Exhibit
10.5





Prepared
by, and after recording


return
to:


James J.
Schwert, Esquire


Oppenheimer
Wolff & Donnelly LLP


Plaza
VII, Suite 3300


45 S.
Seventh Street


Minneapolis,
MN 55402





Freddie
Mac Loan No. 534382134





MULTIFAMILY DEED OF
TRUST,


ASSIGNMENT OF
RENTS


AND SECURITY AGREEMENT AND
FIXTURE FILING





(TEXAS
– REVISION DATE 02-15-2008)





The
following must appear in 12 point Times New Roman font (or the equivalent) on
the first page of any recorded document if the Borrower is an
individual:





NOTICE OF
      CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE
      OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT
      BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY
      NUMBER OR YOUR DRIVER'S LICENSE
NUMBER.





MULTIFAMILY
DEED OF TRUST,


ASSIGNMENT
OF RENTS


SECURITY
AGREEMENT AND FIXTURE FILING


(TEXAS
– REVISION DATE 02-15-2008)





THIS MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT AND FIXTURE FILING (the “Instrument”) is made to be
effective this 16th day of December, 2009,
by CARUTH HAVEN L.P., a limited partnership organized and existing under the
laws of Delaware, whose address is 1920 Main Street, Suite 400, Irvine,
California 92614, as trustor (“Borrower”), to PETER S. GRAF,
as trustee (“Trustee”),
for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., a corporation
organized and existing under the laws of Ohio, whose address is 127 Public
Square, Cleveland, Ohio 44114, as beneficiary (“Lender”).  Borrower's
organizational identification number, if applicable, is 4616611.





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 Dallas County, State of Texas and
described in Exhibit A attached to this Instrument.  To have and to
hold the Mortgaged Property unto Trustee, Trustee’s successor in trust and
Trustee’s assigns forever.





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, 2020 (the "Maturity Date"), in the
principal amount of Ten Million and No/100
Dollars ($10,000,000.00), 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 warrants and represents 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, except as shown on the schedule of
exceptions to coverage in the title policy issued to and accepted by Lender
contemporaneously with the execution and recordation of this Instrument and
insuring Lender's interest in the Mortgaged Property (the "Schedule of Title
Exceptions").  Borrower covenants that Borrower will warrant
and defend generally the title to the Mortgaged Property against all claims and
demands, subject to any easements and restrictions listed in the Schedule of
Title Exceptions.





UNIFORM
COVENANTS


REVISION
DATE 02-15-2008





Covenants.  In
consideration of the mutual promises set forth in this Instrument, Borrower and
Lender covenant and agree as follows:


Page
1





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





(a)          "Attorneys' Fees and Costs"
means (i) fees and out-of-pocket costs of Lender's and Loan Servicer's
attorneys, as applicable, including costs of Lender's and Loan Servicer's
in-house counsel, support staff costs, costs of preparing for litigation,
computerized research, telephone and facsimile transmission expenses, mileage,
deposition costs, postage, duplicating, process service, videotaping and similar
costs and expenses; (ii) costs and fees of expert witnesses, including
appraisers; and (iii) investigatory fees.





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





(c)          "Business Day" means any day
other than a Saturday, a Sunday or any other day on which Lender or the national
banking associations are not open for business.





(d)         "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.





(e)          "Controlling Entity" means an
entity which owns, directly or indirectly through one or more intermediaries,
(i) a general partnership interest or a Controlling Interest of the limited
partnership interests in Borrower (if Borrower is a partnership or joint
venture), (ii) a manager's interest in Borrower or a Controlling Interest of the
ownership or membership interests in Borrower (if Borrower is a limited
liability company), (iii) a Controlling Interest of any class of voting stock of
Borrower (if Borrower is a corporation), (iv) a trustee's interest or a
Controlling Interest of the beneficial interests in Borrower (if Borrower is a
trust), or (v) a managing partner's interest or a Controlling Interest of the
partnership interests in Borrower (if Borrower is a limited liability
partnership).





(f)          "Controlling Interest" means
(i) 51 percent or more of the ownership interests in an entity, or (ii) a
percentage ownership interest in an entity of less than 51 percent, if the
owner(s) of that interest actually direct(s) the business and affairs of the
entity without the requirement of consent of any other party.  The
Controlling Interest shall be deemed to be 51 percent unless otherwise stated in
Exhibit B.





(g)         "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.


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2





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





(i)          "Fixtures" means all property
owned by Borrower 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.





(j)          "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 or over the Borrower.





(k)         "Hazard Insurance" is defined
in Section 19.





(l)          "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 that (i)  is defined as a "hazardous
substance," "hazardous material," "hazardous waste," "toxic substance," "toxic
pollutant," "contaminant," or "pollutant" by or within the meaning of any
Hazardous Materials Law, or (ii) is regulated in any way by or within the
meaning of any Hazardous Materials Law.





(m)        "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 or the protection
of human health or the environment 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 of 1976, 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 et seq., and their
state analogs.


Page
3





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





(o)         "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.





(p)         "Indebtedness" means the
principal of, interest at the fixed or variable rate set forth in the Note 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.





(q)         "Initial Owners" means, with
respect to Borrower or any other entity, the persons or entities that (i) on the
date of the Note, or (ii) on the date of a Transfer to which Lender has
consented, own in the aggregate 100 percent of the ownership interests in
Borrower or that entity.





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





(s)         "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.





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





(u)         "Loan Documents" means the
Note, this Instrument, all guaranties, all indemnity agreements, all Collateral
Agreements, O&M Programs, the MMP 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.





(v)         "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.




(w)        "MMP" means a moisture
management plan to control water intrusion and prevent the development of Mold
or moisture at the Mortgaged Property throughout the term of this
Instrument.  At a minimum, the MMP must contain a provision for (i)
staff training, (ii) information to be provided to tenants, (iii) documentation
of the plan, (iv) the appropriate protocol for incident response and remediation
and (v) routine, scheduled inspections of common space and unit
interiors.


Page
4





(x)         "Mold" means mold, fungus,
microbial contamination or pathogenic organisms.





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





(i)
            the
      Land;





(ii)
            the
      Improvements;





(iii)
            the
      Fixtures;





(iv)
            the
      Personalty;





(v)
            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 benefiting
      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;





(vi)
            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;





(vii)
            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;





(viii)
            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;





(ix)
            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;


Page
5





(x)
            all
      Rents and Leases;


(xi)
            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;





(xii)
            all
      Imposition Deposits;





(xiii)
            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);





(xiv)
            all
      tenant security deposits which have not been forfeited by any tenant under
      any Lease and any bond or other security in lieu of such deposits;
      and





(xv)
            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.





(z)          "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.





(aa)        "O&M Program" is defined in
Section 18(d).





(bb)       "Personalty" means
all:





(i)
            accounts
      (including deposit accounts) of Borrower related to the Mortgaged
      Property;





(ii)
            equipment
      and inventory owned by Borrower, which are used now or in the future in
      connection with the ownership, management or operation of the Land or
      Improvements or are located on the Land or Improvements, including
      furniture, furnishings, machinery, building materials, goods, supplies,
      tools, books, records (whether in written or electronic form), and
      computer equipment (hardware and
software);





(iii)
            other
      tangible personal property owned by Borrower which is used now or in the
      future in connection with the ownership, management or operation of the
      Land or Improvements or is located on the Land or in the Improvements,
      including ranges, stoves, microwave ovens, refrigerators, dishwashers,
      garbage disposers, washers, dryers and other appliances (other than
      Fixtures);


Page
6





(iv)
            any
      operating agreements relating to the Land or the
    Improvements;


(v)
            any
      surveys, plans and specifications and contracts for architectural,
      engineering and construction services relating to the Land or the
      Improvements;





(vi)
            all
      other intangible property, general intangibles 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
      and including subsidy or similar payments received from any sources,
      including a governmental authority;
and





(vii)
            any
      rights of Borrower in or under letters of
  credit.





