Loan No. 904707938
                MULTIFAMILY NOTE
                  (MULTISTATE)

US $11,000,000.00
<PAGE>
December ____, 1997

     FOR VALUE RECEIVED, the undersigned
("Borrower") jointly and severally (if more
than one)  promises to pay to the order of
REILLY MORTGAGE GROUP, INC., a District of
Columbia corporation, the principal sum of
Eleven Million and No/100ths Dollars
(US $11,000,000.00), with interest on the
unpaid principal balance at the annual rate
of Six and Three-Quarters percent (6.75%).

     1.    Defined Terms.  As used in this
Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term
"Indebtedness" means the principal of,
interest on, or any other amounts due at any
time under, this Note, the Security
Instrument or any other Loan Document,
including prepayment premiums, late charges,
default interest, and advances to protect the
security of the Security Instrument under
Section 12 of the Security Instrument.
"Event of Default" and other capitalized
terms used but not defined in this Note shall
have the meanings given to such terms in the
Security Instrument.

     2.    Address for Payment.  All payments
due under this Note shall be payable at  2000
Corporate Ridge, Suite 925, McLean, Virginia
22102, or such other place as may be
designated by written notice to Borrower from
or on behalf of Lender.

     3.    Payment of Principal and Interest.
Principal and interest shall be paid as
follows:

     (a)   Unless disbursement of principal is
made by Lender to Borrower on the first day
of the month, interest for the period
beginning on the date of disbursement and
ending on and including the last day of the
month in which such disbursement is made
shall be payable simultaneously with the
execution of this Note.  Interest under this
Note shall be computed on the basis of a 360-
day year consisting of twelve 30-day months.

     (b)    Consecutive monthly installments
of principal and interest, each in the amount
of Seventy One Thousand Three Hundred Forty
Five and 79/100ths Dollars (US $71,345.79),
shall be payable on the first day of each
month beginning on February 1, 1998, until
the entire unpaid principal balance evidenced
by this Note is fully paid.  Any accrued
interest remaining past due for 30 days or
more shall be added to and become part of the
unpaid principal balance and shall bear
interest at the rate or rates specified in
this Note, and any reference below to
"accrued interest" shall refer to accrued
interest which has not become part of the
unpaid principal balance.  Any remaining
principal and interest shall be due and
payable on January 1, 2008 or on any earlier
date on which the unpaid principal balance of
this Note becomes due and payable, by
acceleration or otherwise (the "Maturity
Date").  The unpaid principal balance shall
continue to bear interest after the Maturity
Date at the Default Rate set forth in this
Note until and including the date on which it
is paid in full.

     (c)   Any regularly scheduled monthly
installment of principal and interest that is
received by Lender before the date it is due
shall be deemed to have been received on the
due date solely for the purpose of
calculating interest due.

     4.    Application of Payments.  If at any
time Lender receives, from Borrower or
otherwise, any amount applicable to the
Indebtedness which is less than all amounts
due and payable at such time, Lender may
apply that payment to amounts then due and
payable in any manner and in any order
determined by Lender, in Lender's discretion.
Borrower agrees that neither Lender's
acceptance of a payment from Borrower in an
amount that is less than all amounts then due
and payable nor Lender's application of such
payment shall constitute or be deemed to
constitute either a waiver of the unpaid
amounts or an accord and satisfaction.

     5.    Security.  The Indebtedness is
secured, among other things, by a multifamily
mortgage, deed to secure debt or deed of
trust dated as of the date of this Note (the
"Security Instrument"), and reference is made
to the Security Instrument for other rights
of Lender as to collateral for the
Indebtedness.

     6.    Acceleration.  If an Event of
Default has occurred and is continuing, the
entire unpaid principal balance, any accrued
interest, the prepayment premium payable
under Paragraph 10, if any, and all other
amounts payable under this Note and any other
Loan Document shall at once become due and
payable, at the option of Lender, without any
prior notice to Borrower.  Lender may
exercise this option to accelerate regardless
of any prior forbearance.

     7.    Late Charge.  If any monthly amount
payable under this Note or under the Security
Instrument or any other Loan Document is not
received by Lender within ten (10) days after
the amount is due, Borrower shall pay to
Lender, immediately and without demand by
Lender, a late charge equal to five percent
of such amount.  Borrower acknowledges that
its failure to make timely payments will
cause Lender to incur additional expenses in
servicing and processing the loan evidenced
by this Note (the "Loan"), and that it is
extremely difficult and impractical to
determine those additional expenses.
Borrower agrees that the late charge payable
pursuant to this Paragraph represents a fair
and reasonable estimate, taking into account
all circumstances existing on the date of
this Note, of the additional expenses Lender
will incur by reason of such late payment.
The late charge is payable in addition to,
and not in lieu of, any interest payable at
the Default Rate pursuant to Paragraph 8.

     8.    Default Rate.  So long as (a) any
monthly installment under this Note remains
past due for 30 days or more, or (b) any
other Event of Default has occurred and is
continuing, interest under this Note shall
accrue on the unpaid principal balance from
the earlier of the due date of the first
unpaid monthly installment or the occurrence
of such other Event of Default, as
applicable, at a rate (the "Default Rate")
equal to the lesser of 4 percentage points
above the rate stated in the first paragraph
of this Note or the maximum interest rate
which may be collected from Borrower under
applicable law.  If the unpaid principal
balance and all accrued interest are not paid
in full on the Maturity Date, the unpaid
principal balance and all accrued interest
shall bear interest from the Maturity Date at
the Default Rate.  Borrower also acknowledges
that its failure to make timely payments will
cause Lender to incur additional expenses in
servicing and processing the Loan, that,
during the time that any monthly installment
under this Note is delinquent for more than
30 days, Lender will incur additional costs
and expenses arising from its loss of the use
of the money due and from the adverse impact
on Lender's ability to meet its other
obligations and to take advantage of other
investment opportunities, and that it is
extremely difficult and impractical to
determine those additional costs and
expenses.  Borrower also acknowledges that,
during the time that any monthly installment
under this Note is delinquent for more than
30 days or any other Event of Default has
occurred and is continuing, Lender's risk of
nonpayment of this Note will be materially
increased and Lender is entitled to be
compensated for such increased risk.
Borrower agrees that the increase in the rate
of interest payable under this Note to the
Default Rate represents a fair and reasonable
estimate, taking into account all
circumstances existing on the date of this
Note, of the additional costs and expenses
Lender will incur by reason of the Borrower's
delinquent payment and the additional
compensation Lender is entitled to receive
for the increased risks of nonpayment
associated with a delinquent loan.

     9.    Limits on Personal Liability.

     (a)   Except as otherwise provided in
this Paragraph 9, Borrower shall have no
personal liability under this Note, the
Security Instrument or any other Loan
Document for the repayment of the
Indebtedness or for the performance of any
other obligations of Borrower under the Loan
Documents, and Lender's only recourse for the
satisfaction of the Indebtedness and the
performance of such obligations shall be
Lender's exercise of its rights and remedies
with respect to the Mortgaged Property and
any other collateral held by Lender as
security for the Indebtedness.  This
limitation on Borrower's liability shall not
limit or impair Lender's enforcement of its
rights against any guarantor of the
Indebtedness or any guarantor of any
obligations of Borrower.

     (b)   Borrower shall be personally liable
to Lender for the repayment of a portion of
the Indebtedness equal to zero percent (0%)
of the original principal balance of this
Note, plus any other amounts for which
Borrower has personal liability under this
Paragraph 9.

     (c)   In addition to Borrower's personal
liability under Paragraph 9(b), Borrower
shall be personally liable to Lender for the
repayment of a further portion of the
Indebtedness equal to any loss or damage
suffered by Lender as a result of (1) failure
of Borrower to pay to Lender upon demand
after an Event of Default all Rents to which
Lender is entitled under Section 3(a) of the
Security Instrument and the amount of all
security deposits collected by Borrower from
tenants then in residence; (2) failure of
Borrower to apply all insurance proceeds and
condemnation proceeds as required by the
Security Instrument; or (3) failure of
Borrower to comply with Section 14(d) or (e)
of the Security Instrument relating to the
delivery of books and records, statements,
schedules and reports.

     (d)    For purposes of determining
Borrower's personal liability under Paragraph
9(b) and Paragraph 9(c), all payments made by
Borrower or any guarantor of this Note with
respect to the Indebtedness and all amounts
received by Lender from the enforcement of
its rights under the Security Instrument
shall be applied first to the portion of the
Indebtedness for which Borrower has no
personal liability.

     (e)   Borrower shall become personally
liable to Lender for the repayment of all of
the Indebtedness upon the occurrence of any
of the following Events of Default: (1)
Borrower's acquisition of any property or
operation of any business not permitted by
Section 33 of the Security Instrument; (2) a
Transfer (including, but not limited to, a
lien or encumbrance) that is an Event of
Default under Section 21 of the Security
Instrument, other than a Transfer consisting
solely of the involuntary removal or
involuntary withdrawal of a general partner
in a limited partnership or a manager in a
limited liability company; or (3) fraud or
written material misrepresentation by
Borrower or any officer, director, partner,
member or employee of Borrower in connection
with the application for or creation of the
Indebtedness or any request for any action or
consent by Lender.

     (f)   In addition to any personal
liability for the Indebtedness, Borrower
shall be personally liable to Lender for (1)
the performance of all of Borrower's
obligations under Section 18 of the Security
Instrument (relating to environmental
matters); (2) the costs of any audit under
Section 14(d) of the Security Instrument; and
(3) any costs and expenses incurred by Lender
in connection with the collection of any
amount for which Borrower is personally
liable under this Paragraph 9, including fees
and out of pocket expenses of attorneys and
expert witnesses and the costs of conducting
any independent audit of Borrower's books and
records to determine the amount for which
Borrower has personal liability.

     (g)   To the extent that Borrower has
personal liability under this Paragraph 9,
Lender may exercise its rights against
Borrower personally without regard to whether
Lender has exercised any rights against the
Mortgaged Property or any other security, or
pursued any rights against any guarantor, or
pursued any other rights available to Lender
under this Note, the Security Instrument, any
other Loan Document or applicable law. For
purposes of this Paragraph 9, the term
"Mortgaged Property" shall not include any
funds that (1) have been applied by Borrower
as required or permitted by the Security
Instrument prior to the occurrence of an
Event of Default or (2) Borrower was unable
to apply as required or permitted by the
Security Instrument because of a bankruptcy,
receivership, or similar judicial proceeding.

     10.   Voluntary and Involuntary
Prepayments.

     (a)   A prepayment premium shall be
payable in connection with any prepayment
made under this Note as provided below:

           (1)  Borrower may voluntarily
prepay all of the unpaid principal balance of
this Note on the last Business Day of a
calendar month if Borrower has given Lender
at least 30 days prior notice of its
intention to make such prepayment.  Such
prepayment shall be made by paying (A) the
amount of principal being prepaid, (B) all
accrued interest, (C) all other sums due
Lender at the time of such prepayment, and
(D) the prepayment premium calculated
pursuant to Schedule A.  For all purposes
including the accrual of interest, any
prepayment received by Lender on any day
other than the last calendar day of the month
shall be deemed to have been received on the
last calendar day of such month.  For
purposes of this Note, a "Business Day" means
any day other than a Saturday, Sunday or any
other day on which Lender is not open for
business.  Borrower shall not have the option
to voluntarily prepay less than all of the
unpaid principal balance.

           (2)  Upon Lender's exercise of any
right of acceleration under this Note,
Borrower shall pay to Lender, in addition to
the entire unpaid principal balance of this
Note outstanding at the time of the
acceleration, (A) all accrued interest and
all other sums due Lender, and (B) the
prepayment premium calculated pursuant to
Schedule A.

           (3)  Any application by Lender of
any collateral or other security to the
repayment of any portion of the unpaid
principal balance of this Note prior to the
Maturity Date and in the absence of
acceleration shall be deemed to be a partial
prepayment by Borrower, requiring the payment
to Lender by Borrower of a prepayment
premium.  The amount of any such partial
prepayment shall be computed so as to provide
to Lender a prepayment premium computed
pursuant to Schedule A without Borrower
having to pay out-of-pocket any additional
amounts.

     (b)   Notwithstanding the provisions of
Paragraph 10(a), no prepayment premium shall
be payable with respect to (A) any prepayment
made no more than 90 days before the Maturity
Date, or (B) any prepayment occurring as a
result of the application of any insurance
proceeds or condemnation award under the
Security Instrument.

     (c)   Schedule A is hereby incorporated
by reference into this Note.

     (d)   Any permitted or required
prepayment of less than the unpaid principal
balance of this Note shall not extend or
postpone the due date of any subsequent
monthly installments or change the amount of
such installments, unless Lender agrees
otherwise in writing.

     (e)   Borrower recognizes that any
prepayment of the unpaid principal balance of
this Note, whether voluntary or involuntary
or resulting from a default by Borrower, will
result in Lender's incurring loss, including
reinvestment loss, additional expense and
frustration or impairment of Lender's ability
to meet its commitments to third parties.
Borrower agrees to pay to Lender upon demand
damages for the detriment caused by any
prepayment, and agrees that it is extremely
difficult and impractical to ascertain the
extent of such damages.  Borrower therefore
acknowledges and agrees that the formula for
calculating prepayment premiums set forth on
Schedule A represents a reasonable estimate
of the damages Lender will incur because of a
prepayment.

     (f)   Borrower further acknowledges that
the prepayment premium provisions of this
Note are a material part of the consideration
for the Loan, and acknowledges that the terms
of this Note are in other respects more
favorable to Borrower as a result of the
Borrower's voluntary agreement to the
prepayment premium provisions.

     11.   Costs and Expenses.  Borrower shall
pay all expenses and costs, including fees
and out-of-pocket expenses of attorneys and
expert witnesses and costs of investigation,
incurred by Lender as a result of any default
under this Note or in connection with efforts
to collect any amount due under this Note, or
to enforce the provisions of any of the other
Loan Documents, including those incurred in
post-judgment collection efforts and in any
bankruptcy proceeding (including any action
for relief from the automatic stay of any
bankruptcy proceeding) or judicial or non-
judicial foreclosure proceeding.

