliver such updated
      Appraisal, new appraisal, insurance valuation or other evidence acceptable
      to Lender, as the case may be, and, if such updated Appraisal, new
      appraisal, insurance valuation, or other evidence acceptable to Lender
      reflects an increase in the insurable value of the Property, the amount of
      insurance required hereunder shall be increased accordingly and Borrower
      shall deliver evidence satisfactory to Lender that such policy has been so
      increased.

            (ii) Commercial comprehensive general liability insurance against
      claims for personal and bodily injury and/or death to one or more persons
      or property damage, occurring on, in or about the Property (including the
      adjoining streets, sidewalks and passageways therein) in such amounts as
      Lender may from time to time reasonably require (but in no event shall
      Lender's requirements be increased more frequently than once during each
      twelve (12) month period) and which are customarily required by
      Institutional Lenders for similar properties similarly situated, but not
      less than $1,000,000 per occurrence and $2,000,000 general aggregate on a
      per location basis and, in addition thereto, not less than $75,000,000
      excess and/or umbrella liability insurance shall be maintained for any and
      all claims.

            (iii) Business interruption, rent loss or other similar insurance
      (A) with loss payable to Lender, (B) covering all risks required to be
      covered by the insurance provided for in Section 3.01(a)(i) hereof and (C)
      in an amount not less than 100% of the projected fixed or base rent plus
      percentage rent for the succeeding twelve (12) month period based on an
      occupancy rate of 100%. The amount of such insurance shall be determined
      upon the execution of this Security Instrument, and not more frequently
      than once each calendar year thereafter based on Borrower's reasonable
      estimate of projected fixed or base rent plus percentage rent, from the
      Property for the next succeeding twelve (12) months. In the event the
      Property shall be damaged or destroyed, Borrower shall and hereby does
      assign to Lender all payment of claims under the policies of such
      insurance, and all amounts payable thereunder, and all net amounts, shall
      be collected by Lender under such policies and shall be applied in
      accordance with this Security Instrument; provided, however, that nothing
      herein contained shall be deemed to relieve Borrower of its obligations to
      timely pay all amounts due under the Loan Documents.

            (iv) War risk insurance when such insurance is obtainable from the
      United States of America or any agency or instrumentality thereof at
      reasonable rates (for the maximum amount of insurance obtainable) and if
      requested by Lender, and such insurance is then customarily required by
      Institutional Lenders of similar properties similarly situated.

            (v) Insurance against loss or damages from (A) leakage of sprinkler
      systems and (B) explosion of steam boilers, air conditioning equipment,
      pressure vessels or similar apparatus now or hereafter installed at the
      Property, in such amounts as Lender may from time to time reasonably
      require and which are then customarily required by Institutional Lenders
      of similar properties similarly situated.

            (vi) Flood insurance in an amount equal to the full insurable value
      of the Property or the maximum amount available, whichever is less, if the
      Improvements are located in an area designated by the Secretary of Housing
      and Urban Development as being "an area of special flood hazard" under the
      National Flood Insurance Program (i.e., having a one percent or greater
      chance of flooding), and if flood insurance is available under the
      National Flood Insurance Act.

            (vii) Worker's compensation insurance or other similar insurance
      which may be required by Governmental Authorities or Legal Requirements.

            (viii) Intentionally omitted.

                                       36
<PAGE>

            (ix) Insurance against damage resulting from acts of terrorism, or
      an insurance policy without an exclusion for damages resulting from
      terrorism, on terms consistent with the commercial property insurance
      policy required under subsections (i) (ii) and (iii) above.

            (x) Such other insurance as may from time to time be required by
      Lender and which is then customarily required by Institutional Lenders for
      similar properties similarly situated, against other insurable hazards,
      including, but not limited to, malicious mischief, vandalism, sinkhole and
      mine subsidence, mold, spores and fungus, windstorm and/or earthquake, due
      regard to be given to the size and type of the Premises, Improvements,
      Fixtures and Equipment and their location, construction and use.

      (b) If Borrower is a partnership or limited liability company, Borrower
shall cause the General Partners to maintain fidelity insurance in an amount
equal to or greater than the annual Operating Income of the Property for the six
(6) month period immediately preceding the date on which the premium for such
insurance is due and payable.

      (c) Borrower shall cause any Manager of the Property to maintain fidelity
insurance in an amount equal to or greater than the annual Operating Income of
the Property for the six (6) month period immediately preceding the date on
which the premium for such insurance is due and payable or such lesser amount as
Lender shall approve.

      Section 3.02. Policy Terms. (a) All insurance required by this Article III
shall be in the form (other than with respect to Sections 3.01(a)(vi) and (vii)
above when insurance in those two sub-sections is placed with a governmental
agency or instrumentality on such agency's forms) and amount and with
deductibles as, from time to time, shall be reasonably acceptable to Lender,
under valid and enforceable policies issued by financially responsible insurers
authorized to do business in the State where the Property is located, with a
general policyholder's service rating of not less than A and a financial rating
of not less than VIII as rated in the most currently available Best's Insurance
Reports (or the equivalent, if such rating system shall hereafter be altered or
replaced) and shall have a claims paying ability rating and/or financial
strength rating, as applicable, of not less than "A" (or its equivalent) or such
lower claims paying ability rating and/or financial strength rating, as
applicable, as Lender shall, in its sole and absolute discretion, consent to,
from a Rating Agency (one of which after a Securitization in which Standard &
Poor's rates any securities issued in connection with such Securitization, shall
be Standard & Poor's) or by a syndicate of insurers through which at least 75%
of the coverage (if there are four (4) or fewer members of such syndicate) or at
least 60% of the coverage (if there are five (5) or more members of the
syndicate) is with carriers having claims-paying ability or financial strength
ratings, as applicable, of "A" (or its equivalent) from the Ratings Agencies,
provided that all members of the syndicate shall have claims-paying ability
ratings and/or financial strength ratings, as applicable, of not less than "BBB"
(or its equivalent) from the Ratings Agencies. Lender acknowledges that so long
as the claims paying ability rating and/or financial strength rating, as
applicable, of Commonwealth is "BBB" (or its equivalent), Commonwealth shall be
an acceptable insurer until the end of the current policy term. Originals or
certified copies of all insurance policies shall be delivered to and held by
Lender. All such policies (except policies for worker's compensation) shall name
Lender, its successors and/or assigns as an additional named insured, shall
provide for loss payable to Lender, its successors and/or assigns and shall
contain (or have attached): (i) standard "non-contributory mortgagee"
endorsement or its equivalent relating, inter alia, to recovery by Lender
notwithstanding the negligent or willful acts or omissions of Borrower; (ii) a
waiver of subrogation endorsement as to Lender; (iii) an endorsement indicating
that neither Lender nor Borrower shall be or be deemed to be a co-insurer with
respect to any casualty risk insured by such policies and shall provide for a
deductible per loss of an amount not more than the lesser of (x) that which is
customarily maintained by owners of similar properties similarly situated and
(y) five percent (5%) of the Net Operating Income, and (iv) a provision that
such policies shall not be canceled, terminated, denied renewal or amended,
including, without limitation, any amendment reducing the scope or limits of
coverage, without at least thirty (30) days' prior written notice to Lender in
each instance. Not less than thirty (30) days prior to the expiration dates of
the insurance policies obtained pursuant to this Security Instrument, originals
or certified copies of renewals of such policies (or certificates evidencing
such renewals) bearing notations evidencing the payment of premiums or
accompanied by other reasonable evidence of such payment (which premiums shall
not be paid by Borrower through or by any financing arrangement which would
entitle an insurer to terminate a policy) shall be delivered by Borrower to
Lender.

                                       37
<PAGE>

Borrower shall not carry separate insurance, concurrent in kind or form or
contributing in the event of loss, with any insurance required under this
Article III.

      (b) If Borrower fails to maintain and deliver to Lender the original
policies or certificates of insurance required by this Security Instrument, or
if there are insufficient funds in the Basic Carrying Costs Sub-Account to pay
the premiums for same, Lender may, at its option, procure such insurance, and
Borrower shall pay, or as the case may be, reimburse Lender for, all premiums
thereon promptly, upon demand by Lender, with interest thereon at the Default
Rate from the date paid by Lender to the date of repayment and such sum shall
constitute a part of the Debt.

      (c) Borrower shall notify Lender of the renewal premium of each insurance
policy and Lender shall be entitled to pay such amount on behalf of Borrower
from the Basic Carrying Costs Sub-Account. With respect to insurance policies
which require periodic payments (i.e., monthly or quarterly) of premiums, Lender
shall be entitled to pay such amounts fifteen (15) days (or such lesser number
of days as Lender shall determine) prior to the respective due dates of such
installments.

      (d) The insurance required by this Security Instrument may, at the option
of Borrower, be effected by blanket and/or umbrella policies issued to Borrower
covering the Property provided that, in each case, the policies otherwise comply
with the provisions of this Security Instrument and allocate to the Property,
from time to time (but in no event less than once a year), the coverage
specified by this Security Instrument, without possibility of reduction or
coinsurance by reason of, or damage to, any other property (real or personal)
named therein. If the insurance required by this Security Instrument shall be
effected by any such blanket or umbrella policies, Borrower shall furnish to
Lender (i) original policies or certified copies thereof, or an original
certificate of insurance together with reasonable access to the original of such
policy to review such policy's coverage of the Property, with schedules attached
thereto showing the amount of the insurance provided under such policies
applicable to the Property and (ii) an Officer's Certificate setting forth (A)
the number of properties covered by such policy, (B) the location by city (if
available, otherwise, county) and state of the properties, (C) the average
square footage of the properties, (D) a brief description of the typical
construction type included in the blanket policy and (E) such other information
as Lender may reasonably request.

      Section 3.03. Assignment of Policies. (a) Borrower hereby assigns to
Lender the proceeds of all insurance (other than worker's compensation and
liability insurance) obtained pursuant to this Security Instrument, all of which
proceeds shall be payable to Lender as collateral and further security for the
payment of the Debt and the performance of the Cross-collateralized Borrowers'
obligations hereunder and under the other Loan Documents, and Borrower hereby
authorizes and directs the issuer of any such insurance to make payment of such
proceeds directly to Lender. Except as otherwise expressly provided in Section
3.04 or elsewhere in this Article III, Lender shall have the option, in its
discretion, and without regard to the adequacy of its security, to apply all or
any part of the proceeds it may receive pursuant to this Article in such manner
as Lender may elect to any one or more of the following: (i) the payment of the
Debt, whether or not then due, in any proportion or priority as Lender, in its
discretion, may elect, (ii) the repair or restoration of the Property, (iii) the
cure of any Default or (iv) the reimbursement of the costs and expenses of
Lender incurred pursuant to the terms hereof in connection with the recovery of
the Insurance Proceeds. Nothing herein contained shall be deemed to excuse
Borrower from repairing or maintaining the Property as provided in this Security
Instrument or restoring all damage or destruction to the Property, regardless of
the sufficiency of the Insurance Proceeds, and the application or release by
Lender of any Insurance Proceeds shall not cure or waive any Default or notice
of Default.

      (b) In the event of the foreclosure of this Security Instrument or any
other transfer of title or assignment of all or any part of the Property in
extinguishment, in whole or in part, of the Debt, all right, title and interest
of Borrower in and to all policies of insurance required by this Security
Instrument shall inure to the benefit of the successor in interest to Borrower
or the purchaser of the Property. If, prior to the receipt by Lender of any
proceeds, the Property or any portion thereof shall have been sold on
foreclosure of this Security Instrument or by deed in lieu thereof or otherwise,
or any claim under such insurance policy arising during the term of this
Security Instrument is not paid until after the extinguishment of the Debt, and
Lender shall not have received the entire amount of the Debt outstanding at the
time of such extinguishment, whether or not a deficiency judgment on this

                                       38
<PAGE>

Security Instrument shall have been sought or recovered or denied, then, the
proceeds of any such insurance to the extent of the amount of the Debt not so
received, shall be paid to and be the property of Lender, together with interest
thereon at the Default Rate, and the reasonable attorney's fees, costs and
disbursements incurred by Lender in connection with the collection of the
proceeds which shall be paid to Lender and Borrower hereby assigns, transfers
and sets over to Lender all of Borrower's right, title and interest in and to
such proceeds. Notwithstanding any provisions of this Security Instrument to the
contrary, Lender shall not be deemed to be a trustee or other fiduciary with
respect to its receipt of any such proceeds, which may be commingled with any
other monies of Lender; provided, however, that Lender shall use such proceeds
for the purposes and in the manner permitted by this Security Instrument. Any
proceeds deposited with Lender shall be held by Lender in an interest-bearing
account, but Lender makes no representation or warranty as to the rate or amount
of interest, if any, which may accrue on such deposit and shall have no
liability in connection therewith. Interest accrued, if any, on the proceeds
shall be deemed to constitute a part of the proceeds for purposes of this
Security Instrument. The provisions of this Section 3.03(b) shall survive the
termination of this Security Instrument by foreclosure, deed in lieu thereof or
otherwise as a consequence of the exercise of the rights and remedies of Lender
hereunder after a Default.

      Section 3.04. Casualty Restoration. (a) (i) In the event of any damage to
or destruction of the Property, Borrower shall give prompt written notice to
Lender (which notice shall set forth Borrower's good faith estimate of the cost
of repairing or restoring such damage or destruction, or if Borrower cannot
reasonably estimate the anticipated cost of restoration, Borrower shall
nonetheless give Lender prompt notice of the occurrence of such damage or
destruction, and will diligently proceed to obtain estimates to enable Borrower
to quantify the anticipated cost and time required for such restoration,
whereupon Borrower shall promptly notify Lender of such good faith estimate)
and, provided that restoration does not violate any Legal Requirements, Borrower
shall promptly commence and diligently prosecute to completion the repair,
restoration or rebuilding of the Property so damaged or destroyed to a condition
such that the Property shall be at least equal in value to that immediately
prior to the damage to the extent practicable, in full compliance with all Legal
Requirements and the provisions of all Leases, and in accordance with Section
3.04(b) below. Such repair, restoration or rebuilding of the Property are
sometimes hereinafter collectively referred to as the "Work".

            (ii) Borrower shall not adjust, compromise or settle any claim for
      Insurance Proceeds without the prior written consent of Lender, which
      shall not be unreasonably withheld or delayed and Lender shall have the
      right, at Borrower's sole cost and expense, to participate in any
      settlement or adjustment of Insurance Proceeds; provided, however, that,
      except during the continuance of an Event of Default, Lender's consent
      shall not be required and Lender shall not have the right to participate
      in any settlement or adjustment of Insurance Proceeds with respect to the
      adjustment, compromising or settlement of any claim for Insurance Proceeds
      in an amount less than $300,000.

            (iii) Subject to Section 3.04(a)(iv), Lender shall apply any
      Insurance Proceeds which it may receive towards the Work in accordance
      with Section 3.04(b) and the other applicable sections of this Article
      III.

            (iv) If (A) a Default shall have occurred and is then continuing,
      (B) Lender is not reasonably satisfied that the Debt Service Coverage,
      after substantial completion of the Work, will be at least equal to the
      Required Debt Service Coverage, (C) more than thirty percent (30%) of the
      reasonably estimated fair market value of the Property is damaged or
      destroyed, (D) Lender is not reasonably satisfied that the Work can be
      completed six (6) months prior to Maturity or (E) Lender is not reasonably
      satisfied that the Work can be completed within six (6) months of the
      damage to or destruction of the Property (each, a "Substantial Casualty"),
      Lender shall have the option, in its sole discretion to apply any
      Insurance Proceeds it may receive pursuant to this Security Instrument
      (less any cost to Lender of recovering and paying out such proceeds
      incurred pursuant to the terms hereof and not otherwise reimbursed to
      Lender, including, without limitation, reasonable attorneys' fees and
      expenses) to the payment of the Debt, without any prepayment fee or charge
      of any kind (in which event, notwithstanding any other term or provision
      hereof and, provided no Event of Default has occurred and is continuing,
      Borrower shall have the right to repay, without any prepayment fee or
      charge of any kind, the Release Price with respect to the Property and
      obtain

                                       39
<PAGE>

      a Release of the Property), or to allow such proceeds to be used for the
      Work pursuant to the terms and subject to the conditions of Section
      3.04(b) hereof and the other applicable sections of this Article III.

            (iv) In the event that Lender elects or is obligated hereunder to
      allow Insurance Proceeds to be used for the Work, any excess proceeds
      remaining after completion of such Work shall be applied to the payment of
      the Debt without any prepayment fee or charge of any kind.

      (b) If any Condemnation Proceeds in accordance with Section 6.01(a), or
any Insurance Proceeds in accordance with Section 3.04(a), are to be applied to
the repair, restoration or rebuilding of the Property, then such proceeds shall
be deposited into a segregated interest-bearing bank account at the Bank, which
shall be an Eligible Account, held by Lender and shall be paid out from time to
time to Borrower as the Work progresses (less any cost to Lender of recovering
and paying out such proceeds, including, without limitation, reasonable
attorneys' fees and costs allocable to inspecting the Work and the plans and
specifications therefor) subject to Section 5.13 hereof and to all of the
following conditions:

            (i) An architect or engineer selected by Borrower and reasonably
      acceptable to Lender (an "Architect" or "Engineer") or a Person otherwise
      reasonably acceptable to Lender, shall have delivered to Lender a
      certificate estimating the cost of completing the Work, and, if the amount
      set forth therein is more than the sum of the amount of Insurance Proceeds
      then being held by Lender in connection with a casualty and amounts agreed
      to be paid as part of a final settlement under the insurance policy upon
      or before completion of the Work, Borrower shall have delivered to Lender
      (A) cash collateral in an amount equal to such excess, (B) an
      unconditional, irrevocable, clean sight draft letter of credit, in form,
      substance and issued by a bank reasonably acceptable to Lender, in the
      amount of such excess and draws on such letter of credit shall be made by
      Lender to make payments pursuant to this Article III following exhaustion
      of the Insurance Proceeds therefore or (C) a completion bond in form,
      substance and issued by a surety company reasonably acceptable to Lender.

            (ii) If the cost of the Work is reasonably estimated by an Architect
      or Engineer in a certification reasonably acceptable to Lender to be equal
      to or exceed ten percent (10%) of the Allocated Loan Amount, such Work
      shall be performed under the supervision of an Architect or Engineer, it
      being understood that the plans and specifications with respect thereto
      shall provide for Work so that, upon completion thereof, the Property
      shall be at least equal in replacement value and general utility to the
      Property prior to the damage or destruction.

            (iii) Each request for payment shall be made on not less than ten
      (10) days' prior notice to Lender and shall be accompanied by a
      certificate of an Architect or Engineer, or, if the Work is not required
      to be supervised by an Architect or Engineer, by an Officer's Certificate
      stating (A) that payment is for Work completed in compliance with the
      plans and specifications, if required under clause (ii) above, (B) that
      the sum requested is required to reimburse Borrower for payments by
      Borrower to date, or is due to the contractors, subcontractors,
      materialmen, laborers, engineers, architects or other Persons rendering
      services or materials for the Work (giving a brief description of such
      services and materials), and that when added to all sums previously paid
      out by Lender does not exceed the value of the Work done to the date of
      such certificate, (C) if the sum requested is to cover payment relating to
      repair and restoration of personal property required or relating to the
      Property, that title to the personal property items covered by the request
      for payment is vested in Borrower (unless Borrower is lessee of such
      personal property), and (D) that the Insurance Proceeds and other amounts
      deposited by Borrower held by Lender after such payment is more than the
      estimated remaining cost to complete such Work; provided, however, that if
      such certificate is given by an Architect or Engineer, such Architect or
      Engineer shall certify as to clause (A) above, and such Officer's
      Certificate shall certify as to the remaining clauses above, and provided,
      further, that Lender shall not be obligated to disburse such funds if
      Lender determines, in Lender's reasonable discretion, that Borrower shall
      not be in compliance with this Section 3.04(b). Additionally, each request
      for payment shall contain a statement signed by Borrower stating that the
      requested payment is for Work satisfactorily done to date.

                                       40
<PAGE>

            (iv) Each request for payment shall be accompanied by waivers of
      lien, in customary form and substance, covering that part of the Work for
      which payment or reimbursement is being requested and, if required by
      Lender, a search prepared by a title company or licensed abstractor, or by
      other evidence satisfactory to Lender that there has not been filed with
      respect to the Property any mechanic's or other lien or instrument for
      retention of title relating to any part of the Work not discharged of
      record. Additionally, as to any personal property covered by the request
      for payment, Lender shall be furnished with evidence of having incurred a
      payment obligation therefor and such further evidence reasonably
      satisfactory to assure Lender that UCC filings therefor provide a valid
      first lien on the personal property.

            (v) Lender shall have the right to inspect the Work at all
      reasonable times upon reasonable prior notice and may condition any
      disbursement of Insurance Proceeds upon satisfactory compliance by
      Borrower with the provisions hereof. Neither the approval by Lender of any
      required plans and specifications for the Work nor the inspection by
      Lender of the Work shall make Lender responsible for the preparation of
      such plans and specifications, or the compliance of such plans and
      specifications of the Work, with any applicable law, regulation,
      ordinance, covenant or agreement.

            (vi) Insurance Proceeds shall not be disbursed more frequently than
      once every thirty (30) days.

            (vii) Until such time as the Work has been substantially completed,
      Lender shall not be obligated to disburse up to ten percent (10%) of the
      cost of the Work (the "Retention Amount") to Borrower. Upon substantial
      completion of the Work, Borrower shall send notice thereof to Lender and,
      subject to the conditions of Section 3.04(b)(i)-(iv), Lender shall
      disburse one-half of the Retention Amount to Borrower; provided, however,
      that the remaining one-half of the Retention Amount shall be disbursed to
      Borrower when Lender shall have received copies of any and all final
      certificates of occupancy or other certificates, licenses and permits
      required for the ownership, occupancy and operation of the Property in
      accordance with all Legal Requirements. Borrower hereby covenants to
      diligently seek to obtain any such certificates, licenses and permits.

            (viii) Upon failure on the part of Borrower promptly to commence the
      Work or to proceed diligently and continuously to completion of the Work
      (in either case, other than due to Force Majeure), which failure shall
      continue after notice for thirty (30) days, Lender may apply any Insurance
      Proceeds or Condemnation Proceeds it then or thereafter holds to the
      payment of the Debt in accordance with the provisions of the Note;
      provided, however, that Lender shall be entitled to apply at any time all
      or any portion of the Insurance Proceeds or Condemnation Proceeds it then
      holds to the extent necessary to cure any Event of Default.

      (c) If Borrower (i) within ninety (90) days after the occurrence of any
damage to the Property or any portion thereof (or such shorter period as may be
required under any Major Space Lease) shall fail to submit to Lender for
approval plans and specifications (if required pursuant to Section 3.04(b)(ii)
hereof) for the Work (approved by the Architect and by all Governmental
Authorities whose approval is required), (ii) after any such plans and
specifications are approved by all Governmental Authorities, the Architect and
Lender, shall fail to promptly commence such Work (other than due to Force
Majeure) or (iii) shall fail to diligently prosecute such Work to completion
(other than due to Force Majeure), then, in addition to all other rights
available hereunder, at law or in equity, Lender, or any receiver of the
Property or any portion thereof, upon five (5) days' prior notice to Borrower
(except in the event of emergency in which case no notice shall be required),
may (but shall have no obligation to) perform or cause to be performed such
Work, and may take such other steps as it reasonably deems advisable. Borrower
hereby waives, for Borrower, any claim, other than for gross negligence or
willful misconduct, against Lender and any receiver arising out of any act or
omission of Lender or such receiver pursuant hereto, and Lender may apply all or
any portion of the Insurance Proceeds (without the need to fulfill any other
requirements of this Section 3.04) to reimburse Lender and such receiver, for
all costs not reimbursed to Lender or such receiver upon demand together with
interest thereon at the Default Rate from the date such amounts are advanced
until the same are paid to Lender or the receiver.

                                       41
<PAGE>

      (d) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to collect and receive any Insurance Proceeds paid
with respect to any portion of the Property or the insurance policies required
to be maintained hereunder, and to endorse any checks, drafts or other
instruments representing any Insurance Proceeds whether payable by reason of
loss thereunder or otherwise.

      Section 3.05. Compliance with Insurance Requirements. Borrower promptly
shall comply with, and shall cause the Property to comply with, all Insurance
Requirements, even if such compliance requires structural changes or
improvements or would result in interference with the use or enjoyment of the
Property or any portion thereof provided Borrower shall have a right to contest
in good faith and with diligence such Insurance Requirements provided (a) no
Default shall exist during such contest and such contest shall not subject the
Property or any portion thereof to any lien or affect the priority of the lien
of this Security Instrument, (b) failure to comply with such Insurance
Requirements will not subject Lender or any of its agents, employees, officers
or directors to any civil or criminal liability, (c) such contest will not cause
any reduction in insurance coverage, (d) such contest shall not affect the
ownership, use or occupancy of the Property, (e) the Property or any part
thereof or any interest therein shall not be in any danger of being sold,
forfeited or lost by reason of such contest by Borrower, (f) Borrower has given
Lender prompt notice of such contest and, upon request by Lender from time to
time, notice of the status of such contest by Borrower and/or information of the
continuing satisfaction of the conditions set forth in clauses (a) through (e)
of this Section 3.05, (g) upon a final determination of such contest, Borrower
shall promptly comply with the requirements thereof, and (h) prior to and during
such contest, Borrower shall furnish to Lender security satisfactory to Lender,
in its reasonable discretion, against loss or injury by reason of such contest
or the non-compliance with such Insurance Requirement (and if such security is
cash, Lender shall deposit the same in an interest-bearing account and interest
accrued thereon, if any, shall be deemed to constitute a part of such security
for purposes of this Security Instrument, but Lender (i) makes no representation
or warranty as to the rate or amount of interest, if any, which may accrue
thereon and shall have no liability in connection therewith and (ii) shall not
be deemed to be a trustee or fiduciary with respect to its receipt of any such
security and any such security may be commingled with other monies of Lender).
If Borrower shall use the Property or any portion thereof in any manner which
could permit the insurer to cancel any insurance required to be provided
hereunder, Borrower immediately shall obtain a substitute policy which shall
satisfy the requirements of this Security Instrument and which shall be
effective on or prior to the date on which any such other insurance policy shall
be canceled. Borrower shall not by any action or omission invalidate any
insurance policy required to be carried hereunder unless such policy is replaced
as aforesaid, or materially increase the premiums on any such policy above the
normal premium charged for such policy. Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable to Lender in connection with the transaction contemplated
hereby.

      Section 3.06. Event of Default During Restoration. Notwithstanding
anything to the contrary contained in this Security Instrument including,
without limitation, the provisions of this Article III, if, at the time of any
casualty affecting the Property or any part thereof, or at any time during any
Work, or at any time that Lender is holding or is entitled to receive any
Insurance Proceeds pursuant to this Security Instrument, a Default exists and is
continuing (whether or not it constitutes an Event of Default), Lender shall
then have no obligation to make such proceeds available for Work and Lender
shall have the right and option, to be exercised in its sole and absolute
discretion and election, with respect to the Insurance Proceeds, either to
retain and apply such proceeds in reimbursement for the actual costs, fees and
expenses incurred by Lender in accordance with the terms hereof in connection
with the adjustment of the loss and any balance toward payment of the Debt in
such priority and proportions as Lender, in its sole discretion, shall deem
proper, or towards the Work, upon such terms and conditions as Lender shall
determine, or to cure any Event of Default, or to any one or more of the
foregoing as Lender, in its sole and absolute discretion, may determine. If
Lender shall receive and retain such Insurance Proceeds, the lien of this
Security Instrument shall be reduced only by the amount thereof received, after
reimbursement to Lender of expenses of collection, and actually applied by
Lender in reduction of the principal sum payable under the Note in accordance
with the Note.

      Section 3.07. Application of Proceeds to Debt Reduction. (a) No damage to
the Property, or any part thereof, by fire or other casualty whatsoever, whether
such damage be partial or total, shall relieve Borrower from its liability to
pay in full the Debt and to perform its obligations under this Security
Instrument and the other Loan Documents.

                                       42
<PAGE>

      (b) If any Insurance Proceeds are applied to reduce the Debt, Lender shall
apply the same in accordance with the provisions of the Note.

                            ARTICLE IV: IMPOSITIONS

      Section 4.01. Payment of Impositions, Utilities and Taxes, etc. (a)
Borrower shall pay or cause to be paid all Impositions at least five (5) days
prior to the date upon which any fine, penalty, interest or cost for nonpayment
is imposed, and furnish to Lender receipted bills of the appropriate taxing
authority or other documentation reasonably satisfactory to Lender evidencing
the payment thereof. If Borrower shall fail to pay any Imposition in accordance
with this Section and is not contesting or causing a contesting of such
Imposition in accordance with Section 4.04 hereof, or if there are insufficient
funds in the Basic Carrying Costs Sub-Account to pay any Imposition, Lender
shall have the right, but shall not be obligated, to pay that Imposition, and
Borrower shall repay to Lender, on demand, any amount paid by Lender, with
interest thereon at the Default Rate from the date of the advance thereof to the
date of repayment, and such amount shall constitute a portion of the Debt
secured by this Security Instrument and the other Cross-collateralized
Mortgages.

      (b) Borrower shall, prior to the date upon which any fine, penalty,
interest or cost for the nonpayment is imposed, pay or cause to be paid all
charges for electricity, power, gas, water and other services and utilities in
connection with the Property, and shall, upon request, deliver to Lender
receipts or other documentation reasonably satisfactory to Lender evidencing
payment thereof. If Borrower shall fail to pay any amount required to be paid by
Borrower pursuant to this Section 4.01 and is not contesting such charges in
accordance with Section 4.04 hereof, Lender shall have the right, but shall not
be obligated, to pay that amount, and Borrower will repay to Lender, on demand,
any amount paid by Lender with interest thereon at the Default Rate from the
date of the advance thereof to the date of repayment, and such amount shall
constitute a portion of the Debt secured by this Security Instrument and the
other Cross-collateralized Mortgages.

      (c) Borrower shall pay all taxes, charges, filing, registration and
recording fees, excises and levies imposed upon Lender by reason of or in
connection with its ownership of any Loan Document or any other instrument
related thereto, or resulting from the execution, delivery and recording of, or
the lien created by, or the obligation evidenced by, any of them, other than
income, franchise and other similar taxes imposed on Lender and shall pay all
corporate stamp taxes, if any, and other taxes, required to be paid on the Loan
Documents. If Borrower shall fail to make any such payment within ten (10) days
after written notice thereof from Lender, Lender shall have the right, but shall
not be obligated, to pay the amount due, and Borrower shall reimburse Lender
therefor, on demand, with interest thereon at the Default Rate from the date of
the advance thereof to the date of repayment, and such amount shall constitute a
portion of the Debt secured by this Security Instrument and the other
Cross-collateralized Mortgages.

      Section 4.02. Deduction from Value. In the event of the passage after the
date of this Security Instrument of any Legal Requirement deducting from the
value of the Property for the purpose of taxation, any lien thereon or changing
in any way the Legal Requirements now in force for the taxation of this Security
Instrument, the other Cross-collateralized Mortgages and/or the Debt for
federal, state or local purposes, or the manner of the operation of any such
taxes so as to adversely affect the interest of Lender, or imposing any tax or
other charge on any Loan Document, then Borrower will pay such tax, with
interest and penalties thereon, if any, within the statutory period. In the
event the payment of such tax or interest and penalties by Borrower would be
unlawful, or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then in any such event, Lender shall have the option, by
written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable, with no prepayment fee or charge of any kind.

      Section 4.03. No Joint Assessment. Borrower shall not consent to or
initiate the joint assessment of the Premises or the Improvements (a) with any
other real property constituting a separate tax lot and Borrower represents and
covenants that the Premises and the Improvements are and shall remain a separate
tax lot or (b) with any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby

                                       43
<PAGE>

the lien of any taxes which may be levied against such personal property shall
be assessed or levied or charged to the Property as a single lien.

      Section 4.04. Right to Contest. Borrower shall have the right, after prior
notice to Lender, at its sole expense, to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender or any of its agents, employees, officers or directors, the validity,
amount or application of any Imposition or any charge described in Section
4.01(b), provided that (a) no Default or Event of Default shall exist during
such proceedings and such contest shall not (unless Borrower shall comply with
clause (d) of this Section 4.04) subject the Property or any portion thereof to
any lien or affect the priority of the lien of this Security Instrument, (b)
failure to pay such Imposition or charge will not subject Lender or any of its
agents, employees, officers or directors to any civil or criminal liability, (c)
the contest suspends enforcement of the Imposition or charge (unless Borrower
first pays the Imposition or charge), (d) prior to and during such contest,
Borrower shall furnish to Lender security satisfactory to Lender, in its
reasonable discretion, against loss or injury by reason of such contest or the
non-payment of such Imposition or charge (and if such security is cash, Lender
may deposit the same in an interest-bearing account and interest accrued
thereon, if any, shall be deemed to constitute a part of such security for
purposes of this Security Instrument, but Lender (i) makes no representation or
warranty as to the rate or amount of interest, if any, which may accrue thereon
and shall have no liability in connection therewith and (ii) shall not be deemed
to be a trustee or fiduciary with respect to its receipt of any such security
and any such security may be commingled with other monies of Lender), (e) such
contest shall not affect the ownership, use or occupancy of the Property, (f)
the Property or any part thereof or any interest therein shall not be in any
danger of being sold, forfeited or lost by reason of such contest by Borrower,
(g) Borrower has given Lender notice of the commencement of such contest and
upon request by Lender, from time to time, notice of the status of such contest
by Borrower and/or confirmation of the continuing satisfaction of clauses (a)
through (f) of this Section 4.04, and (h) upon a final determination of such
contest, Borrower shall promptly comply with the requirements thereof. Upon
completion of any contest, Borrower shall immediately pay the amount due, if
any, and deliver to Lender proof of the completion of the contest and payment of
the amount due, if any, following which Lender shall return the security, if
any, deposited with Lender pursuant to clause (d) of this Section 4.04. Borrower
shall not pay any Imposition in installments unless permitted by applicable
Legal Requirements, and shall, upon the request of Lender, deliver copies of all
notices and bills relating to any Imposition or other charge covered by this
Article IV to Lender.

      Section 4.05. No Credits on Account of the Debt. Borrower will not claim
or demand or be entitled to any credit or credits on account of the Debt for any
part of the Impositions assessed against the Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value of the
Property, or any part thereof, by reason of this Security Instrument or the
Debt. In the event such claim, credit or deduction shall be required by Legal
Requirements, Lender shall have the option, by written notice of not less than
ninety (90) days, to declare the Debt immediately due and payable, and Borrower
hereby agrees to pay such amounts not later than ninety (90) days after such
notice.

      Section 4.06. Documentary Stamps. If, at any time, the United States of
America, any State or Commonwealth thereof or any subdivision of any such State
shall require revenue or other stamps to be affixed to the Note, this Security
Instrument or any other Loan Document, or impose any other tax or charges on the
same, Borrower will pay the same, with interest and penalties thereon, if any.

                       ARTICLE V: CENTRAL CASH MANAGEMENT

      Section 5.01. Cash Flow. Borrower hereby acknowledges and agrees that the
Rent (which for the purposes of this Section 5.01 shall not include security
deposits from tenants under Leases held by Borrower and not applied towards
Rent) derived from the Property and Loss Proceeds shall be utilized (a) to fund
the Basic Carrying Costs Sub-Account, (b) to pay all amounts to become due and
payable under the Note by funding the Debt Service Payment Sub-Account, (c) to
fund the Recurring Replacement Reserve Sub-Account, (d)to fund the Operation and
Maintenance Expense Sub-Account and (e) to fund the Mez Payment Sub-Account.
Borrower shall cause Manager to collect all security deposits from tenants under
valid Leases, which shall be held by Manager, as agent for Borrower, in
accordance with applicable law, and unless otherwise agreed to in writing by
Lender, in a segregated demand deposit bank account at such commercial or
savings bank or banks as may be reasonably satisfactory to

                                       44
<PAGE>

Lender (the "Security Deposit Account"). Borrower shall notify Lender of any
security deposits held as letters of credit and, upon Lender's request, such
letters of credit shall be promptly delivered to Lender. Borrower shall have no
right to withdraw funds from the Security Deposit Account; provided that, prior
to the occurrence of an Event of Default, Borrower may withdraw funds from the
Security Deposit Account to refund or apply security deposits as required by the
Leases or by applicable Legal Requirements. After the occurrence of an Event of
Default, all withdrawals from the Security Deposit Account must be approved by
Lender. Manager shall collect all Rent and shall deposit such funds within one
(1) Business Day after receipt thereof in the Rent Account, the name and address
of the bank in which such account is located and the account number of which to
be identified in writing by Manager to Lender. Borrower shall, or shall cause
the Manager to, cause the Rent Account Bank to enter into a lockbox agreement in
form and substance reasonably acceptable to Lender (the "Rent Account
Agreement"). Pursuant to the Rent Account Agreement, the bank in which the Rent
Account is located (the "Rent Account Bank") has been instructed that (a) prior
to receipt of notice from Lender (a "Sweep Notice") that a Trigger Event has
occurred, all funds deposited in the Rent Account shall be transferred to the
Borrower Account not less often than one time per week, and (b) from and after
the receipt of a Sweep Notice from Lender, all funds deposited in the Rent
Account shall be automatically transferred through automatic clearing house
funds or by Federal wire to the Central Account prior to 1:00 p.m. (New York
City time) on each Business Day until receipt by such bank of notice from Lender
revoking the Sweep Notice. Lender shall provide the Rent Account Bank with
revocation of the Sweep Notice promptly upon the cure of each Trigger Event.
Lender may elect to change the financial institution in which the Central
Account shall be maintained; however, Lender shall give Borrower and the Rent
Account Bank not fewer than five (5) Business Days' prior notice of such change.
Neither Borrower nor Manager shall change the Rent Account Bank or the Rent
Account without the prior written consent of Lender. All fees and charges of the
bank(s) in which the Rent Account and the Central Account is located shall be
paid by Borrower. Borrower grants to Lender an irrevocable power of attorney
coupled with an interest for the purpose of executing any Lockbox Agreement in
the event Borrower fails to deliver any executed Lockbox Agreement to Lender.

      Section 5.02. Establishment of Sub-Accounts. Lender has established the
Central Account in the name of Lender, as secured party and Borrower has
established the Rent Account in the joint names of Borrower and Lender. The Rent
Account and the Central Account shall be under the sole dominion and control of
Lender. From and after the occurrence of a Trigger Event, the Rent Account shall
be under the control of Lender pursuant to Section 5.01 hereof and Borrower
shall have no right of withdrawal from the Rent Account. Borrower hereby
irrevocably directs and authorizes Lender to withdraw funds from the Central
Account, all in accordance with the terms and conditions of this Security
Instrument. Borrower shall have no right of withdrawal in respect of the Central
Account or the Rent Account except as specifically provided herein. Each
transfer of funds to be made hereunder shall be made only to the extent that
funds are on deposit in the Central Account or the affected Sub-Account, and
Lender shall have no responsibility to make additional funds available in the
event that funds on deposit are insufficient. The Central Account shall contain
the Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account, the
Recurring Replacement Reserve Sub-Account, the Operation and Maintenance Expense
Sub-Account and the Mez Payment Sub-Account, each of which accounts shall be
Eligible Accounts (each a "Sub-Account" and collectively, the "Sub-Accounts") to
which certain funds shall be allocated and from which disbursements shall be
made pursuant to the terms of this Security Instrument. In addition, on the date
hereof the Central Account shall also contain a Sub-Account entitled the
"Engineering Escrow Sub-Account" which initially shall be funded with the
Initial Engineering Deposit (representing sums applicable to certain engineering
work as set forth on EXHIBIT D, attached hereto and made a part hereof
(collectively, "Required Engineering Work")). Disbursements from the Engineering
Escrow Sub-Account shall be made in accordance with Section 5.12 hereof.

      Section 5.03. Intentionally Omitted.

      Section 5.04. Intentionally Omitted.

      Section 5.05. Monthly Funding of Sub-Accounts. On or before each Payment
Date during the term of the Loan, commencing on the first (1st) Payment Date
occurring after the month in which the Loan is initially funded, Borrower shall
pay, or cause to be paid by Federal wire or automatic clearing house funds to
the Central Account, the Basic Carrying Costs Monthly Installment, the Required
Debt Service Payment, the Recurring Replacement Reserve Monthly Installment, the
Mez Payment Amount and all sums required to be deposited into the

                                       45
<PAGE>

Operation and Maintenance Expense Sub-Account pursuant to clauses (a) through
(g) of this Section 5.05 and all funds transferred or deposited into the Central
Account shall be allocated among the Sub-Accounts as follows and in the
following priority:

      (a) first, to the Basic Carrying Costs Sub-Account, until an amount equal
to the Basic Carrying Costs Monthly Installment for such Interest Accrual Period
has been allocated to the Basic Carrying Costs Sub-Account;

      (b) second, to the Debt Service Payment Sub-Account, until an amount equal
to the Required Debt Service Payment for the Payment Date occurring for such
Interest Accrual Period has been allocated to the Debt Service Payment
Sub-Account;

      (c) third, to the Recurring Replacement Reserve Sub-Account, until an
amount equal to the Recurring Replacement Reserve Monthly Installment for such
Interest Accrual Period has been allocated to the Recurring Replacement Reserve
Sub-Account;

      (d) fourth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the Cash Expenses, other
than management fees payable to Affiliates of Borrower, for such Interest
Accrual Period pursuant to the related Approved Annual Budget;

      (e) fifth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Net Capital Expenditures for such Interest Accrual Period pursuant to the
related Approved Annual Budget;

      (f) sixth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Extraordinary Expenses approved by Lender for such Interest Accrual Period; and

      (g) seventh, but only if an Event of Default is not then continuing, to
the Mez Payment Sub-Account until an amount equal to the Mez Payment Amount has
been allocated to the Mez Payment Sub-Account.

      Lender shall notify Borrower as soon as reasonably practicable after the
amounts set forth in clauses (a) through (g) above have been transferred or
deposited into the Central Account and allocated as aforesaid to the extent such
deposits are fully made prior to the Payment Date in such Interest Accrual
Period. Provided that (I) no Event of Default has occurred and is continuing and
(II) Lender has received the Manager's Certification referred to in Section
2.09(d) hereof for the most recent period for which the same is due, Lender
agrees that in each Interest Accrual Period any amounts deposited into or
remaining in the Central Account after the Sub-Accounts have been funded in
accordance with clauses (a) through (g) above with respect to such Interest
Accrual Period and any periods prior thereto, shall be disbursed by Lender to
Borrower on the Payment Date in such Interest Accrual Period. The balance of the
funds distributed to, or withdrawn by, Borrower after payment of all Operating
Expenses by or on behalf of Borrower may be retained by Borrower. After the
occurrence, and during the continuance, of an Event of Default, no funds held in
the Central Account or the Rent Account shall be distributed to, or withdrawn
by, Borrower, and Lender shall have the right to apply all or any portion of the
funds held in either or both of such accounts and any Sub-Account to the Debt in
Lender's sole discretion.

      Section 5.06. Payment of Basic Carrying Costs. Borrower hereby agrees to
pay all Basic Carrying Costs (without regard to the amount of money in the Basic
Carrying Costs Sub-Account). Should an Event of Default occur, the sums on
deposit in the Basic Carrying Costs Sub-Account may be applied by Lender in
payment of any Basic Carrying Costs or may be applied to the payment of the Debt
or any other charges affecting all or any portion of the Cross-collateralized
Properties as Lender in its sole discretion may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.

                                       46
<PAGE>

      Section 5.07. Debt Service Payment Sub-Account. On each Payment Date
during the term of the Loan, Lender shall transfer to the Collection Account,
from the Debt Service Payment Sub-Account, an amount equal to the sum of (a) the
Required Debt Service Payment for such Payment Date and (b) any amounts
deposited into the Central Account that are either (i) Loss Proceeds that Lender
has elected to apply to reduce the Debt in accordance with the terms of Article
III hereof or (ii) excess Loss Proceeds remaining after the completion of any
restoration required hereunder.

      Section 5.08. Recurring Replacement Reserve Sub-Account. Borrower hereby
agrees to pay all Recurring Replacement Expenditures with respect to the
Property (without regard to the amount of money then available in the Recurring
Replacement Reserve Sub-Account). Should an Event of Default occur, the sums on
deposit in the Recurring Replacement Reserve Sub-Account may be applied by
Lender in payment of any Recurring Replacement Expenditures or may be applied to
the payment of the Debt or any other charges affecting all or any portion of the
Cross-collateralized Properties, as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.

      Section 5.09. Operation and Maintenance Expense Sub-Account. Borrower
hereby agrees to pay all Operating Expenses with respect to the Property
(without regard to the amount of money then available in the Operation and
Maintenance Expense Sub-Account). All funds allocated to the Operation and
Maintenance Expense Sub-Account shall be held by Lender pursuant to the
provisions of this Security Instrument. Any sums held in the Operation and
Maintenance Expense Sub-Account shall be disbursed to Borrower within five (5)
Business Days of receipt by Lender from Borrower of (a) a written request for
such disbursement which shall indicate the Operating Expenses (exclusive of
Basic Carrying Costs and any management fees payable to Borrower, or to any
Affiliate of Borrower) for which the requested disbursement is to pay and (b) an
Officer's Certificate stating that no Operating Expenses with respect to the
Property are more than sixty (60) days past due; provided, however, in the event
that Borrower legitimately disputes any invoice for an Operating Expense, and
(i) no Event of Default has occurred and is continuing hereunder, (ii) Borrower
shall have set aside adequate reserves for the payment of such disputed sums
together with all interest and late fees thereon, (iii) Borrower has complied
with all the requirements of this Security Instrument relating thereto, and (iv)
the contesting of such sums shall not constitute a default under any other
instrument, agreement, or document to which Borrower is a party, then Borrower
may, after certifying to Lender as to items (i) through (iv) hereof, contest
such invoice. Borrower may request a disbursement from the Operation and
Maintenance Expense Sub-Account no more than one (1) time per calendar month.
Should an Event of Default occur and be continuing, the sums on deposit in the
Operation and Maintenance Expense Sub-Account may be applied by Lender in
payment of any Operating Expenses for the Property or may be applied to the
payment of the Debt or other charges affecting all or any portion of the
Property as Lender, in its sole discretion, may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.

      Section 5.10. Intentionally Omitted.

      Section 5.11. Intentionally Omitted.

      Section 5.12. Performance of Engineering Work. (a) Borrower shall promptly
commence and diligently thereafter pursue to completion (without regard to the
amount of money then available in the Engineering Escrow Sub-Account) the
Required Engineering Work within the timetable set forth on EXHIBIT D hereof or
such longer period of time, if any, to which Lender has agreed in writing, which
period may, provided that Borrower is attempting to complete the Required
Engineering Work with all due diligence, be extended in the event of a Force
Majeure for whatever period of time the Force Majeure prevented Borrower from
completing the Required Engineering Work, such extension period not to exceed an
additional three (3) months. After Borrower completes an item of Required
Engineering Work, Borrower may submit to Lender an invoice therefor with lien
waivers and an Officer's Certificate or, with respect to items which
individually or in the aggregate exceed $10,000, a statement from the Engineer,
in each case reasonably acceptable to Lender, indicating that the portion of the
Required Engineering Work in question has been completed in a workmanlike manner
and in compliance with all Legal

                                       47
<PAGE>

Requirements, and Lender shall, within twenty (20) days thereafter, although in
no event more frequently than once each month, reimburse such amount to Borrower
from the Engineering Escrow Sub-Account; provided, however, that Borrower shall
not be reimbursed more than the amount set forth on EXHIBIT D hereto as the
amount allocated to the portion of the Required Engineering Work for which
reimbursement is sought.

      (b)   From and after the date all of the Required Engineering Work is
completed, Borrower may submit a written request, which request shall be
delivered together with final lien waivers and a statement from the Engineer, as
the case may be, reasonably acceptable to Lender, indicating that all of the
Required Engineering Work has been completed in compliance with all Legal
Requirements, and Lender shall, within twenty (20) days thereafter, disburse any
balance of the Engineering Escrow Sub-Account to Borrower. Should an Event of
Default occur, the sums on deposit in the Engineering Escrow Sub-Account may be
applied by Lender in payment of any Required Engineering Work or may be applied
to the payment of the Debt or any other charges affecting all or any portion of
the Cross-collateralized Properties, as Lender in its sole discretion may
determine; provided, however, that no such application shall be deemed to have
been made by operation of law or otherwise until actually made by Lender as
herein provided.

      Section 5.13. Loss Proceeds. In the event of a casualty to the Property,
unless Lender elects, or is required pursuant to Article III hereof to make all
of the Insurance Proceeds available to Borrower for restoration, Lender and
Borrower shall cause all such Insurance Proceeds to be paid by the insurer
directly to the Central Account, whereupon Lender shall, after deducting
Lender's costs of recovering and paying out such Insurance Proceeds, including
without limitation, reasonable attorneys' fees, apply same to reduce the Debt in
accordance with the terms of the Note; provided, however, that if Lender elects,
or is deemed to have elected, to make the Insurance Proceeds available for
restoration, all Insurance Proceeds in respect of rent loss, business
interruption or similar coverage shall be maintained in the Central Account, to
be applied by Lender in the same manner as Rent received with respect to the
operation of the Property; provided, further, however, that in the event that
the Insurance Proceeds with respect to such rent loss, business interruption or
similar insurance policy are paid in a lump sum in advance, Lender shall hold
such Insurance Proceeds in a segregated interest-bearing escrow account, which
shall be an Eligible Account, shall estimate, in Lender's reasonable discretion,
the number of months required for Borrower to restore the damage caused by the
casualty, shall divide the aggregate rent loss, business interruption or similar
Insurance Proceeds by such number of months, and shall disburse from such bank
account into the Central Account each month during the performance of such
restoration such monthly installment of said Insurance Proceeds. In the event
that Insurance Proceeds are to be applied toward restoration, Lender shall hold
such funds in a segregated bank account at the Bank, which shall be an Eligible
Account, and shall disburse same in accordance with the provisions of Section
3.04 hereof. Unless Lender elects, or is required pursuant to Section 6.01
hereof to make all of the Condemnation Proceeds available to Borrower for
restoration, Lender and Borrower shall cause all such Condemnation Proceeds to
be paid to the Central Account, whereupon Lender shall, after deducting Lender's
costs of recovering and paying out such Condemnation Proceeds, including without
limitation, reasonable attorneys' fees, apply same, by transferring such amounts
to the Collection Account, to reduce the Debt in accordance with the terms of
the Note; provided, however, that any Condemnation Proceeds received in
connection with a temporary Taking shall be maintained in the Central Account,
to be applied by Lender in the same manner as Rent received with respect to the
operation of the Property; provided, further, however, that in the event that
the Condemnation Proceeds of any such temporary Taking are paid in a lump sum in
advance, Lender shall hold such Condemnation Proceeds in a segregated
interest-bearing bank account, which shall be an Eligible Account, shall
estimate, in Lender's reasonable discretion, the number of months that the
Property shall be affected by such temporary Taking, shall divide the aggregate
Condemnation Proceeds in connection with such temporary Taking by such number of
months, and shall disburse from such bank account into the Central Account each
month during the pendency of such temporary Taking such monthly installment of
said Condemnation Proceeds. In the event that Condemnation Proceeds are to be
applied toward restoration, Lender shall hold such funds in a segregated bank
account at the Bank, which shall be an Eligible Account, and shall disburse same
in accordance with the provisions of Section 3.04 hereof. If any Loss Proceeds
are received by Borrower, such Loss Proceeds shall be received in trust for
Lender, shall be segregated from other funds of Borrower, and shall be forthwith
paid into the Central Account, or paid to Lender to hold in a segregated bank
account at the Bank, in each case to be applied or disbursed in accordance with
the foregoing. Any Loss Proceeds made available to Borrower for restoration in
accordance herewith, to the extent not used by Borrower in connection with, or
to the extent they exceed the cost of, such restoration, shall be

                                       48
<PAGE>

deposited into the Central Account, whereupon Lender shall apply the same to
reduce the Debt in accordance with the terms of the Note.

      Section 5.14. Mez Payment Sub-Account. Provided that no Event of Default
has occurred and is continuing, on each Payment Date during which the Mez Loan
is outstanding, Lender shall transfer to the holder of the Mez Loan, as
identified in writing by a joint direction executed by Borrower and the holder
of the Mez Loan, an amount equal to the Mez Payment Amount. Should an Event of
Default occur, the sums on deposit in the Mez Payment Sub-Account may be applied
by Lender to the payment of the Debt or any other charges affecting all or any
portion of the Property, as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.
The holder of the Mez Loan shall be deemed a third party beneficiary for
purposes of enforcing its right to receive payments of the Mez Payment Amount
pursuant to the provisions of this Section 5.14, except that Borrower (and not
Lender) shall be responsible for any deficiencies in such amount.

                            ARTICLE VI: CONDEMNATION

            Section 6.01. Condemnation. (a) Borrower shall notify Lender
promptly of the commencement or threat of any Taking of the Property or any
portion thereof. Lender is hereby irrevocably appointed as Borrower's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain the proceeds of any such Taking and to make any compromise or
settlement in connection with such proceedings (subject to Borrower's reasonable
approval, except after the occurrence of an Event of Default, in which event
Borrower's approval shall not be required), subject to the provisions of this
Security Instrument; provided, however, that Borrower may participate in any
such proceedings and shall be authorized and entitled to compromise or settle
any such proceeding with respect to Condemnation Proceeds in an amount less than
five percent (5%) of the Allocated Loan Amount. Borrower shall execute and
deliver to Lender any and all instruments reasonably required in connection with
any such proceeding promptly after request therefor by Lender. Except as set
forth above, Borrower shall not adjust, compromise, settle or enter into any
agreement with respect to such proceedings without the prior consent of Lender.
All Condemnation Proceeds are hereby assigned to and shall be paid to Lender to
be applied in accordance with the terms hereof. With respect to Condemnation
Proceeds in an amount in excess of five percent (5%) of the Allocated Loan
Amount, Borrower hereby authorizes Lender to compromise, settle, collect and
receive such Condemnation Proceeds, and to give proper receipts and acquittance
therefor. Subject to the provisions of this Article VI, Lender may apply such
Condemnation Proceeds (less any cost to Lender of recovering and paying out such
proceeds, including, without limitation, reasonable attorneys' fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment of
the Debt or to allow such proceeds to be used for the Work.

      (b)   "Substantial Taking" shall mean (i) a Taking of such portion of the
Property that would, in Lender's reasonable discretion, leave remaining a
balance of the Property which would not under then current economic conditions,
applicable Development Laws and other applicable Legal Requirements, permit the
restoration of the Property so as to constitute a complete, rentable facility of
the same sort as existed prior to the Taking, having adequate ingress and egress
to the Property, capable of producing a projected Net Operating Income (as
reasonably determined by Lender) yielding a projected Debt Service Coverage
therefrom for the next two (2) years of not less than the Required Debt Service
Coverage, (ii) a Taking which occurs less than two (2) years prior to the
Maturity Date, (iii) a Taking which Lender is not reasonably satisfied could be
restored within twelve (12) months and at least six (6) months prior to the
Maturity Date or (iv) a Taking of more than fifteen percent (15%) of the
reasonably estimated fair market value of the Property.

      (c)   In the case of a Substantial Taking, Condemnation Proceeds shall be
payable to Lender in reduction of the Debt but without any prepayment fee or
charge of any kind and, if Borrower elects to apply any Condemnation Proceeds it
may receive pursuant to this Security Instrument to the payment of the Debt,
Borrower may prepay the balance of the Debt without any prepayment fee or charge
of any kind.

                                       49
<PAGE>

      (d)   In the event of a Taking which is less than a Substantial Taking,
Borrower at its sole cost and expense (whether or not the award shall have been
received or shall be sufficient for restoration) shall proceed diligently to
restore, or cause the restoration of, the remaining Improvements not so taken,
to maintain a complete, rentable, self-contained fully operational facility of
the same sort as existed prior to the Taking in as good a condition as is
reasonably possible. In the event of such a Taking, Lender shall receive the
Condemnation Proceeds and shall pay over the same:

            (i)   first, provided no Default shall have occurred and be
      continuing, to Borrower to the extent of any portion of the award as may
      be necessary to pay the reasonable cost of restoration of the Improvements
      remaining, and

            (ii)  second, to Lender, in reduction of the Debt without any
      prepayment premium or charge of any kind.

      If one or more Takings in the aggregate create a Substantial Taking, then,
in such event, the sections of this Article VI above applicable to Substantial
Takings shall apply.

      (e)   In the event Lender is obligated to or elects to make Condemnation
Proceeds available for the restoration or rebuilding of the Property, such
proceeds shall be disbursed in the manner and subject to the conditions set
forth in Section 3.04(b) hereof. If, in accordance with this Article VI, any
Condemnation Proceeds are used to reduce the Debt, they shall be applied in
accordance with the provisions of the Note. Borrower shall promptly execute and
deliver all instruments requested by Lender for the purpose of confirming the
assignment of the Condemnation Proceeds to Lender. Application of all or any
part of the Condemnation Proceeds to the Debt shall be made in accordance with
the provisions of Sections 3.06 and 3.07 hereof. No application of the
Condemnation Proceeds to the reduction of the Debt shall have the effect of
releasing the lien of this Security Instrument until the remainder of the Debt
has been paid in full. In the case of any Taking, Lender, to the extent that
Lender has not been reimbursed by Borrower, shall be entitled, as a first
priority out of any Condemnation Proceeds, to reimbursement for all costs, fees
and expenses reasonably incurred in the determination and collection of any
Condemnation Proceeds. All Condemnation Proceeds deposited with Lender pursuant
to this Section, until expended or applied as provided herein, shall be held in
accordance with Section 3.04(b) hereof and shall constitute additional security
for the payment of the Debt and the payment and performance of Borrower's
obligations, but Lender shall not be deemed a trustee or other fiduciary with
respect to its receipt of such Condemnation Proceeds or any part thereof. All
awards so deposited with Lender shall be held by Lender in an Eligible Account,
but Lender makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue on any such deposit and shall have no
liability in connection therewith. For purposes hereof, any reference to the
award shall be deemed to include interest, if any, which has accrued thereon.

                         ARTICLE VII: LEASES AND RENTS

      Section 7.01. Assignment. (a) Borrower does hereby bargain, sell, assign
and set over unto Lender, all of Borrower's interest in the Leases and Rents.
The assignment of Leases and Rents in this Section 7.01 is an absolute,
unconditional and present assignment from Borrower to Lender and not an
assignment for security and the existence or exercise of Borrower's revocable
license to collect Rent shall not operate to subordinate this assignment to any
subsequent assignment. The exercise by Lender of any of its rights or remedies
pursuant to this Section 7.01 shall not be deemed to make Lender a
mortgagee-in-possession. In addition to the provisions of this Article VII,
Borrower shall comply with all terms, provisions and conditions of the
Assignment.

      (b)   So long as there shall exist and be continuing no Event of Default,
Borrower shall have a revocable license to take all actions with respect to all
Leases and Rents, present and future, including the right to collect and use the
Rents, subject to the terms of this Security Instrument and the Assignment.

      (c)   In a separate instrument Borrower shall, as requested from time to
time by Lender, assign to Lender or its nominee by specific or general
assignment, any and all Leases, such assignments to be in form and content
reasonably acceptable to Lender, but subject to the provisions of Section
7.01(b) hereof. Borrower agrees to

                                       50
<PAGE>

deliver to Lender, within thirty (30) days after Lender's request, a true and
complete copy of every Major Space Lease and during the continuance of any
Default, all other Leases and, within ten (10) days after Lender's request, a
complete list of the Leases, certified by Borrower to be true, accurate and
complete and stating the demised premises, the names of the lessees, the Rent
payable under the Leases, the date to which such Rents have been paid, the
material terms of the Leases, including, without limitation, the dates of
occupancy, the dates of expiration, any Rent concessions, work obligations or
other inducements granted to the lessees thereunder, and any renewal options.

      (d)   The rights of Lender contained in this Article VII, the Assignment
or any other assignment of any Lease shall not result in any obligation or
liability of Lender to Borrower or any lessee under a Lease or any party
claiming through any such lessee.

      (e)   At any time after an Event of Default, the license granted
hereinabove may be revoked by Lender, and Lender or a receiver appointed in
accordance with this Security Instrument may enter upon the Property, and
collect, retain and apply the Rents toward payment of the Debt in such priority
and proportions as Lender in its sole discretion shall deem proper.

      (f)   In addition to the rights which Lender may have herein, upon the
occurrence of any Event of Default, Lender, at its option, may require Borrower
to pay monthly in advance to Lender, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation of such
part of the Property as may be used and occupied by Borrower and may require
Borrower to vacate and surrender possession of the Property to Lender or to such
receiver and, in default thereof, Borrower may be evicted by summary proceedings
or otherwise.

      Section 7.02. Management of Property. (a) Borrower shall manage the
Property or cause the Property to be managed in a manner which is consistent
with the Approved Manager Standard. All Space Leases shall provide for rental
rates comparable to then existing local market rates and terms and conditions
which constitute good and prudent business practice and are consistent with
prevailing market terms and conditions, and shall be arms-length transactions.
All Leases shall be on a form previously approved by Lender and shall provide
that they are subordinate to this Security Instrument and that the lessees
thereunder attorn to Lender; provided, however, that the foregoing shall not
apply to month-to-month agreements entered into with respect to the use of
mini-storage facilities by Borrower in the ordinary course of business and on
Borrower's standard form agreement. Borrower shall deliver copies of all Major
Space Leases, amendments, modifications and renewals thereof to Lender. All
proposed Major Space Leases for the Property shall be subject to the prior
written approval of Lender, provided, however that Borrower may enter into new
commercial leases with unrelated third parties without obtaining the prior
consent of Lender provided that: (i) the proposed tenant is unrelated to a
tenant under an existing Lease; (ii) the proposed leases conform with the
requirements of this Section 7.02; (iii) the space to be leased pursuant to such
proposed lease does not exceed 5,000 square feet; and (iv) the term of the
proposed lease inclusive of all extensions and renewals, does not exceed five
(5) years.

      (b)   Borrower (i) shall observe and perform all of its material
obligations under the Leases pursuant to applicable Legal Requirements and shall
not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (ii) shall promptly send copies to Lender of all notices
of default which Borrower shall receive under the Leases; (iii) shall,
consistent with the Approved Manager Standard, enforce all of the terms,
covenants and conditions contained in the Leases to be observed or performed;
(iv) shall not collect more than five percent (5%) of monthly Rent under the
Leases more than one (1) month in advance (except that Borrower may collect in
advance such security deposits as are permitted pursuant to applicable Legal
Requirements and are commercially reasonable in the prevailing market); (v)
shall not execute any other assignment of lessor's interest in the Leases or the
Rents except as otherwise expressly permitted pursuant to this Security
Instrument; (vi) shall not cancel or terminate any of the Leases or accept a
surrender thereof in any manner inconsistent with the Approved Manager Standard;
(vii) shall not convey, transfer or suffer or permit a conveyance or transfer of
all or any part of the Premises or the Improvements or of any interest therein
so as to effect a merger of the estates and rights of, or a termination or
diminution of the obligations of, lessees thereunder; (viii) shall not alter,
modify or change the terms of any guaranty of any Major Space Lease or cancel or
terminate any such guaranty; (ix) shall, in accordance with the Approved Manager
Standard, make all reasonable efforts to seek lessees for space as it becomes
vacant and enter into Leases

                                       51
<PAGE>

in accordance with the terms hereof; (x) shall not materially modify, alter or
amend any Major Space Lease or Property Agreement without Lender's consent,
which consent will not be unreasonably withheld or delayed; (xi) shall notify
Lender promptly if any Pad Owner shall cease business operations or of the
occurrence of any event of which it becomes aware affecting a Pad Owner or its
property which might have any material effect on the Property; and (xii) shall,
without limitation to any other provision hereof, execute and deliver at the
request of Lender all such further assurances, confirmations and assignments in
connection with the Property as are required herein and as Lender shall from
time to time reasonably require.

      (c)   All security deposits of lessees, whether held in cash or any other
form, shall be treated by Borrower as trust funds and shall be held in
compliance with all Legal Requirements. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under applicable
Legal Requirements shall be maintained in full force and effect unless replaced
by cash deposits as hereinabove described, shall be issued by a Person
reasonably satisfactory to Lender, shall, if permitted pursuant to Legal
Requirements, at Lender's option, name Lender as payee or mortgagee thereunder
or be fully assignable to Lender and shall, in all respects, comply with
applicable Legal Requirements and otherwise be reasonably satisfactory to
Lender. Borrower shall, upon request, provide Lender with evidence reasonably
satisfactory to Lender of Borrower's compliance with the foregoing. Following
the occurrence and during the continuance of any Event of Default, Borrower
shall, upon Lender's request, if permitted by applicable Legal Requirements,
turn over the security deposits (and any interest thereon) to Lender to be held
by Lender in accordance with the terms of the Leases and all Legal Requirements.

      (d)   Lender shall, upon request of Borrower, enter into a subordination,
nondisturbance and attornment agreement ("SNDA") with respect to each proposed
tenant entering into a Lease in compliance with the requirements of this
Security Instrument; provided, that such Lease is (i) for at least 5,000 square
feet of space of the Premises, (ii) with a tenant reasonably approved by Lender
in writing prior to Borrower's execution of any such Lease and (iii) on the
standard form of Lease previously approved in writing by Lender. Any SNDA
executed by Lender shall be on Lender's then standard form and provide that in
the event Lender or any purchaser at foreclosure shall succeed to Borrower's
interest in the Property, the Leases of such tenants will remain in full force
and effect and be binding upon Lender or such purchaser and such tenant as
though each were original parties thereto.

      (e)   Borrower covenants and agrees with Lender that (i) the Property will
be managed at all times by Borrower or Manager pursuant to a management
agreement to be approved by Lender (the "Management Agreement"), (ii) after
Borrower has knowledge of a fifty percent (50%) or more change in control of the
ownership of Manager, Borrower will promptly give Lender notice thereof (a
"Manager Control Notice") and (iii) the Management Agreement may be terminated
by Lender at any time for cause (including, but not limited to, Manager's gross
negligence, misappropriation of funds, willful misconduct or fraud) or at any
time following (A) the occurrence of an Event of Default, or (B) the receipt of
a Manager Control Notice or (C) the date upon which the trailing twelve (12)
month Aggregate Debt Service Coverage is equal to or less than 1.10:1.00, and a
substitute managing agent shall be appointed by Borrower, subject to Lender's
prior written approval, which may be given or withheld in Lender's sole
discretion and which may be conditioned on, inter alia, a letter from the Rating
Agency confirming that any rating issued by the Rating Agency in connection with
a Securitization will not, as a result of the proposed change of Manager, be
downgraded from the then current ratings thereof, qualified or withdrawn.
Borrower may from time to time appoint a successor manager to manage the
Property with Lender's prior written consent which consent shall not be
unreasonably withheld or delayed, provided that any such successor manager shall
be a reputable management company which meets the Approved Manager Standard and
each Rating Agency shall have confirmed in writing that any rating issued by the
Rating Agency in connection with a Securitization will not, as a result of the
proposed change of Manager, be downgraded from the then current ratings thereof,
qualified or withdrawn. Borrower further covenants and agrees that Borrower
shall require Manager (or any successor managers) to maintain at all times
during the term of the Loan worker's compensation insurance as required by
Governmental Authorities. Lender acknowledges that, as of the Closing Date, the
Property is self-managed by Borrower.

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<PAGE>

                      ARTICLE VIII: MAINTENANCE AND REPAIR

      Section 8.01. Maintenance and Repair of the Property; Alterations;
Replacement of Equipment. Borrower hereby covenants and agrees:

      (a)   Borrower shall not (i) desert or abandon the Property, (ii) change
the use of the Property or cause or permit the use or occupancy of any part of
the Property to be discontinued if such discontinuance or use change would
violate any zoning or other law, ordinance or regulation; (iii) consent to or
seek any lowering of the zoning classification, or greater zoning restriction
affecting the Property; or (iv) take any steps whatsoever to convert the
Property, or any portion thereof, to a condominium or cooperative form of
ownership.

      (b)   Borrower shall, at its expense, (i) take good care of the Property
including grounds generally, and utility systems and sidewalks, roads, alleys,
and curbs therein, and shall keep the same in good, safe and insurable condition
and in compliance with all applicable Legal Requirements, (ii) promptly make all
repairs to the Property, above grade and below grade, interior and exterior,
structural and nonstructural, ordinary and extraordinary, unforeseen and
foreseen, and maintain the Property in a manner appropriate for the facility and
(iii) not commit or suffer to be committed any waste of the Property or do or
suffer to be done anything which will increase the risk of fire or other hazard
to the Property or impair the value thereof. Borrower shall keep the sidewalks,
vaults, gutters and curbs comprising, or adjacent to, the Property, clean and
free from dirt, snow, ice, rubbish and obstructions. All repairs made by
Borrower shall be made with first-class materials, in a good and workmanlike
manner, shall be equal or better in quality and class to the original work and
shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under
Space Leases or Pad Owners or other Persons under Property Agreements, Borrower
may fulfill its obligations hereunder by causing such tenants, Pad Owners or
other Persons, as the case may be, to perform their obligations thereunder. As
used herein, the terms "repair" and "repairs" shall be deemed to include all
necessary replacements.

      (c)   Borrower shall not demolish, remove, construct, or, except as
otherwise expressly provided herein, restore, or alter the Property or any
portion thereof; nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration which would diminish the value
of the Property without Lender's prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed; provided, however,
Borrower may make structural or exterior alterations to the Improvements or
interior alterations of a non-structural type without Lender's prior written
consent provided that (i) the aggregate cost of such alterations does not exceed
$100,000.00 or (ii) in the event that such alterations are required due to an
emergency situation and Borrower determines, in its commercially reasonable
discretion and subject to the Approved Manager Standard that obtaining such
consent from Lender is not practical under the circumstances (provided, however
that Borrower shall use its best efforts to provide notice to Lender of such
alterations within five (5) Business Days of such emergency condition commencing
at the Property).

      (d)   Borrower represents and warrants to Lender that (i) there are no
fixtures, machinery, apparatus, tools, equipment or articles of personal
property attached or appurtenant to, or located on, or used in connection with
the management, operation or maintenance of the Property, except for the
Equipment and Fixtures, equipment leased by Borrower for the management,
operation or maintenance of the Property in accordance with the Loan Documents
and the U-Haul rental fleet of trucks, vans and wagons; (ii) the Equipment and
the leased equipment constitute all of the fixtures, machinery, apparatus,
tools, equipment and articles of personal property necessary to the proper
operation and maintenance of the Property; and (iii) all of the Equipment is
free and clear of all liens, except for the lien of this Security Instrument and
the Permitted Encumbrances. All right, title and interest of Borrower in and to
all extensions, improvements, betterments, renewals and appurtenances to the
Property hereafter acquired by, or released to, Borrower or constructed,
assembled or placed by Borrower in the Property, and all changes and
substitutions of the security constituted thereby, shall be and, in each such
case, without any further mortgage, encumbrance, conveyance, assignment or other
act by Lender or Borrower, shall become subject to the lien and security
interest of this Security Instrument as fully and completely, and with the same
effect, as though now owned by Borrower and specifically described in this
Security Instrument, but at any and all times Borrower shall execute and deliver
to Lender any documents Lender may reasonably deem necessary or appropriate for
the purpose of specifically subjecting the same to the lien and security
interest of this Security Instrument.

                                       53
<PAGE>

      (e)   Notwithstanding the provisions of this Security Instrument to the
contrary, Borrower shall have the right, at any time and from time to time, to
remove and dispose of Equipment which may have become obsolete or unfit for use
or which is no longer useful in the management, operation or maintenance of the
Property. Borrower shall promptly replace any such Equipment so disposed of or
removed with other Equipment of equal value and utility, free of any security
interest or superior title, liens or claims; except that, if by reason of
technological or other developments, replacement of the Equipment so removed or
disposed of is not necessary or desirable for the proper management, operation
or maintenance of the Property, Borrower shall not be required to replace the
same. All such replacements or additional equipment shall be deemed to
constitute "Equipment" and shall be covered by the security interest herein
granted.

              ARTICLE IX: TRANSFER OR ENCUMBRANCE OF THE PROPERTY

      Section 9.01. Other Encumbrances. Borrower shall not further encumber or
permit the further encumbrance in any manner (whether by grant of a pledge,
security interest or otherwise) of the Property or any part thereof or interest
therein, including, without limitation, of the Rents therefrom (other than
purchase money financing of equipment in the ordinary course of business
provided that such purchase money financing complies with the provisions of
Section 2.02(g)(viii) hereof); provided, however, notwithstanding anything
contained in this Security Instrument, Lender hereby consents to the Mez Loan
and the pledge of a direct or indirect interest in Borrower in connection
therewith. In addition, Borrower shall not further encumber and shall not permit
the further encumbrance in any manner (whether by grant of a pledge, security
interest or otherwise) of Borrower or any direct or indirect interest in
Borrower except as expressly permitted pursuant to this Security Instrument.

      Section 9.02. No Transfer. Borrower acknowledges that Lender has examined
and relied on the expertise of Borrower and, if applicable, each General
Partner, in owning and operating properties such as the Property in agreeing to
make the Loan and will continue to rely on Borrower's ownership of the Property
as a means of maintaining the value of the Property as security for repayment of
the Debt and Borrower acknowledges that Lender has a valid interest in
maintaining the value of the Property. Borrower shall not Transfer, nor permit
any Transfer, without the prior written consent of Lender, which consent Lender
may withhold in its sole and absolute discretion. Lender shall not be required
to demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Transfer without Lender's consent. This provision shall apply to every
Transfer regardless of whether voluntary or not, or whether or not Lender has
consented to any previous Transfer.

      Section 9.03. Due on Sale. Lender may declare the Debt immediately due and
payable upon any Transfer or further encumbrance without Lender's consent
without regard to whether any impairment of its security or any increased risk
of default hereunder can be demonstrated. This provision shall apply to every
Transfer or further encumbrance of the Property or any part thereof or interest
in the Property or in Borrower regardless of whether voluntary or not, or
whether or not Lender has consented to any previous Transfer or further
encumbrance of the Property or interest in Borrower.

      Section 9.04. Permitted Transfer. Notwithstanding the foregoing provisions
of this Article IX, subsequent to the first (1st) anniversary of the Closing
Date, a one time sale, conveyance or transfer of the Cross-collateralized
Properties in their entirety (hereinafter, "Sale") shall be permitted hereunder,
provided that each of the following terms and conditions are satisfied:

      (a)   no Default is then continuing hereunder or under any of the other
Loan Documents;

      (b)   Lender shall have consented to the Sale, which consent shall not be
unreasonably withheld or delayed, and, if the proposed Sale is to occur at any
time after a Securitization, each Rating Agency shall have delivered written
confirmation that any rating issued by such Rating Agency in connection with the
Securitization will not, as a result of the proposed Sale, be downgraded from
the then current ratings thereof, qualified or withdrawn; provided, however,
that no request for consent to the Sale will be entertained by Lender if the
proposed Sale is to occur within sixty (60) days of any contemplated sale of the
Loan by Lender, whether in connection with a Securitization or otherwise;

                                       54
<PAGE>

      (c)   Borrower gives Lender written notice of the terms of the proposed
Sale not less than sixty (60) days before the date on which such Sale is
scheduled to close and, concurrently therewith, gives Lender (i) all such
information concerning the proposed transferee of the Property (hereinafter,
"Buyer") as Lender would require in evaluating an initial extension of credit to
a borrower and Lender determines, in its sole discretion that the Buyer is
acceptable to Lender in all respects and (ii) a non-refundable application fee
equal to $7,500;

      (d)   Borrower pays Lender, concurrently with the closing of such Sale, a
non-refundable assumption fee in an amount equal to one percent (1%) of the then
outstanding Loan Amount together with all out-of-pocket costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred by Lender in
connection with the Sale;

      (e)   Buyer assumes all of the obligations under the Loan Documents and,
prior to or concurrently with the closing of such Sale, Buyer executes, without
any cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate said assumption and delivers such
legal opinions as Lender may reasonably require;

      (f)   Borrower and Buyer execute, without any cost or expense to Lender,
new financing statements or financing statement amendments and any additional
documents reasonably requested by Lender;

      (g)   Borrower delivers to Lender, without any cost or expense to Lender,
such endorsements to Lender's title insurance policy, hazard insurance policy
endorsements or certificates and other similar materials as Lender may deem
necessary at the time of the Sale, all in form and substance reasonably
satisfactory to Lender, including, without limitation, an endorsement or
endorsements to Lender's title insurance policy insuring the lien of this
Security Instrument, extending the effective date of such policy to the date of
execution and delivery (or, if later, of recording) of the assumption agreement
referenced above in subparagraph (e) of this Section, with no additional
exceptions added to such policy, and insuring that fee simple title to the
Property is vested in Buyer;

      (h)   Borrower executes and delivers to Lender, without any cost or
expense to Lender, a release of Lender, its officers, directors, employees and
agents, from all claims and liability relating to the transactions evidenced by
the Loan Documents, through and including the date of the closing of the Sale,
which agreement shall be in form and substance reasonably satisfactory to Lender
and shall be binding upon Buyer;

      (i)   subject to the provisions of Section 18.32 hereof, such Sale is not
construed so as to relieve Borrower of any personal liability under the Note or
any of the other Loan Documents for any acts or events occurring or obligations
arising prior to or simultaneously with the closing of such Sale, and Borrower
executes, without any cost or expense to Lender, such documents and agreements
as Lender shall reasonably require to evidence and effectuate the ratification
of said personal liability;

      (j)   such Sale is not construed so as to relieve any Guarantor of its
obligations under any guaranty or indemnity agreement executed in connection
with the Loan and each such Guarantor executes, without any cost or expense to
Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate the ratification of each such guaranty agreement,
provided that if Buyer or a party associated with Buyer approved by Lender in
its sole discretion assumes the obligations of the current Guarantor under its
guaranty and Buyer or such party associated with Buyer, as applicable, executes,
without any cost or expense to Lender, a new guaranty in similar form and
substance to the existing guaranty and otherwise satisfactory to Lender, then
Lender shall release the current Guarantor from all obligations arising under
its guaranty after the closing of such Sale; and

      (k)   Buyer is a Single Purpose Entity and Lender receives a
non-consolidation opinion relating to Buyer from Buyer's counsel, which opinion
is in form and substance acceptable to Lender.

                            ARTICLE X: CERTIFICATES

      Section 10.01. Estoppel Certificates. (a) After request by Lender,
Borrower, within fifteen (15) days and at its expense, will furnish Lender with
a statement, duly acknowledged and certified, setting forth (i) the

                                       55
<PAGE>

amount of the original principal amount of the Note, and the unpaid principal
amount of the Note, (ii) the rate of interest of the Note, (iii) the date
payments of interest and/or principal were last paid, (iv) any offsets or
defenses to the payment of the Debt, and if any are alleged, the nature thereof,
(v) that the Note and this Security Instrument have not been modified or if
modified, giving particulars of such modification and (vi) that there has
occurred and is then continuing no Default or if such Default exists, the nature
thereof, the period of time it has existed, and the action being taken to remedy
such Default.

      (b)   Within fifteen (15) days after written request by Borrower, Lender
shall furnish to Borrower a written statement confirming the amount of the Debt,
the maturity date of the Note and the date to which interest has been paid.

      (c)   Borrower shall use all reasonable efforts to obtain estoppel
certificates from tenants that may be required hereunder or under the other Loan
Documents.

                              ARTICLE XI: NOTICES

      Section 11.01. Notices. Any notice, demand, statement, request or consent
made hereunder shall be in writing and delivered personally or sent to the party
to whom the notice, demand or request is being made by Federal Express or other
nationally recognized overnight delivery service, as follows and shall be deemed
given when delivered personally or one (1) Business Day after being deposited
with Federal Express or such other nationally recognized delivery service:

      If to Lender:   To Lender, at the address first written above,

                      with a copy to:

                      Morgan Stanley Mortgage Capital Inc.
                      1221 Avenue of the Americas, 27th Floor
                      New York, New York  10020
                      Attn: Stephen Holmes
                      Facsimile: No.: (212) 762-9495

                      and:

                      Proskauer Rose LLP
                      1585 Broadway
                      New York, New York 10036
                      Attn: David J. Weinberger, Esq.

      If to Borrower: To Borrower, at the address first written above,

                      with a copy to:

                      U-Haul International, Inc.
                      Legal Department
                      2727 N. Central Avenue
                      Phoenix, AZ  85004
                      Attention: Jennifer M. Settles, Esq.

or such other address as either Borrower or Lender shall hereafter specify by
not less than ten (10) days prior written notice as provided herein; provided,
however, that notwithstanding any provision of this Article to the contrary,
such notice of change of address shall be deemed given only upon actual receipt
thereof. Rejection or other refusal to accept or the inability to deliver
because of changed addresses of which no notice was given as herein required
shall be deemed to be receipt of the notice, demand, statement, request or
consent.