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





(dd)       "Rents" means all rents
(whether from residential or non-residential space), revenues and other income
of the Land or the Improvements, 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, and, if Borrower is a cooperative housing
corporation or association, maintenance fees, charges or assessments payable by
shareholders or residents under proprietary leases or occupancy agreements,
whether now due, past due, or to become due.





(ee)        "Taxes" means all taxes,
assessments, vault rentals and other charges, if any, whether 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.





(ff)         "Transfer" is defined in
Section 21.





2.           UNIFORM
COMMERCIAL CODE SECURITY AGREEMENT.





(a)          This
Instrument is also a security agreement under the Uniform Commercial Code for
any of the Mortgaged Property which, under applicable law, may be subjected to a
security interest under the Uniform Commercial Code, whether such Mortgaged
Property is owned now or acquired 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 hereby authorizes Lender to prepare and file
financing statements, continuation statements and financing statement amendments
in such form as Lender may require to perfect or continue the perfection of this
security interest and Borrower agrees, if Lender so requests, to execute and
deliver to Lender such financing statements, continuation statements and
amendments.  Borrower shall pay all filing costs and all costs and
expenses of any record searches for financing statements and/or amendments 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.


Page
7


(b)         Unless
Borrower gives Notice to Lender within 30 days after the occurrence of any of
the following, and executes and delivers to Lender modifications or supplements
of this Instrument (and any financing statement which may be filed in connection
with this Instrument) as Lender may require, Borrower shall not (i) change its
name, identity, structure or jurisdiction of organization; (ii) change the
location of its place of business (or chief executive office if more than one
place of business); or (iii) add to or change any location at which any of the
Mortgaged Property is stored, held or located.





(c)          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.





(d)         This
Instrument constitutes a financing statement with respect to any part of the
Mortgaged Property that is or may become a Fixture, if permitted by applicable
law.





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.  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.


Page
8


(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, (i) 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, (ii) no
tenant shall be obligated to inquire further as to the occurrence or continuance
of an Event of Default, and (iii) 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 any prior
indebtedness that is being assigned to Lender, or 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.


Page
9


(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.  If Borrower is a housing cooperative corporation or
association, Borrower hereby agrees that if a receiver is appointed, the order
appointing the receiver may contain a provision requiring the receiver 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, it being acknowledged and agreed that the
Indebtedness is an obligation of the Borrower and must be paid out of
maintenance charges payable by the Borrower's tenant shareholders under their
proprietary leases or occupancy agreements.  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.  Except to the
extent of Lender's gross negligence or willful misconduct, 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 Section 3(d), 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.


Page
10


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.  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.  Except to the extent of Lender's gross negligence
or willful misconduct, 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.


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(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.  However, Lender's consent shall not be required
for the modification or extension of a non-residential Lease if such
modification or extension is on terms at least as favorable to Borrower as those
customary at that time in the applicable market and the income from the extended
or modified Lease will not be less than the income received from the Lease as of
the date of this Instrument.  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 (i) such Leases are subordinate to the lien of this Instrument; (ii) 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; (iii) 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;
(iv) the Lease shall not be terminated by foreclosure or any other transfer of
the Mortgaged Property; (v) 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 (vi) 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.





(h)         If
Borrower is a cooperative housing corporation or association, notwithstanding
anything to the contrary contained in this subsection or in Section 21, so long
as Borrower remains a cooperative housing corporation or association and is not
in breach of any covenant of this Instrument, Lender hereby consents
to:





(i)
            the
      execution of leases of apartments for a term in excess of two years from
      Borrower to a tenant shareholder of Borrower, so long as such leases,
      including proprietary leases, are and will remain subordinate to the lien
      of this Instrument; and


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(ii)
            the
      surrender or termination of such leases of apartments where the
      surrendered or terminated lease is immediately replaced or where the
      Borrower makes its best efforts to secure such immediate replacement by a
      newly executed lease of the same apartment to a tenant shareholder of the
      Borrower.  However, no consent is hereby given by Lender to any
      execution, surrender, termination or assignment of a lease under terms
      that would waive or reduce the obligation of the resulting tenant
      shareholder under such lease to pay cooperative assessments in full when
      due or the obligation of the former tenant shareholder to pay any unpaid
      portion of such assessments.





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)         
Unless this requirement is waived in writing by Lender, which waiver may be
contained in this Section 7(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, the items marked "Collect"
below.  Lender will not require the Borrower to make Imposition
Deposits with respect to the items marked "Deferred" below.





[Collect]
            Hazard
      Insurance premiums or other insurance premiums required by Lender under
      Section 19,


[Collect]
            Taxes,


[Deferred]
            water
      and sewer charges (that could become a lien on the Mortgaged
      Property),


[N/A]
            ground
      rents,


[Deferred]
            assessments
      or other charges (that could become a lien on the Mortgaged
      Property)


Page
13


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 Imposition.





(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.  As additional security for all of Borrower's obligations
under this Instrument and the other Loan Documents, Borrower hereby pledges and
grants to Lender a security interest in the Imposition Deposits and all proceeds
of, and all interest and dividends on, the Imposition Deposits.  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,
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, 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.





(f)          If
Lender does not collect an Imposition Deposit with respect to an Imposition
either marked "Deferred" in Section 7(a) or pursuant to a separate written
waiver by Lender, then on or before the date each such Imposition is due, or on
the date this Instrument requires each such Imposition to be paid, Borrower must
provide Lender with proof of payment of each such Imposition for which Lender
does not require collection of Imposition Deposits.  Lender may revoke
its deferral or waiver and require Borrower to deposit with Lender any or all of
the Imposition Deposits listed in Section 7(a), regardless of whether any such
item is marked "Deferred" in such section, upon Notice to Borrower, (i) if
Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to
provide timely proof to Lender of such payment, or (iii) at any time during the
existence of an Event of Default.


Page
14





(g)         In
the event of a Transfer prohibited by or requiring Lender's approval under
Section 21, Lender's waiver of the collection of any Imposition Deposit in this
Section 7 may be modified or rendered void by Lender at Lender's option by
Notice to Borrower and the transferee(s) as a condition of Lender's approval of
such Transfer.





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 that 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 AND ORGANIZATIONAL DOCUMENTS.





(a)          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, disability
accommodation, 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.





(b)         Borrower
shall at all times maintain records sufficient to demonstrate compliance with
the provisions of this Section 10.





(c)         
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.


Page
15





(d)         Borrower
shall at all times comply with all laws, regulations and requirements of any
Governmental Authority relating to Borrower's formation, continued existence and
good standing in the Property Jurisdiction.  Borrower shall at all
times comply with its organizational documents, including but not limited to its
partnership agreement (if Borrower is a partnership), its by-laws (if Borrower
is a corporation or housing cooperative corporation or association) or its
operating agreement (if Borrower is an limited liability company, joint venture
or tenancy-in-common ).  If Borrower is a housing cooperative
corporation or association, Borrower shall at all times maintain its status as a
"cooperative housing corporation" as such term is defined in Section 216(b) of
the Internal revenue Code of 1986, as amended, or any successor statute
thereto.





11.        USE OF
PROPERTY.Unless required by applicable law, Borrower shall
not (a) 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, except for any
change in use approved by Lender, (b) convert any individual dwelling units or
common areas to commercial use, (c) initiate a change in the zoning
classification of the Mortgaged Property or acquiesce without Notice to and
consent of Lender in a change in the zoning classification of the Mortgaged
Property, (d) establish any condominium or cooperative regime with respect to
the Mortgaged Property, (e) combine all or any part of the Mortgaged Property
with all or any part of a tax parcel which is not part of the Mortgaged
Property, or (f) subdivide or otherwise split any tax parcel constituting all or
any part of the Mortgaged Property without the prior consent of
Lender.  Notwithstanding anything contained in this Section to the
contrary, if Borrower is a housing cooperative corporation or association,
Lender acknowledges and consents to Borrower's use of the Mortgaged Property as
a housing cooperative.