     12.   Forbearance.  Any forbearance by
Lender in exercising any right or remedy
under this Note, the Security Instrument, or
any other Loan Document or otherwise afforded
by applicable law, shall not be a waiver of
or preclude the exercise of that or any other
right or remedy.  The acceptance by Lender of
any payment after the due date of such
payment, or in an amount which is less than
the required payment, shall not be a waiver
of Lender's right to require prompt payment
when due of all other payments or to exercise
any right or remedy with respect to any
failure to make prompt payment.  Enforcement
by Lender of any security for Borrower's
obligations under this Note shall not
constitute an election by Lender of remedies
so as to preclude the exercise of any other
right or remedy available to Lender.

     13.   Waivers.  Presentment, demand,
notice of dishonor, protest, notice of
acceleration, notice of intent to demand or
accelerate payment or maturity, presentment
for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness are
waived by Borrower and all endorsers and
guarantors of this Note and all other third
party obligors.

     14.   Loan Charges.  If any applicable
law limiting the amount of interest or other
charges permitted to be collected from
Borrower in connection with the Loan is
interpreted so that any interest or other
charge provided for in any Loan Document,
whether considered separately or together
with other charges provided for in any other
Loan Document, violates that law, and
Borrower is entitled to the benefit of that
law, that interest or charge is hereby
reduced to the extent necessary to eliminate
that violation.  The amounts, if any,
previously paid to Lender in excess of the
permitted amounts shall be applied by Lender
to reduce the unpaid principal balance of
this Note.  For the purpose of determining
whether any applicable law limiting the
amount of interest or other charges permitted
to be collected from Borrower has been
violated, all Indebtedness that constitutes
interest, as well as all other charges made
in connection with the Indebtedness that
constitute interest, shall be deemed to be
allocated and spread ratably over the stated
term of the Note.  Unless otherwise required
by applicable law, such allocation and
spreading shall be effected in such a manner
that the rate of interest so computed is
uniform throughout the stated term of the
Note.

     15.   Commercial Purpose.  Borrower
represents that the Indebtedness is being
incurred by Borrower solely for the purpose
of carrying on a business or commercial
enterprise, and not for personal, family or
household purposes.

     16.   Counting of Days.  Except where
otherwise specifically provided, any
reference in this Note to a period of "days"
means calendar days, not Business Days.

     17.   Governing Law.  This Note shall be
governed by the law of the jurisdiction in
which the Land is located.

     18.   Captions.  The captions of the
paragraphs of this Note are for convenience
only and shall be disregarded in construing
this Note.

     19.   Notices.  All notices, demands and
other communications required or permitted to
be given by Lender to Borrower pursuant to
this Note shall be given in accordance with
Section 31 of the Security Instrument.

     20.   Consent to Jurisdiction and Venue.
Borrower agrees that any controversy arising
under or in relation to this Note shall be
litigated exclusively in the jurisdiction in
which the Land is located (the "Property
Jurisdiction").  The state and federal courts
and authorities with jurisdiction in the
Property Jurisdiction shall have exclusive
jurisdiction over all controversies which
shall arise under or in relation to this
Note.  Borrower irrevocably consents to
service, jurisdiction, and venue of such
courts for any such litigation and waives any
other venue to which it might be entitled by
virtue of domicile, habitual residence or
otherwise.

     21.   WAIVER OF TRIAL BY JURY.  BORROWER
AND LENDER EACH (A) AGREES NOT TO ELECT A
TRIAL BY JURY WITH RESPECT TO ANY ISSUE
ARISING OUT OF THIS NOTE OR THE RELATIONSHIP
BETWEEN THE PARTIES AS LENDER AND BORROWER
THAT IS TRIABLE OF RIGHT BY A JURY AND (B)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH
RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY
SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT
LEGAL COUNSEL.

     ATTACHED SCHEDULES.  The following
Schedules are attached to this Note:

     |X |    Schedule A    Prepayment Premium
(required)

     |    |       Schedule B    Modifications
to Multifamily Note



     IN WITNESS WHEREOF, Borrower has signed
and delivered this Note or has caused this
Note to be signed and delivered by its duly
authorized representative.

                                BORROWER:

                                CENTURY III
ASSOCIATES LIMITED
                                PARTNERSHIP, a
Maryland limited
                                partnership

ATTEST/WITNESS:                 By:  The Krupp
Corporation, a Massachusetts

corporation, General Partner


__________________________                 By:
_____________________________

Stephen C. Parthum, its Duly

Authorized Agent

                                        04-
3074016
                                Borrower's
Social Security/Employer
                                ID Number
PAY TO THE ORDER OF FEDERAL HOME
LOAN MORTGAGE CORPORATION WITHOUT
RECOURSE

This _____ day of December, 1997

REILLY MORTGAGE GROUP, INC.

By:  __________________________________
                     , its Vice President
<PAGE>
<PAGE>
SCHEDULE A

 PREPAYMENT PREMIUM


Any prepayment premium payable under
Paragraph 10 of this Note shall be computed
as follows:

     (a)   If the prepayment is made between
the date of this Note and the date that is
114 months after the first day of the first
calendar month following the date of this
Note (the "Yield Maintenance Period"), the
prepayment premium shall be the greater of:

     (i)   1.0% of the unpaid principal
balance of this Note; or

     (ii)  the product obtained by
multiplying:

           (A)  the amount of principal being
prepaid,

                by

           (B)  the excess (if any) of the
Monthly Note Rate over the Assumed
                Reinvestment Rate,

                by

           (C)  the Present Value Factor.

           For purposes of subparagraph (ii),
the following definitions shall apply:

           Monthly Note Rate: one-twelfth
           (1/12) of the annual interest rate
           of the Note, expressed as a decimal
           calculated to five digits.

           Prepayment Date:  in the case of a
           voluntary prepayment, the date on
           which the prepayment is made; in
           any other case, the date on which
           Lender accelerates the unpaid
           principal balance of the Note.

           Assumed Reinvestment Rate:  one-
           twelfth (1/12) of the yield rate as
           of the date 5 Business Days before
           the Prepayment Date, on the 6.125%
           U.S. Treasury Security due August
           1, 2007, as reported in The Wall
           Street Journal, expressed as a
           decimal calculated to five digits.
           In the event that no yield is
           published on the applicable date
           for the Treasury Security used to
           determine the Assumed Reinvestment
           Rate, Lender, in its discretion,
           shall select the non-callable
           Treasury Security maturing in the
           same year as the Treasury Security
           specified above with the lowest
           yield published in The Wall Street
           Journal as of the applicable date.
           If the publication of such yield
           rates in The Wall Street Journal is
           discontinued for any reason, Lender
           shall select a security with a
           comparable rate and term to the
           Treasury Security used to determine
           the Assumed Reinvestment Rate.  The
           selection of an alternate security
           pursuant to this Paragraph shall be
           made in Lender's discretion.

           Present Value Factor:  the factor
           that discounts to present value the
           costs resulting to Lender from the
           difference in interest rates during
           the months remaining in the Yield
           Maintenance Period, using the
           Assumed Reinvestment Rate as the
           discount rate, with monthly
           compounding, expressed numerically
           as follows:



           n = number of months remaining in
Yield Maintenance Period

           ARR = Assumed Reinvestment Rate

     (b)   If the prepayment is made after the
expiration of the Yield Maintenance Period
but more than 90 days before the Maturity
Date, the prepayment premium shall be 1.0% of
the unpaid principal balance of this Note.
<PAGE>
SCHEDULE B

MODIFICATIONS TO MULTIFAMILY NOTE

Prepared by, and after recording Loan No.
904707938
return to:

Robert B. Joselow, Esq.
SEEGER POTTER RICHARDSON
 LUXTON JOSELOW & BROOKS, L.L.P.
2121 K Street, N.W., Suite 700
Washington, D.C. 20037











MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT

(MARYLAND)
<PAGE>

MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS AND
 SECURITY AGREEMENT


THIS MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF
RENTS AND SECURITY AGREEMENT (the
"Instrument") is made this ______ day of
December, 1997, by CENTURY III ASSOCIATES
LIMITED PARTNERSHIP, a limited partnership
organized and existing under the laws of
Maryland, whose address is c/o Berkshire
Mortgage Finance, 1000 Parkwood Circle, Suite
900, Atlanta, Georgia 30339, as grantor
("Borrower"), to James R. Kozuch, as trustee
("Trustee"), for the benefit of REILLY
MORTGAGE GROUP, INC., a corporation organized
and existing under the laws of the District
of Columbia, whose address is 2000 Corporate
Ridge, Suite 925, McLean, Virginia 22102, as
beneficiary ("Lender").

Borrower, in consideration of the
Indebtedness and the trust created by this
Instrument, irrevocably grants, conveys and
assigns to Trustee, in trust, with power of
sale, the Mortgaged Property, including the
Land located in Baltimore County, State of
Maryland and described in Exhibit A attached
to this Instrument, and authorizes Trustee to
sell the Mortgaged Property upon default by
any lawful means, as provided in this
Instrument, and assents to the passage of a
decree for the sale of the Mortgage Property.


TO SECURE TO LENDER the repayment of the
Indebtedness evidenced by Borrower's
Multifamily Note payable to Lender, dated as
of the date of this Instrument, and maturing
on January 1, 2008, in the principal amount
of $11,000,000.00, and all renewals,
extensions and modifications of the
Indebtedness, and the performance of the
covenants and agreements of Borrower
contained in the Loan Documents.

Borrower represents and warrants that
Borrower is lawfully seized of the Mortgaged
Property and has the right, power and
authority to grant, convey and assign the
Mortgaged Property, and that the Mortgaged
Property is unencumbered.  Borrower covenants
that Borrower will warrant and defend
specially the title to the Mortgaged Property
against all claims and demands, subject to
any easements and restrictions listed in a
schedule of exceptions to coverage in any
title insurance policy issued to Lender
contemporaneously with the execution and
recordation of this Instrument and insuring
Lender's interest in the Mortgaged Property.

Covenants.  Borrower and Lender covenant and
agree as follows:

1.DEFINITIONS. The following terms, when used
in this Instrument (including when used in
the above recitals), shall have the following
meanings:

(a)"Borrower" means all persons or entities
identified as "Borrower" in the first
paragraph of this Instrument, together with
their successors and assigns.

(b)"Collateral Agreement" means any separate
agreement between Borrower and Lender for the
purpose of establishing replacement reserves
for the Mortgaged Property, establishing a
fund to assure the completion of repairs or
improvements specified in that agreement, or
assuring reduction of the outstanding
principal balance of the Indebtedness if the
occupancy of or income from the Mortgaged
Property does not increase to a level
specified in that agreement, or any other
agreement or agreements between Borrower and
Lender which provide for the establishment of
any other fund, reserve or account.

(c)"Controlling Entity" means an entity which
owns, directly or indirectly through one or
more intermediaries, (A) a general
partnership interest or more than 50% of the
limited partnership interests in Borrower (if
Borrower is a partnership or joint venture),
(B) a manager's interest in Borrower or more
than 50% of the ownership or membership
interests in Borrower (if Borrower is a
limited liability company), or (C) more than
50% of any class of voting stock of Borrower
(if Borrower is a corporation).

(d)"Environmental Permit" means any permit,
license, or other authorization issued under
any Hazardous Materials Law with respect to
any activities or businesses conducted on or
in relation to the Mortgaged Property.

(e)"Event of Default" means the occurrence of
any event listed in Section 22.

(f)"Fixtures" means all property which is so
attached to the Land or the Improvements as
to constitute a fixture under applicable law,
including: machinery, equipment, engines,
boilers, incinerators, installed building
materials; systems and equipment for the
purpose of supplying or distributing heating,
cooling, electricity, gas, water, air, or
light; antennas, cable, wiring and conduits
used in connection with radio, television,
security, fire prevention, or fire detection
or otherwise used to carry electronic
signals; telephone systems and equipment;
elevators and related machinery and
equipment; fire detection, prevention and
extinguishing systems and apparatus; security
and access control systems and apparatus;
plumbing systems; water heaters, ranges,
stoves, microwave ovens, refrigerators,
dishwashers, garbage disposers, washers,
dryers and other appliances; light fixtures,
awnings, storm windows and storm doors;
pictures, screens, blinds, shades, curtains
and curtain rods; mirrors; cabinets,
paneling, rugs and floor and wall coverings;
fences, trees and plants; swimming pools; and
exercise equipment.

     (g)   "Governmental Authority" means any
board, commission, department or body of any
municipal, county, state or federal
governmental unit, or any subdivision of any
of them, that has or acquires jurisdiction
over the Mortgaged Property or the use,
operation or improvement of the Mortgaged
Property.

     (h)   "Hazardous Materials" means
petroleum and petroleum products and
compounds containing them, including
gasoline, diesel fuel and oil; explosives;
flammable materials; radioactive materials;
polychlorinated biphenyls ("PCBs") and
compounds containing them; lead and lead-
based paint; asbestos or asbestos-containing
materials in any form that is or could become
friable; underground or above-ground storage
tanks, whether empty or containing any
substance; any substance the presence of
which on the Mortgaged Property is prohibited
by any federal, state or local authority; any
substance that requires special handling; and
any other material or substance now or in the
future defined as a "hazardous substance,"
"hazardous material," "hazardous waste,"
"toxic substance," "toxic pollutant,"
"contaminant," or "pollutant" within the
meaning of any Hazardous Materials Law.

     (i)   "Hazardous Materials Laws" means
all federal, state, and local laws,
ordinances and regulations and standards,
rules, policies and other governmental
requirements, administrative rulings and
court judgments and decrees in effect now or
in the future and including all amendments,
that relate to Hazardous Materials and apply
to Borrower or to the Mortgaged Property.
Hazardous Materials Laws include, but are not
limited to, the Comprehensive Environmental
Response, Compensation and Liability Act, 42
U.S.C. Section 9601, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., the Toxic Substance
Control Act, 15 U.S.C. Section 2601, et seq.,
the Clean Water Act, 33 U.S.C. Section 1251,
et seq., and the Hazardous Materials
Transportation Act, 49 U.S.C. Section 5101,
and their state analogs.

     (j)   "Impositions" and "Imposition
Deposits" are defined in Section 7(a).

     (k)   "Improvements" means the buildings,
structures, improvements, and alterations now
constructed or at any time in the future
constructed or placed upon the Land,
including any future replacements and
additions.