                                       56
<PAGE>

                          ARTICLE XII: INDEMNIFICATION

      Section 12.01. Indemnification Covering Property. In addition, and without
limitation, to any other provision of this Security Instrument or any other Loan
Document, Borrower shall protect, indemnify and save harmless Lender and its
successors and assigns, and each of their agents, employees, officers,
directors, stockholders, partners and members (collectively, "Indemnified
Parties") for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys' fees and disbursements imposed upon or incurred by or
asserted against any of the Indemnified Parties by reason of (a) ownership of
this Security Instrument, the Assignment, the Property or any part thereof or
any interest therein or receipt of any Rents; (b) any accident, injury to or
death of any person or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (c) any use, nonuse or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, the
Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (d) any failure on the part of Borrower to perform or
comply with any of the terms of this Security Instrument or the Assignment; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (f) any claim by
brokers, finders or similar Persons claiming to be entitled to a commission in
connection with any Lease or other transaction involving the Property or any
part thereof; (g) any Imposition including, without limitation, any Imposition
attributable to the execution, delivery, filing, or recording of any Loan
Document, Lease or memorandum thereof; (h) any lien or claim arising on or
against the Property or any part thereof under any Legal Requirement or any
liability asserted against any of the Indemnified Parties with respect thereto;
(i) any claim arising out of or in any way relating to any tax or other
imposition on the making and/or recording of this Security Instrument, the Note
or any of the other Loan Documents; (j) a Default under Sections 2.02(f),
2.02(g), 2.02(k), 2.02(t) or 2.02(w) hereof, (k) the failure of any Person to
file timely with the Internal Revenue Service an accurate Form 1099-B, Statement
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with the Loan, or to supply a
copy thereof in a timely fashion to the recipient of the proceeds of the Loan;
or (l) the claims of any lessee or any Person acting through or under any lessee
or otherwise arising under or as a consequence of any Lease. Notwithstanding the
foregoing provisions of this Section 12.01 to the contrary, Borrower shall have
no obligation to indemnify the Indemnified Parties pursuant to this Section
12.01 for liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses relative to the foregoing which result from Lender's,
and its successors' or assigns', willful misconduct or gross negligence. Any
amounts payable to Lender by reason of the application of this Section 12.01
shall constitute a part of the Debt secured by this Security Instrument and the
other Loan Documents and shall become immediately due and payable and shall bear
interest at the Default Rate from the date the liability, obligation, claim,
cost or expense is sustained by Lender, as applicable, until paid. The
provisions of this Section 12.01 shall survive the termination of this Security
Instrument whether by repayment of the Debt, foreclosure or delivery of a deed
in lieu thereof, assignment or otherwise. In case any action, suit or proceeding
is brought against any of the Indemnified Parties by reason of any occurrence of
the type set forth in (a) through (l) above, Borrower shall, at Borrower's
expense, resist and defend such action, suit or proceeding or will cause the
same to be resisted and defended by counsel at Borrower's expense for the
insurer of the liability or by counsel designated by Borrower (unless reasonably
disapproved by Lender promptly after Lender has been notified of such counsel);
provided, however, that nothing herein shall compromise the right of Lender (or
any other Indemnified Party) to appoint its own counsel at Borrower's expense
for its defense with respect to any action which, in the reasonable opinion of
Lender or such other Indemnified Party, as applicable, presents a conflict or
potential conflict between Lender or such other Indemnified Party that would
make such separate representation advisable. Any Indemnified Party will give
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification hereunder. The
Indemnified Parties shall not settle or compromise any action, proceeding or
claim as to which it is indemnified hereunder without notice to Borrower. The
provisions of this Section 12.01 shall survive for a period of ten (10) years
after the termination of this Security Instrument, whether by repayment of the
Debt, foreclosure or delivery of a deed in lieu thereof, assignment or
otherwise. Notwithstanding the foregoing, the provisions of this Article XII are
not intended to modify or restrict the provisions of Section 18.32 hereof.

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                             ARTICLE XIII: DEFAULTS

      Section 13.01. Events of Default. The Debt shall become immediately due at
the option of Lender upon any one or more of the following events ("Event of
Default"):

      (a)   if the final payment or prepayment premium, if any, due under the
Note shall not be paid on Maturity;

      (b)   if any monthly payment of interest and/or principal due under the
Note (other than the sums described in (a) above) shall not be fully paid within
five (5) days of the date upon which the same is due and payable thereunder;

      (c)   if payment of any sum (other than the sums described in (a) above or
(b) above) required to be paid pursuant to the Note, this Security Instrument or
any other Loan Document shall not be paid within five (5) days after Lender
delivers written notice to Borrower that same is due and payable thereunder or
hereunder;

      (d)   if Borrower, Guarantor or, if Borrower or Guarantor is a
partnership, any general partner of Borrower or Guarantor, or, if Borrower or
Guarantor is a limited liability company, any member of Borrower or Guarantor,
shall institute or cause to be instituted any proceeding for the termination or
dissolution of Borrower, Guarantor or any such general partner or member;

      (e)   if the insurance policies required hereunder are not kept in full
force and effect, or if the insurance policies are not assigned and delivered to
Lender as herein provided;

      (f)   if Borrower or Guarantor attempts to assign its rights under this
Security Instrument or any other Loan Document or any interest herein or
therein, or if any Transfer occurs other than in accordance with the provisions
hereof;

      (g)   if any representation or warranty of Borrower or Guarantor made
herein or in any other Loan Document or in any certificate, report, financial
statement or other instrument or agreement furnished to Lender shall prove false
or misleading in any material respect;

      (h)   if Borrower, Guarantor or any general partner of Borrower or
Guarantor shall make an assignment for the benefit of creditors or shall admit
in writing its inability to pay its debts generally as they become due;

      (i)   if a receiver, liquidator or trustee of Borrower, Guarantor or any
general partner of Borrower or Guarantor shall be appointed or if Borrower,
Guarantor or their respective general partners shall be adjudicated a bankrupt
or insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in, by Borrower, Guarantor
or their respective general partners or if any proceeding for the dissolution or
liquidation of Borrower, Guarantor or their respective general partners shall be
instituted; however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower, Guarantor or their respective
general partners, as applicable, upon the same not being discharged, stayed or
dismissed within sixty (60) days or if Borrower, Guarantor or their respective
general partners shall generally not be paying its debts as they become due;

      (j)   if Borrower shall be in default beyond any notice or grace period,
if any, under any other mortgage or deed of trust or security agreement covering
any part of the Property without regard to its priority relative to this
Security Instrument; provided, however, this provision shall not be deemed a
waiver of the provisions of Article IX prohibiting further encumbrances
affecting the Property or any other provision of this Security Instrument;

      (k)   if the Property becomes subject (i) to any lien which is superior to
the lien of this Security Instrument, other than a lien for real estate taxes
and assessments not due and payable, or (ii) to any mechanic's, materialman's or
other lien which is or is asserted to be superior to the lien of this Security
Instrument, and such lien

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<PAGE>

shall remain undischarged (by payment, bonding, or otherwise) for thirty (30)
days following service of notice thereof upon Borrower unless contested in
accordance with the terms hereof;

      (l)   if Borrower discontinues the operation of the Property or any part
thereof for reasons other than repair or restoration arising from a casualty or
condemnation for ten (10) days or more;

      (m)   except as permitted in this Security Instrument, any material
alteration, demolition or removal of any of the Improvements without the prior
consent of Lender;

      (n)   if Borrower consummates a transaction which would cause this
Security Instrument or Lender's rights under this Security Instrument, the Note
or any other Loan Document to constitute a non-exempt prohibited transaction
under ERISA or result in a violation of a state statute regulating government
plans subjecting Lender to liability for a violation of ERISA or a state
statute;

      (o)   if an Event of Default shall occur under any of the other
Cross-collateralized Mortgages or any default beyond applicable notice and grace
periods under any document executed by the Cross-collateralized Borrowers; or

      (p)   if a default under any of the other terms, covenants or conditions
of the Note, this Security Instrument or any other Loan Document, other than as
set forth in (a) through (o) above, for ten (10) days after notice from Lender
in the case of any default which can be cured by the payment of a sum of money,
or for thirty (30) days after notice from Lender in the case of any other
default or an additional thirty (30) days if Borrower is diligently and
continuously effectuating a cure of a curable non-monetary default, other than
as set forth in (a) through (o) above.

      Section 13.02. Remedies. (a) Upon the occurrence and during the
continuance of any Event of Default, Lender may, in addition to any other rights
or remedies available to it hereunder or under any other Loan Document, at law
or in equity, take such action, without notice or demand, as it reasonably deems
advisable to protect and enforce its rights against Borrower or any one or more
of the Cross-collateralized Borrowers and in and to the Property or any one or
more of the Cross-collateralized Properties or any one or more of them,
including, but not limited to, the following actions, each of which may be
pursued singly, concurrently or otherwise, at such time and in such order as
Lender may determine, in its sole discretion, without impairing or otherwise
affecting any other rights and remedies of Lender hereunder, at law or in
equity: (i) declare all or any portion of the unpaid Debt to be immediately due
and payable; provided, however, that upon the occurrence of any of the events
specified in Section 13.01(i), the entire Debt will be immediately due and
payable without notice or demand or any other declaration of the amounts due and
payable; or (ii) bring an action to foreclose this Security Instrument and
without applying for a receiver for the Rents, but subject to the rights of the
tenants under the Leases, enter into or upon the Property or any part thereof,
either personally or by its agents, nominees or attorneys, and dispossess
Borrower and its agents and servants therefrom, and thereupon Lender may (A)
use, operate, manage, control, insure, maintain, repair, restore and otherwise
deal with all and every part of the Property and conduct the business thereat,
(B) make alterations, additions, renewals, replacements and improvements to or
on the Property or any part thereof, (C) exercise all rights and powers of
Borrower with respect to the Property or any part thereof, whether in the name
of Borrower or otherwise, including, without limitation, the right, subject to
the terms of the Leases, to make, cancel, enforce or modify Leases, obtain and
evict tenants, and demand, sue for, collect and receive all earnings, revenues,
rents, issues, profits and other income of the Property and every part thereof,
and (D) apply the receipts from the Property or any part thereof to the payment
of the Debt, after deducting therefrom all expenses (including, without
limitation, reasonable attorneys' fees and disbursements) reasonably incurred in
connection with the aforesaid operations and all amounts necessary to pay the
Impositions, insurance and other charges in connection with the Property or any
part thereof, as well as just and reasonable compensation for the services of
Lender's third-party agents; or (iii) have an appraisal or other valuation of
the Property or any part thereof performed by an Appraiser (and Borrower
covenants and agrees it shall cooperate in causing any such valuation or
appraisal to be performed) and any cost or expense incurred by Lender in
connection therewith shall constitute a portion of the Debt and be secured by
this Security Instrument and shall be immediately due and payable to Lender with
interest, at the Default Rate, until the date of receipt by Lender; or (iv) sell
the Property or institute proceedings for the complete foreclosure of this

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<PAGE>

Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument in which case the Property or any part thereof may be sold for cash
or credit in one or more parcels; or (v) with or without entry, and to the
extent permitted and pursuant to the procedures provided by applicable Legal
Requirements, institute proceedings for the partial foreclosure of this
Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument for the portion of the Debt then due and payable, subject to the lien
of this Security Instrument continuing unimpaired and without loss of priority
so as to secure the balance of the Debt not then due; or (vi) sell the Property
or any part thereof and any or all estate, claim, demand, right, title and
interest of Borrower therein and rights of redemption thereof, pursuant to power
of sale or otherwise, at one or more sales, in whole or in parcels, in any order
or manner, at such time and place, upon such terms and after such notice thereof
as may be required or permitted by law, at the discretion of Lender, and in the
event of a sale, by foreclosure or otherwise, of less than all of the Property,
this Security Instrument shall continue as a lien on the remaining portion of
the Property; or (vii) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained in the
Loan Documents, or any of them; or (viii) recover judgment on the Note or any
guaranty either before, during or after (or in lieu of) any proceedings for the
enforcement of this Security Instrument; or (ix) apply, ex parte, for the
appointment of a custodian, trustee, receiver, keeper, liquidator or conservator
of the Property or any part thereof, irrespective of the adequacy of the
security for the Debt and without regard to the solvency of Borrower or of any
Person liable for the payment of the Debt, to which appointment Borrower does
hereby consent and such receiver or other official shall have all rights and
powers permitted by applicable law and such other rights and powers as the court
making such appointment may confer, but the appointment of such receiver or
other official shall not impair or in any manner prejudice the rights of Lender
to receive the Rent with respect to any of the Property pursuant to this
Security Instrument or the Assignment; or (x) require, at Lender's option,
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of any portion of the Property occupied by Borrower and may require
Borrower to vacate and surrender possession to Lender of the Property or to such
receiver and Borrower may be evicted by summary proceedings or otherwise; or
(xi) without notice to Borrower (A) apply all or any portion of the cash
collateral in any Sub-Account, including any interest and/or earnings therein,
to carry out the obligations of Borrower under this Security Instrument and the
other Loan Documents, to protect and preserve the Property and for any other
purpose permitted under this Security Instrument and the other Loan Documents
and/or (B) have all or any portion of such cash collateral immediately paid to
Lender to be applied against the Debt in the order and priority set forth in the
Note; or (xii) pursue any or all such other rights or remedies as Lender may
have under applicable law or in equity; provided, however, that the provisions
of this Section 13.02(a) shall not be construed to extend or modify any of the
notice requirements or grace periods provided for hereunder or under any of the
other Loan Documents. Borrower hereby waives, to the fullest extent permitted by
Legal Requirements, any defense Borrower might otherwise raise or have by the
failure to make any tenants parties defendant to a foreclosure proceeding and to
foreclose their rights in any proceeding instituted by Lender.

      (b)   Any time after an Event of Default Lender shall have the power to
sell the Property or any part thereof at public auction, in such manner, at such
time and place, upon such terms and conditions, and upon such public notice as
Lender may deem best for the interest of Lender, or as may be required or
permitted by applicable law, consisting of advertisement in a newspaper of
general circulation in the jurisdiction and for such period as applicable law
may require and at such other times and by such other methods, if any, as may be
required by law to convey the Property in fee simple by Lender's deed with
special warranty of title to and at the cost of the purchaser, who shall not be
liable to see to the application of the purchase money. The proceeds or avails
of any sale made under or by virtue of this Section 13.02, together with any
other sums which then may be held by Lender under this Security Instrument,
whether under the provisions of this Section 13.02 or otherwise, shall be
applied as follows:

      First: To the payment of the third-party costs and expenses reasonably
      incurred in connection with any such sale and to advances, fees and
      expenses, including, without limitation, reasonable fees and expenses of
      Lender's legal counsel as applicable, and of any judicial proceedings
      wherein the same may be made, and of all expenses, liabilities and
      advances reasonably made or incurred by Lender under this Security
      Instrument, together with interest as provided herein on all such advances
      made by Lender, and all Impositions, except any Impositions or other
      charges subject to which the Property shall have been sold;

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<PAGE>

      Second: To the payment of the whole amount then due, owing and unpaid
      under the Note for principal and interest thereon, with interest on such
      unpaid principal at the Default Rate from the date of the occurrence of
      the earliest Event of Default that formed a basis for such sale until the
      same is paid;

      Third: To the payment of any other portion of the Debt required to be paid
      by Borrower pursuant to any provision of this Security Instrument, the
      Note, or any of the other Loan Documents; and

      Fourth: The surplus, if any, to Borrower unless otherwise required by
      Legal Requirements.

Lender and any receiver or custodian of the Property or any part thereof shall
be liable to account for only those rents, issues, proceeds and profits actually
received by it.

      (c)   Lender may adjourn from time to time any sale by it to be made under
or by virtue of this Security Instrument by announcement at the time and place
appointed for such sale or for such adjourned sale or sales and, except as
otherwise provided by any applicable provision of Legal Requirements, Lender
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.

      (d)   Upon the completion of any sale or sales made by Lender under or by
virtue of this Section 13.02 or the other provisions of this Security
Instrument, Lender, or any officer of any court empowered to do so, shall
execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, granting, conveying,
assigning and transferring all estate, right, title and interest in and to the
property and rights sold. Lender is hereby irrevocably appointed the true and
lawful attorney-in-fact of Borrower (coupled with an interest), in its name and
stead, to make all necessary conveyances, assignments, transfers and deliveries
of the property and rights so sold and for that purpose Lender may execute all
necessary instruments of conveyance, assignment, transfer and delivery, and may
substitute one or more Persons with like power, Borrower hereby ratifying and
confirming all that its said attorney-in-fact or such substitute or substitutes
shall lawfully do by virtue hereof. Nevertheless, Borrower, if so requested by
Lender, shall ratify and confirm any such sale or sales by executing and
delivering to Lender, or to such purchaser or purchasers all such instruments as
may be advisable, in the sole judgement of Lender, for such purpose, and as may
be designated in such request. Any such sale or sales made under or by virtue of
this Section 13.02, whether made under the power of sale herein granted or under
or by virtue of judicial proceedings or a judgment or decree of foreclosure and
sale, shall operate to divest all the estate, right, title, interest, claim and
demand whatsoever, whether at law or in equity, of Borrower in and to the
property and rights so sold, and shall, to the fullest extent permitted under
Legal Requirements, be a perpetual bar, both at law and in equity against
Borrower and against any and all Persons claiming or who may claim the same, or
any part thereof, from, through or under Borrower.

      (e)   In the event of any sale made under or by virtue of this Section
13.02 (whether made under the power of sale herein granted or under or by virtue
of judicial proceedings or a judgment or decree of foreclosure and sale), the
entire Debt immediately thereupon shall, anything in the Loan Documents to the
contrary notwithstanding, become due and payable.

      (f)   Upon any sale made under or by virtue of this Section 13.02 (whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or a judgment or decree of foreclosure and sale), Lender may bid for
and acquire the Property or any part thereof and in lieu of paying cash therefor
may make settlement for the purchase price by crediting upon the Debt the net
sales price after deducting therefrom the expenses of the sale and the costs of
the action.

      (g)   No recovery of any judgment by Lender and no levy of an execution
under any judgment upon the Property or any part thereof or upon any other
property of Borrower shall release the lien of this Security Instrument upon the
Property or any part thereof, or any liens, rights, powers or remedies of Lender
hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired until all amounts due under the Note, this Security Instrument and
the other Loan Documents are paid in full.

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<PAGE>

      (h)   Upon the exercise by Lender of any power, right, privilege, or
remedy pursuant to this Security Instrument which requires any consent,
approval, registration, qualification, or authorization of any Governmental
Authority, Borrower agrees to execute and deliver, or will cause the execution
and delivery of, all applications, certificates, instruments, assignments and
other documents and papers that Lender or any purchaser of the Property may be
required to obtain for such governmental consent, approval, registration,
qualification, or authorization and Lender is hereby irrevocably appointed the
true and lawful attorney-in-fact of Borrower (coupled with an interest), in its
name and stead, to execute all such applications, certificates, instruments,
assignments and other documents and papers.

      Section 13.03. Payment of Debt After Default. If, following the occurrence
of any Event of Default, Borrower shall tender payment of an amount sufficient
to satisfy the Debt in whole or in part at any time prior to a foreclosure sale
of the Property, and if at the time of such tender prepayment of the principal
balance of the Note is not permitted by the Note or this Security Instrument,
Borrower shall also pay to Lender a sum equal to (a) the entire principal
balance of the Note, all accrued interest thereon and all other fees, charges
and sums due and payable hereunder, (b) all costs and expenses in connection
with the enforcement of Lender's rights hereunder, and (c) a prepayment charge
(the "Prepayment Charge") equal to the greater of (i) 1% of the principal
balance of the Note and (ii) the amount, which when added to the Principal
Amount, will be sufficient to purchase the Federal Obligations necessary to meet
the Scheduled Defeasance Payments assuming defeasance would be permitted under
Article 15 of this Security Instrument. Failure of Lender to require any of
these payments shall not constitute a waiver of the right to require the same in
the event of any subsequent default or to exercise any other remedy available to
Lender hereunder, under any other Loan Document or at law or in equity. If at
the time of such tender, prepayment of the principal balance of the Note is
permitted, such tender by Borrower shall be deemed to be a voluntary prepayment
of the principal balance of the Note, and Borrower shall, in addition to the
entire Debt, also pay to Lender the applicable prepayment consideration
specified in the Note and this Security Instrument.

      Section 13.04. Possession of the Property. Upon the occurrence of any
Event of Default and the acceleration of the Debt or any portion thereof,
Borrower, if an occupant of the Property or any part thereof, upon demand of
Lender, shall immediately surrender possession of the Property (or the portion
thereof so occupied) to Lender, and if Borrower is permitted to remain in
possession, the possession shall be as a month-to-month tenant of Lender and, on
demand, Borrower shall pay to Lender monthly, in advance, a reasonable rental
for the space so occupied and in default thereof Borrower may be dispossessed.
The covenants herein contained may be enforced by a receiver of the Property or
any part thereof. Nothing in this Section 13.04 shall be deemed to be a waiver
of the provisions of this Security Instrument making the Transfer of the
Property or any part thereof without Lender's prior written consent an Event of
Default.

      Section 13.05. Interest After Default. If any amount due under the Note,
this Security Instrument or any of the other Loan Documents is not paid within
any applicable notice and grace period after same is due, whether such date is
the stated due date, any accelerated due date or any other date or at any other
time specified under any of the terms hereof or thereof, then, in such event,
Borrower shall pay interest on the amount not so paid from and after the date on
which such amount first becomes due at the Default Rate; and such interest shall
be due and payable at such rate until the earlier of the cure of all Events of
Default or the payment of the entire amount due to Lender, whether or not any
action shall have been taken or proceeding commenced to recover the same or to
foreclose this Security Instrument. All unpaid and accrued interest shall be
secured by this Security Instrument as part of the Debt. Nothing in this Section
13.05 or in any other provision of this Security Instrument shall constitute an
extension of the time for payment of the Debt.

      Section 13.06. Borrower's Actions After Default. After the happening of
any Event of Default and immediately upon the commencement of any action, suit
or other legal proceedings by Lender to obtain judgment for the Debt, or of any
other nature in aid of the enforcement of the Loan Documents, Borrower will (a)
after receipt of notice of the institution of any such action, waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, and (b) if required by Lender, consent to the
appointment of a receiver or receivers of the Property or any part thereof and
of all the earnings, revenues, rents, issues, profits and income thereof.

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<PAGE>

      Section 13.07. Control by Lender After Default. Notwithstanding the
appointment of any custodian, receiver, liquidator or trustee of Borrower, or of
any of its property, or of the Property or any part thereof, to the extent
permitted by Legal Requirements, Lender shall be entitled to obtain possession
and control of all property now and hereafter covered by this Security
Instrument and the Assignment in accordance with the terms hereof.

      Section 13.08. Right to Cure Defaults. (a) Upon the occurrence of any
Event of Default, Lender or its agents may, but without any obligation to do so
and without notice to or demand on Borrower and without releasing Borrower from
any obligation hereunder, make or do the same in such manner and to such extent
as Lender may deem necessary to protect the security hereof. Lender and its
agents are authorized to enter upon the Property or any part thereof for such
purposes, or appear in, defend, or bring any action or proceedings to protect
Lender's interest in the Property or any part thereof or to foreclose this
Security Instrument or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this Section 13.08, shall constitute a portion of the
Debt and shall be immediately due and payable to Lender upon demand. All such
costs and expenses incurred by Lender or its agents in remedying such Event of
Default or in appearing in, defending, or bringing any such action or proceeding
shall bear interest at the Default Rate, for the period from the date so
demanded to the date of payment to Lender. All such costs and expenses incurred
by Lender or its agents together with interest thereon calculated at the above
rate shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument.

      (b)   If Lender makes any payment or advance that Lender is authorized by
this Security Instrument to make in the place and stead of Borrower (i) relating
to the Impositions or tax liens asserted against the Property, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any of the Impositions or the tax liens or
claims thereof; (ii) relating to any apparent or threatened adverse title, lien,
claim of lien, encumbrance, claim or charge, Lender will be the sole judge of
the legality or validity of same; or (iii) relating to any other purpose
authorized by this Security Instrument but not enumerated in this Section 13.08,
Lender may do so whenever, in its judgment and discretion, the payment or
advance seems necessary or desirable to protect the Property and the full
security interest intended to be created by this Security Instrument. In
connection with any payment or advance made pursuant to this Section 13.08,
Lender has the option and is authorized, but in no event shall be obligated, to
obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Lender pursuant to this Section 13.08 and the
cost and expenses of said title report will be due and payable by Borrower on
demand, together with interest at the Default Rate, and will be secured by this
Security Instrument.

      Section 13.09. Late Payment Charge. If any portion of the Debt is not paid
in full on or before the fifth (5th) day after the date on which it is due and
payable hereunder, Borrower shall pay to Lender an amount equal to five percent
(5%) of such unpaid portion of the Debt ("Late Charge") to defray the expense
incurred by Lender in handling and processing such delinquent payment, and such
amount shall constitute a part of the Debt.

      Section 13.10. Recovery of Sums Required to Be Paid. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due and payable hereunder
(after the expiration of any grace period or the giving of any notice herein
provided, if any), without regard to whether or not the balance of the Debt
shall be due, and without prejudice to the right of Lender thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by
Borrower existing at the time such earlier action was commenced.

      Section 13.11. Marshalling and Other Matters. Borrower hereby waives, to
the fullest extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement, redemption (both equitable and statutory) and
homestead laws now or hereafter in force and all rights of marshalling in the
event of any sale hereunder of the Property or any part thereof or any interest
therein. Nothing herein or in any other Loan Document shall be construed as
requiring Lender to resort to any particular Cross-collateralized Property for
the satisfaction of the Debt in preference or priority to any other
Cross-collateralized Property but Lender may seek satisfaction out of all the
Cross-collateralized Properties or any part thereof in its absolute discretion.
Further, Borrower hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, whether equitable or statutory and on behalf of each and
every Person acquiring

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any interest in or title to the Property or any part thereof subsequent to the
date of this Security Instrument and on behalf of all Persons to the fullest
extent permitted by applicable law.

      Section 13.12. Tax Reduction Proceedings. After an Event of Default,
Borrower shall be deemed to have appointed Lender as its attorney-in-fact to
seek a reduction or reductions in the assessed valuation of the Property for
real property tax purposes or for any other purpose and to prosecute any action
or proceeding in connection therewith. This power, being coupled with an
interest, shall be irrevocable for so long as any part of the Debt remains
unpaid and any Event of Default shall be continuing.

      Section 13.13. General Provisions Regarding Remedies.

      (a)   Right to Terminate Proceedings. Lender may terminate or rescind any
proceeding or other action brought in connection with its exercise of the
remedies provided in Section 13.02 at any time before the conclusion thereof, as
determined in Lender's sole discretion and without prejudice to Lender.

      (b)   No Waiver or Release. The failure of Lender to exercise any right,
remedy or option provided in the Loan Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation contained in the
Loan Documents. No acceptance by Lender of any payment after the occurrence of
an Event of Default and no payment by Lender of any payment or obligation for
which Borrower is liable hereunder shall be deemed to waive or cure any Event of
Default. No sale of all or any portion of the Property, no forbearance on the
part of Lender, and no extension of time for the payment of the whole or any
portion of the Debt or any other indulgence given by Lender to Borrower or any
other Person, shall operate to release or in any manner affect the interest of
Lender in the Property or the liability of Borrower to pay the Debt. No waiver
by Lender shall be effective unless it is in writing and then only to the extent
specifically stated.

      (c)   No Impairment; No Releases. The interests and rights of Lender under
the Loan Documents shall not be impaired by any indulgence, including (i) any
renewal, extension or modification which Lender may grant with respect to any of
the Debt; (ii) any surrender, compromise, release, renewal, extension, exchange
or substitution which Lender may grant with respect to the Property or any
portion thereof; or (iii) any release or indulgence granted to any maker,
endorser, guarantor or surety of any of the Debt.

      (d)   Effect on Judgment. No recovery of any judgment by Lender and no
levy of an execution under any judgment upon any Property or any portion thereof
shall affect in any manner or to any extent the lien of the other
Cross-collateralized Mortgages upon the remaining Cross-collateralized
Properties or any portion thereof, or any rights, powers or remedies of Lender
hereunder or thereunder. Such lien, rights, powers and remedies of Lender shall
continue unimpaired as before.

                   ARTICLE XIV: COMPLIANCE WITH REQUIREMENTS

      Section 14.01. Compliance with Legal Requirements. (a) Borrower shall
promptly comply with all present and future Legal Requirements, foreseen and
unforeseen, ordinary and extraordinary, whether requiring structural or
nonstructural repairs or alterations including, without limitation, all zoning,
subdivision, building, safety and environmental protection, land use and
development Legal Requirements, all Legal Requirements which may be applicable
to the curbs adjoining the Property or to the use or manner of use thereof, and
all rent control, rent stabilization and all other similar Legal Requirements
relating to rents charged and/or collected in connection with the Leases.
Borrower represents and warrants that (i) except as previously disclosed to
Lender in the zoning report delivered to Lender in connection with the
origination of the Loan, the Property is in compliance in all material respects
with all Legal Requirements as of the date hereof, no notes or notices of
violations of any Legal Requirements have been entered or received by Borrower
and there is no basis for the entering of such notes or notices and (ii) any
violations of Legal Requirements with respect to the Property will not result in
a Material Adverse Effect, be a threat to the health and safety of any Person or
impair Borrower's ability to collect any Rent.

      (b)   Borrower shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender, the validity or application of any Legal Requirement and to suspend

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compliance therewith if permitted under applicable Legal Requirements, provided
(i) failure to comply therewith may not subject Lender to any civil or criminal
liability, (ii) prior to and during such contest, Borrower shall furnish to
Lender security reasonably satisfactory to Lender, in its discretion, against
loss or injury by reason of such contest or non-compliance with such Legal
Requirement, (iii) no Default or Event of Default shall exist during such
proceedings and such contest shall not otherwise violate any of the provisions
of any of the Loan Documents, (iv) such contest shall not, (unless Borrower
shall comply with the provisions of clause (ii) of this Section 14.01(b))
subject the Property to any lien or encumbrance the enforcement of which is not
suspended or otherwise affect the priority of the lien of this Security
Instrument; (v) such contest shall not affect the ownership, use or occupancy of
the Property; (vi) the Property or any part thereof or any interest therein
shall not be in any danger of being sold, forfeited or lost by reason of such
contest by Borrower; (vii) Borrower shall give Lender prompt notice of the
commencement of such proceedings and, upon request by Lender, notice of the
status of such proceedings and/or confirmation of the continuing satisfaction of
the conditions set forth in clauses (i) - (vi) of this Section 14.01(b); and
(viii) upon a final determination of such proceeding, Borrower shall take all
steps necessary to comply with any requirements arising therefrom.

      (c)   Borrower shall at all times comply with all applicable Legal
Requirements with respect to the construction, use and maintenance of any vaults
adjacent to the Property. If by reason of the failure to pay taxes, assessments,
charges, permit fees, franchise taxes or levies of any kind or nature, the
continued use of the vaults adjacent to Property or any part thereof is
discontinued, Borrower nevertheless shall, with respect to any vaults which may
be necessary for the continued use of the Property, take such steps (including
the making of any payment) to ensure the continued use of vaults or
replacements.

      Section 14.02. Compliance with Recorded Documents; No Future Grants.
Borrower shall promptly perform and observe or cause to be performed and
observed, all of the terms, covenants and conditions of all Property Agreements
and all things necessary to preserve intact and unimpaired any and all
appurtenances or other interests or rights affecting the Property.

                       ARTICLE XV: DEFEASANCE; PREPAYMENT

      Section 15.01. Defeasance; Prepayment. (a) Except as set forth in this
Section 15.01, no prepayment or defeasance of the Debt may be made by or on
behalf of Borrower in whole or in part.

      (b)   Borrower may defease the Loan at any time subsequent to the second
(2nd) anniversary of a Securitization and prior to the calendar month three (3)
months prior to the Maturity Date, in whole or, from time to time, in part, as
of the last day of an Interest Accrual Period, in accordance with the following
provisions:

            (i)   Lender shall have received from Borrower, not less than thirty
      (30) days', nor more than ninety (90) days', prior written notice
      specifying the date proposed for such defeasance and the amount which is
      to be defeased, which proposed date shall be a Payment Date.

            (ii)  Borrower shall also pay to Lender all interest due through and
      including the last day of the Interest Accrual Period ending on the day
      prior to the Payment Date in which such defeasance is being made, together
      with any and all other amounts due and owing pursuant to the terms of the
      Note, this Security Instrument or the other Loan Documents, including,
      without limitation, any costs incurred in connection with a defeasance.

            (iii) No Event of Default shall have occurred and be continuing.

            (iv)  Borrower shall (A) pay the Defeasance Deposit and (B) deliver
      to Lender (1) a security agreement, in form and substance reasonably
      satisfactory to Lender, creating a first priority lien on the Defeasance
      Deposit and the Federal Obligations purchased on behalf of Borrower with
      the Defeasance Deposit in accordance with the terms of this Section
      15.01(b)(iv) (the "Security Agreement"); (2) an Officer's Certificate
      certifying that the requirements set forth in this Section 15.01(b)(iv)
      have been satisfied; (3) an opinion of counsel for Borrower in form and
      substance reasonably satisfactory to Lender

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<PAGE>

      stating, among other things, that (x) Lender has a perfected security
      interest in the Defeasance Deposit and a first priority perfected security
      interest in the Federal Obligations purchased by Lender on behalf of
      Borrower, (y) the contemplated defeasance will not result in any deemed
      exchange pursuant to Section 1001 of the Code of the Note and will not
      adversely affect the Note's or, if applicable, the undefeased Note's
      status as indebtedness for Federal income tax purposes and (z) any trust
      formed as a "real estate mortgage investment conduit" within the meaning
      of Section 860D of the Code ("REMIC") in connection with a Securitization
      will not fail to maintain its status as a REMIC as a result of such
      defeasance; (4) in the event that only a portion of the Loan is being
      defeased, Borrower shall execute and deliver all necessary documents to
      split the Note into two substitute notes, one having a principal balance
      equal to the defeased portion of the Note (the "Defeased Note") and one
      note having a principal balance equal to the undefeased portion of the
      Note (the "Undefeased Note"), the amortization schedule for which notes
      shall be calculated, in the case of a Defeased Note, or recalculated, in
      the case of an Undefeased Note, to fully amortize the respective principal
      balances of each on a twenty-five (25) year schedule (commencing on the
      Closing Date) utilizing level monthly payments of principal and interest;
      (5) a certificate, in form and substance reasonably satisfactory to Lender
      from a nationally recognized Independent certified public accountant
      confirming that the requirements of this Section 15.01(b) have been
      satisfied; and (6) such other certificates, documents, opinions or
      instruments as Lender may reasonably request. Borrower hereby irrevocably
      appoints Lender as its agent and attorney-in-fact, coupled with an
      interest, for the purpose of using the Defeasance Deposit to purchase
      Federal Obligations which provide Scheduled Defeasance Payments, and
      Lender shall, upon receipt of the Defeasance Deposit, purchase such
      Federal Obligations on behalf of Borrower. Borrower, pursuant to the
      Security Agreement or other appropriate document, shall authorize and
      direct that the payments received from the Federal Obligations shall be
      made directly to Lender and applied to satisfy the obligations of Borrower
      under the Defeased Note. The Defeased Note and the Undefeased Note shall
      have identical terms as the Note, except for the principal balance. A
      Defeased Note cannot be the subject of a further defeasance.

            (v)   The Rating Agencies shall have confirmed in writing that any
      rating issued by the Rating Agencies in connection with the Securitization
      will not, as a result of the proposed defeasance, be downgraded from the
      then current ratings thereof, qualified or withdrawn.

            (vi)  In the event of a defeasance of the Loan in whole, but not in
      part, if Borrower shall continue to own any assets other than the
      Defeasance Deposit, Borrower shall establish or designate a
      special-purpose bankruptcy-remote successor entity acceptable to Lender
      (the "Successor Borrower"), with respect to which a substantive
      nonconsolidation opinion satisfactory in form and substance reasonably
      satisfactory to Lender has been delivered to Lender and Borrower shall
      transfer and assign to the Successor Borrower all obligations, rights and
      duties under the Note and the Security Agreement, together with the
      pledged Defeasance Deposit. The Successor Borrower shall assume the
      obligations of Borrower under the Note and the Security Agreement and
      Borrower shall be relieved of its obligations hereunder and thereunder.
      Borrower shall pay Ten and No/100 Dollars ($10.00) to the Successor
      Borrower as consideration for assuming such Borrower obligations.

            (vii) In the event that Borrower desires to allocate all or any
      portion of a Defeasance Deposit to reduce the Allocated Loan Amount of a
      specific Cross-collateralized Property, Borrower shall have included in
      the notice required to be given pursuant to clause (i) of this Section
      15.01(b) a statement designating to which Cross-collateralized Property
      Borrower wishes to have such Defeasance Deposit allocated.

      (c)   At any time on or subsequent to the Payment Date which is six (6)
months prior to the Maturity Date, Borrower may prepay the Loan, in whole, but
not in part, as of the last day of an Interest Accrual Period, in accordance
with the following provisions:

            (i)   Lender shall have received from Borrower, not less than thirty
      (30) days', nor more than ninety (90) days', prior written notice
      specifying the date proposed for such prepayment and the amount which is
      to be prepaid which proposed date shall be a Payment Date.

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<PAGE>

            (ii)  Borrower shall also pay to Lender all interest due through and
      including the last day of the Interest Accrual Period ending on the day
      prior to the Payment Date in which such prepayment is being made, together
      with any and all other amounts due and owing pursuant to the terms of the
      Note, this Security Instrument or the other Loan Documents.

            (iii) No Event of Default shall have occurred and be continuing.

            (iv)  Any partial prepayment of the Principal Amount, including,
      without limitation, Unscheduled Payments, shall be applied to the
      installments of principal last due hereunder and shall not release or
      relieve Borrower or any other Cross-collateralized Borrower from the
      obligation to pay the regularly scheduled installments of principal
      becoming due under the Note.

      Section 15.02. Release of Property. If Loss Proceeds from the Property are
applied towards the repayment of the Debt, Lender shall, promptly, upon
satisfaction of all the following terms and conditions, execute, acknowledge and
deliver to Borrower a release of this Security Instrument (a "Release") in
recordable form with respect to the Property:

      (a)   In the event of a prepayment of the Loan in part, but not in whole,
Lender shall have received the Release Price.

      (b)   Borrower shall, at its sole cost and expense, prepare any and all
documents and instruments necessary to effect the Release, all of which shall be
subject to the reasonable approval of Lender, and Borrower shall pay all costs
reasonably incurred by Lender (including, but not limited to, reasonable
attorneys' fees and disbursements, title search costs and endorsement premiums)
in connection with the review, execution and delivery of the Release.

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

      (d)   Subsequent to the Release, Borrower shall continue to be in
compliance with all of the terms of the Loan Documents, including without
limitation, Section 2.02(g) hereof.

      (e)   The Rating Agencies shall have confirmed in writing that any rating
issued by the Rating Agencies in connection with a Securitization will not, as a
result of the proposed Release, be downgraded from their current ratings
thereof, qualified or withdrawn.

                     ARTICLE XVI: ENVIRONMENTAL COMPLIANCE

      Section 16.01. Covenants, Representations and Warranties. (a) Borrower has
not, at any time, and, to Borrower's best knowledge after due inquiry and
investigation, except as set forth in the Environmental Report, no other Person
has at any time, handled, buried, stored, retained, refined, transported,
processed, manufactured, generated, produced, spilled, allowed to seep, leak,
escape or leach, or pumped, poured, emitted, emptied, discharged, injected,
dumped, transferred or otherwise disposed of or dealt with Hazardous Materials
on, to or from the Premises or any other real property owned and/or occupied by
Borrower, and Borrower does not intend to and shall not use the Property or any
part thereof or any such other real property for the purpose of handling,
burying, storing, retaining, refining, transporting, processing, manufacturing,
generating, producing, spilling, seeping, leaking, escaping, leaching, pumping,
pouring, emitting, emptying, discharging, injecting, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials, except for use and
storage for use of heating oil, cleaning fluids, pesticides and other substances
customarily used in the operation of properties that are being used for the same
purposes as the Property is presently being used, provided such use and/or
storage for use is in compliance with the requirements hereof and the other Loan
Documents and does not give rise to liability under applicable Legal
Requirements or Environmental Statutes or be the basis for a lien against the
Property or any part thereof. In addition, without limitation to the foregoing
provisions, Borrower represents and warrants that, to the best of its knowledge,
after due inquiry and investigation, except as previously disclosed in writing
to Lender, there is no asbestos in, on, over, or under all or any portion of the
fire-proofing or any other portion of the Property.

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<PAGE>

      (b)   Borrower, after due inquiry and investigation, knows of no seepage,
leak, escape, leach, discharge, injection, release, emission, spill, pumping,
pouring, emptying or dumping of Hazardous Materials into waters on, under or
adjacent to the Property or any part thereof or any other real property owned
and/or occupied by Borrower, or onto lands from which such Hazardous Materials
might seep, flow or drain into such waters, except as disclosed in the
Environmental Report.

      (c)   Borrower shall not permit any Hazardous Materials to be handled,
buried, stored, retained, refined, transported, processed, manufactured,
generated, produced, spilled, allowed to seep, leak, escape or leach, or to be
pumped, poured, emitted, emptied, discharged, injected, dumped, transferred or
otherwise disposed of or dealt with on, under, to or from the Property or any
portion thereof at any time, except for use and storage for use of heating oil,
ordinary cleaning fluids, pesticides and other substances customarily used in
the operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does
not give rise to liability under applicable Legal Requirements or be the basis
for a lien against the Property or any part thereof.

      (d)   Borrower represents and warrants that no actions, suits, or
proceedings have been commenced, or are pending, or to the best knowledge of
Borrower, are threatened with respect to any Legal Requirement governing the
use, manufacture, storage, treatment, transportation, or processing of Hazardous
Materials with respect to the Property or any part thereof. Borrower has
received no notice of, and, except as disclosed in the Environmental Report,
after due inquiry, has no knowledge of any fact, condition, occurrence or
circumstance which with notice or passage of time or both would give rise to a
claim under or pursuant to any Environmental Statute pertaining to Hazardous
Materials on, in, under or originating from the Property or any part thereof or
any other real property owned or occupied by Borrower or arising out of the
conduct of Borrower, including, without limitation, pursuant to any
Environmental Statute.

      (e)   Borrower has not waived any Person's liability with regard to
Hazardous Materials in, on, under or around the Property, nor has Borrower
retained or assumed, contractually or by operation of law, any other Person's
liability relative to Hazardous Materials or any claim, action or proceeding
relating thereto.

      (f)   In the event that there shall be filed a lien against the Property
or any part thereof pursuant to any Environmental Statute pertaining to
Hazardous Materials, Borrower shall, within sixty (60) days or, in the event
that the applicable Governmental Authority has commenced steps to cause the
Premises or any part thereof to be sold pursuant to the lien, within fifteen
(15) days, from the date that Borrower receives notice of such lien, either (i)
pay the claim and remove the lien from the Property, or (ii) furnish (A) a bond
satisfactory to Lender in the amount of the claim out of which the lien arises,
(B) a cash deposit in the amount of the claim out of which the lien arises, or
(C) other security reasonably satisfactory to Lender in an amount sufficient to
discharge the claim out of which the lien arises.

      (g)   Borrower represents and warrants that (i) except as disclosed in the
Environmental Report, Borrower has no knowledge of any violation of any
Environmental Statute or any Environmental Problem in connection with the
Property, nor has Borrower been requested or required by any Governmental
Authority to perform any remedial activity or other responsive action in
connection with any Environmental Problem and (ii) neither the Property nor any
other property owned by Borrower is included or, to Borrower's best knowledge,
after due inquiry and investigation, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency (the "EPA") or on the inventory of other potential "Problem"
sites issued by the EPA and has not otherwise been identified by the EPA as a
potential CERCLA site or included or, to Borrower's knowledge, after due inquiry
and investigation, proposed for inclusion on any list or inventory issued
pursuant to any other Environmental Statute, if any, or issued by any other
Governmental Authority. Borrower covenants that Borrower will comply with all
Environmental Statutes affecting or imposed upon Borrower or the Property.

      (h)   Borrower covenants that it shall promptly notify Lender of the
presence and/or release of any Hazardous Materials and of any request for
information or any inspection of the Property or any part thereof by any
Governmental Authority with respect to any Hazardous Materials and provide
Lender with copies of such request

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<PAGE>

and any response to any such request or inspection. Borrower covenants that it
shall, in compliance with applicable Legal Requirements, conduct and complete
all investigations, studies, sampling and testing (and promptly shall provide
Lender with copies of any such studies and the results of any such test) and all
remedial, removal and other actions necessary to clean up and remove all
Hazardous Materials in, on, over, under, from or affecting the Property or any
part thereof in accordance with all such Legal Requirements applicable to the
Property or any part thereof to the satisfaction of Lender.

      (i)   Following the occurrence of an Event of Default hereunder, and
without regard to whether Lender shall have taken possession of the Property or
a receiver has been requested or appointed or any other right or remedy of
Lender has or may be exercised hereunder or under any other Loan Document,
Lender shall have the right (but no obligation) to conduct such investigations,
studies, sampling and/or testing of the Property or any part thereof as Lender
may, in its discretion, determine to conduct, relative to Hazardous Materials.
All costs and expenses incurred in connection therewith including, without
limitation, consultants' fees and disbursements and laboratory fees, shall
constitute a part of the Debt and shall, upon demand by Lender, be immediately
due and payable and shall bear interest at the Default Rate from the date so
demanded by Lender until reimbursed. Borrower shall, at its sole cost and
expense, fully and expeditiously cooperate in all such investigations, studies,
samplings and/or testings including, without limitation, providing all relevant
information and making knowledgeable people available for interviews.

      (j)   Borrower represents and warrants that all paint and painted surfaces
existing within the interior or on the exterior of the Improvements are not
flaking, peeling, cracking, blistering, or chipping, and do not contain lead or
are maintained in a condition that prevents exposure of young children to
lead-based paint, as of the date hereof, and that the current inspections,
operation, and maintenance program at the Property with respect to lead-based
paint is consistent with FNMA guidelines and sufficient to ensure that all
painted surfaces within the Property shall be maintained in a condition that
prevents exposure of tenants to lead-based paint. To Borrower's knowledge, there
have been no claims for adverse health effects from exposure on the Property to
lead-based paint or requests for the investigation, assessment or removal of
lead-based paint at the Property.

      (k)   Borrower represents and warrants that except in accordance with all
applicable Environmental Statutes and as disclosed in the Environmental Report,
(i) no underground treatment or storage tanks or pumps or water, gas, or oil
wells are or have been located about the Property, (ii) no PCBs or transformers,
capacitors, ballasts or other equipment that contain dielectric fluid containing
PCBs are located about the Property, (iii) no insulating material containing
urea formaldehyde is located about the Property and (iv) no asbestos-containing
material is located about the Property.

      Section 16.02. Environmental Indemnification. Borrower shall defend,
indemnify and hold harmless the Indemnified Parties for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
whether incurred or imposed within or outside the judicial process, including,
without limitation, reasonable attorneys' and consultants' fees and
disbursements and investigations and laboratory fees arising out of, or in any
way related to any Environmental Problem, including without limitation:

      (a)   the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threat of release of any Hazardous Materials in,
on, over, under, from or affecting the Property or any part thereof whether or
not disclosed by the Environmental Report;

      (b)   any personal injury (including wrongful death, disease or other
health condition related to or caused by, in whole or in part, any Hazardous
Materials) or property damage (real or personal) arising out of or related to
any Hazardous Materials in, on, over, under, from or affecting the Property or
any part thereof whether or not disclosed by the Environmental Report;

      (c)   any action, suit or proceeding brought or threatened, settlement
reached, or order of any Governmental Authority relating to such Hazardous
Material whether or not disclosed by the Environmental Report; and/or

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<PAGE>

      (d)   any violation of the provisions, covenants, representations or
warranties of Section 16.01 hereof or of any Legal Requirement which is based on
or in any way related to any Hazardous Materials in, on, over, under, from or
affecting the Property or any part thereof including, without limitation, the
cost of any work performed and materials furnished in order to comply therewith
whether or not disclosed by the Environmental Report.

      Notwithstanding the foregoing provisions of this Section 16.02 to the
contrary, Borrower shall have no obligation to indemnify Lender for liabilities,
claims, damages, penalties, causes of action, costs and expenses relative to the
foregoing which result directly from Lender's willful misconduct or gross
negligence. Any amounts payable to Lender by reason of the application of this
Section 16.02 shall be secured by this Security Instrument and shall, upon
demand by Lender, become immediately due and payable and shall bear interest at
the Default Rate from the date so demanded by Lender until paid.

      This indemnification shall survive the termination of this Security
Instrument whether by repayment of the Debt, foreclosure or deed in lieu
thereof, assignment, or otherwise; provided, however, in the event that no Event
of Default had occurred and Lender shall have received a clean Phase I
environmental report satisfactory in form and substance and prepared by a Person
satisfactory to Lender in all respects, this indemnification shall terminate
five (5) years after repayment of the Debt. The indemnity provided for in this
Section 16.02 shall not be included in any exculpation of Borrower or its
principals from personal liability provided for in this Security Instrument or
in any of the other Loan Documents. Nothing in this Section 16.02 shall be
deemed to deprive Lender of any rights or remedies otherwise available to
Lender, including, without limitation, those rights and remedies provided
elsewhere in this Security Instrument or the other Loan Documents.

                           ARTICLE XVII: ASSIGNMENTS

      Section 17.01. Participations and Assignments. Lender shall have the right
to assign this Security Instrument and/or any of the Loan Documents, and to
transfer, assign or sell participations and subparticipations (including blind
or undisclosed participations and subparticipations) in the Loan Documents and
the obligations hereunder to any Person; provided, however, that no such
participation shall increase, decrease or otherwise affect either Borrower's or
Lender's obligations under this Security Instrument or the other Loan Documents.

                          ARTICLE XVIII: MISCELLANEOUS

      Section 18.01. Right of Entry. Upon reasonable notice, except in the event
of an emergency, in which case no reasonable notice shall be required, Lender
and its agents shall have the right to enter and inspect the Property or any
part thereof at all reasonable times and to inspect Borrower's books and records
and to make abstracts and reproductions thereof.

      Section 18.02. Cumulative Rights. The rights of Lender under this Security
Instrument shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision. Lender shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled, subject to the terms of this Security
Instrument, to every right and remedy now or hereafter afforded by law.

      Section 18.03. Liability. If Borrower consists of more than one Person,
the obligations and liabilities of each such Person hereunder shall be joint and
several.

      Section 18.04. Exhibits Incorporated. The information set forth on the
cover hereof, and the Exhibits annexed hereto, are hereby incorporated herein as
a part of this Security Instrument with the same effect as if set forth in the
body hereof.

      Section 18.05. Severable Provisions. If any term, covenant or condition of
the Loan Documents including, without limitation, the Note or this Security
Instrument, is held to be invalid, illegal or unenforceable in any respect, such
Loan Document shall be construed without such provision.

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      Section 18.06. Duplicate Originals. This Security Instrument may be
executed in any number of duplicate originals and each such duplicate original
shall be deemed to constitute but one and the same instrument.

      Section 18.07. No Oral Change. The terms of this Security Instrument,
together with the terms of the Note and the other Loan Documents constitute the
entire understanding and agreement of the parties hereto and supersede all prior
agreements, understandings and negotiations between Borrower and Lender with
respect to the Loan. This Security Instrument, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act on the part of Borrower or Lender, but only by an agreement
in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.

      Section 18.08. Waiver of Counterclaim, Etc. BORROWER HEREBY WAIVES THE
RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY
ACTION OR PROCEEDING BROUGHT AGAINST IT BY LENDER OR ITS AGENTS, AND WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER OR IN ANY COUNTERCLAIM BORROWER MAY BE PERMITTED TO ASSERT HEREUNDER
OR WHICH MAY BE ASSERTED BY LENDER OR ITS AGENTS, AGAINST BORROWER, OR IN ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS SECURITY
INSTRUMENT OR THE DEBT.

      Section 18.09. Headings; Construction of Documents; etc. The table of
contents, headings and captions of various paragraphs of this Security
Instrument are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
Borrower acknowledges that it was represented by competent counsel in connection
with the negotiation and drafting of this Security Instrument and the other Loan
Documents and that neither this Security Instrument nor the other Loan Documents
shall be subject to the principle of construing the meaning against the Person
who drafted same.

      Section 18.10. Sole Discretion of Lender. Whenever Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory shall be
in the sole discretion of Lender and shall be final and conclusive, except as
may be otherwise specifically provided herein.

      Section 18.11. Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Security Instrument specifically and expressly provides for the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice.

      Section 18.12. Covenants Run with the Land. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises, shall be
binding upon Borrower and shall inure to the benefit of Lender, subsequent
holders of this Security Instrument and their successors and assigns. Without
limitation to any provision hereof, the term "Borrower" shall include and refer
to the borrower named herein, any subsequent owner of the Property, and its
respective heirs, executors, legal representatives, successors and assigns. The
representations, warranties and agreements contained in this Security Instrument
and the other Loan Documents are intended solely for the benefit of the parties
hereto, shall confer no rights hereunder, whether legal or equitable, in any
other Person and no other Person shall be entitled to rely thereon.

      Section 18.13. Applicable Law. THIS SECURITY INSTRUMENT WAS NEGOTIATED IN
NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE

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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW
OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, PRIORITY, ENFORCEMENT AND FORECLOSURE OF THE LIENS AND
SECURITY INTERESTS CREATED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE PREMISES ARE LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL
LOAN DOCUMENTS, AND THE DEBT OR OBLIGATIONS ARISING HEREUNDER.

      Section 18.14. Security Agreement. (a) (i) This Security Instrument is
both a real property mortgage, deed to secure debt or deed of trust, as
applicable, and a "security agreement" within the meaning of the UCC. The
Property includes both real and personal property and all other rights and
interests, whether tangible or intangible in nature, of Borrower in the
Property. This Security Instrument is filed as a fixture filing and covers goods
which are or are to become fixtures on the Property. Borrower by executing and
delivering this Security Instrument has granted to Lender, as security for the
Debt, a security interest in the Property to the full extent that the Property
may be subject to the UCC (said portion of the Property so subject to the UCC
being called in this Section 18.14 the "Collateral"). If an Event of Default
shall occur, Lender, in addition to any other rights and remedies which it may
have, shall have and may exercise immediately and without demand, any and all
rights and remedies granted to a secured party upon default under the UCC,
including, without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender following an Event of
Default, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place acceptable to Lender. Borrower shall
pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys' fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect to
the Collateral. Any disposition pursuant to the UCC of so much of the Collateral
as may constitute personal property shall be considered commercially reasonable
if made pursuant to a public sale which is advertised at least twice in a
newspaper in which sheriff's sales are advertised in the county where the
Premises is located. Any notice of sale, disposition or other intended action by
Lender with respect to the Collateral given to Borrower in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
reasonable notice to Borrower. The proceeds of any disposition of the
Collateral, or any part thereof, may be applied by Lender to the payment of the
Debt in such priority and proportions as Lender in its discretion shall deem
proper. It is not necessary that the Collateral be present at any disposition
thereof. Lender shall have no obligation to clean-up or otherwise prepare the
Collateral for disposition.

            (ii)  The mention in a financing statement filed in the records
normally pertaining to personal property of any portion of the Property shall
not derogate from or impair in any manner the intention of this Security
Instrument. Lender and Borrower hereby declare that all items of Collateral are
part of the real property encumbered hereby to the fullest extent permitted by
law, regardless of whether any such item is physically attached to the
Improvements or whether serial numbers are used for the better identification of
certain items. Specifically, the mention in any such financing statement of any
items included in the Property shall not be construed to alter, impair or impugn
any rights of Lender as determined by this Security Instrument or the priority
of Lender's lien upon and security interest in the Property in the event that
notice of Lender's priority of interest as to any portion of the Property is
required to be filed in accordance with the UCC to be effective against or take
priority over the interest of any particular class of persons, including the
federal government or any subdivision or instrumentality thereof. No portion of
the Collateral constitutes or is the proceeds of "Farm Products", as defined in
the UCC.

            (iii) If Borrower is at any time a beneficiary under a letter of
credit now or hereafter issued in favor of Borrower, Borrower shall promptly
notify Lender thereof and, at the request and option of Lender, Borrower shall,
pursuant to an agreement in form and substance satisfactory to Lender, either
(A) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to Lender of the proceeds of any drawing under the letter of
credit or (B) arrange for Lender to become the transferee beneficiary of the
letter of credit, with Lender agreeing, in each case, that the proceeds of any
drawing under the letter to credit are to be applied as provided in this
Security Instrument.

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            (iv)  Borrower and Lender acknowledge that for the purposes of
Article 9 of the UCC, the law of the State of New York shall be the law of the
jurisdiction of the bank in which the Central Account is located.

            (v)   Lender may comply with any applicable Legal Requirements in
connection with the disposition of the Collateral, and Lender's compliance
therewith will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

            (vi)  Lender may sell the Collateral without giving any warranties
as to the Collateral. Lender may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like. This procedure will not be considered
to adversely affect the commercial reasonableness of any sale of the Collateral.

            (vii) If Lender sells any of the Collateral upon credit, Borrower
will be credited only with payments actually made by the purchaser, received by
Lender and applied to the indebtedness of Borrower. In the event the purchaser
of the Collateral fails to fully pay for the Collateral, Lender may resell the
Collateral and Borrower will be credited with the proceeds of such sale.

      (b)   Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to file with the appropriate public office on its
behalf any financing or other statements signed only by Lender, as secured
party, or, to the extent permitted under the UCC, unsigned, in connection with
the Collateral covered by this Security Instrument.

      Section 18.15. Actions and Proceedings. Lender has the right to appear in
and defend any action or proceeding brought with respect to the Property in its
own name or, if required by Legal Requirements or, if in Lender's reasonable
judgment, it is necessary, in the name and on behalf of Borrower, which Lender
believes will adversely affect the Property or this Security Instrument and to
bring any action or proceedings, in its name or in the name and on behalf of
Borrower, which Lender, in its discretion, decides should be brought to protect
its interest in the Property.

      Section 18.16. Usury Laws. This Security Instrument and the Note are
subject to the express condition, and it is the expressed intent of the parties,
that at no time shall Borrower be obligated or required to pay interest on the
principal balance due under the Note at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by law to contract or
agree to pay. If by the terms of this Security Instrument or the Note, Borrower
is at any time required or obligated to pay interest on the principal balance
due under the Note at a rate in excess of such maximum rate, such rate of
interest shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be computed at such maximum rate and all prior interest
payments in excess of such maximum rate shall be applied and shall be deemed to
have been payments in reduction of the principal balance of the Note. No
application to the principal balance of the Note pursuant to this Section 18.16
shall give rise to any requirement to pay any prepayment fee or charge of any
kind due hereunder, if any.

      Section 18.17. Remedies of Borrower. In the event that a claim or
adjudication is made that Lender has acted unreasonably or unreasonably delayed
acting in any case where by law or under the Note, this Security Instrument or
the Loan Documents, it has an obligation to act reasonably or promptly, Lender
shall not be liable for any monetary damages, and Borrower's remedies shall be
limited to injunctive relief or declaratory judgment.

      Section 18.18. Offsets, Counterclaims and Defenses. Any assignee of this
Security Instrument, the Assignment and the Note shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to the Note,
the Assignment or this Security Instrument which Borrower may otherwise have
against any assignor of this Security Instrument, the Assignment and the Note
and no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon this
Security Instrument, the Assignment or the Note and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.

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      Section 18.19. No Merger. If Borrower's and Lender's estates become the
same including, without limitation, upon the delivery of a deed by Borrower in
lieu of a foreclosure sale, or upon a purchase of the Property by Lender in a
foreclosure sale, this Security Instrument and the lien created hereby shall not
be destroyed or terminated by the application of the doctrine of merger and in
such event Lender shall continue to have and enjoy all of the rights and
privileges of Lender as to the separate estates; and, as a consequence thereof,
upon the foreclosure of the lien created by this Security Instrument, any Leases
or subleases then existing and created by Borrower shall not be destroyed or
terminated by application of the law of merger or as a result of such
foreclosure unless Lender or any purchaser at any such foreclosure sale shall so
elect. No act by or on behalf of Lender or any such purchaser shall constitute a
termination of any Lease or sublease unless Lender or such purchaser shall give
written notice thereof to such lessee or sublessee.

      Section 18.20. Restoration of Rights. In case Lender shall have proceeded
to enforce any right under this Security Instrument by foreclosure sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, in every such case,
Borrower and Lender shall be restored to their former positions and rights
hereunder with respect to the Property subject to the lien hereof.

      Section 18.21. Waiver of Statute of Limitations. The pleadings of any
statute of limitations as a defense to any and all obligations secured by this
Security Instrument are hereby waived to the full extent permitted by Legal
Requirements.

      Section 18.22. Advances. This Security Instrument shall cover any and all
advances made pursuant to the Loan Documents, rearrangements and renewals of the
Debt and all extensions in the time of payment thereof, even though such
advances, extensions or renewals be evidenced by new promissory notes or other
instruments hereafter executed and irrespective of whether filed or recorded.
Likewise, the execution of this Security Instrument shall not impair or affect
any other security which may be given to secure the payment of the Debt, and all
such additional security shall be considered as cumulative. The taking of
additional security, execution of partial releases of the security, or any
extension of time of payment of the Debt shall not diminish the force, effect or
lien of this Security Instrument and shall not affect or impair the liability of
Borrower and shall not affect or impair the liability of any maker, surety, or
endorser for the payment of the Debt.

      Section 18.23. Application of Default Rate Not a Waiver. Application of
the Default Rate shall not be deemed to constitute a waiver of any Default or
Event of Default or any rights or remedies of Lender under this Security
Instrument, any other Loan Document or applicable Legal Requirements, or a
consent to any extension of time for the payment or performance of any
obligation with respect to which the Default Rate may be invoked.

      Section 18.24. Intervening Lien. To the fullest extent permitted by law,
any agreement hereafter made pursuant to this Security Instrument shall be
superior to the rights of the holder of any intervening lien.

      Section 18.25. No Joint Venture or Partnership. Borrower and Lender intend
that the relationship created hereunder be solely that of mortgagor and
mortgagee or grantor and beneficiary or borrower and lender, as the case may be.
Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.

      Section 18.26. Time of the Essence. Time shall be of the essence in the
performance of all obligations of Borrower hereunder.

      Section 18.27. Borrower's Obligations Absolute. Borrower acknowledges that
Lender and/or certain Affiliates of Lender are engaged in the business of
financing, owning, operating, leasing, managing, and brokering real estate and
in other business ventures which may be viewed as adverse to or competitive with
the business, prospect, profits, operations or condition (financial or
otherwise) of Borrower. Except as set forth to the contrary in the Loan
Documents, all sums payable by Borrower hereunder shall be paid without notice
or demand,

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counterclaim, set-off, deduction or defense and without abatement, suspension,
deferment, diminution or reduction, and the obligations and liabilities of
Borrower hereunder shall in no way be released, discharged, or otherwise
affected (except as expressly provided herein) by reason of: (a) any damage to
or destruction of or any Taking of the Property or any portion thereof or any
other Cross-collateralized Property; (b) any restriction or prevention of or
interference with any use of the Property or any portion thereof or any other
Cross-collateralized Property; (c) any title defect or encumbrance or any
eviction from the Premises or any portion thereof by title paramount or
otherwise; (d) any bankruptcy proceeding relating to Borrower, any General
Partner, or any guarantor or indemnitor, or any action taken with respect to
this Security Instrument or any other Loan Document by any trustee or receiver
of Borrower or any other Cross-collateralized Borrower or any such General
Partner, guarantor or indemnitor, or by any court, in any such proceeding; (e)
any claim which Borrower has or might have against Lender; (f) any default or
failure on the part of Lender to perform or comply with any of the terms hereof
or of any other agreement with Borrower or any other Cross-collateralized
Borrower; or (g) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not Borrower shall have notice or knowledge of any
of the foregoing.

      Section 18.28. Publicity. All promotional news releases, publicity or
advertising by Manager, Borrower or their respective Affiliates through any
media intended to reach the general public shall not refer to the Loan Documents
or the financing evidenced by the Loan Documents, or to Lender or to any of its
Affiliates without the prior written approval of Lender or such Affiliate, as
applicable, in each instance, such approval not to be unreasonably withheld or
delayed. Lender shall be authorized to provide information relating to the
Property, the Loan and matters relating thereto to rating agencies,
underwriters, potential securities investors, auditors, regulatory authorities
and to any Persons which may be entitled to such information by operation of
law. Notwithstanding the foregoing, Lender shall obtain Borrower's written
approval (which approval shall not unreasonably be withheld, delayed or
conditioned) prior to releasing any publicity articles or advertisements (such
as "tombstones") concerning the finances of the Property or the Loan.

      Section 18.29. Securitization Opinions. In the event the Loan is included
as an asset of a Securitization by Lender or any of its Affiliates, Borrower
shall, within fifteen (15) Business Days after Lender's written request
therefor, at Lender's sole cost and expense, deliver opinions in form and
substance and delivered by counsel reasonably acceptable to Lender and each
Rating Agency, as may be reasonably required by Lender and/or the Rating Agency
in connection with such securitization. Borrower's failure to deliver the
opinions required hereby within such fifteen (15) Business Day period shall
constitute an "Event of Default" hereunder.

      Section 18.30. Cooperation with Rating Agencies. Borrower covenants and
agrees that in the event the Loan is to be included as an asset of a
Securitization, Borrower shall (a) gather any information reasonably required by
each Rating Agency in connection with such a Securitization, (b) at Lender's
request, meet with representatives of each Rating Agency to discuss the business
and operations of the Property, and (c) cooperate with the reasonable requests
of each Rating Agency and Lender in connection with all of the foregoing as well
as in connection with all other matters and the preparation of any offering
documents with respect thereto, including, without limitation, entering into any
amendments or modifications to this Security Instrument or to any other Loan
Document which may be requested by Lender to conform to Rating Agency or market
standards for a Securitization provided that no such modification shall modify
(a) the interest rate payable under the Note, (b) the stated maturity of the
Note, (c) the amortization of principal under the Note, (d) Section 18.32
hereof, (e) any other material economic term of the Loan or (f) any provision,
the effect of which would materially increase Borrower's obligations or
materially decrease Borrower's rights under the Loan Documents. Borrower
acknowledges that the information provided by Borrower to Lender may be
incorporated into the offering documents for a Securitization and to the fullest
extent permitted, Borrower irrevocably waives all rights, if any, to prohibit
such disclosures including, without limitation, any right of privacy. Lender and
each Rating Agency shall be entitled to rely on the information supplied by, or
on behalf of, Borrower and Borrower indemnifies and holds harmless the
Indemnified Parties, their Affiliates and each Person who controls such Persons
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as same may be amended from time to time, for,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, known or
unknown, contingent or otherwise, whether incurred or imposed within or outside
the judicial process, including, without limitation, reasonable attorneys' fees
and disbursements that arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such information or
arise out of or are based

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upon the omission or alleged omission to state therein a material fact required
to be stated in such information or necessary in order to make the statements in
such information, or in light of the circumstances under which they were made,
not misleading.

      Section 18.31. Securitization Financials. Borrower covenants and agrees
that, upon Lender's written request therefor in connection with a
Securitization, Borrower shall, at Lender's sole cost and expense, promptly
deliver audited financial statements and related documentation prepared by an
Independent certified public accountant that satisfy securities laws and
requirements for use in a public registration statement (which may include up to
three (3) years of historical financial statements).

      Section 18.32. Exculpation. Notwithstanding anything herein or in any
other Loan Document to the contrary, except as otherwise set forth in this
Section 18.32 to the contrary, Lender shall not enforce the liability and
obligation of Borrower or (a) if Borrower is a partnership, its constituent
partners or any of their respective partners, (b) if Borrower is a trust, its
beneficiaries or any of their respective Partners (as hereinafter defined), (c)
if Borrower is a corporation, any of its shareholders, directors, principals,
officers or employees, or (d) if Borrower is a limited liability company, any of
its members (the Persons described in the foregoing clauses (a) -(d), as the
case may be, are hereinafter referred to as the "Partners") to perform and
observe the obligations contained in this Security Instrument or any of the
other Loan Documents by any action or proceeding wherein a money judgment shall
be sought against Borrower or the Partners, except that Lender may bring a
foreclosure action, action for specific performance, or other appropriate action
or proceeding (including, without limitation, an action to obtain a deficiency
judgment) solely for the purpose of enabling Lender to realize upon (i)
Borrower's interest in the Property, (ii) the Rent to the extent (x) received by
Borrower (or received by its Partners) after the occurrence of an Event of
Default, or (y) distributed to Borrower (or its Partners, but only to the extent
received by its Partners) during or with respect to any period for which Lender
did not receive a Manager Certification accurate in all material respects
confirming and certifying that all Operating Expenses with respect to the
Property which had accrued as of the applicable date of such Manager
Certification had been paid (or if same had not been paid, that Manager had
taken adequate reserves therefor) (all Rent covered by clauses (x) and (y) being
hereinafter referred to as the "Recourse Distributions") and (iii) any other
collateral given to Lender under the Loan Documents (the collateral described in
the foregoing clauses (i) through (iii) is hereinafter referred to as the
"Default Collateral"); provided, however, that any judgment in any such action
or proceeding shall be enforceable against Borrower and the Partners only to the
extent of any such Default Collateral. The provisions of this Section shall not,
however, (a) impair the validity of the Debt evidenced by the Note or in any way
affect or impair the lien of this Security Instrument or any of the other Loan
Documents or the right of Lender to foreclose this Security Instrument following
the occurrence of an Event of Default; (b) impair the right of Lender to name
Borrower as a party defendant in any action or suit for judicial foreclosure and
sale under this Security Instrument; (c) affect the validity or enforceability
of the Note, this Security Instrument, or any of the other Loan Documents, or
impair the right of Lender to seek a personal judgment against Guarantor; (d)
impair the right of Lender to obtain the appointment of a receiver; (e) impair
the enforcement of the Assignment; (f) impair the right of Lender to bring suit
for a monetary judgment with respect to fraud or material misrepresentation by
Borrower, or any other Person in connection with this Security Instrument, the
Note or the other Loan Documents, and the foregoing provisions shall not modify,
diminish or discharge the liability of Borrower or the Partners with respect to
same; (g) impair the right of Lender to bring suit for a monetary judgment to
obtain the Recourse Distributions received by Borrower including, without
limitation, the right to bring suit for a monetary judgement to proceed against
any Partner, to the extent of any such Recourse Distributions theretofore
distributed to and received by such Partner, and the foregoing provisions shall
not modify, diminish or discharge the liability of Borrower or the Partners with
respect to same; (h) impair the right of Lender to bring suit for a monetary
judgment with respect to Borrower's misappropriation of tenant security deposits
or Rent collected more than one (1) month in advance, and the foregoing
provisions shall not modify, diminish or discharge the liability of Borrower or
the Partners with respect to same; (i) impair the right of Lender to obtain Loss
Proceeds due to Lender pursuant to this Security Instrument; (j) impair the
right of Lender to enforce the provisions of Sections 2.02(g), 12.01, 16.01 or
16.02, inclusive of this Security Instrument, even after repayment in full by
Borrower of the Debt or to bring suit for a monetary judgment against Borrower
or the Partners with respect to any obligation set forth in said Sections; (k)
prevent or in any way hinder Lender from exercising, or constitute a defense, or
counterclaim, or other basis for relief in respect of the exercise of, any other
remedy against any or all of the collateral securing the Note as provided in the
Loan Documents; (l) impair the right of Lender to bring suit for a

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monetary judgment with respect to any misapplication or conversion of Loss
Proceeds, and the foregoing provisions shall not modify, diminish or discharge
the liability of Borrower or the Partners with respect to same; (m) impair the
right of Lender to sue for, seek or demand a deficiency judgment against
Borrower solely for the purpose of foreclosing the Property or any part thereof,
or realizing upon the Default Collateral; provided, however, that any such
deficiency judgment referred to in this clause (m) shall be enforceable against
Borrower and the Partners (but only to the extent distributed to and actually
received by such Partner) only to the extent of any of the Default Collateral;
(n) impair the ability of Lender to bring suit for a monetary judgment with
respect to damage, arson or waste to or of the Property resulting from
intentional misconduct or gross negligence of Borrower, the Partners or any
Affiliates thereof; (o) intentionally omitted; (p) be deemed a waiver of any
right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the Debt
or to require that all collateral shall continue to secure all of the Debt; (q)
impair the right of Lender to bring suit for monetary judgment with respect to
any losses resulting from any claims, actions or proceedings initiated by
Borrower (or any Affiliate of Borrower) alleging that the relationship of
Borrower and Lender is that of joint venturers, partners, tenants in common,
joint tenants or any relationship other than that of debtor and creditor; or (r)
impair the right of Lender to bring suit for a monetary judgment in the event of
a Transfer in violation of the provisions of Article IX hereof. The provisions
of this Section 18.32 shall be inapplicable to Borrower if (a) any proceeding,
action, petition or filing under the Bankruptcy Code, or any similar state or
federal law now or hereafter in effect relating to bankruptcy, reorganization or
insolvency, or the arrangement or adjustment of debts, shall be filed by,
consented to or acquiesced in by or with respect to Borrower, or if Borrower
shall institute any proceeding for its dissolution or liquidation, or shall make
an assignment for the benefit of creditors, or (b) Borrower or any Affiliate
contests or in any material way interferes with, directly or indirectly
(collectively, a "Contest") any foreclosure action, UCC sale or other material
remedy exercised by Lender upon the occurrence of any Event of Default whether
by making any motion, bringing any counterclaim, claiming any defense, seeking
any injunction or other restraint, commencing any action, or otherwise (provided
that if any such Person obtains a non-appealable order successfully asserting a
Contest, Borrower shall have no liability under this clause (b)), in which event
Lender shall have recourse against all of the assets of Borrower including,
without limitation, any right, title and interest of Borrower in and to the
Property and any Recourse Distributions received by the Partners of Borrower
(but excluding the other assets of such Partners to the extent Lender would not
have had recourse thereto other than in accordance with the provisions of this
Section 18.32).

      Section 18.33. Certain Matters Relating to Property Located in the State
of Alabama. With respect to the Property which is located in the State of
Alabama, notwithstanding anything contained herein to the contrary:

      (a)   The money, property or services that are the subject of the
transactions provided for in the Loan Documents are not primarily for personal,
family or household purposes as contemplated by Section 5-19-1(2) of the Code of
Alabama 1975, as amended.

      (b)   Any time after an Event of Default, this Security Instrument shall
be subject to foreclosure and may be foreclosed as provided by law in case of
past-due mortgages, and Lender shall be authorized, at its option, whether or
not possession of the Property is taken, to sell the Property (or such part of
parts thereof as Lender may from time to time elect to sell) under the power of
sale which is hereby given to Lender, at public outcry, to the highest bidder
for cash, at the front or main door of the courthouse of the county in which the
Premises to be sold, or a substantial or material part thereof, is located,
after first giving notice by publication one a week for three successive weeks
of the time, place and terms of such sale, together with a description of the
Property to be sold, by publication in some newspaper published in the county or
counties in which the Premises to be sold is located. If there is Premises to be
sold in more than one county, publication shall be made in all counties where
the Premises to be sold is located, but if no newspaper is published in any such
county, the notice shall be published in a newspaper published in an adjoining
county for three successive weeks. The sale shall be held between the hours of
11:00 a.m. and 4:00 p.m. on the day designated for the exercise of the power of
sale hereunder. Lender may bid at any sale held under this Security Instrument
and may purchase the Property, or any part thereof, if the highest bidder
therefor. The purchaser at any such sale shall be under no obligation to see to
the proper application of the purchase money. At any sale all or any part of the
Property, real, personal, or mixed, may be offered for sale in parcels or en
masse for one total price, and the proceeds of any such sale en masse shall be
accounted for in one amount without distinction between the items included
therein and without assigning to them any proportion of such proceeds,

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Borrower hereby waiving the application of any doctrine of marshalling or like
proceeding. In case Lender, in the exercise of the power of sale herein given,
elects to sell the Property in parts or parcels, sales thereof may be held from
time to time, and the power of sale granted herein shall not be fully exercised
until all of the Property not previously sold shall have been sold or all the
Debt shall have been paid in full and this Security Instrument shall have been
terminated as provided herein. In case of any sale of the Property as authorized
by this paragraph, all prerequisites to the sale shall be presumed to have been
performed, and in any conveyance given hereunder all statements of facts, or
other recitals therein made, as to the nonpayment of any of the Debt or as to
the advertisement of sale, or the time, place and manner of sale, or as to any
other fact or thing, shall be taken in all courts of law or equity as rebuttably
presumptive evidence that the facts so stated or recited are true.

      (c) This Security Instrument shall be effective as a financing statement
filed as a fixture filing for purposes of Article 9 of the Uniform Commercial
Code. The fixture filing covers all goods that are or are to become affixed to
the Realty. The goods are described by item or type in the granting clauses
hereof. Borrower is the debtor, and Lender is the secured party. The names of
the debtor (Borrower) and the secured party (Lender) are given in the first
paragraph of this Security Instrument. This Security Instrument is signed by the
debtor (Borrower) as a fixture filing. The mailing address of Lender set out in
the first paragraph of this Security Instrument is an address of the secured
party from which information concerning the security interest may be obtained.
The mailing address of the Borrower set out in the first paragraph of this
Security Instrument is a mailing address for the debtor. A statement indicating
the types, or describing the items, of collateral is set forth in this Section
and in the granting clauses of this Security Instrument. The real estate to
which the goods are or are to be affixed is described in Exhibit A. The Borrower
is a record owner of the real estate.

      (d) Intentionally omitted.

      (e) The date of this Security Instrument is intended as a date for the
convenient identification of this Security Instrument and is not intended to
indicate that this Security Instrument was executed and delivered on that date.

      (f) The "NOW THEREFORE" clause is amended by deleting the words "Borrower
has irrevocably granted, and by these presents and by the execution and delivery
hereof does hereby irrevocably grant, bargain, sell, alien, demise, release,
convey, assign, transfer, deed, hypothecate, pledge, set over, warrant, mortgage
and confirm to Lender, forever, with power of sale," and inserting the following
in its place: "Borrower has granted, bargained, sold and conveyed unto the
Lender and by these presents does hereby grant, bargain, sell and convey unto
the Lender, forever, with power of sale, and has granted and by these presents
does hereby grant to the Lender, a security interest in,".

      Section 18.34. Certain Matters Relating to Property Located in the State
of Arkansas. With respect to the Property which is located in the State of
Arkansas, notwithstanding anything contained herein to the contrary:

      (a) Borrower releases all right of appraisement and also releases all
right of redemption under the laws of Arkansas, including, without limitation,
all right of redemption under Ark. Code Ann. Section 18-49-106 (1987).

      (b) Upon the occurrence or continuance of an Event of Default, Borrower
acknowledges and consents to statutory foreclosure pursuant to Ark. Code Ann.
Sections 18-50-101 et seq. (2003 Supp.).

      Section 18.35. Certain Matters Relating to Property Located in the State
of Connecticut. With respect to the Property which is located in the State of
Connecticut, notwithstanding anything contained herein to the contrary:

      (a) This Security Instrument shall constitute an Open-End Mortgage Deed in
accordance with Conn. Gen. Statutes Section 49-2. Further, it is agreed that
additional advancement may be made by Lender or its assignees as provided in
this Security Instrument or any of the other Loan Documents for the benefit of
Borrower, whether such future advances are obligatory or made at the option of
Lender. Each such advance is to be secured

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with and have the same priority as the Debt to the extent the amount of such
subsequent advance when added to the amount of the Debt does not exceed the sum
of two (2) times the Loan Amount. Such advances are repayable no later than the
maturity date specified in the Loan Documents. Borrower shall execute a note or
notes evidencing such future advances, which note or notes shall be delivered to
Lender or its assigns and which note or notes shall be included in the words
"Note" or "Debt" wherever either appears in the context of this Security
Instrument. To the extent permitted by law, the failure to execute such note or
notes shall not impair the validity of this Security Instrument and such
advances shall be secured by the lien of this Security Instrument.

      (b) The term "Security Instrument" as used herein shall mean this
"Open-End Mortgage Deed."

      (c) A copy of the Note is attached hereto and made a part hereof.