12.        PROTECTION
OF LENDER'S SECURITY; INSTRUMENT SECURES FUTURE ADVANCES.





(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, file such documents,
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
(i) payment of Attorneys' Fees and Costs, (ii) payment of fees and out-of-pocket
expenses of accountants, inspectors and consultants, (iii) entry upon the
Mortgaged Property to make repairs or secure the Mortgaged Property, (iv)
procurement of the insurance required by Section 19, (v) payment of amounts
which Borrower has failed to pay under Sections 15 and 17, and (vi) advances
made by Lender 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").


Page
16





(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 secured by this Instrument, 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.





(a)         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, upon reasonable notice to Borrower if the inspection is to include
occupied residential units (which notice need not be in
writing).  Notice to Borrower shall not be required in the case of an
emergency, as determined in Lender's discretion, or when an Event of Default has
occurred and is continuing.





(b)         If
Lender determines that Mold has developed as a result of a water intrusion event
or leak, Lender, at Lender's discretion, may require that a professional
inspector inspect the Mortgaged Property as frequently as Lender determines is
necessary until any issue with Mold and its cause(s) are resolved to
Lender's satisfaction.  Such inspection shall be limited to a visual
and olfactory inspection of the area that has experienced the Mold, water
intrusion event or leak.  Borrower shall be responsible for the cost
of such professional inspection and any remediation deemed to be necessary as a
result of the professional inspection.  After any issue with Mold,
water intrusion or leaks is remedied to Lender's satisfaction, Lender shall not
require a professional inspection any more frequently than once every three
years unless Lender is otherwise aware of Mold as a result of a subsequent water
intrusion event or leak.





(c)          If
Lender or Loan Servicer determines not to conduct an annual inspection of the
Mortgaged Property, and in lieu thereof Lender requests a certification,
Borrower shall be prepared to provide and must actually provide to Lender a
factually correct certification each year that the annual inspection is waived
to the following effect:





Borrower
has not received any written complaint, notice, letter or other written
communication from tenants, management agent or governmental authorities
regarding mold, fungus, microbial contamination or pathogenic organisms ("Mold")
or any activity, condition, event or omission that causes or facilitates the
growth of Mold on or in any part of the Mortgaged Property or if Borrower has
received any such written complaint, notice, letter or other written
communication that Borrower has investigated and determined that no Mold
activity, condition or event exists or alternatively has fully and properly
remediated such activity, condition, event or omission in compliance with the
Moisture Management Plan for the Mortgaged Property.


Page
17





If
Borrower is unwilling or unable to provide such certification, Lender may
require a professional inspection of the Mortgaged Property at Borrower's
expense.





14.        BOOKS
AND RECORDS; FINANCIAL REPORTING.





(a)          Borrower
shall keep and maintain at all times at the Mortgaged Property or the management
agent's office, and upon Lender's request shall make available at the Mortgaged
Property (or, at Borrower's option, at the management agent's office), 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 by
Lender at any reasonable time.





(b)         Within
120 days after the end of each fiscal year of Borrower, Borrower shall furnish
to Lender 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.  If Borrower's fiscal year is other than the calendar
year, Borrower must also submit to Lender a year-end statement of income and
expenses within 120 days after the end of the calendar year.





(c)          Within
120 days after the end of each calendar year, and at any other time, upon
Lender's request, Borrower shall furnish to Lender each of the
following.  However, Lender shall not require any of the following
more frequently than quarterly except when there has been an Event of Default
and such Event of Default is continuing, in which case Lender may, upon written
request to Borrower, require Borrower to furnish any of the following more
frequently:





(i)
            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;





(ii)
            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; and


Page
18





(iii)
            a
      statement that identifies all owners of any interest in Borrower and any
      Controlling Entity and the interest held by each (unless Borrower or any
      Controlling Entity is a publicly-traded entity in which case such
      statement of ownership shall not be required), 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.





(d)         At
any time upon Lender's request, Borrower shall furnish to Lender each of the
following.  However, Lender shall not require any of the following
more frequently than quarterly except when there has been an Event of Default
and such Event of Default is continuing, in which case Lender may require
Borrower to furnish any of the following more frequently:





(i)
            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;





(ii)
            a
      quarterly or year-to-date income and expense statement for the Mortgaged
      Property; and





(iii)
            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.





(e)          Upon
Lender's request at any time when an Event of Default has occurred and is
continuing, Borrower shall furnish to Lender monthly income and expense
statements and rent schedules for the Mortgaged Property.





(f)          An
individual having authority to bind Borrower shall certify each of the
statements, schedules and reports required by Sections 14(b) through 14(e) to be
complete and accurate.  Each of the statements, schedules and reports
required by Sections 14(b) through 14(e) shall be in such form and contain such
detail as Lender may reasonably require.  Lender also may require that
any of the statements, schedules or reports listed in Section 14(b) and 14(c)(i)
and (ii) be audited at Borrower's expense by independent certified public
accountants acceptable to Lender, at any time when an Event of Default has
occurred and is continuing or at any time that Lender, in its reasonable
judgment, determines that audited financial statements are required for an
accurate assessment of the financial condition of Borrower or of the Mortgaged
Property.


Page
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(g)         If
Borrower fails to provide in a timely manner the statements, schedules and
reports required by Sections 14(b) through (e), Lender shall give Borrower
Notice specifying the statements, schedules and reports required by Section
14(b) through (e) that Borrower has failed to provide.  If Borrower
has not provided the required statements, schedules and reports within 10
Business Days following such Notice, then 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.  Notice to Borrower shall
not be required in the case of an emergency, as determined in Lender's
discretion, or when an Event of Default has occurred and is
continuing.





(h)         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.





(i)           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 (i) pay the expenses of
operating, managing, maintaining and repairing the Mortgaged Property (including
utilities, repairs and replacements) before the last date upon which each such
payment may be made without any penalty or interest charge being added, and (ii)
pay insurance premiums at least 30 days prior to the expiration date of each
policy of insurance, unless applicable law specifies some lesser
period.





(c)         
If Lender is collecting Imposition Deposits, to the extent that Lender holds
sufficient Imposition Deposits for the purpose of paying a specific Imposition,
then Borrower shall not be obligated to pay such Imposition, so long as no Event
of Default exists and Borrower has timely delivered to Lender any bills or
premium notices that it has received.  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 (i) any Event of Default has occurred and
is continuing, (ii) insufficient Imposition Deposits are held by Lender at the
time an Imposition becomes due and payable or (iii) 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 (i) Borrower notifies Lender of the commencement or
expected commencement of such proceedings, (ii) the Mortgaged Property is not in
danger of being sold or forfeited, (iii) if Borrower has not already paid the
Imposition, Borrower deposits with Lender reserves sufficient to pay the
contested Imposition, if requested by Lender, and (iv) Borrower furnishes
whatever additional security is required in the proceedings or is reasonably
requested by Lender.


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20


(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
furnish to Lender, on or before the date this Instrument requires such
Impositions to be paid, receipts evidencing that such payments were
made.





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.





(a)         Borrower
shall not commit waste or permit impairment or deterioration of the Mortgaged
Property.





(b)         Borrower
shall not abandon the Mortgaged Property.





(c)         Borrower
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; however, Borrower shall not be obligated to perform such
restoration or repair if (i) no Event of Default has occurred and is continuing,
and (ii) Lender has elected to apply any available insurance proceeds and/or
condemnation awards to the payment of Indebtedness pursuant to Section
19(h)(ii), (iii), (iv) or (v), or pursuant to Section 20.





