Secured Installment Note

SECURED INSTALLMENT NOTE


$25,800,000.00 San Jose, California
April 6, 2005


FOR VALUE RECEIVED, the undersigned, MISSION WEST PROPERTIES, L.P., a Delaware limited partnership ("Borrower"), as maker, whose address is 10050 Bandley Drive, Cupertino, California 95014, does hereby promise to pay to the order of ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA, a Minnesota corporation ("Lender"), as payee, at its office c/o Allianz of America, Inc., 55 Greens Farms Road, P.O. Box 5160, Westport, Connecticut 06881-5160, Attn: Real Estate Department, or such other place as Lender may designate in writing, in lawful money of the United States of America, the principal sum of TWENTY FIVE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($25,800,000.00), or so much thereof as may be advanced, together with interest thereon to accrue, at the rate of five and 56/100 percent (5.56%) per annum (the "Note Rate"), subject to adjustment as herein provided.


1. Payment. Said principal sum, and interest as herein provided to
accrue on the unpaid principal, shall be paid as follows:


(a) Interest only at the Note Rate from and including the date of
this Note through and including April 9, 2005, shall be paid in
advance on the date of this Note.


(b) On each "Payment Date" to and including March 10, 2020,
payments of principal and interest in the amount of $178,351.00 shall
be due and payable. "Payment Date" means the tenth (10th) day of each
consecutive calendar month for the term of this Note commencing May
10, 2005. The payments due under this subparagraph (b) are each called
a "Monthly Installment."


(c) The entire remaining principal amount, together with any
accrued and unpaid interest (the "Final Installment"), shall be due
and payable in full on April 10, 2020 (the "Maturity Date").


(d) Interest shall be computed on the basis of a three hundred
sixty (360) day year consisting of twelve (12) months of thirty (30)
days each.


2. Application of Payments. All payments shall be applied first to
"Costs", as defined below, and interest accrued thereon; then to the
payment of escrows for taxes and insurance, if any; then to "Late Charges",
as defined below, and interest accrued thereon, if any; then to accrued and
unpaid interest, and the remainder to the reduction of the principal
balance outstanding from time to time. The term "Costs" shall mean any sums
advanced by Lender as provided under the terms of the "Deed of Trust," as
defined below, and as provided in Paragraph 9 of this Note.


3. Late Charge. If any payment of principal or interest, or both, so
provided for herein is not paid when due, it would be impracticable or
extremely difficult to fix the actual damages resulting therefrom to
Lender, and, therefore, Borrower hereby agrees to pay to Lender a late
charge of FIVE CENTS ($.05) for each ONE DOLLAR ($1.00) so overdue, not as
a penalty, but for the purpose of defraying the expenses incident to
handling such delinquent payment (a "Late Charge"). Such Late Charge
represents the reasonable estimate of a fair average compensation for the
loss that may be sustained by Lender due to the failure of Borrower to make
timely payments. Such Late Charge (i) shall be paid without prejudice to
the right of Lender to collect any other amounts provided to be paid or to
declare a default under this Note or the Deed of Trust, (ii) shall be
payable not later than the due date of the next payment, and (iii) shall be
secured by the "Security Documents", as defined below. In addition, during
the period of the occurrence of an "Event of Default" (as defined in
Article IV of the Deed of Trust), the entire unpaid principal of this Note
shall accrue interest at the Note Rate, increased by FIVE HUNDRED (500)
BASIS POINTS (the "Default Rate").


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4. Prepayment. (a) Subject to Paragraph 4(e), this Note may be prepaid
in full at any time subject to a prepayment premium that may be
substantial. Such premium represents consideration to Lender for loss of
yield and reinvestment cost. The prepayment premium shall be determined by
Lender and shall be equal to the greater of (i) the prepayment premium
calculated in the manner described below, or (ii) zero. The prepayment
premium shall be an amount equal to the excess, if any,


between (x) the present value at the time of prepayment of the remaining
scheduled Monthly Installments and the present value at the time of
prepayment of the Final Installment, both discounted on a monthly basis at
the "Index Rate," as defined below, and (y) the unpaid principal balance of
this Note at the time of prepayment. The "Index Rate" is defined as the
current yield at the time of prepayment of the Treasury Constant Maturity
(the "TCM") referenced in the weekly Federal Reserve Statistical Release
H-15 (519) for the week immediately preceding the date on which written
request for prepayment is received by Lender for the maturity most closely
corresponding to the remaining loan term as appropriately interpolated,
increased by TWENTY-FIVE (25) BASIS POINTS.


(b) If the TCM ceases to be published during the loan term, the Index
Rate shall be the average of the yield, for the five (5) business days
preceding the date of prepayment of this Note, of the US Treasury Note or
Bond having a remaining term to maturity and coupon rate most closely
corresponding to the remaining term to maturity and interest rate of this
Note. The Index Rate will apply for any prepayment made within thirty (30)
days after such request is received by Lender, after which a more recent
Index Rate may be used at the sole discretion of Lender.


(c) The prepayment premium is to compensate Lender, and its successors
and assigns, for the loss of interest it would otherwise earn on the
principal hereof, if such principal were allowed to remain outstanding, and
for the cost incurred in connection with reinvestment of principal so
prepaid, at an earlier date than the Maturity Date.


(d) In the event of the occurrence of an Event of Default, and
following acceleration of the maturity of this Note, any payment of the
amount necessary to satisfy this Note shall be deemed to be a voluntary
prepayment of this Note and shall be accompanied by the prepayment premium.


(e) To the extent permitted by law, said prepayment premium shall be
payable regardless of whether the loan evidenced by this Note is prepaid
voluntarily or involuntarily; provided, however, that no premium shall be
payable on prepayments by application of the proceeds of any proceedings in
eminent domain, or proceedings in lieu thereof, by application of the
proceeds of fire or other casualty insurance, or by operation of Section
1.6 of the Deed of Trust; and provided, further, that no premium shall be
payable on a prepayment made during the ninety (90) days immediately prior
to the Maturity Date.


(f) Borrower hereby waives all rights under California Civil Code
Section 2954.10 which provides, in part, as follows:


AN OBLIGEE WHICH ACCELERATES THE MATURITY DATE OF THE PRINCIPAL AND ACCRUED
INTEREST, PURSUANT TO CONTRACT, ON ANY LOAN SECURED BY A MORTGAGE OR DEED
OF TRUST ON REAL PROPERTY UPON THE CONVEYANCE OF ANY RIGHT, TITLE, OR
INTEREST IN THAT PROPERTY, MAY NOT CLAIM, EXACT, OR COLLECT ANY CHARGE,
FEE, OR PENALTY FOR ANY PREPAYMENT RESULTING FROM THAT ACCELERATION.


Borrower understands and acknowledges that Lender bargained for this waiver
as part of the consideration which induced Lender to enter into this
transaction. Borrower initials this subparagraph (f) for the purpose of
evidencing its understanding of Civil Code Section 2954.10 recited in part
above and Borrower's agreement to the waiver of its terms.


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5. Security; Deed of Trust. (a) This Note is secured by a Deed of
Trust, Security Agreement, Fixture Filing with Absolute Assignment of Rents
(the "Deed of Trust"), an Absolute Assignment of Leases, Rents and Income
(the "Assignment"), each of even date herewith, encumbering certain
improved real and personal property located in the City of San Jose, Santa
Clara County, California, and described in the Deed of Trust (the
"Property"), and any other instruments, now or hereafter executed by
Borrower in favor of Lender, which evidence, or constitute additional
security for, this Note (as used herein th ...