     (l)   "Indebtedness" means the principal
of, interest on, and all other amounts due at
any time under, the Note, this Instrument or
any other Loan Document, including prepayment
premiums, late charges, default interest, and
advances as provided in Section 12 to protect
the security of this Instrument.

     (m)   "Initial Owners" means, with
respect to Borrower or any other entity, the
persons or entities who on the date of the
Note own in the aggregate 100% of the
ownership interests in Borrower or that
entity.

     (n)   "Land" means the land described in
Exhibit A.

     (o)   "Leases" means all present and
future leases, subleases, licenses,
concessions or grants or other possessory
interests now or hereafter in force, whether
oral or written, covering or affecting the
Mortgaged Property, or any portion of the
Mortgaged Property (including proprietary
leases or occupancy agreements if Borrower is
a cooperative housing corporation), and all
modifications, extensions or renewals.

     (p)   "Lender" means the entity
identified as "Lender" in the first paragraph
of this Instrument, or any subsequent holder
of the Note.

     (q)   "Loan Documents" means the Note,
this Instrument, all guaranties, all
indemnity agreements, all Collateral
Agreements, O&M Programs, and any other
documents now or in the future executed by
Borrower, any guarantor or any other person
in connection with the loan evidenced by the
Note, as such documents may be amended from
time to time.

     (r)   "Loan Servicer" means the entity
that from time to time is designated by
Lender to collect payments and deposits and
receive notices under the Note, this
Instrument and any other Loan Document, and
otherwise to service the loan evidenced by
the Note for the benefit of Lender.  Unless
Borrower receives notice to the contrary, the
Loan Servicer is the entity identified as
"Lender" in the first paragraph of this
Instrument.

     (s)   "Mortgaged Property" means all of
Borrower's present and future right, title
and interest in and to all of the following:

           (1)  the Land;

           (2)  the Improvements;

           (3)  the Fixtures;

           (4)  the Personalty;

           (5)  all current and future rights,
                including air rights,
                development rights, zoning
                rights and other similar
                rights or interests,
                easements, tenements,
                rights-of-way, strips and
                gores of land, streets,
                alleys, roads, sewer rights,
                waters, watercourses, and
                appurtenances related to or
                benefitting the Land or the
                Improvements, or both, and all
                rights-of-way, streets, alleys
                and roads which may have been
                or may in the future be
                vacated;

          (6)  all proceeds paid or to be
               paid by any insurer of the
                Land, the Improvements, the
                Fixtures, the Personalty or
                any other part of the
                Mortgaged Property, whether or
                not Borrower obtained the
                insurance pursuant to Lender's
                requirement;

           (7)  all awards, payments and other
                compensation made or to be
                made by any municipal, state
                or federal authority with
                respect to the Land, the
                Improvements, the Fixtures,
                the Personalty or any other
                part of the Mortgaged
                Property, including any awards
                or settlements resulting from
                condemnation proceedings or
                the total or partial taking of
                the Land, the Improvements,
                the Fixtures, the Personalty
                or any other part of the
                Mortgaged Property under the
                power of eminent domain or
                otherwise and including any
                conveyance in lieu thereof;

           (8)  all contracts, options and
                other agreements for the sale
                of the Land, the Improvements,
                the Fixtures, the Personalty
                or any other part of the
                Mortgaged Property entered
                into by Borrower now or in the
                future, including cash or
                securities deposited to secure
                performance by parties of
                their obligations;

           (9)  all proceeds from the
                conversion, voluntary or
                involuntary, of any of the
                above into cash or liquidated
                claims, and the right to
                collect such proceeds;

           (10) all Rents and Leases;

           (11) all earnings, royalties,
                accounts receivable, issues
                and profits from the Land, the
                Improvements or any other part
                of the Mortgaged Property, and
                all undisbursed proceeds of
                the loan secured by this
                Instrument and, if Borrower is
                a cooperative housing
                corporation, maintenance
                charges or assessments payable
                by shareholders or residents;

           (12) all Imposition Deposits;

           (13) all refunds or rebates of
                Impositions by any municipal,
                state or federal authority or
                insurance company (other than
                refunds applicable to periods
                before the real property tax
                year in which this Instrument
                is dated);

           (14) all tenant security deposits
                which have not been forfeited
                by any tenant under any Lease;
                and

           (15) all names under or by which
                any of the above Mortgaged
                Property may be operated or
                known, and all trademarks,
                trade names, and goodwill
                relating to any of the
                Mortgaged Property.

     (t)   "Note" means the Multifamily Note
described on page 1 of this Instrument,
including all schedules, riders, allonges and
addenda, as such Multifamily Note may be
amended from time to time.

     (u)   "O&M Program" is defined in
Section 18(a).

     (v)   "Personalty" means all furniture,
furnishings, equipment, machinery, building
materials, appliances, goods, supplies,
tools, books, records (whether in written or
electronic form), computer equipment
(hardware and software) and other tangible
personal property (other than Fixtures) which
are used now or in the future in connection
with the ownership, management or operation
of the Land or the Improvements or are
located on the Land or in the Improvements,
and any operating agreements relating to the
Land or the Improvements, and any surveys,
plans and specifications and contracts for
architectural, engineering and construction
services relating to the Land or the
Improvements and all other intangible
property and rights relating to the operation
of, or used in connection with, the Land or
the Improvements, including all governmental
permits relating to any activities on the
Land.

     (w)   "Property Jurisdiction" is defined
in Section 30(a).

     (x)   "Rents" means all rents (whether
from residential or non-residential space),
revenues and other income of the Land or the
Improvements, including parking fees, laundry
and vending machine income and fees and
charges for food, health care and other
services provided at the Mortgaged Property,
whether now due, past due, or to become due,
and deposits forfeited by tenants.

     (y)   "Taxes" means all taxes,
assessments, vault rentals and other charges,
if any, general, special or otherwise,
including all assessments for schools, public
betterments and general or local
improvements, which are levied, assessed or
imposed by any public authority or quasi-
public authority, and which, if not paid,
will become a lien, on the Land or the
Improvements.

     (z)   "Transfer" means (A) a sale,
assignment, transfer or other disposition
(whether voluntary, involuntary or by
operation of law); (B) the granting, creating
or attachment of a lien, encumbrance or
security interest (whether voluntary,
involuntary or by operation of law); (C) the
issuance or other creation of an ownership
interest in a legal entity, including a
partnership interest, interest in a limited
liability company  or corporate stock; (D)
the withdrawal, retirement, removal or
involuntary resignation of a partner in a
partnership or a member or manager in a
limited liability company; or (E) the merger,
dissolution, liquidation, or consolidation of
a legal entity or the reconstitution of one
type of legal entity into another type of
legal entity.  "Transfer" does not include
(i) a conveyance of the Mortgaged Property at
a judicial or non-judicial foreclosure sale
under this Instrument or (ii) the Mortgaged
Property becoming part of a bankruptcy estate
by operation of law under the United States
Bankruptcy Code.  For purposes of defining
the term "Transfer,"  the term "partnership"
shall mean a general partnership, a limited
partnership, a joint venture and a limited
liability partnership, and the term "partner"
shall mean a general partner, a limited
partner and a joint venturer.

     2.    UNIFORM COMMERCIAL CODE SECURITY
AGREEMENT. This Instrument is also a security
agreement under the Uniform Commercial Code
for any of the Mortgaged Property which,
under applicable law, may be subject to a
security interest under the Uniform
Commercial Code, whether acquired now or in
the future, and all products and cash and
non-cash proceeds thereof (collectively, "UCC
Collateral"), and Borrower hereby grants to
Lender a security interest in the UCC
Collateral.  Borrower shall execute and
deliver to Lender, upon Lender's request,
financing statements, continuation statements
and amendments, in such form as Lender may
require to perfect or continue the perfection
of this security interest.  Borrower shall
pay all filing costs and all costs and
expenses of any record searches for financing
statements that Lender may require.  Without
the prior written consent of Lender, Borrower
shall not create or permit to exist any other
lien or security interest in any of the UCC
Collateral.  If an Event of Default has
occurred and is continuing, Lender shall have
the remedies of a secured party under the
Uniform Commercial Code, in addition to all
remedies provided by this Instrument or
existing under applicable law.  In exercising
any remedies, Lender may exercise its
remedies against the UCC Collateral
separately or together, and in any order,
without in any way affecting the availability
of Lender's other remedies.  This Instrument
constitutes a financing statement with
respect to any part of the Mortgaged Property
which is or may become a Fixture.

     3.    ASSIGNMENT OF RENTS; APPOINTMENT OF
RECEIVER; LENDER IN POSSESSION.

     (a)   As part of the consideration for
the Indebtedness, Borrower absolutely and
unconditionally assigns and transfers to
Lender all Rents. It is the intention of
Borrower to establish a present, absolute and
irrevocable transfer and assignment to Lender
of all Rents and to authorize and empower
Lender to collect and receive all Rents
without the necessity of further action on
the part of Borrower.  Promptly upon request
by Lender, Borrower agrees to execute and
deliver such further assignments as Lender
may from time to time require.  Borrower and
Lender intend this assignment of Rents to be
immediately effective and to constitute an
absolute present assignment and not an
assignment for additional security only.  For
purposes of giving effect to this absolute
assignment of Rents, and for no other
purpose, Rents shall not be deemed to be a
part of the "Mortgaged Property" as that term
is defined in Section 1(s).  However, if this
present, absolute and unconditional
assignment of Rents is not enforceable by its
terms under the laws of the Property
Jurisdiction, then  the Rents shall  be
included as a part of the Mortgaged Property
and it is the intention of the Borrower that
in this circumstance this Instrument create
and perfect a lien on Rents in favor of
Lender, which lien shall be effective as of
the date of this Instrument.

     (b)   After the occurrence of an Event of
Default, Borrower authorizes Lender to
collect, sue for and compromise Rents and
directs each tenant of the Mortgaged Property
to pay all Rents to, or as directed by,
Lender.  However, until the occurrence of an
Event of Default, Lender hereby grants to
Borrower a revocable license to collect and
receive all Rents, to hold all Rents in trust
for the benefit of Lender and to apply all
Rents to pay the installments of interest and
principal then due and payable under the Note
and the other amounts then due and payable
under the other Loan Documents, including
Imposition Deposits, and to pay the current
costs and expenses of managing, operating and
maintaining the Mortgaged Property, including
utilities, Taxes and insurance premiums (to
the extent not included in Imposition
Deposits), tenant improvements and other
capital expenditures.  So long as no Event of
Default has occurred and is continuing, the
Rents remaining after application pursuant to
the preceding sentence may be retained by
Borrower free and clear of, and released
from, Lender's rights with respect to Rents
under this Instrument. From and after the
occurrence of an Event of Default, and
without the necessity of Lender entering upon
and taking and maintaining control of the
Mortgaged Property directly, or by a
receiver, Borrower's license to collect Rents
shall automatically terminate and Lender
shall without notice be entitled to all Rents
as they become due and payable, including
Rents then due and unpaid.  Borrower shall
pay to Lender upon demand all Rents to which
Lender is entitled.  At any time on or after
the date of Lender's demand for Rents, Lender
may give, and Borrower hereby irrevocably
authorizes Lender to give, notice to all
tenants of the Mortgaged Property instructing
them to pay all Rents to Lender, no tenant
shall be obligated to inquire further as to
the occurrence or continuance of an Event of
Default, and no tenant shall be obligated to
pay to Borrower any amounts which are
actually paid to Lender in response to such a
notice.  Any such notice by Lender shall be
delivered to each tenant personally, by mail
or by delivering such demand to each rental
unit.  Borrower shall not interfere with and
shall cooperate with Lender's collection of
such Rents.

     (c)   Borrower represents and warrants to
Lender that Borrower has not executed any
prior assignment of Rents (other than an
assignment of Rents securing indebtedness
that will be paid off and discharged with the
proceeds of the loan evidenced by the Note),
that Borrower has not performed, and Borrower
covenants and agrees that it will not
perform, any acts and has not executed, and
shall not execute, any instrument which would
prevent Lender from exercising its rights
under this Section 3, and that at the time of
execution of this Instrument there has been
no anticipation or prepayment of any Rents
for more than two months prior to the due
dates of such Rents.  Borrower shall not
collect or accept payment of any Rents more
than two months prior to the due dates of
such Rents.

     (d)   If an Event of Default has occurred
and is continuing, Lender may, regardless of
the adequacy of Lender's security or the
solvency of Borrower and even in the absence
of waste, enter upon and take and maintain
full control of the Mortgaged Property in
order to perform all acts that Lender in its
discretion determines to be necessary or
desirable for the operation and maintenance
of the Mortgaged Property, including the
execution, cancellation or modification of
Leases, the collection of all Rents, the
making of repairs to the Mortgaged Property
and the execution or termination of contracts
providing for the management, operation or
maintenance of the Mortgaged Property, for
the purposes of enforcing the assignment of
Rents pursuant to Section 3(a), protecting
the Mortgaged Property or the security of
this Instrument, or for such other purposes
as Lender in its discretion may deem
necessary or desirable.  Alternatively, if an
Event of Default has occurred and is
continuing, regardless of the adequacy of
Lender's security, without regard to
Borrower's solvency and without the necessity
of giving prior notice (oral or written) to
Borrower, Lender may apply to any court
having jurisdiction for the appointment of a
receiver for the Mortgaged Property to take
any or all of the actions set forth in the
preceding sentence.  If Lender elects to seek
the appointment of a receiver for the
Mortgaged Property at any time after an Event
of Default has occurred and is continuing,
Borrower, by its execution of this
Instrument, expressly consents to the
appointment of such receiver, including the
appointment of a receiver ex parte if
permitted by applicable law.  Lender or the
receiver, as the case may be, shall be
entitled to receive a reasonable fee for
managing the Mortgaged Property.  Immediately
upon appointment of a receiver or immediately
upon the Lender's entering upon and taking
possession and control of the Mortgaged
Property, Borrower shall surrender possession
of the Mortgaged Property to Lender or the
receiver, as the case may be, and shall
deliver to Lender or the receiver, as the
case may be, all documents, records
(including records on electronic or magnetic
media), accounts, surveys, plans, and
specifications relating to the Mortgaged
Property and all security deposits and
prepaid Rents.  In the event Lender takes
possession and control of the Mortgaged
Property, Lender may exclude Borrower and its
representatives from the Mortgaged Property.
Borrower acknowledges and agrees that the
exercise by Lender of any of the rights
conferred under this Section 3 shall not be
construed to make Lender a mortgagee-in-
possession of the Mortgaged Property so long
as Lender has not itself entered into actual
possession of the Land and Improvements.