      Section 18.36. Certain Matters Relating to Property located in the State
of Florida. With respect to the Property which is located in the State of
Florida, notwithstanding anything contained herein to the contrary:

      (a) It is agreed that, in addition to existing indebtedness, any future
advances made by the then holder of the Note to or for the benefit of Borrower
or Borrower's permitted assignees, whether such advances are obligatory or are
made at the option of Lender, or otherwise, at any time within twenty (20) years
from the date of this Security Instrument, with interest thereon at the rate
agreed upon at the time of each additional loan or advance, shall be equally
secured with and have the same priority as the Debt and be subject to all of the
terms and provisions of this Security Instrument, whether or not such additional
loan or advance is evidenced by a promissory note of Borrower and whether or not
identified by a recital that it is secured by this Security Instrument; provided
that, although the total amount of the indebtedness that may be secured may
decrease to zero from time to time or may increase from time to time, the
aggregate amount of outstanding Debt so secured at any one time shall not exceed
the sum of two (2) times the Loan Amount, plus interest and disbursements made
for the payment of taxes, levies or insurance on the Property with interest on
such disbursements. It is understood and agreed that this future advance
provision shall not be construed to obligate Lender to make any such additional
loans or advances. It is further agreed that any additional note or notes
executed and delivered under this future advance provision shall be included in
the words "Note" or "Debt" wherever either appears in the context of this
Security Instrument. Borrower, for itself and its successors in title and its
successors and permitted assigns, hereby expressly waives and relinquishes any
rights granted under Section 697.04 of the Florida Statutes, or otherwise, to
limit the amount of indebtedness that may be secured by this Security Instrument
at any time during the term of this Security Instrument. Borrower further
covenants not to file for record any notice limiting the maximum principal
amount that may be secured by this Security Instrument and agrees that any such
notice, if filed, shall be null and void; and except as hereinafter provided, of
no effect. In the event that, notwithstanding the foregoing covenant, Borrower
or its successor in title files for record any notice limiting the maximum
principal amount that may be secured by this Security Instrument in violation of
the foregoing covenant, the Debt shall, at the option of Lender, become
immediately due and payable.

      (b) Notwithstanding anything to the contrary contained in this Security
Instrument, Lender shall comply with the requirements of Section 501.137.
Florida Statutes, as applicable, with respect to the payment of Impositions and
insurance premiums from the Basic Carrying Costs Sub-Account so that the maximum
tax discount available may be obtained with regard to the Premises and so that
insurance coverage on the Property does not lapse.

      (c) The assignment of leases and rents contained in this Security
Instrument is intended to provide Lender with all the rights and remedies of
lenders pursuant to Section 697.07 of the Florida Statutes (hereinafter "Section
697.07"), as may be amended from time to time. However, in no event shall this
reference diminish, alter, impair, or affect any other rights and remedies of
Lender, including but not limited to, the appointment of a receiver as provided
herein, nor shall any provision in this Section diminish, alter, impair or
affect any rights or powers of the receiver in law or equity or as set forth
herein. In addition, this assignment shall be fully operative without regard to
value of the Property or without regard to the adequacy of the Property to serve
as security for the obligations owed by Borrower to Lender, and shall be in
addition to any rights arising under Section 697.07. Further, except for the
notices required hereunder, if any, Borrower waives any notice of default or
demand for turnover of rents by Lender,

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<PAGE>

together with any rights under Section 697.07 to apply to a court to deposit the
Rents into the registry of the court or such other depository as the court may
designate.

      Section 18.37. Certain Matters Relating to Property Located in the State
of Georgia. With respect to the Property which is located in the State of
Georgia, notwithstanding anything contained herein to the contrary:

      (a) The terms "mortgage" and "hypothecate" which are contained in the "NOW
THEREFORE" paragraph in the Recitals hereto and in Sections 2.02(q), 2.03,
2.05(b), 2.05(f), 8.01(d), 15.02 and 18.14 hereof shall be deleted.

      (b) The "PROVIDED ALWAYS" paragraph in the Recitals hereto shall be
deleted in its entirety and the following provisions shall be inserted in its
place:

            Borrower covenants that Borrower is lawfully seized and possessed of
      the Premises as aforesaid, has good right to convey the same, and that the
      same are unencumbered except for the Permitted Encumbrances. Borrower
      warrants and will forever defend the title to the Premises against the
      claims of all persons whomsoever, except as to the Permitted Encumbrances.

            This Deed is intended to operate and is to be construed as a deed
      passing the title to the Premises to Lender and is made under those
      provisions of the existing laws of the State of Georgia relating to deeds
      to secure debt, and not as a mortgage, and is given to secure the payment
      of the Note, the final payment on which is due on Maturity, unless
      otherwise extended pursuant to the terms of the Note, together with any
      and all renewals, modifications, consolidations and extensions of the
      indebtedness evidenced thereby, together with the Debt, and together with
      any and all additional advances made by Lender to protect or preserve the
      Property or the security interests created hereby on the Property, or for
      taxes, assessments or insurance premiums as hereinafter provided or for
      the performance of any of Borrower's obligations hereunder or for any
      other purpose provided herein (whether or not the original Borrower
      remains the owner of the Property at the time of such advances).

            Should the Debt be paid according to the tenor and effect thereof
      when the same become due and payable, and should Borrower perform all
      covenants contained in this Deed in a timely manner, then this Deed shall
      be cancelled and surrendered of record.

      (c) The definition of "Security Instrument" in Section 1.01 hereof shall
be deleted in its entirety and the following shall be inserted in its place:

            "Security Instrument" means this Deed to Secure Debt, Security
      Instrument and Assignment of Rents as originally executed or as it may
      hereafter from time to time be supplemented, amended, modified or extended
      by one or more indentures supplemental hereto.

      (d) The phrase "first mortgage" found in Section 2.06 hereof shall be
deleted and the phrase "first deed to secure debt" shall be inserted in its
place.

      (e) Subsection 13.02(a)(vi) shall be deleted in its entirety and the
following shall be inserted in its place:

            (vi) sell the Property or any part of the Property at one or more
      public sale or sales before the door of the courthouse of the county in
      which the Property or any part of the Property is situated, to the highest
      bidder for cash, in order to pay the Debt, and all expenses of sale and of
      all proceedings in connection therewith, including reasonable attorney's
      fees, after advertising the time, place and terms of sale once a week for
      four (4) weeks immediately preceding such sale (but without regard to the
      number of days) in a newspaper in which Sheriff's sales are advertised in
      said county. At any such public sale, Lender may execute and deliver to
      the purchaser a conveyance of the Premises or any part of the Premises in
      fee

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<PAGE>

      simple, with full warranties of title and, to this end, Borrower hereby
      constitutes and appoints Lender the agent and attorney-in-fact of Borrower
      to make such sale and conveyance, and thereby to divest Borrower of all
      right, title and equity that Borrower may have in and to the Premises and
      to vest the same in the purchaser of purchasers at such sale or sales, and
      all the acts and doings of said agent and attorney-in-fact are hereby
      ratified and confirmed and any recitals in said conveyance or conveyances
      as to facts essential to a valid sale shall be binding upon Borrower. The
      aforesaid power of sale and agency hereby granted are coupled with an
      interest and are irrevocable by death or otherwise, are granted as
      cumulative of the other remedies provided hereby or by law for the
      collection of the Debt, and shall not be exhausted by one exercise
      thereof, but may be exercised until full payment of all of the Debt. In
      the event of any sale under this Security Instrument by virtue of the
      exercise of the powers herein granted, or pursuant to any order in any
      judicial proceedings or otherwise, the Premises may be sold as an entirety
      or in separate parcels and in such manner or order as Lender, in its sole
      discretion, may elect, and if Lender so elects, Lender may sell the
      personal property covered by this Security Instrument at one or more
      separate sales in any manner permitted by the Uniform Commercial Code, and
      one or more exercises of the powers herein granted shall not extinguish
      nor exhaust such powers, until the entire Property are sold or the Debt is
      paid in full.

      (f) As this instrument is a deed passing legal title pursuant to the laws
of the State of Georgia, and is not a mortgage, whenever reference herein is
made to the "lien of this Security Instrument", or words of similar import, such
words shall be construed as meaning the security title and interest created and
conveyed by this Deed.

      (g) Whenever reference is made herein to "reasonable attorney's fees" or
similar words, such reference shall mean attorney's fees computed based upon the
attorney's normal hourly rates and the amount of time expended, and not the
statutory attorney's fees provided by Official Code of Georgia Annotated Section
13-1-11.

      (h) The Maturity Date is the Payment Date occurring in the calendar month
subsequent to the month in which the Closing Date occurs in 2015.

      Section 18.38. Certain Matters Relating to Property located in the State
of Illinois. With respect to the Property which is located in the State of
Illinois, notwithstanding anything contained herein to the contrary:

      (a) COMPLIANCE WITH ILLINOIS MORTGAGE FORECLOSURE LAW.

      If any provision in this Security Instrument is determined to be
inconsistent with any provision of the Illinois Mortgage Foreclosure Law (735
ILCS 5/15-1101 et seq. (1992 State Bar Edition)) (the "IMFL"), the provisions of
the IMFL shall take precedence over the provisions of this Security Instrument,
but shall not invalidate or render unenforceable any other provisions of this
Security Instrument that can be construed in a manner consistent with the IMFL.

      If any provision of this Security Instrument shall grant to Lender any
rights or remedies upon an Event of Default which are more limited than the
rights that would otherwise be vested in Lender under the IMFL in the absence of
such provision, Lender shall be vested with the rights granted in the IMFL to
the full extent permitted by law.

      Without limiting the generality of the foregoing, all expenses incurred by
Lender to the extent reimbursable under Sections 15-1510 and 15-1512 of the
IMFL, whether incurred before or after any decree or judgment of foreclosure,
and whether enumerated in this Security Instrument, shall be added to the Debt
secured by this Security Instrument or by the judgment of foreclosure.

      Without limiting the generality of the foregoing, this Security Instrument
also secures all future advances made pursuant to the terms of this Security
Instrument or the other Loan Documents made after this Security Instrument is
recorded, including but not limited to all monies so advanced by Lender in
accordance with the terms of this Security Instrument to (A) preserve or restore
the Property, (B) preserve the lien of this Security Instrument

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<PAGE>

or the priority thereof or (C) enforce this Security Instrument, and, to the
full extent permitted by Subsection (b)(5) of Section 15-1302 of the IMFL or
other law, shall be a lien from the time this Security Instrument is recorded.

      (b) WAIVER OF STATUTORY RIGHTS. BORROWER ACKNOWLEDGES THAT THE TRANSACTION
OF WHICH THIS SECURITY INSTRUMENT IS A PART IS A TRANSACTION WHICH DOES NOT
INCLUDE EITHER AGRICULTURAL REAL ESTATE (AS DEFINED IN SECTION 15-1201 OF THE
IMFL), OR RESIDENTIAL REAL ESTATE (AS DEFINED IN SECTION 15-1219 OF THE IMFL),
AND TO THE FULL EXTENT PERMITTED BY LAW, VOLUNTARILY AND KNOWINGLY WAIVES
BORROWER'S RIGHTS TO REINSTATEMENT AND REDEMPTION AS ALLOWED UNDER SECTION
15-1601(b) OF THE IMFL, AND TO THE FULL EXTENT PERMITTED BY LAW, THE BENEFITS OF
ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY,
REDEMPTION AND MORATORIUM LAWS UNDER ANY STATE OR FEDERAL LAW.

      (c) FIXTURE FILING. THIS INSTRUMENT IS EFFECTIVE AND SHALL BE EFFECTIVE AS
A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH
ARE OR ARE TO BECOME FIXTURES INCLUDED WITHIN THE PROPERTY AND IS TO BE FILED
FOR RECORD OR REGISTERED IN THE REAL ESTATE RECORDS OF THE COUNTY IN WHICH THE
PREMISES IS LOCATED. THE ADDRESS OF LENDER [SECURED PARTY] AND THE MAILING
ADDRESS OF BORROWER [DEBTOR] ARE SET FORTH WITHIN. A PHOTOGRAPHIC OR OTHER
REPRODUCTION OF THIS INSTRUMENT OR ANY FINANCING STATEMENT RELATING TO THIS
INSTRUMENT SHALL BE SUFFICIENT AS A FINANCING STATEMENT.

      (d) MAXIMUM AMOUNT SECURED. Borrower and Lender intend that this Security
Instrument shall secure not only sums advanced as of the date hereof but also
all advances provided for in the Loan Documents; provided however that the
maximum amount secured by this Security Instrument shall in no event exceed two
(2) times the Loan Amount.

      (e) BUSINESS LOAN. Borrower represents and agrees that the obligations
secured hereby constitute a business loan within the purview of such paragraph
1(c) of Section 4 of the Illinois Interest Act, 815 ILCS 205/1 et seq. (1992
State Bar Edition) (or any substitute, amended or replacement statutes)
transacted solely for the purpose of carrying on or acquiring the business of
Borrower, and also constitutes a loan secured by a mortgage which comes within
the purview of subparagraph 1(l) of said Section.

      (f) MATURITY DATE. The maturity date of the Loan is the Payment Date
occurring in the calendar month subsequent to the month in which the Closing
Date occurs in 2015.

      (g) MORTGAGEE-IN-POSSESSION. In addition to any provision of this Security
Instrument authorizing Lender to take or be placed in possession of the
Premises, or for the appointment of a receiver, Lender shall have the right, in
accordance with Sections 5/15-1701 and 5/15-1702 of the IMFL, to be placed in
possession of the Premises or at its request to have a received appointed, and
such receiver, or Lender, if and when placed in possession, shall have, in
addition to any other powers provided in this Security Instrument, all powers,
immunities and duties as provided for in Sections 2/15-1701 and 5/15-1702 of the
IMFL.

      (h) INSURANCE. Notwithstanding the provisions of Article III hereof, if
Borrower fails to provide Lender evidence of the insurance coverages required
pursuant to the provisions of this Security Instrument, Lender may purchase such
insurance at Borrower's expense to cover Lender's interest in the Premises. The
insurance may, but need not, protect Borrower's interest. The coverages that
Lender purchases may not pay any claim that Borrower makes or any claim that is
made against Borrower in connection with the Premises. Borrower may later cancel
any insurance purchased by Lender but only after providing Lender with evidence
that Borrower has obtained such insurance as required pursuant to Article III of
this Security Instrument. If Lender purchased insurance for the Premises,
Borrower will be responsible for the costs of such insurance, including, without
limitation, interest and any other charges which Lender may impose in connection
with the placement of the insurance, until the effective

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<PAGE>

date of the cancellation and the expiration of the insurance. The cost of the
insurance may be added to the Debt. The cost of the insurance may be more than
the cost of the insurance Borrower may be able to obtain on its own.

      Section 18.39. Certain Matters Relating to Property located in the State
of Indiana. With respect to the Property which is located in the State of
Indiana, notwithstanding anything contained herein to the contrary:

      (a) The following terms and references (for purposes of this Section only)
shall mean the following:

            (i) "Applicable Law" means statutory and case law in the State,
      including, but not by way of limitation, Mortgages, Ind. Code 32-29,
      Mortgage Foreclosure Actions, Ind. Code 32-30-10, Receiverships, Ind. Code
      32-30-5, and the Uniform Commercial Code - Secured Transactions, Ind. Code
      26-1-9.1 (the "UCC"), as amended, modified and/or --- recodified from time
      to time; provided, however, if by reason of mandatory provisions of law,
      the perfection, the effect of perfection or nonperfection, and the
      priority of a security interests in any Collateral are governed by the
      Uniform Commercial Code as in effect in a jurisdiction other than the
      State, "UCC" shall mean the Uniform --- Commercial Code as in effect in
      such other jurisdiction for purposes of the provisions hereof relating to
      perfection, effect of perfection or non-perfection, and the priority of
      the security interests in any such Collateral.

            (ii) "County" means the County in the State in which the Property is
      located.

            (iii) "County Recorder" means the Recorder of the County.

            (iv) "State" means the state in which the Property is located.

      (b) Where any provision of this Security Instrument is inconsistent with
any provision of Applicable Law regulating the creation or enforcement of a
security interest in real or personal property, the provisions of Applicable Law
shall take precedence over the provisions of this Security Instrument, but shall
not invalidate or render unenforceable any other provisions of this Security
Instrument that can be construed in a manner consistent with Applicable Law.

      (c) Notwithstanding any provision in this Security Instrument relating to
a power of sale or other provision for sale of the Property upon default other
than under a judicial proceeding, any sale of the Property pursuant to this
Security Instrument will be made through a judicial proceeding.

      (d) Notwithstanding any provision in this Security Instrument purporting
to irrevocably grant a security interest in the Property, upon the payment and
satisfaction of this Security Instrument and upon the request of Borrower,
Lender will file a release of this Security Instrument or other certification
that this Security Instrument has been satisfied in the office of the recorder
in the County.

      (e) In addition to any other obligation secured by this Security
Instrument, this Security Instrument also secures:

            future obligations and advances up to the maximum amount of two (2)
            times the Loan Amount (whether made as an obligation, made at the
            option of Lender, made after a reduction to a zero (0) or other
            balance, or made otherwise) to the same extent as if the future
            obligations and advances were made on the date of execution of this
            Security Instrument; and

            future modifications, extensions, and renewals of any indebtedness
            or obligations secured by this Security Instrument.

      (f) To the extent the Applicable Law limits (i) the availability of the
exercise of any of the remedies set forth herein, including without limitation
the remedies involving the right of Lender to exercise self-help in

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<PAGE>

connection with the enforcement of the terms of this Security Instrument, or
(ii) the enforcement of waivers and indemnities made by Borrower, such remedies,
waivers, or indemnities shall be exercisable or enforceable, any provisions in
this Security Instrument to the contrary notwithstanding, if, and to the extent,
permitted by the laws in force at the time of the exercise of such remedies or
the enforcement of such waivers or indemnities at the time of the execution and
delivery of this Security Instrument. Anything contained in this Security
Instrument to the contrary, Lender shall enforce the terms and provisions of
this Security Instrument subject to and in accordance with all applicable Legal
Requirements and Applicable Law.

      (g) Anything contained herein or in Ind. Code 32-29-7-5 to the contrary
notwithstanding, no waiver made by Borrower in this Security Instrument, or in
any of the other terms and provisions of the Loan Documents, shall constitute
the consideration for or be deemed to be a waiver or release by Lender of the
right to seek a deficiency judgment against Borrower or any other Person or
entity who may be personally liable for the Debt, which right to seek a
deficiency judgment is hereby reserved, preserved and retained by Lender for its
own behalf and its successors and assigns.

      (h) Part of the Property and Collateral is or may become fixtures. It is
intended that as to the fixtures, as such term is defined in Ind. Code
26-1-9.1-102(41), that are part of the Property, this Security Instrument shall
be effective as a continuously perfected financing statement filed pursuant to
Ind. Code 26-1-9.1-515 as a fixture filing from the date of the filing of this
Security Instrument for record with the County Recorder. In order to satisfy
Ind. Code 26-1-9.1-502(a) and Ind. Code 26-1-9.1-502(b), the following
information is hereby provided:

    Name of Debtor:               Borrower is the "Debtor"

    Address of Debtor:            See Section 11.01 of this Security Instrument

    Type of Organization:         limited liability company

    State of Organization:        Delaware

    Organization Number:          As set forth on the Signature Page hereof

    Name of Secured Party:        Lender is the "Secured Party"

    Address of Secured Party:     See Section 11.01 of this Security Instrument

    Record Owner of Property:     Borrower

      (i) Borrower hereby acknowledges receipt of a copy of this Security
Instrument in compliance with Lender's obligation to deliver a copy of the
fixture filing to Borrower pursuant to Section 9.1-502(f) of the UCC.

      (j) The final maturity date of the obligations secured hereby (including
all extensions permitted pursuant to the terms of the Loan Documents) is the
Payment Date occurring in the calendar month subsequent to the month in which
the Closing Date occurs in 2015.

      (k) The Property (i) does not contain any facility or facilities that are
subject to reporting (by either Borrower or any tenant or lessee thereon or
other person or entity in possession or occupancy of any portion thereof) under
Section 312 of the federal Emergency Planning and Community Right-to-Know Act of
1986 (42 U.S.C. Section 11022); (ii) is not the site of any underground storage
tanks; and (iii) is not listed on the Comprehensive Environmental Response,
Compensation and Liability Information System (CERCLIS) in accordance with
Section 116 of CERCLA (42 U.S.C. Section 9616). By reason of the foregoing, the
conveyance made by Borrower to Lender by this Security Instrument is not subject
to the disclosure or other provisions of the Indiana Responsible Property
transfer Law, Ind. Code 13-25-3.

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<PAGE>

      (l) If Lender exercises its rights under Section 13.02 (a)(viii) hereof
and brings an action to recover judgment under the Note or any guaranty and
during the pendancy of such action brings a separate action under this Security
Instrument, such actions shall be consolidated.

      (m) The definition of Property shall include all refunds and rebates with
respect to any tax or utility payments, regardless of the time period to which
they relate.

      (n) All attorneys fees and expenses incurred by Borrower in connection
with the enforcement of any of the terms of this Security Instrument shall
include, without limitation, support staff costs and amounts expended in
connection with litigation preparation and computerized research, telephone and
telefax expenses, mileage, depositions, postage, photocopies, process service,
videotapes, environmental testing and audits, environmental reviews and
inspections and environmental clean-up and remediation.

      (o) Without limiting the scope of the assignment of Rents contained in
this Security Instrument, the assignment of Rents set forth herein shall
constitute an assignment of rents as set forth in Ind. Code 32-21-4-2 and
thereby creates, and Borrower hereby grants to Lender, a security interest in
the Rents that will be perfected upon the recording of this Security Instrument.

      (p) Subject to the terms and provisions of this Security Instrument,
Borrower hereby irrevocably consents to the appointment of a receiver permitted
under Applicable Law, which receiver, when duly appointed, shall have all of the
powers and duties of receivers pursuant to Applicable Law.

      (q) The term "Debt" as defined in this Security Instrument shall include,
without limitation, any judgment(s) or final decree(s) rendered to collect any
money obligations of Borrower to Lender and/or to enforce the performance or
collection of all covenants, agreements, other obligations and liabilities of
the Borrower under this Security Instrument or any or all of the Loan Documents;
provided, however, such Debt shall not include any judgment(s) or final
decree(s) rendered in another jurisdiction, which judgment(s) or final decree(s)
would be unenforceable by an Indiana Court pursuant to Ind. Code 34-54-3-4. The
obtaining of any judgment by Lender (other than a judgment foreclosing this
Security Instrument) and any levy of any execution under any such judgment upon
the Property shall not affect in any manner or to any extent the lien of this
Security Instrument upon the Property or any part thereof, or any liens, powers,
rights and remedies of Lender, but such liens, powers, rights and remedies shall
continue unimpaired as before until the judgment or levy is satisfied.

      (r) Notwithstanding anything contained herein or the other Loan Documents
to the contrary, the provisions in this Security Instrument regarding creation,
validity, perfection, priority and enforceability of the lien and security
interests created hereby, all warranties of title contained herein with respect
to the Property and all provisions hereof relating to the realization of the
security covered hereby with respect to the Property shall be governed by
Applicable Law.

      Section 18.40. Certain Matters Relating to Property located in the State
of Iowa. With respect to the Property which is located in the State of Iowa,
notwithstanding anything contained herein to the contrary:

      (a) In the event of the foreclosure of this Security Instrument and a
subsequent sheriff's sale of the Property, Borrower agrees that the redemption
period from said sale, as provided by the statutes of the State of Iowa, may, in
Lender's sole discretion, be reduced to six months, provided Lender, in said
foreclosure action, waives any rights to a deficiency judgment against Borrower
which may arise out of the foreclosure proceedings. It is further agreed that in
the event of the finding by court decree in such foreclosure that the real
estate hereinabove referred to has been abandoned by the owners and Persons
personally liable under the Note at the time of the foreclosure, the period of
redemption from the foreclosure sale may in Lender's sole discretion be reduced
to sixty (60) days, provided Lender waives its right to any deficiency judgment
against the Borrower which may arise out of the foreclosure proceedings. Nothing
in this Section (a) shall be construed to limit or otherwise affect any other
redemption provisions contained in Chapter 628 of the Iowa Code.

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<PAGE>

      (b) This Security Instrument secures credit in the amount of two (2) times
the Loan Amount. Loans and advances up to this amount, together with interest,
are senior to indebtedness to other creditors under subsequently recorded or
filed mortgages and liens.

      (c) The maturity date of the Note is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      (d) Borrower represents and warrants that:

            (i) None of the Property constitutes and none of the funds
      represented by the Note will be used to purchase: (i) real property which
      is a single-family or two-family dwelling occupied or to be occupied by
      Borrower; (ii) agricultural products or property used for an agricultural
      purpose as defined in Iowa Code Section 535.13; (iii) agricultural lands
      defined in Iowa Code Section 12C.1(5) or 175.2(1), or (iv) property used
      for agricultural purposes defined in Iowa Code Section 570A.1(2).

            (ii) Transactions contemplated by this Security Instrument, the Note
      and the other Loan Documents do not constitute a consumer credit
      transaction as defined in Iowa Code Section 537.1301.11; and the
      transactions contemplated by this Security Instrument, the Note and the
      Other Loan Documents are for a business purpose as defined in Iowa Code
      Section 535.2(2)(a)(5).

      (e) Borrower acknowledges receipt of a copy of this Security Instrument,
the Note and each of the other Loan Documents.

      (f) Borrower waives, to the fullest extent permitted by applicable law,
any requirement, whether pursuant to Iowa Rule of Civil Procedure 228 or
otherwise, that the Note must be filed with the clerk of court or otherwise
surrendered at the time judgment is rendered on the Note. Borrower further
consents, in any mortgage foreclosure or other action brought on the Note in
Iowa, to the entry of judgment in any such action without the filing of the Note
with the clerk of court or other surrender of the Note.

      Section 18.41. Certain Matters Relating to Property Located in the State
of Kansas. With respect to the Property which is located in the State of Kansas,
notwithstanding anything contained herein to the contrary:

      (a) Lender may bring an action to foreclose this Security Instrument and
upon appointment of a receiver for the rents (to which Lender shall have the
right to the immediate appointment, without regard to the adequacy of the
security and Borrower hereby irrevocably consents to such appointment and waives
notice of any application therefore) enter into or upon the Property or any part
thereof either personally or by its agents, nominees or attorneys, and disposes
Borrower and its agents and servants therefrom.

      (b) Lender may bring an action in any court of competent jurisdiction to
foreclose this instrument or to enforce any of the covenants and agreements
hereof. The Property may be foreclosed in parts or as an entirety. Lender, upon
application to a court of competent jurisdiction shall to the fullest extent
permitted by law be entitled without notice and without regard to the
sufficiency or value of any security for the indebtedness secured hereby or the
solvency of any party bound for its payment, to the appointment of a receiver to
take possession of and to operate the Property and to collect and apply the
income, rents, issues, profits and revenues thereof. The receiver shall have all
of the rights and powers permitted under the laws of the state within which the
Property is located. Upon the completion of any sale or sales made by the Lender
under or by virtue of this Section, the Lender or any officer of any court
empowered to do so shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument or good and sufficient instruments
conveying, assigning and transferring all estate, right, title and interest in
and to the Property and rights sold. The Lender is hereby appointed the true and
lawful attorney of the Borrower in its name in stead to make all necessary
conveyances, assignments, transfers and deliveries of the Property and rights so
sold and for that purpose, the Lender may execute all necessary instruments of
conveyance, assignment and transfer and may substitute one or more persons with
like power, the Borrower hereby ratifying and confirming all that its said
attorney or such substitute or substitutes shall lawfully do by virtue hereof.
This power of

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<PAGE>

attorney shall be deemed to be a power coupled with an interest and not subject
to revocation. Nevertheless, the Borrower, if so requested by the Lender, shall
ratify and confirm any such sale or sales by executing and delivering to the
Lender or to such purchaser or purchasers all such instruments as may be
advisable, in the judgment of the Lender, for that purpose, and as may be
designated in such request. Any such sale or sales made under or by virtue of
this Section whether made under or by virtue of judicial proceedings or of a
judgment or decree of a foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, or the Borrower in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against the Borrower and
against any and all persons claiming or who may claim the same, or any part
thereof from, through or under the Borrower. Upon any sale made under or by
virtue of this Section, the Lender may bid for and acquire the Property or any
part thereof and in lieu of paying cash therefor and may make settlement for the
purchase price by crediting upon the indebtedness of the Borrower secured by
this Security Instrument the net sales price after deducting therefrom the
expenses of the sale and the cost of the action and any other sums which the
Lender is authorized to deduct under this Security Instrument. The Lender, upon
so acquiring the Property, or any part thereof, shall be entitled to hold, lease
rent, operate, manage and sell the same in any manner provided by applicable
laws. Lender, at Lender's option, is authorized to foreclose this Security
Instrument subject to the rights of any tenants of the Property, and the failure
to make any such tenants parties defendants to any such foreclosure proceeding
and to foreclose their rights will not be, nor be asserted by Borrower as a
defense to any proceedings instituted by Lender to collect the sums secured
hereby.

      (c) This Security Instrument secures future advances pursuant to K.S.A.
Section 58-2336.

      (d) The loan secured by this Security Instrument is a "Business Loan"
within the meaning of K.S.A. Section 16-207E.

      Section 18.42. Certain Matters Relating to Property Located in the State
of Kentucky. With respect to the Property which is located in the Commonwealth
of Kentucky, notwithstanding anything contained herein to the contrary:

      (a) The first paragraph of page 1 shall be amended to include "New York
County" in the address of the Lender. KRS 382.430.

      (b) The maturity date of the Note is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      (c) With reference to KRS 382.520, it is acknowledged and agreed that this
Security Instrument secures not only the initial advances under the Note but
also all future advances and all other additional indebtedness, whether direct,
indirect, future, contingent or otherwise, connected with or arising out of the
Note and the Loan Documents, to the extent of not more than two (2) times the
Loan Amount. It shall be a default under this Security Instrument if Borrower
requests a release, in the manner provided by KRS 382.250, of any portion of the
lien securing any of the additional indebtedness secured by this Security
Instrument prior to the date that all of the obligations have been paid and the
Loan Documents have been terminated, and Borrower hereby waives any and all
right to request such a release to the maximum extent permitted by law.

      (d) FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE THE FOLLOWING INFORMATION
IS FURNISHED:

            (i) The name and address of the record owner of the real estate
      described in this instrument is the same as that set forth for Fee Owner
      on page 1 hereof:

            (ii) The names and addresses of the Debtors (Borrower) is the same
      as that set forth for Borrower on page 1 hereof:

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<PAGE>

            (iii) The name and address of the Secured Party (Lender) is the same
      as that set forth for Lender on page 1 hereof:

            (iv) Information concerning the security interest evidenced by this
      instrument may be obtained from the Secured Party at its address above.

            (v) This document covers goods which are or are to become fixtures.

            (vi) The organizational numbers for the Debtors (Borrower) are set
      forth on the signature page hereof.

      Section 18.43. Certain Matters Relating to Property Located in the State
of Louisiana. With respect to the Property which is located in the State of
Louisiana, notwithstanding anything contained herein to the contrary:

      (a) Each reference to a "lien" will include a reference to a "privilege"
"mortgage", and/or "security interest", as appropriate. Each reference to the
appointment and powers of a receiver with respect to any Louisiana property
shall be to a keeper appointed pursuant to this Security Instrument. Each
reference to an "easement" or "easements" will include a reference to a
"servitude" and "servitudes". Each reference to a county will include a
reference to a Louisiana parish. The terms "land", "real property", and "real
estate" will mean "immovable property" as that term is used in the Louisiana
Civil Code. The term "personal property" will mean "movable property" as that
term is used in the Louisiana Civil Code. The term "tangible" property will mean
"corporeal" property as that term is used in the Louisiana Civil Code. The term
"intangible" property will mean "incorporeal" property as that term is used in
the Louisiana Civil Code. References to the "Code" or the "Uniform Commercial
Code" in effect in the State of Louisiana shall be to the Louisiana Commercial
Laws, La. R.S. Section 10:1-101 et seq. The term "fee estate" or "fee simple
title" will mean "full ownership interest" as that term is used in the Louisiana
Civil Code. The term "buildings" shall be deemed to include other constructions.
The phrase "covenant or other right running with the land" shall be deemed to
include a real right or a recorded lease of immovable property. The term
"condemnation" means "expropriation" as that term is used in Louisiana law. The
term "conveyance in lieu of foreclosure" or "action in lieu thereof" will mean
"giving in payment" as that term is used in Louisiana law. The term "joint and
several" will mean "solidary" as that term is used in the Louisiana Civil Code.
The term "statute of limitations" means prescriptive period or preemptive
period.

      (b) For the purposes of the recitals and the other provisions of this
Security Instrument, it is understood that, subject to the terms hereof,
Borrower by these presents and by the execution and delivery hereof, does hereby
specially mortgage, affect, hypothecate, pledge and assign to Lender forever (to
the extent legally permitted), and grant Lender a continuing security interest
in, all right, title and interest of Borrower in and to all of the Property.

      (c) It is agreed that this Security Instrument shall secure not only the
sums advanced as of the date hereof, but any other advances whether obligatory
or otherwise, whether provided for in the Note, this Security Instrument or in
the Loan Documents. It is further agreed as to all such obligations both present
and future, this Security Instrument shall have effect between the parties from
the time this Security Instrument is established and as to third persons from
the time this Security Instrument is filed for registry; provided, however, that
the maximum amount of the obligations that may be outstanding at any time and
from time to time and secured hereby is $500,000,000.00.

      (d) The Debt secured by this Security Instrument has a maturity date that
is the Payment Date occurring in the calendar month subsequent to the month in
which the Closing Date occurs in 2015.

      (e) Borrower will not by act or omission change or permit to be changed
the zoning of the Premises from its current zoning classification.

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<PAGE>

      (f) Upon the occurrence of an Event of Default under this Security
Instrument, power is granted to Lender to commence a Louisiana executory process
foreclosure proceeding, and to have all or any part of the Property immediately
seized and sold with or without appraisal, in regular session of court or in
vacation, in accordance with applicable Louisiana law, without the necessity of
further demanding payment from Borrower or of notifying Borrower or placing
Borrower in default. For purposes of foreclosure under Louisiana executory
process procedures, Borrower acknowledges the indebtedness secured hereby
whether now existing or arising hereafter and confesses judgment in Lender's
favor up to the full amount of Borrower's obligations secured by this Security
Instrument, in principal, interest, late charges, attorney's fees and other fees
and charges, and all other amounts secured under this Security Instrument. To
the extent permitted under applicable Louisiana law, Borrower additionally
waives: (a) the benefit of appraisal as provided in Articles 2332, 2336, 2723
and 2724 of the Louisiana Code of Civil Procedure, and all other laws with
regard to appraisal upon judicial sale; (b) the demand and three (3) days' delay
as provided under Article 2721 of the Louisiana Code of Civil Procedure; (c) the
notice of seizure as provided under Articles 2293 and 2721 of the Louisiana Code
of Civil Procedure; (d) the three (3) days' delay provided under Articles 2331
and 2722 of the Louisiana Code of Civil Procedure; and (e) all other benefits
provided under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other Articles not specifically mentioned above. Borrower
waives all homestead and other exemptions from seizure. These remedies are in
addition to all others provided under Louisiana law.

      (g) Upon, or at any time after the filing of a complaint to foreclose this
Security Instrument, the court in which such complaint is filed may appoint a
keeper of the Property pursuant to the provisions of La. R.S. 9:Section 5136 et
seq., as amended from time to time. Such keeper shall have all powers and
authorities that may be exercised by keepers under the laws of the State as now
or hereafter existing, and shall be compensated in accordance with such laws.
All fees, compensation and other amounts due a keeper hereunder shall be a part
of the Debt and shall be secured by this Security Instrument. References in this
Security Instrument and the Assignment to a "receiver" or words of similar
import shall include a keeper appointed pursuant to the provisions of this
Section.

      (h) For purposes of La. R.S. Sections 9:5555 and 5556, Borrower
acknowledges that none of the Debt evidences indebtedness or instruments
paraphed for identification with this Security Instrument. For purposes of
Louisiana Civil Code article 3298, La. R.S. Section 9:4401 and other applicable
law, this Security Instrument has been granted to secure the present and future
Debt, up to $500,000,000.00, whether now existing or hereafter arising, of
whatever nature and kind, whatsoever. This Security Instrument shall remain in
effect until cancelled by a written cancellation signed by Lender.

      (i) The reference in Section 13.02(b) hereof to "fee simple" shall be
deemed to mean "fee (full ownership)" and the reference to Section 13.02(b)
hereof to "deed with special warranty of title" shall be deemed to mean "deed
with waiver of warranty of title."

      (j) The phrase "power of sale or otherwise" found in Section 13.02(a)(vi)
hereof shall be deleted and the phrase "applicable Louisiana law" shall be
inserted in its place.

      (k) The phrase "whether made under the power of sale herein granted or
under or by virtue of judicial proceedings or a judgment or decree of
foreclosure and sale" found in Sections 13.02(d), 13.02(e) and 13.02(f) shall be
deleted and the phrase "whether by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale or otherwise in accordance with applicable
Louisiana law" shall be inserted in its place.

      (l) Borrower agrees to provide to all applicable insurers notice of the
collateral assignment made by Borrower in clause (g) of the description of the
Property contained in this Security Instrument.

      (m) Any and all declarations of facts made by authentic act before a
notary public in the presence of two witnesses by a person declaring that such
facts lie within his knowledge, shall constitute authentic evidence of such
facts for the purpose of executory process. Borrower specifically agrees that
such an affidavit by a representative of Lender as to the existence, amount,
terms and maturity of the Debt and of a default thereunder shall constitute
authentic evidence of such facts for the purpose of executory process.

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<PAGE>

      (n) Borrower represents that the Note evidences an indebtedness incurred
for a business or commercial purpose.

      Section 18.44. Certain Matters Relating to Property Located in Maine. With
respect to the Property located in the State of Maine, notwithstanding anything
contained herein to the contrary:

      (a) Lender shall have the STATUTORY POWER OF SALE as described in Title
33, Maine Revised Statutes Annotated, Section 501-A, as amended from time to
time, which is expressly incorporated herein by reference.

      (b) All references in this Security Instrument to any obligation of
Borrower to pay attorney fees and disbursements shall include, without
limitation, attorney fees and disbursements incurred in any bankruptcy
proceedings.

      (c) This Security Instrument secures indebtedness and obligations arising
from a commercial loan and none of the proceeds shall be used for primarily
personal, family or household purposes.

      (d) This Security Instrument constitutes, among other things, a fixture
filing. Borrower is the debtor and Borrower's address is 715 South Country Club
Drive, Mesa, Arizona 85210. Borrower is the record owner of the Premises.

      (e) NO ORAL AGREEMENT. UNDER MAINE LAW, NO PROMISE, CONTRACT, OR AGREEMENT
TO LEND MONEY, EXTEND CREDIT, FORBEAR FROM COLLECTION OF A DEBT, OR MAKE ANY
OTHER ACCOMMODATION FOR THE REPAYMENT OF A DEBT FOR MORE THAN $250,000.00 MAY BE
ENFORCED IN COURT AGAINST LENDER UNLESS IT IS IN WRITING AND SIGNED BY LENDER.
ACCORDINGLY, BORROWER CANNOT ENFORCE ANY ORAL PROMISE UNLESS IT IS CONTAINED IN
LOAN DOCUMENTS SIGNED BY LENDER, NOR CAN ANY CHANGE, FORBEARANCE OR OTHER
ACCOMMODATION RELATING TO THE DEBT, THIS LOAN, THIS SECURITY INSTRUMENT OR THE
OTHER LOAN DOCUMENTS BE ENFORCED, UNLESS IT IS IN WRITING AND SIGNED BY LENDER.

      (f) This Security Instrument is an open-ended mortgage that secures
existing indebtedness, "future advances," "protective advances," and "contingent
obligations" as such terms are defined in 33 M.R.S.A. Section 505, as the same
may be amended. The maximum aggregate amount of all debts or obligations secured
by this Security Instrument, including future advances but excluding protective
advances, shall not at any time exceed the total amount of two (2) times the
Loan Amount.

      Section 18.45. Certain Matters Relating to Property Located in the State
of Massachusetts. With respect to the Property which is located in the State of
Massachusetts, notwithstanding anything contained herein to the contrary:

      (a) Borrower hereby, as continuing security for payment or performance of
its obligations under the Note and the other Loan Documents in accordance with
the terms thereof, grants with MORTGAGE COVENANTS and assigns to Lender, and
grants to Lender a continuing security interest in and to all the Property.

      (b) This Security Instrument is upon the STATUTORY CONDITION and upon the
further condition that all covenants and agreements on the part of Borrower
herein undertaken shall be kept and fully and seasonably performed and that no
breach of any other of the covenants or conditions specified herein shall be
permitted, for any breach of which, upon the occurrence of an Event of Default
Lender shall have the STATUTORY POWER OF SALE together with all other remedies
now or hereafter permitted by law.

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<PAGE>

      (c) This Security Instrument has been executed as a sealed instrument as
of the date first above written.

      Section 18.46. Certain Matters Relating to Property Located in the State
of Michigan. With respect to the Property which is located in the State of
Michigan, notwithstanding anything contained herein to the contrary:

      (a) Lender shall have all the rights, benefits and privileges set forth in
this Security Instrument subject to the provisions of MCLA 554.231, MCLA 544.211
et seq. and MCLA 565.81 et seq. It is the intention of the parties that the
provisions of this Security Instrument, and all of the rights and powers granted
or reserved to Lender hereunder, shall be construed and enforced to the broadest
extent permissible under applicable Michigan law governing assignments of leases
and rents including, without limitation, MCLA 554.231 et seq. Any provision
contained herein which would, as drafted, violate any provision of, or be in any
respect unenforceable under, Michigan law shall be automatically deemed to be
modified to the extent necessary, consistent with its purpose, to render such
provision enforceable under Michigan law.

      (b) THIS SECURITY INSTRUMENT IS A "FUTURE ADVANCE MORTGAGE" PURSUANT TO
M.C.L.A. 565.901. ALL FUTURE ADVANCES UNDER THIS SECURITY INSTRUMENT OR UNDER
ANY OF THE LOAN DOCUMENTS SHALL HAVE THE SAME PRIORITY AS IF THE FUTURE ADVANCE
WAS MADE ON THE DATE THAT THIS SECURITY INSTRUMENT WAS RECORDED. THIS SECURITY
INSTRUMENT SHALL SECURE ALL INDEBTEDNESS OF BORROWER, ITS SUCCESSORS AND
ASSIGNS, UNDER THIS SECURITY INSTRUMENT, WHENEVER AND HOWEVER INCURRED. NOTICE
IS HEREBY GIVEN THAT THE INDEBTEDNESS SECURED HEREBY MAY INCREASE AS A RESULT OF
ANY DEFAULTS HEREUNDER BY BORROWER DUE TO, FOR EXAMPLE AND WITHOUT LIMITATION,
UNPAID INTEREST OR LATE CHARGES, UNPAID TAXES OR UNPAID INSURANCE PREMIUMS WHICH
LENDER ELECTS TO ADVANCE PURSUANT TO THE TERMS OF THIS SECURITY INSTRUMENT,
DEFAULTS UNDER LEASES THAT LENDER ELECTS TO CURE, ATTORNEYS' FEES OR COSTS
INCURRED IN ENFORCING THE LOAN DOCUMENTS OR OTHER EXPENSES INCURRED BY LENDER IN
PROTECTING THE PREMISES, THE SECURITY OF THIS SECURITY INSTRUMENT OR LENDER'S
RIGHTS AND INTERESTS.

      (c) In the event of a default under this Security Instrument, power is
granted to Lender to sell the Property or any part thereof at public auction and
to convey same to the purchaser after notice as required by the statutes of the
State of Michigan for foreclosure of mortgages by advertisement being Sections
600.3201, et seq., Michigan Compiled Laws, as amended.

      (d) This Security Instrument contains a power of sale which permits Lender
to cause the Property to be sold by advertisement rather than pursuant to court
action; and Borrower hereby voluntarily and knowingly waives any right Lender
may have by virtue of any applicable constitutional provision or statute to any
notice or court hearing prior to the exercise of the power of sale, except as
may be expressly required by the Michigan statute governing foreclosures by
advertisement. By execution of the Mortgage, Borrower represents and
acknowledges that the meaning and the consequences of the foregoing have been
discussed as fully as desired by Borrower with Borrower's legal counsel.

      (e) As additional security for the Debt and performance of the covenants
and agreements herein and in any other agreement contained, pursuant to Michigan
Compiled Laws 554.231 et seq., as amended, Borrower hereby assigns and conveys
to Lender and grants Lender security interests in any and all leases, written or
unwritten, of the Property or any part thereof, heretofore, now or hereafter
entered into and demising any part of the Property, and all rents, issues,
income and profits derived from the use of the Property or any portion thereof,
whether due or to become due.

      (f) Borrower's failure, refusal or neglect to pay any taxes levied against
the Property or any insurance premiums due upon policies of insurance covering
the Property, shall constitute waste under Michigan Compiled Laws 600.2927, and
Lender shall have a right to appointment of a receiver of the Property and of
the earnings,

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<PAGE>

income and profits thereof, with such powers as the Court making such
appointment confers, and Borrower hereby irrevocably consents to such
appointment in such event, and agrees to pay Lender's costs and expenses
incurred in such proceeding, including reasonably attorneys fees. Payment by
Lender for and on behalf of Borrower of any delinquent taxes, assessments, or
insurance premiums payable by Borrower under the terms of this Security
Instrument shall not cure the default herein described, nor shall it in any
manner impair Lender's right to the appointment of a receiver as set forth
herein.

      (g) The maturity date of the Loan is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      Section 18.47. Certain Matters Relating to Property Located in Minnesota.
The following provisions shall apply with respect to the Property located in the
State of Minnesota (the "Property"):

      (a) Acceleration; Foreclosure. If any Event of Default has occurred and is
continuing, Lender may, at its option, exercise one or more of the following
rights and remedies (and any other rights and remedies available to it):

            (i) Lender may exercise all of their rights under paragraph (b)
      below.

            (ii) Lender shall have and may exercise, with respect to all
      Fixtures, all the rights and remedies accorded upon default to a secured
      party under the Uniform Commercial Code as in effect in the State of
      Minnesota. If notice to Borrower of the intended disposition of such
      property is required by law in a particular instance, such notice shall be
      deemed commercially reasonable if given to Borrower (in the manner
      specified in Section 11.01) at least 10 calendar days prior to the date of
      intended disposition. Borrower shall pay on demand all costs and expenses
      incurred by Lender in exercising such rights and remedies, including but
      not limited to reasonable attorneys' fees and legal expenses.

            (iii) Lender may (and is hereby authorized and empowered to)
      foreclose this Security Instrument by action or advertisement pursuant to
      the statutes of the State of Minnesota in such case made and provided,
      power being expressly granted to sell the Property at public auction and
      convey the same to the purchaser in fee simple and, out of the proceeds
      arising from such sale, to pay all indebtedness secured hereby, with
      interest, and all legal costs and charges of such foreclosure and the
      maximum attorneys' fees permitted by law, which costs, charges and fees
      Borrower agrees to pay.

      (b) Assignment of Rents and Leases.

            (i) Upon the occurrence of any Event of Default Lender may, at its
      option, in addition to the other remedies set forth in paragraph (a)
      above:

                  (A) in the name, place and stead of Borrower and without
            becoming a mortgagee-in-possession (i) enter upon, manage and
            operate the Property or retain the services of one or more
            independent contractors to manage and operate all or any part of the
            Property; (ii) make, enforce, modify and accept surrender of the
            Lease; (iii) obtain or evict tenants, collect, sue for, fix or
            modify all tolls, rents, issues, profits, products, revenues and
            other income of the Property and every part thereof and enforce all
            rights of Borrower under the Lease; and (iv) perform any and all
            other acts that may be necessary or proper to protect the security
            of this Security Instrument.

                  (B) with or without exercising the rights set forth in
            subparagraph (A) above, give or require Borrower to give notice of
            any or all tenants authorizing and directing them to pay all Rents
            directly to Lender; and

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<PAGE>

                  (C) without regard to any waste, adequacy of the security or
            solvency of Borrower, apply for the appointment of a receiver of the
            Property, to which appointment Borrower hereby consents, whether or
            not foreclosure proceedings have been commenced under this Security
            Instrument and whether or not a foreclosure sale has occurred.

The exercise of any of the foregoing rights or remedies and the application of
the Rents pursuant to paragraph (ii) shall not cure or waive any Event of
Default (or notice of default) under this Security Instrument or invalidate any
act done pursuant to such notice.

            (ii) All Rents collected by Lender or any receiver each month shall
      be applied as follows:

                  (A) to payment of all reasonable fees of the receiver approved
            by the court;

                  (B) to payment of all tenant security deposits then owing
            pursuant to the provisions of Minnesota Statutes Section 504B.178;

                  (C) to payment of all prior or current real estate taxes and
            special assessments with respect to the Property, or if this
            Security Instrument or any other instrument relating to the Debt
            requires periodic escrow payments for such taxes and assessments, to
            the escrow payments then due;

                  (D) to payment of all premiums then due for insurance required
            by the provisions of this Security Instrument, or if this Security
            Instrument or any other instrument relating to the Debt requires
            periodic escrow payments for such premiums, to the escrow payments
            then due;

                  (E) to payment of expenses incurred for normal maintenance of
            the Property;

                  (F) if received prior to any foreclosure sale of the Property,
            to Lender for payment of the Debt, but no such payment made after
            acceleration of the Debt shall affect such acceleration;

                  (G) if received during or with respect to the period of
            redemption following a foreclosure sale of the Property:

                        (1) if the purchaser at the foreclosure sale is not
            Lender, first to Lender to the extent of any deficiency of the sale
            proceeds to repay Debt and second to the purchaser to be retained as
            a credit to the redemption price, but if the Property is not
            redeemed, then to the purchaser of the Property;

                        (2) if the purchaser at the foreclosure sale is Lender,
            to Lender to the extent of any deficiency of the sale proceeds to
            repay the Debt, and the balance to be retained by Lender as a credit
            to the redemption price, but if the Property is not redeemed, then
            to Lender, whether or not any such deficiency exists.

      The rights and powers of Lender under this paragraph (b) and the
      application of Rents under this paragraph (b) shall continue until
      expiration of the redemption period from any foreclosure sale, whether or
      not any deficiency remains after the foreclosure sale.

      (c) Fixture Filing. From the date of its recording, this Security
Instrument shall be effective as a financing statement files as a fixture filing
with respect to the Fixtures. For this purpose, the following information is set
forth:

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<PAGE>

            (i) The name and address of the record owner of the real estate
      described in this instrument is the same as that set forth for Borrower on
      page 1 hereof:

            (ii) the name and address of the Debtor (Borrower) is the same as
      that set forth for Borrower on page 1 hereof:

            (iii) the name and address of the Secured Party (Lender) is the same
      as that set forth for Lender on page 1 hereof:

            (iv) This document covers goods which are or are to become fixtures.

            (v) The Debtor named above is the record owner of the real estate
      described herein.

      (d) Intentionally Omitted.

      (e) Acknowledgment Regarding Future Advances. To the extent that this
Security Instrument secures indebtedness other than the Note, the amount of such
indebtedness is not currently known.

Lender acknowledges that it is aware of the provisions of Minnesota Statutes
Section 287.05, subd. 5, and intends to comply with the requirements contained
therein.

      Section 18.48. Certain Matters Relating to Property Located in the State
of New Hampshire. With respect to the Property which is located in the State of
New Hampshire, notwithstanding anything contained herein to the contrary:

      (a) This Security Interest is granted with the STATUTORY POWER OF SALE.

      (b) Upon the occurrence and during the continuance of an Event of Default,
Lender may, at Lender's option, by Lender itself, or otherwise, pursuant to the
STATUTORY POWER OF SALE, sell the Property consisting of real estate and
personalty situated thereon, and all estate, right, title, and interest of
Borrower therein, at one or more sales, as an entirety or in parcels, with such
elements of real and/or personal property, and at such time and place in any
municipality in which any of the Premises is located at the Premises, and upon
such terms as Lender may deem expedient, or as may be required by applicable
law. In the event of a sale by foreclosure pursuant to the STATUTORY POWER OF
SALE of less than all of the Property, this Security Instrument shall continue
as a lien and security interest on the remaining portion of the Property.

      (c) The maximum principal amount of the Debt, including present and future
obligations, which may be secured by the lien of this Security Instrument on the
Property located in New Hampshire at any one time is $250,000,000), plus
interest, costs and advances made by Lender to protect or preserve the Premises
or the lien of this Security Instrument, or for taxes, assessments or insurance
premiums as herein provided.

      Section 18.49. Certain Matters Relating to Property Located in the State
of New Jersey. With respect to the Property which is located in the State of New
Jersey, notwithstanding anything contained herein to the Contrary:

      (a) Borrower represents and warrants that (i) all filings and submissions
or other action required pursuant to the New Jersey Industrial Site Recovery
Act, N.J.S.A. 13:1K-6, et seq., as modified ("ISRA"), if any, in connection with
the Loan, have been made or taken and (ii) the Property is not located within a
"freshwater wetlands" or a "transition area," each as defined by N.J.S.A.
13:9B-3, and is not subject to the terms of the New Jersey Freshwater Wetlands
Protection Act, as amended, N.J.S.A. 13:9B-1 et. seq., or the rules and
regulations promulgated thereunder.

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<PAGE>

      (b) This Security Instrument shall be governed by and construed in
accordance with the laws of the State of New York, provided, however, that (i)
matters of title to the Property located in New Jersey, (ii) matters of
creation, perfection and priority of the lien of this Security Instrument and
(iii) those procedural issues of foreclosure, deed in lieu of foreclosure or
sale, which are required to be governed by the laws of the State of New Jersey
shall be governed by the laws of New Jersey and construed in accordance
therewith.

      (c) BORROWER HEREBY ACKNOWLEDGES RECEIPT OF A TRUE COPY OF THIS SECURITY
INSTRUMENT WITHOUT CHARGE.

      (d) Borrower agrees, and it is so intended that this Security Instrument
is subject to Modification as set forth in N.J.S.A. 46:9-8.1, et seq.

      (e) Borrower shall not conduct or cause or permit to be conducted on the
Property any activity which constitutes an Industrial Establishment (as such
term is defined in ISRA) without the prior written consent of Lender. In the
event that the provisions of ISRA become applicable to the Property subsequent
to the date hereof, Borrower shall give prompt written notice thereof to Lender
and shall take immediate requisite action to insure full compliance therewith.
Borrower shall deliver to Lender copies of all correspondence, notices and
submissions that it sends to or receives from the New Jersey Department of
Environmental Protection in connection with such ISRA compliance. Borrower's
obligation to comply with ISRA shall, notwithstanding its general applicability,
also specifically apply to sale, transfer, closure or termination of operations
associated with any foreclosure action, including, without limitation, a
foreclosure action brought with respect to this Security Instrument. In
connection with the purchase of the Property, Borrower required that the seller
of the Property comply with the provisions of ISRA and the seller did comply
therewith.

      (f) The Property has not been and is not now being used as a Major
Facility (as defined in the Environmental Statutes), and Borrower shall not use
the Property as a Major Facility in the future without the prior written consent
of Lender. If Borrower ever becomes an owner or operator of a Major Facility,
then Borrower shall furnish the New Jersey Department of Environmental
Protection with all the information required by N.J.S.A. 58:10-23.11d, and shall
duly file with the Director of the Division of Taxation in the New Jersey
Department of the Treasury a tax report or return, and shall pay all taxes due
therewith, in accordance with N.J.S.A. 58:10-23, 11b.

      (g) Borrower represents and warrants that the loans or other financial
accommodations included as obligations secured by this Security Instrument were
obtained solely for the purpose of carrying on or acquiring a business or
commercial investment and not for residential, consumer or household purposes.

      Section 18.50. Certain Matters Relating to Property Located in the State
of New York. With respect to the Property which is located in the State of New
York, notwithstanding anything contained herein to the contrary:

      (a) Borrower represents that this Security Instrument does not encumber
property principally improved or to be improved by one or more structures
containing in the aggregate not more than six (6) residential dwelling units.

      (b) Pursuant to Section 13 of the lien law of New York, Borrower shall
receive the advances secured hereby and shall hold the right to receive such
advances as a trust fund to be applied first for the purpose of paying the cost
of any improvement and shall apply such advances first to the payment of the
cost of any such improvements on the Property before using any part of the total
of the same for any other purpose.

      (c) Lender shall have all of the rights against lessees of the Property as
set forth in Section 291(f) of the Real Property Law of New York.

      (d) The provisions of subsection 4 of Section 254 of the New York Real
Property Law covering the insurance of buildings against loss by fire and the
application of Insurance Proceeds shall not apply to this Security

                                       95
<PAGE>

Instrument. In the event of any conflict, inconsistency or ambiguity between the
provisions of Article III hereof and the provisions of subsection 4 of Section
254 of the New York Real Property Law covering the insurance of buildings
against loss by fire and the application of Insurance Proceeds, the provisions
of Article III shall control.

      (e) (i) In the event of any sale or transfer of the Property, or any part
thereof, including any sale or transfer by reason of foreclosure of this
Security Instrument or any prior or subordinate mortgage or by deed in lieu of
any such foreclosure, Borrower shall timely and duly complete, execute and
deliver to Lender all forms and supporting documentation required by any taxing
authority to estimate and fix any tax payable by reason of such sale or transfer
or recording of the deed evidencing such sale or transfer, including any New
York State Real Estate Transfer Tax payable pursuant to Article 31 of the New
York Tax Law and New York City Real Property Transfer Tax payable pursuant to
Chapter 21, Title 11 of the New York City Administrative Code (individually, a
"Transfer Tax" and collectively, the "Transfer Taxes").

            (ii) Borrower shall pay the Transfer Taxes that may hereafter become
      due and payable with respect to any sale or transfer of the Property
      described in this Article, and in default of such payment, Lender may pay
      the same and the amount of such payment shall be added to the Debt secured
      hereby and, unless incurred in connection with a foreclosure of this
      Security Instrument or deed in lieu of such foreclosure, shall be secured
      by this Security Instrument.

            (iii) Borrower hereby irrevocably constitutes and appoints Lender as
      its attorney-in-fact, coupled with an interest, to prepare and deliver any
      questionnaire, statement, affidavit or tax return in connection with any
      Transfer Tax applicable to any foreclosure or deed in lieu of foreclosure
      described in this Article.

            (iv) Borrower shall indemnify and hold harmless Lender against (i)
      any and all liability incurred by Lender for the payment of any Transfer
      Tax with respect to any transfer of the Property by reason of foreclosure,
      and (ii) any and all expenses incurred by Lender in connection therewith
      including, without limitation, interest, penalties and attorneys' fees.

            (v) The obligation to pay the Transfer Taxes and indemnify Lender
      under this Section is a personal obligation of Borrower, whether or not
      Borrower is personally obligated to pay the Debt secured by this Security
      Instrument, and shall be binding upon and enforceable against the
      distributees, successors and assigns of Borrower with the same force and
      effect as though each of them had personally executed and delivered this
      Security Instrument, notwithstanding any exculpation provision in favor of
      Borrower with respect to the payment of any other monetary obligations
      under this Security Instrument.

            (vi) In the event that Borrower fails or refuses to pay a tax
      payable by Borrower with respect to a sale or transfer by reason of a
      foreclosure of this Security Instrument in accordance with this Section,
      the amount of the tax, any interest or penalty applicable thereto and any
      other amount payable pursuant to Borrower's obligation to indemnify Lender
      under this Section may, at the sole option of Lender, be paid as an
      expense of the sale out of the proceeds of the mortgage foreclosure sale.

            (vii) The provisions of this Section shall survive any transfer and
      the delivery of the deed affecting such transfer. Nothing in this Section
      shall be deemed to grant to Borrower any greater rights to sell, assign or
      otherwise transfer the Premises than are expressly provided in Article IX
      nor to deprive Lender of any right to refuse to consent to any transaction
      referred to in this Section.

      (f) The clauses and covenants contained in this Security Instrument that
are construed by Section 254 of the New York Real Property Law shall be
construed as provided in those sections (except as provided in Subsection (d) of
this Section and Article III hereof). The additional clauses and covenants
contained in this Security Instrument shall afford rights supplemental to and
not exclusive of the rights conferred by the clauses and covenants construed by
Section 254 and shall not impair, modify, alter or defeat such rights (except as
provided in Subsection (d) of this Section and Article III hereof),
notwithstanding that such additional clauses and covenants

                                       96
<PAGE>

may relate to the same subject matter or provide for different or additional
rights in the same or similar contingencies as the clauses and covenants
construed by Section 254. The right of Lender arising under the clauses and
covenants contained in this Security Instrument shall be separate, distinct and
cumulative and none of them shall be in exclusion of the others. No act of
Lender shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision, anything herein or otherwise to
the contrary notwithstanding. In the event of any inconsistencies between the
provisions of Section 254 and the provisions of this Security Instrument, the
provisions of this Security Instrument shall prevail.

      (g) Notwithstanding anything to the contrary in this Security Instrument,
the maximum amount of principal indebtedness secured by this Security Instrument
or which under any contingency may be secured by this Security Instrument is
125% of the Allocated Loan Amount for the Property.

      (h) At Borrower's request, and upon (a) Borrower's prepayment of the Debt
in full, whether by prepayment or otherwise and (b) payment by Borrower of
Lender's reasonable counsel fees and disbursements and other reasonable costs,
if any, and provided Borrower (a) refinances the Loan through any institution
other than Lender, or (b) sells any of the Premises, and an institution other
than Lender is involved in the financing of such sale, Lender shall deliver an
assignment of the Note, this Security Instrument to Borrower's designee without
recourse, representation or warranty, together with the Note (or an affidavit of
lost note) duly endorsed by Lender to Borrower's designee.

      Section 18.51. Certain Matters Relating to Property Located in the State
of Ohio. With respect to the Property which is located in the State of Ohio,
notwithstanding anything contained herein to the contrary:

      (a) This Security Instrument is an Open-End Mortgage, and Borrower and
Lender intend that this Security Instrument shall secure not only the sums
advanced as of the date hereof, but also the unadvanced balance of the Note,
which sums Lender is obligated to advance, and in addition shall secure any and
all advances provided for in the Loan Documents to the fullest extent provided
for under Section 5301.232 of the Ohio Revised Code; provided, however, that the
maximum amount of the principal portion of the Debt that may be outstanding at
any time is $500,000,000.00. In addition to any other debt or obligation secured
hereby, this Security Instrument shall also secure unpaid balances of advances
made with respect to the Property for the payment of taxes, assessments,
insurance premiums, and costs incurred for the protection of the Premises to the
fullest extent provided for under Section 5301.233 of the Ohio Revised Code.

      (b) The following is hereby inserted after the definition of the word
"Debt" in the "NOW THEREFORE" paragraph found in the Recitals hereto:

      as well as to secure the unpaid balance of advances made by Lender for the
      payment of taxes, assessments, insurance premiums, and costs incurred for
      the protection of the Property to the fullest extent provided for under
      Section 5301.233 of the Ohio Revised Code.

      (c) The following is hereby inserted at the end of Section 18.14 of this
Security Instrument as an additional subparagraph:

            (c) The name of the "debtor" is the "Borrower" identified on page 1
      hereof; and the name of the "secured party" is the "Lender" identified on
      page 1 hereof; the mailing address of the "secured party" from which
      information concerning the security interests may be obtained and the
      mailing address of the "debtor" are as set forth in the preamble of this
      Security Instrument; and a statement indicating the types, or describing
      the items, of collateral is set forth hereinabove in the granting clauses.
      Borrower is the owner of the real property constituting the "Premises"
      encumbered by this Security Instrument.

      (d) Lender shall be and hereby is authorized and empowered to do, as
mortgagee, all things provided to be done in the mechanics' lien laws of the
State of Ohio (including Section 1311.14 of the Ohio Revised Code), and all acts
amendatory or supplementary thereto.

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<PAGE>

      (e) The maturity date of the Loan is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      (f) With respect to any agreement by Borrower in this Security Instrument
or in any other Loan Document to pay Lender's attorneys' fee and disbursements
incurred in connection with the Loan, Borrower agrees that each Loan Document is
a "contract of indebtedness" and that the attorneys' fees and disbursements
referenced are those which are a reasonable amount, all as contemplated by Ohio
Revised Code Section 1301.21, as such Section may hereafter be amended. Borrower
further agrees that the indebtedness incurred in connection with the Loan is not
incurred for purposes that are primarily personal, family or household and
confirms that the total amount owed on the contract of indebtedness exceeds One
Hundred Thousand and No/100 Dollars ($100,000.00).

      Section 18.52. Certain Matters Relating to Property Located in Oklahoma.
With respect to Property located in the State of Oklahoma, notwithstanding
anything contained herein to the contrary:

      (a) Without in any way limiting the other provisions of this Security
Instrument, but in addition thereto and in amplification thereof, upon the
occurrence of any Event of Default which has not been waived, Borrower hereby
confers on Lender the power to sell the Property, and the interests of persons
therein, in the manner and pursuant to the procedures set forth in the "Oklahoma
Power of Sale Mortgage Foreclosure Act" (46 O.S. Sections 40-49), as said Act
may be amended from time to time, or pursuant to other applicable statutory or
judicial authority. If no cure is effected within the statutory time limits,
Lender may accelerate the indebtedness secured hereby without further notice
(the aforementioned statutory cure period shall run concurrently with any
contractual provision for notice before acceleration of debt) and may then
proceed in the manner and subject to the conditions of the above-referenced
statutes to send to Borrower and other necessary parties a notice of sale and
may sell and convey the Property in accordance with the above-referenced laws.
Lender may enforce this Security Instrument by exercising said power of sale or
at Lender's sole option by judicial foreclosure proceedings as provided by law.
No action of Lender based upon the provisions contained herein or in the
Oklahoma Power of Sale Mortgage Foreclosure Act, including, without limitation,
the giving of the notice of intent to foreclose by power of sale or the notice
of sale, shall constitute an election of remedies which would preclude Lender
from pursuing judicial foreclosure before or at any time after commencement of
the power of sale foreclosure procedure. If Lender institutes judicial
proceedings to enforce this Security Instrument, Borrower hereby waives or does
not waive, at the sole option of Lender, appraisement of the Property, said
option to be exercised by Lender at the time judgment is rendered or at any time
prior thereto. Borrower fully understands the consequences of conferring on
Lender the above-described power of sale, and if Lender elects to enforce this
Security Instrument by exercising said power of sale, Borrower hereby expressly
waives to the fullest extent permitted by law any right to a judicial hearing
prior to the sale of the Property. As often as any proceedings may be taken to
foreclose this Security Instrument, whether pursuant to the power of sale herein
conferred or by judicial proceedings, or to foreclose the security interest
herein granted to Lender, Borrower agrees to pay to Lender, in addition to all
other sums due, all costs and expenses, including reasonable attorney fees,
incurred by Lender.

      (b) It is specifically understood that the obligation of the Borrower to
pay certain filing, registration and recording charges and all taxes, duties,
imposts, assessments and charges set forth in Section 4.01(c) of the Security
Instrument specifically includes payment of and the Borrower specifically agrees
to pay all additional Oklahoma Real Estate Mortgage Tax and certification fees
charged in connection with the Security Interest recorded in Oklahoma.

      (c) A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY
ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE.

      (d) The Maturity Date of the Debt is July 1, 2015.

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<PAGE>

      Section 18.53. Certain Matters Relating to Property Located in the
Commonwealth of Pennsylvania. With respect to the Property which is located in
the Commonwealth of Pennsylvania, notwithstanding anything contained herein to
the contrary:

      (a) FOR THE PURPOSE OF OBTAINING POSSESSION OF THE PROPERTY AND EXERCISING
THE OTHER REMEDIES PROVIDED IN THIS SECTION, BORROWER HEREBY AUTHORIZES THE
PROTHONOTARY OR ANY ATTORNEY OF THE COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA TO APPEAR FOR BORROWER TO FILE AN AGREEMENT FOR ENTERING IN ANY
COURT OF COMPETENT JURISDICTION AN AMICABLE ACTION FOR CONFESSION OF JUDGMENT IN
EJECTMENT AGAINST BORROWER AND ALL PERSONS CLAIMING UNDER BORROWER FOR
POSSESSION OF THE PROPERTY, FOR WHICH THIS SECURITY INSTRUMENT OR A TRUE CORRECT
COPY THEREOF SHALL BE A SUFFICIENT WARRANT, WHEREUPON, IF LENDER SO DESIRES, A
WRIT OF POSSESSION MAY ISSUE FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDINGS
WHATSOEVER, AND PROVIDED THAT IF FOR ANY REASON AFTER SUCH ACTION SHALL HAVE
BEEN COMMENCED THE SAME SHALL BE TERMINATED AND POSSESSION REMAIN IN OR BE
RESTORED TO BORROWER, LENDER SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT DEFAULT OR
DEFAULTS TO BRING ONE OR MORE AMICABLE ACTION OR ACTIONS AS HEREINBEFORE SET
FORTH TO RECOVER POSSESSION BY CONFESSION OF JUDGMENT AS AFORESAID. THE
AUTHORITY AND POWER TO APPEAR AND CONFESS JUDGMENT IN EJECTMENT AGAINST BORROWER
SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE THEREOF AND MAY BE EXERCISED AS
OFTEN AS LENDER SHALL FIND IT NECESSARY AND DESIRABLE AND THIS SECURITY
INSTRUMENT SHALL BE A SUFFICIENT WARRANT THEREFORE. IN THE EVENT OF ANY JUDGMENT
CONFESSED AGAINST BORROWER HEREUNDER IS STRICKEN OR OPENED UPON APPLICATION BY
OR ON THE COMPANY'S BEHALF FOR ANY REASON, LENDER IS HEREBY AUTHORIZED AND
EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT IN EJECTMENT AGAINST BORROWER
IN EJECTMENT, AS PROVIDED FOR HEREIN, IF DOING SO WILL CURE ANY ERRORS OR
DEFECTS IN SUCH PRIOR PROCEDURES.

      BY SIGNING THIS INSTRUMENT, BORROWER HEREBY ACKNOWLEDGES THAT BORROWER HAS
READ THIS SECURITY INSTRUMENT (INCLUDING WITHOUT LIMITATION THE CONFESSION SET
FORTH HEREIN), HAS HAD THE OPPORTUNITY TO HAVE THE SAME REVIEWED BY LEGAL
COUNSEL, UNDERSTANDS THE SAME, AND AGREES TO THE PROVISIONS CONTAINED HEREIN,
INCLUDING, WITHOUT LIMITATION, THE CONFESSION OF JUDGMENT PROVISIONS AND
UNDERSTANDS THAT A CONFESSION OF JUDGMENT CONSTITUTES A WAIVER OR RIGHTS
BORROWER OTHERWISE WOULD HAVE TO PRIOR NOTICE AND A HEARING BEFORE A JUDGMENT IS
ENTERED AGAINST BORROWER AND WHICH MAY RESULT IN A COURT JUDGMENT AGAINST
BORROWER WITHOUT PRIOR NOTICE OR HEARING.

      BORROWER HEREBY AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY ATTORNEY
OR ANY COURT OF RECORDS OR THE SHERIFF (OR THE LAWFUL DESIGNEE OF THE SHERIFF)
WITHIN ANY COUNTY OF THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, TO TAKE ALL
ACTION ALLOWED BY OR PROVIDED FOR IN THE PENNSYLVANIA RULES OF CIVIL PROCEDURE
OR OTHER APPLICABLE RULES OF CIVIL PROCEDURE TO EXECUTE ON ANY JUDGMENT ENTERED
AGAINST BORROWER PURSUANT TO THE CONFESSION OF JUDGMENT SET FORTH ABOVE WITHOUT
PRIOR NOTICE OR HEARING OF ANY NATURE WHATSOEVER, WAIVING ALL LAWS EXEMPTING
REAL OR PERSONAL PROPERTY FROM EXECUTION TO THE EXTENT THAT SUCH LAWS MAY
LAWFULLY BE WAIVED. NO SINGLE EXERCISE OF THE FOREGOING POWER TO EXECUTE ON
JUDGMENTS WITHOUT A HEARING SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT
ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE VALID, VOIDABLE OR VOID, BUT
THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME
AS OFTEN AS THE AGENT SHALL ELECT.

      (b) This Security Instrument is an Open-End Mortgage. This Security
Instrument secures, and the Debt include, future advances. All advances and
indebtedness arising and occurring from time to time under this

                                       99
<PAGE>

Security Instrument shall be secured hereby. The maximum amount of indebtedness
(as defined in 42 Pa. Stat. Section 8143, which term excludes interest and
excludes advances and expenses made by Lender to protect its interest in the
Property) outstanding at any time which is secured by this Security Instrument
is 125% of the Allocated Loan Amount for the Property. Borrower hereby covenants
and agrees that it will not exercise, and hereby waives, its right under 42 Pa.
Stat. Section 8143(c) to limit the indebtedness secured by this Security
Instrument.

      (c) This Security Instrument secures, and the Debt include, (i) all
advances made by Lender with respect to any of the Property for the payment of
Basic Carrying Costs or other costs incurred for the protection of any of the
Property or the lien of this Security Instrument, (ii) all expenses incurred by
Lender by reason of an Event of Default hereunder and (iii) all advances made by
Lender to enable completion of construction of the Property. As provided in 42
Pa. Stat. Section 8144, this Security Instrument shall constitute a lien on the
Property from the time this Security Instrument is left of record (or, if this
is a purchase money mortgage, from the time of delivery hereof to Lender) for,
among other things, all such advances and expenses, plus interest thereon,
regardless of the time when such advances are made or such expenses are
incurred. All notices to be given to Lender pursuant to 42 Pa. Stat. Section
8143 shall be given as set forth in Section 11.01 hereof.

      Section 18.54. Certain Matters Relating to Property Located in the State
of Rhode Island. With respect to the Property located in the State of Rhode
Island, notwithstanding anything contained herein to the contrary:

      (a) The following is hereby added to the last paragraph on page 1
beginning "NOW THEREFORE" after the phrase "mortgage and confirm to" on the 5th
line at the top of page 2:

            Lender, WITH MORTGAGE COVENANTS, and grants a security interest in.

      (b) Paragraph (d) of the granting clause is hereby amended by adding the
following phrase immediately after the phrase "all of which":

            are goods that are or are to become fixtures.

      (c) The following is hereby added to the last paragraph of the granting
clause of this Security Instrument beginning "All of the foregoing items" and
immediately after the phrase "of Borrower therein":

            to the extent assignable under applicable law,

      (d) The following is hereby added at the end of the definition
"Environmental Statute" in this Security Instrument immediately before the
phrase "and all rules, regulations and guidance documents promulgated or
published thereunder":

            the Hazardous Waste Management Act of 1978, R.I.G.L. Section
            23-19.1-1, et seq., as amended, and the Industrial Property
            Remediation and Reuse Act, R.I.G.L. Section 23-19.14-1, et seq., as
            amended

      (e) The following is hereby added to the beginning of the penultimate
sentence in Section 7.01(a) and at the beginning of Section 7.01(d) of this
Security Instrument:

            To the extent permitted by applicable law,

      (f) The following is hereby added at the beginning of Section 13.02(a) of
this Security Instrument:

            This Security Instrument is upon the STATUTORY CONDITION, and upon
            the further condition that all covenants of Borrower contained in
            this Security Instrument, the Loan Documents and/or any other
            documents evidencing the Debt, shall be kept

                                      100
<PAGE>

            and performed, and for any breach of said STATUTORY CONDITION or
            further condition, Lender shall have the STATUTORY POWER OF SALE.

            Said STATUTORY CONDITION and STATUTORY POWER OF SALE, as well as the
            MORTGAGE COVENANTS contained in the granting clause of this Security
            Instrument, are those contained in the General Laws of the State of
            Rhode Island.

            Provided further however, to the extent permitted by law,
            publication, pursuant to said STATUTORY POWER OF SALE, of notice of
            the time and place of sale may, in Lender's sole discretion, be made
            by publishing the same at least once each week for three (3)
            successive weeks in a public newspaper published daily in the City
            of Providence, Rhode Island and not as otherwise provided in said
            STATUTORY POWER OF SALE.

            It is expressly understood and agreed to by Borrower and Lender that
            the power of sale contained in this Security Instrument shall, in
            the event that the Property is comprised of separate lots or parcels
            of land, survive the foreclosure of any portion of the Property and
            may be exercised on different occasions to separately foreclose each
            and every lot or parcel of land comprising the Property until all of
            the Property has been foreclosed in accordance with applicable law
            and the terms of this Security Instrument.

      (g) Section 13.04 of this Security Instrument is hereby amended by
deleting the phrase "month-to-month tenant" and substituting "tenant at
sufferance."

      (h) Section 13.13 is hereby amended to add a new subsection (e) as
follows:

            (e) Compliance with Rhode Island Law. To the extent that the
      provisions of this Security Instrument as to the creation, perfection,
      priority, enforcement and foreclosure of the liens and security interests
      created in this Security Instrument are inconsistent with Rhode Island law
      (including, without limitation, R.I.G.L. Section 6A-9-101 et seq., Section
      34-11-20, Section 34-11-21, Section 34-11-22, and Section 34-27-2), Rhode
      Island law shall take precedence over the provisions of this Security
      Instrument but shall not invalidate or render unenforceable any other
      provisions of this Security Instrument that can be construed in a manner
      consistent with Rhode Island law.

      (i) Section 18.14 of this Security Instrument is hereby amended by adding
a new subsection (c) as follows:

            (c) Part of the Property and Collateral is or may become fixtures.
      It is intended that, as to such fixtures, this Security Instrument shall
      be effective as a financing statement filed as a fixture filing from the
      date of the recording of this Security Instrument for record with the
      Records of Land Evidence of the Town/City in which the Premises is
      located. The information in this Section is provided in order that this
      Security Instrument shall comply with the requirements of the Uniform
      Commercial Code in effect in Rhode Island, for a mortgage instrument to be
      filed as a financing statement pursuant to R.I.G.L. Section 6A-9-502. For
      the purposes of said statute, (i) Borrower is the "Debtor" and its name
      and mailing address are set forth on page 1 and Section 11.01 of this
      Security Instrument and (ii) Lender is "Secured Party" and its name and
      mailing address from which information concerning the security interest
      granted herein may be obtained are as set forth on page 1 and Section
      11.01 of this Security Instrument. A statement describing the portion of
      the Property and Collateral comprising goods or other personal property
      that may now be or hereafter become fixtures hereby secured is set forth
      in the granting clauses hereof. The record owner of the Property is Fee
      Owner.

      (j) The following is hereby added at the end of Section 18.14 of this
Security Instrument:

                                      101
<PAGE>

            All of the foregoing rights and remedies of Lender contained in this
            Section 18.14 shall be exercised in accordance with and to the
            fullest extent permitted under the UCC.

      (k) The following phrase is hereby added to the second sentence in Section
18.16 and the first sentence of Section 18.17 and 18.19 of this Security
Instrument:

            To the fullest extent permitted by applicable law,

      (l) Section 18.22 of this Security Instrument is hereby amended by adding
the following at the end of said Section 18.22:

            Notwithstanding the foregoing, the Loan secured by this Security
            Instrument will be fully advanced at closing and does not include a
            revolving credit component or open-end mortgage for purposes of
            Rhode Island law.

      Section 18.55. Certain Matters Relating to Property Located in the State
of South Carolina. With respect to the Property located in the State of South
Carolina, notwithstanding anything contained herein to the contrary:

      (a) COMPLIANCE WITH SOUTH CAROLINA MORTGAGE FORECLOSURE LAW:

            (i) If any provision of this Security Instrument is determined to be
      inconsistent with any provisions of the South Carolina Code of Laws (1976)
      (the "SCCL") as deal with Mortgage Foreclosures or the South Carolina
      Rules of Civil Procedure (the "SCRCP"), the SCCL and SCRCP shall take
      precedence over the provisions of this Security Instrument, but shall not
      invalidate or render unenforceable any other provisions of this Security
      Instrument that can be construed in a manner consistent with the SCCL or
      SCRCP.

            (ii) Section 3.01 shall be amended to add the following sentence at
      the end of said paragraph: "Provided, however, that in no instance shall
      Lender require Borrower to purchase casualty insurance on the Property in
      excess of the replacement cost of the Improvements."

            (iii) Section 13.13(a) shall be amended to add the following
      sentence at the end of said paragraph: "Provided, however, that any such
      termination or recision shall be in accordance with and subject to the
      provisions of South Carolina Code of Laws (1976) as deal with Mortgage
      Foreclosures and the South Carolina Rules of Civil Procedure.

            (iv) Pursuant to Section 29-3-50 of the SCCL, this Security
      Instrument secures future advances which may be made by Lender, provided
      that the total amount of indebtedness secured hereunder may not exceed the
      maximum principal amount of two (2) times the Loan Amount, plus interest
      thereon, attorney's fees and court costs, together with such other
      advances as may be authorized by law.

            (v) Interest secured under this Security Instrument may include,
      without limitation, deferred or capitalized interest to the extent
      provided in the Note.

            (vi) WAIVER OF APPRAISAL. The laws of South Carolina provide that in
      any real estate foreclosure proceeding a defendant against whom a personal
      judgment is taken or asked may within thirty days after the sale of the
      Property apply to the court for an order of appraisal. The statutory
      appraisal value as approved by the Court would be substituted for the high
      bid and may decrease the amount of any deficiency owing in connection with
      the transaction. THE UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE
      STATUTORY APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL
      FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED
      VALUE OF THE PROPERTY.

                                      102
<PAGE>

      (b) As to those items of the Collateral which are or shall become affixed
to the Property, and all products and proceeds thereof, this Security Instrument
is and shall be effective as a Financing Statement filed as a fixture filing as
and from the date of its recordation in the real estate records of the County in
which the Property is situated. The name of the record owner of the Property is
the Borrower identified on the first page of the Security Instrument. The name
and address of Borrower, as debtor, is set forth on the first page of this
Security Instrument. The name and address of Lender, as secured party, and from
whom information concerning the security interest created herein may be
obtained, is set forth on the first page of this Security Instrument. The
provisions of the granting clauses (b) through (p) on pages 2 through 4 of this
Security Instrument describe the types and items of the Collateral affixed or to
be affixed to the Property.