(d)         Borrower
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)         Borrower
shall provide for professional management of the Mortgaged Property by a
residential rental property manager satisfactory to Lender at all times under a
contract approved by Lender in writing, which contract must be terminable upon
not more than 30 days notice without the necessity of establishing cause and
without payment of a penalty or termination fee by Borrower or its
successors.





(f)          Borrower
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, including any removal, demolition or alteration
occurring in connection with a rehabilitation of all or part of the Mortgaged
Property, except (i) in connection with the replacement of tangible Personalty,
(ii) if Borrower is a cooperative housing corporation or association, to the
extent permitted with respect to individual dwelling units under the form of
proprietary lease or occupancy agreement and (iii) repairs and replacements in
connection with making an individual unit ready for a new
occupant.


Page
21


(g)         Unless
otherwise waived by Lender in writing, Borrower must have or must establish and
must adhere to the MMP.  If the Borrower is required to have an MMP,
the Borrower must keep all MMP documentation at the Mortgaged Property or at the
management agent's office and available for the Lender or the Loan Servicer to
review during any annual assessment or other inspection of the Mortgaged
Property that is required by Lender.





(h)         If
Borrower is a housing cooperative corporation or association, until the
Indebtedness is paid in full Borrower shall not reduce the maintenance fees,
charges or assessments payable by shareholders or residents under proprietary
leases or occupancy agreements below a level which is sufficient to pay all
expenses of the Borrower, including, without limitation, all operating and other
expenses for the Mortgaged Property and all payments due pursuant to the terms
of the Note and any Loan Documents.





18.        ENVIRONMENTAL
HAZARDS.





(a)         Except
for matters described in Section 18(b), Borrower shall not cause or permit any
of the following:





(i)
            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;





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





(iii)
            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;





(iv)
            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;
or





(v)
            any
      violation or noncompliance with the terms of any O&M Program as
      defined in subsection (d).


Page
22





The
matters described in clauses (i) through (v) above, except as otherwise provided
in Section 18(b), are referred to collectively in this Section 18 as "Prohibited Activities or
Conditions."





(b)         Prohibited
Activities or Conditions shall not include lawful conditions permitted by an
O&M Program or the safe and lawful use and storage of quantities of (i)
pre-packaged supplies, cleaning materials and petroleum products customarily
used in the operation and maintenance of comparable multifamily properties, (ii)
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 (iii) 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)         As
required by Lender, Borrower shall also have established a written operations
and maintenance program with respect to certain Hazardous
Materials.  Each such operations and maintenance program and any
additional or revised operations and maintenance programs established for the
Mortgaged Property pursuant to this Section 18 must be approved by Lender and
shall be referred to herein as an "O&M
Program."  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 each O&M
Program.  Borrower shall pay all costs of performance of Borrower's
obligations under any O&M Program, and Lender's out-of-pocket costs incurred
in connection with the monitoring and review of each O&M Program and
Borrower's performance shall be paid by Borrower upon demand by
Lender.  Any such out-of-pocket costs of Lender that 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 (which written disclosure may be in certain
environmental assessments and other written reports accepted by Lender in
connection with the funding of the Indebtedness and dated prior to the date of
this Instrument):





(i)
            Borrower
      has not at any time engaged in, caused or permitted any Prohibited
      Activities or Conditions on the Mortgaged
  Property;





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


Page
23


(iii)
            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 Mortgaged Property that has been previously disclosed by
      Borrower to Lender in writing, that tank complies with all requirements of
      Hazardous Materials Laws;





(iv)
            to
      the best of Borrower's knowledge after reasonable and diligent inquiry,
      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;





(v)
            to
      the best of Borrower's knowledge after reasonable and diligent inquiry, 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;





(vi)
            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





(vii)
            Borrower
      has not received any written 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.





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





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





(ii)
            Borrower's
      receipt of or knowledge of any written complaint, order, notice of
      violation or other communication from any tenant, management agent,
      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;
      or


Page
24





(iii)
            Borrower's
      breach of any of its obligations under this Section
  18.





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,
a purpose of which is to identify the extent or cause of or potential for a
Prohibited Activity or Condition ("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 Attorneys' Fees and Costs and the costs of
technical consultants whether incurred in connection with any judicial or
administrative process or otherwise) that Borrower fails to pay promptly shall
become an additional part of the Indebtedness as provided in Section
12.  As long as (i) no Event of Default has occurred and is
continuing, (ii) Borrower has actually paid for or reimbursed Lender for all
costs of any such Environmental Inspections performed or required by Lender, and
(iii) Lender is not prohibited by law, contract or otherwise from doing so,
Lender shall make available to Borrower, without representation of any kind,
copies of Environmental Inspections prepared by third parties and delivered to
Lender.  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 or for 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
Environmental Inspections made by or for Lender.  Borrower
acknowledges that Lender cannot control or otherwise assure the truthfulness or
accuracy of the results of any 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 that a party may
bid at such sale.  Borrower agrees that Lender shall have no liability
whatsoever as a result of delivering the results to any third party of any
Environmental Inspections made by or for Lender, 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 Environmental Inspections made by or for Lender.





(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, or is otherwise required by Lender as a consequence of any Prohibited
Activity or Condition or to prevent the occurrence of a Prohibited Activity or
Condition, Borrower shall, by the earlier of (i) the applicable deadline
required by Hazardous Materials Law or (ii) 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.


Page
25


(i)          Borrower
shall comply with all Hazardous Materials Laws applicable to the Mortgaged
Property.  Without limiting the generality of the previous sentence,
Borrower shall (i) obtain and maintain all Environmental Permits required by
Hazardous Materials Laws and comply with all conditions of such Environmental
Permits; (ii) cooperate with any inquiry by any Governmental Authority; and
(iii) comply with any governmental or judicial order that 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 Attorneys'
Fees and Costs and remediation costs, whether incurred in connection with any
judicial or administrative process or otherwise, arising directly or indirectly
from any of the following:





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





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





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





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





(v)
            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.  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.  However, unless an
Event of Default has occurred and is continuing, or the interests of Borrower
and Lender are in conflict, as determined by Lender in its discretion, Lender
shall permit Borrower to undertake the actions referenced in this Section 18 in
accordance with this Section 18(k) and Section 18(l) so long as Lender approves
such action, which approval shall not be unreasonably withheld or
delayed.  Borrower shall reimburse Lender upon demand for all costs
and expenses incurred by Lender, including all costs of settlements entered into
in good faith, consultants' fees and Attorneys' Fees and Costs.


Page
26


(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 (i) 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 (ii) 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:





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





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





(iii)
            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;





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





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





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





(vii)
            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:





(i)
            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;


Page
27





(ii)
            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





(iii)
            reimburse
      Indemnitees for any and all expenses, including Attorneys' Fees and Costs,
      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)         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.  Notwithstanding the
foregoing, if Lender has never been a mortgagee-in-possession of, or held title
to, the Mortgaged Property, Borrower shall have no obligation to indemnify the
Indemnitees under this Section 18 after the date of the release of record of the
lien of this Instrument by payment in full at the Maturity Date or by voluntary
prepayment in full.





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, windstorm and allied perils, general boiler
and machinery coverage, and business interruption including loss of rental value
insurance for the Mortgaged Property with extra expense insurance.  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.  In the event any updated reports or other documentation are
reasonably required by Lender in order to determine whether such additional
insurance is necessary or prudent, Borrower shall pay for all such documentation
at its sole cost and expense.  Borrower acknowledges and agrees that
Lender's insurance requirements may change from time to time throughout the term
of the Indebtedness.  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, Borrower shall insure such
Improvements against loss by flood.  All insurance required pursuant
to this Section 19(a) shall be referred to as "Hazard
Insurance."  All policies of Hazard Insurance must include a
non-contributing, non-reporting mortgagee clause in favor of, and in a form
approved by, Lender.