     (e)   If Lender enters the Mortgaged
Property, Lender shall be liable to account
only to Borrower and only for those Rents
actually received.  Lender shall not be
liable to Borrower, anyone claiming under or
through Borrower or anyone having an interest
in the Mortgaged Property, by reason of any
act or omission of Lender under this
Section 3, and Borrower hereby releases and
discharges Lender from any such liability to
the fullest extent permitted by law.

     (f)   If the Rents are not sufficient to
meet the costs of taking control of and
managing the Mortgaged Property and
collecting the Rents, any funds expended by
Lender for such purposes shall become an
additional part of the Indebtedness as
provided in Section 12.

     (g)   Any entering upon and taking of
control of the Mortgaged Property by Lender
or the receiver, as the case may be, and any
application of Rents as provided in this
Instrument shall not cure or waive any Event
of Default or invalidate any other right or
remedy of Lender under applicable law or
provided for in this Instrument.

     4.    ASSIGNMENT OF LEASES; LEASES
AFFECTING THE MORTGAGED PROPERTY.

     (a)   As part of the consideration for
the Indebtedness, Borrower absolutely and
unconditionally assigns and transfers to
Lender all of Borrower's right, title and
interest in, to and under the Leases,
including Borrower's right, power and
authority to modify the terms of any such
Lease, or extend or terminate any such Lease.
 It is the intention of Borrower to establish
a present, absolute and irrevocable transfer
and assignment to Lender of all of Borrower's
right, title and interest in, to and under
the Leases.  Borrower and Lender intend this
assignment of the Leases to be immediately
effective and to constitute an absolute
present assignment and not an assignment for
additional security only.  For purposes of
giving effect to this absolute assignment of
the Leases, and for no other purpose, the
Leases shall not be deemed to be a part of
the "Mortgaged Property" as that term is
defined in Section 1(s).  However, if this
present, absolute and unconditional
assignment of the Leases is not enforceable
by its terms under the laws of the Property
Jurisdiction, then the Leases shall be
included as a part of the Mortgaged Property
and it is the intention of the Borrower that
in this circumstance this Instrument create
and perfect a lien on the Leases in favor of
Lender, which lien shall be effective as of
the date of this Instrument.

     (b)   Until Lender gives notice to
Borrower of Lender's exercise of its rights
under this Section 4, Borrower shall have all
rights, power and authority granted to
Borrower under any Lease (except as otherwise
limited by this Section or any other
provision of this Instrument), including the
right, power and authority to modify the
terms of any Lease or extend or terminate any
Lease.  Upon the occurrence of an Event of
Default, the permission given to Borrower
pursuant to the preceding sentence to
exercise all rights, power and authority
under Leases shall automatically terminate.
Borrower shall comply with and observe
Borrower's obligations under all Leases,
including Borrower's obligations pertaining
to the maintenance and disposition of tenant
security deposits.

     (c)   Borrower acknowledges and agrees
that the exercise by Lender, either directly
or by a receiver, of any of the rights
conferred under this Section 4 shall not be
construed to make Lender a mortgagee-in-
possession of the Mortgaged Property so long
as Lender has not itself entered into actual
possession of the Land and the Improvements.
The acceptance by Lender of the assignment of
the Leases pursuant to Section 4(a) shall not
at any time or in any event obligate Lender
to take any action under this Instrument or
to expend any money or to incur any expenses.
Lender shall not be liable in any way for any
injury or damage to person or property
sustained by any person or persons, firm or
corporation in or about the Mortgaged
Property.  Prior to Lender's actual entry
into and taking possession of the Mortgaged
Property,  Lender shall not (i) be obligated
to perform any of the terms, covenants and
conditions contained in any Lease (or
otherwise have any obligation with respect to
any Lease); (ii) be obligated  to appear in
or defend any action or proceeding relating
to the Lease or the Mortgaged Property; or
(iii) be responsible for the operation,
control, care, management or repair of the
Mortgaged Property or any portion of the
Mortgaged Property.  The execution of this
Instrument by Borrower shall constitute
conclusive evidence that all responsibility
for the operation, control, care, management
and repair of the Mortgaged Property is and
shall be that of Borrower, prior to such
actual entry and taking of possession.

     (d)   Upon delivery of notice by Lender
to Borrower of Lender's exercise of Lender's
rights under this Section 4 at any time after
the occurrence of an Event of Default, and
without the necessity of Lender entering upon
and taking and maintaining control of the
Mortgaged Property directly, by a receiver,
or by any other manner or proceeding
permitted by the laws of the Property
Jurisdiction, Lender immediately shall have
all rights, powers and authority granted to
Borrower under any Lease, including the
right, power and authority to modify the
terms of any such Lease, or extend or
terminate any such Lease.

     (e)   Borrower shall, promptly upon
Lender's request, deliver to Lender an
executed copy of each residential Lease then
in effect. All Leases for residential
dwelling units shall be on forms approved by
Lender, shall be for initial terms of at
least six months and not more than two years,
and shall not include options to purchase.

     (f)   Borrower shall not lease any
portion of the Mortgaged Property for non-
residential use except with the prior written
consent of Lender and Lender's prior written
approval of the Lease agreement.  Borrower
shall not modify the terms of, or extend or
terminate, any Lease for non-residential use
(including any Lease in existence on the date
of this Instrument) without the prior written
consent of Lender.  Borrower shall, without
request by Lender, deliver an executed copy
of each non-residential Lease to Lender
promptly after such Lease is signed.   All
non-residential Leases, including renewals or
extensions of existing Leases, shall
specifically provide that (1) such Leases are
subordinate to the lien of this Instrument;
(2) the tenant shall attorn to Lender and any
purchaser at a foreclosure sale, such
attornment to be self-executing and effective
upon acquisition of title to the Mortgaged
Property by any purchaser at a foreclosure
sale or by Lender in any manner; (3) the
tenant agrees to execute such further
evidences of attornment as Lender or any
purchaser at a foreclosure sale may from time
to time request; (4) the Lease shall not be
terminated by foreclosure or any other
transfer of the Mortgaged Property; (5) after
a foreclosure sale of the Mortgaged Property,
Lender or any other purchaser at such
foreclosure sale may, at Lender's or such
purchaser's option, accept or terminate such
Lease; and (6) the tenant shall, upon receipt
after the occurrence of an Event of Default
of a written request from Lender, pay all
Rents payable under the Lease to Lender.

     (g)   Borrower shall not receive or
accept Rent under any Lease (whether
residential or non-residential) for more than
two months in advance.

     5.    PAYMENT OF INDEBTEDNESS;
PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
PREMIUM.  Borrower shall pay the Indebtedness
when due in accordance with the terms of the
Note and the other Loan Documents and shall
perform, observe and comply with all other
provisions of the Note and the other Loan
Documents.  Borrower shall pay a prepayment
premium in connection with certain
prepayments of the Indebtedness, including a
payment made after Lender's exercise of any
right of acceleration of the Indebtedness, as
provided in the Note.

     6.    EXCULPATION.  Borrower's personal
liability for payment of the Indebtedness and
for performance of the other obligations to
be performed by it under this Instrument is
limited  in the manner, and to the extent,
provided in the Note.

     7.    DEPOSITS FOR TAXES, INSURANCE AND
OTHER CHARGES.

     (a)   Borrower shall deposit with Lender
on the day monthly installments of principal
or interest, or both, are due under the Note
(or on another day designated in writing by
Lender), until the Indebtedness is paid in
full, an additional amount sufficient to
accumulate with Lender the entire sum
required to pay, when due (1) any water and
sewer charges which, if not paid, may result
in a lien on all or any part of the Mortgaged
Property, (2) the premiums for fire and other
hazard insurance, rent loss insurance and
such other insurance as Lender may require
under Section 19, (3) Taxes, and (4) amounts
for other charges and expenses which Lender
at any time reasonably deems necessary to
protect the Mortgaged Property, to prevent
the imposition of liens on the Mortgaged
Property, or otherwise to protect Lender's
interests, all as reasonably estimated from
time to time by Lender, plus one-sixth of
such estimate.  The amounts deposited under
the preceding sentence are collectively
referred to in this Instrument as the
"Imposition Deposits".  The obligations of
Borrower for which the Imposition Deposits
are required are collectively referred to in
this Instrument as "Impositions".  The amount
of the Imposition Deposits shall be
sufficient to enable Lender to pay each
Imposition before the last date upon which
such payment may be made without any penalty
or interest charge being added.  Lender shall
maintain records indicating how much of the
monthly Imposition Deposits and how much of
the aggregate Imposition Deposits held by
Lender are held for the purpose of paying
Taxes, insurance premiums and each other
obligation of Borrower for which Imposition
Deposits are required.  Any waiver by Lender
of the requirement that Borrower remit
Imposition Deposits to Lender may be revoked
by Lender, in Lender's discretion, at any
time upon notice to Borrower.

     (b)   Imposition Deposits shall be held
in an institution (which may be Lender, if
Lender is such an institution) whose deposits
or accounts are insured or guaranteed by a
federal agency.  Lender shall not be
obligated to open additional accounts or
deposit Imposition Deposits in additional
institutions when the amount of the
Imposition Deposits exceeds the maximum
amount of the federal deposit insurance or
guaranty.  Lender shall apply the Imposition
Deposits to pay Impositions so long as no
Event of Default has occurred and is
continuing.  Unless applicable law requires,
Lender shall not be required to pay Borrower
any interest, earnings or profits on the
Imposition Deposits.  Borrower hereby pledges
and grants to Lender a security interest in
the Imposition Deposits as additional
security for all of Borrower's obligations
under this Instrument and the other Loan
Documents.  Any amounts deposited with Lender
under this Section 7 shall not be trust
funds, nor shall they operate to reduce the
Indebtedness, unless applied by Lender for
that purpose under Section 7(e).

     (c)   If Lender receives a bill or
invoice for an Imposition, Lender shall pay
the Imposition from the Imposition Deposits
held by Lender.  Lender shall have no
obligation to pay any Imposition to the
extent it exceeds Imposition Deposits then
held by Lender.  Lender may  pay an
Imposition according to any bill, statement
or estimate from the appropriate public
office or insurance company without inquiring
into the accuracy of the bill, statement or
estimate or into the validity of the
Imposition.

     (d)   If at any time the amount of the
Imposition Deposits held by Lender for
payment of a specific Imposition exceeds the
amount reasonably deemed necessary by Lender
plus one-sixth of such estimate, the excess
shall be credited against future installments
of Imposition Deposits.  If at any time the
amount of the Imposition Deposits held by
Lender for payment of a specific Imposition
is less than the amount reasonably estimated
by Lender to be necessary plus one-sixth of
such estimate, Borrower shall pay to Lender
the amount of the deficiency within 15 days
after notice from Lender.

     (e)   If an Event of Default has occurred
and is continuing, Lender may apply any
Imposition Deposits, in any amounts and in
any order as Lender determines, in Lender's
discretion, to pay any Impositions or as a
credit against the Indebtedness. Upon payment
in full of the Indebtedness, Lender shall
refund to Borrower any Imposition Deposits
held by Lender.

     8.    COLLATERAL AGREEMENTS.  Borrower
shall deposit with Lender such amounts as may
be required by any Collateral Agreement and
shall perform all other obligations of
Borrower under each Collateral Agreement.

     9.    APPLICATION OF PAYMENTS.  If at any
time Lender receives, from Borrower or
otherwise, any amount applicable to the
Indebtedness which is less than all amounts
due and payable at such time, then Lender may
apply that payment to amounts then due and
payable in any manner and in any order
determined by Lender, in Lender's discretion.
Neither Lender's acceptance of an amount
which is less than all amounts then due and
payable nor Lender's application of such
payment in the manner authorized shall
constitute or be deemed to constitute either
a waiver of the unpaid amounts or an accord
and satisfaction.  Notwithstanding the
application of any such amount to the
Indebtedness,  Borrower's obligations under
this Instrument and the Note shall remain
unchanged.

     10.   COMPLIANCE WITH LAWS.  Borrower
shall comply with all laws, ordinances,
regulations and requirements of any
Governmental Authority and all recorded
lawful covenants and agreements relating to
or affecting the Mortgaged Property,
including all laws, ordinances, regulations,
requirements and covenants pertaining to
health and safety, construction of
improvements on the Mortgaged Property, fair
housing, zoning and land use, and Leases.
Borrower also shall comply with all
applicable laws that pertain to the
maintenance and disposition of tenant
security deposits.  Borrower shall at all
times maintain records sufficient to
demonstrate  compliance with the provisions
of this Section 10.  Borrower shall take
appropriate measures to prevent, and shall
not engage in or knowingly permit, any
illegal activities at the Mortgaged Property
that could endanger tenants or visitors,
result in damage to the Mortgaged Property,
result in forfeiture of the Mortgaged
Property, or otherwise materially impair the
lien created by this Instrument or Lender's
interest in the Mortgaged Property.  Borrower
represents and warrants to Lender that no
portion of the Mortgaged Property has been or
will be purchased with the proceeds of any
illegal activity.

     11.   USE OF PROPERTY.  Unless required
by applicable law, Borrower shall not (a)
except for any change in use approved by
Lender, allow changes in the use for which
all or any part of the Mortgaged Property is
being used at the time this Instrument was
executed, (b) convert any individual dwelling
units or common areas to commercial use, (c)
initiate or acquiesce in a change in the
zoning classification of the Mortgaged
Property, or (d) establish any condominium or
cooperative regime with respect to the
Mortgaged Property.

     12.   PROTECTION OF LENDER'S SECURITY.

     (a)   If Borrower fails to perform any of
its obligations under this Instrument or any
other Loan Document, or if any action or
proceeding is commenced which purports to
affect the Mortgaged Property, Lender's
security or Lender's rights under this
Instrument, including eminent domain,
insolvency, code enforcement, civil or
criminal forfeiture, enforcement of Hazardous
Materials Laws, fraudulent conveyance or
reorganizations or proceedings involving a
bankrupt or decedent, then Lender at Lender's
option may make such appearances, disburse
such sums and take such actions as Lender
reasonably deems necessary to perform such
obligations of Borrower and to protect
Lender's interest, including (1) payment of
fees and out of pocket expenses of attorneys,
accountants, inspectors and consultants, (2)
entry upon the Mortgaged Property to make
repairs or secure the Mortgaged Property, (3)
procurement of the insurance required by
Section 19, and (4) payment of amounts which
Borrower has failed to pay under Sections 15
and 17.