      Section 18.56. Certain Matters Relating to Property Located in the State
of Vermont. With respect to the Property which is located in the State of
Vermont, notwithstanding anything contained herein to the contrary:

      (a) Borrower hereby grants Lender a power of sale to foreclose this
Security Instrument pursuant to Vt. Stat. Ann. Tit. 12, Sections 4531(a) -
4533(a)(Supp. 2004), as such provision may be amended from time to time, and
Lender may, to the extent permitted by law, with or without first taking
possession, sell the Property, in whole or, to the extent permitted by law, in
part, at public auction in the State of Vermont, or at such place as may be
required by law, and may adjourn such sale from time to time by announcement at
the time and place appointed for such sale or adjourned sale, and upon such
sale, Lender may make and deliver to any purchaser a good and sufficient deed,
conveyance, or bill of sale, and good and sufficient receipts for the purchase
money, and do and perform all other acts as may be necessary fully to carry into
effect this power of sale.

      (b) If Lender should employ attorneys or incur other expenses for the
enforcement or performance or observance of any obligation, right or agreement
herein contained, Borrower agrees that it will on demand therefore reimburse the
reasonable fees of such attorneys and such other expenses so incurred. Any
provision herein to the contrary notwithstanding, Borrower agrees in the event
of foreclosure of the Security Instrument or the lien of the security interest
granted herein, it shall pay the entire amount of reasonable attorneys' fees
incurred by Lender, its successors or assigns in connection with any such
foreclosure, and that the amount of such fees are expressly not limited by the
provisions of Rule 80.1(f) of the Vermont Rules of Civil Procedure.

      Section 18.57. Certain Matters Relating to Property Located in Wisconsin.
With respect to Property located in the State of Wisconsin, notwithstanding
anything contained herein to the contrary:

      (a) Borrower agrees that, to the extent permitted by law, upon waiving the
right to a deficiency judgement, this Security Instrument may be foreclosed by
Lender, at it option, pursuant to the provisions of Section 846.103(2) of
Wisconsin Statues, or any successor thereof.

      [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      103
<PAGE>

      IN WITNESS WHEREOF, Borrower has duly executed this Security Instrument
the day and year first above written.

Borrower's Organizational Number:           BORROWER:

20-28483969904                              AREC 8, LLC,
                                            a Delaware limited liability company

                                            By: /s/ Gary B. Horton
                                                --------------------
                                                Name: Gary B. Horton
                                                Title: Treasurer

Borrower's Organizational Number:           UHIL 8, LLC,
                                            a Delaware limited liability company
20-28483969852
                                            By: /s/ Gary B. Horton
                                                ---------------------
                                                Name:  Gary B. Horton
                                                Title:  Treasurer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>7
<FILENAME>p70784exv10w6.txt
<DESCRIPTION>EX-10.6
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.6

                     SCHEDULE OF ADDITIONAL PROMISSORY NOTES

      On June 8, 2005, the borrowers under the following promissory note signed
additional promissory notes in substantially the same form as the attached note
for the following amounts:

<TABLE>
<CAPTION>
Promissory Note                  Amount
- ---------------                  ------
<S>                          <C>
    Pool B                   $35,489,464.00
    Pool C                   $40,158,317.00
    Pool D                   $38,443,073.00
    Pool E                   $40,589,057.00
    Pool F                   $38,227,798.00
</TABLE>

<PAGE>

                                                       U-Haul - Grande Pool MS A
                                                        MSMCI Loan No.: 05-20270

                                 PROMISSORY NOTE

Note Amount: $47,092,381.00

Maturity Date: The Payment Date in July, 2015.

            THIS PROMISSORY NOTE (this "Note"), is made as of June 8, 2005, by
the undersigned, as maker ("Borrower"), in favor of MORGAN STANLEY MORTGAGE
CAPITAL INC. and its successors or assigns, as payee ("Lender").

                                R E C I T A L S:

            A. This Note evidences a loan (the "Loan") made by Lender to
Borrower in the original principal amount of FORTY-SEVEN MILLION NINETY-TWO
THOUSAND THREE-HUNDRED EIGHTY-ONE AND NO/100 DOLLARS ($47,092,381.00) (the "Loan
Amount") and secured by, inter alia, certain mortgages, deeds of trust, deeds to
secure debt and/or certain mortgages which were amended, restated and
consolidated by agreements of consolidation and modification of mortgage,
security agreement, assignment of rents and fixture filing, each of even date
herewith (as same may hereafter be amended, modified, supplemented or replaced,
collectively, the "Security Instrument") from Borrower, as mortgagor or grantor,
in favor and for the benefit of Lender, as mortgagee or beneficiary, as security
for the Loan and the other Loan Documents;

            B. Borrower and Lender intend these Recitals to be a material part
of this Note.

            NOW, THEREFORE, FOR VALUE RECEIVED Borrower does hereby covenant and
promise to pay to the order of Lender, without any counterclaim, setoff or
deduction whatsoever, on the Maturity Date (as hereinafter defined), in
immediately available funds, at 1221 Avenue of the Americas, 27th Floor, New
York, New York 10020 or at such other place as Lender may designate to Borrower
in writing from time to time, in legal tender of the United States of America,
the Loan Amount and all other amounts due or becoming due hereunder, to the
extent not previously paid in accordance herewith, together with all interest
accrued thereon through the date the Loan is repaid in full, at the rate of
5.52% per annum to be computed on the basis of the actual number of days elapsed
in a 360 day year (the "Interest Rate"), on so much of the Loan Amount as is
from time to time outstanding on the first day of the applicable Interest
Accrual Period (as hereinafter defined) (taking into account any principal
reduction to the Loan Amount which occurs on the Payment Date in such Interest
Accrual Period).

Section 1. DEFINITIONS

            Defined terms in this Note shall include in the singular number the
plural and in the plural number the singular. All capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the Security
Instrument.

<PAGE>

Section 2. PAYMENTS AND LOAN TERMS

            Section 2.1 Interest and Amortization Payments.

                  (a) Interest on the unpaid Principal Amount of the Loan for
the First Interest Accrual Period computed at the Interest Rate shall be
payable, without any counterclaim, setoff or deduction whatsoever, on the First
Payment Date. Commencing on the Payment Date next following the First Payment
Date, and on each Payment Date thereafter until this Note is paid in full on the
Maturity Date or otherwise, an amount equal to the Monthly Debt Service Payment
in the amount of $289,751.16 shall be due and payable, without any counterclaim,
setoff or deduction whatsoever, which amount represents principal installments
("Principal Payments"), together with interest irrespective of whether or not
any voluntary or involuntary prepayments of principal have been made and which
payment is calculated utilizing twelve (12) thirty (30) day months. The entire
outstanding principal balance, to the extent not theretofore paid, together with
all accrued but unpaid interest thereon (including, without limitation, interest
which has been accrued and not been paid resulting from interest being
calculated for the purposes hereof pursuant to the "Now Therefore" paragraph of
the Recitals hereof) and any other amounts due hereunder shall be due and
payable on the Payment Date in July, 2015 (the "Maturity Date").

                  (b) To the extent any Interest Shortfall shall occur, except
as otherwise provided in Section 3.2 hereof, such Interest Shortfall shall
accrue additional interest at the Interest Rate.

                  (c) To the extent Payments (as hereinafter defined) are or
become due and payable under this Note or any of the other Loan Documents on a
day (the "Due Date") which is not a Business Day, such Payments are and shall be
due and payable on the first Business Day immediately following the Due Date for
such Payments. In the event that any Payment is received after 1:00 p.m. Eastern
Time on any day, it shall be deemed received and paid on the subsequent Business
Day.

            Section 2.2 Application of Payments.

                  (a) Each and every payment (a "Payment") made by Borrower to
Lender in accordance with the terms of this Note and/or the terms of any one or
more of the other Loan Documents and all other proceeds received by Lender with
respect to the Debt, shall be applied as follows:

                        (1) Payments other than Unscheduled Payments shall be
applied (i) first, to all interest (other than Default Rate Interest) which
shall be due and payable with respect to the Loan Amount pursuant to the terms
hereof as of the date the Payment is received (including any Interest Shortfalls
and interest thereon to the extent permitted by applicable law), (ii) second,
taking into account the respective date of such Payments, to the Loan Amount
until the Loan Amount has been amortized in accordance with the terms hereof,
(iii) third, to all Late Charges, Default Rate Interest or other premiums and
other sums payable hereunder or under the other Loan Documents (other than those
sums included in clauses (i) and (ii) of this Section 2.2(a)(1)) in such order
and priority as determined by Lender in its sole discretion and (iv) on the
Maturity Date, to the Loan Amount until the Loan Amount has been paid in full.

                        (2) Unscheduled Payments shall be applied at the end of
the Interest Accrual Period in which such Unscheduled Payments are received as a
principal prepayment of the Loan Amount to amortize the Loan Amount.

                  (b) To the extent that Borrower makes a Payment or Lender
receives any Payment or proceeds for Borrower's benefit, which are subsequently
invalidated, declared to be fraudulent or

                                       3
<PAGE>

preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the obligations of Borrower
hereunder intended to be satisfied shall be revived and continue as if such
Payment or proceeds had not been received by Lender.

            Section 2.3 Prepayments.

      The Debt may not be prepaid, in whole or in part, except as set forth in
Article XV of the Security Instrument.

Section 3. DEFAULTS

            Section 3.1 Events of Default.

      This Note is secured by, among other things, the Security Instrument which
specifies various Events of Default, upon the happening of which all or portions
of the sums owing under this Note may be declared immediately due and payable as
more specifically provided therein. Each Event of Default under the Security
Instrument or any one or more of the other Loan Documents shall be an Event of
Default hereunder.

            Section 3.2 Remedies.

      If an Event of Default shall occur hereunder or under any other Loan
Document, the Principal Amount and, to the extent permitted by applicable law,
all accrued but unpaid interest on the Principal Amount shall, commencing on the
date of the occurrence of such Event of Default, at the option of Lender,
immediately and without notice to Borrower, accrue interest at the Default Rate
until such Event of Default is cured or if not cured, until the repayment of the
Debt. The foregoing provision shall not be construed as a waiver by Lender of
its right to pursue any other remedies available to it under the Security
Instrument, or any other Loan Document, nor shall it be construed to limit in
any way the application of the Default Rate.

Section 4. EXCULPATION

            Section 4.1 Exculpation.

            Notwithstanding anything to the contrary contained in this Note or
the other Loan Documents, the obligations of Borrower hereunder shall be
non-recourse except with respect to the Property, and as otherwise provided in
Section 18.32 of the Security Instrument, the terms of which are incorporated
herein.

Section 5. MISCELLANEOUS

            Section 5.1 Further Assurances.

      Borrower shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Lender all documents, and take all actions,
required by Lender from time to time to confirm the rights created or now or
hereafter intended to be created under this Note and the other Loan Documents,
to protect and further the validity, priority and enforceability of this Note
and the other Loan Documents, to subject to the Loan Documents any property of
Borrower intended by the terms of any one or more of the Loan Documents to be
encumbered by the Loan Documents, or otherwise carry out the purposes of the
Loan Documents and the transactions contemplated thereunder; provided,

                                       4
<PAGE>

however, that no such further actions, assurances and confirmations shall
increase Borrower's obligations under this Note or any other Loan Document.

            Section 5.2 Modification, Waiver in Writing.

      No modification, amendment, extension, discharge, termination or waiver (a
"Modification") of any provision of this Note, the Security Instrument or any
one or more of the other Loan Documents, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
a writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to, or demand on, Borrower shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances. Lender does not
hereby agree to, nor does Lender hereby commit itself to, enter into any
Modification. However, in the event Lender does ever agree to a Modification,
such Modification shall only be upon the terms and conditions set forth in the
Security Instrument.

            Section 5.3 Costs of Collection.

      Subject to the provisions of Section 4 hereof, Borrower agrees to pay all
costs and expenses of collection incurred by Lender, in addition to principal,
interest and late or delinquency charges (including, without limitation,
reasonable attorneys' fees and disbursements) and including all costs and
expenses incurred in connection with the pursuit by Lender of any of its rights
or remedies referred to in Section 3 hereof or its rights or remedies referred
to in any of the Loan Documents or the protection of or realization of
collateral or in connection with any of Lender's collection efforts, whether or
not suit on this Note, on any of the other Loan Documents or any foreclosure
proceeding is filed, and all such costs and expenses shall be payable on demand,
together with interest at the Default Rate thereon, and also shall be secured by
the Security Instrument and all other collateral at any time held by Lender as
security for Borrower's obligations to Lender.

            Section 5.4 Maximum Amount.

                  (a) It is the intention of Borrower and Lender to conform
strictly to the usury and similar laws relating to interest and the collection
of other charges from time to time in force, and all agreements between Borrower
and Lender, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the
amount paid or agreed to be paid in the aggregate to Lender as interest or other
charges hereunder or under the other Loan Documents or in any other security
agreement given to secure the Debt, or in any other document evidencing,
securing or pertaining to the Debt, exceed the maximum amount permissible under
applicable usury or such other laws (the "Maximum Amount"). If under any
circumstances whatsoever fulfillment of any provision hereof, or any of the
other Loan Documents, at the time performance of such provision shall be due,
shall involve transcending the Maximum Amount, then ipso facto, the obligation
to be fulfilled shall be reduced to the Maximum Amount. For the purposes of
calculating the actual amount of interest or other charges paid and/or payable
hereunder, in respect of laws pertaining to usury or such other laws, all
charges and other sums paid or agreed to be paid hereunder to the holder hereof
for the use, forbearance or detention of the Debt, outstanding from time to time
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread from the date of disbursement of the proceeds of this Note
until payment in full of all of the Debt, so that the actual rate of interest on
account of the Debt is uniform through the term hereof. The terms and provisions
of this

                                       5
<PAGE>

Section 5.4 shall control and supersede every other provision of all agreements
between Borrower or any endorser and Lender.

                  (b) If under any circumstances Lender shall ever receive an
amount which would exceed the Maximum Amount, such amount shall be deemed a
payment in reduction of the Loan Amount owing hereunder and any other obligation
of Borrower in favor of Lender, and shall be so applied in accordance with
Section 2.2 hereof, or if such excessive interest exceeds the unpaid balance of
the Loan Amount and any other obligation of Borrower in favor of Lender, the
excess shall be deemed to have been a payment made by mistake and shall be
refunded to Borrower.

            Section 5.5 Waivers.

      BORROWER HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVES PRESENTMENT, DEMAND,
PROTEST, NOTICE OF PROTEST OR NOTICE OF ANY KIND, INCLUDING, WITHOUT LIMITATION,
ANY NOTICE OF INTENTION TO ACCELERATE AND NOTICE OF ACCELERATION, EXCEPT AS
EXPRESSLY PROVIDED HEREIN, AND IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING
BROUGHT BY LENDER ON THIS NOTE, ANY AND EVERY RIGHT IT MAY HAVE TO (a) A TRIAL
BY JURY, (b) INTERPOSE ANY COUNTERCLAIM THEREIN (OTHER THAN A COUNTERCLAIM WHICH
CAN ONLY BE ASSERTED IN THE SUIT, ACTION OR PROCEEDING BROUGHT BY LENDER ON THIS
NOTE AND CANNOT BE MAINTAINED IN A SEPARATE ACTION) AND (c) HAVE THE SAME
CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING.

            Section 5.6 Governing Law.

                  (a) This Note was negotiated in New York, and made by Borrower
and accepted by Lender in the State of New York, and the proceeds of the Note
delivered pursuant hereto were disbursed from New York, which State the parties
agree has a substantial relationship to the parties and to the underlying
transaction embodied hereby, and in all respects, including, without limiting
the generality of the foregoing, matters of construction, validity and
performance. This Note and the obligations arising hereunder shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and performed in such State and any applicable law
of the United States of America, except that at all times the provisions for the
creation, perfection, and enforcement of the liens and security interests
created pursuant to the Security Instrument and pursuant to the other Loan
Documents shall be governed by and construed according to the law of the State
in which the Property is located, it being understood that, to the fullest
extent permitted by the laws of such State, the law of the State of New York
shall govern the validity and the enforceability of all Loan Documents, and the
Debt or obligations arising hereunder or thereunder. To the fullest extent
permitted by law, Borrower hereby unconditionally and irrevocably waives any
claim to assert that the law of any other jurisdiction governs this Note and
this Note shall be governed by and construed in accordance with the laws of the
State of New York pursuant to Section 5-1401 of the New York General Obligations
Law.

                  (b) Any legal suit, action or proceeding against Borrower or
Lender arising out of or relating to this Note shall be instituted in any
federal or state court in New York, New York, pursuant to Section 5-1402 of the
New York General Obligations Law, and Borrower waives any objection which it may
now or hereafter have to the laying of venue of any such suit, action or
proceeding, and Borrower hereby irrevocably submits to the jurisdiction of any
such court in any suit, action or proceeding. Borrower does hereby designate and
appoint CT Corporation having an address at 111 Eighth Avenue, New York, New
York 10011 as its authorized agent to accept and acknowledge on its behalf
service of any and all process which

                                       6
<PAGE>

may be served in any such suit, action or proceeding in any federal or state
court in New York, New York, and agrees that service of process upon said agent
at said address and written notice of said service of Borrower mailed or
delivered to Borrower in the manner provided in the Security Instrument, shall
be deemed in every respect effective service of process upon Borrower, in any
such suit, action or proceeding in the State of New York. Borrower (i) shall
give prompt notice to the Lender of any changed address of its authorized agent
hereunder, (ii) may at any time and from time to time designate a substitute
authorized agent with an office in New York, New York (which office shall be
designated as the address for service of process), and (iii) shall promptly
designate such a substitute if its authorized agent ceases to have an office in
New York, New York or is dissolved without leaving a successor.

                  Section 5.7 Headings.

      The Section headings in this Note are included herein for convenience of
reference only and shall not constitute a part of this Note for any other
purpose.

                  Section 5.8 Assignment.

      Lender shall have the right to transfer, sell and assign this Note, the
Security Instrument and/or any of the other Loan Documents or any interest
therein, and the obligations hereunder, to any Person. All references to
"Lender" hereunder shall be deemed to include the assigns of the Lender.

                  Section 5.9 Severability.

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

                  Section 5.10 Joint and Several.

      If Borrower consists of more than one Person or party, the obligations and
liabilities of each such Person or party hereunder shall be joint and several.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       7
<PAGE>

      IN WITNESS WHEREOF, this Note has been duly executed by the Borrower the
day and year first written above.

                                BORROWER:

                                AREC 8, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                AREC 9, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                AREC 10, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                AREC 11, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                AREC 12, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

<PAGE>

                                AREC 13, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                UHIL 8, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                UHIL 9, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                UHIL 10, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                UHIL 11, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

                                UHIL 12, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

<PAGE>

                                UHIL 13, LLC, Borrower

                                By: /s/ Gary B. Horton
                                    --------------------
                                    Name: Gary B. Horton
                                    Title: Treasurer

<PAGE>

                           ALLONGE TO PROMISSORY NOTE

      Allonge to Promissory Note, dated as of June __, 2005, made by AREC 8,
LLC, AREC 9, LLC, AREC 10, LLC, AREC 11, LLC, AREC 12, LLC, AREC 13, LLC, UHIL
8, LLC, UHIL 9, LLC, UHIL 10, LLC, UHIL 11, LLC, UHIL 12, LLC and UHIL 13, LLC,
each a Delaware limited liability company, in favor of MORGAN STANLEY MORTGAGE
CAPITAL INC., a New York corporation, in the original principal amount of
FORTY-SEVEN MILLION NINETY-TWO THOUSAND THREE-HUNDRED EIGHTY-ONE AND NO/100
DOLLARS (47,092,381.00).

                                   ENDORSEMENT

Pay to the order of ______________________________________________, without
recourse or warranty.

Dated: _____________, 200__

                                MORGAN STANLEY MORTGAGE CAPITAL INC.

                                By: ______________________________
                                    Name:
                                    Title:
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>8
<FILENAME>p70784exv10w7.txt
<DESCRIPTION>EX-10.7
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.7

                        SCHEDULE OF ADDITIONAL AGREEMENTS

      On June 8, 2005, additional agreements in substantially the same form as
the below agreement were signed by the following entities:

<TABLE>
<CAPTION>
Agreement       Borrowing Entities
- ---------       ------------------
<S>             <C>
    1           AREC 2, LLC
                UHIL 2, LLC

    2           AREC 3, LLC
                UHIL 3, LLC

    3           AREC 4, LLC
                UHIL 4, LLC

    4           AREC 5, LLC
                UHIL 5, LLC

    5           AREC 6, LLC
                UHIL 6, LLC

    6           AREC 7, LLC
                UHIL 7, LLC
</TABLE>

<PAGE>

U-Haul Grande - ML 1

================================================================================

                                   AREC 1, LLC

                                       and

                                  UHIL 1, LLC,

                                   as Borrower

                                       to

                      MERRILL LYNCH MORTGAGE LENDING, INC.

                                    as Lender

                          MORTGAGE, SECURITY AGREEMENT,
                     ASSIGNMENT OF RENTS AND FIXTURE FILING

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

                           Dated: June 8, 2005

                           PREPARED BY AND UPON RECORDATION RETURN TO:

                           Proskauer Rose LLP
                           1585 Broadway
                           New York, New York 10036

                           Attention: David J. Weinberger, Esq.

================================================================================

<PAGE>

      THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE FILING
(the "Security Instrument") is made as of the 8th day of June, 2005, by AREC 1,
LLC ("Fee Owner") and UHIL 1, LLC ("Lessee" and together with Fee Owner,
hereinafter collectively referred to as "Borrower"), each having its chief
executive office at 2727 North Central Avenue, Phoenix, Arizona 85004, to
MERRILL LYNCH MORTGAGE LENDING, INC., having an address at 4 World Financial
Center, 16th Floor, New York, NY 10080, attention: CMBS Servicing (hereinafter
referred to as "Lender").

                                   WITNESSETH:

      WHEREAS, Lender has authorized and made a loan (hereinafter referred to as
the "Loan") to Borrower in the maximum principal sum of SEVENTY-FOUR MILLION
NINE HUNDRED EIGHTY-EIGHT THOUSAND AND NO/100 DOLLARS ($74,988,000.00)
(hereinafter referred to as the "Loan Amount"), which Loan is evidenced by one
or more promissory notes or amended, restated and consolidated promissory notes,
as applicable, dated the date hereof (together with any supplements, amendments,
modifications, replacements or extensions thereof, hereinafter collectively
referred to as the "Note") given by Borrower, as maker, to Lender, as payee;

      WHEREAS, in consideration of the Loan, Borrower has agreed to make
payments in amounts sufficient to pay and redeem, and provide for the payment
and redemption of the principal of, premium, if any, and interest on the Note
when due;

      WHEREAS, Borrower desires by this Security Instrument to provide for,
among other things, the issuance of the Note and for the deposit, deed and
pledge by Borrower with, and the creation of a security interest in favor of,
Lender, as security for Borrower's obligations to Lender from time to time
pursuant to the Note and the other Loan Documents;

      WHEREAS, Borrower and Lender intend these recitals to be a material part
of this Security Instrument; and

      WHEREAS, all things necessary to make this Security Instrument the valid
and legally binding obligation of Borrower in accordance with its terms, for the
uses and purposes herein set forth, have been done and performed.

      NOW THEREFORE, to secure the payment of the principal of, prepayment
premium (if any) and interest on the Note, and all other obligations,
liabilities or sums due or to become due under this Security Instrument, the
Note or any other Loan Document, including, without limitation, interest on said
obligations, liabilities or sums (said principal, premium, interest and other
sums being hereinafter referred to as the "Debt"), and the performance of all
other covenants, obligations and liabilities of Borrower pursuant to the Loan
Documents, Borrower has executed and delivered this Security Instrument; and
Borrower has irrevocably granted, and by these presents and by the execution and
delivery hereof does hereby irrevocably grant, bargain, sell, alien, demise,
release, convey, assign, transfer, deed, hypothecate, pledge, set over, warrant,
mortgage and confirm to Lender, forever with power of sale, all right, title and
interest of Borrower in and to all of the following property, rights, interests
and estates:

<PAGE>

            (a) the plot(s), piece(s) or parcel(s) of real property described in
      EXHIBIT A attached hereto and made a part hereof (individually and
      collectively, hereinafter referred to as the "Premises");

            (b) (i) all buildings, foundations, structures, fixtures, additions,
      enlargements, extensions, modifications, repairs, replacements and
      improvements of every kind or nature now or hereafter located on the
      Premises (hereinafter collectively referred to as the "Improvements"); and
      (ii) to the extent permitted by law, the name or names, if any, as may now
      or hereafter be used for any of the Improvements, and the goodwill
      associated therewith;

            (c) all easements, servitudes, rights-of-way, strips and gores of
      land, streets, ways, alleys, passages, sewer rights, water, water courses,
      water rights and powers, ditches, ditch rights, reservoirs and reservoir
      rights, air rights and development rights, lateral support, drainage, gas,
      oil and mineral rights, tenements, hereditaments and appurtenances of any
      nature whatsoever, in any way belonging, relating or pertaining to the
      Premises or the Improvements and the reversion and reversions, remainder
      and remainders, whether existing or hereafter acquired, and all land lying
      in the bed of any street, road or avenue, opened or proposed, in front of
      or adjoining the Premises to the center line thereof and any and all
      sidewalks, drives, curbs, passageways, streets, spaces and alleys adjacent
      to or used in connection with the Premises and/or Improvements and all the
      estates, rights, titles, interests, property, possession, claim and demand
      whatsoever, both in law and in equity, of Borrower of, in and to the
      Premises and Improvements and every part and parcel thereof, with the
      appurtenances thereto;

            (d) all machinery, equipment, fittings, apparatus, appliances,
      furniture, furnishings, tools, fixtures (including, but not limited to,
      all heating, air conditioning, ventilating, waste disposal, sprinkler and
      fire and theft protection equipment, plumbing, lighting, communications
      and elevator fixtures) and other property of every kind and nature
      whatsoever owned by Borrower, or in which Borrower has or shall have an
      interest, now or hereafter located upon, or in, and used in connection
      with the Premises or the Improvements, or appurtenant thereto, and all
      building equipment, materials and supplies of any nature whatsoever owned
      by Borrower, or in which Borrower has or shall have an interest, now or
      hereafter located upon, or in, and used in connection with the Premises or
      the Improvements or appurtenant thereto (hereinafter, all of the foregoing
      items described in this paragraph (d) are collectively called the
      "Equipment"), all of which, and any replacements, modifications,
      alterations and additions thereto, to the extent permitted by applicable
      law, shall be deemed to constitute fixtures (together with all "fixtures"
      (as defined in the UCC) hereafter located on the Premises or the
      Improvements, the "Fixtures"), and are part of the real estate and
      security for the payment of the Debt and the performance of Borrower's
      obligations. For specificity, the parties acknowledge that U-Haul's truck,
      van and wagon rental fleet shall not constitute Equipment hereunder. To
      the extent any portion of the Equipment is not real property or Fixtures
      under applicable law, it shall be deemed to be personal property, and this
      Security Instrument shall constitute a security agreement creating a
      security interest therein in favor of Lender under the UCC;

            (e) all awards or payments, including interest thereon, which may
      hereafter be made with respect to the Premises, the Improvements, the
      Fixtures, or the Equipment, whether from the exercise of the right of
      eminent domain (including but not limited to any transfer made in lieu of
      or in anticipation of the exercise of said right), or for a change of
      grade, or for any other injury to or decrease in the value of the
      Premises, the Improvements or the Equipment or refunds with respect to the
      payment of property taxes and assessments, and all other proceeds of the
      conversion, voluntary or involuntary, of the Premises, Improvements,
      Equipment, Fixtures or any other Property or part thereof into cash or
      liquidated claims;

            (f) all leases, tenancies, licenses and other agreements affecting
      the use, enjoyment or occupancy of the Premises, the Improvements, the
      Fixtures, or the Equipment or any portion thereof now or hereafter entered
      into, whether before or after the filing by or against Borrower of any
      petition for relief under the Bankruptcy Code and all reciprocal easement
      agreements, license agreements and other agreements with Pad Owners
      (hereinafter collectively referred to as the "Leases"), together with all
      cash or security deposits, lease termination payments, advance rentals and
      payments of similar nature and guarantees or other security held by, or
      issued in favor of, Borrower in connection therewith to the extent of
      Borrower's right or interest therein and all remainders, reversions and
      other rights and estates appurtenant

                                       2
<PAGE>

      thereto, and all base, fixed, percentage or additional rents, and other
      rents, oil and gas or other mineral royalties, and bonuses, issues,
      profits and rebates and refunds or other payments made by any Governmental
      Authority from or relating to the Premises, the Improvements, the Fixtures
      or the Equipment plus all rents, receipts, common area charges and other
      payments now existing or hereafter arising, whether paid or accruing
      before or after the filing by or against Borrower of any petition for
      relief under the Bankruptcy Code (the "Rents") and all proceeds from the
      sale or other disposition of the Leases and the right to receive and apply
      the Rents to the payment of the Debt;

            (g) all proceeds of and any unearned premiums on any insurance
      policies covering the Premises, the Improvements, the Fixtures, the Rents
      or the Equipment, including, without limitation, the right to receive and
      apply the proceeds of any insurance, judgments, or settlements made in
      lieu thereof, for damage to the Premises, the Improvements, the Fixtures
      or the Equipment and all refunds or rebates of Impositions, and interest
      paid or payable with respect thereto;

            (h) all deposit accounts, securities accounts, funds or other
      accounts maintained or deposited with Lender, or its assigns, in
      connection herewith, including, without limitation, the Security Deposit
      Account (to the extent permitted by law), the Engineering Escrow
      Sub-Account, the Rent Account, the Central Account, the Basic Carrying
      Costs Sub-Account, the Debt Service Payment Sub-Account, the Operation and
      Maintenance Expense Sub-Account, the Mez Payment Sub-Account and the
      Recurring Replacement Reserve Sub-Account and all monies and investments
      deposited or to be deposited in such accounts;

            (i) all accounts receivable, contract rights, franchises, interests,
      estate or other claims, both at law and in equity, now existing or
      hereafter arising, and relating to the Premises, the Improvements, the
      Fixtures or the Equipment, not included in Rents;

            (j) all now existing or hereafter arising claims against any Person
      with respect to any damage to the Premises, the Improvements, the Fixtures
      or the Equipment, including, without limitation, damage arising from any
      defect in or with respect to the design or construction of the
      Improvements, the Fixtures or the Equipment and any damage resulting
      therefrom;

            (k) all deposits or other security or advance payments, including
      rental payments now or hereafter made by or on behalf of Borrower to
      others, with respect to (i) insurance policies, (ii) utility services,
      (iii) cleaning, maintenance, repair or similar services, (iv) refuse
      removal or sewer service, (v) parking or similar services or rights and
      (vi) rental of Equipment, if any, relating to or otherwise used in the
      operation of the Premises, the Improvements, the Fixtures or the
      Equipment;

            (l) intangible property now or hereafter relating to the Premises,
      the Improvements, the Fixtures or the Equipment or its operation,
      including, without limitation, software, letter of credit rights, trade
      names, trademarks (including, without limitation, any licenses of or
      agreements to license trade names or trademarks now or hereafter entered
      into by Borrower), logos, building names and goodwill;

            (m) all now existing or hereafter arising advertising material,
      guaranties, warranties, building permits, other permits, licenses, plans
      and specifications, shop and working drawings, soil tests, appraisals and
      other documents, materials and/or personal property of any kind now or
      hereafter existing in or relating to the Premises, the Improvements, the
      Fixtures, and the Equipment;

            (n) all now existing or hereafter arising drawings, designs, plans
      and specifications prepared by architects, engineers, interior designers,
      landscape designers and any other consultants or professionals for the
      design, development, construction, repair and/or improvement of the
      Property, as amended from time to time;

            (o) the right, in the name of and on behalf of Borrower, to appear
      in and defend any now existing or hereafter arising action or proceeding
      brought with respect to the Premises, the Improvements,

                                       3
<PAGE>

      the Fixtures or the Equipment and to commence any action or proceeding to
      protect the interest of Lender in the Premises, the Improvements, the
      Fixtures or the Equipment; and

            (p) all proceeds, products, substitutions and accessions (including
      claims and demands therefor) of each of the foregoing.

      All of the foregoing items (a) through (p), together with all of the
right, title and interest of Borrower therein, are collectively referred to as
the "Property".

      TO HAVE AND TO HOLD the above granted and described Property unto Lender,
and the successors and assigns of Lender in fee simple, forever.

      PROVIDED, ALWAYS, and these presents are upon this express condition, if
Borrower shall well and truly pay and discharge the Debt and perform and observe
the terms, covenants and conditions set forth in the Loan Documents, then these
presents and the estate hereby granted shall cease and be void.

      AND Borrower covenants with and warrants to Lender that:

                             ARTICLE I: DEFINITIONS

      Section 1.01. Certain Definitions.

      For all purposes of this Security Instrument, except as otherwise
expressly provided or unless the context clearly indicates a contrary intent:

            (i) the capitalized terms defined in this Section have the meanings
      assigned to them in this Section, and include the plural as well as the
      singular;

            (ii) all accounting terms not otherwise defined herein have the
      meanings assigned to them in accordance with GAAP; and

            (iii) the words "herein", "hereof", and "hereunder" and other words
      of similar import refer to this Security Instrument as a whole and not to
      any particular Section or other subdivision.

      "Affiliate" of any specified Person shall mean any other Person directly
or indirectly Controlling or Controlled by or under direct or indirect common
Control with such specified Person.

      "Aggregate Debt Service Coverage" shall mean the quotient obtained by
dividing the aggregate Net Operating Income for all of the Cross-collateralized
Properties for the specified period by the aggregate payments of interest and
principal (not including the amount of principal payable upon Maturity) due for
such specified period under the Note (determined as of the date the calculation
of Aggregate Debt Service Coverage is required or requested hereunder).

      "Allocated Loan Amount" shall mean the Initial Allocated Loan Amount of
each Cross-collateralized Property as such amount may be adjusted from time to
time as hereinafter set forth. Upon each adjustment of the Principal Amount
(each a "Total Adjustment"), whether as a result of amortization, defeasance or
prepayment or as otherwise expressly provided herein or in any other Loan
Document, each Allocated Loan Amount shall be increased or decreased, as the
case may be, by an amount equal to the product of (a) the Total Adjustment, and
(b) a fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
Principal Amount prior to the adjustment to the Principal Amount which results
in the recalculation of the Allocated Loan Amount. However, when the Principal
Amount is reduced as a result of Lender's receipt of (a) a Release Price or, in
connection with a Release, funds sufficient to prepay a portion of the Principal
Amount in the amount of the Release Price, the Allocated Loan Amount for the
Cross-collateralized Property being released and discharged from the encumbrance
of the applicable Cross-collateralized Mortgage and related Loan Documents shall
be reduced to zero (the amount by which such Allocated Loan Amount is reduced

                                       4
<PAGE>

being referred to as the "Released Allocated Amount"), and each other Allocated
Loan Amount shall be decreased by an amount equal to the product of (i) the
excess of (A) the Release Price over (B) the Released Allocated Amount and (ii)
a fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
aggregate of all of the Allocated Loan Amounts other than the Allocated Loan
Amount applicable to the Cross-collateralized Property for which the Release
Price was paid , or (b) Net Proceeds, the Allocated Loan Amount for the
Cross-collateralized Property with respect to which the Net Proceeds were
received shall be reduced to zero (the amount by which such Allocated Loan
Amount is reduced being referred to as the "Foreclosed Allocated Amount") and
each other Allocated Loan Amount shall (A) if the Net Proceeds exceed the
Foreclosed Allocated Amount (such excess being referred to as the "Surplus Net
Proceeds"), be decreased by an amount equal to the product of (i) the Surplus
Net Proceeds and (ii) a fraction, the numerator of which is the applicable
Allocated Loan Amount (prior to the adjustment in question) and the denominator
of which is the aggregate of all of the Allocated Loan Amounts (prior to the
adjustment in question) other than the Allocated Loan Amount applicable to the
Cross-collateralized Property with respect to which the Net Proceeds were
received (such fraction being referred to as the "Net Proceeds Adjustment
Fraction"), (B) if the Foreclosed Allocated Amount exceeds the Net Proceeds
(such excess being referred to as the "Net Proceeds Deficiency"), be increased
by an amount equal to the product of (i) the Net Proceeds Deficiency and (ii)
the Net Proceeds Adjustment Fraction, or (C) if the Net Proceeds equal the
Foreclosed Allocated Amount, remain unadjusted, or (c) Loss Proceeds or partial
prepayments or defeasances, as applicable, made in accordance with Section 15.01
hereof, the Allocated Loan Amount for the Cross-collateralized Property with
respect to which the Loss Proceeds or partial prepayments or defeasances, as
applicable, were received shall be decreased by an amount equal to the sum of
(i) with respect to Loss Proceeds, Loss Proceeds which are applied towards the
reduction of the Principal Amount as set forth in Article III hereof, if any,
and (ii) with respect to partial prepayments or defeasances, as applicable, the
amount of any such partial prepayment which is applied towards the reduction of
the Principal Amount in accordance with the provisions of the Note, if any, but
in no event shall the Allocated Loan Amount for the Cross-collateralized
Property with respect to which the Loss Proceeds or partial prepayments or
defeasances, as applicable, were received be reduced to an amount less than zero
(the amount by which such Allocated Loan Amount is reduced being referred to as
the "Loss Proceeds or Prepayment Allocated Amount") and each other Allocated
Loan Amount shall be decreased by an amount equal to the product of (i) the
excess of (A) the Loss Proceeds or such partial prepayments or defeasances, as
applicable, over (B) the Loss Proceeds or Prepayment Allocated Amount, and (ii)
a fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
aggregate of all of the Allocated Loan Amounts (prior to the adjustment in
question) other than the Allocated Loan Amount applicable to the
Cross-collateralized Property to which such Loss Proceeds or partial prepayments
or defeasances, as applicable, were applied.

      "Annual Budget" shall mean an annual budget submitted by Borrower to
Lender in accordance with the terms of Section 2.09 hereof.

      "Appraisal" shall mean the appraisal of the Property and all supplemental
reports or updates thereto previously delivered to Lender in connection with the
Loan.

      "Appraiser" shall mean the Person who prepared the Appraisal.

      "Approved Annual Budget" shall mean each Annual Budget approved by Lender
in accordance with terms hereof or, if there is no Annual Budget approved by
Lender, the actual expenses set forth in the cash flow statements delivered to
Lender pursuant to Section 2.09(c) hereof with respect to the prior Fiscal Year
adjusted to reflect increases in Basic Carrying Costs and to delete
non-recurring expenses.

      "Approved Manager Standard" shall mean the standard of business
operations, practices and procedures customarily employed by entities having a
senior executive with at least seven (7) years' experience in the management of
self-storage and retail properties which manage not less than 1,000,000 square
feet of gross leasable area, including, without limitation, certain properties
which contain more than 100,000 square feet of gross leasable area.

      "Architect" shall have the meaning set forth in Section 3.04(b)(i) hereof.

                                       5
<PAGE>

      "Assignment" shall mean the Assignment of Leases and Rents and Security
Deposits of even date herewith relating to the Property given by Borrower to
Lender, as the same may be modified, amended or supplemented from time to time.

      "Bank" shall mean the bank, trust company, savings and loan association or
savings bank designated by Lender, in its sole and absolute discretion, in which
the Central Account shall be located.

      "Bankruptcy Code" shall mean 11 U.S.C.Section 101 et seq., as amended from
time to time.

      "Basic Carrying Costs" shall mean the sum of the following costs
associated with the Property: (a) Impositions and (b) insurance premiums.

      "Basic Carrying Costs Monthly Installment" shall mean Lender's estimate of
one-twelfth (1/12th) of the annual amount for Basic Carrying Costs. "Basic
Carrying Costs Monthly Installment" shall also include, if required by Lender, a
sum of money which, together with such monthly installments, will be sufficient
to make the payment of each such Basic Carrying Cost at least thirty (30) days
prior to the date initially due. Should such Basic Carrying Costs not be
ascertainable at the time any monthly deposit is required to be made, the Basic
Carrying Costs Monthly Installment shall be determined by Lender in its
reasonable discretion on the basis of the aggregate Basic Carrying Costs for the
prior Fiscal Year or month or the prior payment period for such cost. As soon as
the Basic Carrying Costs are fixed for the then current Fiscal Year, month or
period, the next ensuing Basic Carrying Costs Monthly Installment shall be
adjusted to reflect any deficiency or surplus in prior monthly payments. If at
any time during the term of the Loan Lender determines that there will be
insufficient funds in the Basic Carrying Costs Sub-Account to make payments when
they become due and payable, Lender shall have the right to adjust the Basic
Carrying Costs Monthly Installment such that there will be sufficient funds to
make such payments. Notwithstanding the foregoing, provided that no Trigger
Event has occurred and is continuing, that a sum equal to not less than the
Initial Basic Carrying Costs Deposit is on deposit in the Basic Carrying Costs
Sub-Account and Borrower has delivered to Lender evidence of payment of all
Basic Carrying Costs within fifteen (15) days of the date such sums were due and
payable, the Basic Carrying Costs Monthly Installment shall be $0.

      "Basic Carrying Costs Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.06 hereof.

      "Borrower" shall mean Borrower named herein and any successor to the
obligations of Borrower.

      "Borrower Account" shall mean an Eligible Account maintained in the name
of Borrower.

      "Business Day" shall mean any day other than (a) a Saturday or Sunday, or
(b) a day on which banking and savings and loan institutions in the State of New
York are authorized or obligated by law or executive order to be closed, or at
any time during which the Loan is an asset of a Securitization, the cities,
states and/or commonwealths used in the comparable definition of "Business Day"
in the Securitization documents.

      "Capital Expenditures" shall mean for any period, the amount expended for
items capitalized under GAAP including expenditures for building improvements or
major repairs, leasing commissions and tenant improvements.

      "Cash Expenses" shall mean for any period, the operating expenses for the
Property as set forth in an Approved Annual Budget to the extent that such
expenses are actually incurred by Borrower minus payments into the Basic
Carrying Costs Sub-Account, the Debt Service Payment Sub-Account and the
Recurring Replacement Reserve Sub-Account.

      "Central Account" shall mean an Eligible Account, maintained at the Bank,
in the name of Lender or its successors or assigns (as secured party) as may be
designated by Lender.

      "Closing Date" shall mean the date of the Note.

                                       6
<PAGE>

      "Code" shall mean the Internal Revenue Code of 1986, as amended and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto.

      "Collection Account" shall mean a demand deposit account designated by
Lender, which shall be an Eligible Account, to which payments of Debt are
transferred.

      "Condemnation Proceeds" shall mean all of the proceeds in respect of any
Taking or purchase in lieu thereof.

      "Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.

      "Control" means, when used with respect to any specific Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person whether through
ownership of voting securities, beneficial interests, by contract or otherwise.
The definition is to be construed to apply equally to variations of the word
"Control" including "Controlled," "Controlling" or "Controlled by."

      "CPI" shall mean "The Consumer Price Index (New Series) (Base Period
1982-84=100) (all items for all urban consumers)" issued by the Bureau of Labor
Statistics of the United States Department of Labor (the "Bureau"). If the CPI
ceases to use the 1982-84 average equaling 100 as the basis of calculation, or
if a change is made in the term, components or number of items contained in said
index, or if the index is altered, modified, converted or revised in any other
way, then the index shall be adjusted to the figure that would have been arrived
at had the change in the manner of computing the index in effect at the date of
this Security Instrument not been made. If at any time during the term of this
Security Instrument the CPI shall no longer be published by the Bureau, then any
comparable index issued by the Bureau or similar agency of the United States
issuing similar indices shall be used in lieu of the CPI.

      "Cross-collateralization Agreement" shall mean that certain
Cross-collateralization Agreement of even date herewith between Borrower and
Lender.

      "Cross-collateralized Mortgage" shall mean each mortgage, deed of trust,
deed to secure debt, security agreement, assignment of rents and fixture filing
as originally executed or as same may hereafter from time to time be
supplemented, amended, modified or extended by one or more indentures
supplemental thereto granted by Borrower to Lender as security for the Note.

      "Cross-collateralized Property" shall mean each parcel or parcels of real
property encumbered by a Cross-collateralized Mortgage as identified on EXHIBIT
F attached hereto and made a part hereof; provided, however, at such time, if
any, that a Cross-collateralized Mortgage is released by Lender, the property
which was encumbered by such Cross-collateralized Property shall no longer
constitute a Cross-collateralized Property.

      "Debt" shall have the meaning set forth in the Recitals hereto.

      "Debt Service" shall mean the amount of interest and principal payments
due and payable in accordance with the Note during an applicable period.

      "Debt Service Coverage" shall mean the quotient obtained by dividing Net
Operating Income for the specified period by the sum of the (a) aggregate
payments of interest, principal and all other sums due for such specified period
under the Note (determined as of the date the calculation of Debt Service
Coverage is required or requested hereunder) and (b) aggregate payments of
interest, principal and all other sums due for such specified period pursuant to
the terms of subordinate or mezzanine financing, if any, then affecting the
Property or, if Debt Service Coverage is being calculated in connection with a
request for consent to any subordinate financing, then proposed.

                                       7
<PAGE>

      "Debt Service Payment Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.07 hereof for the purposes of making Debt Service
payments.

      "Default" shall mean any Event of Default or event which would constitute
an Event of Default if all requirements in connection therewith for the giving
of notice, the lapse of time, and the happening of any further condition, event
or act, had been satisfied.

      "Default Rate" shall mean the lesser of (a) the highest rate allowable at
law and (b) five percent (5%) above the interest rate set forth in the Note.

      "Default Rate Interest" shall mean, to the extent the Default Rate becomes
applicable, interest in excess of the interest which would have accrued on (a)
the Principal Amount and (b) any accrued but unpaid interest, if the Default
Rate was not applicable.

      "Defeasance Deposit" shall mean an amount equal to the total cost incurred
or to be incurred in the purchase on behalf of Borrower of Federal Obligations
necessary to meet the Scheduled Defeasance Payments.

      "Defeased Note" shall have the meaning set forth in Section 15.01 hereof.

      "Development Laws" shall mean all applicable subdivision, zoning,
environmental protection, wetlands protection, or land use laws or ordinances,
and any and all applicable rules and regulations of any Governmental Authority
promulgated thereunder or related thereto.

      "Eligible Account" shall mean a segregated account which is either (a) an
account or accounts maintained with a federal or state chartered depository
institution or trust company the long term unsecured debt obligations of which
are rated by each of the Rating Agencies (or, if not rated by Fitch, Inc.
("Fitch"), otherwise acceptable to Fitch, as confirmed in writing that such
account would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) in its highest rating category at all times
(or, in the case of the Basic Carrying Costs Sub-Account, the long term
unsecured debt obligations of which are rated at least "AA" (or its equivalent))
by each of the Rating Agencies (or, if not rated by Fitch, otherwise acceptable
to Fitch, as confirmed in writing that such account would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to any certificates issued in connection with a Securitization) or, if
the funds in such account are to be held in such account for less than thirty
(30) days, the short term obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as confirmed
in writing that such account would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any
certificates issued in connection with a Securitization) in its highest rating
category at all times or (b) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company acting
in its fiduciary capacity which, in the case of a state chartered depository
institution is subject to regulations substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination by federal and state
authority, or otherwise acceptable (as evidenced by a written confirmation from
each Rating Agency that such account would not, in and of itself, cause a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) to each Rating
Agency, which may be an account maintained by Lender or its agents. Eligible
Accounts may bear interest. The title of each Eligible Account shall indicate
that the funds held therein are held in trust for the uses and purposes set
forth herein.

      "Engineer" shall have the meaning set forth in Section 3.04(b)(i) hereof.

      "Engineering Escrow Sub-Account" shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof, maintained pursuant to
Section 5.12 hereof and funded on the Closing Date relating to payments for any
Required Engineering Work.

      "Environmental Problem" shall mean any of the following:

                                       8
<PAGE>

            (a) the presence of any Hazardous Material on, in, under, or above
      all or any portion of the Property except those Hazardous Materials used
      in the ordinary course of Borrower's business, in compliance with, and not
      likely to give rise to liability under, Environmental Statutes;

            (b) the release or threatened release of any Hazardous Material from
      or onto the Property;

            (c) the violation or threatened violation of any Environmental
      Statute with respect to the Property; or

            (d) the failure to obtain or to abide by the terms or conditions of
      any permit or approval required under any Environmental Statute with
      respect to the Property.

A condition described above shall be an Environmental Problem regardless of
whether or not any Governmental Authority has taken any action in connection
with the condition and regardless of whether that condition was in existence on
or before the date hereof.

      "Environmental Report" shall mean the environmental audit report for the
Property and any supplements or updates thereto, previously delivered to Lender
in connection with the Loan.

      "Environmental Statute" shall mean any federal, state or local statute,
ordinance, rule or regulation, any judicial or administrative order (whether or
not on consent) or judgment applicable to Borrower or the Property including,
without limitation, any judgment or settlement based on common law theories, and
any provisions or condition of any permit, license or other authorization
binding on Borrower relating to (a) the protection of the environment, the
safety and health of persons (including employees) or the public welfare from
actual or potential exposure (or effects of exposure) to any actual or potential
release, discharge, disposal or emission (whether past or present) of any
Hazardous Materials or (b) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous Materials,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq., the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42
U.S.C. Section 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. Section 1251 et seq., the Toxic
Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 1101 et
seq., the Clean Air Act of 1966, as amended, 42 U.S.C. Section 7401 et seq., the
National Environmental Policy Act of 1975, 42 U.S.C. Section 4321, the Rivers
and Harbors Act of 1899, 33 U.S.C. Section 401 et seq., the Endangered Species
Act of 1973, as amended, 16 U.S.C. Section 1531 et seq., the Occupational Safety
and Health Act of 1970, as amended, 29 U.S.C. Section 651 et seq., and the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq., and
all rules, regulations and guidance documents promulgated or published
thereunder.

      "Equipment" shall have the meaning set forth in granting clause (d) of
this Security Instrument.

      "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Security
Instrument and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.

      "ERISA Affiliate" shall mean any corporation or trade or business that is
a member of any group of organizations (a) described in Section 414(b) or (c) of
the Code of which Borrower or Guarantor is a member and (b) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which
Borrower or Guarantor is a member.

      "Event of Default" shall have the meaning set forth in Section 13.01
hereof.

                                       9
<PAGE>

      "Extraordinary Expense" shall mean an extraordinary operating expense or
capital expense not set forth in the Approved Annual Budget or allotted for in
the Recurring Replacement Reserve Sub-Account.

      "Federal Obligations" shall mean non-callable direct obligations of, or
obligations fully guaranteed as to payment of principal and interest by, the
United States of America or any agency or instrumentality thereof provided that
such obligations are backed by the full faith and credit of the United States of
America as chosen by Borrower, subject to the approval of Lender.

      "First Interest Accrual Period" shall mean the period commencing on the
Closing Date and ending on the last day of the month in which the Closing Date
occurs.

      "First Payment Date" shall mean the Payment Date in the month following
the month in which the Loan is initially funded.

      "Fiscal Year" shall mean the twelve (12) month period commencing on April
1 and ending on March 31 during each year of the term of this Security
Instrument, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior written consent of Lender.

      "Fixtures" shall have the meaning set forth in granting clause (d) of this
Security Instrument.

      "Force Majeure" shall mean an unavoidable delay caused by general strikes,
lockouts or labor disputes, wars (declared or undeclared), terrorist attacks,
natural disasters such as fires, storms, floods or earthquakes, power outages or
other utility interruptions or other material extraordinary events not
reasonably foreseeable by the parties hereto, and which such interruption causes
a delay in the performance of any material obligation hereunder.

      "GAAP" shall mean generally accepted accounting principles in the United
States of America, as of the date of the applicable financial report,
consistently applied.

      "General Partner" shall mean, if Borrower is a partnership, each general
partner of Borrower and, if Borrower is a limited liability company, each
managing member of Borrower and in each case, if applicable, each general
partner or managing member of such general partner or managing member. In the
event that Borrower or any General Partner is a single member limited liability
company, the term "General Partner" shall include such single member.

      "Governmental Authority" shall mean, with respect to any Person, any
federal or State government or other political subdivision thereof and any
entity, including any regulatory or administrative authority or court,
exercising executive, legislative, judicial, regulatory or administrative or
quasi-administrative functions of or pertaining to government, and any
arbitration board or tribunal, in each case having jurisdiction over such
applicable Person or such Person's property and any stock exchange on which
shares of capital stock of such Person are listed or admitted for trading.

      "Guarantor" shall mean any Person guaranteeing, in whole or in part, the
obligations of Borrower under the Loan Documents.

      "Hazardous Material" shall mean any flammable, explosive or radioactive
materials, hazardous materials or wastes, hazardous or toxic substances,
pollutants or related materials, asbestos or any material containing asbestos,
molds, spores and fungus which may pose a risk to human health or the
environment or any other substance or material as defined in or regulated by any
Environmental Statutes.

      "Impositions" shall mean all taxes (including, without limitation, all
real estate, ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible, transaction, privilege
or license or similar taxes), assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Security Instrument), ground rents, water, sewer or
other rents and charges, excises, levies, fees (including, without limitation,
license, permit, inspection, authorization and similar

                                       10
<PAGE>

fees), and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Property and/or any Rent (including all interest and
penalties thereon), which at any time prior to, during or in respect of the term
hereof may be assessed or imposed on or in respect of or be a lien upon (a)
Borrower (including, without limitation, all franchise, single business or other
taxes imposed on Borrower for the privilege of doing business in the
jurisdiction in which the Property or any other collateral delivered or pledged
to Lender in connection with the Loan is located) or Lender, (b) the Property or
any part thereof or any Rents therefrom or any estate, right, title or interest
therein, or (c) any occupancy, operation, use or possession of, or sales from,
or activity conducted on, or in connection with the Property, or any part
thereof, or the leasing or use of the Property, or any part thereof, or the
acquisition or financing of the acquisition of the Property, or any part
thereof, by Borrower.

      "Improvements" shall have the meaning set forth in granting clause (b) of
this Security Instrument.

      "Indemnified Parties" shall have the meaning set forth in Section 12.01
hereof.

      "Independent" shall mean, when used with respect to any Person, a Person
who (a) is in fact independent, (b) does not have any direct financial interest
or any material indirect financial interest in Borrower, or in any Affiliate of
Borrower or any constituent partner, shareholder, member or beneficiary of
Borrower, (c) is not connected with Borrower or any Affiliate of Borrower or any
constituent partner, shareholder, member or beneficiary of Borrower as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions and (d) is not a member of the immediate family of
a Person defined in (b) or (c) above. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be provided, such opinion or
certificate shall state that the Person executing the same has read this
definition and is Independent within the meaning hereof.

      "Initial Allocated Loan Amount" shall mean the portion of the Loan Amount
allocated to each Cross-collateralized Property as set forth on EXHIBIT C
attached hereto and made a part hereof.

      "Initial Basic Carrying Cost Deposit" shall equal the amount set forth on
EXHIBIT B attached hereto and made a part hereof.

      "Initial Engineering Deposit" shall equal the amount set forth on EXHIBIT
B attached hereto and made a part hereof.

      "Initial Recurring Replacement Reserve Deposit" shall equal the amount set
forth on EXHIBIT B attached hereto and made a part hereof.

      "Institutional Lender" shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company or pension
and/or annuity company, (d) any fraternal benefit society, (e) any pension,
retirement or profit sharing trust or fund within the meaning of Title I of
ERISA or for which any bank, trust company, national banking association or
investment adviser registered under the Investment Advisers Act of 1940, as
amended, is acting as trustee or agent, (f) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any broker or dealer registered
under the Securities Exchange Act of 1934, as amended, or any investment adviser
registered under the Investment Adviser Act of 1940, as amended, (i) any
government, any public employees' pension or retirement system, or any other
government agency supervising the investment of public funds, or (j) any other
entity all of the equity owners of which are Institutional Lenders; provided
that each of said Persons shall have net assets in excess of $1,000,000,000 and
a net worth in excess of $500,000,000, be in the business of making commercial
mortgage loans, secured by properties of like type, size and value as the
Property and have a long term credit rating which is not less than "BBB-" (or
its equivalent) from each Rating Agency.

      "Insurance Proceeds" shall mean all of the proceeds received under the
insurance policies required to be maintained by Borrower pursuant to Article III
hereof.

                                       11
<PAGE>

      "Insurance Requirements" shall mean all terms of any insurance policy
required by this Security Instrument, all requirements of the issuer of any such
policy, and all regulations and then current standards applicable to or
affecting the Property or any use or condition thereof, which may, at any time,
be recommended by the Board of Fire Underwriters, if any, having jurisdiction
over the Property, or such other Person exercising similar functions.

      "Interest Accrual Period" shall mean the First Interest Accrual Period
and, thereafter, each one (1) month period, which shall be a calendar month.

      "Interest Rate" shall have the meaning set forth in the Note.

      "Interest Shortfall" shall mean any shortfall in the amount of interest
required to be paid with respect to the Loan Amount on any Payment Date.

      "Late Charge" shall have the meaning set forth in Section 13.09 hereof.

      "Leases" shall have the meaning set forth in granting clause (f) of this
Security Instrument.

      "Legal Requirement" shall mean as to any Person, the certificate of
incorporation, by-laws, certificate of limited partnership, agreement of limited
partnership or other organization or governing documents of such Person, and any
law, statute, order, ordinance, judgement, decree, injunction, treaty, rule or
regulation (including, without limitation, Environmental Statutes, Development
Laws and Use Requirements) or determination of an arbitrator or a court or other
Governmental Authority and all covenants, agreements, restrictions and
encumbrances contained in any instruments, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

      "Lender" shall mean the Lender named herein and its successors or assigns.

      "Loan" shall have the meaning set forth in the Recitals hereto.

      "Loan Amount" shall have the meaning set forth in the Recitals hereto.

      "Loan Documents" shall mean this Security Instrument, the Note, the
Assignment, and any and all other agreements, instruments, certificates or
documents executed and delivered by Borrower or any Affiliate of Borrower in
connection with the Loan.

      "Loan Year" shall mean each 365 day period (or 366 day period if the month
of February in a leap year is included) commencing on the first day of the month
following the Closing Date (provided, however, that the first Loan Year shall
also include the period from the Closing Date to the end of the month in which
the Closing Date occurs).

      "Loss Proceeds" shall mean, collectively, all Insurance Proceeds and all
Condemnation Proceeds.

      "Major Space Lease" shall mean any Space Lease of a tenant or Affiliate of
such tenant where such tenant or such Affiliate leases, in the aggregate, five
percent (5%) or more of the Total GLA.

      "Management Agreement" shall have the meaning set forth in Section 7.02
hereof.

      "Manager" shall mean the Person, other than Borrower, which manages the
Property on behalf of Borrower, which Person shall be subject to the review and
approval of Lender. If the Property is self managed, "Manager" shall mean
Borrower.

      "Manager Certification" shall have the meaning set forth in Section 2.09
hereof.

                                       12
<PAGE>

      "Material Adverse Effect" shall mean any event or condition that has a
material adverse effect on (a) the Property, (b) the business, prospects,
profits, management, operations or condition (financial or otherwise) of
Borrower, (c) the enforceability, validity, perfection or priority of the lien
of any Loan Document or (d) the ability of Borrower to perform any obligations
under any Loan Document.

      "Maturity", when used with respect to the Note, shall mean the Maturity
Date set forth in the Note or such other date pursuant to the Note on which the
final payment of principal, and premium, if any, on the Note becomes due and
payable as therein or herein provided, whether at Stated Maturity or by
declaration of acceleration, or otherwise.

      "Maturity Date" shall mean the Maturity Date set forth in the Note.

      "Mez Loan" shall mean a certain mezzanine loan in the original principal
sum of $20,000,000 and, provided that the aggregate debt service coverage and
loan-to-value ratio for all of the Cross-collateralized Properties and other
properties in which the borrower under such mezzanine loan holds a direct or
indirect ownership interest, in each case as determined by Lender in its
reasonable discretion utilizing its then current underwriting standards and
assuming that the principal balance of the Mez Loan is increased to the
requested amount, is 1.15:1.0 or greater and 85% or lower, respectively, a
maximum principal sum of $50,000,000, which is evidenced or to be evidenced by a
certain promissory note, secured by, among other things, a first priority pledge
of the direct or indirect ownership interest in Borrower and which matures no
earlier than the Maturity Date. In the event that the Mez Loan does not close as
of the Closing Date, such loan must be consented to in writing by Lender, which
consent shall not be unreasonably withheld and may be conditioned upon, among
other things, receipt by Lender of an executed intercreditor agreement, in form
and substance reasonably acceptable to Lender between the lender of the proposed
Mez Loan and Lender and receipt of written confirmation from each Rating Agency
that any rating issued by the Rating Agency in connection with a Securitization
will not, as a result of the proposed Mez Loan be downgraded from the then
current ratings thereof, qualified or withdrawn.

      "Mez Payment Amount" shall mean, as of any Payment Date, the amount of
interest and principal then due and payable pursuant to the terms of the Mez
Loan.

      "Mez Payment Sub-Account" shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof and maintained pursuant to
Section 5.14 hereof.

      "Monthly Debt Service Payment" shall mean a monthly payment of principal
and interest in an amount equal to that which is required pursuant to the Note.

      "Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been, or were required to
have been, made by Borrower, Guarantor or any ERISA Affiliate and which is
covered by Title IV of ERISA.

      "Net Capital Expenditures" shall mean for any period the amount by which
Capital Expenditures during such period exceeds reimbursements for such items
during such period from any fund established pursuant to the Loan Documents.

      "Net Operating Income" shall mean in each Fiscal Year or portion thereof
during the term hereof, Operating Income less Operating Expenses.

      "Net Proceeds" shall mean the excess of (a)(i) the purchase price (at
foreclosure or otherwise) actually received by Lender with respect to the
Property as a result of the exercise by Lender of its rights, powers, privileges
and other remedies after the occurrence of an Event of Default, or (ii) in the
event that Lender (or Lender's nominee) is the purchaser at foreclosure by
credit bid, then the amount of such credit bid, in either case, over (b) all
costs and expenses, including, without limitation, all reasonable attorneys'
fees and disbursements and any brokerage fees, if applicable, incurred by Lender
in connection with the exercise of such remedies, including the sale of such
Property after a foreclosure against the Property.

                                       13
<PAGE>

      "Note" shall have the meaning set forth in the Recitals hereto.

      "OFAC List" means the list of specially designated nationals and blocked
persons subject to financial sanctions that is maintained by the U.S. Treasury
Department, Office of Foreign Assets Control and accessible through the internet
website www.treas.gov/ofac/t11sdn.pdf.

      "Officer's Certificate" shall mean a certificate delivered to Lender by
Borrower which is signed on behalf of Borrower by an authorized representative
of Borrower which states that the items set forth in such certificate are true,
accurate and complete in all respects.

      "Operating Expenses" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all expenses directly attributable to the operation,
repair and/or maintenance of the Property including, without limitation, (a)
Impositions, (b) insurance premiums, (c) management fees, whether or not
actually paid, equal to the greater of the actual management fees and five
percent (5%) of annual "base" or "fixed" Rent due under the Leases and (d) costs
attributable to the operation, repair and maintenance of the systems for
heating, ventilating and air conditioning the Improvements and actually paid for
by Borrower. Operating Expenses shall not include interest, principal and
premium, if any, due under the Note or otherwise in connection with the Debt,
income taxes, extraordinary capital improvement costs, any non-cash charge or
expense such as depreciation or amortization.

      "Operating Income" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all revenue derived by Borrower arising from the
Property including, without limitation, rental revenues (whether denominated as
basic rent, additional rent, escalation payments, electrical payments or
otherwise) and other fees and charges payable pursuant to Leases or otherwise in
connection with the Property, and business interruption, rent or other similar
insurance proceeds. Operating Income shall not include (a) Insurance Proceeds
(other than proceeds of rent, business interruption or other similar insurance
allocable to the applicable period) and Condemnation Proceeds (other than
Condemnation Proceeds arising from a temporary taking or the use and occupancy
of all or part of the applicable Property allocable to the applicable period),
or interest accrued on such Condemnation Proceeds, (b) proceeds of any
financing, (c) proceeds of any sale, exchange or transfer of the Property or any
part thereof or interest therein, (d) capital contributions or loans to Borrower
or an Affiliate of Borrower, (e) any item of income otherwise includable in
Operating Income but paid directly by any tenant to a Person other than Borrower
except for real estate taxes paid directly to any taxing authority by any
tenant, (f) any other extraordinary, non-recurring revenues, (g) Rent paid by or
on behalf of any lessee under a Space Lease which is the subject of any
proceeding or action relating to its bankruptcy, reorganization or other
arrangement pursuant to the Bankruptcy Code or any similar federal or state law
or which has been adjudicated a bankrupt or insolvent unless such Space Lease
has been affirmed by the trustee in such proceeding or action, (h) Rent paid by
or on behalf of any lessee under a Space Lease the demised premises of which are
not occupied either by such lessee or by a sublessee thereof (i) Rent paid by or
on behalf of any lessee under a Space Lease in whole or partial consideration
for the termination of any Space Lease, or (j) sales tax rebates from any
Governmental Authority.

      "Operation and Maintenance Expense Sub-Account" shall mean the Sub-Account
of the Central Account established pursuant to Section 5.02 hereof and
maintained pursuant to Section 5.09 hereof relating to the payment of Operating
Expenses (exclusive of Basic Carrying Costs).

      "Pad Owners" shall mean any owner of any fee interest in property
contiguous to or surrounded by the Property who has entered into or is subject
to a reciprocal easement agreement or other agreement or agreements with
Borrower either (a) in connection with an existing or potential improvement on
such property or (b) relating to or affecting the Property.

      "Payment Date" shall mean, with respect to each month, the first (1st)
calendar day in such month, or if such day is not a Business Day, the next
following Business Day.

      "PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.

      "Permitted Encumbrances" shall have the meaning set forth in Section
2.05(a) hereof.

                                       14
<PAGE>

      "Person" shall mean any individual, corporation, limited liability
company, 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.

      "Plan" shall mean an employee benefit or other plan established or
maintained by Borrower, Guarantor or any ERISA Affiliate during the five-year
period ended prior to the date of this Security Instrument or to which Borrower,
Guarantor or any ERISA Affiliate makes, is obligated to make or has, within the
five year period ended prior to the date of this Security Instrument, been
required to make contributions (whether or not covered by Title IV of ERISA or
Section 302 of ERISA or Section 401(a) or 412 of the Code), other than a
Multiemployer Plan.

      "Premises" shall have the meaning set forth in granting clause (a) of this
Security Instrument.

      "Principal Amount" shall mean the Loan Amount as such amount may be
reduced from time to time pursuant to the terms of this Security Instrument, the
Note or the other Loan Documents.

      "Principal Payments" shall mean all payments of principal made pursuant to
the terms of the Note.

      "Prohibited Person" means any Person identified on the OFAC List or any
other Person or foreign country or agency thereof with whom a U.S. Person may
not conduct business or transactions by prohibition of Federal law or Executive
Order of the President of the United States of America.

      "Property" shall have the meaning set forth in the granting clauses of
this Security Instrument.

      "Property Agreements" shall mean all agreements, grants of easements
and/or rights-of-way, reciprocal easement agreements, permits, declarations of
covenants, conditions and restrictions, disposition and development agreements,
planned unit development agreements, management or parking agreements, party
wall agreements or other instruments affecting the Property, including, without
limitation any agreements with Pad Owners, but not including any brokerage
agreements, management agreements, service contracts, Space Leases or the Loan
Documents.

      "Rating Agency" shall mean each of Standard & Poor's Ratings Services,
Inc., a division of The McGraw-Hill Company, Inc. ("Standard & Poor's"), Fitch,
Inc., and Moody's Investors Service, Inc. ("Moody's"), and any successor to any
of them; provided, however, that at any time after a Securitization, "Rating
Agency" shall mean those of the foregoing rating agencies that from time to time
rate the securities issued in connection with such Securitization.

      "Realty" shall have the meaning set forth in Section 2.05(b) hereof.

      "Recurring Replacement Expenditures" shall mean expenditures related to
capital repairs, replacements and improvements performed at the Property from
time to time.

      "Recurring Replacement Reserve Monthly Installment" shall mean the amount
per month set forth on EXHIBIT B attached hereto and made a part hereof.
Notwithstanding the foregoing, provided that no Trigger Event has occurred and
is continuing and that a sum equal to not less than the Initial Recurring
Replacement Reserve Deposit is on deposit in the Recurring Replacement Reserve
Sub-Account, the Recurring Replacement Reserve Monthly Installment shall be $0.

      "Recurring Replacement Reserve Sub-Account" shall mean the Sub-Account of
the Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.08 hereof relating to the payment of Recurring Replacement
Expenditures.

      "Release" shall mean a release of this Security Instrument in recordable
form with respect to the Property.

      "Release Price" shall mean an amount equal to the sum of (i) one hundred
percent (100%) of the Allocated Loan Amount, plus (ii) twenty-five percent (25%)
of the Initial Allocated Loan Amount.

                                       15
<PAGE>

      "Rent Account" shall mean an Eligible Account, maintained at the Rent
Account Bank, in the joint names of Lessee and Lender or its successors or
assigns (as secured party) as may be designated by Lender.

      "Rent Account Bank" shall mean the bank in which the Rent Account is
located.

      "Rents" shall have the meaning set forth in granting clause (f) of this
Security Instrument.

      "Rent Roll" shall have the meaning set forth in Section 2.05 (o) hereof.

      "Required Debt Service Coverage" shall mean a Debt Service Coverage of not
less than 1.10:1.

      "Required Debt Service Payment" shall mean, as of any Payment Date, the
amount of interest and principal then due and payable pursuant to the Note,
together with any other sums due thereunder, including, without limitation, any
prepayments required to be made or for which notice has been given under this
Security Instrument, Default Rate Interest and premium, if any, paid in
accordance therewith.

      "Required Engineering Work" shall have the meaning set forth in Section
5.02 hereof.

      "Retention Amount" shall have the meaning set forth in Section
3.04(b)(vii) hereof.

      "Scheduled Defeasance Payments" shall mean:

            (a) with respect to a defeasance of the Loan in whole, payments on
      or prior to, but as close as possible to (i) each scheduled Payment Date,
      after the date of defeasance and through and including the Maturity Date,
      upon which interest payments or interest and Principal Payments are
      required under the Loan Documents and in amounts equal to the scheduled
      payments due on such dates under the Loan Documents and (ii) the Maturity
      Date, of the Principal Amount and any accrued and unpaid interest thereon;
      or

            (b) with respect to any defeasance of the Loan in part, payments on
      or prior to, but as close as possible to, (i) each scheduled Payment Date
      after the date of defeasance through and including the Maturity Date, of a
      proportionate share (based on the percentage of outstanding principal
      prior to the defeasance represented by the amount of principal defeased)
      of the monthly installments of principal and interest due on such dates
      under the Loan Documents and (ii) the Maturity Date, of the unpaid portion
      of the portion of the Principal Amount so defeased and any accrued and
      unpaid interest thereon.

      "Securities Act" shall mean the Securities Act of 1933, as the same shall
be amended from time to time.

      "Securitization" shall mean a public or private offering of securities by
Lender or any of its Affiliates or their respective successors and assigns which
are collateralized, in whole or in part, by this Security Instrument.

      "Security Agreement" shall have the meaning set forth in Section 15.01
hereof.

      "Security Deposit Account" shall have the meaning set forth in Section
5.01 hereof.

      "Security Instrument" shall mean this Security Instrument as originally
executed or as it may hereafter from time to time be supplemented, amended,
modified or extended by one or more indentures supplemental hereto.

      "Single Purpose Entity" shall mean a corporation, partnership, joint
venture, limited liability company, trust or unincorporated association, which
is formed or organized solely for the purpose of holding, directly, an ownership
interest in the Property and the other properties encumbered by the
Cross-collateralized Mortgages or, with respect to General Partner, holding an
ownership interest in and managing a Person which holds an ownership interest in
the Property, does not engage in any business unrelated to the Property, does
not have any assets other than those related to its interest in the Property or
any indebtedness other than as permitted by this Security Instrument or the
other Loan Documents, has its own separate books and records and has its own
accounts, in each

                                       16
<PAGE>

case which are separate and apart from the books and records and accounts of any
other Person, holds itself out as being a Person separate and apart from any
other Person and which otherwise satisfies the criteria of the Rating Agency, as
in effect on the Closing Date, for a special-purpose bankruptcy-remote entity.

      "Solvent" shall mean, as to any Person, that (a) the sum of the assets of
such Person, at a fair valuation, exceeds its liabilities, including contingent
liabilities, (b) such Person has sufficient capital with which to conduct its
business as presently conducted and as proposed to be conducted and (c) such
Person has not incurred debts, and does not intend to incur debts, beyond its
ability to pay such debts as they mature. For purposes of this definition,
"debt" means any liability on a claim, and "claim" means (a) a right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured, or (b) a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured, or unsecured. With respect to any such
contingent liabilities, such liabilities shall be computed in accordance with
GAAP at the amount which, in light of all the facts and circumstances existing
at the time, represents the amount which can reasonably be expected to become an
actual or matured liability.

      "Space Leases" shall mean any Lease or sublease thereunder (including,
without limitation, any Major Space Lease) or any other agreement providing for
the use and occupancy of a portion of the Property as the same may be amended,
renewed or supplemented.

      "State" shall mean any of the states which are members of the United
States of America.

      "Stated Maturity", when used with respect to the Note or any installment
of interest and/or principal payment thereunder, shall mean the date specified
in the Note as the fixed date on which a payment of all or any portion of
principal and/or interest is due and payable.

      "Sub-Accounts" shall have the meaning set forth in Section 5.02 hereof.

      "Substantial Casualty" shall have the meaning set forth in Section 3.04
hereof.

      "Taking" shall mean a condemnation or taking pursuant to the lawful
exercise of the power of eminent domain.

      "Total GLA" shall mean the total gross leasable area of the Property,
including all Space Leases.

      "Transfer" shall mean the conveyance, assignment, sale, mortgaging,
encumbrance, pledging, hypothecation, granting of a security interest in,
granting of options with respect to, or other disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) all or any portion of any legal
or beneficial interest (a) in all or any portion of the Property (other than
easements that do not have a Material Adverse Effect and which are entered into
in accordance with the terms of this Security Instrument and Leases entered into
by Borrower in the ordinary course of Borrower's business); (b) if Borrower or,
if Borrower is a partnership, any General Partner, is a corporation, in the
stock of Borrower or any General Partner; (c) in Borrower (or any trust of which
Borrower is a trustee); or (d) if Borrower is a limited or general partnership,
joint venture, limited liability company, trust, nominee trust, tenancy in
common or other unincorporated form of business association or form of ownership
interest, in any Person having a legal or beneficial ownership in Borrower,
excluding any legal or beneficial interest in any constituent limited partner,
if Borrower is a limited partnership, or in any non-managing member, if Borrower
is a limited liability company, unless such interest would, or together with all
other direct or indirect interests in Borrower which were previously
transferred, aggregate 49% or more of the partnership or membership, as
applicable, interest in Borrower or would result in any Person who, as of the
Closing Date, did not own, directly or indirectly, 49% or more of the
partnership or membership, as applicable, interest in Borrower owning, directly
or indirectly, 49% or more of the partnership or membership, as applicable,
interest in Borrower and excluding any legal or beneficial interest in any
General Partner unless such interest would, or together with all other direct or
indirect interest in the General Partner which were previously transferred,
aggregate 49% or more of the partnership or membership, as applicable, interest
in the

                                       17
<PAGE>

General Partner (or result in a change in control of the management of the
General Partner from the individuals exercising such control immediately prior
to the conveyance or other disposition of such legal or beneficial interest) and
shall also include, without limitation to the foregoing, the following: an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof or any interest therein for a price to be paid in installments; an
agreement by Borrower leasing all or substantially all of the Property to one or
more Persons pursuant to a single or related transactions, or a sale, assignment
or other transfer of, or the grant of a security interest in, Borrower's right,
title and interest in and to any Leases or any Rent; any instrument subjecting
the Property to a condominium regime or transferring ownership to a cooperative
corporation; and the dissolution or termination of Borrower or the merger or
consolidation of Borrower with any other Person; provided, however that
"Transfer" shall not include (a) transfers made by devise or descent or by
operation of law upon the death of a partner, member or shareholder of Borrower
or General Partner or any Person owning a direct or indirect legal or beneficial
interest in Borrower or General Partner if (i) written notice of any transfer
pursuant to this proviso is given to Lender together with such documents
relating to the transfer as Lender may reasonably require, (ii) control over the
management and operation of the Property is retained by AMERCO (the "Original
Principals", whether one or more) and (iii) no such transfer, death or other
event has any adverse effect either on the Single Purpose Entity status of
Borrower under the requirements of any Rating Agency or on the status of
Borrower as a continuing legal entity liable for the payment of the Debt and the
performance of all other obligations secured hereby, nor (b) subject to the
provisions of clauses (i) through (iii) above and provided, that (i) any inter
vivos transfer of all or any portion of the Property or any inter vivos transfer
or issuance of capital stock (or other ownership interests) in Borrower or
General Partner is made in connection with Original Principals' bona fide, good
faith estate planning, (ii) Original Principals do not transfer in excess of 49%
of their direct or indirect ownership interest in Borrower and (iii) the
Person(s) with Control of Borrower or the management of the Property are (x) the
same Person(s) who had such Control and management rights immediately prior to
the transfer in question, or (y) reasonably acceptable to Lender, (i) an inter
vivos or testamentary transfer of all or any portion of the ownership interest
in Borrower to one or more family members of Original Principals or a trust in
which all of the beneficial interest is held by one or more family members of
Original Principals or a partnership, limited liability company, corporation or
other legal entity in which a majority of the capital and profits interests are
held by one or more family members of Original Principals, or (ii) any inter
vivos or testamentary transfer or issuance of capital stock (or other ownership
interests) in the General Partner to one or more family members of Original
Principals, a trust in which all of the beneficial interest is held by one or
more family members of Original Principals or a partnership, limited liability
company, corporation or other legal entity in which a majority of the capital
and profits interests are held by one or more family members of Original
Principals. As used herein, "family members" shall include spouses, children and
grandchildren and any lineal descendants.

      "Treasury Constant Maturity Yield Index" shall mean the average yield for
"This Week" as reported by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519).

      "Trigger Event" shall mean the earliest to occur of (a) an Event of
Default or (b) the date on which the Aggregate Debt Service Coverage, as
determined by Lender in its sole and absolute discretion, shall fall below
1.15:1.0 for the trailing twelve (12) month period.

      "UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State in which the Realty is located.

      "Undefeased Note" shall have the meaning set forth in Section 15.01
hereof.

      "Unscheduled Payments" shall mean (a) all Loss Proceeds that Borrower has
elected or is required to apply to the repayment of the Debt pursuant to this
Security Instrument, the Note or any other Loan Documents, (b) any funds
representing a voluntary or involuntary principal prepayment other than
scheduled Principal Payments and (c) any Net Proceeds

      "Use Requirements" shall mean any and all building codes, permits,
certificates of occupancy or compliance, laws, regulations, or ordinances
(including, without limitation, health, pollution, fire protection, medical and
day-care facilities, waste product and sewage disposal regulations),
restrictions of record, easements, reciprocal easements, declarations or other
agreements affecting the use of the Property or any part thereof.

                                       18
<PAGE>

      "Welfare Plan" shall mean an employee welfare benefit plan as defined in
Section 3(1) of ERISA established or maintained by Borrower, Guarantor or any
ERISA Affiliate or that covers any current or former employee of Borrower,
Guarantor or any ERISA Affiliate.

      "Work" shall have the meaning set forth in Section 3.04(a)(i) hereof.

                        ARTICLE II: COVENANTS, WARRANTIES
                         AND REPRESENTATIONS OF BORROWER

      Section 2.01. Payment of Debt. Borrower will pay the Debt at the time and
in the manner provided in the Note and the other Loan Documents, all in lawful
money of the United States of America in immediately available funds.

      Section 2.02. Representations, Warranties and Covenants of Borrower.
Borrower represents and warrants to and covenants with Lender:

      (a) Organization and Authority. Borrower (i) is a limited liability
company, general partnership, limited partnership or corporation, as the case
may be, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation, (ii) has all requisite power and authority
and all necessary licenses and permits to own and operate the Property and to
carry on its business as now conducted and as presently proposed to be conducted
and (iii) is duly qualified, authorized to do business and in good standing in
the jurisdiction where the Property is located and in each other jurisdiction
where the conduct of its business or the nature of its activities makes such
qualification necessary, or if not qualified or authorized to do business under
such jurisdictions, will become qualified and authorized in such jurisdictions
within ninety (90) days of the date hereof. If Borrower is a limited liability
company, limited partnership or general partnership, each general partner or
managing member, as applicable, of Borrower which is a corporation is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.

      (b) Power. Borrower and, if applicable, each General Partner has full
power and authority to execute, deliver and perform, as applicable, the Loan
Documents to which it is a party, to make the borrowings thereunder, to execute
and deliver the Note and to grant to Lender a first, prior, perfected and
continuing lien on and security interest in the Property, subject only to the
Permitted Encumbrances.