Page
28





(b)         All
premiums on insurance policies required under this Section 19 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.  Borrower shall deliver to Lender a legible copy
of each insurance policy (or duplicate original) and 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 5 days prior to the expiration date of any insurance policy, Borrower
shall deliver to Lender evidence acceptable to Lender that the policy has been
renewed.  If Borrower has not delivered a legible copy of each renewal
policy (or a duplicate original) prior to the expiration date of any insurance
policy, Borrower shall deliver a legible copy of each renewal policy (or a
duplicate original) in a form satisfactory to Lender within 120 days after the
expiration date of the original policy.





(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.  All policies for general liability insurance must contain a
standard additional insured provision, in favor of, and in a form approved by,
Lender.





(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 Hazard Insurance, to appear in and prosecute any
action arising from such Hazard Insurance policies, to collect and receive the
proceeds of Hazard 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, (i) require a
"repair or replacement" settlement, in which case  the proceeds
will  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 (ii) require
an "actual cash value" settlement in which case  the proceeds may be
applied to the payment of the Indebtedness, whether or not then due. To the
extent Lender determines to require a repair or replacement settlement and apply
insurance proceeds to Restoration, Lender shall apply the proceeds in accordance
with Lender's then-current policies relating to the restoration of casualty
damage on similar multifamily properties.


Page
29





(g)         Notwithstanding
any provision to the contrary in this Section 19, as long as 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,





(i)
            in
      the event of a casualty resulting in damage to the Mortgaged Property
      which will cost $10,000 or less to repair, the Borrower shall have the
      sole right to make proof of loss, adjust and compromise the claim and
      collect and receive any proceeds directly without the approval or prior
      consent of the Lender so long as the insurance proceeds are used solely
      for the Restoration of the Mortgaged Property;
  and





(ii)
            in
      the event of a casualty resulting in damage to the Mortgaged Property
      which will cost more than $10,000 but less than $50,000 to repair, the
      Borrower is authorized to make proof of loss and adjust and compromise the
      claim without the prior consent of Lender, and Lender shall hold the
      applicable insurance proceeds to be used to reimburse Borrower for the
      cost of Restoration of the Mortgaged Property and shall not apply such
      proceeds to the payment of sums due under this
  Instrument.





(h)         Lender
will have the right to exercise its option to apply insurance proceeds to the
payment of the Indebtedness only if Lender determines that at least one of the
following conditions is met:





(i)
            an
      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;





(ii)
            Lender
      determines, in its discretion, that there will not be sufficient funds
      from insurance proceeds, anticipated contributions of Borrower of its own
      funds or other sources acceptable to Lender to complete the
      Restoration;





(iii)
            Lender
      determines, in its discretion, that the rental income from the Mortgaged
      Property after completion of the Restoration will not be sufficient to
      meet all operating costs and other expenses, Imposition Deposits, deposits
      to reserves and loan repayment obligations relating to the Mortgaged
      Property;





(iv)
            Lender
      determines, in its discretion, that the Restoration will not be completed
      at least one year before the Maturity Date (or six months before the
      Maturity Date if Lender determines in its discretion that re-leasing of
      the Mortgaged Property will be completed within such six-month period);
      or





(v)
            Lender
      determines that the Restoration will not be completed within one year
      after the date of the loss or
casualty.


Page
30





(i)          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.





(j)          Unless
Lender otherwise agrees in writing, any application of any insurance 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.





(k)         Borrower
agrees to execute such further evidence of assignment of any insurance proceeds
as Lender may require.





20.        CONDEMNATION.





(a)         Borrower
shall promptly notify Lender in writing of any action or proceeding or notice
relating to any proposed or actual 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, after consultation with Borrower and
consistent with commercially reasonable standards of a prudent
lender.  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 (including Attorneys' Fees and Costs)
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.  [NO RIGHT TO
TRANSFER].





(a)          "Transfer"
means


Page
31





(i)
            a
      sale, assignment, transfer or other disposition (whether voluntary,
      involuntary or by operation of
law);





(ii)
            the
      granting, creating or attachment of a lien, encumbrance or security
      interest (whether voluntary, involuntary or by operation of
      law);





(iii)
            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;





(iv)
            the
      withdrawal, retirement, removal or involuntary resignation of a partner in
      a partnership or a member or manager in a limited liability company;
      or





(v)
            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.





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.





(b)         "Transfer"
does not include





(i)
            a
      conveyance of the Mortgaged Property at a judicial or non-judicial
      foreclosure sale under this
Instrument,





(ii)
            the
      Mortgaged Property becoming part of a bankruptcy estate by operation of
      law under the United States Bankruptcy Code,
or





(iii)
            a
      lien against the Mortgaged Property for local taxes and/or assessments not
      then due and payable.





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





(i)
            a
      Transfer to which Lender has
consented;





(ii)
            a
      Transfer that occurs in accordance with Section
  21(d);





(iii)
            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;


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32


(iv)
            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;





(v)
            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 60 days of the date of creation;
      and





(vi)
            if
      Borrower is a housing cooperative corporation or association, the Transfer
      of more than 49 percent of the shares in the housing cooperative or the
      assignment of more than 49 percent of the occupancy agreements or leases
      relating thereto by tenant shareholders of the housing cooperative or
      association to other tenant
shareholders.





(d)         The
occurrence of any of the following Transfers shall not constitute an Event of
Default under this Instrument, provided that Borrower has notified Lender in
writing within 30 days following the occurrence of any of the following, and
such Transfer does not constitute an Event of Default under any other Section of
this Instrument:





(i)
            a
      change of the Borrower's name, provided that UCC financing statements
      and/or amendments sufficient to continue the perfection of Lender's
      security interest have been properly filed and copies have been delivered
      to Lender;





(ii)
            a
      change of the form of the Borrower not involving a transfer of the
      Borrower's assets and not resulting in any change in liability of any
      Initial Owner, provided that UCC financing statements and/or amendments
      sufficient to continue the perfection of Lender's security interest have
      been properly filed and copies have been delivered to
    Lender;





(iii)
            the
      merger of the Borrower with another entity when the Borrower  is
      the surviving entity;





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





(v)
            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, including
      Attorneys' Fees and Costs, incurred by Lender in connection with reviewing
      Borrower's request.





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


Page
33





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





(ii)
            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 a
      Controlling Interest of all limited partnership interests in
      Borrower;





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





(iv)
            if
      Borrower is a limited liability company, (A) a Transfer of any membership
      interest in Borrower which would cause the Initial Owners to own less than
      a Controlling Interest of all the membership interests in Borrower, (B) a
      Transfer of any membership or other interest of a manager in Borrower that
      results in a change of manager, or (C) a change of a nonmember
      manager;





(v)
            if
      Borrower is a corporation, (A) the Transfer of any voting stock in
      Borrower which would cause the Initial Owners to own less than a
      Controlling Interest 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 percent or more of that
      stock;





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





(vii)
            if
      Borrower is a limited liability partnership, (A) a Transfer of any
      partnership interest in Borrower which would cause  the Initial
      Owners to own less than a Controlling Interest of all partnership
      interests in Borrower, or (B) a transfer of any partnership or other
      interest of a managing partner in Borrower that results in a change of
      manager; and





(viii)
            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(e)(i) through (vii)
  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.