     (b)   Any amounts disbursed by Lender
under this Section 12, or under any other
provision of this Instrument that treats such
disbursement as being made under this
Section 12, shall be added to, and become
part of, the principal component of the
Indebtedness, shall be immediately due and
payable and shall bear interest from the date
of disbursement until paid at the "Default
Rate", as defined  in the Note.

     (c)   Nothing in this Section 12 shall
require Lender to incur any expense or take
any action.

     13.   INSPECTION.  Lender, its agents,
representatives, and designees may make or
cause to be made entries upon and inspections
of the Mortgaged Property (including
environmental inspections and tests) during
normal business hours, or at any other
reasonable time.

     14.   BOOKS AND RECORDS; FINANCIAL
REPORTING.

     (a)   Borrower shall keep and maintain at
all times at the Mortgaged Property or the
management agent's offices, and upon Lender's
request shall make available at the Mortgaged
Property,  complete and accurate books of
account and records (including copies of
supporting bills and invoices) adequate to
reflect correctly the operation of the
Mortgaged Property, and copies of all written
contracts, Leases, and other instruments
which affect the Mortgaged Property.  The
books, records, contracts, Leases and other
instruments shall be subject to examination
and inspection at any reasonable time by
Lender.

     (b)    Borrower shall furnish to Lender
all of the following:

           (1)  within 120 days after the end
                of each fiscal year of
                Borrower, a statement of
                income and expenses for
                Borrower's operation of the
                Mortgaged Property for that
                fiscal year, a statement of
                changes in financial position
                of Borrower relating to the
                Mortgaged Property for that
                fiscal year and, when
                requested by Lender, a balance
                sheet showing all assets and
                liabilities of Borrower
                relating to the Mortgaged
                Property as of the end of that
                fiscal year;

           (2)  within 120 days after the end
                of each fiscal year of
                Borrower, and at any other
                time upon Lender's request, a
                rent schedule for the
                Mortgaged Property showing the
                name of each tenant, and for
                each tenant, the space
                occupied, the lease expiration
                date, the rent payable for the
                current month, the date
                through which rent has been
                paid, and any related
                information requested by
                Lender;

           (3)  within 120 days after the end
                of each fiscal year of
                Borrower, and at any other
                time upon Lender's request, an
                accounting of all security
                deposits held pursuant to all
                Leases, including the name of
                the institution (if any) and
                the names and identification
                numbers of the accounts (if
                any) in which such security
                deposits are held and the name
                of the person to contact at
                such financial institution,
                along with any authority or
                release necessary for Lender
                to access information
                regarding such accounts;

           (4)  within 120 days after the end
                of each fiscal year of
                Borrower, and at any other
                time upon Lender's request, a
                statement that identifies all
                owners of any interest in
                Borrower and any Controlling
                Entity and the interest held
                by each, if Borrower or a
                Controlling Entity is a
                corporation, all officers and
                directors of Borrower and the
                Controlling Entity, and if
                Borrower or a Controlling
                Entity is a limited liability
                company, all managers who are
                not members;

           (5)  upon Lender's request,
                quarterly income and expense
                statements for the Mortgaged
                Property;

           (6)  upon Lender's request at any
                time when an Event of Default
                has occurred and is
                continuing, monthly income and
                expense statements for the
                Mortgaged Property;

           (7)  upon Lender's request, a
                monthly property management
                report for the Mortgaged
                Property, showing the number
                of inquiries made and rental
                applications received from
                tenants or prospective tenants
                and deposits received from
                tenants and any other
                information requested by
                Lender; and

           (8)  upon Lender's request, a
                balance sheet, a statement of
                income and expenses for
                Borrower and a statement of
                changes in financial position
                of Borrower for Borrower's
                most recent fiscal year.

     (c)   Each of the statements, schedules
and reports required by Section 14(b) shall
be certified to be complete and accurate by
an individual having authority to bind
Borrower, and shall be in such form and
contain such detail as Lender may reasonably
require.  Lender also may require that any
statements, schedules or reports be audited
at Borrower's expense by independent
certified public accountants acceptable to
Lender.

     (d)   If Borrower fails to provide in a
timely manner the statements, schedules and
reports required by Section 14(b), Lender
shall have the right to have Borrower's books
and records audited, at Borrower's expense,
by independent certified public accountants
selected by Lender in order to obtain such
statements, schedules and reports, and all
related costs and expenses of Lender shall
become immediately due and payable and shall
become an additional part of the Indebtedness
as provided in Section 12.

     (e)   If an Event of Default has occurred
and is continuing, Borrower shall deliver to
Lender upon written demand all books and
records relating to the Mortgaged Property or
its operation.

     (f)   Borrower authorizes Lender to
obtain a credit report on Borrower at any
time.

     15.   TAXES; OPERATING EXPENSES.

     (a)   Subject to the provisions of
Section 15(c) and Section 15(d), Borrower
shall pay, or cause to be paid, all Taxes
when due and before the addition of any
interest, fine, penalty  or cost for
nonpayment.

     (b)   Subject to the provisions of
Section 15(c), Borrower shall pay the
expenses of operating, managing, maintaining
and repairing the Mortgaged Property
(including insurance premiums, utilities,
repairs and replacements) before the last
date upon which each such payment may be made
without any penalty or interest charge being
added.

     (c)   As long as no Event of Default
exists and Borrower has timely delivered to
Lender any bills or premium notices that it
has received, Borrower shall not be obligated
to pay Taxes, insurance premiums or any other
individual Imposition to the extent that
sufficient Imposition Deposits are held by
Lender for the purpose of paying that
specific Imposition.  If an Event of Default
exists, Lender may exercise any rights Lender
may have with respect to Imposition Deposits
without regard to whether Impositions are
then due and payable.  Lender shall have no
liability to Borrower for failing to pay any
Impositions to the extent that any Event of
Default has occurred and is continuing,
insufficient Imposition Deposits are held by
Lender at the time an Imposition becomes due
and payable or Borrower has failed to provide
Lender with bills and premium notices as
provided above.

     (d)    Borrower, at its own expense, may
contest by appropriate legal proceedings,
conducted diligently and in good faith, the
amount or validity of any Imposition other
than insurance premiums, if (1) Borrower
notifies Lender of the commencement or
expected commencement of such proceedings,
(2) the Mortgaged Property is not in danger
of being sold or forfeited, (3) Borrower
deposits with Lender reserves sufficient to
pay the contested Imposition, if requested by
Lender, and (4) Borrower furnishes whatever
additional security is required in the
proceedings or is reasonably requested by
Lender, which may include the delivery to
Lender of the reserves established by
Borrower to pay the contested Imposition.

     (e)   Borrower shall promptly deliver to
Lender a copy of all notices of, and invoices
for, Impositions, and if Borrower pays any
Imposition directly, Borrower shall promptly
furnish to Lender receipts evidencing such
payments.

     16.   LIENS; ENCUMBRANCES.  Borrower
acknowledges that, to the extent provided in
Section 21, the grant, creation or existence
of any mortgage, deed of trust, deed to
secure debt, security interest or other lien
or encumbrance (a "Lien") on the Mortgaged
Property (other than the lien of this
Instrument) or on certain ownership interests
in Borrower, whether voluntary, involuntary
or by operation of law, and whether or not
such Lien has priority over the lien of this
Instrument, is a "Transfer" which constitutes
an Event of Default and subjects Borrower to
personal liability under the Note.

     17.   PRESERVATION, MANAGEMENT AND
MAINTENANCE OF MORTGAGED PROPERTY.  Borrower
(a) shall not commit waste or permit
impairment or deterioration of the Mortgaged
Property, (b) shall not abandon the Mortgaged
Property, (c) shall restore or repair
promptly, in a good and workmanlike manner,
any damaged part of the Mortgaged Property to
the equivalent of its original condition, or
such other condition as Lender may approve in
writing, whether or not insurance proceeds or
condemnation awards are available to cover
any costs of such restoration or repair, (d)
shall keep the Mortgaged Property in good
repair, including the replacement of
Personalty and Fixtures with items of equal
or better function and quality, (e) shall
provide for professional management of the
Mortgaged Property by a residential rental
property manager satisfactory to Lender under
a contract approved by Lender in writing, and
(f) shall give notice to Lender of and,
unless otherwise directed in writing by
Lender, shall appear in and defend any action
or proceeding purporting to affect the
Mortgaged Property, Lender's security or
Lender's rights under this Instrument.
Borrower shall not (and shall not permit any
tenant or other person to) remove, demolish
or alter the Mortgaged Property or any part
of the Mortgaged Property except in
connection with the replacement of tangible
Personalty.

     18.   ENVIRONMENTAL HAZARDS.

     (a)   Except for matters covered by a
written program of operations and maintenance
approved in writing by Lender (an "O&M
Program") or matters described in
Section 18(b), Borrower shall not cause or
permit any of the following:

           (1)  the presence, use, generation,
                release, treatment,
                processing, storage (including
                storage in above ground and
                underground storage tanks),
                handling, or disposal of any
                Hazardous Materials on or
                under the Mortgaged Property
                or any other  property of
                Borrower that is adjacent to
                the Mortgaged Property;

           (2)  the transportation of any
                Hazardous Materials to, from,
                or across the Mortgaged
                Property;

           (3)  any occurrence or condition on
                the Mortgaged Property or any
                other property of Borrower
                that is adjacent to the
                Mortgaged Property, which
                occurrence or condition is or
                may be in violation of
                Hazardous Materials Laws; or

           (4)  any violation of or
                noncompliance with the terms
                of any Environmental Permit
                with respect to the Mortgaged
                Property or any  property of
                Borrower that is adjacent to
                the Mortgaged Property.

The matters described in clauses (1) through
(4) above are referred to collectively in
this Section 18 as "Prohibited Activities or
Conditions".

     (b)   Prohibited Activities and
Conditions shall not include the safe and
lawful use and storage of quantities of (1)
pre-packaged supplies, cleaning materials and
petroleum products customarily used in the
operation and maintenance of comparable
multifamily properties, (2) cleaning
materials, personal grooming items and other
items sold in pre-packaged containers for
consumer use and used by tenants and
occupants of residential dwelling units in
the Mortgaged Property; and (3) petroleum
products used in the operation and
maintenance of motor vehicles from time to
time located on the Mortgaged Property's
parking areas, so long as all of the
foregoing are used, stored, handled,
transported and disposed of in compliance
with Hazardous Materials Laws.

     (c)   Borrower shall take all
commercially reasonable actions (including
the inclusion of appropriate provisions in
any Leases executed after the date of this
Instrument) to prevent its employees, agents,
and contractors, and all tenants and other
occupants from causing or permitting any
Prohibited Activities or Conditions.
Borrower shall not lease or allow the
sublease or use of all or any portion of the
Mortgaged Property to any tenant or subtenant
for nonresidential use by any user that, in
the ordinary course of its business, would
cause or permit any Prohibited Activity or
Condition.

     (d)   If an O&M Program has been
established with respect to Hazardous
Materials, Borrower shall comply in a timely
manner with, and cause all employees, agents,
and contractors of Borrower and any other
persons present on the Mortgaged Property to
comply with the O&M Program.  All costs of
performance of Borrower's obligations under
any O&M Program shall be paid by Borrower,
and Lender's out-of-pocket costs incurred in
connection with the monitoring and review of
the O&M Program and Borrower's performance
shall be paid by Borrower upon demand by
Lender.  Any such out-of-pocket costs of
Lender which Borrower fails to pay promptly
shall become an additional part of the
Indebtedness as provided in Section 12.

     (e)   Borrower represents and warrants to
Lender that, except as previously disclosed
by Borrower to Lender in writing:

           (1)  Borrower has not at any time
                engaged in, caused or
                permitted any Prohibited
                Activities or Conditions;

           (2)  to the best of Borrower's
                knowledge after reasonable and
                diligent inquiry, no
                Prohibited Activities or
                Conditions exist or have
                existed;

           (3)  except to the extent
                previously disclosed by
                Borrower to Lender in writing,
                the Mortgaged Property does
                not now contain any
                underground storage tanks,
                and, to the best of Borrower's
                knowledge after reasonable and
                diligent inquiry, the
                Mortgaged Property has not
                contained any underground
                storage tanks in the past.  If
                there is an underground
                storage tank located on the
                Property which has been
                previously disclosed by
                Borrower to Lender in writing,
                that tank complies with all
                requirements of Hazardous
                Materials Laws;

           (4)  Borrower has complied with all
                Hazardous Materials Laws,
                including all requirements for
                notification regarding
                releases of Hazardous
                Materials.  Without limiting
                the generality of the
                foregoing, Borrower has
                obtained all Environmental
                Permits required for the
                operation of the Mortgaged
                Property in accordance with
                Hazardous Materials Laws now
                in effect and all such
                Environmental Permits are in
                full force and effect;

           (5)  no event has occurred with
                respect to the Mortgaged
                Property that constitutes, or
                with the passing of time or
                the giving of notice would
                constitute, noncompliance with
                the terms of any Environmental
                Permit;

           (6)  there are no actions, suits,
                claims or proceedings pending
                or, to the best of Borrower's
                knowledge after reasonable and
                diligent inquiry, threatened
                that involve the Mortgaged
                Property and allege, arise out
                of, or relate to any
                Prohibited Activity or
                Condition; and

           (7)  Borrower has not received any
                complaint, order, notice of
                violation or other
                communication from any
                Governmental Authority with
                regard to air emissions, water
                discharges, noise emissions or
                Hazardous Materials, or any
                other environmental, health or
                safety matters affecting the
                Mortgaged Property or any
                other property of Borrower
                that is adjacent to the
                Mortgaged Property.

The representations and warranties in this
Section 18 shall be continuing
representations and warranties that shall be
deemed to be made by Borrower throughout the
term of the loan evidenced by the Note, until
the Indebtedness has been paid in full.