      (c) Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents to which Borrower is a party, the making of the borrowings
thereunder, the execution and delivery of the Note, the grant of the liens on
the Property pursuant to the Loan Documents to which Borrower is a party and the
consummation of the Loan are within the powers of Borrower and have been duly
authorized by Borrower and, if applicable, the General Partners, by all
requisite action (and Borrower hereby represents that no approval or action of
any member, limited partner or shareholder, as applicable, of Borrower is
required to authorize any of the Loan Documents to which Borrower is a party)
and will constitute the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with their terms, except as
enforcement may be stayed or limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in proceedings at law or in equity) and
will not (i) violate any provision of its partnership agreement or partnership
certificate or certificate of incorporation or by-laws, or operating agreement,
certificate of formation or articles of organization, as applicable, or, to its
knowledge, any law, judgment, order, rule or regulation of any court,
arbitration panel or other Governmental Authority, domestic or foreign, or other
Person affecting or binding upon Borrower or the Property, or (ii) violate any
provision of any indenture, agreement, mortgage, deed of trust, contract or
other instrument to which Borrower or, if applicable, any General Partner is a
party or by which any of their respective property, assets or revenues are
bound, or be in conflict with, result in an acceleration of any obligation or a
breach of or constitute (with notice or lapse of time or both) a default or
require any payment or prepayment under, any such indenture, agreement,
mortgage, deed of trust, contract or other instrument, or (iii) result in the
creation or imposition of any lien, except those in favor of Lender as provided
in the Loan Documents to which it is a party.

                                       19
<PAGE>

      (d) Consent. Neither Borrower nor, if applicable, any General Partner, is
required to obtain any consent, approval or authorization from, or to file any
declaration or statement with, any Governmental Authority or other agency in
connection with or as a condition to the execution, delivery or performance of
this Security Instrument, the Note or the other Loan Documents which has not
been so obtained or filed.

      (e) Intentionally Omitted.

      (f) Other Agreements. Borrower is not a party to nor is otherwise bound by
any agreements or instruments which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect. Neither Borrower nor, if
applicable, any General Partner, is in violation of its organizational documents
or other restriction or any agreement or instrument by which it is bound, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
Governmental Authority, or any Legal Requirement, in each case, applicable to
Borrower or the Property, except for such violations that would not,
individually or in the aggregate, have a Material Adverse Effect.

      (g) Maintenance of Existence. (i) Borrower and, if applicable, each
General Partner at all times since their formation have been duly formed and
existing and shall preserve and keep in full force and effect their existence as
a Single Purpose Entity.

            (ii) Borrower and, if applicable, each General Partner, at all times
      since their organization have complied, and will continue to comply, with
      the provisions of its certificate and agreement of partnership or
      certificate of incorporation and by-laws or articles of organization,
      certificate of formation and operating agreement, as applicable, and the
      laws of its jurisdiction of organization relating to partnerships,
      corporations or limited liability companies, as applicable.

            (iii) Borrower and, if applicable, each General Partner have done or
      caused to be done and will do all things necessary to observe
      organizational formalities and preserve their existence and Borrower and,
      if applicable, each General Partner will not amend, modify or otherwise
      change the certificate and agreement of partnership or certificate of
      incorporation and by-laws or articles of organization, certificate of
      formation and operating agreement, as applicable, or other organizational
      documents of Borrower and, if applicable, each General Partner without the
      prior written consent of Lender.

            (iv) Borrower and, if applicable, each General Partner, have at all
      times accurately maintained, and will continue to accurately maintain,
      their respective financial statements, accounting records and other
      partnership, company or corporate documents separate from those of any
      other Person and Borrower will file its own tax returns or, if Borrower
      and/or, if applicable, General Partner is part of a consolidated group for
      purposes of filing tax returns, Borrower and, General Partner, as
      applicable will be shown as separate members of such group. Borrower and,
      if applicable, each General Partner have not at any time since their
      formation commingled, and will not commingle, their respective assets with
      those of any other Person, other than funds deposited into the "U-Haul
      Concentration Account" and funds deposited into local bank accounts,
      provided that the Insolvency Opinion has concluded that such commingling
      will not result in a substantive consolidation of Borrower with any other
      Person, and will maintain on a ledger basis their assets in such a manner
      such that it will not be costly or difficult to segregate, ascertain or
      identify their individual assets from those of any other Person. Borrower
      and, if applicable, each General Partner have at all times since their
      formation accurately maintained and utilized, and will continue to
      accurately maintain and utilize, their own separate bank accounts (unless
      the Insolvency Opinion has concluded that the failure to have separate
      bank accounts will not result in a substantive consolidation of Borrower
      with any other Person), payroll and separate books of account, stationery,
      invoices and checks, if any.

            (v) Borrower and, if applicable, each General Partner, have at all
      times paid, and will continue to pay, their own liabilities from their own
      separate assets and shall each allocate and charge fairly and reasonably
      any overhead which Borrower and, if applicable, any General Partner,
      shares with any other Person, including, without limitation, for office
      space and services performed by any employee of another Person.

                                       20
<PAGE>

            (vi) Borrower and, if applicable, each General Partner, have at all
      times identified themselves, and will continue to identify themselves, in
      all dealings with the public, under their own names and as separate and
      distinct entities and shall correct any known misunderstanding regarding
      their status as separate and distinct entities. Borrower and, if
      applicable, each General Partner, have not at any time identified
      themselves, and will not identify themselves, as being a division of any
      other Person.

            (vii) Borrower and, if applicable, each General Partner, have been
      at all times, and will continue to be, adequately capitalized in light of
      the nature of their respective businesses.

            (viii) Borrower and, if applicable, each General Partner, (A) have
      not owned, do not own and will not own any assets or property other than,
      with respect to Borrower, the Property and any incidental personal
      property necessary for the ownership, management or operation of the
      Property and, with respect to General Partner, if applicable, its interest
      in Borrower, (B) have not engaged and will not engage in any business
      other than the ownership, management and operation of the Property or,
      with respect to General Partner, if applicable, its interest in Borrower,
      (C) have not incurred and will not incur any debt, secured or unsecured,
      direct or contingent (including guaranteeing any obligation), other than
      (X) the Loan, (Y) unsecured trade and operational debt which (1) is not
      evidenced by a note, (2) is incurred in the ordinary course of the
      operation of the Property, (3) does not exceed in the aggregate three
      percent (3%) of the Allocated Loan Amount for the Property and (4) is,
      unless being contested in accordance with the terms of this Security
      Instrument, paid prior to the earlier to occur of the thirtieth (30th) day
      after the date incurred and the date when due, and (Z) with respect to the
      General Partner, the Mez Loan, (D) have not pledged and will not pledge
      their assets for the benefit of any other Person other than, with respect
      to the Mez Loan, the pledge by each General Partner of its interest in
      Borrower, and (E) have not made and will not make any loans or advances to
      any Person (including any Affiliate).

            (ix) Neither Borrower nor, if applicable, any General Partner will
      change its name or principal place of business.

            (x) Neither Borrower nor, if applicable, any General Partner has,
      and neither of such Persons will have, any subsidiaries.

            (xi) Borrower will preserve and maintain its existence as a Delaware
      limited liability company and all material rights, privileges, tradenames
      and franchises.

            (xii) Neither Borrower, nor, if applicable, any General Partner,
      will merge or consolidate with, or sell all or substantially all of its
      respective assets to any Person, or liquidate, wind up or dissolve itself
      (or suffer any liquidation, winding up or dissolution). Neither Borrower,
      nor, if applicable, any General Partner will acquire any business or
      assets from, or capital stock or other ownership interest of, or be a
      party to any acquisition of, any Person.

            (xiii) Borrower and, if applicable, each General Partner, have not
      at any time since their formation assumed, guaranteed or held themselves
      out to be responsible for, and will not assume, guarantee or hold
      themselves out to be responsible for the liabilities or the decisions or
      actions respecting the daily business affairs of their partners,
      shareholders or members or any predecessor company, corporation or
      partnership, each as applicable, any Affiliates, or any other Persons.
      Borrower has not at any time since its formation acquired, and will not
      acquire, obligations or securities of its partners or shareholders,
      members or any predecessor company, corporation or partnership, each as
      applicable, or any Affiliates. Borrower and, if applicable, each General
      Partner, have not at any time since their formation made, and will not
      make, loans to its partners, members or shareholders or any predecessor
      company, corporation or partnership, each as applicable, or any Affiliates
      of any of such Persons. Borrower and, if applicable, each General Partner,
      have no known contingent liabilities nor do they have any material
      financial liabilities under any indenture, mortgage, deed of trust, loan
      agreement or other agreement or instrument to which such Person is a party
      or by which it is otherwise bound other than under the Loan Documents and,
      with respect to each General Partner, the Mez Loan.

                                       21
<PAGE>

            (xiv) Borrower has not at any time since its formation entered into
      and was not a party to, and, will not enter into or be a party to, any
      transaction with its Affiliates, members, partners or shareholders, as
      applicable, or any Affiliates thereof except in the ordinary course of
      business of Borrower on terms which are no less favorable to Borrower than
      would be obtained in a comparable arm's length transaction with an
      unrelated third party.

            (xv) If Borrower is a limited partnership or a limited liability
      company, the General Partner shall be a corporation or limited liability
      company whose sole asset is its interest in Borrower and the General
      Partner will at all times comply, and will cause Borrower to comply, with
      each of the representations, warranties, and covenants contained in this
      Section 2.02(g) as if such representation, warranty or covenant was made
      directly by such General Partner.

            (xvi) Borrower shall at all times cause there to be at least one (1)
      duly appointed member of the board of directors or board of managers or
      other governing board or body, as applicable (an "Independent Director"),
      of, if Borrower is a corporation, Borrower, and, if Borrower is a limited
      partnership or limited liability company, of the General Partner,
      reasonably satisfactory to Lender who shall not have been at the time of
      such individual's appointment, and may not be or have been at any time (A)
      a shareholder, officer, director, attorney, counsel, partner, member or
      employee of Borrower or any of the foregoing Persons or Affiliates
      thereof, (B) a customer or creditor of, or supplier or service provider
      to, Borrower or any of its shareholders, partners, members or their
      Affiliates, (C) a member of the immediate family of any Person referred to
      in (A) or (B) above or (D) a Person Controlling, Controlled by or under
      common Control with any Person referred to in (A) through (C) above. A
      natural person who otherwise satisfies the foregoing definition except for
      being the Independent Director of a Single Purpose Entity Affiliated with
      Borrower or General Partner shall not be disqualified from serving as an
      Independent Director if such individual is at the time of initial
      appointment, or at any time while serving as the Independent Director, an
      Independent Director of a Single Purpose Entity Affiliated with Borrower
      or General Partner if such individual is an independent director provided
      by a nationally-recognized company that provides professional independent
      directors.

            (xvii) Borrower and, if applicable, each General Partner, shall not
      cause or permit the board of directors or board of managers or other
      governing board or body, as applicable, of Borrower or, if applicable,
      each General Partner, to take any action which, under the terms of any
      certificate of incorporation, by-laws or articles of organization with
      respect to any common stock, requires a vote of the board of directors of
      Borrower, or, if applicable, the General Partner, unless at the time of
      such action there shall be at least one member who is an Independent
      Director.

            (xviii) Borrower and, if applicable, each General Partner shall pay
      the salaries of their own employees and maintain a sufficient number of
      employees in light of their contemplated business operations.

            (xix) Borrower shall, and shall cause its Affiliates to, conduct its
      business so that the assumptions made with respect to Borrower in that
      certain opinion letter relating to substantive non-consolidation dated the
      date hereof (the "Insolvency Opinion") delivered in connection with the
      Loan shall be true and correct in all respects.

Notwithstanding anything to the contrary contained in this Section 2.02(g),
provided Borrower is a Delaware single member limited liability company which
satisfies the single purpose bankruptcy remote entity requirements of each
Rating Agency for a single member limited liability company, the foregoing
provisions of this Section 2.02(g) shall not apply to the General Partner.

      (h) No Defaults. No Default or Event of Default has occurred and is
continuing or would occur as a result of the consummation of the transactions
contemplated by the Loan Documents. Borrower is not in default in the payment or
performance of any of its Contractual Obligations in any respect.

      (i) Consents and Approvals. Borrower and, if applicable, each General
Partner, have obtained or made all necessary (i) consents, approvals and
authorizations, and registrations and filings of or with all

                                       22
<PAGE>

Governmental Authorities and (ii) consents, approvals, waivers and notifications
of partners, stockholders, members creditors, lessors and other nongovernmental
Persons, in each case, which are required to be obtained or made by Borrower or,
if applicable, the General Partner, in connection with the execution and
delivery of, and the performance by Borrower of its obligations under, the Loan
Documents.

      (j) Investment Company Act Status, etc. Borrower is not (i) an "investment
company," or a company "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (iii) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.

      (k) Compliance with Law. Borrower is in compliance in all material
respects with all Legal Requirements to which it or the Property is subject,
including, without limitation, all Environmental Statutes, the Occupational
Safety and Health Act of 1970, the Americans with Disabilities Act and ERISA. No
portion of the Property has been or will be purchased, improved, fixtured,
equipped or furnished with proceeds of any illegal activity and to the best of
Borrower's knowledge, no illegal activities are being conducted at or from the
Property.

      (l) Financial Information. All financial data that has been delivered by
Borrower to Lender (i) is true, complete and correct in all material respects,
(ii) accurately represents the financial condition and results of operations of
the Persons covered thereby as of the date on which the same shall have been
furnished, and (iii) has been prepared in accordance with GAAP (or such other
accounting basis as is reasonably acceptable to Lender) throughout the periods
covered thereby. As of the date hereof, neither Borrower nor, if applicable, any
General Partner, has any contingent liability, liability for taxes or other
unusual or forward commitment not reflected in such financial statements
delivered to Lender. Since the date of the last financial statements delivered
by Borrower to Lender except as otherwise disclosed in such financial statements
or notes thereto, there has been no change in the assets, liabilities or
financial position of Borrower nor, if applicable, any General Partner, or in
the results of operations of Borrower which would have a Material Adverse
Effect. Neither Borrower nor, if applicable, any General Partner, has incurred
any obligation or liability, contingent or otherwise not reflected in such
financial statements which would have a Material Adverse Effect.

      (m) Transaction Brokerage Fees. Borrower has not dealt with any financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Security Instrument. All
brokerage fees, commissions and other expenses payable in connection with the
transactions contemplated by the Loan Documents have been paid in full by
Borrower contemporaneously with the execution of the Loan Documents and the
funding of the Loan. Borrower hereby agrees to indemnify and hold Lender
harmless for, from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from (i) a claim by any
Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein or (ii) any breach of the foregoing
representation. The provisions of this subsection (m) shall survive the
repayment of the Debt.

      (n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of "purchasing" or "carrying" any "margin stock" within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulations T, U or X or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and conditions
of the Loan Documents.

      (o) Pending Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Borrower, threatened against or affecting Borrower
or the Property in any court or before any Governmental Authority which if
adversely determined either individually or collectively has or is reasonably
likely to have a Material Adverse Effect.

      (p) Solvency; No Bankruptcy. Each of Borrower and, if applicable, the
General Partner, (i) is and has at all times been Solvent and will remain
Solvent immediately upon the consummation of the transactions contemplated by
the Loan Documents and (ii) is free from bankruptcy, reorganization or
arrangement proceedings or a general assignment for the benefit of creditors and
is not contemplating the filing of a petition under any state or

                                       23
<PAGE>

federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of such Person's assets or property and Borrower has no knowledge of any
Person contemplating the filing of any such petition against it or, if
applicable, the General Partner. None of the transactions contemplated hereby
will be or have been made with an intent to hinder, delay or defraud any present
or future creditors of Borrower and Borrower has received reasonably equivalent
value in exchange for its obligations under the Loan Documents. Borrower's
assets do not, and immediately upon consummation of the transaction contemplated
in the Loan Documents will not, constitute unreasonably small capital to carry
out its business as presently conducted or as proposed to be conducted. Borrower
does not intend to, nor believe that it will, incur debts and liabilities beyond
its ability to pay such debts as they may mature.

      (q) Use of Proceeds. The proceeds of the Loan shall be applied by Borrower
to, inter alia, (i) satisfy certain mortgage loans presently encumbering all or
a part of the Property, (ii) pay certain transaction costs incurred by Borrower
in connection with the Loan and (iii) for operating capital. No portion of the
proceeds of the Loan will be used for family, personal, agricultural or
household use.

      (r) Tax Filings. Borrower and, if applicable, each General Partner, have
filed all federal, state and local tax returns required to be filed and have
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Borrower and, if applicable, the
General Partners. Borrower and, if applicable, the General Partners, believe
that their respective tax returns properly reflect the income and taxes of
Borrower and said General Partner, if any, for the periods covered thereby,
subject only to reasonable adjustments required by the Internal Revenue Service
or other applicable tax authority upon audit.

      (s) Not Foreign Person. Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.

      (t) ERISA. (i) The assets of Borrower and Guarantor are not and will not
become treated as "plan assets", whether by operation of law or under
regulations promulgated under ERISA. Each Plan and Welfare Plan, and, to the
knowledge of Borrower, each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, its terms and the applicable provisions of ERISA, the Code and any other
applicable Legal Requirement, and no event or condition has occurred and is
continuing as to which Borrower would be under an obligation to furnish a report
to Lender under clause (ii)(A) of this Section. Other than an application for a
favorable determination letter with respect to a Plan, there are no pending
issues or claims before the Internal Revenue Service, the United States
Department of Labor or any court of competent jurisdiction related to any Plan
or Welfare Plan under which Borrower, Guarantor or any ERISA Affiliate, directly
or indirectly (through an indemnification agreement or otherwise), could be
subject to any material risk of liability under Section 409 or 502(i) of ERISA
or Section 4975 of the Code. No Welfare Plan provides or will provide benefits,
including, without limitation, death or medical benefits (whether or not
insured) with respect to any current or former employee of Borrower, Guarantor
or any ERISA Affiliate beyond his or her retirement or other termination of
service other than (A) coverage mandated by applicable law, (B) death or
disability benefits that have been fully provided for by fully paid up insurance
or (C) severance benefits.

            (ii) Borrower will furnish to Lender as soon as possible, and in any
      event within ten (10) days after Borrower knows or has reason to believe
      that any of the events or conditions specified below with respect to any
      Plan, Welfare Plan or Multiemployer Plan has occurred or exists, an
      Officer's Certificate setting forth details respecting such event or
      condition and the action, if any, that Borrower or its ERISA Affiliate
      proposes to take with respect thereto (and a copy of any report or notice
      required to be filed with or given to PBGC (or any other relevant
      Governmental Authority)) by Borrower or an ERISA Affiliate with respect to
      such event or condition, if such report or notice is required to be filed
      with the PBGC or any other relevant Governmental Authority:

                  (A) any reportable event, as defined in Section 4043 of ERISA
            and the regulations issued thereunder, with respect to a Plan, as to
            which PBGC has not by regulation waived the requirement of Section
            4043(a) of ERISA that it be notified within thirty (30) days of the
            occurrence of such event (provided that a failure to meet the
            minimum funding standard of Section 412 of the Code and of Section
            302 of ERISA, including, without limitation, the failure to make on
            or before its due date a required installment under Section 412(m)
            of the Code and of Section

                                       24
<PAGE>

            302(e) of ERISA, shall be a reportable event regardless of the
            issuance of any waivers in accordance with Section 412(d) of the
            Code), and any request for a waiver under Section 412(d) of the Code
            for any Plan;

                  (B) the distribution under Section 4041 of ERISA of a notice
            of intent to terminate any Plan or any action taken by Borrower or
            an ERISA Affiliate to terminate any Plan;

                  (C) the institution by PBGC of proceedings under Section 4042
            of ERISA for the termination of, or the appointment of a trustee to
            administer, any Plan, or the receipt by Borrower or any ERISA
            Affiliate of a notice from a Multiemployer Plan that such action has
            been taken by PBGC with respect to such Multiemployer Plan;

                  (D) the complete or partial withdrawal from a Multiemployer
            Plan by Borrower or any ERISA Affiliate that results in liability
            under Section 4201 or 4204 of ERISA (including the obligation to
            satisfy secondary liability as a result of a purchaser default) or
            the receipt by Borrower or any ERISA Affiliate of notice from a
            Multiemployer Plan that it is in reorganization or insolvency
            pursuant to Section 4241 or 4245 of ERISA or that it intends to
            terminate or has terminated under Section 4041A of ERISA;

                  (E) the institution of a proceeding by a fiduciary of any
            Multiemployer Plan against Borrower or any ERISA Affiliate to
            enforce Section 515 of ERISA, which proceeding is not dismissed
            within thirty (30) days;

                  (F) the adoption of an amendment to any Plan that, pursuant to
            Section 401(a)(29) of the Code or Section 307 of ERISA, would result
            in the loss of tax-exempt status of the trust of which such Plan is
            a part if Borrower or an ERISA Affiliate fails to timely provide
            security to the Plan in accordance with the provisions of said
            Sections; or

                  (G) the imposition of a lien or a security interest in
            connection with a Plan.

            (iii) Borrower shall not knowingly engage in or permit any
      transaction in connection with which Borrower, Guarantor or any ERISA
      Affiliate could be subject to either a civil penalty or tax assessed
      pursuant to Section 502(i) or 502(l) of ERISA or Section 4975 of the Code,
      permit any Welfare Plan to provide benefits, including without limitation,
      medical benefits (whether or not insured), with respect to any current or
      former employee of Borrower, Guarantor or any ERISA Affiliate beyond his
      or her retirement or other termination of service other than (A) coverage
      mandated by applicable law, (B) death or disability benefits that have
      been fully provided for by paid up insurance or otherwise or (C) severance
      benefits, permit the assets of Borrower or Guarantor to become "plan
      assets", whether by operation of law or under regulations promulgated
      under ERISA or adopt, amend (except as may be required by applicable law)
      or increase the amount of any benefit or amount payable under, or permit
      any ERISA Affiliate to adopt, amend (except as may be required by
      applicable law) or increase the amount of any benefit or amount payable
      under, any employee benefit plan (including, without limitation, any
      employee welfare benefit plan) or other plan, policy or arrangement,
      except for normal increases in the ordinary course of business consistent
      with past practice that, in the aggregate, do not result in a material
      increase in benefits expense to Borrower, Guarantor or any ERISA
      Affiliate.

      (u) Labor Matters. No organized work stoppage or labor strike is pending
or threatened by employees or other laborers at the Property and (i) Borrower
(A) is not involved in or threatened with any labor dispute, grievance or
litigation relating to labor matters involving any employees and other laborers
at the Property, including, without limitation, violation of any federal, state
or local labor, safety or employment laws (domestic or foreign) and/or charges
of unfair labor practices or discrimination complaints; (B) has not engaged in
any unfair labor practices within the meaning of the National Labor Relations
Act or the Railway Labor Act; and (C) is not a party to, or bound by, any
collective bargaining agreement or union contract with respect to employees and
other laborers at the Property and no such agreement or contract is currently
being negotiated by Borrower, Manager or any of their Affiliates; and (ii)
Manager (A) is not involved in or threatened with any labor dispute, grievance
or litigation relating to labor matters involving any employees and other
laborers at the Property, including, without

                                       25
<PAGE>

limitation, violation of any federal, state or local labor, safety or employment
laws (domestic or foreign) and/or charges of unfair labor practices or
discrimination complaints; (B) has not engaged in any unfair labor practices at
the Property within the meaning of the National Labor Relations Act or the
Railway Labor Act; and (C) is not a party to, or bound by, any collective
bargaining agreement or union contract with respect to employees and other
laborers at the Property and no such agreement or contract is currently being
negotiated by Borrower, Manager or any of their Affiliates.

      (v) Borrower's Legal Status. Borrower's exact legal name that is indicated
on the signature page hereto, organizational identification number and place of
business or, if more than one, its chief executive office, as well as Borrower's
mailing address, if different, which were identified by Borrower to Lender and
contained in this Security Instrument, are true, accurate and complete. Borrower
(i) will not change its name, its place of business or, if more than one place
of business, its chief executive office, or its mailing address or
organizational identification number if it has one without giving Lender at
least thirty (30) days prior written notice of such change, (ii) if Borrower
does not have an organizational identification number and later obtains one,
Borrower shall promptly notify Lender of such organizational identification
number and (iii) Borrower will not change its type of organization, jurisdiction
of organization or other legal structure.

      (w) Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering
Laws. (i) None of Borrower, General Partner, any Guarantor, or any Person who
owns any equity interest in or Controls Borrower, General Partner or any
Guarantor currently is identified on the OFAC List or otherwise qualifies as a
Prohibited Person, and Borrower has implemented procedures, approved by General
Partner, to ensure that no Person who now or hereafter owns an equity interest
in Borrower or General Partner is a Prohibited Person or Controlled by a
Prohibited Person, (ii) no proceeds of the Loan will be used to fund any
operations in, finance any investments or activities in or make any payments to,
Prohibited Persons, and (iii) none of Borrower, General Partner, or any
Guarantor are in violation of any Legal Requirements relating to anti-money
laundering or anti-terrorism, including, without limitation, Legal Requirements
related to transacting business with Prohibited Persons or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the
related regulations issued thereunder, including temporary regulations, all as
amended from time to time. No tenant at the Property currently is identified on
the OFAC List or otherwise qualifies as a Prohibited Person, and, to the best of
Borrower's knowledge, no tenant at the Property is owned or Controlled by a
Prohibited Person. Borrower has determined that Manager has implemented
procedures, approved by Borrower, to ensure that no tenant at the Property is a
Prohibited Person or owned or Controlled by a Prohibited Person.

      Section 2.03. Further Acts, etc. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages or deeds of trust, as
applicable, assignments, notices of assignments, transfers and assurances as
Lender shall, from time to time, reasonably require for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned and hypothecated, or which Borrower may
be or may hereafter become bound to convey or assign to Lender, or for carrying
out or facilitating the performance of the terms of this Security Instrument or
for filing, registering or recording this Security Instrument and, on demand,
will execute and deliver and hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements, chattel mortgages or comparable
security instruments to evidence more effectively the lien hereof upon the
Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of protecting, perfecting, preserving and
realizing upon the interests granted pursuant to this Security Instrument and to
effect the intent hereof, all as fully and effectually as Borrower might or
could do; and Borrower hereby ratifies all that Lender shall lawfully do or
cause to be done by virtue hereof. Upon receipt of an affidavit of an officer of
Lender as to the loss, theft, destruction or mutilation of the Note or any other
Loan Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or other applicable
Loan Document, Borrower will issue, in lieu thereof, a replacement Note or other
applicable Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Loan Document in the same principal amount thereof and
otherwise of like tenor.

                                       26
<PAGE>

      Section 2.04. Recording of Security Instrument, etc. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, will cause this Security Instrument, and any security instrument
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully protect the lien or security
interest hereof upon, and the interest of Lender in, the Property. Borrower will
pay all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Security Instrument, any
mortgage or deed of trust, as applicable, supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and all federal, state, county and municipal, taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Security Instrument, any mortgage or deed of trust, as
applicable, supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, except where prohibited by law
to do so, in which event Lender may declare the Debt to be immediately due and
payable. Borrower shall hold harmless and indemnify Lender and its successors
and assigns, against any liability incurred as a result of the imposition of any
tax on the making and recording of this Security Instrument.

      Section 2.05. Representations, Warranties and Covenants Relating to the
Property. Borrower represents and warrants to and covenants with Lender with
respect to the Property as follows:

      (a) Lien Priority. This Security Instrument is a valid and enforceable
first lien on the Property, free and clear of all encumbrances and liens having
priority over the lien of this Security Instrument, except for office equipment
such as computers, facsimile machines and copiers leased in the normal course of
Borrower's business, with an aggregate value not to exceed $5,000 and except for
the items set forth as exceptions to or subordinate matters in the title
insurance policy insuring the lien of this Security Instrument and other items
disclosed to Lender in a disclosure statement delivered by Borrower to Lender in
connection with the origination of the Loan, none of which, individually or in
the aggregate, materially interfere with the benefits of the security intended
to be provided by this Security Instrument, materially affect the value or
marketability of the Property, impair the use or operation of the Property for
the use currently being made thereof or impair Borrower's ability to pay its
obligations in a timely manner (such items being the "Permitted Encumbrances").

      (b) Title. Fee Owner has, subject only to the Permitted Encumbrances,
good, insurable and marketable fee simple title to the Premises, Improvements
and Fixtures (collectively, the "Realty") and Lessee has, subject only to
Permitted Encumbrances, good, insurable and marketable leasehold title to the
Realty and, in each case, to all easements and rights benefiting the Realty and
has the right, power and authority to mortgage, encumber, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, pledge, assign, and hypothecate the
Property. Borrower will preserve its interest in and title to the Property and
will forever warrant and defend the same to Lender against any and all claims
made by, through or under Borrower and will forever warrant and defend the
validity and priority of the lien and security interest created herein against
the claims of all Persons whomsoever claiming by, through or under Borrower. The
foregoing warranty of title shall survive the foreclosure of this Security
Instrument and shall inure to the benefit of and be enforceable by Lender in the
event Lender acquires title to the Property pursuant to any foreclosure. In
addition, there are no outstanding options or rights of first refusal to
purchase the Property or Borrower's ownership thereof.

      (c) Taxes and Impositions. All taxes and other Impositions and
governmental assessments due and owing in respect of, and affecting, the
Property have been paid. Borrower has paid all Impositions which constitute
special governmental assessments in full, except for those assessments which are
permitted by applicable Legal Requirements to be paid in installments, in which
case all installments which are due and payable have been paid in full. There
are no pending, or to Borrower's best knowledge, proposed special or other
assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such
special or other assessments.

      (d) Casualty; Flood Zone. The Realty is in good repair and free and clear
of any damage, destruction or casualty (whether or not covered by insurance)
that would materially affect the value of the Realty or the use for which the
Realty was intended, there exists no structural or other material defects or
damages in or to the Property and Borrower has not received any written notice
from any insurance company or bonding company of any material

                                       27
<PAGE>

defect or inadequacies in the Property, or any part thereof, which would
materially and adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond. No portion of the
Premises is located in an "area of special flood hazard," as that term is
defined in the regulations of the Federal Insurance Administration, Department
of Housing and Urban Development, under the National Flood Insurance Act of
1968, as amended (24 CFR Section 1909.1) or Borrower has obtained the flood
insurance required by Section 3.01(a)(vi) hereof. The Premises either does not
lie in a 100 year flood plain that has been identified by the Secretary of
Housing and Urban Development or any other Governmental Authority or, if it
does, Borrower has obtained the flood insurance required by Section 3.01(a)(vi)
hereof.

      (e) Completion; Encroachment. All Improvements necessary for the efficient
use and operation of the Premises, including, without limitation, all
Improvements which were included for purposes of determining the appraised value
of the Property in the Appraisal, have been completed and none of said
Improvements lie outside the boundaries and building restriction lines of the
Premises except for de-minimis encroachments on adjoining properties as
disclosed in the survey provided to Lender in connection with the origination of
the Loan. Except as set forth in the title insurance policy insuring the lien of
this Security Instrument, no improvements on adjoining properties encroach upon
the Premises.

      (f) Separate Lot. The Premises are taxed separately without regard to any
other real estate and constitute a legally subdivided lot under all applicable
Legal Requirements (or, if not subdivided, no subdivision or platting of the
Premises is required under applicable Legal Requirements), and for all purposes
may be mortgaged, encumbered, conveyed or otherwise dealt with as an independent
parcel. The Property does not benefit from any tax abatement or exemption.

      (g) Use. The existence of all Improvements, the present use and operation
thereof and the access of the Premises and the Improvements to all of the
utilities and other items referred to in paragraph (k) below are in compliance
in all material respects with all Leases affecting the Property and all
applicable Legal Requirements, including, without limitation, Environmental
Statutes, Development Laws and Use Requirements. Borrower has not received any
notice from any Governmental Authority alleging any uncured violation relating
to the Property of any applicable Legal Requirements.

      (h) Licenses and Permits. Borrower currently holds and will continue to
hold all certificates of occupancy, licenses, registrations, permits, consents,
franchises and approvals of any Governmental Authority or any other Person which
are material for the lawful occupancy and operation of the Realty or which are
material to the ownership or operation of the Property or the conduct of
Borrower's business. All such certificates of occupancy, licenses,
registrations, permits, consents, franchises and approvals are current and in
full force and effect.

      (i) Environmental Matters. Borrower has received and reviewed the
Environmental Report and has no reason to believe that the Environmental Report
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein or herein, in light of
the circumstances under which such statements were made, not misleading.

      (j) Property Proceedings. There are no actions, suits or proceedings
pending or threatened in any court or before any Governmental Authority or
arbitration board or tribunal (i) relating to (A) the zoning of the Premises or
any part thereof, (B) any certificates of occupancy, licenses, registrations,
permits, consents or approvals issued with respect to the Property or any part
thereof, (C) except as otherwise disclosed in writing to Lender, the
condemnation of the Property or any part thereof, or (D) the condemnation or
relocation of any roadways abutting the Premises required for access or the
denial or limitation of access to the Premises or any part thereof from any
point of access to the Premises, (ii) asserting that (A) any such zoning,
certificates of occupancy, licenses, registrations, permits, consents and/or
approvals do not permit the operation of any material portion of the Realty as
presently being conducted, (B) any material improvements located on the Property
or any part thereof cannot be located thereon or operated with their intended
use or (C) the operation of the Property or any part thereof is in violation in
any material respect of any Environmental Statutes, Development Laws or other
Legal Requirements or Space Leases or Property Agreements or (iii) which might
(A) affect the validity or priority of any

                                       28
<PAGE>

Loan Document or (B) have a Material Adverse Effect. Borrower is not aware of
any facts or circumstances which may give rise to any actions, suits or
proceedings described in the preceding sentence.

      (k) Utilities. The Premises has all necessary legal access to water, gas
and electrical supply, storm and sanitary sewerage facilities, other required
public utilities (with respect to each of the aforementioned items, by means of
either a direct connection to the source of such utilities or through
connections available on publicly dedicated roadways directly abutting the
Premises or through permanent insurable easements benefiting the Premises), fire
and police protection, parking, and means of direct access between the Premises
and public highways over recognized curb cuts (or such access to public highways
is through private roadways which may be used for ingress and egress pursuant to
permanent insurable easements).

      (l) Mechanics' Liens. The Property is free and clear of any mechanics'
liens or liens in the nature thereof, and no rights are outstanding that under
law could give rise to any such liens, any of which liens are or may be prior
to, or equal with, the lien of this Security Instrument, except those which are
insured against by the title insurance policy insuring the lien of this Security
Instrument.

      (m) Title Insurance. Lender has received a lender's title insurance policy
insuring this Security Instrument as a first lien on the Realty subject only to
Permitted Encumbrances.

      (n) Insurance. The Property is insured in accordance with the requirements
set forth in Article III hereof.

      (o) Space Leases.

            (i) Borrower has delivered a true, correct and complete schedule of
      all Space Leases as of the date hereof, which accurately and completely
      sets forth in all material respects, for each such Space Lease, the
      matters set forth therein (collectively, the "Rent Roll").

            (ii) Each Space Lease constitutes the legal, valid and binding
      obligation of Borrower and, to the knowledge of Borrower, is enforceable
      against the tenant thereof. No default exists, or with the passing of time
      or the giving of notice would exist, (A) under any Major Space Lease or
      (B) under any other Space Leases which would, in the aggregate, have a
      Material Adverse Effect.

            (iii) No tenant under any Space Lease has, as of the date hereof,
      paid Rent more than thirty (30) days in advance except for Rent
      aggregating not more than five percent (5%) of the Rent receivable for
      such period, and the Rents under such Space Leases have not been waived,
      released, or otherwise discharged or compromised.

            (iv) All work to be performed by Borrower under the Space Leases has
      been substantially performed, all contributions to be made by Borrower to
      the tenants thereunder have been made except for any held-back amounts,
      and all other conditions precedent to each such tenant's obligations
      thereunder have been satisfied.

            (v) Except as previously disclosed to Lender in writing, there are
      no options to terminate any Major Space Lease.

            (vi) Each tenant under a Major Space Lease or such tenant's
      authorized subtenant is currently occupying the space demised by such
      Major Space Lease.

            (vii) Borrower has delivered to Lender true, correct and complete
      copies of all Major Space Leases described in the Rent Roll.

            (viii) Each Space Lease is in full force and effect and (except as
      disclosed on the Rent Roll) has not been assigned, modified, supplemented
      or amended in any way.

                                       29
<PAGE>

            (ix) Each tenant under each Major Space Lease is free from
      bankruptcy, reorganization or arrangement proceedings or a general
      assignment for the benefit of creditors.

            (x) No Space Lease provides any party with the right to obtain a
      lien or encumbrance upon the Property superior to the lien of this
      Security Instrument.

      (p) Property Agreements.

            (i) Each Property Agreement other than the lease between Fee Owner
      and Lessee (which is terminable upon the occurrence of an Event of
      Default) and Permitted Encumbrances is terminable with or without cause on
      not less than thirty (30) days notice and is otherwise on commercially
      reasonable terms and consistent with the Approved Manager Standard.

            (ii) No Property Agreement provides any party with the right to
      obtain a lien or encumbrance upon the Property superior to the lien of
      this Security Instrument.

            (iii) No default exists or with the passing of time or the giving of
      notice or both would exist under any Property Agreement which would,
      individually or in the aggregate, have a Material Adverse Effect.

            (iv) Borrower has not received or given any written communication
      which alleges that a default exists or, with the giving of notice or the
      lapse of time, or both, would exist under the provisions of any Property
      Agreement.

            (v) No condition exists whereby Borrower or any future owner of the
      Property may be required to purchase any other parcel of land which is
      subject to any Property Agreement or which gives any Person a right to
      purchase, or right of first refusal with respect to, the Property.

            (vi) To the best knowledge of Borrower, no offset or any right of
      offset exists respecting continued contributions to be made by any party
      to any Property Agreement except as expressly set forth therein. Except as
      previously disclosed to Lender in writing, no material exclusions or
      restrictions on the utilization, leasing or improvement of the Property
      (including non-compete agreements) exists in any Property Agreement.

            (vii) All "pre-opening" requirements contained in all Property
      Agreements (including, but not limited to, all off-site and on-site
      construction requirements), if any, have been fulfilled, and, to the best
      of Borrower's knowledge, no condition now exists whereby any party to any
      such Property Agreement could refuse to honor its obligations thereunder.

            (viii) All work, if any, to be performed by Borrower under each of
      the Property Agreements has been substantially performed, all
      contributions to be made by Borrower to any party to such Property
      Agreements have been made, and all other conditions to such party's
      obligations thereunder have been satisfied.

      (q) Personal Property. Borrower has delivered to Lender a true, correct
and complete schedule of all personal property, if any, owned by Borrower and
located upon the Property or used in connection with the use or operation of the
Realty or, in lieu thereof, an Officer's Certificate stating that the aggregate
value of any such personal property does not exceed $5,000 and Borrower
represents that it has good and marketable title to all such personal property,
free and clear of any liens, except for liens created under the Loan Documents
and liens which describe the equipment and other personal property owned by
tenants.

      (r) Leasing Brokerage and Management Fees. Except as previously disclosed
to Lender in writing, there are no brokerage fees or commissions payable by
Borrower with respect to the leasing of space at the Property and there are no
management fees payable by Borrower with respect to the management of the
Property.

                                       30
<PAGE>

      (s) Security Deposits. Borrower is in compliance with all Legal
Requirements relating to all security deposits as to which failure to comply
might, individually or in the aggregate, have a Material Adverse Effect.

      (t) Loan to Value Ratio. To the best knowledge of Borrower, based on the
substantial real estate expertise of Borrower, Borrower's familiarity with the
Property, and the Appraisal (which Borrower believes to contain a reasonable
assessment of the fair market value of the Property), the Initial Allocated Loan
Amount does not exceed one hundred twenty-five percent (125%) of the fair market
value of the Property as of the Closing Date. For the purposes of this clause
(t), the term "fair market value" shall be reduced by (i) the amount of any
indebtedness secured by a lien affecting the Property that is prior to, or on a
parity with, the lien of this Security Instrument, and (ii) the value of any
property that is not "real property" within the meaning of Treas. Reg. Sections
1.860G-2 and 1.856-3(d).

      (u) Representations Generally. The representations and warranties
contained in this Security Instrument, and the review and inquiry made on behalf
of Borrower therefor, have all been made by Persons having the requisite
expertise and knowledge to provide such representations and warranties. No
representation, warranty or statement of fact made by or on behalf of Borrower
in this Security Instrument or in any certificate, document or schedule
furnished to Lender pursuant hereto, contains any untrue statement of a material
fact or omits to state any material fact necessary to make statements contained
therein or herein not misleading (which may be to Borrower's best knowledge
where so provided herein). There are no facts presently known to Borrower which
have not been disclosed to Lender which would, individually or in the aggregate,
have a Material Adverse Effect nor as far as Borrower can foresee might,
individually or in the aggregate, have a Material Adverse Effect.

      Section 2.06. Removal of Lien. (a) Borrower shall, at its expense,
maintain this Security Instrument as a first lien on the Property and shall keep
the Property free and clear of all liens and encumbrances of any kind and nature
other than the Permitted Encumbrances. Borrower shall, within thirty (30) days
of being served with notice thereof, promptly discharge of record, by bond or
otherwise, any such liens and, promptly upon request by Lender, shall deliver to
Lender evidence reasonably satisfactory to Lender of the discharge thereof.

      (b) Without limitation to the provisions of Section 2.06(a) hereof,
Borrower shall (i) pay, from time to time when the same shall become due, all
claims and demands of mechanics, materialmen, laborers, and others which, if
unpaid, might result in, or permit the creation of, a lien on the Property or
any part thereof, (ii) cause to be removed of record (by payment or posting of
bond or settlement or otherwise) any mechanics', materialmens', laborers' or
other lien on the Property, or any part thereof, or on the revenues, rents,
issues, income or profit arising therefrom, and (iii) in general, do or cause to
be done, without expense to Lender, everything reasonably necessary to preserve
in full the lien of this Security Instrument. If Borrower fails to comply with
the requirements of this Section 2.06(b), then, upon five (5) Business Days'
prior notice to Borrower, Lender may, but shall not be obligated to, pay any
such lien, and Borrower shall, within five (5) Business Days after Lender's
demand therefor, reimburse Lender for all sums so expended, together with
interest thereon at the Default Rate from the date advanced, all of which shall
be deemed part of the Debt. Nothing contained herein shall be deemed a consent
or request of Lender, express or implied, by inference or otherwise, to the
performance of any alteration, repair or other work by any contractor,
subcontractor or laborer or the furnishing of any materials by any materialmen
in connection therewith.

      (c) Notwithstanding the foregoing, Borrower may contest any lien (other
than a lien relating to non-payment of Impositions, the contest of which shall
be governed by Section 4.04 hereof) of the type set forth in subparagraph
(b)(ii) of this Section 2.06 provided that, following prior notice to Lender (i)
Borrower is contesting the validity of such lien with due diligence and in good
faith and by appropriate proceedings, without cost or expense to Lender or any
of its agents, employees, officers, or directors, (ii) Borrower shall preclude
the collection of, or other realization upon, any contested amount from the
Property or any revenues from or interest in the Property, (iii) neither the
Property nor any part thereof nor interest therein, shall be in any danger of
being sold, forfeited or lost by reason of such contest by Borrower, (iv) such
contest by Borrower shall not affect the ownership, use or occupancy of the
Property, (v) such contest by Borrower shall not subject Lender or Borrower to
the risk of civil or criminal liability (other than the civil liability of
Borrower for the amount of the lien in question), (vi) such lien is subordinate
to the lien of this Security Instrument, (vii) Borrower has not consented to
such lien, (viii) Borrower has given Lender prompt notice of the filing of such
lien and the bonding thereof by Borrower and, upon request by Lender from time
to time, notice of the status of such contest by Borrower and/or confirmation of
the

                                       31
<PAGE>

continuing satisfaction of the conditions set forth in this Section 2.06(c),
(ix) Borrower shall promptly pay the obligation secured by such lien upon a
final determination of Borrower's liability therefor, and (x) in the event any
such lien exceeds $25,000 or at any time after and during the occurrence of a
Default, Borrower shall deliver to Lender cash, a bond or other security
acceptable to Lender equal to 125% of the contested amount pursuant to
collateral arrangements reasonably satisfactory to Lender.

      Section 2.07. Cost of Defending and Upholding this Security Instrument
Lien. If any action or proceeding is commenced to which Lender is made a party
relating to the Loan Documents and/or the Property or Lender's interest therein
or in which it becomes necessary to defend or uphold the lien of this Security
Instrument or any other Loan Document, Borrower shall, on demand, reimburse
Lender for all expenses (including, without limitation, reasonable attorneys'
fees and disbursements) incurred by Lender in connection therewith, and such
sum, together with interest thereon at the Default Rate from and after such
demand until fully paid, shall constitute a part of the Debt.

      Section 2.08. Use of the Property. Borrower will use, or cause to be used,
the Property for such use as is permitted pursuant to applicable Legal
Requirements including, without limitation, under the certificate of occupancy
applicable to the Property, and which is required by the Loan Documents.
Borrower shall not suffer or permit the Property or any portion thereof to be
used by the public, any tenant, or any Person not subject to a Lease, in a
manner as is reasonably likely to impair Borrower's title to the Property, or in
such manner as may give rise to a claim or claims of adverse usage or adverse
possession by the public, or of implied dedication of the Property or any part
thereof.

      Section 2.09. Financial Reports. (a) Borrower will keep and maintain or
will cause to be kept and maintained on a Fiscal Year basis, in accordance with
GAAP (or such other accounting basis reasonably acceptable to Lender)
consistently applied, proper and accurate books, tax returns, records and
accounts reflecting (i) all of the financial affairs of Borrower and Guarantor
and (ii) all items of income and expense in connection with the operation of the
Property or in connection with any services, equipment or furnishings provided
in connection with the operation thereof, whether such income or expense may be
realized by Borrower or by any other Person whatsoever, excepting lessees
unrelated to and unaffiliated with Borrower who have leased from Borrower
portions of the Premises for the purpose of occupying the same. Lender shall
have the right from time to time at all times during normal business hours upon
reasonable notice to examine such books, tax returns, records and accounts at
the office of Borrower or other Person maintaining such books, tax returns,
records and accounts and to make such copies or extracts thereof as Lender shall
desire. After the occurrence of an Event of Default, Borrower shall pay any
costs and expenses incurred by Lender to examine Borrower's and Guarantor's
accounting records with respect to the Property, as Lender shall determine to be
necessary or appropriate in the protection of Lender's interest.

      (b) Borrower will furnish Lender (i) annually, within seventy-five (75)
days following the end of each Fiscal Year of AMERCO with a complete copy of
AMERCO's financial statements audited by AMERCO's Independent auditors; (ii)
quarterly with forty (40) days following the end of each fiscal quarter of
AMERCO with a complete copy of AMERCO's quarterly financial statements reviewed
by AMERCO's Independent auditors; (iii) annually within seventy-five (75) days
following the end of each Fiscal Year of AMERCO with a complete copy of each
Guarantor's financial statements, prepared in accordance with GAAP by an
in-house certified public accountant and certified by Borrower; and (iv)
quarterly within forty (40) days following the end of each fiscal quarter of
AMERCO with a complete copy of each Guarantor's financial statements, prepared
in accordance with GAAP by an in-house certified public accountant and certified
by Borrower. Together with such financial statements, Borrower shall deliver
Borrower's financial statements prepared in accordance with GAAP (or such other
accounting basis reasonably acceptable to Lender) consistently applied covering
(i) all of the financial affairs of Borrower and (ii) the operation of the
Property for such Fiscal Year or fiscal quarter, as applicable, and containing a
statement of revenues and expenses, a statement of assets and liabilities and a
statement of Borrower's equity and Borrower shall furnish to Lender an Officer's
Certificate certifying as of the date thereof (1) that the financial statements
accurately represent the results of operations and financial condition of
Borrower and the Property all in accordance with GAAP (or such other accounting
basis reasonably acceptable to Lender) consistently applied, and (2) whether
there exists an event or circumstance which constitutes, or which upon notice or
lapse of time or both would constitute, a Default under the Note or any other
Loan Document executed and delivered by

                                       32
<PAGE>

Borrower, and if such event or circumstance exists, the nature thereof, the
period of time it has existed and the action then being taken to remedy such
event or circumstance.

      (c) Borrower will furnish Lender monthly, within sixty (60) days following
the end of each month, with a true, complete and correct cash flow statement
with respect to the Property in the form attached hereto as EXHIBIT E and made a
part hereof, showing (i) all cash receipts of any kind whatsoever and all cash
payments and disbursements, and (ii) year-to-date summaries of such cash
receipts, payments and disbursements together with a certification of Manager
stating that such cash flow statement is true, complete and correct and a list
of all litigation and proceedings affecting Borrower or the Property in which
the amount involved is $250,000 or more, if not covered by insurance (or
$1,000,000 or more whether or not covered by insurance).

      (d) Borrower will furnish Lender monthly, within sixty (60) days following
the end of each month, with a certification of Manager stating that all
Operating Expenses with respect to the Property which had accrued as of the last
day of the month preceding the delivery of the cash flow statement referred to
in clause (c) above have been fully paid or otherwise reserved or provided for
by Manager (any such certification or any certification furnished by a Manager
pursuant to clause (c) above, a "Manager Certification").

      (e) Borrower will furnish Lender annually, upon request by Lender
therefor, within forty-five (45) days following receipt of such request, with a
true, complete and correct (i) "unitmix" report for the Property which notes the
number of self-storage units that are rented on the basis of the size of the
unit and includes the security deposit, if any, held by Borrower, the space
covered and the arrearages for such tenant, if any, and (ii) rent roll for the
Property with respect to all commercial tenants, including a list of which
tenants are in default under their respective Leases, dated as of the date of
Lender's request, identifying each tenant, the monthly rent and additional rent,
if any, payable by such tenant, the expiration date of such tenant's Lease, the
security deposit, if any, held by Borrower under the Lease, the space covered by
the Lease, and the arrearages for such tenant, if any, and each such "unitmix"
report and rent roll shall be accompanied by an Officer's Certificate, dated as
of the date of the delivery of such "unitmix" report or rent roll, certifying
that such "unitmix" report or rent roll is true, correct and complete in all
material respects as of its date.

      (f) Borrower shall furnish to Lender, within the later of sixty (60) days
after Lender's request therefor and five (5) days following the date on which
such item is available, with such further detailed information with respect to
the operation of the Property and the financial affairs of Borrower as may be
reasonably requested by Lender.

      (g) Borrower shall cause Manager to furnish to Lender, within forty-five
(45) days after receipt of Lender's written request, a schedule of tenant
security deposits, together with a certification of Manager as to the balance in
the Security Deposit Account and that such tenant security deposits are being
held in accordance with all Legal Requirements.

      (h) Borrower will furnish Lender annually, within one hundred and twenty
(120) days after the end of each Fiscal Year, with a report setting forth (i)
the Net Operating Income for such Fiscal Year, (ii) the average occupancy rate
of the Property during such Fiscal Year, (iii) the capital repairs, replacements
and improvements performed at the Property during such Fiscal Year and the
aggregate Recurring Replacement Expenditures made in connection therewith, and
(iv) the balance contained in each of the Sub-Accounts as of the end of such
Fiscal Year (which balance Lender shall provide upon Borrower's written request
therefor).

      (i) Borrower shall and shall cause Guarantor to furnish to Lender
annually, within sixty (60) days of filing, its respective tax return, a copy of
such tax return.

      (j) If a Trigger Event has occurred and is continuing, Borrower shall
submit to Lender for Lender's written approval an Annual Budget not later than
sixty (60) days prior to the commencement of each Fiscal Year or, if a Trigger
Event occurs subsequent to a date which is sixty (60) days prior to the
commencement of a Fiscal Year, within sixty (60) days of the occurrence of the
Trigger Event, in form satisfactory to Lender setting forth in reasonable detail
budgeted monthly operating income and monthly operating capital and other
expenses for the

                                       33
<PAGE>

Property. Each Annual Budget shall contain, among other things, limitations on
management fees, third party service fees, and other expenses as Borrower may
reasonably determine. Lender shall have the right to approve such Annual Budget
which approval shall not be unreasonably withheld, and in the event that Lender
objects to the proposed Annual Budget submitted by Borrower, Lender shall advise
Borrower of such objections within fifteen (15) days after receipt thereof (and
deliver to Borrower a reasonably detailed description of such objections) and
Borrower shall, within three (3) days after receipt of notice of any such
objections, revise such Annual Budget and resubmit the same to Lender. Lender
shall advise Borrower of any objections to such revised Annual Budget within ten
(10) days after receipt thereof (and deliver to Borrower a reasonably detailed
description of such objections) and Borrower shall revise the same in accordance
with the process described herein until Lender approves an Annual Budget,
provided, however, that if Lender shall not advise Borrower of its objections to
any proposed Annual Budget within the applicable time period set forth in this
Section, then such proposed Annual Budget shall be deemed approved by Lender.
Until such time that Lender approves a proposed Annual Budget, the most recently
Approved Annual Budget shall apply; provided that, such Approved Annual Budget
shall be adjusted to reflect actual increases in Basic Carrying Costs and to
delete any non-recurring expenses and provided, further, if there is no approved
Annual Budget for the prior Fiscal Year, Lender shall utilize the actual
expenses set forth in the cash flow statements delivered to Lender pursuant to
Section 2.09(c) with respect to the prior Fiscal Year adjusted to reflect actual
increases in Basic Carrying Costs and to delete non-recurring expenses. In the
event that Borrower must incur an Extraordinary Expense, then Borrower shall
promptly deliver to Lender a reasonably detailed explanation of such proposed
Extraordinary Expense for Lender's approval, which approval may be granted or
denied in Lender's sole and absolute discretion.

      (k) In the event that Borrower fails to deliver any of the financial
statements, reports or other information required to be delivered to Lender
pursuant to this Section 2.09 on or prior to their due dates, if any such
failure shall continue for ten (10) days following notice thereof from Lender,
Borrower shall pay to Lender on each Payment Date for each month or portion
thereof that any such financial statement, report or other information remains
undelivered, an administrative fee in the amount of Five Thousand Dollars
($5,000) multiplied by the number of undelivered statements, reports or other
items. Borrower agrees that such administrative fee (i) is a fair and reasonable
fee necessary to compensate Lender for its additional administrative costs and
increased costs relating to Borrower's failure to deliver the aforementioned
statements, reports or other items as and when required hereunder and (ii) is
not a penalty.

      (l) Borrower may, with respect to the information requested in Section
2.09(a)-(j), (i) to the extent permitted by law, provide consolidated tax
returns and consolidated financial statements and (ii) permit its assets to be
listed on the financial statements of an Affiliate if permitted by GAAP;
provided, however, that any consolidated financial statement shall indicate that
its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated entity.

      Section 2.10. Litigation. Borrower will give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened (in
writing) against Borrower which might have a Material Adverse Effect.

      Section 2.11. Updates of Representations. Borrower shall deliver to Lender
within ten (10) days of the request of Lender an Officer's Certificate updating
all of the representations and warranties contained in this Security Instrument
and the other Loan Documents and certifying that all of the representations and
warranties contained in this Security Instrument and the other Loan Documents,
as updated pursuant to such Officer's Certificate, are true, accurate and
complete as of the date of such Officer's Certificate.

                 ARTICLE III: INSURANCE AND CASUALTY RESTORATION

      Section 3.01. Insurance Coverage. (a) Borrower shall, at its expense,
maintain or cause to be maintained the following insurance coverages with
respect to the Property during the term of this Security Instrument:

                                       34
<PAGE>

            (i) Insurance against loss or damage by fire, casualty and other
      hazards included in an "all-risk" extended coverage endorsement or its
      equivalent, with such endorsements as Lender may from time to time
      reasonably require and which are customarily required by Institutional
      Lenders of similar properties similarly situated, including, without
      limitation, if the Property constitutes a legal non-conforming use, an
      ordinance of law coverage endorsement which contains "Demolition Cost",
      "Loss Due to Operation of Law" and "Increased Cost of Construction"
      coverages, covering the Property in an amount not less than the greater of
      (A) 100% of the insurable replacement value of the Property (exclusive of
      the Premises and footings and foundations) and (B) such other amount as is
      necessary to prevent any reduction in such policy by reason of and to
      prevent Borrower, Lender or any other insured thereunder from being deemed
      to be a co-insurer. Not less frequently than once every three (3) years,
      Borrower, at its option, shall either (A) have the Appraisal updated or
      obtain a new appraisal of the Property, (B) have a valuation of the
      Property made by or for its insurance carrier conducted by an appraiser
      experienced in valuing properties of similar type to that of the Property
      which are in the geographical area in which the Property is located or (C)
      provide such other evidence as will, in Lender's sole judgment, enable
      Lender to determine whether there shall have been an increase in the
      insurable value of the Property and Borrower shall deliver such updated
      Appraisal, new appraisal, insurance valuation or other evidence acceptable
      to Lender, as the case may be, and, if such updated Appraisal, new
      appraisal, insurance valuation, or other evidence acceptable to Lender
      reflects an increase in the insurable value of the Property, the amount of
      insurance required hereunder shall be increased accordingly and Borrower
      shall deliver evidence satisfactory to Lender that such policy has been so
      increased.

            (ii) Commercial comprehensive general liability insurance against
      claims for personal and bodily injury and/or death to one or more persons
      or property damage, occurring on, in or about the Property (including the
      adjoining streets, sidewalks and passageways therein) in such amounts as
      Lender may from time to time reasonably require (but in no event shall
      Lender's requirements be increased more frequently than once during each
      twelve (12) month period) and which are customarily required by
      Institutional Lenders for similar properties similarly situated, but not
      less than $1,000,000 per occurrence and $2,000,000 general aggregate on a
      per location basis and, in addition thereto, not less than $75,000,000
      excess and/or umbrella liability insurance shall be maintained for any and
      all claims.

            (iii) Business interruption, rent loss or other similar insurance
      (A) with loss payable to Lender, (B) covering all risks required to be
      covered by the insurance provided for in Section 3.01(a)(i) hereof and (C)
      in an amount not less than 100% of the projected fixed or base rent plus
      percentage rent for the succeeding twelve (12) month period based on an
      occupancy rate of 100%. The amount of such insurance shall be determined
      upon the execution of this Security Instrument, and not more frequently
      than once each calendar year thereafter based on Borrower's reasonable
      estimate of projected fixed or base rent plus percentage rent, from the
      Property for the next succeeding twelve (12) months. In the event the
      Property shall be damaged or destroyed, Borrower shall and hereby does
      assign to Lender all payment of claims under the policies of such
      insurance, and all amounts payable thereunder, and all net amounts, shall
      be collected by Lender under such policies and shall be applied in
      accordance with this Security Instrument; provided, however, that nothing
      herein contained shall be deemed to relieve Borrower of its obligations to
      timely pay all amounts due under the Loan Documents.

            (iv) War risk insurance when such insurance is obtainable from the
      United States of America or any agency or instrumentality thereof at
      reasonable rates (for the maximum amount of insurance obtainable) and if
      requested by Lender, and such insurance is then customarily required by
      Institutional Lenders of similar properties similarly situated.

            (v) Insurance against loss or damages from (A) leakage of sprinkler
      systems and (B) explosion of steam boilers, air conditioning equipment,
      pressure vessels or similar apparatus now or hereafter installed at the
      Property, in such amounts as Lender may from time to time reasonably
      require and which are then customarily required by Institutional Lenders
      of similar properties similarly situated.

            (vi) Flood insurance in an amount equal to the full insurable value
      of the Property or the maximum amount available, whichever is less, if the
      Improvements are located in an area designated by the

                                       35
<PAGE>

      Secretary of Housing and Urban Development as being "an area of special
      flood hazard" under the National Flood Insurance Program (i.e., having a
      one percent or greater chance of flooding), and if flood insurance is
      available under the National Flood Insurance Act.

            (vii) Worker's compensation insurance or other similar insurance
      which may be required by Governmental Authorities or Legal Requirements.

            (viii) Intentionally omitted.

            (ix) Insurance against damage resulting from acts of terrorism, or
      an insurance policy without an exclusion for damages resulting from
      terrorism, on terms consistent with the commercial property insurance
      policy required under subsections (i) (ii) and (iii) above.

            (x) Such other insurance as may from time to time be required by
      Lender and which is then customarily required by Institutional Lenders for
      similar properties similarly situated, against other insurable hazards,
      including, but not limited to, malicious mischief, vandalism, sinkhole and
      mine subsidence, mold, spores and fungus, windstorm and/or earthquake, due
      regard to be given to the size and type of the Premises, Improvements,
      Fixtures and Equipment and their location, construction and use.

      (b) If Borrower is a partnership or limited liability company, Borrower
shall cause the General Partners to maintain fidelity insurance in an amount
equal to or greater than the annual Operating Income of the Property for the six
(6) month period immediately preceding the date on which the premium for such
insurance is due and payable.

      (c) Borrower shall cause any Manager of the Property to maintain fidelity
insurance in an amount equal to or greater than the annual Operating Income of
the Property for the six (6) month period immediately preceding the date on
which the premium for such insurance is due and payable or such lesser amount as
Lender shall approve.

      Section 3.02. Policy Terms. (a) All insurance required by this Article III
shall be in the form (other than with respect to Sections 3.01(a)(vi) and (vii)
above when insurance in those two sub-sections is placed with a governmental
agency or instrumentality on such agency's forms) and amount and with
deductibles as, from time to time, shall be reasonably acceptable to Lender,
under valid and enforceable policies issued by financially responsible insurers
authorized to do business in the State where the Property is located, with a
general policyholder's service rating of not less than A and a financial rating
of not less than VIII as rated in the most currently available Best's Insurance
Reports (or the equivalent, if such rating system shall hereafter be altered or
replaced) and shall have a claims paying ability rating and/or financial
strength rating, as applicable, of not less than "A" (or its equivalent) or such
lower claims paying ability rating and/or financial strength rating, as
applicable, as Lender shall, in its sole and absolute discretion, consent to,
from a Rating Agency (one of which after a Securitization in which Standard &
Poor's rates any securities issued in connection with such Securitization, shall
be Standard & Poor's) or by a syndicate of insurers through which at least 75%
of the coverage (if there are four (4) or fewer members of such syndicate) or at
least 60% of the coverage (if there are five (5) or more members of the
syndicate) is with carriers having claims-paying ability or financial strength
ratings, as applicable, of "A" (or its equivalent) from the Ratings Agencies,
provided that all members of the syndicate shall have claims-paying ability
ratings and/or financial strength ratings, as applicable, of not less than "BBB"
(or its equivalent) from the Ratings Agencies. Lender acknowledges that so long
as the claims paying ability rating and/or financial strength rating, as
applicable, of Commonwealth is "BBB" (or its equivalent), Commonwealth shall be
an acceptable insurer until the end of the current policy term. Originals or
certified copies of all insurance policies shall be delivered to and held by
Lender. All such policies (except policies for worker's compensation) shall name
Lender, its successors and/or assigns as an additional named insured, shall
provide for loss payable to Lender, its successors and/or assigns and shall
contain (or have attached): (i) standard "non-contributory mortgagee"
endorsement or its equivalent relating, inter alia, to recovery by Lender
notwithstanding the negligent or willful acts or omissions of Borrower; (ii) a
waiver of subrogation endorsement as to Lender; (iii) an endorsement indicating
that neither Lender nor Borrower shall be or be deemed to be a co-insurer with
respect to any casualty risk insured by such policies and shall provide for a

                                       36
<PAGE>

deductible per loss of an amount not more than the lesser of (x) that which is
customarily maintained by owners of similar properties similarly situated and
(y) five percent (5%) of the Net Operating Income, and (iv) a provision that
such policies shall not be canceled, terminated, denied renewal or amended,
including, without limitation, any amendment reducing the scope or limits of
coverage, without at least thirty (30) days' prior written notice to Lender in
each instance. Not less than thirty (30) days prior to the expiration dates of
the insurance policies obtained pursuant to this Security Instrument, originals
or certified copies of renewals of such policies (or certificates evidencing
such renewals) bearing notations evidencing the payment of premiums or
accompanied by other reasonable evidence of such payment (which premiums shall
not be paid by Borrower through or by any financing arrangement which would
entitle an insurer to terminate a policy) shall be delivered by Borrower to
Lender. Borrower shall not carry separate insurance, concurrent in kind or form
or contributing in the event of loss, with any insurance required under this
Article III.

      (b) If Borrower fails to maintain and deliver to Lender the original
policies or certificates of insurance required by this Security Instrument, or
if there are insufficient funds in the Basic Carrying Costs Sub-Account to pay
the premiums for same, Lender may, at its option, procure such insurance, and
Borrower shall pay, or as the case may be, reimburse Lender for, all premiums
thereon promptly, upon demand by Lender, with interest thereon at the Default
Rate from the date paid by Lender to the date of repayment and such sum shall
constitute a part of the Debt.

      (c) Borrower shall notify Lender of the renewal premium of each insurance
policy and Lender shall be entitled to pay such amount on behalf of Borrower
from the Basic Carrying Costs Sub-Account. With respect to insurance policies
which require periodic payments (i.e., monthly or quarterly) of premiums, Lender
shall be entitled to pay such amounts fifteen (15) days (or such lesser number
of days as Lender shall determine) prior to the respective due dates of such
installments.

      (d) The insurance required by this Security Instrument may, at the option
of Borrower, be effected by blanket and/or umbrella policies issued to Borrower
covering the Property provided that, in each case, the policies otherwise comply
with the provisions of this Security Instrument and allocate to the Property,
from time to time (but in no event less than once a year), the coverage
specified by this Security Instrument, without possibility of reduction or
coinsurance by reason of, or damage to, any other property (real or personal)
named therein. If the insurance required by this Security Instrument shall be
effected by any such blanket or umbrella policies, Borrower shall furnish to
Lender (i) original policies or certified copies thereof, or an original
certificate of insurance together with reasonable access to the original of such
policy to review such policy's coverage of the Property, with schedules attached
thereto showing the amount of the insurance provided under such policies
applicable to the Property and (ii) an Officer's Certificate setting forth (A)
the number of properties covered by such policy, (B) the location by city (if
available, otherwise, county) and state of the properties, (C) the average
square footage of the properties, (D) a brief description of the typical
construction type included in the blanket policy and (E) such other information
as Lender may reasonably request.

      Section 3.03. Assignment of Policies. (a) Borrower hereby assigns to
Lender the proceeds of all insurance (other than worker's compensation and
liability insurance) obtained pursuant to this Security Instrument, all of which
proceeds shall be payable to Lender as collateral and further security for the
payment of the Debt and the performance of Borrower's obligations hereunder and
under the other Loan Documents, and Borrower hereby authorizes and directs the
issuer of any such insurance to make payment of such proceeds directly to
Lender. Except as otherwise expressly provided in Section 3.04 or elsewhere in
this Article III, Lender shall have the option, in its discretion, and without
regard to the adequacy of its security, to apply all or any part of the proceeds
it may receive pursuant to this Article in such manner as Lender may elect to
any one or more of the following: (i) the payment of the Debt, whether or not
then due, in any proportion or priority as Lender, in its discretion, may elect,
(ii) the repair or restoration of the Property, (iii) the cure of any Default or
(iv) the reimbursement of the costs and expenses of Lender incurred pursuant to
the terms hereof in connection with the recovery of the Insurance Proceeds.
Nothing herein contained shall be deemed to excuse Borrower from repairing or
maintaining the Property as provided in this Security Instrument or restoring
all damage or destruction to the Property, regardless of the sufficiency of the
Insurance Proceeds, and the application or release by Lender of any Insurance
Proceeds shall not cure or waive any Default or notice of Default.

                                       37

<PAGE>

      (b) In the event of the foreclosure of this Security Instrument or any
other transfer of title or assignment of all or any part of the Property in
extinguishment, in whole or in part, of the Debt, all right, title and interest
of Borrower in and to all policies of insurance required by this Security
Instrument shall inure to the benefit of the successor in interest to Borrower
or the purchaser of the Property. If, prior to the receipt by Lender of any
proceeds, the Property or any portion thereof shall have been sold on
foreclosure of this Security Instrument or by deed in lieu thereof or otherwise,
or any claim under such insurance policy arising during the term of this
Security Instrument is not paid until after the extinguishment of the Debt, and
Lender shall not have received the entire amount of the Debt outstanding at the
time of such extinguishment, whether or not a deficiency judgment on this
Security Instrument shall have been sought or recovered or denied, then, the
proceeds of any such insurance to the extent of the amount of the Debt not so
received, shall be paid to and be the property of Lender, together with interest
thereon at the Default Rate, and the reasonable attorney's fees, costs and
disbursements incurred by Lender in connection with the collection of the
proceeds which shall be paid to Lender and Borrower hereby assigns, transfers
and sets over to Lender all of Borrower's right, title and interest in and to
such proceeds. Notwithstanding any provisions of this Security Instrument to the
contrary, Lender shall not be deemed to be a trustee or other fiduciary with
respect to its receipt of any such proceeds, which may be commingled with any
other monies of Lender; provided, however, that Lender shall use such proceeds
for the purposes and in the manner permitted by this Security Instrument. Any
proceeds deposited with Lender shall be held by Lender in an interest-bearing
account, but Lender makes no representation or warranty as to the rate or amount
of interest, if any, which may accrue on such deposit and shall have no
liability in connection therewith. Interest accrued, if any, on the proceeds
shall be deemed to constitute a part of the proceeds for purposes of this
Security Instrument. The provisions of this Section 3.03(b) shall survive the
termination of this Security Instrument by foreclosure, deed in lieu thereof or
otherwise as a consequence of the exercise of the rights and remedies of Lender
hereunder after a Default.

      Section 3.04. Casualty Restoration. (a) (i) In the event of any damage to
or destruction of the Property, Borrower shall give prompt written notice to
Lender (which notice shall set forth Borrower's good faith estimate of the cost
of repairing or restoring such damage or destruction, or if Borrower cannot
reasonably estimate the anticipated cost of restoration, Borrower shall
nonetheless give Lender prompt notice of the occurrence of such damage or
destruction, and will diligently proceed to obtain estimates to enable Borrower
to quantify the anticipated cost and time required for such restoration,
whereupon Borrower shall promptly notify Lender of such good faith estimate)
and, provided that restoration does not violate any Legal Requirements, Borrower
shall promptly commence and diligently prosecute to completion the repair,
restoration or rebuilding of the Property so damaged or destroyed to a condition
such that the Property shall be at least equal in value to that immediately
prior to the damage to the extent practicable, in full compliance with all Legal
Requirements and the provisions of all Leases, and in accordance with Section
3.04(b) below. Such repair, restoration or rebuilding of the Property are
sometimes hereinafter collectively referred to as the "Work".

            (ii) Borrower shall not adjust, compromise or settle any claim for
      Insurance Proceeds without the prior written consent of Lender, which
      shall not be unreasonably withheld or delayed and Lender shall have the
      right, at Borrower's sole cost and expense, to participate in any
      settlement or adjustment of Insurance Proceeds; provided, however, that,
      except during the continuance of an Event of Default, Lender's consent
      shall not be required and Lender shall not have the right to participate
      in any settlement or adjustment of Insurance Proceeds with respect to the
      adjustment, compromising or settlement of any claim for Insurance Proceeds
      in an amount less than $300,000.

            (iii) Subject to Section 3.04(a)(iv), Lender shall apply any
      Insurance Proceeds which it may receive towards the Work in accordance
      with Section 3.04(b) and the other applicable sections of this Article
      III.

            (iv) If (A) a Default shall have occurred and is then continuing,
      (B) Lender is not reasonably satisfied that the Debt Service Coverage,
      after substantial completion of the Work, will be at least equal to the
      Required Debt Service Coverage, (C) more than thirty percent (30%) of the
      reasonably estimated fair market value of the Property is damaged or
      destroyed, (D) Lender is not reasonably satisfied that the Work can be
      completed six (6) months prior to Maturity or (E) Lender is not reasonably
      satisfied that the Work can be completed within six (6) months of the
      damage to or destruction of the Property (each, a "Substantial Casualty"),
      Lender shall have the option, in its sole discretion to apply any
      Insurance Proceeds

                                       38

<PAGE>

      it may receive pursuant to this Security Instrument (less any cost to
      Lender of recovering and paying out such proceeds incurred pursuant to the
      terms hereof and not otherwise reimbursed to Lender, including, without
      limitation, reasonable attorneys' fees and expenses) to the payment of the
      Debt, without any prepayment fee or charge of any kind (in which event,
      notwithstanding any other term or provision hereof and, provided no Event
      of Default has occurred and is continuing, Borrower shall have the right
      to repay, without any prepayment fee or charge of any kind, the Release
      Price with respect to the Property and obtain a Release of the Property),
      or to allow such proceeds to be used for the Work pursuant to the terms
      and subject to the conditions of Section 3.04(b) hereof and the other
      applicable sections of this Article III.

            (v) In the event that Lender elects or is obligated hereunder to
      allow Insurance Proceeds to be used for the Work, any excess proceeds
      remaining after completion of such Work shall be applied to the payment of
      the Debt without any prepayment fee or charge of any kind.

      (b) If any Condemnation Proceeds in accordance with Section 6.01(a), or
any Insurance Proceeds in accordance with Section 3.04(a), are to be applied to
the repair, restoration or rebuilding of the Property, then such proceeds shall
be deposited into a segregated interest-bearing bank account at the Bank, which
shall be an Eligible Account, held by Lender and shall be paid out from time to
time to Borrower as the Work progresses (less any cost to Lender of recovering
and paying out such proceeds, including, without limitation, reasonable
attorneys' fees and costs allocable to inspecting the Work and the plans and
specifications therefor) subject to Section 5.13 hereof and to all of the
following conditions:

            (i) An architect or engineer selected by Borrower and reasonably
      acceptable to Lender (an "Architect" or "Engineer") or a Person otherwise
      reasonably acceptable to Lender, shall have delivered to Lender a
      certificate estimating the cost of completing the Work, and, if the amount
      set forth therein is more than the sum of the amount of Insurance Proceeds
      then being held by Lender in connection with a casualty and amounts agreed
      to be paid as part of a final settlement under the insurance policy upon
      or before completion of the Work, Borrower shall have delivered to Lender
      (A) cash collateral in an amount equal to such excess, (B) an
      unconditional, irrevocable, clean sight draft letter of credit, in form,
      substance and issued by a bank reasonably acceptable to Lender, in the
      amount of such excess and draws on such letter of credit shall be made by
      Lender to make payments pursuant to this Article III following exhaustion
      of the Insurance Proceeds therefore or (C) a completion bond in form,
      substance and issued by a surety company reasonably acceptable to Lender.

            (ii) If the cost of the Work is reasonably estimated by an Architect
      or Engineer in a certification reasonably acceptable to Lender to be equal
      to or exceed ten percent (10%) of the Allocated Loan Amount, such Work
      shall be performed under the supervision of an Architect or Engineer, it
      being understood that the plans and specifications with respect thereto
      shall provide for Work so that, upon completion thereof, the Property
      shall be at least equal in replacement value and general utility to the
      Property prior to the damage or destruction.

            (iii) Each request for payment shall be made on not less than ten
      (10) days' prior notice to Lender and shall be accompanied by a
      certificate of an Architect or Engineer, or, if the Work is not required
      to be supervised by an Architect or Engineer, by an Officer's Certificate
      stating (A) that payment is for Work completed in compliance with the
      plans and specifications, if required under clause (ii) above, (B) that
      the sum requested is required to reimburse Borrower for payments by
      Borrower to date, or is due to the contractors, subcontractors,
      materialmen, laborers, engineers, architects or other Persons rendering
      services or materials for the Work (giving a brief description of such
      services and materials), and that when added to all sums previously paid
      out by Lender does not exceed the value of the Work done to the date of
      such certificate, (C) if the sum requested is to cover payment relating to
      repair and restoration of personal property required or relating to the
      Property, that title to the personal property items covered by the request
      for payment is vested in Borrower (unless Borrower is lessee of such
      personal property), and (D) that the Insurance Proceeds and other amounts
      deposited by Borrower held by Lender after such payment is more than the
      estimated remaining cost to complete such Work; provided, however, that if
      such certificate is given by an Architect or Engineer, such Architect or
      Engineer shall certify as to clause (A) above, and such Officer's
      Certificate shall certify as to the remaining clauses above, and provided,
      further, that Lender shall

                                       39

<PAGE>

      not be obligated to disburse such funds if Lender determines, in Lender's
      reasonable discretion, that Borrower shall not be in compliance with this
      Section 3.04(b). Additionally, each request for payment shall contain a
      statement signed by Borrower stating that the requested payment is for
      Work satisfactorily done to date.

            (iv) Each request for payment shall be accompanied by waivers of
      lien, in customary form and substance, covering that part of the Work for
      which payment or reimbursement is being requested and, if required by
      Lender, a search prepared by a title company or licensed abstractor, or by
      other evidence satisfactory to Lender that there has not been filed with
      respect to the Property any mechanic's or other lien or instrument for
      retention of title relating to any part of the Work not discharged of
      record. Additionally, as to any personal property covered by the request
      for payment, Lender shall be furnished with evidence of having incurred a
      payment obligation therefor and such further evidence reasonably
      satisfactory to assure Lender that UCC filings therefor provide a valid
      first lien on the personal property.

            (v) Lender shall have the right to inspect the Work at all
      reasonable times upon reasonable prior notice and may condition any
      disbursement of Insurance Proceeds upon satisfactory compliance by
      Borrower with the provisions hereof. Neither the approval by Lender of any
      required plans and specifications for the Work nor the inspection by
      Lender of the Work shall make Lender responsible for the preparation of
      such plans and specifications, or the compliance of such plans and
      specifications of the Work, with any applicable law, regulation,
      ordinance, covenant or agreement.

            (vi) Insurance Proceeds shall not be disbursed more frequently than
      once every thirty (30) days.

            (vii) Until such time as the Work has been substantially completed,
      Lender shall not be obligated to disburse up to ten percent (10%) of the
      cost of the Work (the "Retention Amount") to Borrower. Upon substantial
      completion of the Work, Borrower shall send notice thereof to Lender and,
      subject to the conditions of Section 3.04(b)(i)-(iv), Lender shall
      disburse one-half of the Retention Amount to Borrower; provided, however,
      that the remaining one-half of the Retention Amount shall be disbursed to
      Borrower when Lender shall have received copies of any and all final
      certificates of occupancy or other certificates, licenses and permits
      required for the ownership, occupancy and operation of the Property in
      accordance with all Legal Requirements. Borrower hereby covenants to
      diligently seek to obtain any such certificates, licenses and permits.

            (viii) Upon failure on the part of Borrower promptly to commence the
      Work or to proceed diligently and continuously to completion of the Work
      (in either case, other than due to Force Majeure), which failure shall
      continue after notice for thirty (30) days, Lender may apply any Insurance
      Proceeds or Condemnation Proceeds it then or thereafter holds to the
      payment of the Debt in accordance with the provisions of the Note;
      provided, however, that Lender shall be entitled to apply at any time all
      or any portion of the Insurance Proceeds or Condemnation Proceeds it then
      holds to the extent necessary to cure any Event of Default.

      (c) If Borrower (i) within ninety (90) days after the occurrence of any
damage to the Property or any portion thereof (or such shorter period as may be
required under any Major Space Lease) shall fail to submit to Lender for
approval plans and specifications (if required pursuant to Section 3.04(b)(ii)
hereof) for the Work (approved by the Architect and by all Governmental
Authorities whose approval is required), (ii) after any such plans and
specifications are approved by all Governmental Authorities, the Architect and
Lender, shall fail to promptly commence such Work (other than due to Force
Majeure) or (iii) shall fail to diligently prosecute such Work to completion
(other than due to Force Majeure), then, in addition to all other rights
available hereunder, at law or in equity, Lender, or any receiver of the
Property or any portion thereof, upon five (5) days' prior notice to Borrower
(except in the event of emergency in which case no notice shall be required),
may (but shall have no obligation to) perform or cause to be performed such
Work, and may take such other steps as it reasonably deems advisable. Borrower
hereby waives, for Borrower, any claim, other than for gross negligence or
willful misconduct, against Lender and any receiver arising out of any act or
omission of Lender or such receiver pursuant hereto, and Lender may apply all or
any portion of the Insurance Proceeds (without the need to fulfill any other
requirements of

                                       40

<PAGE>

this Section 3.04) to reimburse Lender and such receiver, for all costs not
reimbursed to Lender or such receiver upon demand together with interest thereon
at the Default Rate from the date such amounts are advanced until the same are
paid to Lender or the receiver.

      (d) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to collect and receive any Insurance Proceeds paid
with respect to any portion of the Property or the insurance policies required
to be maintained hereunder, and to endorse any checks, drafts or other
instruments representing any Insurance Proceeds whether payable by reason of
loss thereunder or otherwise.