Page
34





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 (i) the application for or creation of the Indebtedness, (ii)
any financial statement, rent schedule, or other report or information provided
to Lender during the term of the Indebtedness, or (iii) any request for Lender's
consent to any proposed action, including a request for disbursement of funds
under any Collateral Agreement;





(e)         any
failure by Borrower to comply with the provisions of Section 20;





(f)          any
Event of Default under Section 21;





(g)         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;





(h)         any
failure by Borrower to perform any of its obligations under this Instrument
(other than those specified in Sections 22(a) through (g)), as and when
required, which continues for a period of 30 days after Notice of such failure
by Lender to Borrower.  However, if Borrower's failure to perform its
obligations as described in this Section 22(h) is of the nature that it cannot
be cured within the 30 day grace period but reasonably could be cured within 90
days, then Borrower shall have additional time as determined by Lender in its
discretion, not to exceed an additional 60 days, in which to cure such default,
provided that Borrower has diligently commenced to cure such default during the
30-day grace period and diligently pursues the cure of such
default.  However, no such Notice or grace periods 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;





(i)          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;


Page
35





(j)          any
exercise by the holder of any other 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;





(k)         any  voluntary
filing by Borrower for bankruptcy protection under the United States Bankruptcy
Code or any reorganization, receivership, insolvency proceeding or other similar
proceeding pursuant to any other federal or state law affecting debtor and
creditor rights to which Borrower voluntarily becomes subject, or the
commencement of any involuntary case 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 which case is not
dismissed or discharged within 90 days after filing; and





(l)          any
representations and warranties by Borrower in this Instrument which is false or
misleading in any material respect.





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 other right or remedy,
or the subsequent 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.


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36


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 or amendments, 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.


Page
37





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 may be litigated in the Property
Jurisdiction.  The state and federal courts and authorities with
jurisdiction in the Property Jurisdiction shall have jurisdiction over all
controversies that 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.  However, nothing
in this Section 30 is intended to limit Lender's right to bring any suit, action
or proceeding relating to matters under this Instrument in any court of any
other jurisdiction.





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 (i) the date when the Notice is
received by the addressee; (ii) 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 (iii) the third Business
Day after the Notice is deposited in the United States mail with postage
prepaid, certified mail, return receipt requested.





(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 that does not specify how
Notices are to be given shall be given in accordance with this Section
31.


Page
38





32.        SALE OF NOTE; CHANGE IN SERVICER;
LOAN SERVICING.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.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 Mortgaged
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.





33.        SINGLE ASSET
BORROWER.Until the Indebtedness is paid in full, Borrower (a)
shall not own 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,
(i) 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,
(ii) Borrower shall not be a third party beneficiary of any Servicing
Arrangement, and (iii) no payment by the Loan Servicer under any Servicing
Arrangement will reduce the amount of the Indebtedness.


Page
39


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; provided, however, that in the event of a Transfer
prohibited by or requiring Lender's approval under Section 21, any or some or
all of the Modifications to Instrument set forth in Exhibit B (if any) may be
modified or rendered void by Lender at Lender's option by Notice to Borrower and
the transferee(s).





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.        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, as well as governmental regulatory agencies having regulatory
authority over Lender.  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.





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





41.        SUBROGATION.If, and to the
extent that, the proceeds of the loan evidenced by the Note, or subsequent
advances under Section 12, are used to pay, satisfy or discharge a Prior Lien,
such loan proceeds or advances 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.





42.        ADJUSTABLE
RATE MORTGAGE - THIRD PARTY CAP AGREEMENT "CAP COLLATERAL."





(a)         If
the Note provides for interest to accrue at an adjustable or variable interest
rate (other than during the "Extension Period," as defined in the Note, if
applicable), then the definition of "Mortgaged Property" shall include the
"Cap
Collateral."  The "Cap Collateral" shall mean


Page
40





(i)
            any
      interest rate cap agreement, interest rate swap agreement, or other
      interest rate-hedging contract or agreement obtained by Borrower as a
      requirement of any Loan Document or as a condition of Lender's making the
      Loan (a "Cap
      Agreement");





(ii)
            any
      and all moneys (collectively, "Cap Payments") payable
      pursuant to any Cap Agreement by the interest rate cap provider or other
      counterparty to a Cap Agreement or any guarantor of the obligations of any
      such cap provider or counterparty (a "Cap
      Provider");




(iii)
            all
      rights of Borrower under any Cap Agreement and all rights of Borrower to
      all Cap Payments, including contract rights and general intangibles,
      whether existing now or arising after the date of this
      Instrument;




(iv)
            all
      rights, liens and security interests or guaranties granted by a Cap
      Provider or any other person to secure or guaranty payment of any Cap
      Payment whether existing now or granted after the date of this
      Instrument;




(v)
            all
      documents, writings, books, files, records and other documents arising
      from or relating to any of the foregoing, whether existing now or created
      after the date of this Instrument;
and





(vi)
              all
      cash and non-cash proceeds and products of (ii) – (v)
    above.





(b)         As
additional security for Borrower's obligation under the Loan Documents, Borrower
hereby assigns and pledges to Lender all of Borrower's right, title and interest
in and to the Cap Collateral.  Borrower has instructed and will
instruct each Cap Provider and any guarantor of a Cap Provider's obligations to
make Cap Payments directly to Lender or to Loan Servicer on behalf of
Lender.





(c)          So
long as there is no Event of Default, Lender or Loan Servicer will remit to
Borrower each Cap Payment received by Lender or Loan Servicer with respect to
any month for which Borrower has paid in full the monthly installment of
principal and interest or interest only, as applicable, due under the
Note.  Alternatively, at Lender's option so long as there is no Event
of Default, Lender may apply a Cap Payment received by Lender or Loan Servicer
with respect to any month to the applicable monthly payment of accrued interest
due under the Note if Borrower has paid in full the remaining portion of such
monthly payment of principal and interest or interest only, as
applicable.


Page
41


(d)         Following
an Event of Default, in addition to any other rights and remedies Lender may
have, Lender may retain any Cap Payments and apply them to the Indebtedness in
such order and amounts as Lender determines.  Neither the existence of
a Cap Agreement nor anything in this Instrument shall relieve Borrower of its
primary obligation to timely pay in full all amounts due under the Note and
otherwise due on account of the Indebtedness.





(e)         If
the Note does not provide for interest to accrue at an adjustable or variable
interest rate (other than during the Extension Period) then this Section 42
shall be of no force or effect.





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 Texas 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.





(a)         If
Lender invokes the power of sale, Lender may, by and through the Trustee, or
otherwise, sell or offer for sale the Mortgaged Property in such portions, order
and parcels as Lender may determine, with or without having first taken
possession of the Mortgaged Property, to the highest bidder for cash at public
auction.  Such sale shall be made at the courthouse door of the county
in which all or any part of the Land to be sold is situated (whether the parts
or parcel, if any, situated in different counties are contiguous or not, and
without the necessity of having any Personalty present at such sale) on the
first Tuesday of any month between the hours of 10:00 a.m. and 4:00 p.m., after
advertising the time, place and terms of sale and that portion of the Mortgaged
Property to be sold by posting or causing to be posted written or printed notice
of sale at least twenty-one (21) days before the date of the sale at the
courthouse door of the county in which the sale is to be made and at the
courthouse door of any other county in which a portion of the Land may be
situated, and by filing such notice with the County Clerk(s) of the county(s) in
which all or a portion of the Land may be situated, which notice may be posted
and filed by the Trustee acting, or by any person acting for the Trustee, and
Lender has, at least twenty-one (21) days before the date of the sale, served
written or printed notice of the proposed sale by certified mail on each debtor
obligated to pay the Indebtedness according to Lender’s records by the deposit
of such notice, enclosed in a postpaid wrapper, properly addressed to such
debtor at debtor’s most recent address as shown by Lender’s records, in a post
office or official depository under the care and custody of the United States
Postal Service.  The affidavit of any person having knowledge of the
facts to the effect that such service was completed shall be prima facie evidence of the
fact of service.