     (f)   Borrower shall promptly notify
Lender in writing upon the occurrence of any
of  the following events:

           (1)  Borrower's discovery of any
                Prohibited Activity or
                Condition;

           (2)  Borrower's receipt of or
                knowledge of any complaint,
                order, notice of violation or
                other communication from any
                Governmental Authority or
                other person with regard to
                present or future alleged
                Prohibited Activities or
                Conditions or any other
                environmental, health or
                safety matters affecting the
                Mortgaged Property or any
                other property of Borrower
                that is adjacent to the
                Mortgaged Property; and

           (3)  any representation or warranty
                in this Section 18 becomes
                untrue after the date of this
                Agreement.

Any such notice given by Borrower shall not
relieve Borrower of, or result in a waiver
of, any obligation under this Instrument, the
Note, or any other Loan Document.

     (g)   Borrower shall pay promptly the
costs of any environmental inspections, tests
or audits ("Environmental Inspections")
required by Lender in connection with any
foreclosure or deed in lieu of foreclosure,
or as a condition of Lender's consent to any
Transfer under Section 21, or required by
Lender following a reasonable determination
by Lender that Prohibited Activities or
Conditions may exist.  Any such costs
incurred by Lender (including the fees and
out-of-pocket costs of attorneys and
technical consultants whether incurred in
connection with any judicial or
administrative process or otherwise) which
Borrower fails to pay promptly shall become
an additional part of the Indebtedness as
provided in Section 12.  The results of all
Environmental Inspections made by Lender
shall at all times remain the property of
Lender and Lender shall have no obligation to
disclose or otherwise make available to
Borrower or any other party such results or
any other information obtained by Lender in
connection with its Environmental
Inspections.  Lender hereby reserves the
right, and Borrower hereby expressly
authorizes Lender, to make available to any
party, including any prospective bidder at a
foreclosure sale of the Mortgaged Property,
the results of any Environmental Inspections
made by Lender with respect to the Mortgaged
Property.  Borrower consents to Lender
notifying any party (either as part of a
notice of sale or otherwise) of the results
of any of Lender's Environmental Inspections.
Borrower acknowledges that Lender cannot
control or otherwise assure the truthfulness
or accuracy of the results of any of its
Environmental Inspections and that the
release of such results to prospective
bidders at a foreclosure sale of the
Mortgaged Property may have a material and
adverse effect upon the amount which a party
may bid at such sale.  Borrower agrees that
Lender shall have no liability whatsoever as
a result of delivering the results of any of
its Environmental Inspections to any third
party, and Borrower hereby releases and
forever discharges Lender from any and all
claims, damages, or causes of action, arising
out of, connected with or incidental to the
results of, the delivery of any of Lender's
Environmental Inspections.

     (h)   If any investigation, site
monitoring, containment, clean-up,
restoration or other remedial work ("Remedial
Work") is necessary to comply with any
Hazardous Materials Law or order of any
Governmental Authority that has or acquires
jurisdiction over the Mortgaged Property  or
the use, operation or improvement of the
Mortgaged Property under any Hazardous
Materials Law, Borrower shall, by the earlier
of (1) the applicable deadline required by
Hazardous Materials Law or (2) 30 days after
notice from Lender demanding such action,
begin performing the Remedial Work, and
thereafter diligently prosecute it to
completion, and shall in any event complete
the work by the time required by applicable
Hazardous Materials Law.  If Borrower fails
to begin on a timely basis or diligently
prosecute any required Remedial Work, Lender
may, at its option, cause the Remedial Work
to be completed, in which case Borrower shall
reimburse Lender on demand for the cost of
doing so.  Any reimbursement due from
Borrower to Lender shall become part of the
Indebtedness as provided in Section 12.

     (i)   Borrower shall cooperate with any
inquiry by any Governmental Authority and
shall comply with any governmental or
judicial order which arises from any alleged
Prohibited Activity or Condition.

     (j)   Borrower shall indemnify, hold
harmless and defend (i) Lender, (ii) any
prior owner or holder of the Note, (iii) the
Loan Servicer, (iv) any prior Loan Servicer,
(v) the officers, directors, shareholders,
partners, employees and trustees of any of
the foregoing, and (vi) the heirs, legal
representatives, successors and assigns of
each of the foregoing (collectively, the
"Indemnitees") from and against all
proceedings, claims, damages, penalties and
costs (whether initiated or sought by
Governmental Authorities or private parties),
including fees and out of pocket expenses of
attorneys and expert witnesses, investigatory
fees, and remediation costs, whether incurred
in connection with any judicial or
administrative process or otherwise, arising
directly or indirectly from any of the
following:

           (1)  any breach of any
                representation or warranty of
                Borrower in this Section 18;

           (2)  any failure by Borrower to
                perform any of its obligations
                under this Section 18;

           (3)  the existence or alleged
                existence of any Prohibited
                Activity or Condition;

           (4)  the presence or alleged
                presence of Hazardous
                Materials on or under the
                Mortgaged Property or any
                property of Borrower that is
                adjacent to the Mortgaged
                Property; and

           (5)  the actual or alleged
                violation of any Hazardous
                Materials Law.

     (k)   Counsel selected by Borrower to
defend Indemnitees shall be subject to the
approval of those Indemnitees.  However, any
Indemnitee may elect to defend any claim or
legal or administrative proceeding at the
Borrower's expense.

     (l)   Borrower shall not, without the
prior written consent of those Indemnitees
who are named as parties to a claim or legal
or administrative proceeding (a "Claim"),
settle or compromise the Claim if the
settlement (1) results in the entry of any
judgment that does not include as an
unconditional term the delivery by the
claimant or plaintiff to Lender of a written
release of those Indemnitees, satisfactory in
form and substance to Lender; or (2) may
materially and adversely affect Lender, as
determined by Lender in its discretion.

     (m)   Borrower's obligation to indemnify
the Indemnitees shall not be limited or
impaired by any of the following, or by any
failure of Borrower or any guarantor to
receive notice of or consideration for any of
the following:

           (1)  any amendment or modification
                of any Loan Document;

           (2)  any extensions of time for
                performance required by any
                Loan Document;

           (3)  any provision in any of the
                Loan Documents limiting
                Lender's recourse to property
                securing the Indebtedness, or
                limiting the personal
                liability of Borrower or any
                other party for payment of all
                or any part of the
                Indebtedness;

           (4)  the accuracy or inaccuracy of
                any representations and
                warranties made by Borrower
                under this Instrument or any
                other Loan Document;

           (5)  the release of Borrower or any
                other person, by Lender or by
                operation of law, from
                performance of any obligation
                under any Loan Document;

           (6)  the release or substitution in
                whole or in part of any
                security for the Indebtedness;
                and

           (7)  Lender's failure to properly
                perfect any lien or security
                interest given as security for
                the Indebtedness.

     (n)   Borrower shall, at its own cost and
expense, do all of the following:

           (1)  pay or satisfy any judgment or
                decree that may be entered
                against any Indemnitee or
                Indemnitees in any legal or
                administrative proceeding
                incident to any matters
                against which Indemnitees are
                entitled to be indemnified
                under this Section 18;

           (2)  reimburse Indemnitees for any
                expenses paid or incurred in
                connection with any matters
                against which Indemnitees are
                entitled to be indemnified
                under this Section 18; and

           (3)  reimburse Indemnitees for any
                and all expenses, including
                fees and out of pocket
                expenses of attorneys and
                expert witnesses, paid or
                incurred in connection with
                the enforcement by Indemnitees
                of their rights under this
                Section 18, or in monitoring
                and participating in any legal
                or administrative proceeding.

     (o)   In any circumstances in which the
indemnity under this Section 18 applies,
Lender may employ its own legal counsel and
consultants to prosecute, defend or negotiate
any claim or legal or administrative
proceeding and Lender, with the prior written
consent of Borrower (which shall not be
unreasonably withheld, delayed or
conditioned) may settle or compromise any
action or legal or administrative proceeding.
Borrower shall reimburse Lender upon demand
for all costs and expenses incurred by
Lender, including all costs of settlements
entered into in good faith, and the fees and
out of pocket expenses of such attorneys and
consultants.

     (p)   The provisions of this Section 18
shall be in addition to any and all other
obligations and liabilities that Borrower may
have  under applicable law or under other
Loan Documents, and each Indemnitee shall be
entitled to indemnification under this
Section 18 without regard to whether Lender
or that Indemnitee has exercised any rights
against the Mortgaged Property or any other
security, pursued any rights against any
guarantor, or pursued any other rights
available under the Loan Documents or
applicable law. If Borrower consists of more
than one person or entity, the obligation of
those persons or entities to indemnify the
Indemnitees under this Section 18 shall be
joint and several. The obligation of Borrower
to indemnify the Indemnitees under this
Section 18 shall survive any repayment or
discharge of the Indebtedness, any
foreclosure proceeding, any foreclosure sale,
any delivery of any deed in lieu of
foreclosure, and any release of record of the
lien of this Instrument.

     19.   PROPERTY AND LIABILITY INSURANCE.

     (a)   Borrower shall keep the
Improvements insured at all times against
such hazards as Lender may from time to time
require, which insurance shall include but
not be limited to coverage against loss by
fire and allied perils, general boiler and
machinery coverage, and business income
coverage.  Lender's insurance requirements
may change from time to time throughout the
term of the Indebtedness.  If Lender so
requires, such insurance shall also include
sinkhole insurance, mine subsidence
insurance, earthquake insurance, and, if the
Mortgaged Property does not conform to
applicable zoning or land use laws, building
ordinance or law coverage.  If any of the
Improvements is located in an area identified
by the Federal Emergency Management Agency
(or any successor to that agency) as an area
having special flood hazards, and if flood
insurance is available in that area, Borrower
shall insure such Improvements against loss
by flood.

     (b)   All premiums on insurance policies
required under Section 19(a) shall be paid in
the manner provided in Section 7, unless
Lender has designated in writing another
method of payment.  All such policies shall
also be in a form approved by Lender.  All
policies of property damage insurance shall
include a non-contributing, non-reporting
mortgage clause in favor of, and in a form
approved by, Lender.  Lender shall have the
right to hold the original policies or
duplicate original policies of all insurance
required by Section 19(a).  Borrower shall
promptly deliver to Lender a copy of all
renewal and other notices received by
Borrower with respect to the policies and all
receipts for paid premiums.  At least 30 days
prior to the expiration date of a policy,
Borrower shall deliver to Lender the original
(or a duplicate original) of a renewal policy
in form satisfactory to Lender.

     (c)   Borrower shall maintain at all
times commercial general liability insurance,
workers' compensation insurance and such
other liability, errors and omissions and
fidelity insurance coverages as Lender may
from time to time require.

     (d)   All insurance policies and renewals
of insurance policies required by this
Section 19 shall be in such amounts and for
such periods as Lender may from time to time
require, and shall be issued by insurance
companies satisfactory to Lender.

     (e)   Borrower shall comply with all
insurance requirements and shall not permit
any condition to exist on the Mortgaged
Property that would invalidate any part of
any insurance coverage that this Instrument
requires Borrower to maintain.

     (f)   In the event of loss, Borrower
shall give immediate written notice to the
insurance carrier and to Lender.  Borrower
hereby authorizes and appoints Lender as
attorney-in-fact for Borrower to make proof
of loss, to adjust and compromise any claims
under policies of property damage insurance,
to appear in and prosecute any action arising
from such property damage insurance policies,
to collect and receive the proceeds of
property damage insurance, and to deduct from
such proceeds Lender's expenses incurred in
the collection of such proceeds.  This power
of attorney is coupled with an interest and
therefore is irrevocable.  However, nothing
contained in this Section 19 shall require
Lender to incur any expense or take any
action.  Lender may, at Lender's option, (1)
hold the balance of such proceeds to be used
to reimburse Borrower for the cost of
restoring and repairing the Mortgaged
Property to the equivalent of its original
condition or to a condition approved by
Lender (the "Restoration"), or (2) apply the
balance of such proceeds to the payment of
the Indebtedness, whether or not then due. To
the extent Lender determines to apply
insurance proceeds to Restoration, Lender
shall do so in accordance with Lender's then-
current policies relating to the restoration
of casualty damage on similar multifamily
properties.

     (g)   Lender shall not exercise its
option to apply insurance proceeds to the
payment of the Indebtedness if all of the
following conditions are met:  (1) no Event
of Default (or any event which, with the
giving of notice or the passage of time, or
both, would constitute an Event of Default)
has occurred and is continuing; (2) Lender
determines, in its discretion, that there
will be sufficient funds to complete the
Restoration; (3) Lender determines, in its
discretion, that the rental income from the
Mortgaged Property after completion of the
Restoration will be sufficient to meet all
operating costs and other expenses,
Imposition Deposits, deposits to reserves and
loan repayment obligations relating to the
Mortgaged Property; and (4) Lender
determines, in its discretion, that the
Restoration will be completed before the
earlier of (A) one year before the maturity
date of the Note or (B) one year after the
date of the loss or casualty.

     (h)   If the Mortgaged Property is sold
at a foreclosure sale or Lender acquires
title to the Mortgaged Property, Lender shall
automatically succeed to all rights of
Borrower in and to any insurance policies and
unearned insurance premiums and in and to the
proceeds resulting from any damage to the
Mortgaged Property prior to such sale or
acquisition.

     20.   CONDEMNATION.

     (a)   Borrower shall promptly notify
Lender of any action or proceeding relating
to any condemnation or other taking, or
conveyance in lieu thereof, of all or any
part of the Mortgaged Property, whether
direct or indirect (a "Condemnation").
Borrower shall appear in and prosecute or
defend any action or proceeding relating to
any Condemnation unless otherwise directed by
Lender in writing.  Borrower authorizes and
appoints Lender as attorney-in-fact for
Borrower to commence, appear in and
prosecute, in Lender's or Borrower's name,
any action or proceeding relating to any
Condemnation and to settle or compromise any
claim in connection with any Condemnation.
This power of attorney is coupled with an
interest and therefore is irrevocable.
However, nothing contained in this Section 20
shall require Lender to incur any expense or
take any action.  Borrower hereby transfers
and assigns to Lender all right, title and
interest of Borrower in and to any award or
payment with respect to (i)  any
Condemnation, or any conveyance in lieu of
Condemnation, and (ii) any damage to the
Mortgaged Property caused by governmental
action that does not result in a
Condemnation.