      Section 3.05. Compliance with Insurance Requirements. Borrower promptly
shall comply with, and shall cause the Property to comply with, all Insurance
Requirements, even if such compliance requires structural changes or
improvements or would result in interference with the use or enjoyment of the
Property or any portion thereof provided Borrower shall have a right to contest
in good faith and with diligence such Insurance Requirements provided (a) no
Default shall exist during such contest and such contest shall not subject the
Property or any portion thereof to any lien or affect the priority of the lien
of this Security Instrument, (b) failure to comply with such Insurance
Requirements will not subject Lender or any of its agents, employees, officers
or directors to any civil or criminal liability, (c) such contest will not cause
any reduction in insurance coverage, (d) such contest shall not affect the
ownership, use or occupancy of the Property, (e) the Property or any part
thereof or any interest therein shall not be in any danger of being sold,
forfeited or lost by reason of such contest by Borrower, (f) Borrower has given
Lender prompt notice of such contest and, upon request by Lender from time to
time, notice of the status of such contest by Borrower and/or information of the
continuing satisfaction of the conditions set forth in clauses (a) through (e)
of this Section 3.05, (g) upon a final determination of such contest, Borrower
shall promptly comply with the requirements thereof, and (h) prior to and during
such contest, Borrower shall furnish to Lender security satisfactory to Lender,
in its reasonable discretion, against loss or injury by reason of such contest
or the non-compliance with such Insurance Requirement (and if such security is
cash, Lender shall deposit the same in an interest-bearing account and interest
accrued thereon, if any, shall be deemed to constitute a part of such security
for purposes of this Security Instrument, but Lender (i) makes no representation
or warranty as to the rate or amount of interest, if any, which may accrue
thereon and shall have no liability in connection therewith and (ii) shall not
be deemed to be a trustee or fiduciary with respect to its receipt of any such
security and any such security may be commingled with other monies of Lender).
If Borrower shall use the Property or any portion thereof in any manner which
could permit the insurer to cancel any insurance required to be provided
hereunder, Borrower immediately shall obtain a substitute policy which shall
satisfy the requirements of this Security Instrument and which shall be
effective on or prior to the date on which any such other insurance policy shall
be canceled. Borrower shall not by any action or omission invalidate any
insurance policy required to be carried hereunder unless such policy is replaced
as aforesaid, or materially increase the premiums on any such policy above the
normal premium charged for such policy. Borrower shall cooperate with Lender in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable to Lender in connection with the transaction contemplated
hereby.

      Section 3.06. Event of Default During Restoration. Notwithstanding
anything to the contrary contained in this Security Instrument including,
without limitation, the provisions of this Article III, if, at the time of any
casualty affecting the Property or any part thereof, or at any time during any
Work, or at any time that Lender is holding or is entitled to receive any
Insurance Proceeds pursuant to this Security Instrument, a Default exists and is
continuing (whether or not it constitutes an Event of Default), Lender shall
then have no obligation to make such proceeds available for Work and Lender
shall have the right and option, to be exercised in its sole and absolute
discretion and election, with respect to the Insurance Proceeds, either to
retain and apply such proceeds in reimbursement for the actual costs, fees and
expenses incurred by Lender in accordance with the terms hereof in connection
with the adjustment of the loss and any balance toward payment of the Debt in
such priority and proportions as Lender, in its sole discretion, shall deem
proper, or towards the Work, upon such terms and conditions as Lender shall
determine, or to cure any Event of Default, or to any one or more of the
foregoing as Lender, in its sole and absolute discretion, may determine. If
Lender shall receive and retain such Insurance Proceeds, the lien of this
Security Instrument shall be reduced only by the amount thereof received, after
reimbursement to Lender of expenses of collection, and actually applied by
Lender in reduction of the principal sum payable under the Note in accordance
with the Note.

                                       41

<PAGE>

      Section 3.07. Application of Proceeds to Debt Reduction. (a) No damage to
the Property, or any part thereof, by fire or other casualty whatsoever, whether
such damage be partial or total, shall relieve Borrower from its liability to
pay in full the Debt and to perform its obligations under this Security
Instrument and the other Loan Documents.

      (b) If any Insurance Proceeds are applied to reduce the Debt, Lender shall
apply the same in accordance with the provisions of the Note.

                             ARTICLE IV: IMPOSITIONS

      Section 4.01. Payment of Impositions, Utilities and Taxes, etc. (a)
Borrower shall pay or cause to be paid all Impositions at least five (5) days
prior to the date upon which any fine, penalty, interest or cost for nonpayment
is imposed, and furnish to Lender receipted bills of the appropriate taxing
authority or other documentation reasonably satisfactory to Lender evidencing
the payment thereof. If Borrower shall fail to pay any Imposition in accordance
with this Section and is not contesting or causing a contesting of such
Imposition in accordance with Section 4.04 hereof, or if there are insufficient
funds in the Basic Carrying Costs Sub-Account to pay any Imposition, Lender
shall have the right, but shall not be obligated, to pay that Imposition, and
Borrower shall repay to Lender, on demand, any amount paid by Lender, with
interest thereon at the Default Rate from the date of the advance thereof to the
date of repayment, and such amount shall constitute a portion of the Debt
secured by this Security Instrument and the other Cross-collateralized
Mortgages.

      (b) Borrower shall, prior to the date upon which any fine, penalty,
interest or cost for the nonpayment is imposed, pay or cause to be paid all
charges for electricity, power, gas, water and other services and utilities in
connection with the Property, and shall, upon request, deliver to Lender
receipts or other documentation reasonably satisfactory to Lender evidencing
payment thereof. If Borrower shall fail to pay any amount required to be paid by
Borrower pursuant to this Section 4.01 and is not contesting such charges in
accordance with Section 4.04 hereof, Lender shall have the right, but shall not
be obligated, to pay that amount, and Borrower will repay to Lender, on demand,
any amount paid by Lender with interest thereon at the Default Rate from the
date of the advance thereof to the date of repayment, and such amount shall
constitute a portion of the Debt secured by this Security Instrument and the
other Cross-collateralized Mortgages.

      (c) Borrower shall pay all taxes, charges, filing, registration and
recording fees, excises and levies imposed upon Lender by reason of or in
connection with its ownership of any Loan Document or any other instrument
related thereto, or resulting from the execution, delivery and recording of, or
the lien created by, or the obligation evidenced by, any of them, other than
income, franchise and other similar taxes imposed on Lender and shall pay all
corporate stamp taxes, if any, and other taxes, required to be paid on the Loan
Documents. If Borrower shall fail to make any such payment within ten (10) days
after written notice thereof from Lender, Lender shall have the right, but shall
not be obligated, to pay the amount due, and Borrower shall reimburse Lender
therefor, on demand, with interest thereon at the Default Rate from the date of
the advance thereof to the date of repayment, and such amount shall constitute a
portion of the Debt secured by this Security Instrument and the other
Cross-collateralized Mortgages.

      Section 4.02. Deduction from Value. In the event of the passage after the
date of this Security Instrument of any Legal Requirement deducting from the
value of the Property for the purpose of taxation, any lien thereon or changing
in any way the Legal Requirements now in force for the taxation of this Security
Instrument, the other Cross-collateralized Mortgages and/or the Debt for
federal, state or local purposes, or the manner of the operation of any such
taxes so as to adversely affect the interest of Lender, or imposing any tax or
other charge on any Loan Document, then Borrower will pay such tax, with
interest and penalties thereon, if any, within the statutory period. In the
event the payment of such tax or interest and penalties by Borrower would be
unlawful, or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then in any such event, Lender shall have the option, by
written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable, with no prepayment fee or charge of any kind.

                                       42

<PAGE>

      Section 4.03. No Joint Assessment. Borrower shall not consent to or
initiate the joint assessment of the Premises or the Improvements (a) with any
other real property constituting a separate tax lot and Borrower represents and
covenants that the Premises and the Improvements are and shall remain a separate
tax lot or (b) with any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to the Property as a single lien.

      Section 4.04. Right to Contest. Borrower shall have the right, after prior
notice to Lender, at its sole expense, to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender or any of its agents, employees, officers or directors, the validity,
amount or application of any Imposition or any charge described in Section
4.01(b), provided that (a) no Default or Event of Default shall exist during
such proceedings and such contest shall not (unless Borrower shall comply with
clause (d) of this Section 4.04) subject the Property or any portion thereof to
any lien or affect the priority of the lien of this Security Instrument, (b)
failure to pay such Imposition or charge will not subject Lender or any of its
agents, employees, officers or directors to any civil or criminal liability, (c)
the contest suspends enforcement of the Imposition or charge (unless Borrower
first pays the Imposition or charge), (d) prior to and during such contest,
Borrower shall furnish to Lender security satisfactory to Lender, in its
reasonable discretion, against loss or injury by reason of such contest or the
non-payment of such Imposition or charge (and if such security is cash, Lender
may deposit the same in an interest-bearing account and interest accrued
thereon, if any, shall be deemed to constitute a part of such security for
purposes of this Security Instrument, but Lender (i) makes no representation or
warranty as to the rate or amount of interest, if any, which may accrue thereon
and shall have no liability in connection therewith and (ii) shall not be deemed
to be a trustee or fiduciary with respect to its receipt of any such security
and any such security may be commingled with other monies of Lender), (e) such
contest shall not affect the ownership, use or occupancy of the Property, (f)
the Property or any part thereof or any interest therein shall not be in any
danger of being sold, forfeited or lost by reason of such contest by Borrower,
(g) Borrower has given Lender notice of the commencement of such contest and
upon request by Lender, from time to time, notice of the status of such contest
by Borrower and/or confirmation of the continuing satisfaction of clauses (a)
through (f) of this Section 4.04, and (h) upon a final determination of such
contest, Borrower shall promptly comply with the requirements thereof. Upon
completion of any contest, Borrower shall immediately pay the amount due, if
any, and deliver to Lender proof of the completion of the contest and payment of
the amount due, if any, following which Lender shall return the security, if
any, deposited with Lender pursuant to clause (d) of this Section 4.04. Borrower
shall not pay any Imposition in installments unless permitted by applicable
Legal Requirements, and shall, upon the request of Lender, deliver copies of all
notices and bills relating to any Imposition or other charge covered by this
Article IV to Lender.

      Section 4.05. No Credits on Account of the Debt. Borrower will not claim
or demand or be entitled to any credit or credits on account of the Debt for any
part of the Impositions assessed against the Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value of the
Property, or any part thereof, by reason of this Security Instrument or the
Debt. In the event such claim, credit or deduction shall be required by Legal
Requirements, Lender shall have the option, by written notice of not less than
ninety (90) days, to declare the Debt immediately due and payable, and Borrower
hereby agrees to pay such amounts not later than ninety (90) days after such
notice.

      Section 4.06. Documentary Stamps. If, at any time, the United States of
America, any State or Commonwealth thereof or any subdivision of any such State
shall require revenue or other stamps to be affixed to the Note, this Security
Instrument or any other Loan Document, or impose any other tax or charges on the
same, Borrower will pay the same, with interest and penalties thereon, if any.

                       ARTICLE V: CENTRAL CASH MANAGEMENT

      Section 5.01. Cash Flow. Borrower hereby acknowledges and agrees that the
Rent (which for the purposes of this Section 5.01 shall not include security
deposits from tenants under Leases held by Borrower and not applied towards
Rent) derived from the Property and Loss Proceeds shall be utilized (a) to fund
the Basic Carrying Costs Sub-Account, (b) to pay all amounts to become due and
payable under the Note by funding the Debt Service Payment Sub-Account, (c) to
fund the Recurring Replacement Reserve Sub-Account, (d)to fund the Operation and
Maintenance Expense Sub-Account and (e) to fund the Mez Payment Sub-Account.
Borrower shall cause Manager

                                       43

<PAGE>

to collect all security deposits from tenants under valid Leases, which shall be
held by Manager, as agent for Borrower, in accordance with applicable law, and
unless otherwise agreed to in writing by Lender, in a segregated demand deposit
bank account at such commercial or savings bank or banks as may be reasonably
satisfactory to Lender (the "Security Deposit Account"). Borrower shall notify
Lender of any security deposits held as letters of credit and, upon Lender's
request, such letters of credit shall be promptly delivered to Lender. Borrower
shall have no right to withdraw funds from the Security Deposit Account;
provided that, prior to the occurrence of an Event of Default, Borrower may
withdraw funds from the Security Deposit Account to refund or apply security
deposits as required by the Leases or by applicable Legal Requirements. After
the occurrence of an Event of Default, all withdrawals from the Security Deposit
Account must be approved by Lender. Manager shall collect all Rent and shall
deposit such funds within one (1) Business Day after receipt thereof in the Rent
Account, the name and address of the bank in which such account is located and
the account number of which to be identified in writing by Manager to Lender.
Borrower shall, or shall cause the Manager to, cause the Rent Account Bank to
enter into a lockbox agreement in form and substance reasonably acceptable to
Lender (the "Rent Account Agreement"). Pursuant to the Rent Account Agreement,
the bank in which the Rent Account is located (the "Rent Account Bank") has been
instructed that (a) prior to receipt of notice from Lender (a "Sweep Notice")
that a Trigger Event has occurred, all funds deposited in the Rent Account shall
be transferred to the Borrower Account not less often than one time per week,
and (b) from and after the receipt of a Sweep Notice from Lender, all funds
deposited in the Rent Account shall be automatically transferred through
automatic clearing house funds or by Federal wire to the Central Account prior
to 1:00 p.m. (New York City time) on each Business Day until receipt by such
bank of notice from Lender revoking the Sweep Notice. Lender shall provide the
Rent Account Bank with revocation of the Sweep Notice promptly upon the cure of
each Trigger Event. Lender may elect to change the financial institution in
which the Central Account shall be maintained; however, Lender shall give
Borrower and the Rent Account Bank not fewer than five (5) Business Days' prior
notice of such change. Neither Borrower nor Manager shall change the Rent
Account Bank or the Rent Account without the prior written consent of Lender.
All fees and charges of the bank(s) in which the Rent Account and the Central
Account is located shall be paid by Borrower. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
executing any Lockbox Agreement in the event Borrower fails to deliver any
executed Lockbox Agreement to Lender.

      Section 5.02. Establishment of Sub-Accounts. Lender has established the
Central Account in the name of Lender, as secured party and Borrower has
established the Rent Account in the joint names of Borrower and Lender. The Rent
Account and the Central Account shall be under the sole dominion and control of
Lender. From and after the occurrence of a Trigger Event, the Rent Account shall
be under the control of Lender pursuant to Section 5.01 hereof and Borrower
shall have no right of withdrawal from the Rent Account. Borrower hereby
irrevocably directs and authorizes Lender to withdraw funds from the Central
Account, all in accordance with the terms and conditions of this Security
Instrument. Borrower shall have no right of withdrawal in respect of the Central
Account or the Rent Account except as specifically provided herein. Each
transfer of funds to be made hereunder shall be made only to the extent that
funds are on deposit in the Central Account or the affected Sub-Account, and
Lender shall have no responsibility to make additional funds available in the
event that funds on deposit are insufficient. The Central Account shall contain
the Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account, the
Recurring Replacement Reserve Sub-Account, the Operation and Maintenance Expense
Sub-Account and the Mez Payment Sub-Account, each of which accounts shall be
Eligible Accounts (each a "Sub-Account" and collectively, the "Sub-Accounts") to
which certain funds shall be allocated and from which disbursements shall be
made pursuant to the terms of this Security Instrument. In addition, on the date
hereof the Central Account shall also contain a Sub-Account entitled the
"Engineering Escrow Sub-Account" which initially shall be funded with the
Initial Engineering Deposit (representing sums applicable to certain engineering
work as set forth on EXHIBIT D, attached hereto and made a part hereof
(collectively, "Required Engineering Work")). Disbursements from the Engineering
Escrow Sub-Account shall be made in accordance with Section 5.12 hereof.

      Section 5.03. Intentionally Omitted.

      Section 5.04. Intentionally Omitted.

      Section 5.05. Monthly Funding of Sub-Accounts. On or before each Payment
Date during the term of the Loan, commencing on the first (1st) Payment Date
occurring after the month in which the Loan is initially funded, Borrower shall
pay, or cause to be paid by Federal wire or automatic clearing house funds to
the Central

                                       44

<PAGE>

Account, the Basic Carrying Costs Monthly Installment, the Required Debt Service
Payment, the Recurring Replacement Reserve Monthly Installment, the Mez Payment
Amount and all sums required to be deposited into the Operation and Maintenance
Expense Sub-Account pursuant to clauses (a) through (g) of this Section 5.05 and
all funds transferred or deposited into the Central Account shall be allocated
among the Sub-Accounts as follows and in the following priority:

      (a) first, to the Basic Carrying Costs Sub-Account, until an amount equal
to the Basic Carrying Costs Monthly Installment for such Interest Accrual Period
has been allocated to the Basic Carrying Costs Sub-Account;

      (b) second, to the Debt Service Payment Sub-Account, until an amount equal
to the Required Debt Service Payment for the Payment Date occurring for such
Interest Accrual Period has been allocated to the Debt Service Payment
Sub-Account;

      (c) third, to the Recurring Replacement Reserve Sub-Account, until an
amount equal to the Recurring Replacement Reserve Monthly Installment for such
Interest Accrual Period has been allocated to the Recurring Replacement Reserve
Sub-Account;

      (d) fourth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the Cash Expenses, other
than management fees payable to Affiliates of Borrower, for such Interest
Accrual Period pursuant to the related Approved Annual Budget;

      (e) fifth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Net Capital Expenditures for such Interest Accrual Period pursuant to the
related Approved Annual Budget;

      (f) sixth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Extraordinary Expenses approved by Lender for such Interest Accrual Period; and

      (g) seventh, but only if an Event of Default is not then continuing, to
the Mez Payment Sub-Account until an amount equal to the Mez Payment Amount has
been allocated to the Mez Payment Sub-Account.

      Lender shall notify Borrower as soon as reasonably practicable after the
amounts set forth in clauses (a) through (g) above have been transferred or
deposited into the Central Account and allocated as aforesaid to the extent such
deposits are fully made prior to the Payment Date in such Interest Accrual
Period. Provided that (I) no Event of Default has occurred and is continuing and
(II) Lender has received the Manager's Certification referred to in Section
2.09(d) hereof for the most recent period for which the same is due, Lender
agrees that in each Interest Accrual Period any amounts deposited into or
remaining in the Central Account after the Sub-Accounts have been funded in
accordance with clauses (a) through (g) above with respect to such Interest
Accrual Period and any periods prior thereto, shall be disbursed by Lender to
Borrower on the Payment Date in such Interest Accrual Period. The balance of the
funds distributed to, or withdrawn by, Borrower after payment of all Operating
Expenses by or on behalf of Borrower may be retained by Borrower. After the
occurrence, and during the continuance, of an Event of Default, no funds held in
the Central Account or the Rent Account shall be distributed to, or withdrawn
by, Borrower, and Lender shall have the right to apply all or any portion of the
funds held in either or both of such accounts and any Sub-Account to the Debt in
Lender's sole discretion.

      Section 5.06. Payment of Basic Carrying Costs. Borrower hereby agrees to
pay all Basic Carrying Costs (without regard to the amount of money in the Basic
Carrying Costs Sub-Account). Should an Event of Default occur, the sums on
deposit in the Basic Carrying Costs Sub-Account may be applied by Lender in
payment of any Basic Carrying Costs or may be applied to the payment of the Debt
or any other charges affecting all or any portion of the Cross-collateralized
Properties as Lender in its sole discretion may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.

                                       45

<PAGE>

      Section 5.07. Debt Service Payment Sub-Account. On each Payment Date
during the term of the Loan, Lender shall transfer to the Collection Account,
from the Debt Service Payment Sub-Account, an amount equal to the sum of (a) the
Required Debt Service Payment for such Payment Date and (b) any amounts
deposited into the Central Account that are either (i) Loss Proceeds that Lender
has elected to apply to reduce the Debt in accordance with the terms of Article
III hereof or (ii) excess Loss Proceeds remaining after the completion of any
restoration required hereunder.

      Section 5.08. Recurring Replacement Reserve Sub-Account. Borrower hereby
agrees to pay all Recurring Replacement Expenditures with respect to the
Property (without regard to the amount of money then available in the Recurring
Replacement Reserve Sub-Account). Should an Event of Default occur, the sums on
deposit in the Recurring Replacement Reserve Sub-Account may be applied by
Lender in payment of any Recurring Replacement Expenditures or may be applied to
the payment of the Debt or any other charges affecting all or any portion of the
Cross-collateralized Properties, as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.

      Section 5.09. Operation and Maintenance Expense Sub-Account. Borrower
hereby agrees to pay all Operating Expenses with respect to the Property
(without regard to the amount of money then available in the Operation and
Maintenance Expense Sub-Account). All funds allocated to the Operation and
Maintenance Expense Sub-Account shall be held by Lender pursuant to the
provisions of this Security Instrument. Any sums held in the Operation and
Maintenance Expense Sub-Account shall be disbursed to Borrower within five (5)
Business Days of receipt by Lender from Borrower of (a) a written request for
such disbursement which shall indicate the Operating Expenses (exclusive of
Basic Carrying Costs and any management fees payable to Borrower, or to any
Affiliate of Borrower) for which the requested disbursement is to pay and (b) an
Officer's Certificate stating that no Operating Expenses with respect to the
Property are more than sixty (60) days past due; provided, however, in the event
that Borrower legitimately disputes any invoice for an Operating Expense, and
(i) no Event of Default has occurred and is continuing hereunder, (ii) Borrower
shall have set aside adequate reserves for the payment of such disputed sums
together with all interest and late fees thereon, (iii) Borrower has complied
with all the requirements of this Security Instrument relating thereto, and (iv)
the contesting of such sums shall not constitute a default under any other
instrument, agreement, or document to which Borrower is a party, then Borrower
may, after certifying to Lender as to items (i) through (iv) hereof, contest
such invoice. Borrower may request a disbursement from the Operation and
Maintenance Expense Sub-Account no more than one (1) time per calendar month.
Should an Event of Default occur and be continuing, the sums on deposit in the
Operation and Maintenance Expense Sub-Account may be applied by Lender in
payment of any Operating Expenses for the Property or may be applied to the
payment of the Debt or other charges affecting all or any portion of the
Property as Lender, in its sole discretion, may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.

      Section 5.10. Intentionally Omitted.

      Section 5.11. Intentionally Omitted.

      Section 5.12. Performance of Engineering Work. (a) Borrower shall promptly
commence and diligently thereafter pursue to completion (without regard to the
amount of money then available in the Engineering Escrow Sub-Account) the
Required Engineering Work within the timetable set forth on EXHIBIT D hereof or
such longer period of time, if any, to which Lender has agreed in writing, which
period may, provided that Borrower is attempting to complete the Required
Engineering Work with all due diligence, be extended in the event of a Force
Majeure for whatever period of time the Force Majeure prevented Borrower from
completing the Required Engineering Work, such extension period not to exceed an
additional three (3) months. After Borrower completes an item of Required
Engineering Work, Borrower may submit to Lender an invoice therefor with lien
waivers and an Officer's Certificate or, with respect to items which
individually or in the aggregate exceed $10,000, a statement from the Engineer,
in each case reasonably acceptable to Lender, indicating that the portion of the
Required Engineering Work in question has been completed in a workmanlike manner
and in compliance with all Legal Requirements, and Lender shall, within twenty
(20) days thereafter, although in no event more frequently than once each month,
reimburse such amount to Borrower from the Engineering Escrow Sub-Account;
provided, however,

                                       46

<PAGE>

that Borrower shall not be reimbursed more than the amount set forth on EXHIBIT
D hereto as the amount allocated to the portion of the Required Engineering Work
for which reimbursement is sought.

      (b) From and after the date all of the Required Engineering Work is
completed, Borrower may submit a written request, which request shall be
delivered together with final lien waivers and a statement from the Engineer, as
the case may be, reasonably acceptable to Lender, indicating that all of the
Required Engineering Work has been completed in compliance with all Legal
Requirements, and Lender shall, within twenty (20) days thereafter, disburse any
balance of the Engineering Escrow Sub-Account to Borrower. Should an Event of
Default occur, the sums on deposit in the Engineering Escrow Sub-Account may be
applied by Lender in payment of any Required Engineering Work or may be applied
to the payment of the Debt or any other charges affecting all or any portion of
the Cross-collateralized Properties, as Lender in its sole discretion may
determine; provided, however, that no such application shall be deemed to have
been made by operation of law or otherwise until actually made by Lender as
herein provided.

      Section 5.13. Loss Proceeds. In the event of a casualty to the Property,
unless Lender elects, or is required pursuant to Article III hereof to make all
of the Insurance Proceeds available to Borrower for restoration, Lender and
Borrower shall cause all such Insurance Proceeds to be paid by the insurer
directly to the Central Account, whereupon Lender shall, after deducting
Lender's costs of recovering and paying out such Insurance Proceeds, including
without limitation, reasonable attorneys' fees, apply same to reduce the Debt in
accordance with the terms of the Note; provided, however, that if Lender elects,
or is deemed to have elected, to make the Insurance Proceeds available for
restoration, all Insurance Proceeds in respect of rent loss, business
interruption or similar coverage shall be maintained in the Central Account, to
be applied by Lender in the same manner as Rent received with respect to the
operation of the Property; provided, further, however, that in the event that
the Insurance Proceeds with respect to such rent loss, business interruption or
similar insurance policy are paid in a lump sum in advance, Lender shall hold
such Insurance Proceeds in a segregated interest-bearing escrow account, which
shall be an Eligible Account, shall estimate, in Lender's reasonable discretion,
the number of months required for Borrower to restore the damage caused by the
casualty, shall divide the aggregate rent loss, business interruption or similar
Insurance Proceeds by such number of months, and shall disburse from such bank
account into the Central Account each month during the performance of such
restoration such monthly installment of said Insurance Proceeds. In the event
that Insurance Proceeds are to be applied toward restoration, Lender shall hold
such funds in a segregated bank account at the Bank, which shall be an Eligible
Account, and shall disburse same in accordance with the provisions of Section
3.04 hereof. Unless Lender elects, or is required pursuant to Section 6.01
hereof to make all of the Condemnation Proceeds available to Borrower for
restoration, Lender and Borrower shall cause all such Condemnation Proceeds to
be paid to the Central Account, whereupon Lender shall, after deducting Lender's
costs of recovering and paying out such Condemnation Proceeds, including without
limitation, reasonable attorneys' fees, apply same, by transferring such amounts
to the Collection Account, to reduce the Debt in accordance with the terms of
the Note; provided, however, that any Condemnation Proceeds received in
connection with a temporary Taking shall be maintained in the Central Account,
to be applied by Lender in the same manner as Rent received with respect to the
operation of the Property; provided, further, however, that in the event that
the Condemnation Proceeds of any such temporary Taking are paid in a lump sum in
advance, Lender shall hold such Condemnation Proceeds in a segregated
interest-bearing bank account, which shall be an Eligible Account, shall
estimate, in Lender's reasonable discretion, the number of months that the
Property shall be affected by such temporary Taking, shall divide the aggregate
Condemnation Proceeds in connection with such temporary Taking by such number of
months, and shall disburse from such bank account into the Central Account each
month during the pendency of such temporary Taking such monthly installment of
said Condemnation Proceeds. In the event that Condemnation Proceeds are to be
applied toward restoration, Lender shall hold such funds in a segregated bank
account at the Bank, which shall be an Eligible Account, and shall disburse same
in accordance with the provisions of Section 3.04 hereof. If any Loss Proceeds
are received by Borrower, such Loss Proceeds shall be received in trust for
Lender, shall be segregated from other funds of Borrower, and shall be forthwith
paid into the Central Account, or paid to Lender to hold in a segregated bank
account at the Bank, in each case to be applied or disbursed in accordance with
the foregoing. Any Loss Proceeds made available to Borrower for restoration in
accordance herewith, to the extent not used by Borrower in connection with, or
to the extent they exceed the cost of, such restoration, shall be deposited into
the Central Account, whereupon Lender shall apply the same to reduce the Debt in
accordance with the terms of the Note.

                                       47

<PAGE>

      Section 5.14. Mez Payment Sub-Account. Provided that no Event of Default
has occurred and is continuing, on each Payment Date during which the Mez Loan
is outstanding, Lender shall transfer to the holder of the Mez Loan, as
identified in writing by a joint direction executed by Borrower and the holder
of the Mez Loan, an amount equal to the Mez Payment Amount. Should an Event of
Default occur, the sums on deposit in the Mez Payment Sub-Account may be applied
by Lender to the payment of the Debt or any other charges affecting all or any
portion of the Property, as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.
The holder of the Mez Loan shall be deemed a third party beneficiary for
purposes of enforcing its right to receive payments of the Mez Payment Amount
pursuant to the provisions of this Section 5.14, except that Borrower (and not
Lender) shall be responsible for any deficiencies in such amount.

                            ARTICLE VI: CONDEMNATION

      Section 6.01. Condemnation. (a) Borrower shall notify Lender promptly of
the commencement or threat of any Taking of the Property or any portion thereof.
Lender is hereby irrevocably appointed as Borrower's attorney-in-fact, coupled
with an interest, with exclusive power to collect, receive and retain the
proceeds of any such Taking and to make any compromise or settlement in
connection with such proceedings (subject to Borrower's reasonable approval,
except after the occurrence of an Event of Default, in which event Borrower's
approval shall not be required), subject to the provisions of this Security
Instrument; provided, however, that Borrower may participate in any such
proceedings and shall be authorized and entitled to compromise or settle any
such proceeding with respect to Condemnation Proceeds in an amount less than
five percent (5%) of the Allocated Loan Amount. Borrower shall execute and
deliver to Lender any and all instruments reasonably required in connection with
any such proceeding promptly after request therefor by Lender. Except as set
forth above, Borrower shall not adjust, compromise, settle or enter into any
agreement with respect to such proceedings without the prior consent of Lender.
All Condemnation Proceeds are hereby assigned to and shall be paid to Lender to
be applied in accordance with the terms hereof. With respect to Condemnation
Proceeds in an amount in excess of five percent (5%) of the Allocated Loan
Amount, Borrower hereby authorizes Lender to compromise, settle, collect and
receive such Condemnation Proceeds, and to give proper receipts and acquittance
therefor. Subject to the provisions of this Article VI, Lender may apply such
Condemnation Proceeds (less any cost to Lender of recovering and paying out such
proceeds, including, without limitation, reasonable attorneys' fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment of
the Debt or to allow such proceeds to be used for the Work.

      (b) "Substantial Taking" shall mean (i) a Taking of such portion of the
Property that would, in Lender's reasonable discretion, leave remaining a
balance of the Property which would not under then current economic conditions,
applicable Development Laws and other applicable Legal Requirements, permit the
restoration of the Property so as to constitute a complete, rentable facility of
the same sort as existed prior to the Taking, having adequate ingress and egress
to the Property, capable of producing a projected Net Operating Income (as
reasonably determined by Lender) yielding a projected Debt Service Coverage
therefrom for the next two (2) years of not less than the Required Debt Service
Coverage, (ii) a Taking which occurs less than two (2) years prior to the
Maturity Date, (iii) a Taking which Lender is not reasonably satisfied could be
restored within twelve (12) months and at least six (6) months prior to the
Maturity Date or (iv) a Taking of more than fifteen percent (15%) of the
reasonably estimated fair market value of the Property.

      (c) In the case of a Substantial Taking, Condemnation Proceeds shall be
payable to Lender in reduction of the Debt but without any prepayment fee or
charge of any kind and, if Borrower elects to apply any Condemnation Proceeds it
may receive pursuant to this Security Instrument to the payment of the Debt,
Borrower may prepay the balance of the Debt without any prepayment fee or charge
of any kind.

      (d) In the event of a Taking which is less than a Substantial Taking,
Borrower at its sole cost and expense (whether or not the award shall have been
received or shall be sufficient for restoration) shall proceed diligently to
restore, or cause the restoration of, the remaining Improvements not so taken,
to maintain a complete, rentable, self-contained fully operational facility of
the same sort as existed prior to the Taking in as good a condition as is
reasonably possible. In the event of such a Taking, Lender shall receive the
Condemnation Proceeds and shall pay over the same:

                                       48

<PAGE>

            (i) first, provided no Default shall have occurred and be
      continuing, to Borrower to the extent of any portion of the award as may
      be necessary to pay the reasonable cost of restoration of the Improvements
      remaining, and

            (ii) second, to Lender, in reduction of the Debt without any
      prepayment premium or charge of any kind.

      If one or more Takings in the aggregate create a Substantial Taking, then,
in such event, the sections of this Article VI above applicable to Substantial
Takings shall apply.

      (e) In the event Lender is obligated to or elects to make Condemnation
Proceeds available for the restoration or rebuilding of the Property, such
proceeds shall be disbursed in the manner and subject to the conditions set
forth in Section 3.04(b) hereof. If, in accordance with this Article VI, any
Condemnation Proceeds are used to reduce the Debt, they shall be applied in
accordance with the provisions of the Note. Borrower shall promptly execute and
deliver all instruments requested by Lender for the purpose of confirming the
assignment of the Condemnation Proceeds to Lender. Application of all or any
part of the Condemnation Proceeds to the Debt shall be made in accordance with
the provisions of Sections 3.06 and 3.07 hereof. No application of the
Condemnation Proceeds to the reduction of the Debt shall have the effect of
releasing the lien of this Security Instrument until the remainder of the Debt
has been paid in full. In the case of any Taking, Lender, to the extent that
Lender has not been reimbursed by Borrower, shall be entitled, as a first
priority out of any Condemnation Proceeds, to reimbursement for all costs, fees
and expenses reasonably incurred in the determination and collection of any
Condemnation Proceeds. All Condemnation Proceeds deposited with Lender pursuant
to this Section, until expended or applied as provided herein, shall be held in
accordance with Section 3.04(b) hereof and shall constitute additional security
for the payment of the Debt and the payment and performance of Borrower's
obligations, but Lender shall not be deemed a trustee or other fiduciary with
respect to its receipt of such Condemnation Proceeds or any part thereof. All
awards so deposited with Lender shall be held by Lender in an Eligible Account,
but Lender makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue on any such deposit and shall have no
liability in connection therewith. For purposes hereof, any reference to the
award shall be deemed to include interest, if any, which has accrued thereon.

                          ARTICLE VII: LEASES AND RENTS

      Section 7.01. Assignment. (a) Borrower does hereby bargain, sell, assign
and set over unto Lender, all of Borrower's interest in the Leases and Rents.
The assignment of Leases and Rents in this Section 7.01 is an absolute,
unconditional and present assignment from Borrower to Lender and not an
assignment for security and the existence or exercise of Borrower's revocable
license to collect Rent shall not operate to subordinate this assignment to any
subsequent assignment. The exercise by Lender of any of its rights or remedies
pursuant to this Section 7.01 shall not be deemed to make Lender a
mortgagee-in-possession. In addition to the provisions of this Article VII,
Borrower shall comply with all terms, provisions and conditions of the
Assignment.

      (b) So long as there shall exist and be continuing no Event of Default,
Borrower shall have a revocable license to take all actions with respect to all
Leases and Rents, present and future, including the right to collect and use the
Rents, subject to the terms of this Security Instrument and the Assignment.

      (c) In a separate instrument Borrower shall, as requested from time to
time by Lender, assign to Lender or its nominee by specific or general
assignment, any and all Leases, such assignments to be in form and content
reasonably acceptable to Lender, but subject to the provisions of Section
7.01(b) hereof. Borrower agrees to deliver to Lender, within thirty (30) days
after Lender's request, a true and complete copy of every Major Space Lease and
during the continuance of any Default, all other Leases and, within ten (10)
days after Lender's request, a complete list of the Leases, certified by
Borrower to be true, accurate and complete and stating the demised premises, the
names of the lessees, the Rent payable under the Leases, the date to which such
Rents have been paid, the material terms of the Leases, including, without
limitation, the dates of occupancy, the dates of expiration, any Rent
concessions, work obligations or other inducements granted to the lessees
thereunder, and any renewal options.

                                       49

<PAGE>

      (d) The rights of Lender contained in this Article VII, the Assignment or
any other assignment of any Lease shall not result in any obligation or
liability of Lender to Borrower or any lessee under a Lease or any party
claiming through any such lessee.

      (e) At any time after an Event of Default, the license granted hereinabove
may be revoked by Lender, and Lender or a receiver appointed in accordance with
this Security Instrument may enter upon the Property, and collect, retain and
apply the Rents toward payment of the Debt in such priority and proportions as
Lender in its sole discretion shall deem proper.

      (f) In addition to the rights which Lender may have herein, upon the
occurrence of any Event of Default, Lender, at its option, may require Borrower
to pay monthly in advance to Lender, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation of such
part of the Property as may be used and occupied by Borrower and may require
Borrower to vacate and surrender possession of the Property to Lender or to such
receiver and, in default thereof, Borrower may be evicted by summary proceedings
or otherwise.

      Section 7.02. Management of Property. (a) Borrower shall manage the
Property or cause the Property to be managed in a manner which is consistent
with the Approved Manager Standard. All Space Leases shall provide for rental
rates comparable to then existing local market rates and terms and conditions
which constitute good and prudent business practice and are consistent with
prevailing market terms and conditions, and shall be arms-length transactions.
All Leases shall be on a form previously approved by Lender and shall provide
that they are subordinate to this Security Instrument and that the lessees
thereunder attorn to Lender; provided, however, that the foregoing shall not
apply to month-to-month agreements entered into with respect to the use of
mini-storage facilities by Borrower in the ordinary course of business and on
Borrower's standard form agreement. Borrower shall deliver copies of all Major
Space Leases, amendments, modifications and renewals thereof to Lender. All
proposed Major Space Leases for the Property shall be subject to the prior
written approval of Lender, provided, however that Borrower may enter into new
commercial leases with unrelated third parties without obtaining the prior
consent of Lender provided that: (i) the proposed tenant is unrelated to a
tenant under an existing Lease; (ii) the proposed leases conform with the
requirements of this Section 7.02; (iii) the space to be leased pursuant to such
proposed lease does not exceed 5,000 square feet; and (iv) the term of the
proposed lease inclusive of all extensions and renewals, does not exceed five
(5) years.

      (b) Borrower (i) shall observe and perform all of its material obligations
under the Leases pursuant to applicable Legal Requirements and shall not do or
permit to be done anything to impair the value of the Leases as security for the
Debt; (ii) shall promptly send copies to Lender of all notices of default which
Borrower shall receive under the Leases; (iii) shall, consistent with the
Approved Manager Standard, enforce all of the terms, covenants and conditions
contained in the Leases to be observed or performed; (iv) shall not collect more
than five percent (5%) of monthly Rent under the Leases more than one (1) month
in advance (except that Borrower may collect in advance such security deposits
as are permitted pursuant to applicable Legal Requirements and are commercially
reasonable in the prevailing market); (v) shall not execute any other assignment
of lessor's interest in the Leases or the Rents except as otherwise expressly
permitted pursuant to this Security Instrument; (vi) shall not cancel or
terminate any of the Leases or accept a surrender thereof in any manner
inconsistent with the Approved Manager Standard; (vii) shall not convey,
transfer or suffer or permit a conveyance or transfer of all or any part of the
Premises or the Improvements or of any interest therein so as to effect a merger
of the estates and rights of, or a termination or diminution of the obligations
of, lessees thereunder; (viii) shall not alter, modify or change the terms of
any guaranty of any Major Space Lease or cancel or terminate any such guaranty;
(ix) shall, in accordance with the Approved Manager Standard, make all
reasonable efforts to seek lessees for space as it becomes vacant and enter into
Leases in accordance with the terms hereof; (x) shall not materially modify,
alter or amend any Major Space Lease or Property Agreement without Lender's
consent, which consent will not be unreasonably withheld or delayed; (xi) shall
notify Lender promptly if any Pad Owner shall cease business operations or of
the occurrence of any event of which it becomes aware affecting a Pad Owner or
its property which might have any material effect on the Property; and (xii)
shall, without limitation to any other provision hereof, execute and deliver at
the request of Lender all such further assurances, confirmations and assignments
in connection with the Property as are required herein and as Lender shall from
time to time reasonably require.

                                       50

<PAGE>

      (c) All security deposits of lessees, whether held in cash or any other
form, shall be treated by Borrower as trust funds and shall be held in
compliance with all Legal Requirements. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under applicable
Legal Requirements shall be maintained in full force and effect unless replaced
by cash deposits as hereinabove described, shall be issued by a Person
reasonably satisfactory to Lender, shall, if permitted pursuant to Legal
Requirements, at Lender's option, name Lender as payee or mortgagee thereunder
or be fully assignable to Lender and shall, in all respects, comply with
applicable Legal Requirements and otherwise be reasonably satisfactory to
Lender. Borrower shall, upon request, provide Lender with evidence reasonably
satisfactory to Lender of Borrower's compliance with the foregoing. Following
the occurrence and during the continuance of any Event of Default, Borrower
shall, upon Lender's request, if permitted by applicable Legal Requirements,
turn over the security deposits (and any interest thereon) to Lender to be held
by Lender in accordance with the terms of the Leases and all Legal Requirements.

      (d) Lender shall, upon request of Borrower, enter into a subordination,
nondisturbance and attornment agreement ("SNDA") with respect to each proposed
tenant entering into a Lease in compliance with the requirements of this
Security Instrument; provided, that such Lease is (i) for at least 5,000 square
feet of space of the Premises, (ii) with a tenant reasonably approved by Lender
in writing prior to Borrower's execution of any such Lease and (iii) on the
standard form of Lease previously approved in writing by Lender. Any SNDA
executed by Lender shall be on Lender's then standard form and provide that in
the event Lender or any purchaser at foreclosure shall succeed to Borrower's
interest in the Property, the Leases of such tenants will remain in full force
and effect and be binding upon Lender or such purchaser and such tenant as
though each were original parties thereto.

      (e) Borrower covenants and agrees with Lender that (i) the Property will
be managed at all times by Borrower or Manager pursuant to a management
agreement to be approved by Lender (the "Management Agreement"), (ii) after
Borrower has knowledge of a fifty percent (50%) or more change in control of the
ownership of Manager, Borrower will promptly give Lender notice thereof (a
"Manager Control Notice") and (iii) the Management Agreement may be terminated
by Lender at any time for cause (including, but not limited to, Manager's gross
negligence, misappropriation of funds, willful misconduct or fraud) or at any
time following (A) the occurrence of an Event of Default, or (B) the receipt of
a Manager Control Notice or (C) the date upon which the trailing twelve (12)
month Aggregate Debt Service Coverage is equal to or less than 1.10:1.00, and a
substitute managing agent shall be appointed by Borrower, subject to Lender's
prior written approval, which may be given or withheld in Lender's sole
discretion and which may be conditioned on, inter alia, a letter from the Rating
Agency confirming that any rating issued by the Rating Agency in connection with
a Securitization will not, as a result of the proposed change of Manager, be
downgraded from the then current ratings thereof, qualified or withdrawn.
Borrower may from time to time appoint a successor manager to manage the
Property with Lender's prior written consent which consent shall not be
unreasonably withheld or delayed, provided that any such successor manager shall
be a reputable management company which meets the Approved Manager Standard and
each Rating Agency shall have confirmed in writing that any rating issued by the
Rating Agency in connection with a Securitization will not, as a result of the
proposed change of Manager, be downgraded from the then current ratings thereof,
qualified or withdrawn. Borrower further covenants and agrees that Borrower
shall require Manager (or any successor managers) to maintain at all times
during the term of the Loan worker's compensation insurance as required by
Governmental Authorities. Lender acknowledges that, as of the Closing Date, the
Property is self-managed by Borrower.

                      ARTICLE VIII: MAINTENANCE AND REPAIR

      Section 8.01. Maintenance and Repair of the Property; Alterations;
Replacement of Equipment. Borrower hereby covenants and agrees:

      (a) Borrower shall not (i) desert or abandon the Property, (ii) change the
use of the Property or cause or permit the use or occupancy of any part of the
Property to be discontinued if such discontinuance or use change would violate
any zoning or other law, ordinance or regulation; (iii) consent to or seek any
lowering of the zoning classification, or greater zoning restriction affecting
the Property; or (iv) take any steps whatsoever to convert the Property, or any
portion thereof, to a condominium or cooperative form of ownership.

                                       51

<PAGE>

      (b) Borrower shall, at its expense, (i) take good care of the Property
including grounds generally, and utility systems and sidewalks, roads, alleys,
and curbs therein, and shall keep the same in good, safe and insurable condition
and in compliance with all applicable Legal Requirements, (ii) promptly make all
repairs to the Property, above grade and below grade, interior and exterior,
structural and nonstructural, ordinary and extraordinary, unforeseen and
foreseen, and maintain the Property in a manner appropriate for the facility and
(iii) not commit or suffer to be committed any waste of the Property or do or
suffer to be done anything which will increase the risk of fire or other hazard
to the Property or impair the value thereof. Borrower shall keep the sidewalks,
vaults, gutters and curbs comprising, or adjacent to, the Property, clean and
free from dirt, snow, ice, rubbish and obstructions. All repairs made by
Borrower shall be made with first-class materials, in a good and workmanlike
manner, shall be equal or better in quality and class to the original work and
shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under
Space Leases or Pad Owners or other Persons under Property Agreements, Borrower
may fulfill its obligations hereunder by causing such tenants, Pad Owners or
other Persons, as the case may be, to perform their obligations thereunder. As
used herein, the terms "repair" and "repairs" shall be deemed to include all
necessary replacements.

      (c) Borrower shall not demolish, remove, construct, or, except as
otherwise expressly provided herein, restore, or alter the Property or any
portion thereof; nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration which would diminish the value
of the Property without Lender's prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed; provided, however,
Borrower may make structural or exterior alterations to the Improvements or
interior alterations of a non-structural type without Lender's prior written
consent provided that (i) the aggregate cost of such alterations does not exceed
$100,000.00 or (ii) in the event that such alterations are required due to an
emergency situation and Borrower determines, in its commercially reasonable
discretion and subject to the Approved Manager Standard that obtaining such
consent from Lender is not practical under the circumstances (provided, however
that Borrower shall use its best efforts to provide notice to Lender of such
alterations within five (5) Business Days of such emergency condition commencing
at the Property).

      (d) Borrower represents and warrants to Lender that (i) there are no
fixtures, machinery, apparatus, tools, equipment or articles of personal
property attached or appurtenant to, or located on, or used in connection with
the management, operation or maintenance of the Property, except for the
Equipment and Fixtures, equipment leased by Borrower for the management,
operation or maintenance of the Property in accordance with the Loan Documents
and the U-Haul rental fleet of trucks, vans and wagons; (ii) the Equipment and
the leased equipment constitute all of the fixtures, machinery, apparatus,
tools, equipment and articles of personal property necessary to the proper
operation and maintenance of the Property; and (iii) all of the Equipment is
free and clear of all liens, except for the lien of this Security Instrument and
the Permitted Encumbrances. All right, title and interest of Borrower in and to
all extensions, improvements, betterments, renewals and appurtenances to the
Property hereafter acquired by, or released to, Borrower or constructed,
assembled or placed by Borrower in the Property, and all changes and
substitutions of the security constituted thereby, shall be and, in each such
case, without any further mortgage, encumbrance, conveyance, assignment or other
act by Lender or Borrower, shall become subject to the lien and security
interest of this Security Instrument as fully and completely, and with the same
effect, as though now owned by Borrower and specifically described in this
Security Instrument, but at any and all times Borrower shall execute and deliver
to Lender any documents Lender may reasonably deem necessary or appropriate for
the purpose of specifically subjecting the same to the lien and security
interest of this Security Instrument.

      (e) Notwithstanding the provisions of this Security Instrument to the
contrary, Borrower shall have the right, at any time and from time to time, to
remove and dispose of Equipment which may have become obsolete or unfit for use
or which is no longer useful in the management, operation or maintenance of the
Property. Borrower shall promptly replace any such Equipment so disposed of or
removed with other Equipment of equal value and utility, free of any security
interest or superior title, liens or claims; except that, if by reason of
technological or other developments, replacement of the Equipment so removed or
disposed of is not necessary or desirable for the proper management, operation
or maintenance of the Property, Borrower shall not be required to replace the
same. All such replacements or additional equipment shall be deemed to
constitute "Equipment" and shall be covered by the security interest herein
granted.

                                       52

<PAGE>

               ARTICLE IX: TRANSFER OR ENCUMBRANCE OF THE PROPERTY

      Section 9.01. Other Encumbrances. Borrower shall not further encumber or
permit the further encumbrance in any manner (whether by grant of a pledge,
security interest or otherwise) of the Property or any part thereof or interest
therein, including, without limitation, of the Rents therefrom (other than
purchase money financing of equipment in the ordinary course of business
provided that such purchase money financing complies with the provisions of
Section 2.02(g)(viii) hereof); provided, however, notwithstanding anything
contained in this Security Instrument, Lender hereby consents to the Mez Loan
and the pledge of a direct or indirect interest in Borrower in connection
therewith. In addition, Borrower shall not further encumber and shall not permit
the further encumbrance in any manner (whether by grant of a pledge, security
interest or otherwise) of Borrower or any direct or indirect interest in
Borrower except as expressly permitted pursuant to this Security Instrument.

      Section 9.02. No Transfer. Borrower acknowledges that Lender has examined
and relied on the expertise of Borrower and, if applicable, each General
Partner, in owning and operating properties such as the Property in agreeing to
make the Loan and will continue to rely on Borrower's ownership of the Property
as a means of maintaining the value of the Property as security for repayment of
the Debt and Borrower acknowledges that Lender has a valid interest in
maintaining the value of the Property. Borrower shall not Transfer, nor permit
any Transfer, without the prior written consent of Lender, which consent Lender
may withhold in its sole and absolute discretion. Lender shall not be required
to demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Transfer without Lender's consent. This provision shall apply to every
Transfer regardless of whether voluntary or not, or whether or not Lender has
consented to any previous Transfer.

      Section 9.03. Due on Sale. Lender may declare the Debt immediately due and
payable upon any Transfer or further encumbrance without Lender's consent
without regard to whether any impairment of its security or any increased risk
of default hereunder can be demonstrated. This provision shall apply to every
Transfer or further encumbrance of the Property or any part thereof or interest
in the Property or in Borrower regardless of whether voluntary or not, or
whether or not Lender has consented to any previous Transfer or further
encumbrance of the Property or interest in Borrower.

      Section 9.04. Permitted Transfer. Notwithstanding the foregoing provisions
of this Article IX, subsequent to the first (1st) anniversary of the Closing
Date, a one time sale, conveyance or transfer of the Cross-collateralized
Properties in their entirety (hereinafter, "Sale") shall be permitted hereunder,
provided that each of the following terms and conditions are satisfied:

      (a) no Default is then continuing hereunder or under any of the other Loan
Documents;

      (b) Lender shall have consented to the Sale, which consent shall not be
unreasonably withheld or delayed, and, if the proposed Sale is to occur at any
time after a Securitization, each Rating Agency shall have delivered written
confirmation that any rating issued by such Rating Agency in connection with the
Securitization will not, as a result of the proposed Sale, be downgraded from
the then current ratings thereof, qualified or withdrawn; provided, however,
that no request for consent to the Sale will be entertained by Lender if the
proposed Sale is to occur within sixty (60) days of any contemplated sale of the
Loan by Lender, whether in connection with a Securitization or otherwise;

      (c) Borrower gives Lender written notice of the terms of the proposed Sale
not less than sixty (60) days before the date on which such Sale is scheduled to
close and, concurrently therewith, gives Lender (i) all such information
concerning the proposed transferee of the Property (hereinafter, "Buyer") as
Lender would require in evaluating an initial extension of credit to a borrower
and Lender determines, in its sole discretion that the Buyer is acceptable to
Lender in all respects and (ii) a non-refundable application fee equal to
$7,500;

      (d) Borrower pays Lender, concurrently with the closing of such Sale, a
non-refundable assumption fee in an amount equal to one percent (1%) of the then
outstanding Loan Amount together with all out-of-pocket costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred by Lender in
connection with the Sale;

                                       53

<PAGE>

      (e) Buyer assumes all of the obligations under the Loan Documents and,
prior to or concurrently with the closing of such Sale, Buyer executes, without
any cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate said assumption and delivers such
legal opinions as Lender may reasonably require;

      (f) Borrower and Buyer execute, without any cost or expense to Lender, new
financing statements or financing statement amendments and any additional
documents reasonably requested by Lender;

      (g) Borrower delivers to Lender, without any cost or expense to Lender,
such endorsements to Lender's title insurance policy, hazard insurance policy
endorsements or certificates and other similar materials as Lender may deem
necessary at the time of the Sale, all in form and substance reasonably
satisfactory to Lender, including, without limitation, an endorsement or
endorsements to Lender's title insurance policy insuring the lien of this
Security Instrument, extending the effective date of such policy to the date of
execution and delivery (or, if later, of recording) of the assumption agreement
referenced above in subparagraph (e) of this Section, with no additional
exceptions added to such policy, and insuring that fee simple title to the
Property is vested in Buyer;

      (h) Borrower executes and delivers to Lender, without any cost or expense
to Lender, a release of Lender, its officers, directors, employees and agents,
from all claims and liability relating to the transactions evidenced by the Loan
Documents, through and including the date of the closing of the Sale, which
agreement shall be in form and substance reasonably satisfactory to Lender and
shall be binding upon Buyer;

      (i) subject to the provisions of Section 18.32 hereof, such Sale is not
construed so as to relieve Borrower of any personal liability under the Note or
any of the other Loan Documents for any acts or events occurring or obligations
arising prior to or simultaneously with the closing of such Sale, and Borrower
executes, without any cost or expense to Lender, such documents and agreements
as Lender shall reasonably require to evidence and effectuate the ratification
of said personal liability;

      (j) such Sale is not construed so as to relieve any Guarantor of its
obligations under any guaranty or indemnity agreement executed in connection
with the Loan and each such Guarantor executes, without any cost or expense to
Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate the ratification of each such guaranty agreement,
provided that if Buyer or a party associated with Buyer approved by Lender in
its sole discretion assumes the obligations of the current Guarantor under its
guaranty and Buyer or such party associated with Buyer, as applicable, executes,
without any cost or expense to Lender, a new guaranty in similar form and
substance to the existing guaranty and otherwise satisfactory to Lender, then
Lender shall release the current Guarantor from all obligations arising under
its guaranty after the closing of such Sale; and

      (k) Buyer is a Single Purpose Entity and Lender receives a
non-consolidation opinion relating to Buyer from Buyer's counsel, which opinion
is in form and substance acceptable to Lender.

                             ARTICLE X: CERTIFICATES

      Section 10.01. Estoppel Certificates. (a) After request by Lender,
Borrower, within fifteen (15) days and at its expense, will furnish Lender with
a statement, duly acknowledged and certified, setting forth (i) the amount of
the original principal amount of the Note, and the unpaid principal amount of
the Note, (ii) the rate of interest of the Note, (iii) the date payments of
interest and/or principal were last paid, (iv) any offsets or defenses to the
payment of the Debt, and if any are alleged, the nature thereof, (v) that the
Note and this Security Instrument have not been modified or if modified, giving
particulars of such modification and (vi) that there has occurred and is then
continuing no Default or if such Default exists, the nature thereof, the period
of time it has existed, and the action being taken to remedy such Default.

      (b) Within fifteen (15) days after written request by Borrower, Lender
shall furnish to Borrower a written statement confirming the amount of the Debt,
the maturity date of the Note and the date to which interest has been paid.

                                       54

<PAGE>

      (c) Borrower shall use all reasonable efforts to obtain estoppel
certificates from tenants that may be required hereunder or under the other Loan
Documents.

                               ARTICLE XI: NOTICES

      Section 11.01. Notices. Any notice, demand, statement, request or consent
made hereunder shall be in writing and delivered personally or sent to the party
to whom the notice, demand or request is being made by Federal Express or other
nationally recognized overnight delivery service, as follows and shall be deemed
given when delivered personally or one (1) Business Day after being deposited
with Federal Express or such other nationally recognized delivery service:

         If to Lender:     To Lender, at the address first written above,

                           with a copy to:

                           Proskauer Rose LLP
                           1585 Broadway
                            New York, New York 10036
                           Attn: David J. Weinberger, Esq.

         If to Borrower:   To Borrower, at the address first written above,

                           with a copy to:

                           U-Haul International, Inc.
                           Legal Department
                           2727 N. Central Avenue
                           Phoenix, AZ  85004
                           Attention: Jennifer M. Settles, Esq.

or such other address as either Borrower or Lender shall hereafter specify by
not less than ten (10) days prior written notice as provided herein; provided,
however, that notwithstanding any provision of this Article to the contrary,
such notice of change of address shall be deemed given only upon actual receipt
thereof. Rejection or other refusal to accept or the inability to deliver
because of changed addresses of which no notice was given as herein required
shall be deemed to be receipt of the notice, demand, statement, request or
consent.

                          ARTICLE XII: INDEMNIFICATION

      Section 12.01. Indemnification Covering Property. In addition, and without
limitation, to any other provision of this Security Instrument or any other Loan
Document, Borrower shall protect, indemnify and save harmless Lender and its
successors and assigns, and each of their agents, employees, officers,
directors, stockholders, partners and members (collectively, "Indemnified
Parties") for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys' fees and disbursements imposed upon or incurred by or
asserted against any of the Indemnified Parties by reason of (a) ownership of
this Security Instrument, the Assignment, the Property or any part thereof or
any interest therein or receipt of any Rents; (b) any accident, injury to or
death of any person or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (c) any use, nonuse or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, the
Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (d) any failure on the part of Borrower to perform or
comply with any of the terms of this Security Instrument or the Assignment; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (f) any claim by
brokers, finders or similar Persons claiming to be entitled to a commission in
connection with any Lease or other transaction involving the Property or any
part thereof; (g) any Imposition including, without limitation, any Imposition
attributable to the

                                       55

<PAGE>

execution, delivery, filing, or recording of any Loan Document, Lease or
memorandum thereof; (h) any lien or claim arising on or against the Property or
any part thereof under any Legal Requirement or any liability asserted against
any of the Indemnified Parties with respect thereto; (i) any claim arising out
of or in any way relating to any tax or other imposition on the making and/or
recording of this Security Instrument, the Note or any of the other Loan
Documents; (j) a Default under Sections 2.02(f), 2.02(g), 2.02(k), 2.02(t) or
2.02(w) hereof, (k) the failure of any Person to file timely with the Internal
Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds
from Real Estate, Broker and Barter Exchange Transactions, which may be required
in connection with the Loan, or to supply a copy thereof in a timely fashion to
the recipient of the proceeds of the Loan; or (l) the claims of any lessee or
any Person acting through or under any lessee or otherwise arising under or as a
consequence of any Lease. Notwithstanding the foregoing provisions of this
Section 12.01 to the contrary, Borrower shall have no obligation to indemnify
the Indemnified Parties pursuant to this Section 12.01 for liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
relative to the foregoing which result from Lender's, and its successors' or
assigns', willful misconduct or gross negligence. Any amounts payable to Lender
by reason of the application of this Section 12.01 shall constitute a part of
the Debt secured by this Security Instrument and the other Loan Documents and
shall become immediately due and payable and shall bear interest at the Default
Rate from the date the liability, obligation, claim, cost or expense is
sustained by Lender, as applicable, until paid. The provisions of this Section
12.01 shall survive the termination of this Security Instrument whether by
repayment of the Debt, foreclosure or delivery of a deed in lieu thereof,
assignment or otherwise. In case any action, suit or proceeding is brought
against any of the Indemnified Parties by reason of any occurrence of the type
set forth in (a) through (l) above, Borrower shall, at Borrower's expense,
resist and defend such action, suit or proceeding or will cause the same to be
resisted and defended by counsel at Borrower's expense for the insurer of the
liability or by counsel designated by Borrower (unless reasonably disapproved by
Lender promptly after Lender has been notified of such counsel); provided,
however, that nothing herein shall compromise the right of Lender (or any other
Indemnified Party) to appoint its own counsel at Borrower's expense for its
defense with respect to any action which, in the reasonable opinion of Lender or
such other Indemnified Party, as applicable, presents a conflict or potential
conflict between Lender or such other Indemnified Party that would make such
separate representation advisable. Any Indemnified Party will give Borrower
prompt notice after such Indemnified Party obtains actual knowledge of any
potential claim by such Indemnified Party for indemnification hereunder. The
Indemnified Parties shall not settle or compromise any action, proceeding or
claim as to which it is indemnified hereunder without notice to Borrower. The
provisions of this Section 12.01 shall survive for a period of ten (10) years
after the termination of this Security Instrument, whether by repayment of the
Debt, foreclosure or delivery of a deed in lieu thereof, assignment or
otherwise. Notwithstanding the foregoing, the provisions of this Article XII are
not intended to modify or restrict the provisions of Section 18.32 hereof.

                             ARTICLE XIII: DEFAULTS

      Section 13.01. Events of Default. The Debt shall become immediately due at
the option of Lender upon any one or more of the following events ("Event of
Default"):

      (a) if the final payment or prepayment premium, if any, due under the Note
shall not be paid on Maturity;

      (b) if any monthly payment of interest and/or principal due under the Note
(other than the sums described in (a) above) shall not be fully paid within five
(5) days of the date upon which the same is due and payable thereunder;

      (c) if payment of any sum (other than the sums described in (a) above or
(b) above) required to be paid pursuant to the Note, this Security Instrument or
any other Loan Document shall not be paid within five (5) days after Lender
delivers written notice to Borrower that same is due and payable thereunder or
hereunder;

      (d) if Borrower, Guarantor or, if Borrower or Guarantor is a partnership,
any general partner of Borrower or Guarantor, or, if Borrower or Guarantor is a
limited liability company, any member of Borrower or Guarantor, shall institute
or cause to be instituted any proceeding for the termination or dissolution of
Borrower, Guarantor or any such general partner or member;

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      (e) if the insurance policies required hereunder are not kept in full
force and effect, or if the insurance policies are not assigned and delivered to
Lender as herein provided;

      (f) if Borrower or Guarantor attempts to assign its rights under this
Security Instrument or any other Loan Document or any interest herein or
therein, or if any Transfer occurs other than in accordance with the provisions
hereof;

      (g) if any representation or warranty of Borrower or Guarantor made herein
or in any other Loan Document or in any certificate, report, financial statement
or other instrument or agreement furnished to Lender shall prove false or
misleading in any material respect;

      (h) if Borrower, Guarantor or any general partner of Borrower or Guarantor
shall make an assignment for the benefit of creditors or shall admit in writing
its inability to pay its debts generally as they become due;

      (i) if a receiver, liquidator or trustee of Borrower, Guarantor or any
general partner of Borrower or Guarantor shall be appointed or if Borrower,
Guarantor or their respective general partners shall be adjudicated a bankrupt
or insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in, by Borrower, Guarantor
or their respective general partners or if any proceeding for the dissolution or
liquidation of Borrower, Guarantor or their respective general partners shall be
instituted; however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Borrower, Guarantor or their respective
general partners, as applicable, upon the same not being discharged, stayed or
dismissed within sixty (60) days or if Borrower, Guarantor or their respective
general partners shall generally not be paying its debts as they become due;

      (j) if Borrower shall be in default beyond any notice or grace period, if
any, under any other mortgage or deed of trust or security agreement covering
any part of the Property without regard to its priority relative to this
Security Instrument; provided, however, this provision shall not be deemed a
waiver of the provisions of Article IX prohibiting further encumbrances
affecting the Property or any other provision of this Security Instrument;

      (k) if the Property becomes subject (i) to any lien which is superior to
the lien of this Security Instrument, other than a lien for real estate taxes
and assessments not due and payable, or (ii) to any mechanic's, materialman's or
other lien which is or is asserted to be superior to the lien of this Security
Instrument, and such lien shall remain undischarged (by payment, bonding, or
otherwise) for thirty (30) days following service of notice thereof upon
Borrower unless contested in accordance with the terms hereof;

      (l) if Borrower discontinues the operation of the Property or any part
thereof for reasons other than repair or restoration arising from a casualty or
condemnation for ten (10) days or more;

      (m) except as permitted in this Security Instrument, any material
alteration, demolition or removal of any of the Improvements without the prior
consent of Lender;

      (n) if Borrower consummates a transaction which would cause this Security
Instrument or Lender's rights under this Security Instrument, the Note or any
other Loan Document to constitute a non-exempt prohibited transaction under
ERISA or result in a violation of a state statute regulating government plans
subjecting Lender to liability for a violation of ERISA or a state statute;

      (o) if an Event of Default shall occur under any of the other
Cross-collateralized Mortgages or any default beyond applicable notice and grace
periods under any document executed by Borrower; or

      (p) if a default under any of the other terms, covenants or conditions of
the Note, this Security Instrument or any other Loan Document, other than as set
forth in (a) through (o) above, for ten (10) days after notice from Lender in
the case of any default which can be cured by the payment of a sum of money, or
for thirty (30) days after notice from Lender in the case of any other default
or an additional thirty (30) days if Borrower is diligently and continuously
effectuating a cure of a curable non-monetary default, other than as set forth
in (a) through (o) above.

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      Section 13.02. Remedies. (a) Upon the occurrence and during the
continuance of any Event of Default, Lender may, in addition to any other rights
or remedies available to it hereunder or under any other Loan Document, at law
or in equity, take such action, without notice or demand, as it reasonably deems
advisable to protect and enforce its rights against Borrower and in and to the
Property or any one or more of the Cross-collateralized Properties or any one or
more of them, including, but not limited to, the following actions, each of
which may be pursued singly, concurrently or otherwise, at such time and in such
order as Lender may determine, in its sole discretion, without impairing or
otherwise affecting any other rights and remedies of Lender hereunder, at law or
in equity: (i) declare all or any portion of the unpaid Debt to be immediately
due and payable; provided, however, that upon the occurrence of any of the
events specified in Section 13.01(i), the entire Debt will be immediately due
and payable without notice or demand or any other declaration of the amounts due
and payable; or (ii) bring an action to foreclose this Security Instrument and
without applying for a receiver for the Rents, but subject to the rights of the
tenants under the Leases, enter into or upon the Property or any part thereof,
either personally or by its agents, nominees or attorneys, and dispossess
Borrower and its agents and servants therefrom, and thereupon Lender may (A)
use, operate, manage, control, insure, maintain, repair, restore and otherwise
deal with all and every part of the Property and conduct the business thereat,
(B) make alterations, additions, renewals, replacements and improvements to or
on the Property or any part thereof, (C) exercise all rights and powers of
Borrower with respect to the Property or any part thereof, whether in the name
of Borrower or otherwise, including, without limitation, the right, subject to
the terms of the Leases, to make, cancel, enforce or modify Leases, obtain and
evict tenants, and demand, sue for, collect and receive all earnings, revenues,
rents, issues, profits and other income of the Property and every part thereof,
and (D) apply the receipts from the Property or any part thereof to the payment
of the Debt, after deducting therefrom all expenses (including, without
limitation, reasonable attorneys' fees and disbursements) reasonably incurred in
connection with the aforesaid operations and all amounts necessary to pay the
Impositions, insurance and other charges in connection with the Property or any
part thereof, as well as just and reasonable compensation for the services of
Lender's third-party agents; or (iii) have an appraisal or other valuation of
the Property or any part thereof performed by an Appraiser (and Borrower
covenants and agrees it shall cooperate in causing any such valuation or
appraisal to be performed) and any cost or expense incurred by Lender in
connection therewith shall constitute a portion of the Debt and be secured by
this Security Instrument and shall be immediately due and payable to Lender with
interest, at the Default Rate, until the date of receipt by Lender; or (iv) sell
the Property or institute proceedings for the complete foreclosure of this
Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument in which case the Property or any part thereof may be sold for cash
or credit in one or more parcels; or (v) with or without entry, and to the
extent permitted and pursuant to the procedures provided by applicable Legal
Requirements, institute proceedings for the partial foreclosure of this Security
Instrument, or take such other action as may be allowed pursuant to Legal
Requirements, at law or in equity, for the enforcement of this Security
Instrument for the portion of the Debt then due and payable, subject to the lien
of this Security Instrument continuing unimpaired and without loss of priority
so as to secure the balance of the Debt not then due; or (vi) sell the Property
or any part thereof and any or all estate, claim, demand, right, title and
interest of Borrower therein and rights of redemption thereof, pursuant to power
of sale or otherwise, at one or more sales, in whole or in parcels, in any order
or manner, at such time and place, upon such terms and after such notice thereof
as may be required or permitted by law, at the discretion of Lender, and in the
event of a sale, by foreclosure or otherwise, of less than all of the Property,
this Security Instrument shall continue as a lien on the remaining portion of
the Property; or (vii) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained in the
Loan Documents, or any of them; or (viii) recover judgment on the Note or any
guaranty either before, during or after (or in lieu of) any proceedings for the
enforcement of this Security Instrument; or (ix) apply, ex parte, for the
appointment of a custodian, trustee, receiver, keeper, liquidator or conservator
of the Property or any part thereof, irrespective of the adequacy of the
security for the Debt and without regard to the solvency of Borrower or of any
Person liable for the payment of the Debt, to which appointment Borrower does
hereby consent and such receiver or other official shall have all rights and
powers permitted by applicable law and such other rights and powers as the court
making such appointment may confer, but the appointment of such receiver or
other official shall not impair or in any manner prejudice the rights of Lender
to receive the Rent with respect to any of the Property pursuant to this
Security Instrument or the Assignment; or (x) require, at Lender's option,
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of any portion of the Property occupied by Borrower and may require
Borrower to vacate and surrender possession to Lender of the Property or to such
receiver and Borrower may be evicted by summary proceedings or otherwise; or
(xi) without notice to Borrower (A) apply all or any portion of the cash
collateral in any Sub-Account, including any interest and/or earnings therein,
to carry out the obligations of Borrower under this

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Security Instrument and the other Loan Documents, to protect and preserve the
Property and for any other purpose permitted under this Security Instrument and
the other Loan Documents and/or (B) have all or any portion of such cash
collateral immediately paid to Lender to be applied against the Debt in the
order and priority set forth in the Note; or (xii) pursue any or all such other
rights or remedies as Lender may have under applicable law or in equity;
provided, however, that the provisions of this Section 13.02(a) shall not be
construed to extend or modify any of the notice requirements or grace periods
provided for hereunder or under any of the other Loan Documents. Borrower hereby
waives, to the fullest extent permitted by Legal Requirements, any defense
Borrower might otherwise raise or have by the failure to make any tenants
parties defendant to a foreclosure proceeding and to foreclose their rights in
any proceeding instituted by Lender.

      (b) Any time after an Event of Default Lender shall have the power to sell
the Property or any part thereof at public auction, in such manner, at such time
and place, upon such terms and conditions, and upon such public notice as Lender
may deem best for the interest of Lender, or as may be required or permitted by
applicable law, consisting of advertisement in a newspaper of general
circulation in the jurisdiction and for such period as applicable law may
require and at such other times and by such other methods, if any, as may be
required by law to convey the Property in fee simple by Lender's deed with
special warranty of title to and at the cost of the purchaser, who shall not be
liable to see to the application of the purchase money. The proceeds or avails
of any sale made under or by virtue of this Section 13.02, together with any
other sums which then may be held by Lender under this Security Instrument,
whether under the provisions of this Section 13.02 or otherwise, shall be
applied as follows:

      First: To the payment of the third-party costs and expenses reasonably
      incurred in connection with any such sale and to advances, fees and
      expenses, including, without limitation, reasonable fees and expenses of
      Lender's legal counsel as applicable, and of any judicial proceedings
      wherein the same may be made, and of all expenses, liabilities and
      advances reasonably made or incurred by Lender under this Security
      Instrument, together with interest as provided herein on all such advances
      made by Lender, and all Impositions, except any Impositions or other
      charges subject to which the Property shall have been sold;

      Second: To the payment of the whole amount then due, owing and unpaid
      under the Note for principal and interest thereon, with interest on such
      unpaid principal at the Default Rate from the date of the occurrence of
      the earliest Event of Default that formed a basis for such sale until the
      same is paid;

      Third: To the payment of any other portion of the Debt required to be paid
      by Borrower pursuant to any provision of this Security Instrument, the
      Note, or any of the other Loan Documents; and

      Fourth: The surplus, if any, to Borrower unless otherwise required by
      Legal Requirements.

Lender and any receiver or custodian of the Property or any part thereof shall
be liable to account for only those rents, issues, proceeds and profits actually
received by it.

      (c) Lender may adjourn from time to time any sale by it to be made under
or by virtue of this Security Instrument by announcement at the time and place
appointed for such sale or for such adjourned sale or sales and, except as
otherwise provided by any applicable provision of Legal Requirements, Lender
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.

      (d) Upon the completion of any sale or sales made by Lender under or by
virtue of this Section 13.02 or the other provisions of this Security
Instrument, Lender, or any officer of any court empowered to do so, shall
execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, granting, conveying,
assigning and transferring all estate, right, title and interest in and to the
property and rights sold. Lender is hereby irrevocably appointed the true and
lawful attorney-in-fact of Borrower (coupled with an interest), in its name and
stead, to make all necessary conveyances, assignments, transfers and deliveries
of the property and rights so sold and for that purpose Lender may execute all
necessary instruments of conveyance, assignment, transfer and delivery, and may
substitute one or more Persons with like power, Borrower hereby ratifying and
confirming all that its said attorney-in-fact or such substitute or substitutes
shall lawfully do by virtue hereof. Nevertheless, Borrower, if so requested by
Lender, shall ratify and confirm any such sale or sales by executing and
delivering to Lender, or to such purchaser or purchasers all such instruments as
may be advisable, in the sole judgement of Lender, for such purpose, and as may
be designated in such request. Any such sale or sales

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made under or by virtue of this Section 13.02, whether made under the power of
sale herein granted or under or by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale, shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Borrower in and to the property and rights so sold, and shall, to the
fullest extent permitted under Legal Requirements, be a perpetual bar, both at
law and in equity against Borrower and against any and all Persons claiming or
who may claim the same, or any part thereof, from, through or under Borrower.

      (e) In the event of any sale made under or by virtue of this Section 13.02
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or a judgment or decree of foreclosure and sale), the
entire Debt immediately thereupon shall, anything in the Loan Documents to the
contrary notwithstanding, become due and payable.

      (f) Upon any sale made under or by virtue of this Section 13.02 (whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or a judgment or decree of foreclosure and sale), Lender may bid for
and acquire the Property or any part thereof and in lieu of paying cash therefor
may make settlement for the purchase price by crediting upon the Debt the net
sales price after deducting therefrom the expenses of the sale and the costs of
the action.

      (g) No recovery of any judgment by Lender and no levy of an execution
under any judgment upon the Property or any part thereof or upon any other
property of Borrower shall release the lien of this Security Instrument upon the
Property or any part thereof, or any liens, rights, powers or remedies of Lender
hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired until all amounts due under the Note, this Security Instrument and
the other Loan Documents are paid in full.

      (h) Upon the exercise by Lender of any power, right, privilege, or remedy
pursuant to this Security Instrument which requires any consent, approval,
registration, qualification, or authorization of any Governmental Authority,
Borrower agrees to execute and deliver, or will cause the execution and delivery
of, all applications, certificates, instruments, assignments and other documents
and papers that Lender or any purchaser of the Property may be required to
obtain for such governmental consent, approval, registration, qualification, or
authorization and Lender is hereby irrevocably appointed the true and lawful
attorney-in-fact of Borrower (coupled with an interest), in its name and stead,
to execute all such applications, certificates, instruments, assignments and
other documents and papers.

      Section 13.03. Payment of Debt After Default. If, following the occurrence
of any Event of Default, Borrower shall tender payment of an amount sufficient
to satisfy the Debt in whole or in part at any time prior to a foreclosure sale
of the Property, and if at the time of such tender prepayment of the principal
balance of the Note is not permitted by the Note or this Security Instrument,
Borrower shall also pay to Lender a sum equal to (a) the entire principal
balance of the Note, all accrued interest thereon and all other fees, charges
and sums due and payable hereunder, (b) all costs and expenses in connection
with the enforcement of Lender's rights hereunder, and (c) a prepayment charge
(the "Prepayment Charge") equal to the greater of (i) 1% of the principal
balance of the Note and (ii) the amount, which when added to the Principal
Amount, will be sufficient to purchase the Federal Obligations necessary to meet
the Scheduled Defeasance Payments assuming defeasance would be permitted under
Article 15 of this Security Instrument. Failure of Lender to require any of
these payments shall not constitute a waiver of the right to require the same in
the event of any subsequent default or to exercise any other remedy available to
Lender hereunder, under any other Loan Document or at law or in equity. If at
the time of such tender, prepayment of the principal balance of the Note is
permitted, such tender by Borrower shall be deemed to be a voluntary prepayment
of the principal balance of the Note, and Borrower shall, in addition to the
entire Debt, also pay to Lender the applicable prepayment consideration
specified in the Note and this Security Instrument.

      Section 13.04. Possession of the Property. Upon the occurrence of any
Event of Default and the acceleration of the Debt or any portion thereof,
Borrower, if an occupant of the Property or any part thereof, upon demand of
Lender, shall immediately surrender possession of the Property (or the portion
thereof so occupied) to Lender, and if Borrower is permitted to remain in
possession, the possession shall be as a month-to-month tenant of Lender and, on
demand, Borrower shall pay to Lender monthly, in advance, a reasonable rental
for the space so occupied and in default thereof Borrower may be dispossessed.
The covenants herein contained may be enforced by

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<PAGE>

a receiver of the Property or any part thereof. Nothing in this Section 13.04
shall be deemed to be a waiver of the provisions of this Security Instrument
making the Transfer of the Property or any part thereof without Lender's prior
written consent an Event of Default.

      Section 13.05. Interest After Default. If any amount due under the Note,
this Security Instrument or any of the other Loan Documents is not paid within
any applicable notice and grace period after same is due, whether such date is
the stated due date, any accelerated due date or any other date or at any other
time specified under any of the terms hereof or thereof, then, in such event,
Borrower shall pay interest on the amount not so paid from and after the date on
which such amount first becomes due at the Default Rate; and such interest shall
be due and payable at such rate until the earlier of the cure of all Events of
Default or the payment of the entire amount due to Lender, whether or not any
action shall have been taken or proceeding commenced to recover the same or to
foreclose this Security Instrument. All unpaid and accrued interest shall be
secured by this Security Instrument as part of the Debt. Nothing in this Section
13.05 or in any other provision of this Security Instrument shall constitute an
extension of the time for payment of the Debt.

      Section 13.06. Borrower's Actions After Default. After the happening of
any Event of Default and immediately upon the commencement of any action, suit
or other legal proceedings by Lender to obtain judgment for the Debt, or of any
other nature in aid of the enforcement of the Loan Documents, Borrower will (a)
after receipt of notice of the institution of any such action, waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, and (b) if required by Lender, consent to the
appointment of a receiver or receivers of the Property or any part thereof and
of all the earnings, revenues, rents, issues, profits and income thereof.

      Section 13.07. Control by Lender After Default. Notwithstanding the
appointment of any custodian, receiver, liquidator or trustee of Borrower, or of
any of its property, or of the Property or any part thereof, to the extent
permitted by Legal Requirements, Lender shall be entitled to obtain possession
and control of all property now and hereafter covered by this Security
Instrument and the Assignment in accordance with the terms hereof.

      Section 13.08. Right to Cure Defaults. (a) Upon the occurrence of any
Event of Default, Lender or its agents may, but without any obligation to do so
and without notice to or demand on Borrower and without releasing Borrower from
any obligation hereunder, make or do the same in such manner and to such extent
as Lender may deem necessary to protect the security hereof. Lender and its
agents are authorized to enter upon the Property or any part thereof for such
purposes, or appear in, defend, or bring any action or proceedings to protect
Lender's interest in the Property or any part thereof or to foreclose this
Security Instrument or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this Section 13.08, shall constitute a portion of the
Debt and shall be immediately due and payable to Lender upon demand. All such
costs and expenses incurred by Lender or its agents in remedying such Event of
Default or in appearing in, defending, or bringing any such action or proceeding
shall bear interest at the Default Rate, for the period from the date so
demanded to the date of payment to Lender. All such costs and expenses incurred
by Lender or its agents together with interest thereon calculated at the above
rate shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument.

      (b) If Lender makes any payment or advance that Lender is authorized by
this Security Instrument to make in the place and stead of Borrower (i) relating
to the Impositions or tax liens asserted against the Property, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any of the Impositions or the tax liens or
claims thereof; (ii) relating to any apparent or threatened adverse title, lien,
claim of lien, encumbrance, claim or charge, Lender will be the sole judge of
the legality or validity of same; or (iii) relating to any other purpose
authorized by this Security Instrument but not enumerated in this Section 13.08,
Lender may do so whenever, in its judgment and discretion, the payment or
advance seems necessary or desirable to protect the Property and the full
security interest intended to be created by this Security Instrument. In
connection with any payment or advance made pursuant to this Section 13.08,
Lender has the option and is authorized, but in no event shall be obligated, to
obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Lender pursuant to this Section 13.08 and the
cost and expenses of said title report will be due and payable by Borrower on
demand, together with interest at the Default Rate, and will be secured by this
Security Instrument.

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<PAGE>

      Section 13.09. Late Payment Charge. If any portion of the Debt is not paid
in full on or before the fifth (5th) day after the date on which it is due and
payable hereunder, Borrower shall pay to Lender an amount equal to five percent
(5%) of such unpaid portion of the Debt ("Late Charge") to defray the expense
incurred by Lender in handling and processing such delinquent payment, and such
amount shall constitute a part of the Debt.