(b)         Trustee
shall deliver to the purchaser at the sale, within a reasonable time after the
sale, a deed conveying the Mortgaged Property so sold in fee simple with
covenants of general warranty.  Borrower covenants and agrees to
defend generally the purchaser’s title to the Mortgaged Property against all
claims and demands.  The recitals in Trustee’s deed shall be prima facie evidence of the
truth of the statements contained in those recitals.  Trustee shall
apply the proceeds of the sale in the following order:  (i) to all
reasonable costs and expenses of the sale, including reasonable Trustee’s fees
not to exceed 5% of the gross sales price, attorneys’ fees and costs of title
evidence; (ii) to the Indebtedness in such order as Lender, in Lender’s
discretion, directs; and (iii) the excess, if any, to the person or persons
legally entitled to the excess.


Page
42


(c)         If
all or any part of the Mortgaged Property is sold pursuant to this Section 43,
Borrower will be divested of any and all interest and claim to the Mortgaged
Property, including any interest or claim to all insurance policies, utility
deposits, bonds, loan commitments and other intangible property included as a
part of the Mortgaged Property.  Additionally, after a sale of all or
any part of the Land, Improvements, Fixtures and Personalty, Borrower will be
considered a tenant at sufferance of the purchaser of the same, and the
purchaser shall be entitled to immediate possession of such
property.  If Borrower shall fail to vacate the Mortgaged Property
immediately, the purchaser may and shall have the right, without further notice
to Borrower, to go into any justice court in any precinct or county in which the
Mortgaged Property is located and file an action in forcible entry and detainer,
which action shall lie against Borrower or its assigns or legal representatives,
as a tenant at sufferance.  This remedy is cumulative of any and all
remedies the purchaser may have under this Instrument or otherwise.





(d)         In
any action for a deficiency after a foreclosure under this Instrument, if any
person against whom recovery is sought requests the court in which the action is
pending to determine the fair market value of the Mortgaged Property, as of the
date of the foreclosure sale, the following shall be the basis of the court’s
determination of fair market value:





(i)
            the
      Mortgaged Property shall be valued “as is” and in its condition as of the
      date of foreclosure, and no assumption of increased value because of
      post-foreclosure repairs, refurbishment, restorations or improvements
      shall be made;





(ii)
            any
      adverse effect on the marketability of title because of the foreclosure or
      because of any other title condition not existing as of the date of this
      Instrument shall be considered;





(iii)
            the
      valuation of the Mortgaged Property shall be based upon an assumption that
      the foreclosure purchaser desires a prompt resale of the Mortgaged
      Property for cash within a six month-period after
    foreclosure;





(iv)
            although
      the Mortgaged Property may be disposed of more quickly by the foreclosure
      purchaser, the gross valuation of the Mortgaged Property as of the date of
      foreclosure shall be discounted for a hypothetical reasonable holding
      period (not to exceed 6 months) at a monthly rate equal to the average
      monthly interest rate on the Note for the twelve months before the date of
      foreclosure;


Page
43


(v)
            the
      gross valuation of the Mortgaged Property as of the date of foreclosure
      shall be further discounted and reduced by reasonable estimated costs of
      disposition, including brokerage commissions, title policy premiums,
      environmental assessment and clean-up costs, tax and assessment,
      prorations, costs to comply with legal requirements and attorneys’
      fees;





(vi)
            expert
      opinion testimony shall be considered only from a licensed appraiser
      certified by the State of Texas and, to the extent permitted under Texas
      law, a member of the Appraisal Institute, having at least five years’
      experience in appraising property similar to the Mortgaged Property in the
      county where the Mortgaged Property is located, and who has conducted and
      prepared a complete written appraisal of the Mortgaged Property taking
      into considerations the factors set forth in this Instrument; no expert
      opinion testimony shall be considered without such written
      appraisal;





(vii)
            evidence
      of comparable sales shall be considered only if also included in the
      expert opinion testimony and written appraisal referred to in subsection
      (vi), above; and





(viii)
            an
      affidavit executed by Lender to the effect that the foreclosure bid
      accepted by Trustee was equal to or greater than the value of the
      Mortgaged Property determined by Lender based upon the factors and methods
      set forth in subsections (i) through (vii) above before the foreclosure
      shall constituteprima
      facie evidence that the foreclosure bid was equal to or greater
      than the fair market value of the Mortgaged Property on the foreclosure
      date.





(e)         Lender
may, at Lender’s option, comply with these provisions in the manner permitted or
required by Title 5, Section 51.002 of the Texas Property Code (relating to the
sale of real estate) or by Chapter 9 of the Texas Business and Commerce Code
(relating to the sale of collateral after default by a debtor), as those titles
and chapters now exist or may be amended or succeeded in the future, or by any
other present or future articles or enactments relating to same
subject.  Unless expressly excluded, the Mortgaged Property shall
include Rents collected before a foreclosure sale, but attributable to the
period following the foreclosure sale, and Borrower shall pay such Rents to the
purchaser at such sale.  At any such sale:





(i)
            whether
      made under the power contained in this Instrument, Section 51.002 of the
      Texas Property Code, Chapter 9 of the Texas Business and Commerce Code,
      any other legal requirement or by virtue of any judicial proceedings or
      any other legal right, remedy or recourse, it shall not be necessary for
      Trustee to have physically present, or to have constructive possession of,
      the Mortgaged Property (Borrower shall deliver to Trustee any portion of
      the Mortgaged Property not actually or constructively possessed by Trustee
      immediately upon demand by Trustee) and the title to and right of
      possession of any such property shall pass to the purchaser as completely
      as if the property had been actually present and delivered to the
      purchaser at the sale;


Page
44





(ii)
            each
      instrument of conveyance executed by Trustee shall contain a general
      warranty of title, binding upon
Borrower;





(iii)
            the
      recitals contained in any instrument of conveyance made by Trustee shall
      conclusively establish the truth and accuracy of the matters recited in
      the Instrument, including nonpayment of the Indebtedness and the
      advertisement and conduct of the sale in the manner provided in this
      Instrument and otherwise by law and the appointment of any successor
      Trustee;





(iv)
            all
      prerequisites to the validity of the sale shall be conclusively presumed
      to have been satisfied;





(v)
            the
      receipt of Trustee or of such other party or officer making the sale shall
      be sufficient to discharge to the purchaser or purchasers for such
      purchaser(s)’ purchase money, and no such purchaser or purchasers, or such
      purchaser(s)’ assigns or personal representatives, shall thereafter be
      obligated to see to the application of such purchase money or be in any
      way answerable for any loss, misapplication or nonapplication of such
      purchase money;





(vi)
            to
      the fullest extent permitted by law, Borrower shall be completely and
      irrevocably divested of all of Borrower’s right, title, interest, claim
      and demand whatsoever, either at law or in equity, in and to the property
      sold, and such sale shall be a perpetual bar to any claim to all or any
      part of the property sold, both at law and in equity, against Borrower and
      against any person claiming by, through or under Borrower;
    and





(vii)
            to
      the extent and under such circumstances as are permitted by law, Lender
      may be a purchaser at any such
sale.





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





45.       
  TRUSTEE.





(a)         
 Trustee may resign by giving of notice of such resignation in writing to
Lender.  If Trustee shall die, resign or become disqualified from acting
under this Instrument or shall fail or refuse to act in accordance with this
Instrument when requested by Lender or if for any reason and without cause
Lender shall prefer to appoint a substitute trustee to act instead of the
original Trustee named in this Instrument or any prior successor or substitute
trustee, Lender shall have full power to appoint a substitute trustee and, if
preferred, several substitute trustees in succession who shall succeed to all
the estate, rights, powers and duties of the original Trustee named in this
Instrument.  Such appointment may be executed by an authorized officer,
agent or attorney-in-fact of Lender (whether acting pursuant to a power of
attorney or otherwise), and such appointment shall be conclusively presumed to
be executed with authority and shall be valid and sufficient without proof of
any action by Lender.