     (b)   Lender may apply such awards or
proceeds, after the deduction of Lender's
expenses incurred in the collection of such
amounts, at Lender's option, to the
restoration or repair of the Mortgaged
Property or to the payment of the
Indebtedness, with the balance, if any, to
Borrower.  Unless Lender otherwise agrees in
writing, any application of any awards or
proceeds to the Indebtedness shall not extend
or postpone the due date of any monthly
installments referred to in the Note,
Section 7 of this Instrument or any
Collateral Agreement, or change the amount of
such installments.  Borrower agrees to
execute such further evidence of assignment
of any awards or proceeds as Lender may
require.


     21.   TRANSFERS OF THE MORTGAGED PROPERTY
OR INTERESTS IN BORROWER.  [RIGHT TO ONE
TRANSFER ONLY -- WITH LENDER APPROVAL]

     (a)   The occurrence of any of the
following events shall constitute an Event of
Default under this Instrument:

           (1)  a Transfer of all or any part
                of the Mortgaged Property or
                any interest in the Mortgaged
                Property;

           (2)  if Borrower is a limited
                partnership, a Transfer of (A)
                any general partnership
                interest, or (B) limited
                partnership interests in
                Borrower that would cause the
                Initial Owners of Borrower to
                own less than 51% of all
                limited partnership interests
                in Borrower;

           (3)  if Borrower is a general
                partnership or a joint
                venture, a Transfer of any
                general partnership or joint
                venture interest in Borrower;

           (4)  if Borrower is a limited
                liability company, a Transfer
                of (A) any membership interest
                in Borrower which would cause
                the Initial Owners to own less
                than 51% of all the membership
                interests in Borrower, or (B)
                any membership or other
                interest of a manager in
                Borrower;

           (5)  if Borrower is a corporation,
                (A) the Transfer of any voting
                stock in Borrower which would
                cause the Initial Owners to
                own less than 51% of any class
                of voting stock in Borrower or
                (B) if the outstanding voting
                stock in Borrower is held by
                100 or more shareholders, one
                or more transfers by a single
                transferor within a 12-month
                period affecting an aggregate
                of 5% or more of that stock;

           (6)  if Borrower is a trust, (A) a
                Transfer of any beneficial
                interest in Borrower which
                would cause the Initial Owners
                to own less than 51% of all
                the beneficial interests in
                Borrower, or (B) the
                termination or revocation of
                the trust, or (C) the removal,
                appointment or substitution of
                a trustee of Borrower; and

           (7)  a Transfer of any interest in
                a Controlling Entity which, if
                such Controlling Entity were
                Borrower, would result in an
                Event of Default under any of
                Sections 21(a)(1) through (6)
                above.

Lender shall not be required to demonstrate
any actual impairment of its security or any
increased risk of default in order to
exercise any of its remedies with respect to
an Event of Default under this Section 21.

     (b)   The occurrence of any of the
following events shall not constitute an
Event of Default under this Instrument,
notwithstanding any provision of
Section 21(a) to the contrary:

           (1)  a Transfer to which Lender has
                consented;

           (2)  a Transfer that occurs by
                devise, descent, or by
                operation of law upon the
                death of a natural person;

           (3)  the grant of a leasehold
                interest in an individual
                dwelling unit for a term of
                two years or less not
                containing an option to
                purchase;

           (4)  a Transfer of obsolete or worn
                out Personalty or Fixtures
                that are contemporaneously
                replaced by items of equal or
                better function and quality,
                which are free of liens,
                encumbrances and security
                interests other than those
                created by the Loan Documents
                or consented to by Lender;

           (5)  the grant of an easement, if
                before the grant Lender
                determines that the easement
                will not materially affect the
                operation or value of the
                Mortgaged Property or Lender's
                interest in the Mortgaged
                Property, and Borrower pays to
                Lender, upon demand, all costs
                and expenses incurred by
                Lender in connection with
                reviewing Borrower's request;
                and

           (6)  the creation of a mechanic's,
                materialman's, or judgment
                lien against the Mortgaged
                Property which is released of
                record or otherwise remedied
                to Lender's satisfaction
                within 30 days of the date of
                creation.

     (c)   Lender shall consent, one time only
and without any adjustment to the rate at
which the Indebtedness secured by this
Instrument bears interest, to a Transfer that
would otherwise violate this Section 21 if,
prior to the Transfer, Borrower has satisfied
each of the following requirements:

           (1)  the submission to Lender of
                all information required by
                Lender to make the
                determination required by this
                Section 21(c);

           (2)  the absence of any Event of
                Default;

           (3)  the transferee meets all of
                the eligibility, credit,
                management and other standards
                (including but not limited to
                any standards with respect to
                previous relationships between
                Lender and the transferee and
                the organization of the
                transferee) customarily
                applied by Lender at the time
                of the proposed Transfer to
                the approval of borrowers in
                connection with the
                origination or purchase of
                similar mortgages on
                multifamily properties;

           (4)  the Mortgaged Property, at the
                time of the proposed Transfer,
                meets all standards as to its
                physical condition that are
                customarily applied by Lender
                at the time of the proposed
                Transfer to the approval of
                properties in connection with
                the origination or purchase of
                similar mortgages on
                multifamily properties;

           (5)  the loan to value ratio at the
                time of the proposed Transfer
                is 70% or less ("loan to value
                ratio" means the ratio of (A)
                the outstanding principal
                balance of the Indebtedness to
                (B) the value of the Mortgaged
                Property, as determined by
                Lender, expressed as a
                percentage);

           (6)  the debt service coverage
                ratio for the last twelve full
                months preceding the proposed
                Transfer was 1.35 or more
                ("debt service coverage ratio"
                means the ratio of (A) the
                annual net operating income
                from the Mortgaged Property's
                operations during that month
                which is available for
                repayment of debt, after
                deducting operating expenses,
                to (B) the annual principal
                and interest payable under the
                Note); and

           (7)  in the case of a Transfer of
                all or any part of the
                Mortgaged Property, (A) the
                execution by the transferee of
                an assumption agreement that
                is acceptable to Lender and
                that, among other things,
                requires the transferee to
                perform all obligations of
                Borrower set forth in the
                Note, this Instrument and any
                other Loan Documents, and may
                require that the transferee
                comply with any provisions of
                this Instrument or any other
                Loan Document which previously
                may have been waived by
                Lender, and (B) if a guaranty
                has been executed and
                delivered in connection with
                the Note, this Instrument or
                any of the other Loan
                Documents, the transferee
                causes one or more individuals
                or entities acceptable to
                Lender to execute and deliver
                to Lender a guaranty in a form
                acceptable to Lender;

           (8)  in the case of a Transfer of
                any interest in a Controlling
                Entity, if a guaranty has been
                executed and delivered in
                connection with the Note, this
                Instrument or any of the other
                Loan Documents, the Borrower
                causes one or more individuals
                or entities acceptable to
                Lender to execute and deliver
                to Lender a guaranty in a form
                acceptable to Lender; and

           (9)  Lender's receipt of all of the
                following:

                (A)  a review fee in the
                     amount of $2,000.00;

                (B)  a transfer fee in an
                     amount equal to 1% of the
                     unpaid principal balance
                     of the Indebtedness
                     immediately before the
                     applicable Transfer; and

                (C)  the amount of Lender's
                     out-of-pocket costs
                     (including reasonable
                     attorneys' fees) incurred
                     in reviewing the Transfer
                     request.

     22.   EVENTS OF DEFAULT.  The occurrence
of any one or more of the following shall
constitute an Event of Default under this
Instrument:

     (a)   any failure by Borrower to pay or
deposit when due any amount required by the
Note, this Instrument or any other Loan
Document;

     (b)   any failure by Borrower to maintain
the insurance coverage required by
Section 19;

     (c)   any failure by Borrower to comply
with the provisions of Section 33;

     (d)   fraud or material misrepresentation
or material omission by Borrower, any of its
officers, directors, trustees, general
partners or managers or any guarantor in
connection with (A) the application for or
creation of the Indebtedness, (B) any
financial statement, rent roll, or other
report or information provided to Lender
during the term of the Indebtedness, or (C)
any request for Lender's consent to any
proposed action, including a request for
disbursement of funds under any Collateral
Agreement;

     (e)   any Event of Default under
Section 21;

     (f)   the commencement of a forfeiture
action or proceeding, whether civil or
criminal, which, in Lender's reasonable
judgment, could result in a forfeiture of the
Mortgaged Property or otherwise materially
impair the lien created by this Instrument or
Lender's interest in the Mortgaged Property;

     (g)   any failure by Borrower to perform
any of its obligations under this Instrument
(other than those specified in Sections 22(a)
through (f)), as and when required, which
continues for a period of 30 days after
notice of such failure by Lender to Borrower.
However, no such notice or grace period shall
apply in the case of any such failure which
could, in Lender's  judgment, absent
immediate exercise by Lender of a right or
remedy under this Instrument, result in harm
to Lender, impairment of the Note or this
Instrument or any other security given under
any other Loan Document;

     (h)   any failure by Borrower to perform
any of its obligations as and when required
under any Loan Document other than this
Instrument which continues beyond the
applicable cure period, if any, specified in
that Loan Document;

     (i)   any exercise by the holder of any
debt instrument secured by a mortgage, deed
of trust or deed to secure debt on the
Mortgaged Property of a right to declare all
amounts due under that debt instrument
immediately due and payable; and

     (j)   Borrower voluntarily files for
bankruptcy protection under the United States
Bankruptcy Code or voluntarily becomes
subject to any reorganization, receivership,
insolvency proceeding or other similar
proceeding pursuant to any other federal or
state law affecting debtor and creditor
rights, or an involuntary case is commenced
against Borrower by any creditor (other than
Lender) of Borrower pursuant to the United
States Bankruptcy Code or other federal or
state law affecting debtor and creditor
rights and is not dismissed or discharged
within 60 days after filing.

     23.   REMEDIES CUMULATIVE.  Each right
and remedy provided in this Instrument is
distinct from all other rights or remedies
under this Instrument or any other Loan
Document or afforded by applicable law, and
each shall be cumulative and may be exercised
concurrently, independently, or successively,
in any order.

     24.   FORBEARANCE.

     (a)   Lender may (but shall not be
obligated to) agree with Borrower, from time
to time, and without giving notice to, or
obtaining the consent of, or having any
effect upon the obligations of, any guarantor
or other third party obligor, to take any of
the following actions:  extend the time for
payment of all or any part of the
Indebtedness; reduce the payments due under
this Instrument, the Note, or any other Loan
Document; release anyone liable for the
payment of any amounts under this Instrument,
the Note, or any other Loan Document; accept
a renewal of the Note; modify the terms and
time of payment of the Indebtedness; join in
any extension or subordination agreement;
release any Mortgaged Property; take or
release other or additional security; modify
the rate of interest or period of
amortization of the Note or change the amount
of the monthly installments payable under the
Note; and otherwise modify this Instrument,
the Note, or any other Loan Document.

     (b)   Any forbearance by Lender in
exercising any right or remedy under the
Note, this Instrument, or any other Loan
Document or otherwise afforded by applicable
law, shall not be a waiver of or preclude the
exercise of any right or remedy.  The
acceptance by Lender of payment of all or any
part of the Indebtedness after the due date
of such payment, or in an amount which is
less than the required payment, shall not be
a waiver of Lender's right to require prompt
payment when due of all other payments on
account of the Indebtedness or to exercise
any remedies for any failure to make prompt
payment. Enforcement by Lender of any
security for the Indebtedness shall not
constitute an election by Lender of remedies
so as to preclude the exercise of any other
right available to Lender.  Lender's receipt
of any awards or proceeds under Sections 19
and 20 shall not operate to cure or waive any
Event of Default.

     25.   LOAN CHARGES.  If any applicable
law limiting the amount of interest or other
charges permitted to be collected from
Borrower is interpreted so that any charge
provided for in any Loan Document, whether
considered separately or together with other
charges levied in connection with any other
Loan Document, violates that law, and
Borrower is entitled to the benefit of that
law, that charge is hereby reduced to the
extent necessary to eliminate that violation.
The amounts, if any, previously paid to
Lender in excess of the permitted amounts
shall be applied by Lender to reduce the
principal of the Indebtedness.  For the
purpose of determining whether any applicable
law limiting the amount of interest or other
charges permitted to be collected from
Borrower has been violated, all Indebtedness
which constitutes interest, as well as all
other charges levied in connection with the
Indebtedness which constitute interest, shall
be deemed to be allocated and spread over the
stated term of the Note.  Unless otherwise
required by applicable law, such allocation
and spreading shall be effected in such a
manner that the rate of interest so computed
is uniform throughout the stated term of the Note.

     26.   WAIVER OF STATUTE OF LIMITATIONS.
Borrower hereby waives the right to assert
any statute of limitations as a bar to the
enforcement of the lien of this Instrument or
to any action brought to enforce any Loan
Document.

     27.   WAIVER OF MARSHALLING.
Notwithstanding the existence of any other
security interests in the Mortgaged Property
held by Lender or by any other party, Lender
shall have the right to determine the order
in which any or all of the Mortgaged Property
shall be subjected to the remedies provided
in this Instrument, the Note, any other Loan
Document or applicable law.  Lender shall
have the right to determine the order in
which any or all portions of the Indebtedness
are satisfied from the proceeds realized upon
the exercise of such remedies.  Borrower and
any party who now or in the future acquires a
security interest in the Mortgaged Property
and who has actual or constructive notice of
this Instrument waives any and all right to
require the marshalling of assets or to
require that any of the Mortgaged Property be
sold in the inverse order of alienation or
that any of the Mortgaged Property be sold in
parcels or as an entirety in connection with
the exercise of any of the remedies permitted
by applicable law or provided in this
Instrument.

     28.   FURTHER ASSURANCES.  Borrower shall
execute, acknowledge, and deliver, at its
sole cost and expense, all further acts,
deeds, conveyances, assignments, estoppel
certificates, financing statements, transfers
and assurances as Lender may require from
time to time in order to better assure,
grant, and convey to Lender the rights
intended to be granted, now or in the future,
to Lender under this Instrument and the Loan
Documents.