      Section 13.10. Recovery of Sums Required to Be Paid. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due and payable hereunder
(after the expiration of any grace period or the giving of any notice herein
provided, if any), without regard to whether or not the balance of the Debt
shall be due, and without prejudice to the right of Lender thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by
Borrower existing at the time such earlier action was commenced.

      Section 13.11. Marshalling and Other Matters. Borrower hereby waives, to
the fullest extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement, redemption (both equitable and statutory) and
homestead laws now or hereafter in force and all rights of marshalling in the
event of any sale hereunder of the Property or any part thereof or any interest
therein. Nothing herein or in any other Loan Document shall be construed as
requiring Lender to resort to any particular Cross-collateralized Property for
the satisfaction of the Debt in preference or priority to any other
Cross-collateralized Property but Lender may seek satisfaction out of all the
Cross-collateralized Properties or any part thereof in its absolute discretion.
Further, Borrower hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, whether equitable or statutory and on behalf of each and
every Person acquiring any interest in or title to the Property or any part
thereof subsequent to the date of this Security Instrument and on behalf of all
Persons to the fullest extent permitted by applicable law.

      Section 13.12. Tax Reduction Proceedings. After an Event of Default,
Borrower shall be deemed to have appointed Lender as its attorney-in-fact to
seek a reduction or reductions in the assessed valuation of the Property for
real property tax purposes or for any other purpose and to prosecute any action
or proceeding in connection therewith. This power, being coupled with an
interest, shall be irrevocable for so long as any part of the Debt remains
unpaid and any Event of Default shall be continuing.

      Section 13.13. General Provisions Regarding Remedies.

      (a) Right to Terminate Proceedings. Lender may terminate or rescind any
proceeding or other action brought in connection with its exercise of the
remedies provided in Section 13.02 at any time before the conclusion thereof, as
determined in Lender's sole discretion and without prejudice to Lender.

      (b) No Waiver or Release. The failure of Lender to exercise any right,
remedy or option provided in the Loan Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation contained in the
Loan Documents. No acceptance by Lender of any payment after the occurrence of
an Event of Default and no payment by Lender of any payment or obligation for
which Borrower is liable hereunder shall be deemed to waive or cure any Event of
Default. No sale of all or any portion of the Property, no forbearance on the
part of Lender, and no extension of time for the payment of the whole or any
portion of the Debt or any other indulgence given by Lender to Borrower or any
other Person, shall operate to release or in any manner affect the interest of
Lender in the Property or the liability of Borrower to pay the Debt. No waiver
by Lender shall be effective unless it is in writing and then only to the extent
specifically stated.

      (c) No Impairment; No Releases. The interests and rights of Lender under
the Loan Documents shall not be impaired by any indulgence, including (i) any
renewal, extension or modification which Lender may grant with respect to any of
the Debt; (ii) any surrender, compromise, release, renewal, extension, exchange
or substitution which Lender may grant with respect to the Property or any
portion thereof; or (iii) any release or indulgence granted to any maker,
endorser, guarantor or surety of any of the Debt.

      (d) Effect on Judgment. No recovery of any judgment by Lender and no levy
of an execution under any judgment upon any Property or any portion thereof
shall affect in any manner or to any extent the lien of the other
Cross-collateralized Mortgages upon the remaining Cross-collateralized
Properties or any portion thereof, or

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any rights, powers or remedies of Lender hereunder or thereunder. Such lien,
rights, powers and remedies of Lender shall continue unimpaired as before.

                    ARTICLE XIV: COMPLIANCE WITH REQUIREMENTS

      Section 14.01. Compliance with Legal Requirements. (a) Borrower shall
promptly comply with all present and future Legal Requirements, foreseen and
unforeseen, ordinary and extraordinary, whether requiring structural or
nonstructural repairs or alterations including, without limitation, all zoning,
subdivision, building, safety and environmental protection, land use and
development Legal Requirements, all Legal Requirements which may be applicable
to the curbs adjoining the Property or to the use or manner of use thereof, and
all rent control, rent stabilization and all other similar Legal Requirements
relating to rents charged and/or collected in connection with the Leases.
Borrower represents and warrants that (i) except as previously disclosed to
Lender in the zoning report delivered to Lender in connection with the
origination of the Loan, the Property is in compliance in all material respects
with all Legal Requirements as of the date hereof, no notes or notices of
violations of any Legal Requirements have been entered or received by Borrower
and there is no basis for the entering of such notes or notices and (ii) any
violations of Legal Requirements with respect to the Property will not result in
a Material Adverse Effect, be a threat to the health and safety of any Person or
impair Borrower's ability to collect any Rent.

      (b) Borrower shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender, the validity or application of any Legal Requirement and to suspend
compliance therewith if permitted under applicable Legal Requirements, provided
(i) failure to comply therewith may not subject Lender to any civil or criminal
liability, (ii) prior to and during such contest, Borrower shall furnish to
Lender security reasonably satisfactory to Lender, in its discretion, against
loss or injury by reason of such contest or non-compliance with such Legal
Requirement, (iii) no Default or Event of Default shall exist during such
proceedings and such contest shall not otherwise violate any of the provisions
of any of the Loan Documents, (iv) such contest shall not, (unless Borrower
shall comply with the provisions of clause (ii) of this Section 14.01(b))
subject the Property to any lien or encumbrance the enforcement of which is not
suspended or otherwise affect the priority of the lien of this Security
Instrument; (v) such contest shall not affect the ownership, use or occupancy of
the Property; (vi) the Property or any part thereof or any interest therein
shall not be in any danger of being sold, forfeited or lost by reason of such
contest by Borrower; (vii) Borrower shall give Lender prompt notice of the
commencement of such proceedings and, upon request by Lender, notice of the
status of such proceedings and/or confirmation of the continuing satisfaction of
the conditions set forth in clauses (i) - (vi) of this Section 14.01(b); and
(viii) upon a final determination of such proceeding, Borrower shall take all
steps necessary to comply with any requirements arising therefrom.

      (c) Borrower shall at all times comply with all applicable Legal
Requirements with respect to the construction, use and maintenance of any vaults
adjacent to the Property. If by reason of the failure to pay taxes, assessments,
charges, permit fees, franchise taxes or levies of any kind or nature, the
continued use of the vaults adjacent to Property or any part thereof is
discontinued, Borrower nevertheless shall, with respect to any vaults which may
be necessary for the continued use of the Property, take such steps (including
the making of any payment) to ensure the continued use of vaults or
replacements.

      Section 14.02. Compliance with Recorded Documents; No Future Grants.
Borrower shall promptly perform and observe or cause to be performed and
observed, all of the terms, covenants and conditions of all Property Agreements
and all things necessary to preserve intact and unimpaired any and all
appurtenances or other interests or rights affecting the Property.

                       ARTICLE XV: DEFEASANCE; PREPAYMENT

      Section 15.01. Defeasance; Prepayment. (a) Except as set forth in this
Section 15.01, no prepayment or defeasance of the Debt may be made by or on
behalf of Borrower in whole or in part.

      (b) Borrower may defease the Loan at any time subsequent to the second
(2nd) anniversary of a Securitization and prior to the calendar month three (3)
months prior to the Maturity Date, in whole or, from time to time, in part, as
of the last day of an Interest Accrual Period, in accordance with the following
provisions:

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            (i) Lender shall have received from Borrower, not less than thirty
      (30) days', nor more than ninety (90) days', prior written notice
      specifying the date proposed for such defeasance and the amount which is
      to be defeased, which proposed date shall be a Payment Date.

            (ii) Borrower shall also pay to Lender all interest due through and
      including the last day of the Interest Accrual Period ending on the day
      prior to the Payment Date in which such defeasance is being made, together
      with any and all other amounts due and owing pursuant to the terms of the
      Note, this Security Instrument or the other Loan Documents, including,
      without limitation, any costs incurred in connection with a defeasance.

            (iii) No Event of Default shall have occurred and be continuing.

            (iv) Borrower shall (A) pay the Defeasance Deposit and (B) deliver
      to Lender (1) a security agreement, in form and substance reasonably
      satisfactory to Lender, creating a first priority lien on the Defeasance
      Deposit and the Federal Obligations purchased on behalf of Borrower with
      the Defeasance Deposit in accordance with the terms of this Section
      15.01(b)(iv) (the "Security Agreement"); (2) an Officer's Certificate
      certifying that the requirements set forth in this Section 15.01(b)(iv)
      have been satisfied; (3) an opinion of counsel for Borrower in form and
      substance reasonably satisfactory to Lender stating, among other things,
      that (x) Lender has a perfected security interest in the Defeasance
      Deposit and a first priority perfected security interest in the Federal
      Obligations purchased by Lender on behalf of Borrower, (y) the
      contemplated defeasance will not result in any deemed exchange pursuant to
      Section 1001 of the Code of the Note and will not adversely affect the
      Note's or, if applicable, the undefeased Note's status as indebtedness for
      Federal income tax purposes and (z) any trust formed as a "real estate
      mortgage investment conduit" within the meaning of Section 860D of the
      Code ("REMIC") in connection with a Securitization will not fail to
      maintain its status as a REMIC as a result of such defeasance; (4) in the
      event that only a portion of the Loan is being defeased, Borrower shall
      execute and deliver all necessary documents to split the Note into two
      substitute notes, one having a principal balance equal to the defeased
      portion of the Note (the "Defeased Note") and one note having a principal
      balance equal to the undefeased portion of the Note (the "Undefeased
      Note"), the amortization schedule for which notes shall be calculated, in
      the case of a Defeased Note, or recalculated, in the case of an Undefeased
      Note, to fully amortize the respective principal balances of each on a
      twenty-five (25) year schedule (commencing on the Closing Date) utilizing
      level monthly payments of principal and interest; (5) a certificate, in
      form and substance reasonably satisfactory to Lender from a nationally
      recognized Independent certified public accountant confirming that the
      requirements of this Section 15.01(b) have been satisfied; and (6) such
      other certificates, documents, opinions or instruments as Lender may
      reasonably request. Borrower hereby irrevocably appoints Lender as its
      agent and attorney-in-fact, coupled with an interest, for the purpose of
      using the Defeasance Deposit to purchase Federal Obligations which provide
      Scheduled Defeasance Payments, and Lender shall, upon receipt of the
      Defeasance Deposit, purchase such Federal Obligations on behalf of
      Borrower. Borrower, pursuant to the Security Agreement or other
      appropriate document, shall authorize and direct that the payments
      received from the Federal Obligations shall be made directly to Lender and
      applied to satisfy the obligations of Borrower under the Defeased Note.
      The Defeased Note and the Undefeased Note shall have identical terms as
      the Note, except for the principal balance. A Defeased Note cannot be the
      subject of a further defeasance.

            (v) The Rating Agencies shall have confirmed in writing that any
      rating issued by the Rating Agencies in connection with the Securitization
      will not, as a result of the proposed defeasance, be downgraded from the
      then current ratings thereof, qualified or withdrawn.

            (vi) In the event of a defeasance of the Loan in whole, but not in
      part, if Borrower shall continue to own any assets other than the
      Defeasance Deposit, Borrower shall establish or designate a
      special-purpose bankruptcy-remote successor entity acceptable to Lender
      (the "Successor Borrower"), with respect to which a substantive
      nonconsolidation opinion satisfactory in form and substance reasonably
      satisfactory to Lender has been delivered to Lender and Borrower shall
      transfer and assign to the Successor Borrower all obligations, rights and
      duties under the Note and the Security Agreement, together with the
      pledged Defeasance Deposit. The Successor Borrower shall assume the
      obligations of Borrower under the Note and the Security Agreement and
      Borrower shall be relieved of its obligations hereunder and

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<PAGE>

      thereunder. Borrower shall pay Ten and No/100 Dollars ($10.00) to the
      Successor Borrower as consideration for assuming such Borrower
      obligations.

            (vii) In the event that Borrower desires to allocate all or any
      portion of a Defeasance Deposit to reduce the Allocated Loan Amount of a
      specific Cross-collateralized Property, Borrower shall have included in
      the notice required to be given pursuant to clause (i) of this Section
      15.01(b) a statement designating to which Cross-collateralized Property
      Borrower wishes to have such Defeasance Deposit allocated.

      (c) At any time on or subsequent to the Payment Date which is six (6)
months prior to the Maturity Date, Borrower may prepay the Loan, in whole, but
not in part, as of the last day of an Interest Accrual Period, in accordance
with the following provisions:

            (i) Lender shall have received from Borrower, not less than thirty
      (30) days', nor more than ninety (90) days', prior written notice
      specifying the date proposed for such prepayment and the amount which is
      to be prepaid which proposed date shall be a Payment Date.

            (ii) Borrower shall also pay to Lender all interest due through and
      including the last day of the Interest Accrual Period ending on the day
      prior to the Payment Date in which such prepayment is being made, together
      with any and all other amounts due and owing pursuant to the terms of the
      Note, this Security Instrument or the other Loan Documents.

            (iii) No Event of Default shall have occurred and be continuing.

            (iv) Any partial prepayment of the Principal Amount, including,
      without limitation, Unscheduled Payments, shall be applied to the
      installments of principal last due hereunder and shall not release or
      relieve Borrower from the obligation to pay the regularly scheduled
      installments of principal becoming due under the Note.

      Section 15.02. Release of Property. If Loss Proceeds from the Property are
applied towards the repayment of the Debt, Lender shall, promptly, upon
satisfaction of all the following terms and conditions, execute, acknowledge and
deliver to Borrower a release of this Security Instrument (a "Release") in
recordable form with respect to the Property:

      (a) In the event of a prepayment of the Loan in part, but not in whole,
Lender shall have received the Release Price.

      (b) Borrower shall, at its sole cost and expense, prepare any and all
documents and instruments necessary to effect the Release, all of which shall be
subject to the reasonable approval of Lender, and Borrower shall pay all costs
reasonably incurred by Lender (including, but not limited to, reasonable
attorneys' fees and disbursements, title search costs and endorsement premiums)
in connection with the review, execution and delivery of the Release.

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

      (d) Subsequent to the Release, Borrower shall continue to be in compliance
with all of the terms of the Loan Documents, including without limitation,
Section 2.02(g) hereof.

      (e) The Rating Agencies shall have confirmed in writing that any rating
issued by the Rating Agencies in connection with a Securitization will not, as a
result of the proposed Release, be downgraded from their current ratings
thereof, qualified or withdrawn.

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                      ARTICLE XVI: ENVIRONMENTAL COMPLIANCE

      Section 16.01. Covenants, Representations and Warranties. (a) Borrower has
not, at any time, and, to Borrower's best knowledge after due inquiry and
investigation, except as set forth in the Environmental Report, no other Person
has at any time, handled, buried, stored, retained, refined, transported,
processed, manufactured, generated, produced, spilled, allowed to seep, leak,
escape or leach, or pumped, poured, emitted, emptied, discharged, injected,
dumped, transferred or otherwise disposed of or dealt with Hazardous Materials
on, to or from the Premises or any other real property owned and/or occupied by
Borrower, and Borrower does not intend to and shall not use the Property or any
part thereof or any such other real property for the purpose of handling,
burying, storing, retaining, refining, transporting, processing, manufacturing,
generating, producing, spilling, seeping, leaking, escaping, leaching, pumping,
pouring, emitting, emptying, discharging, injecting, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials, except for use and
storage for use of heating oil, cleaning fluids, pesticides and other substances
customarily used in the operation of properties that are being used for the same
purposes as the Property is presently being used, provided such use and/or
storage for use is in compliance with the requirements hereof and the other Loan
Documents and does not give rise to liability under applicable Legal
Requirements or Environmental Statutes or be the basis for a lien against the
Property or any part thereof. In addition, without limitation to the foregoing
provisions, Borrower represents and warrants that, to the best of its knowledge,
after due inquiry and investigation, except as previously disclosed in writing
to Lender, there is no asbestos in, on, over, or under all or any portion of the
fire-proofing or any other portion of the Property.

      (b) Borrower, after due inquiry and investigation, knows of no seepage,
leak, escape, leach, discharge, injection, release, emission, spill, pumping,
pouring, emptying or dumping of Hazardous Materials into waters on, under or
adjacent to the Property or any part thereof or any other real property owned
and/or occupied by Borrower, or onto lands from which such Hazardous Materials
might seep, flow or drain into such waters, except as disclosed in the
Environmental Report.

      (c) Borrower shall not permit any Hazardous Materials to be handled,
buried, stored, retained, refined, transported, processed, manufactured,
generated, produced, spilled, allowed to seep, leak, escape or leach, or to be
pumped, poured, emitted, emptied, discharged, injected, dumped, transferred or
otherwise disposed of or dealt with on, under, to or from the Property or any
portion thereof at any time, except for use and storage for use of heating oil,
ordinary cleaning fluids, pesticides and other substances customarily used in
the operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does
not give rise to liability under applicable Legal Requirements or be the basis
for a lien against the Property or any part thereof.

      (d) Borrower represents and warrants that no actions, suits, or
proceedings have been commenced, or are pending, or to the best knowledge of
Borrower, are threatened with respect to any Legal Requirement governing the
use, manufacture, storage, treatment, transportation, or processing of Hazardous
Materials with respect to the Property or any part thereof. Borrower has
received no notice of, and, except as disclosed in the Environmental Report,
after due inquiry, has no knowledge of any fact, condition, occurrence or
circumstance which with notice or passage of time or both would give rise to a
claim under or pursuant to any Environmental Statute pertaining to Hazardous
Materials on, in, under or originating from the Property or any part thereof or
any other real property owned or occupied by Borrower or arising out of the
conduct of Borrower, including, without limitation, pursuant to any
Environmental Statute.

      (e) Borrower has not waived any Person's liability with regard to
Hazardous Materials in, on, under or around the Property, nor has Borrower
retained or assumed, contractually or by operation of law, any other Person's
liability relative to Hazardous Materials or any claim, action or proceeding
relating thereto.

      (f) In the event that there shall be filed a lien against the Property or
any part thereof pursuant to any Environmental Statute pertaining to Hazardous
Materials, Borrower shall, within sixty (60) days or, in the event that the
applicable Governmental Authority has commenced steps to cause the Premises or
any part thereof to be sold pursuant to the lien, within fifteen (15) days, from
the date that Borrower receives notice of such lien, either (i) pay the claim
and remove the lien from the Property, or (ii) furnish (A) a bond satisfactory
to Lender in the amount of the claim out of which the lien arises, (B) a cash
deposit in the amount of the claim out of which the lien arises, or

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(C) other security reasonably satisfactory to Lender in an amount sufficient to
discharge the claim out of which the lien arises.

      (g) Borrower represents and warrants that (i) except as disclosed in the
Environmental Report, Borrower has no knowledge of any violation of any
Environmental Statute or any Environmental Problem in connection with the
Property, nor has Borrower been requested or required by any Governmental
Authority to perform any remedial activity or other responsive action in
connection with any Environmental Problem and (ii) neither the Property nor any
other property owned by Borrower is included or, to Borrower's best knowledge,
after due inquiry and investigation, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency (the "EPA") or on the inventory of other potential "Problem"
sites issued by the EPA and has not otherwise been identified by the EPA as a
potential CERCLA site or included or, to Borrower's knowledge, after due inquiry
and investigation, proposed for inclusion on any list or inventory issued
pursuant to any other Environmental Statute, if any, or issued by any other
Governmental Authority. Borrower covenants that Borrower will comply with all
Environmental Statutes affecting or imposed upon Borrower or the Property.

      (h) Borrower covenants that it shall promptly notify Lender of the
presence and/or release of any Hazardous Materials and of any request for
information or any inspection of the Property or any part thereof by any
Governmental Authority with respect to any Hazardous Materials and provide
Lender with copies of such request and any response to any such request or
inspection. Borrower covenants that it shall, in compliance with applicable
Legal Requirements, conduct and complete all investigations, studies, sampling
and testing (and promptly shall provide Lender with copies of any such studies
and the results of any such test) and all remedial, removal and other actions
necessary to clean up and remove all Hazardous Materials in, on, over, under,
from or affecting the Property or any part thereof in accordance with all such
Legal Requirements applicable to the Property or any part thereof to the
satisfaction of Lender.

      (i) Following the occurrence of an Event of Default hereunder, and without
regard to whether Lender shall have taken possession of the Property or a
receiver has been requested or appointed or any other right or remedy of Lender
has or may be exercised hereunder or under any other Loan Document, Lender shall
have the right (but no obligation) to conduct such investigations, studies,
sampling and/or testing of the Property or any part thereof as Lender may, in
its discretion, determine to conduct, relative to Hazardous Materials. All costs
and expenses incurred in connection therewith including, without limitation,
consultants' fees and disbursements and laboratory fees, shall constitute a part
of the Debt and shall, upon demand by Lender, be immediately due and payable and
shall bear interest at the Default Rate from the date so demanded by Lender
until reimbursed. Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all such investigations, studies, samplings and/or
testings including, without limitation, providing all relevant information and
making knowledgeable people available for interviews.

      (j) Borrower represents and warrants that all paint and painted surfaces
existing within the interior or on the exterior of the Improvements are not
flaking, peeling, cracking, blistering, or chipping, and do not contain lead or
are maintained in a condition that prevents exposure of young children to
lead-based paint, as of the date hereof, and that the current inspections,
operation, and maintenance program at the Property with respect to lead-based
paint is consistent with FNMA guidelines and sufficient to ensure that all
painted surfaces within the Property shall be maintained in a condition that
prevents exposure of tenants to lead-based paint. To Borrower's knowledge, there
have been no claims for adverse health effects from exposure on the Property to
lead-based paint or requests for the investigation, assessment or removal of
lead-based paint at the Property.

      (k) Borrower represents and warrants that except in accordance with all
applicable Environmental Statutes and as disclosed in the Environmental Report,
(i) no underground treatment or storage tanks or pumps or water, gas, or oil
wells are or have been located about the Property, (ii) no PCBs or transformers,
capacitors, ballasts or other equipment that contain dielectric fluid containing
PCBs are located about the Property, (iii) no insulating material containing
urea formaldehyde is located about the Property and (iv) no asbestos-containing
material is located about the Property.

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      Section 16.02. Environmental Indemnification. Borrower shall defend,
indemnify and hold harmless the Indemnified Parties for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
whether incurred or imposed within or outside the judicial process, including,
without limitation, reasonable attorneys' and consultants' fees and
disbursements and investigations and laboratory fees arising out of, or in any
way related to any Environmental Problem, including without limitation:

      (a) the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threat of release of any Hazardous Materials in, on, over,
under, from or affecting the Property or any part thereof whether or not
disclosed by the Environmental Report;

      (b) any personal injury (including wrongful death, disease or other health
condition related to or caused by, in whole or in part, any Hazardous Materials)
or property damage (real or personal) arising out of or related to any Hazardous
Materials in, on, over, under, from or affecting the Property or any part
thereof whether or not disclosed by the Environmental Report;

      (c) any action, suit or proceeding brought or threatened, settlement
reached, or order of any Governmental Authority relating to such Hazardous
Material whether or not disclosed by the Environmental Report; and/or

      (d) any violation of the provisions, covenants, representations or
warranties of Section 16.01 hereof or of any Legal Requirement which is based on
or in any way related to any Hazardous Materials in, on, over, under, from or
affecting the Property or any part thereof including, without limitation, the
cost of any work performed and materials furnished in order to comply therewith
whether or not disclosed by the Environmental Report.

      Notwithstanding the foregoing provisions of this Section 16.02 to the
contrary, Borrower shall have no obligation to indemnify Lender for liabilities,
claims, damages, penalties, causes of action, costs and expenses relative to the
foregoing which result directly from Lender's willful misconduct or gross
negligence. Any amounts payable to Lender by reason of the application of this
Section 16.02 shall be secured by this Security Instrument and shall, upon
demand by Lender, become immediately due and payable and shall bear interest at
the Default Rate from the date so demanded by Lender until paid.

      This indemnification shall survive the termination of this Security
Instrument whether by repayment of the Debt, foreclosure or deed in lieu
thereof, assignment, or otherwise; provided, however, in the event that no Event
of Default had occurred and Lender shall have received a clean Phase I
environmental report satisfactory in form and substance and prepared by a Person
satisfactory to Lender in all respects, this indemnification shall terminate
five (5) years after repayment of the Debt. The indemnity provided for in this
Section 16.02 shall not be included in any exculpation of Borrower or its
principals from personal liability provided for in this Security Instrument or
in any of the other Loan Documents. Nothing in this Section 16.02 shall be
deemed to deprive Lender of any rights or remedies otherwise available to
Lender, including, without limitation, those rights and remedies provided
elsewhere in this Security Instrument or the other Loan Documents.

                            ARTICLE XVII: ASSIGNMENTS

      Section 17.01. Participations and Assignments. Lender shall have the right
to assign this Security Instrument and/or any of the Loan Documents, and to
transfer, assign or sell participations and subparticipations (including blind
or undisclosed participations and subparticipations) in the Loan Documents and
the obligations hereunder to any Person; provided, however, that no such
participation shall increase, decrease or otherwise affect either Borrower's or
Lender's obligations under this Security Instrument or the other Loan Documents.

                          ARTICLE XVIII: MISCELLANEOUS

      Section 18.01. Right of Entry. Upon reasonable notice, except in the event
of an emergency, in which case no reasonable notice shall be required, Lender
and its agents shall have the right to enter and inspect the

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Property or any part thereof at all reasonable times and to inspect Borrower's
books and records and to make abstracts and reproductions thereof.

      Section 18.02. Cumulative Rights. The rights of Lender under this Security
Instrument shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision. Lender shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled, subject to the terms of this Security
Instrument, to every right and remedy now or hereafter afforded by law.

      Section 18.03. Liability. If Borrower consists of more than one Person,
the obligations and liabilities of each such Person hereunder shall be joint and
several.

      Section 18.04. Exhibits Incorporated. The information set forth on the
cover hereof, and the Exhibits annexed hereto, are hereby incorporated herein as
a part of this Security Instrument with the same effect as if set forth in the
body hereof.

      Section 18.05. Severable Provisions. If any term, covenant or condition of
the Loan Documents including, without limitation, the Note or this Security
Instrument, is held to be invalid, illegal or unenforceable in any respect, such
Loan Document shall be construed without such provision.

      Section 18.06. Duplicate Originals. This Security Instrument may be
executed in any number of duplicate originals and each such duplicate original
shall be deemed to constitute but one and the same instrument.

      Section 18.07. No Oral Change. The terms of this Security Instrument,
together with the terms of the Note and the other Loan Documents constitute the
entire understanding and agreement of the parties hereto and supersede all prior
agreements, understandings and negotiations between Borrower and Lender with
respect to the Loan. This Security Instrument, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act on the part of Borrower or Lender, but only by an agreement
in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.

      Section 18.08. Waiver of Counterclaim, Etc. BORROWER HEREBY WAIVES THE
RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY
ACTION OR PROCEEDING BROUGHT AGAINST IT BY LENDER OR ITS AGENTS, AND WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER OR IN ANY COUNTERCLAIM BORROWER MAY BE PERMITTED TO ASSERT HEREUNDER
OR WHICH MAY BE ASSERTED BY LENDER OR ITS AGENTS, AGAINST BORROWER, OR IN ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS SECURITY
INSTRUMENT OR THE DEBT.

      Section 18.09. Headings; Construction of Documents; etc. The table of
contents, headings and captions of various paragraphs of this Security
Instrument are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
Borrower acknowledges that it was represented by competent counsel in connection
with the negotiation and drafting of this Security Instrument and the other Loan
Documents and that neither this Security Instrument nor the other Loan Documents
shall be subject to the principle of construing the meaning against the Person
who drafted same.

      Section 18.10. Sole Discretion of Lender. Whenever Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory shall be
in the sole discretion of Lender and shall be final and conclusive, except as
may be otherwise specifically provided herein.

      Section 18.11. Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Security Instrument specifically and expressly

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<PAGE>

provides for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice.

      Section 18.12. Covenants Run with the Land. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises, shall be
binding upon Borrower and shall inure to the benefit of Lender, subsequent
holders of this Security Instrument and their successors and assigns. Without
limitation to any provision hereof, the term "Borrower" shall include and refer
to the borrower named herein, any subsequent owner of the Property, and its
respective heirs, executors, legal representatives, successors and assigns. The
representations, warranties and agreements contained in this Security Instrument
and the other Loan Documents are intended solely for the benefit of the parties
hereto, shall confer no rights hereunder, whether legal or equitable, in any
other Person and no other Person shall be entitled to rely thereon.

      Section 18.13. Applicable Law. THIS SECURITY INSTRUMENT WAS NEGOTIATED IN
NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY
APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION, PRIORITY, ENFORCEMENT AND FORECLOSURE
OF THE LIENS AND SECURITY INTERESTS CREATED HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PREMISES ARE LOCATED,
IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH
STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS, AND THE DEBT OR OBLIGATIONS ARISING
HEREUNDER.

      Section 18.14. Security Agreement. (a) (i) This Security Instrument is
both a real property mortgage, deed to secure debt or deed of trust, as
applicable, and a "security agreement" within the meaning of the UCC. The
Property includes both real and personal property and all other rights and
interests, whether tangible or intangible in nature, of Borrower in the
Property. This Security Instrument is filed as a fixture filing and covers goods
which are or are to become fixtures on the Property. Borrower by executing and
delivering this Security Instrument has granted to Lender, as security for the
Debt, a security interest in the Property to the full extent that the Property
may be subject to the UCC (said portion of the Property so subject to the UCC
being called in this Section 18.14 the "Collateral"). If an Event of Default
shall occur, Lender, in addition to any other rights and remedies which it may
have, shall have and may exercise immediately and without demand, any and all
rights and remedies granted to a secured party upon default under the UCC,
including, without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender following an Event of
Default, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place acceptable to Lender. Borrower shall
pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys' fees, incurred or paid by Lender in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect to
the Collateral. Any disposition pursuant to the UCC of so much of the Collateral
as may constitute personal property shall be considered commercially reasonable
if made pursuant to a public sale which is advertised at least twice in a
newspaper in which sheriff's sales are advertised in the county where the
Premises is located. Any notice of sale, disposition or other intended action by
Lender with respect to the Collateral given to Borrower in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
reasonable notice to Borrower. The proceeds of any disposition of the
Collateral, or any part thereof, may be applied by Lender to the payment of the
Debt in such priority and proportions as Lender in its discretion shall deem
proper. It is not necessary that the Collateral be present at any disposition
thereof. Lender shall have no obligation to clean-up or otherwise prepare the
Collateral for disposition.

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            (ii) The mention in a financing statement filed in the records
normally pertaining to personal property of any portion of the Property shall
not derogate from or impair in any manner the intention of this Security
Instrument. Lender and Borrower hereby declare that all items of Collateral are
part of the real property encumbered hereby to the fullest extent permitted by
law, regardless of whether any such item is physically attached to the
Improvements or whether serial numbers are used for the better identification of
certain items. Specifically, the mention in any such financing statement of any
items included in the Property shall not be construed to alter, impair or impugn
any rights of Lender as determined by this Security Instrument or the priority
of Lender's lien upon and security interest in the Property in the event that
notice of Lender's priority of interest as to any portion of the Property is
required to be filed in accordance with the UCC to be effective against or take
priority over the interest of any particular class of persons, including the
federal government or any subdivision or instrumentality thereof. No portion of
the Collateral constitutes or is the proceeds of "Farm Products", as defined in
the UCC.

            (iii) If Borrower is at any time a beneficiary under a letter of
credit now or hereafter issued in favor of Borrower, Borrower shall promptly
notify Lender thereof and, at the request and option of Lender, Borrower shall,
pursuant to an agreement in form and substance satisfactory to Lender, either
(A) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to Lender of the proceeds of any drawing under the letter of
credit or (B) arrange for Lender to become the transferee beneficiary of the
letter of credit, with Lender agreeing, in each case, that the proceeds of any
drawing under the letter to credit are to be applied as provided in this
Security Instrument.

            (iv) Borrower and Lender acknowledge that for the purposes of
Article 9 of the UCC, the law of the State of New York shall be the law of the
jurisdiction of the bank in which the Central Account is located.

            (v) Lender may comply with any applicable Legal Requirements in
connection with the disposition of the Collateral, and Lender's compliance
therewith will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.

            (vi) Lender may sell the Collateral without giving any warranties as
to the Collateral. Lender may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like. This procedure will not be considered
to adversely affect the commercial reasonableness of any sale of the Collateral.

            (vii) If Lender sells any of the Collateral upon credit, Borrower
will be credited only with payments actually made by the purchaser, received by
Lender and applied to the indebtedness of Borrower. In the event the purchaser
of the Collateral fails to fully pay for the Collateral, Lender may resell the
Collateral and Borrower will be credited with the proceeds of such sale.

      (b) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to file with the appropriate public office on its
behalf any financing or other statements signed only by Lender, as secured
party, or, to the extent permitted under the UCC, unsigned, in connection with
the Collateral covered by this Security Instrument.

      Section 18.15. Actions and Proceedings. Lender has the right to appear in
and defend any action or proceeding brought with respect to the Property in its
own name or, if required by Legal Requirements or, if in Lender's reasonable
judgment, it is necessary, in the name and on behalf of Borrower, which Lender
believes will adversely affect the Property or this Security Instrument and to
bring any action or proceedings, in its name or in the name and on behalf of
Borrower, which Lender, in its discretion, decides should be brought to protect
its interest in the Property.

      Section 18.16. Usury Laws. This Security Instrument and the Note are
subject to the express condition, and it is the expressed intent of the parties,
that at no time shall Borrower be obligated or required to pay interest on the
principal balance due under the Note at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by law to contract or
agree to pay. If by the terms of this Security Instrument or the Note, Borrower
is at any time required or obligated to pay interest on the principal balance
due under the Note at a rate in excess of such maximum rate, such rate of
interest shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be

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computed at such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Note. No application to the principal
balance of the Note pursuant to this Section 18.16 shall give rise to any
requirement to pay any prepayment fee or charge of any kind due hereunder, if
any.

      Section 18.17. Remedies of Borrower. In the event that a claim or
adjudication is made that Lender has acted unreasonably or unreasonably delayed
acting in any case where by law or under the Note, this Security Instrument or
the Loan Documents, it has an obligation to act reasonably or promptly, Lender
shall not be liable for any monetary damages, and Borrower's remedies shall be
limited to injunctive relief or declaratory judgment.

      Section 18.18. Offsets, Counterclaims and Defenses. Any assignee of this
Security Instrument, the Assignment and the Note shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to the Note,
the Assignment or this Security Instrument which Borrower may otherwise have
against any assignor of this Security Instrument, the Assignment and the Note
and no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon this
Security Instrument, the Assignment or the Note and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.

      Section 18.19. No Merger. If Borrower's and Lender's estates become the
same including, without limitation, upon the delivery of a deed by Borrower in
lieu of a foreclosure sale, or upon a purchase of the Property by Lender in a
foreclosure sale, this Security Instrument and the lien created hereby shall not
be destroyed or terminated by the application of the doctrine of merger and in
such event Lender shall continue to have and enjoy all of the rights and
privileges of Lender as to the separate estates; and, as a consequence thereof,
upon the foreclosure of the lien created by this Security Instrument, any Leases
or subleases then existing and created by Borrower shall not be destroyed or
terminated by application of the law of merger or as a result of such
foreclosure unless Lender or any purchaser at any such foreclosure sale shall so
elect. No act by or on behalf of Lender or any such purchaser shall constitute a
termination of any Lease or sublease unless Lender or such purchaser shall give
written notice thereof to such lessee or sublessee.

      Section 18.20. Restoration of Rights. In case Lender shall have proceeded
to enforce any right under this Security Instrument by foreclosure sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, in every such case,
Borrower and Lender shall be restored to their former positions and rights
hereunder with respect to the Property subject to the lien hereof.

      Section 18.21. Waiver of Statute of Limitations. The pleadings of any
statute of limitations as a defense to any and all obligations secured by this
Security Instrument are hereby waived to the full extent permitted by Legal
Requirements.

      Section 18.22. Advances. This Security Instrument shall cover any and all
advances made pursuant to the Loan Documents, rearrangements and renewals of the
Debt and all extensions in the time of payment thereof, even though such
advances, extensions or renewals be evidenced by new promissory notes or other
instruments hereafter executed and irrespective of whether filed or recorded.
Likewise, the execution of this Security Instrument shall not impair or affect
any other security which may be given to secure the payment of the Debt, and all
such additional security shall be considered as cumulative. The taking of
additional security, execution of partial releases of the security, or any
extension of time of payment of the Debt shall not diminish the force, effect or
lien of this Security Instrument and shall not affect or impair the liability of
Borrower and shall not affect or impair the liability of any maker, surety, or
endorser for the payment of the Debt.

      Section 18.23. Application of Default Rate Not a Waiver. Application of
the Default Rate shall not be deemed to constitute a waiver of any Default or
Event of Default or any rights or remedies of Lender under this Security
Instrument, any other Loan Document or applicable Legal Requirements, or a
consent to any extension of time for the payment or performance of any
obligation with respect to which the Default Rate may be invoked.

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      Section 18.24. Intervening Lien. To the fullest extent permitted by law,
any agreement hereafter made pursuant to this Security Instrument shall be
superior to the rights of the holder of any intervening lien.

      Section 18.25. No Joint Venture or Partnership. Borrower and Lender intend
that the relationship created hereunder be solely that of mortgagor and
mortgagee or grantor and beneficiary or borrower and lender, as the case may be.
Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.

      Section 18.26. Time of the Essence. Time shall be of the essence in the
performance of all obligations of Borrower hereunder.

      Section 18.27. Borrower's Obligations Absolute. Borrower acknowledges that
Lender and/or certain Affiliates of Lender are engaged in the business of
financing, owning, operating, leasing, managing, and brokering real estate and
in other business ventures which may be viewed as adverse to or competitive with
the business, prospect, profits, operations or condition (financial or
otherwise) of Borrower. Except as set forth to the contrary in the Loan
Documents, all sums payable by Borrower hereunder shall be paid without notice
or demand, counterclaim, set-off, deduction or defense and without abatement,
suspension, deferment, diminution or reduction, and the obligations and
liabilities of Borrower hereunder shall in no way be released, discharged, or
otherwise affected (except as expressly provided herein) by reason of: (a) any
damage to or destruction of or any Taking of the Property or any portion thereof
or any other Cross-collateralized Property; (b) any restriction or prevention of
or interference with any use of the Property or any portion thereof or any other
Cross-collateralized Property; (c) any title defect or encumbrance or any
eviction from the Premises or any portion thereof by title paramount or
otherwise; (d) any bankruptcy proceeding relating to Borrower, any General
Partner, or any guarantor or indemnitor, or any action taken with respect to
this Security Instrument or any other Loan Document by any trustee or receiver
of Borrower or any such General Partner, guarantor or indemnitor, or by any
court, in any such proceeding; (e) any claim which Borrower has or might have
against Lender; (f) any default or failure on the part of Lender to perform or
comply with any of the terms hereof or of any other agreement with Borrower; or
(g) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether or not Borrower shall have notice or knowledge of any of the
foregoing.

      Section 18.28. Publicity. All promotional news releases, publicity or
advertising by Manager, Borrower or their respective Affiliates through any
media intended to reach the general public shall not refer to the Loan Documents
or the financing evidenced by the Loan Documents, or to Lender or to any of its
Affiliates without the prior written approval of Lender or such Affiliate, as
applicable, in each instance, such approval not to be unreasonably withheld or
delayed. Lender shall be authorized to provide information relating to the
Property, the Loan and matters relating thereto to rating agencies,
underwriters, potential securities investors, auditors, regulatory authorities
and to any Persons which may be entitled to such information by operation of
law. Notwithstanding the foregoing, Lender shall obtain Borrower's written
approval (which approval shall not unreasonably be withheld, delayed or
conditioned) prior to releasing any publicity articles or advertisements (such
as "tombstones") concerning the finances of the Property or the Loan.

      Section 18.29. Securitization Opinions. In the event the Loan is included
as an asset of a Securitization by Lender or any of its Affiliates, Borrower
shall, within fifteen (15) Business Days after Lender's written request
therefor, at Lender's sole cost and expense, deliver opinions in form and
substance and delivered by counsel reasonably acceptable to Lender and each
Rating Agency, as may be reasonably required by Lender and/or the Rating Agency
in connection with such securitization. Borrower's failure to deliver the
opinions required hereby within such fifteen (15) Business Day period shall
constitute an "Event of Default" hereunder.

      Section 18.30. Cooperation with Rating Agencies. Borrower covenants and
agrees that in the event the Loan is to be included as an asset of a
Securitization, Borrower shall (a) gather any information reasonably required by
each Rating Agency in connection with such a Securitization, (b) at Lender's
request, meet with representatives of each Rating Agency to discuss the business
and operations of the Property, and (c) cooperate with the reasonable requests
of each Rating Agency and Lender in connection with all of the foregoing as well
as in connection with all

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other matters and the preparation of any offering documents with respect
thereto, including, without limitation, entering into any amendments or
modifications to this Security Instrument or to any other Loan Document which
may be requested by Lender to conform to Rating Agency or market standards for a
Securitization provided that no such modification shall modify (a) the interest
rate payable under the Note, (b) the stated maturity of the Note, (c) the
amortization of principal under the Note, (d) Section 18.32 hereof, (e) any
other material economic term of the Loan or (f) any provision, the effect of
which would materially increase Borrower's obligations or materially decrease
Borrower's rights under the Loan Documents. Borrower acknowledges that the
information provided by Borrower to Lender may be incorporated into the offering
documents for a Securitization and to the fullest extent permitted, Borrower
irrevocably waives all rights, if any, to prohibit such disclosures including,
without limitation, any right of privacy. Lender and each Rating Agency shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and
Borrower indemnifies and holds harmless the Indemnified Parties, their
Affiliates and each Person who controls such Persons within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as same may be amended from time to time, for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
whether incurred or imposed within or outside the judicial process, including,
without limitation, reasonable attorneys' fees and disbursements that arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such information or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated in such information or necessary in order to make the statements in such
information, or in light of the circumstances under which they were made, not
misleading.

      Section 18.31. Securitization Financials. Borrower covenants and agrees
that, upon Lender's written request therefor in connection with a
Securitization, Borrower shall, at Lender's sole cost and expense, promptly
deliver audited financial statements and related documentation prepared by an
Independent certified public accountant that satisfy securities laws and
requirements for use in a public registration statement (which may include up to
three (3) years of historical financial statements).

      Section 18.32. Exculpation. Notwithstanding anything herein or in any
other Loan Document to the contrary, except as otherwise set forth in this
Section 18.32 to the contrary, Lender shall not enforce the liability and
obligation of Borrower or (a) if Borrower is a partnership, its constituent
partners or any of their respective partners, (b) if Borrower is a trust, its
beneficiaries or any of their respective Partners (as hereinafter defined), (c)
if Borrower is a corporation, any of its shareholders, directors, principals,
officers or employees, or (d) if Borrower is a limited liability company, any of
its members (the Persons described in the foregoing clauses (a) -(d), as the
case may be, are hereinafter referred to as the "Partners") to perform and
observe the obligations contained in this Security Instrument or any of the
other Loan Documents by any action or proceeding wherein a money judgment shall
be sought against Borrower or the Partners, except that Lender may bring a
foreclosure action, action for specific performance, or other appropriate action
or proceeding (including, without limitation, an action to obtain a deficiency
judgment) solely for the purpose of enabling Lender to realize upon (i)
Borrower's interest in the Property, (ii) the Rent to the extent (x) received by
Borrower (or received by its Partners) after the occurrence of an Event of
Default, or (y) distributed to Borrower (or its Partners, but only to the extent
received by its Partners) during or with respect to any period for which Lender
did not receive a Manager Certification accurate in all material respects
confirming and certifying that all Operating Expenses with respect to the
Property which had accrued as of the applicable date of such Manager
Certification had been paid (or if same had not been paid, that Manager had
taken adequate reserves therefor) (all Rent covered by clauses (x) and (y) being
hereinafter referred to as the "Recourse Distributions") and (iii) any other
collateral given to Lender under the Loan Documents (the collateral described in
the foregoing clauses (i) through (iii) is hereinafter referred to as the
"Default Collateral"); provided, however, that any judgment in any such action
or proceeding shall be enforceable against Borrower and the Partners only to the
extent of any such Default Collateral. The provisions of this Section shall not,
however, (a) impair the validity of the Debt evidenced by the Note or in any way
affect or impair the lien of this Security Instrument or any of the other Loan
Documents or the right of Lender to foreclose this Security Instrument following
the occurrence of an Event of Default; (b) impair the right of Lender to name
Borrower as a party defendant in any action or suit for judicial foreclosure and
sale under this Security Instrument; (c) affect the validity or enforceability
of the Note, this Security Instrument, or any of the other Loan Documents, or
impair the right of Lender to seek a personal judgment against Guarantor; (d)
impair the right of Lender to obtain the appointment of a receiver; (e) impair
the enforcement of the Assignment; (f) impair the right of Lender to bring suit
for a monetary

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judgment with respect to fraud or material misrepresentation by Borrower, or any
other Person in connection with this Security Instrument, the Note or the other
Loan Documents, and the foregoing provisions shall not modify, diminish or
discharge the liability of Borrower or the Partners with respect to same; (g)
impair the right of Lender to bring suit for a monetary judgment to obtain the
Recourse Distributions received by Borrower including, without limitation, the
right to bring suit for a monetary judgement to proceed against any Partner, to
the extent of any such Recourse Distributions theretofore distributed to and
received by such Partner, and the foregoing provisions shall not modify,
diminish or discharge the liability of Borrower or the Partners with respect to
same; (h) impair the right of Lender to bring suit for a monetary judgment with
respect to Borrower's misappropriation of tenant security deposits or Rent
collected more than one (1) month in advance, and the foregoing provisions shall
not modify, diminish or discharge the liability of Borrower or the Partners with
respect to same; (i) impair the right of Lender to obtain Loss Proceeds due to
Lender pursuant to this Security Instrument; (j) impair the right of Lender to
enforce the provisions of Sections 2.02(g), 12.01, 16.01 or 16.02, inclusive of
this Security Instrument, even after repayment in full by Borrower of the Debt
or to bring suit for a monetary judgment against Borrower or the Partners with
respect to any obligation set forth in said Sections; (k) prevent or in any way
hinder Lender from exercising, or constitute a defense, or counterclaim, or
other basis for relief in respect of the exercise of, any other remedy against
any or all of the collateral securing the Note as provided in the Loan
Documents; (l) impair the right of Lender to bring suit for a monetary judgment
with respect to any misapplication or conversion of Loss Proceeds, and the
foregoing provisions shall not modify, diminish or discharge the liability of
Borrower or the Partners with respect to same; (m) impair the right of Lender to
sue for, seek or demand a deficiency judgment against Borrower solely for the
purpose of foreclosing the Property or any part thereof, or realizing upon the
Default Collateral; provided, however, that any such deficiency judgment
referred to in this clause (m) shall be enforceable against Borrower and the
Partners (but only to the extent distributed to and actually received by such
Partner) only to the extent of any of the Default Collateral; (n) impair the
ability of Lender to bring suit for a monetary judgment with respect to damage,
arson or waste to or of the Property resulting from intentional misconduct or
gross negligence of Borrower, the Partners or any Affiliates thereof; (o)
intentionally omitted; (p) be deemed a waiver of any right which Lender may have
under Sections 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy
Code to file a claim for the full amount of the Debt or to require that all
collateral shall continue to secure all of the Debt; (q) impair the right of
Lender to bring suit for monetary judgment with respect to any losses resulting
from any claims, actions or proceedings initiated by Borrower (or any Affiliate
of Borrower) alleging that the relationship of Borrower and Lender is that of
joint venturers, partners, tenants in common, joint tenants or any relationship
other than that of debtor and creditor; or (r) impair the right of Lender to
bring suit for a monetary judgment in the event of a Transfer in violation of
the provisions of Article IX hereof. The provisions of this Section 18.32 shall
be inapplicable to Borrower if (a) any proceeding, action, petition or filing
under the Bankruptcy Code, or any similar state or federal law now or hereafter
in effect relating to bankruptcy, reorganization or insolvency, or the
arrangement or adjustment of debts, shall be filed by, consented to or
acquiesced in by or with respect to Borrower, or if Borrower shall institute any
proceeding for its dissolution or liquidation, or shall make an assignment for
the benefit of creditors, or (b) Borrower or any Affiliate contests or in any
material way interferes with, directly or indirectly (collectively, a "Contest")
any foreclosure action, UCC sale or other material remedy exercised by Lender
upon the occurrence of any Event of Default whether by making any motion,
bringing any counterclaim, claiming any defense, seeking any injunction or other
restraint, commencing any action, or otherwise (provided that if any such Person
obtains a non-appealable order successfully asserting a Contest, Borrower shall
have no liability under this clause (b)), in which event Lender shall have
recourse against all of the assets of Borrower including, without limitation,
any right, title and interest of Borrower in and to the Property and any
Recourse Distributions received by the Partners of Borrower (but excluding the
other assets of such Partners to the extent Lender would not have had recourse
thereto other than in accordance with the provisions of this Section 18.32).

      Section 18.33. Certain Matters Relating to Property Located in the State
of Alabama. With respect to the Property which is located in the State of
Alabama, notwithstanding anything contained herein to the contrary:

      (a) The money, property or services that are the subject of the
transactions provided for in the Loan Documents are not primarily for personal,
family or household purposes as contemplated by Section 5-19-1(2) of the Code of
Alabama 1975, as amended.

      (b) Any time after an Event of Default, this Security Instrument shall be
subject to foreclosure and may be foreclosed as provided by law in case of
past-due mortgages, and Lender shall be authorized, at its option,

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whether or not possession of the Property is taken, to sell the Property (or
such part of parts thereof as Lender may from time to time elect to sell) under
the power of sale which is hereby given to Lender, at public outcry, to the
highest bidder for cash, at the front or main door of the courthouse of the
county in which the Premises to be sold, or a substantial or material part
thereof, is located, after first giving notice by publication one a week for
three successive weeks of the time, place and terms of such sale, together with
a description of the Property to be sold, by publication in some newspaper
published in the county or counties in which the Premises to be sold is located.
If there is Premises to be sold in more than one county, publication shall be
made in all counties where the Premises to be sold is located, but if no
newspaper is published in any such county, the notice shall be published in a
newspaper published in an adjoining county for three successive weeks. The sale
shall be held between the hours of 11:00 a.m. and 4:00 p.m. on the day
designated for the exercise of the power of sale hereunder. Lender may bid at
any sale held under this Security Instrument and may purchase the Property, or
any part thereof, if the highest bidder therefor. The purchaser at any such sale
shall be under no obligation to see to the proper application of the purchase
money. At any sale all or any part of the Property, real, personal, or mixed,
may be offered for sale in parcels or en masse for one total price, and the
proceeds of any such sale en masse shall be accounted for in one amount without
distinction between the items included therein and without assigning to them any
proportion of such proceeds, Borrower hereby waiving the application of any
doctrine of marshalling or like proceeding. In case Lender, in the exercise of
the power of sale herein given, elects to sell the Property in parts or parcels,
sales thereof may be held from time to time, and the power of sale granted
herein shall not be fully exercised until all of the Property not previously
sold shall have been sold or all the Debt shall have been paid in full and this
Security Instrument shall have been terminated as provided herein. In case of
any sale of the Property as authorized by this paragraph, all prerequisites to
the sale shall be presumed to have been performed, and in any conveyance given
hereunder all statements of facts, or other recitals therein made, as to the
nonpayment of any of the Debt or as to the advertisement of sale, or the time,
place and manner of sale, or as to any other fact or thing, shall be taken in
all courts of law or equity as rebuttably presumptive evidence that the facts so
stated or recited are true.

      (c) This Security Instrument shall be effective as a financing statement
filed as a fixture filing for purposes of Article 9 of the Uniform Commercial
Code. The fixture filing covers all goods that are or are to become affixed to
the Realty. The goods are described by item or type in the granting clauses
hereof. Borrower is the debtor, and Lender is the secured party. The names of
the debtor (Borrower) and the secured party (Lender) are given in the first
paragraph of this Security Instrument. This Security Instrument is signed by the
debtor (Borrower) as a fixture filing. The mailing address of Lender set out in
the first paragraph of this Security Instrument is an address of the secured
party from which information concerning the security interest may be obtained.
The mailing address of the Borrower set out in the first paragraph of this
Security Instrument is a mailing address for the debtor. A statement indicating
the types, or describing the items, of collateral is set forth in this Section
and in the granting clauses of this Security Instrument. The real estate to
which the goods are or are to be affixed is described in Exhibit A. The Borrower
is a record owner of the real estate.

      (d) Intentionally omitted.

      (e) The date of this Security Instrument is intended as a date for the
convenient identification of this Security Instrument and is not intended to
indicate that this Security Instrument was executed and delivered on that date.

      (f) The "NOW THEREFORE" clause is amended by deleting the words "Borrower
has irrevocably granted, and by these presents and by the execution and delivery
hereof does hereby irrevocably grant, bargain, sell, alien, demise, release,
convey, assign, transfer, deed, hypothecate, pledge, set over, warrant, mortgage
and confirm to Lender, forever, with power of sale," and inserting the following
in its place: "Borrower has granted, bargained, sold and conveyed unto the
Lender and by these presents does hereby grant, bargain, sell and convey unto
the Lender, forever, with power of sale, and has granted and by these presents
does hereby grant to the Lender, a security interest in,".

      Section 18.34. Certain Matters Relating to Property Located in the State
of Arkansas. With respect to the Property which is located in the State of
Arkansas, notwithstanding anything contained herein to the contrary:

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      (a) Borrower releases all right of appraisement and also releases all
right of redemption under the laws of Arkansas, including, without limitation,
all right of redemption under Ark. Code Ann. Section 18-49-106 (1987).

      (b) Upon the occurrence or continuance of an Event of Default, Borrower
acknowledges and consents to statutory foreclosure pursuant to Ark. Code Ann.
Sections 18-50-101 et seq. (2003 Supp.).

      Section 18.35. Certain Matters Relating to Property Located in the State
of Connecticut. With respect to the Property which is located in the State of
Connecticut, notwithstanding anything contained herein to the contrary:

      (a) This Security Instrument shall constitute an Open-End Mortgage Deed in
accordance with Conn. Gen. Statutes Section 49-2. Further, it is agreed that
additional advancement may be made by Lender or its assignees as provided in
this Security Instrument or any of the other Loan Documents for the benefit of
Borrower, whether such future advances are obligatory or made at the option of
Lender. Each such advance is to be secured with and have the same priority as
the Debt to the extent the amount of such subsequent advance when added to the
amount of the Debt does not exceed the sum of two (2) times the Loan Amount.
Such advances are repayable no later than the maturity date specified in the
Loan Documents. Borrower shall execute a note or notes evidencing such future
advances, which note or notes shall be delivered to Lender or its assigns and
which note or notes shall be included in the words "Note" or "Debt" wherever
either appears in the context of this Security Instrument. To the extent
permitted by law, the failure to execute such note or notes shall not impair the
validity of this Security Instrument and such advances shall be secured by the
lien of this Security Instrument.

      (b) The term "Security Instrument" as used herein shall mean this
"Open-End Mortgage Deed."

      (c) A copy of the Note is attached hereto and made a part hereof.

      Section 18.36. Certain Matters Relating to Property located in the State
of Florida. With respect to the Property which is located in the State of
Florida, notwithstanding anything contained herein to the contrary:

      (a) It is agreed that, in addition to existing indebtedness, any future
advances made by the then holder of the Note to or for the benefit of Borrower
or Borrower's permitted assignees, whether such advances are obligatory or are
made at the option of Lender, or otherwise, at any time within twenty (20) years
from the date of this Security Instrument, with interest thereon at the rate
agreed upon at the time of each additional loan or advance, shall be equally
secured with and have the same priority as the Debt and be subject to all of the
terms and provisions of this Security Instrument, whether or not such additional
loan or advance is evidenced by a promissory note of Borrower and whether or not
identified by a recital that it is secured by this Security Instrument; provided
that, although the total amount of the indebtedness that may be secured may
decrease to zero from time to time or may increase from time to time, the
aggregate amount of outstanding Debt so secured at any one time shall not exceed
the sum of two (2) times the Loan Amount, plus interest and disbursements made
for the payment of taxes, levies or insurance on the Property with interest on
such disbursements. It is understood and agreed that this future advance
provision shall not be construed to obligate Lender to make any such additional
loans or advances. It is further agreed that any additional note or notes
executed and delivered under this future advance provision shall be included in
the words "Note" or "Debt" wherever either appears in the context of this
Security Instrument. Borrower, for itself and its successors in title and its
successors and permitted assigns, hereby expressly waives and relinquishes any
rights granted under Section 697.04 of the Florida Statutes, or otherwise, to
limit the amount of indebtedness that may be secured by this Security Instrument
at any time during the term of this Security Instrument. Borrower further
covenants not to file for record any notice limiting the maximum principal
amount that may be secured by this Security Instrument and agrees that any such
notice, if filed, shall be null and void; and except as hereinafter provided, of
no effect. In the event that, notwithstanding the foregoing covenant, Borrower
or its successor in title files for record any notice limiting the maximum
principal amount that may be secured by this Security Instrument in violation of
the foregoing covenant, the Debt shall, at the option of Lender, become
immediately due and payable.

      (b) Notwithstanding anything to the contrary contained in this Security
Instrument, Lender shall comply with the requirements of Section 501.137.
Florida Statutes, as applicable, with respect to the payment of

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Impositions and insurance premiums from the Basic Carrying Costs Sub-Account so
that the maximum tax discount available may be obtained with regard to the
Premises and so that insurance coverage on the Property does not lapse.

      (c) The assignment of leases and rents contained in this Security
Instrument is intended to provide Lender with all the rights and remedies of
lenders pursuant to Section 697.07 of the Florida Statutes (hereinafter "Section
697.07"), as may be amended from time to time. However, in no event shall this
reference diminish, alter, impair, or affect any other rights and remedies of
Lender, including but not limited to, the appointment of a receiver as provided
herein, nor shall any provision in this Section diminish, alter, impair or
affect any rights or powers of the receiver in law or equity or as set forth
herein. In addition, this assignment shall be fully operative without regard to
value of the Property or without regard to the adequacy of the Property to serve
as security for the obligations owed by Borrower to Lender, and shall be in
addition to any rights arising under Section 697.07. Further, except for the
notices required hereunder, if any, Borrower waives any notice of default or
demand for turnover of rents by Lender, together with any rights under Section
697.07 to apply to a court to deposit the Rents into the registry of the court
or such other depository as the court may designate.

      Section 18.37. Certain Matters Relating to Property Located in the State
of Georgia. With respect to the Property which is located in the State of
Georgia, notwithstanding anything contained herein to the contrary:

      (a) The terms "mortgage" and "hypothecate" which are contained in the "NOW
THEREFORE" paragraph in the Recitals hereto and in Sections 2.02(q), 2.03,
2.05(b), 2.05(f), 8.01(d), 15.02 and 18.14 hereof shall be deleted.

      (b) The "PROVIDED ALWAYS" paragraph in the Recitals hereto shall be
deleted in its entirety and the following provisions shall be inserted in its
place:

            Borrower covenants that Borrower is lawfully seized and possessed of
      the Premises as aforesaid, has good right to convey the same, and that the
      same are unencumbered except for the Permitted Encumbrances. Borrower
      warrants and will forever defend the title to the Premises against the
      claims of all persons whomsoever, except as to the Permitted Encumbrances.

            This Deed is intended to operate and is to be construed as a deed
      passing the title to the Premises to Lender and is made under those
      provisions of the existing laws of the State of Georgia relating to deeds
      to secure debt, and not as a mortgage, and is given to secure the payment
      of the Note, the final payment on which is due on Maturity, unless
      otherwise extended pursuant to the terms of the Note, together with any
      and all renewals, modifications, consolidations and extensions of the
      indebtedness evidenced thereby, together with the Debt, and together with
      any and all additional advances made by Lender to protect or preserve the
      Property or the security interests created hereby on the Property, or for
      taxes, assessments or insurance premiums as hereinafter provided or for
      the performance of any of Borrower's obligations hereunder or for any
      other purpose provided herein (whether or not the original Borrower
      remains the owner of the Property at the time of such advances).

            Should the Debt be paid according to the tenor and effect thereof
      when the same become due and payable, and should Borrower perform all
      covenants contained in this Deed in a timely manner, then this Deed shall
      be cancelled and surrendered of record.

      (c) The definition of "Security Instrument" in Section 1.01 hereof shall
be deleted in its entirety and the following shall be inserted in its place:

            "Security Instrument" means this Deed to Secure Debt, Security
      Instrument and Assignment of Rents as originally executed or as it may
      hereafter from time to time be supplemented, amended, modified or extended
      by one or more indentures supplemental hereto.

      (d) The phrase "first mortgage" found in Section 2.06 hereof shall be
deleted and the phrase "first deed to secure debt" shall be inserted in its
place.

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<PAGE>

      (e) Subsection 13.02(a)(vi) shall be deleted in its entirety and the
following shall be inserted in its place:

            (vi) sell the Property or any part of the Property at one or more
      public sale or sales before the door of the courthouse of the county in
      which the Property or any part of the Property is situated, to the highest
      bidder for cash, in order to pay the Debt, and all expenses of sale and of
      all proceedings in connection therewith, including reasonable attorney's
      fees, after advertising the time, place and terms of sale once a week for
      four (4) weeks immediately preceding such sale (but without regard to the
      number of days) in a newspaper in which Sheriff's sales are advertised in
      said county. At any such public sale, Lender may execute and deliver to
      the purchaser a conveyance of the Premises or any part of the Premises in
      fee simple, with full warranties of title and, to this end, Borrower
      hereby constitutes and appoints Lender the agent and attorney-in-fact of
      Borrower to make such sale and conveyance, and thereby to divest Borrower
      of all right, title and equity that Borrower may have in and to the
      Premises and to vest the same in the purchaser of purchasers at such sale
      or sales, and all the acts and doings of said agent and attorney-in-fact
      are hereby ratified and confirmed and any recitals in said conveyance or
      conveyances as to facts essential to a valid sale shall be binding upon
      Borrower. The aforesaid power of sale and agency hereby granted are
      coupled with an interest and are irrevocable by death or otherwise, are
      granted as cumulative of the other remedies provided hereby or by law for
      the collection of the Debt, and shall not be exhausted by one exercise
      thereof, but may be exercised until full payment of all of the Debt. In
      the event of any sale under this Security Instrument by virtue of the
      exercise of the powers herein granted, or pursuant to any order in any
      judicial proceedings or otherwise, the Premises may be sold as an entirety
      or in separate parcels and in such manner or order as Lender, in its sole
      discretion, may elect, and if Lender so elects, Lender may sell the
      personal property covered by this Security Instrument at one or more
      separate sales in any manner permitted by the Uniform Commercial Code, and
      one or more exercises of the powers herein granted shall not extinguish
      nor exhaust such powers, until the entire Property are sold or the Debt is
      paid in full.

      (f) As this instrument is a deed passing legal title pursuant to the laws
of the State of Georgia, and is not a mortgage, whenever reference herein is
made to the "lien of this Security Instrument", or words of similar import, such
words shall be construed as meaning the security title and interest created and
conveyed by this Deed.

      (g) Whenever reference is made herein to "reasonable attorney's fees" or
similar words, such reference shall mean attorney's fees computed based upon the
attorney's normal hourly rates and the amount of time expended, and not the
statutory attorney's fees provided by Official Code of Georgia Annotated Section
13-1-11.

      (h) The Maturity Date is the Payment Date occurring in the calendar month
subsequent to the month in which the Closing Date occurs in 2015.

      Section 18.38. Certain Matters Relating to Property located in the State
of Illinois. With respect to the Property which is located in the State of
Illinois, notwithstanding anything contained herein to the contrary:

      (a) COMPLIANCE WITH ILLINOIS MORTGAGE FORECLOSURE LAW.

      If any provision in this Security Instrument is determined to be
inconsistent with any provision of the Illinois Mortgage Foreclosure Law (735
ILCS 5/15-1101 et seq. (1992 State Bar Edition)) (the "IMFL"), the provisions of
the IMFL shall take precedence over the provisions of this Security Instrument,
but shall not invalidate or render unenforceable any other provisions of this
Security Instrument that can be construed in a manner consistent with the IMFL.

      If any provision of this Security Instrument shall grant to Lender any
rights or remedies upon an Event of Default which are more limited than the
rights that would otherwise be vested in Lender under the IMFL in the absence of
such provision, Lender shall be vested with the rights granted in the IMFL to
the full extent permitted by law.

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<PAGE>

      Without limiting the generality of the foregoing, all expenses incurred by
Lender to the extent reimbursable under Sections 15-1510 and 15-1512 of the
IMFL, whether incurred before or after any decree or judgment of foreclosure,
and whether enumerated in this Security Instrument, shall be added to the Debt
secured by this Security Instrument or by the judgment of foreclosure.

      Without limiting the generality of the foregoing, this Security Instrument
also secures all future advances made pursuant to the terms of this Security
Instrument or the other Loan Documents made after this Security Instrument is
recorded, including but not limited to all monies so advanced by Lender in
accordance with the terms of this Security Instrument to (A) preserve or restore
the Property, (B) preserve the lien of this Security Instrument or the priority
thereof or (C) enforce this Security Instrument, and, to the full extent
permitted by Subsection (b)(5) of Section 15-1302 of the IMFL or other law,
shall be a lien from the time this Security Instrument is recorded.

      (b) WAIVER OF STATUTORY RIGHTS. BORROWER ACKNOWLEDGES THAT THE TRANSACTION
OF WHICH THIS SECURITY INSTRUMENT IS A PART IS A TRANSACTION WHICH DOES NOT
INCLUDE EITHER AGRICULTURAL REAL ESTATE (AS DEFINED IN SECTION 15-1201 OF THE
IMFL), OR RESIDENTIAL REAL ESTATE (AS DEFINED IN SECTION 15-1219 OF THE IMFL),
AND TO THE FULL EXTENT PERMITTED BY LAW, VOLUNTARILY AND KNOWINGLY WAIVES
BORROWER'S RIGHTS TO REINSTATEMENT AND REDEMPTION AS ALLOWED UNDER SECTION
15-1601(B) OF THE IMFL, AND TO THE FULL EXTENT PERMITTED BY LAW, THE BENEFITS OF
ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY,
REDEMPTION AND MORATORIUM LAWS UNDER ANY STATE OR FEDERAL LAW.

      (c) FIXTURE FILING. THIS INSTRUMENT IS EFFECTIVE AND SHALL BE EFFECTIVE AS
A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH
ARE OR ARE TO BECOME FIXTURES INCLUDED WITHIN THE PROPERTY AND IS TO BE FILED
FOR RECORD OR REGISTERED IN THE REAL ESTATE RECORDS OF THE COUNTY IN WHICH THE
PREMISES IS LOCATED. THE ADDRESS OF LENDER [SECURED PARTY] AND THE MAILING
ADDRESS OF BORROWER [DEBTOR] ARE SET FORTH WITHIN. A PHOTOGRAPHIC OR OTHER
REPRODUCTION OF THIS INSTRUMENT OR ANY FINANCING STATEMENT RELATING TO THIS
INSTRUMENT SHALL BE SUFFICIENT AS A FINANCING STATEMENT.

      (d) MAXIMUM AMOUNT SECURED. Borrower and Lender intend that this Security
Instrument shall secure not only sums advanced as of the date hereof but also
all advances provided for in the Loan Documents; provided however that the
maximum amount secured by this Security Instrument shall in no event exceed two
(2) times the Loan Amount.

      (e) BUSINESS LOAN. Borrower represents and agrees that the obligations
secured hereby constitute a business loan within the purview of such paragraph
1(c) of Section 4 of the Illinois Interest Act, 815 ILCS 205/1 et seq. (1992
State Bar Edition) (or any substitute, amended or replacement statutes)
transacted solely for the purpose of carrying on or acquiring the business of
Borrower, and also constitutes a loan secured by a mortgage which comes within
the purview of subparagraph 1(l) of said Section.

      (f) MATURITY DATE. The maturity date of the Loan is the Payment Date
occurring in the calendar month subsequent to the month in which the Closing
Date occurs in 2015.

      (g) MORTGAGEE-IN-POSSESSION. In addition to any provision of this Security
Instrument authorizing Lender to take or be placed in possession of the
Premises, or for the appointment of a receiver, Lender shall have the right, in
accordance with Sections 5/15-1701 and 5/15-1702 of the IMFL, to be placed in
possession of the Premises or at its request to have a received appointed, and
such receiver, or Lender, if and when placed in possession, shall have, in
addition to any other powers provided in this Security Instrument, all powers,
immunities and duties as provided for in Sections 2/15-1701 and 5/15-1702 of the
IMFL.

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<PAGE>

      (h) INSURANCE. Notwithstanding the provisions of Article III hereof, if
Borrower fails to provide Lender evidence of the insurance coverages required
pursuant to the provisions of this Security Instrument, Lender may purchase such
insurance at Borrower's expense to cover Lender's interest in the Premises. The
insurance may, but need not, protect Borrower's interest. The coverages that
Lender purchases may not pay any claim that Borrower makes or any claim that is
made against Borrower in connection with the Premises. Borrower may later cancel
any insurance purchased by Lender but only after providing Lender with evidence
that Borrower has obtained such insurance as required pursuant to Article III of
this Security Instrument. If Lender purchased insurance for the Premises,
Borrower will be responsible for the costs of such insurance, including, without
limitation, interest and any other charges which Lender may impose in connection
with the placement of the insurance, until the effective date of the
cancellation and the expiration of the insurance. The cost of the insurance may
be added to the Debt. The cost of the insurance may be more than the cost of the
insurance Borrower may be able to obtain on its own.

      Section 18.39. Certain Matters Relating to Property located in the State
of Indiana. With respect to the Property which is located in the State of
Indiana, notwithstanding anything contained herein to the contrary:

      (a) The following terms and references (for purposes of this Section only)
shall mean the following:

            (i) "Applicable Law" means statutory and case law in the State,
      including, but not by way of limitation, Mortgages, Ind. Code 32-29,
      Mortgage Foreclosure Actions, Ind. Code 32-30-10, Receiverships, Ind. Code
      32-30-5, and the Uniform Commercial Code - Secured Transactions, Ind. Code
      26-1-9.1 (the "UCC"), as amended, modified and/or recodified from time to
      time; provided, however, if by reason of mandatory provisions of law, the
      perfection, the effect of perfection or nonperfection, and the priority of
      a security interests in any Collateral are governed by the Uniform
      Commercial Code as in effect in a jurisdiction other than the State, "UCC"
      shall mean the Uniform Commercial Code as in effect in such other
      jurisdiction for purposes of the provisions hereof relating to perfection,
      effect of perfection or non-perfection, and the priority of the security
      interests in any such Collateral.

            (ii)  "County" means the County in the State in which the Property
                  is located.

            (iii) "County Recorder" means the Recorder of the County.

            (iv)  "State" means the state in which the Property is located.

      (b) Where any provision of this Security Instrument is inconsistent with
any provision of Applicable Law regulating the creation or enforcement of a
security interest in real or personal property, the provisions of Applicable Law
shall take precedence over the provisions of this Security Instrument, but shall
not invalidate or render unenforceable any other provisions of this Security
Instrument that can be construed in a manner consistent with Applicable Law.

      (c) Notwithstanding any provision in this Security Instrument relating to
a power of sale or other provision for sale of the Property upon default other
than under a judicial proceeding, any sale of the Property pursuant to this
Security Instrument will be made through a judicial proceeding.

      (d) Notwithstanding any provision in this Security Instrument purporting
to irrevocably grant a security interest in the Property, upon the payment and
satisfaction of this Security Instrument and upon the request of Borrower,
Lender will file a release of this Security Instrument or other certification
that this Security Instrument has been satisfied in the office of the recorder
in the County.

      (e) In addition to any other obligation secured by this Security
Instrument, this Security Instrument also secures:

      future obligations and advances up to the maximum amount of two (2) times
      the Loan Amount (whether made as an obligation, made at the option of
      Lender, made after a reduction to a zero (0)

                                       81
<PAGE>

      or other balance, or made otherwise) to the same extent as if the future
      obligations and advances were made on the date of execution of this
      Security Instrument; and

      future modifications, extensions, and renewals of any indebtedness or
      obligations secured by this Security Instrument.

      (f) To the extent the Applicable Law limits (i) the availability of the
exercise of any of the remedies set forth herein, including without limitation
the remedies involving the right of Lender to exercise self-help in connection
with the enforcement of the terms of this Security Instrument, or (ii) the
enforcement of waivers and indemnities made by Borrower, such remedies, waivers,
or indemnities shall be exercisable or enforceable, any provisions in this
Security Instrument to the contrary notwithstanding, if, and to the extent,
permitted by the laws in force at the time of the exercise of such remedies or
the enforcement of such waivers or indemnities at the time of the execution and
delivery of this Security Instrument. Anything contained in this Security
Instrument to the contrary, Lender shall enforce the terms and provisions of
this Security Instrument subject to and in accordance with all applicable Legal
Requirements and Applicable Law.

      (g) Anything contained herein or in Ind. Code 32-29-7-5 to the contrary
notwithstanding, no waiver made by Borrower in this Security Instrument, or in
any of the other terms and provisions of the Loan Documents, shall constitute
the consideration for or be deemed to be a waiver or release by Lender of the
right to seek a deficiency judgment against Borrower or any other Person or
entity who may be personally liable for the Debt, which right to seek a
deficiency judgment is hereby reserved, preserved and retained by Lender for its
own behalf and its successors and assigns.

      (h) Part of the Property and Collateral is or may become fixtures. It is
intended that as to the fixtures, as such term is defined in Ind. Code
26-1-9.1-102(41), that are part of the Property, this Security Instrument shall
be effective as a continuously perfected financing statement filed pursuant to
Ind. Code 26-1-9.1-515 as a fixture filing from the date of the filing of this
Security Instrument for record with the County Recorder. In order to satisfy
Ind. Code 26-1-9.1-502(a) and Ind. Code 26-1-9.1-502(b), the following
information is hereby provided:

Name of Debtor:                   Borrower is the "Debtor"

Address of Debtor:                See Section 11.01 of this Security Instrument

Type of Organization:             limited liability company

State of Organization:            Delaware

Organization Number:              As set forth on the Signature Page hereof

Name of Secured Party:            Lender is the "Secured Party"

Address of Secured Party:         See Section 11.01 of this Security Instrument

Record Owner of Property:         Borrower

      (i) Borrower hereby acknowledges receipt of a copy of this Security
Instrument in compliance with Lender's obligation to deliver a copy of the
fixture filing to Borrower pursuant to Section 9.1-502(f) of the UCC.

      (j) The final maturity date of the obligations secured hereby (including
all extensions permitted pursuant to the terms of the Loan Documents) is the
Payment Date occurring in the calendar month subsequent to the month in which
the Closing Date occurs in 2015.

      (k) The Property (i) does not contain any facility or facilities that are
subject to reporting (by either Borrower or any tenant or lessee thereon or
other person or entity in possession or occupancy of any portion thereof)

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<PAGE>

under Section 312 of the federal Emergency Planning and Community Right-to-Know
Act of 1986 (42 U.S.C. Section 11022); (ii) is not the site of any underground
storage tanks; and (iii) is not listed on the Comprehensive Environmental
Response, Compensation and Liability Information System (CERCLIS) in accordance
with Section 116 of CERCLA (42 U.S.C. Section 9616). By reason of the foregoing,
the conveyance made by Borrower to Lender by this Security Instrument is not
subject to the disclosure or other provisions of the Indiana Responsible
Property transfer Law, Ind. Code 13-25-3.

      (l) If Lender exercises its rights under Section 13.02 (a)(viii) hereof
and brings an action to recover judgment under the Note or any guaranty and
during the pendancy of such action brings a separate action under this Security
Instrument, such actions shall be consolidated.

      (m) The definition of Property shall include all refunds and rebates with
respect to any tax or utility payments, regardless of the time period to which
they relate.

      (n) All attorneys fees and expenses incurred by Borrower in connection
with the enforcement of any of the terms of this Security Instrument shall
include, without limitation, support staff costs and amounts expended in
connection with litigation preparation and computerized research, telephone and
telefax expenses, mileage, depositions, postage, photocopies, process service,
videotapes, environmental testing and audits, environmental reviews and
inspections and environmental clean-up and remediation.

      (o) Without limiting the scope of the assignment of Rents contained in
this Security Instrument, the assignment of Rents set forth herein shall
constitute an assignment of rents as set forth in Ind. Code 32-21-4-2 and
thereby creates, and Borrower hereby grants to Lender, a security interest in
the Rents that will be perfected upon the recording of this Security Instrument.

      (p) Subject to the terms and provisions of this Security Instrument,
Borrower hereby irrevocably consents to the appointment of a receiver permitted
under Applicable Law, which receiver, when duly appointed, shall have all of the
powers and duties of receivers pursuant to Applicable Law.

      (q) The term "Debt" as defined in this Security Instrument shall include,
without limitation, any judgment(s) or final decree(s) rendered to collect any
money obligations of Borrower to Lender and/or to enforce the performance or
collection of all covenants, agreements, other obligations and liabilities of
the Borrower under this Security Instrument or any or all of the Loan Documents;
provided, however, such Debt shall not include any judgment(s) or final
decree(s) rendered in another jurisdiction, which judgment(s) or final decree(s)
would be unenforceable by an Indiana Court pursuant to Ind. Code 34-54-3-4. The
obtaining of any judgment by Lender (other than a judgment foreclosing this
Security Instrument) and any levy of any execution under any such judgment upon
the Property shall not affect in any manner or to any extent the lien of this
Security Instrument upon the Property or any part thereof, or any liens, powers,
rights and remedies of Lender, but such liens, powers, rights and remedies shall
continue unimpaired as before until the judgment or levy is satisfied.

      (r) Notwithstanding anything contained herein or the other Loan Documents
to the contrary, the provisions in this Security Instrument regarding creation,
validity, perfection, priority and enforceability of the lien and security
interests created hereby, all warranties of title contained herein with respect
to the Property and all provisions hereof relating to the realization of the
security covered hereby with respect to the Property shall be governed by
Applicable Law.

      Section 18.40. Certain Matters Relating to Property located in the State
of Iowa. With respect to the Property which is located in the State of Iowa,
notwithstanding anything contained herein to the contrary:

      (a) In the event of the foreclosure of this Security Instrument and a
subsequent sheriff's sale of the Property, Borrower agrees that the redemption
period from said sale, as provided by the statutes of the State of Iowa, may, in
Lender's sole discretion, be reduced to six months, provided Lender, in said
foreclosure action, waives any rights to a deficiency judgment against Borrower
which may arise out of the foreclosure proceedings. It is further agreed that in
the event of the finding by court decree in such foreclosure that the real
estate hereinabove referred to

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<PAGE>

has been abandoned by the owners and Persons personally liable under the Note at
the time of the foreclosure, the period of redemption from the foreclosure sale
may in Lender's sole discretion be reduced to sixty (60) days, provided Lender
waives its right to any deficiency judgment against the Borrower which may arise
out of the foreclosure proceedings. Nothing in this Section (a) shall be
construed to limit or otherwise affect any other redemption provisions contained
in Chapter 628 of the Iowa Code.

      (b) This Security Instrument secures credit in the amount of two (2) times
the Loan Amount. Loans and advances up to this amount, together with interest,
are senior to indebtedness to other creditors under subsequently recorded or
filed mortgages and liens.

      (c) The maturity date of the Note is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      (d) Borrower represents and warrants that:

            (i) None of the Property constitutes and none of the funds
      represented by the Note will be used to purchase: (i) real property which
      is a single-family or two-family dwelling occupied or to be occupied by
      Borrower; (ii) agricultural products or property used for an agricultural
      purpose as defined in Iowa Code Section 535.13; (iii) agricultural lands
      defined in Iowa Code Section 12C.1(5) or 175.2(1), or (iv) property used
      for agricultural purposes defined in Iowa Code Section 570A.1(2).

            (ii) Transactions contemplated by this Security Instrument, the Note
      and the other Loan Documents do not constitute a consumer credit
      transaction as defined in Iowa Code Section 537.1301.11; and the
      transactions contemplated by this Security Instrument, the Note and the
      Other Loan Documents are for a business purpose as defined in Iowa Code
      Section 535.2(2)(a)(5).

      (e) Borrower acknowledges receipt of a copy of this Security Instrument,
the Note and each of the other Loan Documents.

      (f) Borrower waives, to the fullest extent permitted by applicable law,
any requirement, whether pursuant to Iowa Rule of Civil Procedure 228 or
otherwise, that the Note must be filed with the clerk of court or otherwise
surrendered at the time judgment is rendered on the Note. Borrower further
consents, in any mortgage foreclosure or other action brought on the Note in
Iowa, to the entry of judgment in any such action without the filing of the Note
with the clerk of court or other surrender of the Note.

      Section 18.41. Certain Matters Relating to Property Located in the State
of Kansas. With respect to the Property which is located in the State of Kansas,
notwithstanding anything contained herein to the contrary:

      (a) Lender may bring an action to foreclose this Security Instrument and
upon appointment of a receiver for the rents (to which Lender shall have the
right to the immediate appointment, without regard to the adequacy of the
security and Borrower hereby irrevocably consents to such appointment and waives
notice of any application therefore) enter into or upon the Property or any part
thereof either personally or by its agents, nominees or attorneys, and disposes
Borrower and its agents and servants therefrom.

