LOAN ASSUMPTION AND SECURITY AGREEMENT, AND NOTE MODIFICATION AGREEMENT

A.

Lender holds a loan (the “ Loan ”) evidenced by an Adjustable Rate Note dated MARCH 16, 2004, payable by MONTEREY PALMS SELF STORAGE, LLC.(the “ Original Borrower ”), to the order of Lender in the original principal amount of $5,200,000.00 (the “ Note ”) and a Change in Terms Agreement dated December 1, 2005. The Note is secured by, among other things, a Deed of Trust, dated MARCH 16, 2004, executed by the Original Borrower, as trustor, in favor of OLD REPUBLIC TITLE COMPANY, as trustee, for the benefit of Lender, as beneficiary, recorded in the Official Records of RIVERSIDE COUNTY, State Of CALIFORNIA, (the “ Official Records ”) on MARCH 25, 2004, as Document No. 2004-0208211 (the “ Deed of Trust ”) and a Modification of Deed of Trust dated December 1, 2005 and recorded on December 22, 2005 as Document No. 2005-1057223 in the official records of Riverside county, state of California.

B.

The Deed of Trust constitutes a first lien on the Original Borrower’s fee simple estate as more particularly described in Exhibit “A”. The Original Borrower’s right, title and interest in and to the land and the improvements located on the land, are collectively referred to in this Agreement as the “ Property ”.

C.

Concurrently with the recordation of this Agreement in the Official Records, Purchaser has acquired title to the Property from the Original Borrower. In connection therewith, Purchaser has requested that Lender consent to Purchaser’s assumption of the Loan. Lender is willing to permit Purchaser to assume the Loan on the terms and subject to the conditions contained in this Agreement.

1.

Assumption of Loan . Effective as of the date on which Purchaser acquires title to the Properly, which shall conclusively be deemed to have occurred no later than the date on which this Agreement is recorded in the Official Records, Purchaser hereby assumes and agrees to perform fully and when due each and every monetary and non-monetary obligation of the Original Borrower under the Note, the Deed of Trust and every other instrument, certificate, agreement and document that sets forth or secures any obligations of the Original Borrower relating to the Loan (collectively, the “ Loan Documents ”). Lender hereby consents to Purchaser’s assumption of the Loan.

2.

Assumption Fee . Concurrently with the recordation of this Agreement, Purchaser shall pay to Lender an assumption fee in the amount of $0.00. If Purchaser is acquiring the Real Property through an escrow (the “ Escrow ”), this paragraph constitutes Purchaser’s irrevocable instructions to the holder of the Escrow to remit such assumption fee to Lender upon the closing of the Escrow from the funds then held in the Escrow for Purchaser’s account.

3.

Purchaser’s Receipt of Loan Documents . Purchaser acknowledges having received a complete copy of each Loan Document, including all riders and exhibits thereto, each in the form executed and delivered by the Original Borrower.

4.

Lender’s Costs; Title Endorsement . Purchaser shall pay, immediately upon Lender’s written request, all out-of-pocket expenses incurred by Lender in connection with Purchaser’s assumption of the Loan, including the fees for recording this Agreement in the Official Records, the cost of obtaining a new Loan Policy of Title Insurance, or an ALTA No. 10, Policy Bring Down endorsement to Lender’s policy of title insurance insuring the continued validity and first lien priority of the Deed of Trust. If for any reason Lender’s title insurer is unwilling or unable to issue such ALTA No. 10, Policy Bring Down endorsement, then Lender, at its election, shall have the right, but not the obligation, to revoke Lender’s consent