     29.   ESTOPPEL CERTIFICATE.  Within 10
days after a request from Lender, Borrower
shall deliver to Lender a written statement,
signed and acknowledged by Borrower,
certifying to Lender or any person designated
by Lender, as of the date of such statement,
(i) that the Loan Documents are unmodified
and in full force and effect  (or, if there
have been modifications, that the Loan
Documents are in full force and effect as
modified and setting forth such
modifications); (ii) the unpaid principal
balance of the Note; (iii) the date to which
interest under the Note has been paid; (iv)
that Borrower is not in default in paying the
Indebtedness or in performing or observing
any of the covenants or agreements contained
in this Instrument or any of the other Loan
Documents (or, if the Borrower is in default,
describing such default in reasonable
detail); (v) whether or not there are then
existing any setoffs or defenses known to
Borrower against the enforcement of any right
or remedy of Lender under the Loan Documents;
and (vi) any additional facts requested by
Lender.

     30.   GOVERNING LAW; CONSENT TO
JURISDICTION AND VENUE.

     (a)   This Instrument, and any Loan
Document which does not itself expressly
identify the law that is to apply to it,
shall be governed by the laws of the
jurisdiction in which the Land is located
(the "Property Jurisdiction").

     (b)   Borrower agrees that any
controversy arising under or in relation to
the Note, this Instrument, or any other Loan
Document shall be litigated exclusively in
the Property Jurisdiction.  The state and
federal courts and authorities with
jurisdiction in the Property Jurisdiction
shall have exclusive jurisdiction over all
controversies which shall arise under or in
relation to the Note, any security for the
Indebtedness, or any other Loan Document.
Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for
any such litigation and waives any other
venue to which it might be entitled by virtue
of domicile, habitual residence or otherwise.


     31.   NOTICE.

     (a)   All notices, demands and other
communications ("notice") under or concerning
this Instrument shall be in writing.  Each
notice shall be addressed to the intended
recipient at its address set forth in this
Instrument, and shall be deemed given on the
earliest to occur of (1) the date when the
notice is received by the addressee; (2) the
first Business Day after the notice is
delivered to a recognized overnight courier
service, with arrangements made for payment
of charges for next Business Day delivery; or
(3) the third Business Day after the notice
is deposited in the United States mail with
postage prepaid, certified mail, return
receipt requested.  As used in this
Section 31, the term "Business Day" means any
day other than a Saturday, a Sunday or any
other day on which Lender is not open for
business.

     (b)   Any party to this Instrument may
change the address to which notices intended
for it are to be directed by means of notice
given to the other party in accordance with
this Section 31.  Each party agrees that it
will not refuse or reject delivery of any
notice given in accordance with this
Section 31, that it will acknowledge, in
writing, the receipt of any notice upon
request by the other party and that any
notice rejected or refused by it shall be
deemed for purposes of this Section 31 to
have been received by the rejecting party on
the date so refused or rejected, as
conclusively established by the records of
the U.S. Postal Service or the courier
service.

     (c)   Any notice under the Note and any
other Loan Document which does not specify
how notices are to be given shall be given in
accordance with this Section 31.

     32.   SALE OF NOTE; CHANGE IN SERVICER.
The Note or a partial interest in the Note
(together with this Instrument and the other
Loan Documents) may be sold one or more times
without prior notice to Borrower.  A sale may
result in a change of the Loan Servicer.
There also may be one or more changes of the
Loan Servicer unrelated to a sale of the
Note.  If there is a change of the Loan
Servicer, Borrower will be given notice of
the change.

     33.   SINGLE ASSET BORROWER.   Until the
Indebtedness is paid in full, Borrower (a)
shall not acquire any real or personal
property other than the Mortgaged Property
and personal property related to the
operation and maintenance of the Mortgaged
Property;  (b) shall not operate any business
other than the management and operation of
the Mortgaged Property; and (c) shall not
maintain its assets in a way difficult to
segregate and identify.

     34.   SUCCESSORS AND ASSIGNS BOUND.  This
Instrument shall bind, and the rights granted
by this Instrument shall inure to, the
respective successors and assigns of Lender
and Borrower.  However, a Transfer not
permitted by Section 21 shall be an Event of
Default.

     35.   JOINT AND SEVERAL LIABILITY.  If
more than one person or entity signs this
Instrument as Borrower, the obligations of
such persons and entities shall be joint and
several.

     36.   RELATIONSHIP OF PARTIES; NO THIRD
PARTY BENEFICIARY.

     (a)   The relationship between Lender and
Borrower shall be solely that of creditor and
debtor, respectively, and nothing contained
in this Instrument shall create any other
relationship between Lender and Borrower.

     (b)   No creditor of any party to this
Instrument and no other person shall be a
third party beneficiary of this Instrument or
any other Loan Document.  Without limiting
the generality of the preceding sentence, (1)
any arrangement (a "Servicing Arrangement")
between the Lender and any Loan Servicer for
loss sharing or interim advancement of funds
shall constitute a contractual obligation of
such Loan Servicer that is independent of the
obligation of Borrower for the payment of the
Indebtedness, (2) Borrower shall not be a
third party beneficiary of any Servicing
Arrangement, and (3) no payment by the Loan
Servicer under any Servicing Arrangement will
reduce the amount of the Indebtedness.

     37.   SEVERABILITY; AMENDMENTS.  The
invalidity or unenforceability of any
provision of this Instrument shall not affect
the validity or enforceability of any other
provision, and all other provisions shall
remain in full force and effect.  This
Instrument contains the entire agreement
among the parties as to the rights granted
and the obligations assumed in this
Instrument.  This Instrument may not be
amended or modified except by a writing
signed by the party against whom enforcement
is sought.

     38.   CONSTRUCTION.  The captions and
headings of the sections of this Instrument
are for convenience only and shall be
disregarded in construing this Instrument.
Any reference in this Instrument to an
"Exhibit" or a "Section" shall, unless
otherwise explicitly provided, be construed
as referring, respectively, to an Exhibit
attached to this Instrument or to a
Section of this Instrument.  All Exhibits
attached to or referred to in this Instrument
are incorporated by reference into this
Instrument.  Any reference in this Instrument
to a statute or regulation shall be construed
as referring to that statute or regulation as
amended from time to time.  Use of the
singular in this Agreement includes the
plural and use of the plural includes the
singular.  As used in this Instrument, the
term "including" means "including, but not
limited to."

     39.   LOAN SERVICING.  All actions
regarding the servicing of the loan evidenced
by the Note, including the collection of
payments, the giving and receipt of notice,
inspections of the Property, inspections of
books and records, and the granting of
consents and approvals, may be taken by the
Loan Servicer unless Borrower receives notice
to the contrary.  If Borrower receives
conflicting notices regarding the identity of
the Loan Servicer or any other subject, any
such notice from Lender shall govern.

     40.   DISCLOSURE OF INFORMATION.  Lender
may furnish information regarding Borrower or
the Mortgaged Property to third parties with
an existing or prospective interest in the
servicing, enforcement, evaluation,
performance, purchase or securitization of
the Indebtedness, including but not limited
to trustees, master servicers, special
servicers, rating agencies, and organizations
maintaining databases on the underwriting and
performance of multifamily mortgage loans.
Borrower irrevocably waives any and all
rights it may have under applicable law to
prohibit such disclosure, including but not
limited to any right of privacy.

     41.   NO CHANGE IN FACTS OR
CIRCUMSTANCES.  All information in the
application for the loan submitted to Lender
(the "Loan Application") and in all financial
statements, rent rolls, reports, certificates
and other documents submitted in connection
with the Loan Application are complete and
accurate in all material respects.  There has
been no material adverse change in any fact
or circumstance that would make any such
information incomplete or inaccurate.

     42.   SUBROGATION.  If, and to the extent
that, the proceeds of the loan evidenced by
the Note are used to pay, satisfy or
discharge any obligation of Borrower for the
payment of money that is secured by a pre-
existing mortgage, deed of trust or other
lien encumbering the Mortgaged Property (a
"Prior Lien"), such loan proceeds shall be
deemed to have been advanced by Lender at
Borrower's request, and Lender shall
automatically, and without further action on
its part, be subrogated to the rights,
including lien priority, of the owner or
holder of the obligation secured by the Prior
Lien, whether or not the Prior Lien is
released.

     43.   ACCELERATION; REMEDIES.  At any
time during the existence of an Event of
Default, Lender, at Lender's option, may
declare the Indebtedness to be immediately
due and payable without further demand, and
may invoke the power of sale and any other
remedies permitted by Maryland law or
provided in this Instrument or in any other
Loan Document.  Borrower acknowledges that
the power of sale granted in this Instrument
may be exercised by Lender without prior
judicial hearing.  Lender shall be entitled
to collect all costs and expenses incurred in
pursuing such remedies, including attorneys'
fees, costs of documentary evidence,
abstracts and title reports.

     If Lender invokes the power of sale,
Lender shall mail or cause Trustee to mail
written notice of sale to Borrower in the
manner prescribed by Maryland law.  Trustee
shall give notice of sale and shall sell the
Mortgaged Property according to Maryland law.
Trustee may sell the Mortgaged Property at
the time and place and under the terms
designated in the notice of sale in one or
more parcels and in such order as Trustee may
determine.  Trustee may postpone sale of all
or any part of the Mortgaged Property by
public announcement at the time and place of
any previously scheduled sale.  Lender or
Lender's designee may purchase the Mortgaged
Property at any sale.

     Trustee shall deliver to the purchaser
at the sale, within a reasonable time after
the sale, a deed conveying the Mortgaged
Property so sold without any express or
implied covenant or warranty.  The recitals
in Trustee's deed shall be prima facie
evidence of the truth of the statements made
in those recitals.  Trustee shall apply the
proceeds of the sale in the following order:
(a) to all costs and expenses of the sale,
including Trustee's fees not to exceed 3% of
the gross sale price, attorneys' fees and
costs of title evidence; (b) to the
Indebtedness in such order as Lender, in
Lender's discretion, directs; and (c) the
excess, if any, to the person or persons
legally entitled to the excess.

     Borrower hereby assents to the passage
of a decree for the sale of the Mortgaged
Property pursuant to Lender's exercise of its
rights under this Section.

     44.   RELEASE.  Upon payment of the
Indebtedness, Lender or Trustee shall release
this Instrument.  Borrower shall pay Lender's
or Trustee's reasonable costs incurred in
releasing this Instrument.

     45.   SUBSTITUTE TRUSTEE.  Lender, at
Lender's option, may from time to time remove
Trustee and appoint a successor trustee by an
instrument recorded in the city or county in
which this Instrument is recorded.  Without
conveyance of the Mortgaged Property, the
successor trustee shall succeed to all the
title, power and duties conferred upon the
Trustee in this Instrument and by applicable
law.

     46.   PROTECTIVE PAYMENTS.  Any amounts
disbursed by Lender under Section 12, or
under any other provision of this Instrument
that treats such disbursement as being made
under Section 12, shall be immediately due
and payable, shall bear interest from the
date of disbursement until paid at the
"Default Rate", as defined in the Note, and,
together with the interest thereon, shall be
a lien on the Mortgaged Property and secured
by this Instrument.  This Section shall
supersede Section 12(b).

     47.   WAIVER OF TRIAL BY JURY.  BORROWER
AND LENDER EACH (A) COVENANTS AND AGREES NOT
TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY
ISSUE ARISING OUT OF THIS INSTRUMENT OR THE
RELATIONSHIP BETWEEN THE PARTIES AS BORROWER
AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY
AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY
WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT
ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT
LEGAL COUNSEL.

     ATTACHED EXHIBITS.  The following
Exhibits are attached to this Instrument:

           |X|  Exhibit A       Description of
the Land (required).

           |X|  Exhibit B       Modifications
to Instrument

     IN WITNESS WHEREOF, Borrower has signed
and delivered this Instrument or has caused
this Instrument to be signed and delivered by
its duly authorized representative.

                     BORROWER:

                     CENTURY III ASSOCIATES
LIMITED PARTNERSHIP,
                     a Maryland limited
partnership

ATTEST/WITNESS:      By:   The Krupp
Corporation, a Massachusetts corporation,
                           General Partner

______________________          By:
__________________________________[SEAL]
                                Stephen C.
Parthum, its Duly Authorized Agent

                                Borrower's
Address:
                                c/o Berkshire
Mortgage Finance
                                1000 Parkwood
Circle, Suite 900
                                Atlanta,
Georgia 30339





STATE OF GEORGIA, ______________ County ss:

I hereby certify that on this ____ day of
December, 1997, before me, the subscriber, a
Notary Public of the State of Georgia, in and
for the County of ____________, personally
appeared Stephen C. Parthum, who acknowledged
himself to be the duly authorized agent of
The Krupp Corporation, a Massachusetts
corporation, general partner of Century III
Associates Limited Partnership, a limited
partnership, and on behalf of said limited
partnership did acknowledge that he, as such
duly authorized agent being authorized so to
do, executed the foregoing instrument for the
purposes therein contained, by signing the
name of the corporation by himself as
____________________.

As Witness:  my hand and notarial seal.

My Commission Expires:
___________________________

Notary Public





<PAGE>
EXHIBIT A

            [DESCRIPTION OF THE LAND]
<PAGE>

EXHIBIT B

MODIFICATIONS TO INSTRUMENT


The following modifications are made to the
text of the Instrument that precedes this
Exhibit:

     Section 21 is amended as follows:

     The One Percent (1%) transfer fee
provided in Section 21 (c)(9)(B) of the
Instrument shall be waived one time only
subject to the approval by Lender of the
transferee in accordance with Section 21(c)
of the Instrument.


                     <PAGE>
                    AFFIDAVIT

DISTRICT OF COLUMBIA ss:

I hereby certify that on this ____ day of
December, 1997, before me, the subscriber, a
Notary Public of the District aforesaid,
personally appeared
__________________________, the agent for the
party or parties secured by the foregoing
Instrument, and made oath in due form of law
that the consideration recited in the
foregoing Instrument is true and bona fide,
as therein set forth, that the amount of the
loan secured by the foregoing Instrument was
disbursed by the party or parties secured to
Borrower or to the person responsible for
disbursement of funds in the closing
transaction or its respective agent at a time
no later than the execution and delivery by
Borrower of the foregoing Instrument, and
that he/she is the duly authorized agent of
the said party or parties secured to make
this affidavit.

As Witness:  my hand and notarial seal.

My Commission Expires:
__________________________________

Notary Public