      (b) Lender may bring an action in any court of competent jurisdiction to
foreclose this instrument or to enforce any of the covenants and agreements
hereof. The Property may be foreclosed in parts or as an entirety. Lender, upon
application to a court of competent jurisdiction shall to the fullest extent
permitted by law be entitled without notice and without regard to the
sufficiency or value of any security for the indebtedness secured hereby or the
solvency of any party bound for its payment, to the appointment of a receiver to
take possession of and to operate the Property and to collect and apply the
income, rents, issues, profits and revenues thereof. The receiver shall have all
of the rights and powers permitted under the laws of the state within which the
Property is located. Upon the completion of any sale or sales made by the Lender
under or by virtue of this Section, the Lender or any officer of any court
empowered to do so shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument or good and sufficient instruments
conveying, assigning and transferring all estate, right,

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<PAGE>

title and interest in and to the Property and rights sold. The Lender is hereby
appointed the true and lawful attorney of the Borrower in its name in stead to
make all necessary conveyances, assignments, transfers and deliveries of the
Property and rights so sold and for that purpose, the Lender may execute all
necessary instruments of conveyance, assignment and transfer and may substitute
one or more persons with like power, the Borrower hereby ratifying and
confirming all that its said attorney or such substitute or substitutes shall
lawfully do by virtue hereof. This power of attorney shall be deemed to be a
power coupled with an interest and not subject to revocation. Nevertheless, the
Borrower, if so requested by the Lender, shall ratify and confirm any such sale
or sales by executing and delivering to the Lender or to such purchaser or
purchasers all such instruments as may be advisable, in the judgment of the
Lender, for that purpose, and as may be designated in such request. Any such
sale or sales made under or by virtue of this Section whether made under or by
virtue of judicial proceedings or of a judgment or decree of a foreclosure and
sale, shall operate to divest all the estate, right, title, interest, claim and
demand whatsoever, whether at law or in equity, or the Borrower in and to the
properties and rights so sold, and shall be a perpetual bar both at law and in
equity against the Borrower and against any and all persons claiming or who may
claim the same, or any part thereof from, through or under the Borrower. Upon
any sale made under or by virtue of this Section, the Lender may bid for and
acquire the Property or any part thereof and in lieu of paying cash therefor and
may make settlement for the purchase price by crediting upon the indebtedness of
the Borrower secured by this Security Instrument the net sales price after
deducting therefrom the expenses of the sale and the cost of the action and any
other sums which the Lender is authorized to deduct under this Security
Instrument. The Lender, upon so acquiring the Property, or any part thereof,
shall be entitled to hold, lease rent, operate, manage and sell the same in any
manner provided by applicable laws. Lender, at Lender's option, is authorized to
foreclose this Security Instrument subject to the rights of any tenants of the
Property, and the failure to make any such tenants parties defendants to any
such foreclosure proceeding and to foreclose their rights will not be, nor be
asserted by Borrower as a defense to any proceedings instituted by Lender to
collect the sums secured hereby.

      (c) This Security Instrument secures future advances pursuant to K.S.A.
Section 58-2336.

      (d) The loan secured by this Security Instrument is a "Business Loan"
within the meaning of K.S.A. Section 16-207E.

      Section 18.42. Certain Matters Relating to Property Located in the State
of Kentucky. With respect to the Property which is located in the Commonwealth
of Kentucky, notwithstanding anything contained herein to the contrary:

      (a) The first paragraph of page 1 shall be amended to include "New York
County" in the address of the Lender. KRS 382.430.

      (b) The maturity date of the Note is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      (c) With reference to KRS 382.520, it is acknowledged and agreed that this
Security Instrument secures not only the initial advances under the Note but
also all future advances and all other additional indebtedness, whether direct,
indirect, future, contingent or otherwise, connected with or arising out of the
Note and the Loan Documents, to the extent of not more than two (2) times the
Loan Amount. It shall be a default under this Security Instrument if Borrower
requests a release, in the manner provided by KRS 382.250, of any portion of the
lien securing any of the additional indebtedness secured by this Security
Instrument prior to the date that all of the obligations have been paid and the
Loan Documents have been terminated, and Borrower hereby waives any and all
right to request such a release to the maximum extent permitted by law.

      (d) FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE THE FOLLOWING INFORMATION
IS FURNISHED:

            (i) The name and address of the record owner of the real estate
      described in this instrument is the same as that set forth for Fee Owner
      on page 1 hereof:

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<PAGE>

            (ii) The names and addresses of the Debtors (Borrower) is the same
      as that set forth for Borrower on page 1 hereof:

            (iii) The name and address of the Secured Party (Lender) is the same
      as that set forth for Lender on page 1 hereof:

            (iv) Information concerning the security interest evidenced by this
      instrument may be obtained from the Secured Party at its address above.

            (v) This document covers goods which are or are to become fixtures.

            (vi) The organizational numbers for the Debtors (Borrower) are set
      forth on the signature page hereof.

      Section 18.43. Certain Matters Relating to Property Located in the State
of Louisiana. With respect to the Property which is located in the State of
Louisiana, notwithstanding anything contained herein to the contrary:

      (a) Each reference to a "lien" will include a reference to a "privilege"
"mortgage", and/or "security interest", as appropriate. Each reference to the
appointment and powers of a receiver with respect to any Louisiana property
shall be to a keeper appointed pursuant to this Security Instrument. Each
reference to an "easement" or "easements" will include a reference to a
"servitude" and "servitudes". Each reference to a county will include a
reference to a Louisiana parish. The terms "land", "real property", and "real
estate" will mean "immovable property" as that term is used in the Louisiana
Civil Code. The term "personal property" will mean "movable property" as that
term is used in the Louisiana Civil Code. The term "tangible" property will mean
"corporeal" property as that term is used in the Louisiana Civil Code. The term
"intangible" property will mean "incorporeal" property as that term is used in
the Louisiana Civil Code. References to the "Code" or the "Uniform Commercial
Code" in effect in the State of Louisiana shall be to the Louisiana Commercial
Laws, La. R.S. Section 10:1-101 et seq. The term "fee estate" or "fee simple
title" will mean "full ownership interest" as that term is used in the Louisiana
Civil Code. The term "buildings" shall be deemed to include other constructions.
The phrase "covenant or other right running with the land" shall be deemed to
include a real right or a recorded lease of immovable property. The term
"condemnation" means "expropriation" as that term is used in Louisiana law. The
term "conveyance in lieu of foreclosure" or "action in lieu thereof" will mean
"giving in payment" as that term is used in Louisiana law. The term "joint and
several" will mean "solidary" as that term is used in the Louisiana Civil Code.
The term "statute of limitations" means prescriptive period or preemptive
period.

      (b) For the purposes of the recitals and the other provisions of this
Security Instrument, it is understood that, subject to the terms hereof,
Borrower by these presents and by the execution and delivery hereof, does hereby
specially mortgage, affect, hypothecate, pledge and assign to Lender forever (to
the extent legally permitted), and grant Lender a continuing security interest
in, all right, title and interest of Borrower in and to all of the Property.

      (c) It is agreed that this Security Instrument shall secure not only the
sums advanced as of the date hereof, but any other advances whether obligatory
or otherwise, whether provided for in the Note, this Security Instrument or in
the Loan Documents. It is further agreed as to all such obligations both present
and future, this Security Instrument shall have effect between the parties from
the time this Security Instrument is established and as to third persons from
the time this Security Instrument is filed for registry; provided, however, that
the maximum amount of the obligations that may be outstanding at any time and
from time to time and secured hereby is $500,000,000.00.

      (d) The Debt secured by this Security Instrument has a maturity date that
is the Payment Date occurring in the calendar month subsequent to the month in
which the Closing Date occurs in 2015.

      (e) Borrower will not by act or omission change or permit to be changed
the zoning of the Premises from its current zoning classification.

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<PAGE>

      (f) Upon the occurrence of an Event of Default under this Security
Instrument, power is granted to Lender to commence a Louisiana executory process
foreclosure proceeding, and to have all or any part of the Property immediately
seized and sold with or without appraisal, in regular session of court or in
vacation, in accordance with applicable Louisiana law, without the necessity of
further demanding payment from Borrower or of notifying Borrower or placing
Borrower in default. For purposes of foreclosure under Louisiana executory
process procedures, Borrower acknowledges the indebtedness secured hereby
whether now existing or arising hereafter and confesses judgment in Lender's
favor up to the full amount of Borrower's obligations secured by this Security
Instrument, in principal, interest, late charges, attorney's fees and other fees
and charges, and all other amounts secured under this Security Instrument. To
the extent permitted under applicable Louisiana law, Borrower additionally
waives: (a) the benefit of appraisal as provided in Articles 2332, 2336, 2723
and 2724 of the Louisiana Code of Civil Procedure, and all other laws with
regard to appraisal upon judicial sale; (b) the demand and three (3) days' delay
as provided under Article 2721 of the Louisiana Code of Civil Procedure; (c) the
notice of seizure as provided under Articles 2293 and 2721 of the Louisiana Code
of Civil Procedure; (d) the three (3) days' delay provided under Articles 2331
and 2722 of the Louisiana Code of Civil Procedure; and (e) all other benefits
provided under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other Articles not specifically mentioned above. Borrower
waives all homestead and other exemptions from seizure. These remedies are in
addition to all others provided under Louisiana law.

      (g) Upon, or at any time after the filing of a complaint to foreclose this
Security Instrument, the court in which such complaint is filed may appoint a
keeper of the Property pursuant to the provisions of La. R.S. 9:Section 5136 et
seq., as amended from time to time. Such keeper shall have all powers and
authorities that may be exercised by keepers under the laws of the State as now
or hereafter existing, and shall be compensated in accordance with such laws.
All fees, compensation and other amounts due a keeper hereunder shall be a part
of the Debt and shall be secured by this Security Instrument. References in this
Security Instrument and the Assignment to a "receiver" or words of similar
import shall include a keeper appointed pursuant to the provisions of this
Section.

      (h) For purposes of La. R.S. Sections 9:5555 and 5556, Borrower
acknowledges that none of the Debt evidences indebtedness or instruments
paraphed for identification with this Security Instrument. For purposes of
Louisiana Civil Code article 3298, La. R.S. Section 9:4401 and other applicable
law, this Security Instrument has been granted to secure the present and future
Debt, up to $500,000,000.00, whether now existing or hereafter arising, of
whatever nature and kind, whatsoever. This Security Instrument shall remain in
effect until cancelled by a written cancellation signed by Lender.

      (i) The reference in Section 13.02(b) hereof to "fee simple" shall be
deemed to mean "fee (full ownership)" and the reference to Section 13.02(b)
hereof to "deed with special warranty of title" shall be deemed to mean "deed
with waiver of warranty of title."

      (j) The phrase "power of sale or otherwise" found in Section 13.02(a)(vi)
hereof shall be deleted and the phrase "applicable Louisiana law" shall be
inserted in its place.

      (k) The phrase "whether made under the power of sale herein granted or
under or by virtue of judicial proceedings or a judgment or decree of
foreclosure and sale" found in Sections 13.02(d), 13.02(e) and 13.02(f) shall be
deleted and the phrase "whether by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale or otherwise in accordance with applicable
Louisiana law" shall be inserted in its place.

      (l) Borrower agrees to provide to all applicable insurers notice of the
collateral assignment made by Borrower in clause (g) of the description of the
Property contained in this Security Instrument.

      (m) Any and all declarations of facts made by authentic act before a
notary public in the presence of two witnesses by a person declaring that such
facts lie within his knowledge, shall constitute authentic evidence of such
facts for the purpose of executory process. Borrower specifically agrees that
such an affidavit by a representative of Lender as to the existence, amount,
terms and maturity of the Debt and of a default thereunder shall constitute
authentic evidence of such facts for the purpose of executory process.

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<PAGE>

      (n) Borrower represents that the Note evidences an indebtedness incurred
for a business or commercial purpose.

      Section 18.44. Certain Matters Relating to Property Located in Maine. With
respect to the Property located in the State of Maine, notwithstanding anything
contained herein to the contrary:

      (a) Lender shall have the STATUTORY POWER OF SALE as described in Title
33, Maine Revised Statutes Annotated, Section 501-A, as amended from time to
time, which is expressly incorporated herein by reference.

      (b) All references in this Security Instrument to any obligation of
Borrower to pay attorney fees and disbursements shall include, without
limitation, attorney fees and disbursements incurred in any bankruptcy
proceedings.

      (c) This Security Instrument secures indebtedness and obligations arising
from a commercial loan and none of the proceeds shall be used for primarily
personal, family or household purposes.

      (d) This Security Instrument constitutes, among other things, a fixture
filing. Borrower is the debtor and Borrower's address is 715 South Country Club
Drive, Mesa, Arizona 85210. Borrower is the record owner of the Premises.

      (e) NO ORAL AGREEMENT. UNDER MAINE LAW, NO PROMISE, CONTRACT, OR AGREEMENT
TO LEND MONEY, EXTEND CREDIT, FORBEAR FROM COLLECTION OF A DEBT, OR MAKE ANY
OTHER ACCOMMODATION FOR THE REPAYMENT OF A DEBT FOR MORE THAN $250,000.00 MAY BE
ENFORCED IN COURT AGAINST LENDER UNLESS IT IS IN WRITING AND SIGNED BY LENDER.
ACCORDINGLY, BORROWER CANNOT ENFORCE ANY ORAL PROMISE UNLESS IT IS CONTAINED IN
LOAN DOCUMENTS SIGNED BY LENDER, NOR CAN ANY CHANGE, FORBEARANCE OR OTHER
ACCOMMODATION RELATING TO THE DEBT, THIS LOAN, THIS SECURITY INSTRUMENT OR THE
OTHER LOAN DOCUMENTS BE ENFORCED, UNLESS IT IS IN WRITING AND SIGNED BY LENDER.

      (f) This Security Instrument is an open-ended mortgage that secures
existing indebtedness, "future advances," "protective advances," and "contingent
obligations" as such terms are defined in 33 M.R.S.A. Section 505, as the same
may be amended. The maximuM aggregate amount of all debts or obligations secured
by this Security Instrument, including future advances but excluding protective
advances, shall not at any time exceed the total amount of two (2) times the
Loan Amount.

      Section 18.45. Certain Matters Relating to Property Located in the State
of Massachusetts. With respect to the Property which is located in the State of
Massachusetts, notwithstanding anything contained herein to the contrary:

      (a) Borrower hereby, as continuing security for payment or performance of
its obligations under the Note and the other Loan Documents in accordance with
the terms thereof, grants with MORTGAGE COVENANTS and assigns to Lender, and
grants to Lender a continuing security interest in and to all the Property.

      (b) This Security Instrument is upon the STATUTORY CONDITION and upon the
further condition that all covenants and agreements on the part of Borrower
herein undertaken shall be kept and fully and seasonably performed and that no
breach of any other of the covenants or conditions specified herein shall be
permitted, for any breach of which, upon the occurrence of an Event of Default
Lender shall have the STATUTORY POWER OF SALE together with all other remedies
now or hereafter permitted by law.

      (c) This Security Instrument has been executed as a sealed instrument as
of the date first above written.

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<PAGE>

      Section 18.46. Certain Matters Relating to Property Located in the State
of Michigan. With respect to the Property which is located in the State of
Michigan, notwithstanding anything contained herein to the contrary:

      (a) Lender shall have all the rights, benefits and privileges set forth in
this Security Instrument subject to the provisions of MCLA 554.231, MCLA 544.211
et seq. and MCLA 565.81 et seq. It is the intention of the parties that the
provisions of this Security Instrument, and all of the rights and powers granted
or reserved to Lender hereunder, shall be construed and enforced to the broadest
extent permissible under applicable Michigan law governing assignments of leases
and rents including, without limitation, MCLA 554.231 et seq. Any provision
contained herein which would, as drafted, violate any provision of, or be in any
respect unenforceable under, Michigan law shall be automatically deemed to be
modified to the extent necessary, consistent with its purpose, to render such
provision enforceable under Michigan law.

      (b) THIS SECURITY INSTRUMENT IS A "FUTURE ADVANCE MORTGAGE" PURSUANT TO
M.C.L.A. 565.901. ALL FUTURE ADVANCES UNDER THIS SECURITY INSTRUMENT OR UNDER
ANY OF THE LOAN DOCUMENTS SHALL HAVE THE SAME PRIORITY AS IF THE FUTURE ADVANCE
WAS MADE ON THE DATE THAT THIS SECURITY INSTRUMENT WAS RECORDED. THIS SECURITY
INSTRUMENT SHALL SECURE ALL INDEBTEDNESS OF BORROWER, ITS SUCCESSORS AND
ASSIGNS, UNDER THIS SECURITY INSTRUMENT, WHENEVER AND HOWEVER INCURRED. NOTICE
IS HEREBY GIVEN THAT THE INDEBTEDNESS SECURED HEREBY MAY INCREASE AS A RESULT OF
ANY DEFAULTS HEREUNDER BY BORROWER DUE TO, FOR EXAMPLE AND WITHOUT LIMITATION,
UNPAID INTEREST OR LATE CHARGES, UNPAID TAXES OR UNPAID INSURANCE PREMIUMS WHICH
LENDER ELECTS TO ADVANCE PURSUANT TO THE TERMS OF THIS SECURITY INSTRUMENT,
DEFAULTS UNDER LEASES THAT LENDER ELECTS TO CURE, ATTORNEYS' FEES OR COSTS
INCURRED IN ENFORCING THE LOAN DOCUMENTS OR OTHER EXPENSES INCURRED BY LENDER IN
PROTECTING THE PREMISES, THE SECURITY OF THIS SECURITY INSTRUMENT OR LENDER'S
RIGHTS AND INTERESTS.

      (c) In the event of a default under this Security Instrument, power is
granted to Lender to sell the Property or any part thereof at public auction and
to convey same to the purchaser after notice as required by the statutes of the
State of Michigan for foreclosure of mortgages by advertisement being Sections
600.3201, et seq., Michigan Compiled Laws, as amended.

      (d) This Security Instrument contains a power of sale which permits Lender
to cause the Property to be sold by advertisement rather than pursuant to court
action; and Borrower hereby voluntarily and knowingly waives any right Lender
may have by virtue of any applicable constitutional provision or statute to any
notice or court hearing prior to the exercise of the power of sale, except as
may be expressly required by the Michigan statute governing foreclosures by
advertisement. By execution of the Mortgage, Borrower represents and
acknowledges that the meaning and the consequences of the foregoing have been
discussed as fully as desired by Borrower with Borrower's legal counsel.

      (e) As additional security for the Debt and performance of the covenants
and agreements herein and in any other agreement contained, pursuant to Michigan
Compiled Laws 554.231 et seq., as amended, Borrower hereby assigns and conveys
to Lender and grants Lender security interests in any and all leases, written or
unwritten, of the Property or any part thereof, heretofore, now or hereafter
entered into and demising any part of the Property, and all rents, issues,
income and profits derived from the use of the Property or any portion thereof,
whether due or to become due.

      (f) Borrower's failure, refusal or neglect to pay any taxes levied against
the Property or any insurance premiums due upon policies of insurance covering
the Property, shall constitute waste under Michigan Compiled Laws 600.2927, and
Lender shall have a right to appointment of a receiver of the Property and of
the earnings, income and profits thereof, with such powers as the Court making
such appointment confers, and Borrower hereby irrevocably consents to such
appointment in such event, and agrees to pay Lender's costs and expenses
incurred in such proceeding, including reasonably attorneys fees. Payment by
Lender for and on behalf of Borrower of any delinquent taxes, assessments, or
insurance premiums payable by Borrower under the terms of this Security

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<PAGE>

Instrument shall not cure the default herein described, nor shall it in any
manner impair Lender's right to the appointment of a receiver as set forth
herein.

      (g) The maturity date of the Loan is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      Section 18.47. Certain Matters Relating to Property Located in Minnesota.
The following provisions shall apply with respect to the Property located in the
State of Minnesota (the "Property"):

      (a) Acceleration; Foreclosure. If any Event of Default has occurred and is
continuing, Lender may, at its option, exercise one or more of the following
rights and remedies (and any other rights and remedies available to it):

            (i) Lender may exercise all of their rights under paragraph (b)
      below.

            (ii) Lender shall have and may exercise, with respect to all
      Fixtures, all the rights and remedies accorded upon default to a secured
      party under the Uniform Commercial Code as in effect in the State of
      Minnesota. If notice to Borrower of the intended disposition of such
      property is required by law in a particular instance, such notice shall be
      deemed commercially reasonable if given to Borrower (in the manner
      specified in Section 11.01) at least 10 calendar days prior to the date of
      intended disposition. Borrower shall pay on demand all costs and expenses
      incurred by Lender in exercising such rights and remedies, including but
      not limited to reasonable attorneys' fees and legal expenses.

            (iii) Lender may (and is hereby authorized and empowered to)
      foreclose this Security Instrument by action or advertisement pursuant to
      the statutes of the State of Minnesota in such case made and provided,
      power being expressly granted to sell the Property at public auction and
      convey the same to the purchaser in fee simple and, out of the proceeds
      arising from such sale, to pay all indebtedness secured hereby, with
      interest, and all legal costs and charges of such foreclosure and the
      maximum attorneys' fees permitted by law, which costs, charges and fees
      Borrower agrees to pay.

      (b) Assignment of Rents and Leases.

            (i) Upon the occurrence of any Event of Default Lender may, at its
      option, in addition to the other remedies set forth in paragraph (a)
      above:

                  (A) in the name, place and stead of Borrower and without
            becoming a mortgagee-in-possession (i) enter upon, manage and
            operate the Property or retain the services of one or more
            independent contractors to manage and operate all or any part of the
            Property; (ii) make, enforce, modify and accept surrender of the
            Lease; (iii) obtain or evict tenants, collect, sue for, fix or
            modify all tolls, rents, issues, profits, products, revenues and
            other income of the Property and every part thereof and enforce all
            rights of Borrower under the Lease; and (iv) perform any and all
            other acts that may be necessary or proper to protect the security
            of this Security Instrument.

                  (B) with or without exercising the rights set forth in
            subparagraph (A) above, give or require Borrower to give notice of
            any or all tenants authorizing and directing them to pay all Rents
            directly to Lender; and

                  (C) without regard to any waste, adequacy of the security or
            solvency of Borrower, apply for the appointment of a receiver of the
            Property, to which appointment Borrower hereby consents, whether or
            not foreclosure proceedings have been commenced under this Security
            Instrument and whether or not a foreclosure sale has occurred.

                                       90
<PAGE>

The exercise of any of the foregoing rights or remedies and the application of
the Rents pursuant to paragraph (ii) shall not cure or waive any Event of
Default (or notice of default) under this Security Instrument or invalidate any
act done pursuant to such notice.

            (ii) All Rents collected by Lender or any receiver each month shall
      be applied as follows:

                  (A) to payment of all reasonable fees of the receiver approved
            by the court;

                  (B) to payment of all tenant security deposits then owing
            pursuant to the provisions of Minnesota Statutes Section 504B.178;

                  (C) to payment of all prior or current real estate taxes and
            special assessments with respect to the Property, or if this
            Security Instrument or any other instrument relating to the Debt
            requires periodic escrow payments for such taxes and assessments, to
            the escrow payments then due;

                  (D) to payment of all premiums then due for insurance required
            by the provisions of this Security Instrument, or if this Security
            Instrument or any other instrument relating to the Debt requires
            periodic escrow payments for such premiums, to the escrow payments
            then due;

                  (E) to payment of expenses incurred for normal maintenance of
            the Property;

                  (F) if received prior to any foreclosure sale of the Property,
            to Lender for payment of the Debt, but no such payment made after
            acceleration of the Debt shall affect such acceleration;

                  (G) if received during or with respect to the period of
            redemption following a foreclosure sale of the Property:

                        (1) if the purchaser at the foreclosure sale is not
            Lender, first to Lender to the extent of any deficiency of the sale
            proceeds to repay Debt and second to the purchaser to be retained as
            a credit to the redemption price, but if the Property is not
            redeemed, then to the purchaser of the Property;

                        (2) if the purchaser at the foreclosure sale is Lender,
            to Lender to the extent of any deficiency of the sale proceeds to
            repay the Debt, and the balance to be retained by Lender as a credit
            to the redemption price, but if the Property is not redeemed, then
            to Lender, whether or not any such deficiency exists.

      The rights and powers of Lender under this paragraph (b) and the
      application of Rents under this paragraph (b) shall continue until
      expiration of the redemption period from any foreclosure sale, whether or
      not any deficiency remains after the foreclosure sale.

      (c) Fixture Filing. From the date of its recording, this Security
Instrument shall be effective as a financing statement files as a fixture filing
with respect to the Fixtures. For this purpose, the following information is set
forth:

            (i) The name and address of the record owner of the real estate
      described in this instrument is the same as that set forth for Borrower on
      page 1 hereof:

            (ii) the name and address of the Debtor (Borrower) is the same as
      that set forth for Borrower on page 1 hereof:

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<PAGE>

            (iii) the name and address of the Secured Party (Lender) is the same
      as that set forth for Lender on page 1 hereof:

            (iv) This document covers goods which are or are to become fixtures.

            (v) The Debtor named above is the record owner of the real estate
      described herein.

      (d) Intentionally Omitted.

      (e) Acknowledgment Regarding Future Advances. To the extent that this
Security Instrument secures indebtedness other than the Note, the amount of such
indebtedness is not currently known.

Lender acknowledges that it is aware of the provisions of Minnesota Statutes
Section 287.05, subd. 5, and intends to comply with the requirements contained
therein.

      Section 18.48. Certain Matters Relating to Property Located in the State
of New Hampshire. With respect to the Property which is located in the State of
New Hampshire, notwithstanding anything contained herein to the contrary:

      (a) This Security Interest is granted with the STATUTORY POWER OF SALE.

      (b) Upon the occurrence and during the continuance of an Event of Default,
Lender may, at Lender's option, by Lender itself, or otherwise, pursuant to the
STATUTORY POWER OF SALE, sell the Property consisting of real estate and
personalty situated thereon, and all estate, right, title, and interest of
Borrower therein, at one or more sales, as an entirety or in parcels, with such
elements of real and/or personal property, and at such time and place in any
municipality in which any of the Premises is located at the Premises, and upon
such terms as Lender may deem expedient, or as may be required by applicable
law. In the event of a sale by foreclosure pursuant to the STATUTORY POWER OF
SALE of less than all of the Property, this Security Instrument shall continue
as a lien and security interest on the remaining portion of the Property.

      (c) The maximum principal amount of the Debt, including present and future
obligations, which may be secured by the lien of this Security Instrument on the
Property located in New Hampshire at any one time is $250,000,000), plus
interest, costs and advances made by Lender to protect or preserve the Premises
or the lien of this Security Instrument, or for taxes, assessments or insurance
premiums as herein provided.

      Section 18.49. Certain Matters Relating to Property Located in the State
of New Jersey. With respect to the Property which is located in the State of New
Jersey, notwithstanding anything contained herein to the Contrary:

      (a) Borrower represents and warrants that (i) all filings and submissions
or other action required pursuant to the New Jersey Industrial Site Recovery
Act, N.J.S.A. 13:1K-6, et seq., as modified ("ISRA"), if any, in connection with
the Loan, have been made or taken and (ii) the Property is not located within a
"freshwater wetlands" or a "transition area," each as defined by N.J.S.A.
13:9B-3, and is not subject to the terms of the New Jersey Freshwater Wetlands
Protection Act, as amended, N.J.S.A. 13:9B-1 et. seq., or the rules and
regulations promulgated thereunder.

      (b) This Security Instrument shall be governed by and construed in
accordance with the laws of the State of New York, provided, however, that (i)
matters of title to the Property located in New Jersey, (ii) matters of
creation, perfection and priority of the lien of this Security Instrument and
(iii) those procedural issues of foreclosure, deed in lieu of foreclosure or
sale, which are required to be governed by the laws of the State of New Jersey
shall be governed by the laws of New Jersey and construed in accordance
therewith.

      (c) BORROWER HEREBY ACKNOWLEDGES RECEIPT OF A TRUE COPY OF THIS SECURITY
INSTRUMENT WITHOUT CHARGE.

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<PAGE>

      (d) Borrower agrees, and it is so intended that this Security Instrument
is subject to Modification as set forth in N.J.S.A. 46:9-8.1, et seq.

      (e) Borrower shall not conduct or cause or permit to be conducted on the
Property any activity which constitutes an Industrial Establishment (as such
term is defined in ISRA) without the prior written consent of Lender. In the
event that the provisions of ISRA become applicable to the Property subsequent
to the date hereof, Borrower shall give prompt written notice thereof to Lender
and shall take immediate requisite action to insure full compliance therewith.
Borrower shall deliver to Lender copies of all correspondence, notices and
submissions that it sends to or receives from the New Jersey Department of
Environmental Protection in connection with such ISRA compliance. Borrower's
obligation to comply with ISRA shall, notwithstanding its general applicability,
also specifically apply to sale, transfer, closure or termination of operations
associated with any foreclosure action, including, without limitation, a
foreclosure action brought with respect to this Security Instrument. In
connection with the purchase of the Property, Borrower required that the seller
of the Property comply with the provisions of ISRA and the seller did comply
therewith.

      (f) The Property has not been and is not now being used as a Major
Facility (as defined in the Environmental Statutes), and Borrower shall not use
the Property as a Major Facility in the future without the prior written consent
of Lender. If Borrower ever becomes an owner or operator of a Major Facility,
then Borrower shall furnish the New Jersey Department of Environmental
Protection with all the information required by N.J.S.A. 58:10-23.11d, and shall
duly file with the Director of the Division of Taxation in the New Jersey
Department of the Treasury a tax report or return, and shall pay all taxes due
therewith, in accordance with N.J.S.A. 58:10-23, 11b.

      (g) Borrower represents and warrants that the loans or other financial
accommodations included as obligations secured by this Security Instrument were
obtained solely for the purpose of carrying on or acquiring a business or
commercial investment and not for residential, consumer or household purposes.

      Section 18.50. Certain Matters Relating to Property Located in the State
of New York. With respect to the Property which is located in the State of New
York, notwithstanding anything contained herein to the contrary:

      (a) Borrower represents that this Security Instrument does not encumber
property principally improved or to be improved by one or more structures
containing in the aggregate not more than six (6) residential dwelling units.

      (b) Pursuant to Section 13 of the lien law of New York, Borrower shall
receive the advances secured hereby and shall hold the right to receive such
advances as a trust fund to be applied first for the purpose of paying the cost
of any improvement and shall apply such advances first to the payment of the
cost of any such improvements on the Property before using any part of the total
of the same for any other purpose.

      (c) Lender shall have all of the rights against lessees of the Property as
set forth in Section 291(f) of the Real Property Law of New York.

      (d) The provisions of subsection 4 of Section 254 of the New York Real
Property Law covering the insurance of buildings against loss by fire and the
application of Insurance Proceeds shall not apply to this Security Instrument.
In the event of any conflict, inconsistency or ambiguity between the provisions
of Article III hereof and the provisions of subsection 4 of Section 254 of the
New York Real Property Law covering the insurance of buildings against loss by
fire and the application of Insurance Proceeds, the provisions of Article III
shall control.

      (e) (i) In the event of any sale or transfer of the Property, or any part
thereof, including any sale or transfer by reason of foreclosure of this
Security Instrument or any prior or subordinate mortgage or by deed in lieu of
any such foreclosure, Borrower shall timely and duly complete, execute and
deliver to Lender all forms and supporting documentation required by any taxing
authority to estimate and fix any tax payable by reason of such sale or transfer
or recording of the deed evidencing such sale or transfer, including any New
York State Real Estate Transfer Tax payable pursuant to Article 31 of the New
York Tax Law and New York City Real Property Transfer

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<PAGE>

Tax payable pursuant to Chapter 21, Title 11 of the New York City Administrative
Code (individually, a "Transfer Tax" and collectively, the "Transfer Taxes").

            (ii) Borrower shall pay the Transfer Taxes that may hereafter become
      due and payable with respect to any sale or transfer of the Property
      described in this Article, and in default of such payment, Lender may pay
      the same and the amount of such payment shall be added to the Debt secured
      hereby and, unless incurred in connection with a foreclosure of this
      Security Instrument or deed in lieu of such foreclosure, shall be secured
      by this Security Instrument.

            (iii) Borrower hereby irrevocably constitutes and appoints Lender as
      its attorney-in-fact, coupled with an interest, to prepare and deliver any
      questionnaire, statement, affidavit or tax return in connection with any
      Transfer Tax applicable to any foreclosure or deed in lieu of foreclosure
      described in this Article.

            (iv) Borrower shall indemnify and hold harmless Lender against (i)
      any and all liability incurred by Lender for the payment of any Transfer
      Tax with respect to any transfer of the Property by reason of foreclosure,
      and (ii) any and all expenses incurred by Lender in connection therewith
      including, without limitation, interest, penalties and attorneys' fees.

            (v) The obligation to pay the Transfer Taxes and indemnify Lender
      under this Section is a personal obligation of Borrower, whether or not
      Borrower is personally obligated to pay the Debt secured by this Security
      Instrument, and shall be binding upon and enforceable against the
      distributees, successors and assigns of Borrower with the same force and
      effect as though each of them had personally executed and delivered this
      Security Instrument, notwithstanding any exculpation provision in favor of
      Borrower with respect to the payment of any other monetary obligations
      under this Security Instrument.

            (vi) In the event that Borrower fails or refuses to pay a tax
      payable by Borrower with respect to a sale or transfer by reason of a
      foreclosure of this Security Instrument in accordance with this Section,
      the amount of the tax, any interest or penalty applicable thereto and any
      other amount payable pursuant to Borrower's obligation to indemnify Lender
      under this Section may, at the sole option of Lender, be paid as an
      expense of the sale out of the proceeds of the mortgage foreclosure sale.

            (vii) The provisions of this Section shall survive any transfer and
      the delivery of the deed affecting such transfer. Nothing in this Section
      shall be deemed to grant to Borrower any greater rights to sell, assign or
      otherwise transfer the Premises than are expressly provided in Article IX
      nor to deprive Lender of any right to refuse to consent to any transaction
      referred to in this Section.

      (f) The clauses and covenants contained in this Security Instrument that
are construed by Section 254 of the New York Real Property Law shall be
construed as provided in those sections (except as provided in Subsection (d) of
this Section and Article III hereof). The additional clauses and covenants
contained in this Security Instrument shall afford rights supplemental to and
not exclusive of the rights conferred by the clauses and covenants construed by
Section 254 and shall not impair, modify, alter or defeat such rights (except as
provided in Subsection (d) of this Section and Article III hereof),
notwithstanding that such additional clauses and covenants may relate to the
same subject matter or provide for different or additional rights in the same or
similar contingencies as the clauses and covenants construed by Section 254. The
right of Lender arising under the clauses and covenants contained in this
Security Instrument shall be separate, distinct and cumulative and none of them
shall be in exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision, anything herein or otherwise to the contrary notwithstanding. In the
event of any inconsistencies between the provisions of Section 254 and the
provisions of this Security Instrument, the provisions of this Security
Instrument shall prevail.

      (g) Notwithstanding anything to the contrary in this Security Instrument,
the maximum amount of principal indebtedness secured by this Security Instrument
or which under any contingency may be secured by this Security Instrument is
125% of the Allocated Loan Amount for the Property.

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<PAGE>

      (h) At Borrower's request, and upon (a) Borrower's prepayment of the Debt
in full, whether by prepayment or otherwise and (b) payment by Borrower of
Lender's reasonable counsel fees and disbursements and other reasonable costs,
if any, and provided Borrower (a) refinances the Loan through any institution
other than Lender, or (b) sells any of the Premises, and an institution other
than Lender is involved in the financing of such sale, Lender shall deliver an
assignment of the Note, this Security Instrument to Borrower's designee without
recourse, representation or warranty, together with the Note (or an affidavit of
lost note) duly endorsed by Lender to Borrower's designee.

      Section 18.51. Certain Matters Relating to Property Located in the State
of Ohio. With respect to the Property which is located in the State of Ohio,
notwithstanding anything contained herein to the contrary:

      (a) This Security Instrument is an Open-End Mortgage, and Borrower and
Lender intend that this Security Instrument shall secure not only the sums
advanced as of the date hereof, but also the unadvanced balance of the Note,
which sums Lender is obligated to advance, and in addition shall secure any and
all advances provided for in the Loan Documents to the fullest extent provided
for under Section 5301.232 of the Ohio Revised Code; provided, however, that the
maximum amount of the principal portion of the Debt that may be outstanding at
any time is $500,000,000.00. In addition to any other debt or obligation secured
hereby, this Security Instrument shall also secure unpaid balances of advances
made with respect to the Property for the payment of taxes, assessments,
insurance premiums, and costs incurred for the protection of the Premises to the
fullest extent provided for under Section 5301.233 of the Ohio Revised Code.

      (b) The following is hereby inserted after the definition of the word
"Debt" in the "NOW THEREFORE" paragraph found in the Recitals hereto:

      as well as to secure the unpaid balance of advances made by Lender for the
      payment of taxes, assessments, insurance premiums, and costs incurred for
      the protection of the Property to the fullest extent provided for under
      Section 5301.233 of the Ohio Revised Code.

      (c) The following is hereby inserted at the end of Section 18.14 of this
Security Instrument as an additional subparagraph:

            (c) The name of the "debtor" is the "Borrower" identified on page 1
      hereof; and the name of the "secured party" is the "Lender" identified on
      page 1 hereof; the mailing address of the "secured party" from which
      information concerning the security interests may be obtained and the
      mailing address of the "debtor" are as set forth in the preamble of this
      Security Instrument; and a statement indicating the types, or describing
      the items, of collateral is set forth hereinabove in the granting clauses.
      Borrower is the owner of the real property constituting the "Premises"
      encumbered by this Security Instrument.

      (d) Lender shall be and hereby is authorized and empowered to do, as
mortgagee, all things provided to be done in the mechanics' lien laws of the
State of Ohio (including Section 1311.14 of the Ohio Revised Code), and all acts
amendatory or supplementary thereto.

      (e) The maturity date of the Loan is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.

      (f) With respect to any agreement by Borrower in this Security Instrument
or in any other Loan Document to pay Lender's attorneys' fee and disbursements
incurred in connection with the Loan, Borrower agrees that each Loan Document is
a "contract of indebtedness" and that the attorneys' fees and disbursements
referenced are those which are a reasonable amount, all as contemplated by Ohio
Revised Code Section 1301.21, as such Section may hereafter be amended. Borrower
further agrees that the indebtedness incurred in connection with the Loan is not
incurred for purposes that are primarily personal, family or household and
confirms that the total amount owed on the contract of indebtedness exceeds One
Hundred Thousand and No/100 Dollars ($100,000.00).

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<PAGE>

      Section 18.52. Certain Matters Relating to Property Located in Oklahoma.
With respect to Property located in the State of Oklahoma, notwithstanding
anything contained herein to the contrary:

      (a) Without in any way limiting the other provisions of this Security
Instrument, but in addition thereto and in amplification thereof, upon the
occurrence of any Event of Default which has not been waived, Borrower hereby
confers on Lender the power to sell the Property, and the interests of persons
therein, in the manner and pursuant to the procedures set forth in the "Oklahoma
Power of Sale Mortgage Foreclosure Act" (46 O.S. Sections 40-49), as said Act
may be amended from time to time, or pursuant to other applicable statutory or
judicial authority. If no cure is effected within the statutory time limits,
Lender may accelerate the indebtedness secured hereby without further notice
(the aforementioned statutory cure period shall run concurrently with any
contractual provision for notice before acceleration of debt) and may then
proceed in the manner and subject to the conditions of the above-referenced
statutes to send to Borrower and other necessary parties a notice of sale and
may sell and convey the Property in accordance with the above-referenced laws.
Lender may enforce this Security Instrument by exercising said power of sale or
at Lender's sole option by judicial foreclosure proceedings as provided by law.
No action of Lender based upon the provisions contained herein or in the
Oklahoma Power of Sale Mortgage Foreclosure Act, including, without limitation,
the giving of the notice of intent to foreclose by power of sale or the notice
of sale, shall constitute an election of remedies which would preclude Lender
from pursuing judicial foreclosure before or at any time after commencement of
the power of sale foreclosure procedure. If Lender institutes judicial
proceedings to enforce this Security Instrument, Borrower hereby waives or does
not waive, at the sole option of Lender, appraisement of the Property, said
option to be exercised by Lender at the time judgment is rendered or at any time
prior thereto. Borrower fully understands the consequences of conferring on
Lender the above-described power of sale, and if Lender elects to enforce this
Security Instrument by exercising said power of sale, Borrower hereby expressly
waives to the fullest extent permitted by law any right to a judicial hearing
prior to the sale of the Property. As often as any proceedings may be taken to
foreclose this Security Instrument, whether pursuant to the power of sale herein
conferred or by judicial proceedings, or to foreclose the security interest
herein granted to Lender, Borrower agrees to pay to Lender, in addition to all
other sums due, all costs and expenses, including reasonable attorney fees,
incurred by Lender.

      (b) It is specifically understood that the obligation of the Borrower to
pay certain filing, registration and recording charges and all taxes, duties,
imposts, assessments and charges set forth in Section 4.01(c) of the Security
Instrument specifically includes payment of and the Borrower specifically agrees
to pay all additional Oklahoma Real Estate Mortgage Tax and certification fees
charged in connection with the Security Interest recorded in Oklahoma.

      (c) A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY
ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE.

      (d) The Maturity Date of the Debt is July 1, 2015.

      Section 18.53. Certain Matters Relating to Property Located in the
Commonwealth of Pennsylvania. With respect to the Property which is located in
the Commonwealth of Pennsylvania, notwithstanding anything contained herein to
the contrary:

      (a) FOR THE PURPOSE OF OBTAINING POSSESSION OF THE PROPERTY AND EXERCISING
THE OTHER REMEDIES PROVIDED IN THIS SECTION, BORROWER HEREBY AUTHORIZES THE
PROTHONOTARY OR ANY ATTORNEY OF THE COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA TO APPEAR FOR BORROWER TO FILE AN AGREEMENT FOR ENTERING IN ANY
COURT OF COMPETENT JURISDICTION AN AMICABLE ACTION FOR CONFESSION OF JUDGMENT IN
EJECTMENT AGAINST BORROWER AND ALL PERSONS CLAIMING UNDER BORROWER FOR
POSSESSION OF THE PROPERTY, FOR WHICH THIS SECURITY INSTRUMENT OR A TRUE CORRECT
COPY THEREOF SHALL BE A SUFFICIENT WARRANT, WHEREUPON, IF LENDER SO DESIRES, A
WRIT OF POSSESSION MAY ISSUE FORTHWITH, WITHOUT

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<PAGE>

ANY PRIOR WRIT OR PROCEEDINGS WHATSOEVER, AND PROVIDED THAT IF FOR ANY REASON
AFTER SUCH ACTION SHALL HAVE BEEN COMMENCED THE SAME SHALL BE TERMINATED AND
POSSESSION REMAIN IN OR BE RESTORED TO BORROWER, LENDER SHALL HAVE THE RIGHT
UPON ANY SUBSEQUENT DEFAULT OR DEFAULTS TO BRING ONE OR MORE AMICABLE ACTION OR
ACTIONS AS HEREINBEFORE SET FORTH TO RECOVER POSSESSION BY CONFESSION OF
JUDGMENT AS AFORESAID. THE AUTHORITY AND POWER TO APPEAR AND CONFESS JUDGMENT IN
EJECTMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE
THEREOF AND MAY BE EXERCISED AS OFTEN AS LENDER SHALL FIND IT NECESSARY AND
DESIRABLE AND THIS SECURITY INSTRUMENT SHALL BE A SUFFICIENT WARRANT THEREFORE.
IN THE EVENT OF ANY JUDGMENT CONFESSED AGAINST BORROWER HEREUNDER IS STRICKEN OR
OPENED UPON APPLICATION BY OR ON THE COMPANY'S BEHALF FOR ANY REASON, LENDER IS
HEREBY AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT IN
EJECTMENT AGAINST BORROWER IN EJECTMENT, AS PROVIDED FOR HEREIN, IF DOING SO
WILL CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR PROCEDURES.

      BY SIGNING THIS INSTRUMENT, BORROWER HEREBY ACKNOWLEDGES THAT BORROWER HAS
READ THIS SECURITY INSTRUMENT (INCLUDING WITHOUT LIMITATION THE CONFESSION SET
FORTH HEREIN), HAS HAD THE OPPORTUNITY TO HAVE THE SAME REVIEWED BY LEGAL
COUNSEL, UNDERSTANDS THE SAME, AND AGREES TO THE PROVISIONS CONTAINED HEREIN,
INCLUDING, WITHOUT LIMITATION, THE CONFESSION OF JUDGMENT PROVISIONS AND
UNDERSTANDS THAT A CONFESSION OF JUDGMENT CONSTITUTES A WAIVER OR RIGHTS
BORROWER OTHERWISE WOULD HAVE TO PRIOR NOTICE AND A HEARING BEFORE A JUDGMENT IS
ENTERED AGAINST BORROWER AND WHICH MAY RESULT IN A COURT JUDGMENT AGAINST
BORROWER WITHOUT PRIOR NOTICE OR HEARING.

      BORROWER HEREBY AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY ATTORNEY
OR ANY COURT OF RECORDS OR THE SHERIFF (OR THE LAWFUL DESIGNEE OF THE SHERIFF)
WITHIN ANY COUNTY OF THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, TO TAKE ALL
ACTION ALLOWED BY OR PROVIDED FOR IN THE PENNSYLVANIA RULES OF CIVIL PROCEDURE
OR OTHER APPLICABLE RULES OF CIVIL PROCEDURE TO EXECUTE ON ANY JUDGMENT ENTERED
AGAINST BORROWER PURSUANT TO THE CONFESSION OF JUDGMENT SET FORTH ABOVE WITHOUT
PRIOR NOTICE OR HEARING OF ANY NATURE WHATSOEVER, WAIVING ALL LAWS EXEMPTING
REAL OR PERSONAL PROPERTY FROM EXECUTION TO THE EXTENT THAT SUCH LAWS MAY
LAWFULLY BE WAIVED. NO SINGLE EXERCISE OF THE FOREGOING POWER TO EXECUTE ON
JUDGMENTS WITHOUT A HEARING SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT
ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE VALID, VOIDABLE OR VOID, BUT
THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME
AS OFTEN AS THE AGENT SHALL ELECT.

      (b) This Security Instrument is an Open-End Mortgage. This Security
Instrument secures, and the Debt include, future advances. All advances and
indebtedness arising and occurring from time to time under this Security
Instrument shall be secured hereby. The maximum amount of indebtedness (as
defined in 42 Pa. Stat. Section 8143, which term excludes interest and excludes
advances and expenses made by Lender to protect its interest in the Property)
outstanding at any time which is secured by this Security Instrument is 125% of
the Allocated Loan Amount for the Property. Borrower hereby covenants and agrees
that it will not exercise, and hereby waives, its right under 42 Pa. Stat.
Section 8143(c) to limit the indebtedness secured by this Security Instrument.

      (c) This Security Instrument secures, and the Debt include, (i) all
advances made by Lender with respect to any of the Property for the payment of
Basic Carrying Costs or other costs incurred for the protection of any of the
Property or the lien of this Security Instrument, (ii) all expenses incurred by
Lender by reason of an Event of Default hereunder and (iii) all advances made by
Lender to enable completion of construction of the Property. As provided in 42
Pa. Stat. Section 8144, this Security Instrument shall constitute a lien on the
Property from the time this Security Instrument is left of record (or, if this
is a purchase money mortgage, from the time of delivery hereof to Lender) for,
among other things, all such advances and expenses, plus interest thereon,
regardless of the time when

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<PAGE>

such advances are made or such expenses are incurred. All notices to be given to
Lender pursuant to 42 Pa. Stat. Section 8143 shall be given as set forth in
Section 11.01 hereof.

      Section 18.54. Certain Matters Relating to Property Located in the State
of Rhode Island. With respect to the Property located in the State of Rhode
Island, notwithstanding anything contained herein to the contrary:

      (a) The following is hereby added to the last paragraph on page 1
beginning "NOW THEREFORE" after the phrase "mortgage and confirm to" on the 5th
line at the top of page 2:

            Lender, WITH MORTGAGE COVENANTS, and grants a security interest in.

      (b) Paragraph (d) of the granting clause is hereby amended by adding the
following phrase immediately after the phrase "all of which":

            are goods that are or are to become fixtures.

      (c) The following is hereby added to the last paragraph of the granting
clause of this Security Instrument beginning "All of the foregoing items" and
immediately after the phrase "of Borrower therein":

            to the extent assignable under applicable law,

      (d) The following is hereby added at the end of the definition
"Environmental Statute" in this Security Instrument immediately before the
phrase "and all rules, regulations and guidance documents promulgated or
published thereunder":

            the Hazardous Waste Management Act of 1978, R.I.G.L.
            Section.23-19.1-1, et seq., as amended, and the Industrial Property
            Remediation and Reuse Act, R.I.G.L. Section 23-19.14-1, et seq., as
            amended

      (e) The following is hereby added to the beginning of the penultimate
sentence in Section 7.01(a) and at the beginning of Section 7.01(d) of this
Security Instrument:

            To the extent permitted by applicable law,

      (f) The following is hereby added at the beginning of Section 13.02(a) of
this Security Instrument:

            This Security Instrument is upon the STATUTORY CONDITION, and upon
            the further condition that all covenants of Borrower contained in
            this Security Instrument, the Loan Documents and/or any other
            documents evidencing the Debt, shall be kept and performed, and for
            any breach of said STATUTORY CONDITION or further condition, Lender
            shall have the STATUTORY POWER OF SALE.

            Said STATUTORY CONDITION and STATUTORY POWER OF SALE, as well as the
            MORTGAGE COVENANTS contained in the granting clause of this Security
            Instrument, are those contained in the General Laws of the State of
            Rhode Island.

            Provided further however, to the extent permitted by law,
            publication, pursuant to said STATUTORY POWER OF SALE, of notice of
            the time and place of sale may, in Lender's sole discretion, be made
            by publishing the same at least once each week for three (3)
            successive weeks in a public newspaper published daily in the City
            of Providence, Rhode Island and not as otherwise provided in said
            STATUTORY POWER OF SALE.

                                       98
<PAGE>

            It is expressly understood and agreed to by Borrower and Lender that
            the power of sale contained in this Security Instrument shall, in
            the event that the Property is comprised of separate lots or parcels
            of land, survive the foreclosure of any portion of the Property and
            may be exercised on different occasions to separately foreclose each
            and every lot or parcel of land comprising the Property until all of
            the Property has been foreclosed in accordance with applicable law
            and the terms of this Security Instrument.

      (g) Section 13.04 of this Security Instrument is hereby amended by
deleting the phrase "month-to-month tenant" and substituting "tenant at
sufferance."

      (h) Section 13.13 is hereby amended to add a new subsection (e) as
follows:

            (e) Compliance with Rhode Island Law. To the extent that the
      provisions of this Security Instrument as to the creation, perfection,
      priority, enforcement and foreclosure of the liens and security interests
      created in this Security Instrument are inconsistent with Rhode Island law
      (including, without limitation, R.I.G.L. Section 6A-9-101 et seq., Section
      34-11-20, Section 34-11-21, Section 34-11-22, and Section 34-27-2), Rhode
      Island law shall take precedence over the provisions of this Security
      Instrument but shall not invalidate or render unenforceable any other
      provisions of this Security Instrument that can be construed in a manner
      consistent with Rhode Island law.

      (i) Section 18.14 of this Security Instrument is hereby amended by adding
a new subsection (c) as follows:

            (c) Part of the Property and Collateral is or may become fixtures.
      It is intended that, as to such fixtures, this Security Instrument shall
      be effective as a financing statement filed as a fixture filing from the
      date of the recording of this Security Instrument for record with the
      Records of Land Evidence of the Town/City in which the Premises is
      located. The information in this Section is provided in order that this
      Security Instrument shall comply with the requirements of the Uniform
      Commercial Code in effect in Rhode Island, for a mortgage instrument to be
      filed as a financing statement pursuant to R.I.G.L. Section 6A-9-502. For
      the purposes of said statute, (i) Borrower is the "Debtor" and its name
      and mailing address are set forth on page 1 and Section 11.01 of this
      Security Instrument and (ii) Lender is "Secured Party" and its name and
      mailing address from which information concerning the security interest
      granted herein may be obtained are as set forth on page 1 and Section
      11.01 of this Security Instrument. A statement describing the portion of
      the Property and Collateral comprising goods or other personal property
      that may now be or hereafter become fixtures hereby secured is set forth
      in the granting clauses hereof. The record owner of the Property is Fee
      Owner.

      (j) The following is hereby added at the end of Section 18.14 of this
Security Instrument:

            All of the foregoing rights and remedies of Lender contained in this
            Section 18.14 shall be exercised in accordance with and to the
            fullest extent permitted under the UCC.

      (k) The following phrase is hereby added to the second sentence in Section
18.16 and the first sentence of Section 18.17 and 18.19 of this Security
Instrument:

            To the fullest extent permitted by applicable law,

      (l) Section 18.22 of this Security Instrument is hereby amended by adding
the following at the end of said Section 18.22:

            Notwithstanding the foregoing, the Loan secured by this Security
            Instrument will be fully advanced at closing and does not include a
            revolving credit component or open-end mortgage for purposes of
            Rhode Island law.

                                       99
<PAGE>

      Section 18.55. Certain Matters Relating to Property Located in the State
of South Carolina. With respect to the Property located in the State of South
Carolina, notwithstanding anything contained herein to the contrary:

      (a) COMPLIANCE WITH SOUTH CAROLINA MORTGAGE FORECLOSURE LAW:

            (i) If any provision of this Security Instrument is determined to be
      inconsistent with any provisions of the South Carolina Code of Laws (1976)
      (the "SCCL") as deal with Mortgage Foreclosures or the South Carolina
      Rules of Civil Procedure (the "SCRCP"), the SCCL and SCRCP shall take
      precedence over the provisions of this Security Instrument, but shall not
      invalidate or render unenforceable any other provisions of this Security
      Instrument that can be construed in a manner consistent with the SCCL or
      SCRCP.

            (ii) Section 3.01 shall be amended to add the following sentence at
      the end of said paragraph: "Provided, however, that in no instance shall
      Lender require Borrower to purchase casualty insurance on the Property in
      excess of the replacement cost of the Improvements."

            (iii) Section 13.13(a) shall be amended to add the following
      sentence at the end of said paragraph: "Provided, however, that any such
      termination or recision shall be in accordance with and subject to the
      provisions of South Carolina Code of Laws (1976) as deal with Mortgage
      Foreclosures and the South Carolina Rules of Civil Procedure.

            (iv) Pursuant to Section 29-3-50 of the SCCL, this Security
      Instrument secures future advances which may be made by Lender, provided
      that the total amount of indebtedness secured hereunder may not exceed the
      maximum principal amount of two (2) times the Loan Amount, plus interest
      thereon, attorney's fees and court costs, together with such other
      advances as may be authorized by law.

            (v) Interest secured under this Security Instrument may include,
      without limitation, deferred or capitalized interest to the extent
      provided in the Note.

            (vi) WAIVER OF APPRAISAL. The laws of South Carolina provide that in
      any real estate foreclosure proceeding a defendant against whom a personal
      judgment is taken or asked may within thirty days after the sale of the
      Property apply to the court for an order of appraisal. The statutory
      appraisal value as approved by the Court would be substituted for the high
      bid and may decrease the amount of any deficiency owing in connection with
      the transaction. THE UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE
      STATUTORY APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL
      FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED
      VALUE OF THE PROPERTY.

      (b) As to those items of the Collateral which are or shall become affixed
to the Property, and all products and proceeds thereof, this Security Instrument
is and shall be effective as a Financing Statement filed as a fixture filing as
and from the date of its recordation in the real estate records of the County in
which the Property is situated. The name of the record owner of the Property is
the Borrower identified on the first page of the Security Instrument. The name
and address of Borrower, as debtor, is set forth on the first page of this
Security Instrument. The name and address of Lender, as secured party, and from
whom information concerning the security interest created herein may be
obtained, is set forth on the first page of this Security Instrument. The
provisions of the granting clauses (b) through (p) on pages 2 through 4 of this
Security Instrument describe the types and items of the Collateral affixed or to
be affixed to the Property.

      Section 18.56. Certain Matters Relating to Property Located in the State
of Vermont. With respect to the Property which is located in the State of
Vermont, notwithstanding anything contained herein to the contrary:

      (a) Borrower hereby grants Lender a power of sale to foreclose this
Security Instrument pursuant to Vt. Stat. Ann. Tit. 12, Sections 4531(a) -
4533(a)(Supp. 2004), as such provision may be amended from time to time, and

                                      100
<PAGE>

Lender may, to the extent permitted by law, with or without first taking
possession, sell the Property, in whole or, to the extent permitted by law, in
part, at public auction in the State of Vermont, or at such place as may be
required by law, and may adjourn such sale from time to time by announcement at
the time and place appointed for such sale or adjourned sale, and upon such
sale, Lender may make and deliver to any purchaser a good and sufficient deed,
conveyance, or bill of sale, and good and sufficient receipts for the purchase
money, and do and perform all other acts as may be necessary fully to carry into
effect this power of sale.

      (b) If Lender should employ attorneys or incur other expenses for the
enforcement or performance or observance of any obligation, right or agreement
herein contained, Borrower agrees that it will on demand therefore reimburse the
reasonable fees of such attorneys and such other expenses so incurred. Any
provision herein to the contrary notwithstanding, Borrower agrees in the event
of foreclosure of the Security Instrument or the lien of the security interest
granted herein, it shall pay the entire amount of reasonable attorneys' fees
incurred by Lender, its successors or assigns in connection with any such
foreclosure, and that the amount of such fees are expressly not limited by the
provisions of Rule 80.1(f) of the Vermont Rules of Civil Procedure.

      Section 18.57. Certain Matters Relating to Property Located in Wisconsin.
With respect to Property located in the State of Wisconsin, notwithstanding
anything contained herein to the contrary:

      (a) Borrower agrees that, to the extent permitted by law, upon waiving the
right to a deficiency judgement, this Security Instrument may be foreclosed by
Lender, at it option, pursuant to the provisions of Section 846.103(2) of
Wisconsin Statues, or any successor thereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      101
<PAGE>

      IN WITNESS WHEREOF, Borrower has duly executed this Security Instrument
the day and year first above written.

Borrower's Organizational Number:         BORROWER:

20-28483969893                            AREC 1, LLC,
                                          a Delaware limited liability company

                                          By:  /s/ Gary B. Horton
                                               ----------------------------
                                               Name:  Gary B. Horton
                                               Title: Treasurer

Borrower's Organizational Number:         UHIL 1, LLC,
                                          a Delaware limited liability company
20-28433969805

                                          By:  /s/ Gary B. Horton
                                               -----------------------------
                                               Name:  Gary B. Horton
                                               Title: Treasurer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>9
<FILENAME>p70784exv10w8.txt
<DESCRIPTION>EX-10.8
<TEXT>
<PAGE>


                                                                    EXHIBIT 10.8

                     SCHEDULE OF ADDITIONAL PROMISSORY NOTES

      On June 8, 2005, additional promissory notes in substantially the same
form as the attached note were executed by the following entities for the
following amounts:

<TABLE>
<CAPTION>
Promissory Note                                 Signing Entities                                         Amount
- ---------------       ----------------------------------------------------------------------         --------------
<S>                   <C>                                                                            <C>
    Pool 2            AREC 2, LLC, AREC 3, LLC, AREC 4, LLC, AREC 5, LLC, AREC 6, LLC, AREC 7,       $25,785,000.00
                      LLC, UHIL 2, LLC, UHIL 3, LLC, UHIL 4, LLC, UHIL 5, LLC, UHIL 6, LLC,
                      UHIL 7, LLC

    Pool 3            AREC 2, LLC, AREC 3, LLC, AREC 4, LLC, AREC 5, LLC, AREC 6, LLC, AREC 7,       $24,274,000.00
                      LLC, UHIL 2, LLC, UHIL 3, LLC, UHIL 4, LLC, UHIL 5, LLC, UHIL 6, LLC,
                      UHIL 7, LLC

    Pool 4            AREC 2, LLC, AREC 3, LLC, AREC 4, LLC, AREC 5, LLC, AREC 6, LLC, AREC 7,       $26,270,000.00
                      LLC, UHIL 2, LLC, UHIL 3, LLC, UHIL 4, LLC, UHIL 5, LLC, UHIL 6, LLC,
                      UHIL 7, LLC

    Pool 5            AREC 2, LLC, AREC 3, LLC, AREC 4, LLC, AREC 5, LLC, AREC 6, LLC, AREC 7,       $26,384,000.00
                      LLC, UHIL 2, LLC, UHIL 3, LLC, UHIL 4, LLC, UHIL 5, LLC, UHIL 6, LLC,
                      UHIL 7, LLC

    Pool 6            AREC 2, LLC, AREC 3, LLC, AREC 4, LLC, AREC 5, LLC, AREC 6, LLC, AREC 7,       $36,313,000.00
                      LLC, UHIL 2, LLC, UHIL 3, LLC, UHIL 4, LLC, UHIL 5, LLC, UHIL 6, LLC,
                      UHIL 7, LLC

    Pool 7            AREC 2, LLC, AREC 3, LLC, AREC 4, LLC, AREC 5, LLC, AREC 6, LLC, AREC 7,       $25,986,000.00
                      LLC, UHIL 2, LLC, UHIL 3, LLC, UHIL 4, LLC, UHIL 5, LLC, UHIL 6, LLC,
                      UHIL 7, LLC
</TABLE>

<PAGE>

                                                       U-Haul - Grande Pool ML 1

                                 PROMISSORY NOTE

Note Amount: $74,988,000.00

Maturity Date: The Payment Date in July, 2015.

            THIS PROMISSORY NOTE (this "Note"), is made as of June 8, 2005, by
the undersigned, as maker ("Borrower"), in favor of MERRILL LYNCH MORTGAGE
LENDING, INC., and its successors or assigns, as payee ("Lender").

                                    RECITALS:

            A. This Note evidences a loan (the "Loan") made by Lender to
Borrower in the original principal amount of SEVENTY-FOUR MILLION NINE-HUNDRED
EIGHTY-EIGHT THOUSAND AND NO/100 DOLLARS ($74,988,000.00) (the "Loan Amount")
and secured by, inter alia, certain mortgages, deeds of trust, deeds to secure
debt and/or certain mortgages which were amended, restated and consolidated by
agreements of consolidation and modification of mortgage, security agreement,
assignment of rents and fixture filing, each of even date herewith (as same may
hereafter be amended, modified, supplemented or replaced, collectively, the
"Security Instrument") from Borrower, as mortgagor or grantor, in favor and for
the benefit of Lender, as mortgagee or beneficiary, as security for the Loan and
the other Loan Documents;

            B. Borrower and Lender intend these Recitals to be a material part
of this Note.

            NOW, THEREFORE, FOR VALUE RECEIVED Borrower does hereby covenant and
promise to pay to the order of Lender, without any counterclaim, setoff or
deduction whatsoever, on the Maturity Date (as hereinafter defined), in
immediately available funds, at 4 World Financial Center, 16th Floor, New York,
NY 10080, attention: CMBS Servicing or at such other place as Lender may
designate to Borrower in writing from time to time, in legal tender of the
United States of America, the Loan Amount and all other amounts due or becoming
due hereunder, to the extent not previously paid in accordance herewith,
together with all interest accrued thereon through the date the Loan is repaid
in full, at the rate of 5.682% per annum to be computed on the basis of the
actual number of days elapsed in a 360 day year (the "Interest Rate"), on so
much of the Loan Amount as is from time to time outstanding on the first day of
the applicable Interest Accrual Period (as hereinafter defined) (taking into
account any principal reduction to the Loan Amount which occurs on the Payment
Date in such Interest Accrual Period).

Section 1. DEFINITIONS

            Defined terms in this Note shall include in the singular number the
plural and in the plural number the singular. All capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the Security
Instrument.

<PAGE>

Section 2. PAYMENTS AND LOAN TERMS

            Section 2.1 Interest and Amortization Payments.

                  (a) Interest on the unpaid Principal Amount of the Loan for
the First Interest Accrual Period computed at the Interest Rate shall be
payable, without any counterclaim, setoff or deduction whatsoever, on the First
Payment Date. Commencing on the Payment Date next following the First Payment
Date, and on each Payment Date thereafter until this Note is paid in full on the
Maturity Date or otherwise, an amount equal to the Monthly Debt Service Payment
in the amount of $434,375.68 shall be due and payable, without any counterclaim,
setoff or deduction whatsoever, which amount represents principal installments
("Principal Payments"), together with interest irrespective of whether or not
any voluntary or involuntary prepayments of principal have been made and which
payment is calculated utilizing twelve (12) thirty (30) day months. The entire
outstanding principal balance, to the extent not theretofore paid, together with
all accrued but unpaid interest thereon (including, without limitation, interest
which has been accrued and not been paid resulting from interest being
calculated for the purposes hereof pursuant to the "Now Therefore" paragraph of
the Recitals hereof) and any other amounts due hereunder shall be due and
payable on the Payment Date in July, 2015 (the "Maturity Date").

                  (b) To the extent any Interest Shortfall shall occur, except
as otherwise provided in Section 3.2 hereof, such Interest Shortfall shall
accrue additional interest at the Interest Rate.

                  (c) To the extent Payments (as hereinafter defined) are or
become due and payable under this Note or any of the other Loan Documents on a
day (the "Due Date") which is not a Business Day, such Payments are and shall be
due and payable on the first Business Day immediately following the Due Date for
such Payments. In the event that any Payment is received after 1:00 p.m. Eastern
Time on any day, it shall be deemed received and paid on the subsequent Business
Day.

            Section 2.2 Application of Payments.

                  (a) Each and every payment (a "Payment") made by Borrower to
Lender in accordance with the terms of this Note and/or the terms of any one or
more of the other Loan Documents and all other proceeds received by Lender with
respect to the Debt, shall be applied as follows:

                        (1) Payments other than Unscheduled Payments shall be
applied (i) first, to all interest (other than Default Rate Interest) which
shall be due and payable with respect to the Loan Amount pursuant to the terms
hereof as of the date the Payment is received (including any Interest Shortfalls
and interest thereon to the extent permitted by applicable law), (ii) second,
taking into account the respective date of such Payments, to the Loan Amount
until the Loan Amount has been amortized in accordance with the terms hereof,
(iii) third, to all Late Charges, Default Rate Interest or other premiums and
other sums payable hereunder or under the other Loan Documents (other than those
sums included in clauses (i) and (ii) of this Section 2.2(a)(1)) in such order
and priority as determined by Lender in its sole discretion and (iv) on the
Maturity Date, to the Loan Amount until the Loan Amount has been paid in full.

                        (2) Unscheduled Payments shall be applied at the end of
the Interest Accrual Period in which such Unscheduled Payments are received as a
principal prepayment of the Loan Amount to amortize the Loan Amount.

                  (b) To the extent that Borrower makes a Payment or Lender
receives any Payment or proceeds for Borrower's benefit, which are subsequently
invalidated, declared to be fraudulent or

                                       3
<PAGE>

preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the obligations of Borrower
hereunder intended to be satisfied shall be revived and continue as if such
Payment or proceeds had not been received by Lender.

            Section 2.3 Prepayments.

      The Debt may not be prepaid, in whole or in part, except as set forth in
Article XV of the Security Instrument.

SECTION 3. DEFAULTS

            Section 3.1 Events of Default.

      This Note is secured by, among other things, the Security Instrument which
specifies various Events of Default, upon the happening of which all or portions
of the sums owing under this Note may be declared immediately due and payable as
more specifically provided therein. Each Event of Default under the Security
Instrument or any one or more of the other Loan Documents shall be an Event of
Default hereunder.

            Section 3.2 Remedies.

      If an Event of Default shall occur hereunder or under any other Loan
Document, the Principal Amount and, to the extent permitted by applicable law,
all accrued but unpaid interest on the Principal Amount shall, commencing on the
date of the occurrence of such Event of Default, at the option of Lender,
immediately and without notice to Borrower, accrue interest at the Default Rate
until such Event of Default is cured or if not cured, until the repayment of the
Debt. The foregoing provision shall not be construed as a waiver by Lender of
its right to pursue any other remedies available to it under the Security
Instrument, or any other Loan Document, nor shall it be construed to limit in
any way the application of the Default Rate.

Section 4. EXCULPATION

            Section 4.1 Exculpation.

            Notwithstanding anything to the contrary contained in this Note or
the other Loan Documents, the obligations of Borrower hereunder shall be
non-recourse except with respect to the Property, and as otherwise provided in
Section 18.32 of the Security Instrument, the terms of which are incorporated
herein.

Section 5. MISCELLANEOUS

            Section 5.1 Further Assurances.

      Borrower shall execute and acknowledge (or cause to be executed and
acknowledged) and deliver to Lender all documents, and take all actions,
required by Lender from time to time to confirm the rights created or now or
hereafter intended to be created under this Note and the other Loan Documents,
to protect and further the validity, priority and enforceability of this Note
and the other Loan Documents, to subject to the Loan Documents any property of
Borrower intended by the terms of any one or more of the Loan Documents to be
encumbered by the Loan Documents, or otherwise carry out the purposes of the
Loan Documents and the transactions contemplated thereunder; provided,

                                       4
<PAGE>

however, that no such further actions, assurances and confirmations shall
increase Borrower's obligations under this Note or any other Loan Document.

            Section 5.2 Modification, Waiver in Writing.

      No modification, amendment, extension, discharge, termination or waiver (a
"Modification") of any provision of this Note, the Security Instrument or any
one or more of the other Loan Documents, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
a writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to, or demand on, Borrower shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances. Lender does not
hereby agree to, nor does Lender hereby commit itself to, enter into any
Modification. However, in the event Lender does ever agree to a Modification,
such Modification shall only be upon the terms and conditions set forth in the
Security Instrument.

            Section 5.3 Costs of Collection.

      Subject to the provisions of Section 4 hereof, Borrower agrees to pay all
costs and expenses of collection incurred by Lender, in addition to principal,
interest and late or delinquency charges (including, without limitation,
reasonable attorneys' fees and disbursements) and including all costs and
expenses incurred in connection with the pursuit by Lender of any of its rights
or remedies referred to in Section 3 hereof or its rights or remedies referred
to in any of the Loan Documents or the protection of or realization of
collateral or in connection with any of Lender's collection efforts, whether or
not suit on this Note, on any of the other Loan Documents or any foreclosure
proceeding is filed, and all such costs and expenses shall be payable on demand,
together with interest at the Default Rate thereon, and also shall be secured by
the Security Instrument and all other collateral at any time held by Lender as
security for Borrower's obligations to Lender.

            Section 5.4 Maximum Amount.

                  (a) It is the intention of Borrower and Lender to conform
strictly to the usury and similar laws relating to interest and the collection
of other charges from time to time in force, and all agreements between Borrower
and Lender, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the
amount paid or agreed to be paid in the aggregate to Lender as interest or other
charges hereunder or under the other Loan Documents or in any other security
agreement given to secure the Debt, or in any other document evidencing,
securing or pertaining to the Debt, exceed the maximum amount permissible under
applicable usury or such other laws (the "Maximum Amount"). If under any
circumstances whatsoever fulfillment of any provision hereof, or any of the
other Loan Documents, at the time performance of such provision shall be due,
shall involve transcending the Maximum Amount, then ipso facto, the obligation
to be fulfilled shall be reduced to the Maximum Amount. For the purposes of
calculating the actual amount of interest or other charges paid and/or payable
hereunder, in respect of laws pertaining to usury or such other laws, all
charges and other sums paid or agreed to be paid hereunder to the holder hereof
for the use, forbearance or detention of the Debt, outstanding from time to time
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread from the date of disbursement of the proceeds of this Note
until payment in full of all of the Debt, so that the actual rate of interest on
account of the Debt is uniform through the term hereof. The terms and provisions
of this

                                       5
<PAGE>

Section 5.4 shall control and supersede every other provision of all agreements
between Borrower or any endorser and Lender.

                  (b) If under any circumstances Lender shall ever receive an
amount which would exceed the Maximum Amount, such amount shall be deemed a
payment in reduction of the Loan Amount owing hereunder and any other obligation
of Borrower in favor of Lender, and shall be so applied in accordance with
Section 2.2 hereof, or if such excessive interest exceeds the unpaid balance of
the Loan Amount and any other obligation of Borrower in favor of Lender, the
excess shall be deemed to have been a payment made by mistake and shall be
refunded to Borrower.

            Section 5.5 Waivers.

      Borrower hereby expressly and unconditionally waives presentment, demand,
protest, notice of protest or notice of any kind, including, without limitation,
any notice of intention to accelerate and notice of acceleration, except as
expressly provided herein, and in connection with any suit, action or proceeding
brought by Lender on this Note, any and every right it may have to (a) a trial
by jury, (b) interpose any counterclaim therein (other than a counterclaim which
can only be asserted in the suit, action or proceeding brought by Lender on this
Note and cannot be maintained in a separate action) and (c) have the same
consolidated with any other or separate suit, action or proceeding.

            Section 5.6 Governing Law.

                  (a) This Note was negotiated in New York, and made by Borrower
and accepted by Lender in the State of New York, and the proceeds of the Note
delivered pursuant hereto were disbursed from New York, which State the parties
agree has a substantial relationship to the parties and to the underlying
transaction embodied hereby, and in all respects, including, without limiting
the generality of the foregoing, matters of construction, validity and
performance. This Note and the obligations arising hereunder shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and performed in such State and any applicable law
of the United States of America, except that at all times the provisions for the
creation, perfection, and enforcement of the liens and security interests
created pursuant to the Security Instrument and pursuant to the other Loan
Documents shall be governed by and construed according to the law of the State
in which the Property is located, it being understood that, to the fullest
extent permitted by the laws of such State, the law of the State of New York
shall govern the validity and the enforceability of all Loan Documents, and the
Debt or obligations arising hereunder or thereunder. To the fullest extent
permitted by law, Borrower hereby unconditionally and irrevocably waives any
claim to assert that the law of any other jurisdiction governs this Note and
this Note shall be governed by and construed in accordance with the laws of the
State of New York pursuant to Section 5-1401 of the New York General Obligations
Law.

                  (b) Any legal suit, action or proceeding against Borrower or
Lender arising out of or relating to this Note shall be instituted in any
federal or state court in New York, New York, pursuant to Section 5-1402 of the
New York General Obligations Law, and Borrower waives any objection which it may
now or hereafter have to the laying of venue of any such suit, action or
proceeding, and Borrower hereby irrevocably submits to the jurisdiction of any
such court in any suit, action or proceeding. Borrower does hereby designate and
appoint CT Corporation having an address at 111 Eighth Avenue, New York, New
York 10011 as its authorized agent to accept and acknowledge on its behalf
service of any and all process which

                                       6
<PAGE>

may be served in any such suit, action or proceeding in any federal or state
court in New York, New York, and agrees that service of process upon said agent
at said address and written notice of said service of Borrower mailed or
delivered to Borrower in the manner provided in the Security Instrument, shall
be deemed in every respect effective service of process upon Borrower, in any
such suit, action or proceeding in the State of New York. Borrower (i) shall
give prompt notice to the Lender of any changed address of its authorized agent
hereunder, (ii) may at any time and from time to time designate a substitute
authorized agent with an office in New York, New York (which office shall be
designated as the address for service of process), and (iii) shall promptly
designate such a substitute if its authorized agent ceases to have an office in
New York, New York or is dissolved without leaving a successor.

            Section 5.7 Headings.

      The Section headings in this Note are included herein for convenience of
reference only and shall not constitute a part of this Note for any other
purpose.

            Section 5.8 Assignment.

      Lender shall have the right to transfer, sell and assign this Note, the
Security Instrument and/or any of the other Loan Documents or any interest
therein, and the obligations hereunder, to any Person. All references to
"Lender" hereunder shall be deemed to include the assigns of the Lender.

            Section 5.9 Severability.

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

            Section 5.10 Joint and Several.

      If Borrower consists of more than one Person or party, the obligations and
liabilities of each such Person or party hereunder shall be joint and several.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       7
<PAGE>

      IN WITNESS WHEREOF, this Note has been duly executed by the Borrower the
day and year first written above.

                                  BORROWER:

                                  AREC 1, LLC,
                                  a Delaware limited liability company

                                  By: /s/ Gary B. Horton
                                      --------------------------------------
                                      Name: Gary B. Horton
                                      Title: Treasurer

                                  UHIL 1, LLC,
                                  a Delaware limited liability company

                                  By: /s/ Gary B. Horton
                                      ---------------------
                                      Name: Gary B. Horton
                                      Title: Treasurer

<PAGE>

                           ALLONGE TO PROMISSORY NOTE

      Allonge to Promissory Note, dated as of June __, 2005, made by AREC 1, LLC
and UHIL 1, LLC, each a Delaware limited liability company, in favor of MERRILL
LYNCH MORTGAGE LENDING, INC., a Delaware corporation, in the original principal
amount of SEVENTY-FOUR MILLION NINE-HUNDRED EIGHTY-EIGHT THOUSAND AND NO/100
DOLLARS ($74,988,000.00).

                                   ENDORSEMENT

Pay to the order of ____________________________, without recourse or warranty.

Dated: _____________, 200__

                                 MERRILL LYNCH MORTGAGE LENDING, INC.

                                 By: ______________________________
                                     Name:
                                     Title:
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>10
<FILENAME>p70784exv99w1.htm
<DESCRIPTION>EX-99.1
<TEXT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="right" style="font-size: 10pt"><B>EXHIBIT 99.1</B>



<P align="left" style="font-size: 10pt">FOR IMMEDIATE RELEASE<BR>
Contact: Jennifer Flachman<BR>
AMERCO Investor Relations<BR>
(602)&nbsp;263-6601<BR>
Flachman@amerco.com


<P align="left" style="font-size: 10pt">AMERCO Closes on Refinancing Plan



<P align="left" style="font-size: 10pt">Reno, NV, June&nbsp;9, 2005, AMERCO (Nasdaq: UHAL) announced today that it has funded on $945&nbsp;million of
financing.



<P align="left" style="font-size: 10pt">As previously announced on May&nbsp;12, 2005, the fundings consist of three asset-backed facilities.



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>$240&nbsp;million senior mortgage funded by Merrill Lynch</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>$465&nbsp;million hybrid real estate backed loan funded by Merrill Lynch</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>$240&nbsp;million senior mortgage funded by Morgan Stanley</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">AMERCO is the parent company of Republic Western Insurance Company, Oxford Life Insurance Company,
Amerco Real Estate Company and U-Haul, the nation&#146;s leading do-it-yourself moving company with a
network of over 14,900 locations in all 50 United States and 10 Canadian Provinces. Celebrating
its 60th year of serving customers, the Company has the largest rental fleet in the world, with
over 94,000 trucks, 75,000 trailers and 35,000 tow devices. U-Haul has also been a leader in the
storage industry since 1974, with over 340,000 rooms and more than 28.8&nbsp;million square feet of
storage space and over 1,000 facilities throughout North America.



<P align="left" style="font-size: 10pt">For more information about AMERCO, please visit www.amerco.com



<P align="left" style="font-size: 10pt">Certain of the statements made in this press release regarding our business constitute
forward-looking statements as contemplated under the Private Securities Litigation Reform Act of
1995. Actual results may differ materially from those anticipated as a result of various risks and
uncertainties. Readers are cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof. The Company undertakes no obligation to publish
revised forward-looking statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events, except as required by law. For a brief discussion
of the risks and uncertainties that may affect AMERCO&#146;s business and future operating results,
please refer to Form&nbsp;10Q for the quarter ended December&nbsp;31, 2004, which is on file with the SEC.



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<P align="right" style="font-size: 10pt"><B>EXHIBIT 99.2</B>



<P align="left" style="font-size: 10pt"><B>Contact:<BR>
Jennifer Flachman<BR>
AMERCO Investor Relations<BR>
(602)&nbsp;263-6601<BR>
Flachman@amerco.com</B>


<P align="left" style="font-size: 10pt"><B>REPUBLIC WESTERN INSURANCE COMPANY ANNOUNCES ORDER FROM ARIZONA DEPARTMENT OF INSURANCE LIFTING
ADMINISTRATIVE SUPERVISION</B>



<P align="left" style="font-size: 10pt">Phoenix, June&nbsp;9, 2005 &#151;Republic Western Insurance Company (Repwest), a subsidiary of AMERCO
(Nasdaq: UHAL), announced today that the Arizona Department of Insurance (ADOI)&nbsp;has signed an Order
releasing the Company from administrative supervision. Repwest was placed under supervision on May
20, 2003.



<P align="left" style="font-size: 10pt">Repwest has been domiciled in Arizona as a property and casualty insurance company since 1973. The
Company employs 250 professionals and operates claims adjusting offices in seven states. Repwest
has been a pioneer in developing innovative products for U-Haul self-move and storage customers.



<P align="left" style="font-size: 10pt">&#147;Our focus going forward will remain on supporting the insurance needs of U-Haul and its customers
and independent self-storage providers,&#148; said Richard Amoroso, president of Republic Western
Insurance Company. &#147;It is through the collective hard work and dedication of our employees and the
employees at AMERCO and U-Haul that Repwest is able to achieve our objectives,&#148; concluded Amoroso.



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