Page
45





(b)         
 Any successor Trustee appointed pursuant to this Section shall, without
any further act, deed or conveyance, become vested with all the estates,
properties, rights, powers and trusts of the predecessor Trustee with like
effect as if originally named as Trustee in this Instrument; but, nevertheless,
upon the written request of Lender or such successor Trustee, the Trustee
ceasing to act shall execute and deliver an instrument transferring to such
successor Trustee, all the estates, properties, rights, powers and trusts of the
Trustee so ceasing to act, and shall duly assign, transfer and deliver any of
the property and monies held by the Trustee ceasing to act to the successor
Trustee.





(c)         
 Trustee may authorize one or more parties to act on Trustee’s behalf to
perform the ministerial functions required of Trustee under this Instrument,
including the transmittal and posting of any notices.





46.       
  VENDOR’S LIEN; RENEWAL
AND EXTENSION.  The Note is in renewal and extension, but not in
extinguishment, of the following indebtedness: __________________.





47.       
  NO FIDUCIARY DUTY.Lender owes no fiduciary or other special duty to Borrower.





48.       
  FIXTURE FILING.This Instrument is also a fixture filing under the Uniform Commercial
Code of Texas.





49.       
  ADDITIONAL PROVISIONS
REGARDING ASSIGNMENT OF RENTS. Section 3 shall not be construed to
require a pro tanto or
other reduction of the Indebtedness resulting from the assignment of
Rents.  If the provisions of Section 3 and the preceding sentence cause the
assignment of Rents in Section 3 to be deemed to be an assignment for additional
security only, Lender shall be entitled to all rights, benefits and remedies
attendant to such collateral assignment.  The assignment of Rents contained
in Section 3 shall terminate upon the release of this
Instrument.


Page
46


50.       
  LOAN
CHARGES.  Borrower and Lender intend at all times to comply with the
laws of the State of Texas governing the maximum rate or amount of interest
payable on or in connection with the Indebtedness (or applicable United States
federal law to the extent that it permits Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under Texas law).  If
the applicable law is ever judicially interpreted so as to render usurious any
amount payable under the Note, this Instrument or any other Loan Document, or
contracted for, charged, taken, reserved or received with respect to the
Indebtedness, or if acceleration of the maturity of the Indebtedness, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by any applicable law, then Borrower and Lender expressly intend
that all excess amounts collected by Lender shall be applied to reduce the
unpaid principal balance of the Indebtedness (or, if the Indebtedness has been
or would thereby be paid in full, shall be refunded to Borrower), and the
provisions of the Note, this Instrument and the other Loan Documents immediately
shall be deemed reformed and the amounts thereafter collectible under the Loan
Documents reduced, without the necessity of the execution of any new documents,
so as to comply with any applicable law, but so as to permit the recovery of the
fullest amount otherwise payable under the Loan Documents.  The right to
accelerate the maturity of the Indebtedness does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and Lender does not intend to collect any unearned interest in the
event of acceleration.  All sums paid or agreed to be paid to Lender for
the use, forbearance or detention of the Indebtedness shall, to the extent
permitted by any applicable law, be amortized, prorated, allocated and spread
throughout the full term of the Indebtedness until payment in full so that the
rate or amount of interest on account of the Indebtedness does not exceed the
applicable usury ceiling.  Notwithstanding any provision contained in the
Note, this Instrument or any other Loan Document that permits the compounding of
interest, including any provision by which any accrued interest is added to the
principal amount of the Indebtedness, the total amount of interest that Borrower
is obligated to pay and Lender is entitled to receive with respect to the
Indebtedness shall not exceed the amount calculated on a simple (i.e., noncompounded)
interest basis at the maximum rate on principal amounts actually advanced to or
for the account of Borrower, including all current and prior advances and any
advances made pursuant to the Instrument or any other Loan Document (such as for
the payment of Impositions and similar expenses or costs).





51.       
  ENTIRE
AGREEMENT.  THIS
INSTRUMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.





52.         
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.


Page
47





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





x
                  
                  Exhibit
      A
                  
                  Description
      of the Land (required).x
                  
                  Exhibit
      B
                  
                  Modifications
      to Instrument (Seniors Housing)x
                  
                  Exhibit
      C
                  
                  Contractsx
                  
                  Exhibit
      D
                  
                  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.




CARUTH HAVEN L.P., a
      Delaware limited partnershipBy:
                  CARUTH
      HAVEN GP, LLC, a Delaware limited liability company,Its:
                  Sole
      General PartnerBy:
                  CGI
      Healthcare Operating Partnership, L.P., a Delaware limited
      partnershipIts:
                  Sole
      MemberBy:
                  Cornerstone
      Growth & Income Operating Partnership, L.P., a Delaware limited
      PartnershipIts:
                  Sole
      General PartnerBy:
                  Cornerstone
      Growth & Income REIT, Inc., a Maryland corporationIts:
                  Sole
      General Partner
 By:
              /s/
      Terry G. RousselName:
              Terry
      G. RousselTitle:
              President


STATE OF __________
                  
                  ))
      ssCOUNTY OF ________
                  
                  )




This
instrument was acknowledged before me on December ___, 2009, by _________________________,
_____________ of Caruth Haven GP, LLC, a Delaware limited liability company, the
General Partner of CARUTH HAVEN L.P., a Delaware limited partnership, on behalf
of said limited partnership.




Notary
      PublicPrinted Name:





My Commission Expires:




Page
48


EXHIBIT
A





[DESCRIPTION
OF THE LAND]





Tract 1 - FEE SIMPLE TRACT





Being a tract or parcel of land situated in the City of
Dallas, Dallas County, Texas, and being all of Lot 4, Block P/5450 of
Lincolnshire Addition, an addition to the City of Dallas, according to the plat
recorded in Volume 97182, Page 4718, Map Records, Dallas County, Texas, and
being more particularly described as follows:





BEGINNING at a 1/2" iron rod with yellow plastic cap
stamped "RLG" set for corner at the intersection of the Northeasterly line of
Caruth Haven Lane (variable width R.O.W.) with the West line of North Central
Expressway (variable width R.O.W.), being North 26 degrees 42 minutes 20 seconds
East a distance of 66.36 feet from the Northeast corner of a tract of land
conveyed to George P. Caruth by deed recorded in Volume 79140, Page 3698, Deed
Records, Dallas County, Texas;





THENCE with the Northeasterly line of Caruth Haven Lane
as follows:





South 58 degrees 35 minutes 23 seconds West a distance
of 16.98 feet to a 1/2" iron rod with yellow plastic cap stamped "RLG" set for
corner;





North 89 degrees 31 minutes 33 seconds West a distance
of 19.85 feet to a 1/2" iron rod with yellow plastic cap stamped "RLG" set for
corner, being the beginning of a curve to the right;





Northwesterly with said curve to the right whose chord
bears North 85 degrees 28 minutes 54 seconds West a distance of 75.67 feet,
having a central angle of 08 degrees 05 minutes 18 seconds, a radius of 536.50
feet, and an arc length of 75.74 feet to a 1/2" iron rod with yellow plastic cap
stamped "RLG" set for corner, being the beginning of a curve to the
left;





Northwesterly with said curve to the left whose chord
bears North 84 degrees 45 minutes 57 seconds West a distance of 36.05 feet,
having a central angle of 06 degrees 39 minutes 23 seconds, a radius of 310.50
feet, and an arc length of 36.07 feet to a 1/2" iron rod with yellow plastic cap
stamped "RLG" set for corner, being the beginning of a curve to the
right;





Northwesterly with said curve to the right whose chord
bears North 77 degrees 01 minute 24 seconds West a distance of 111.18 feet,
having a central angle of 22 degrees 08 minutes 27 seconds, a radius of 289.50
feet, and an arc length of 111.87 feet to a 1/2" iron rod with yellow plastic
cap stamped "RLG" set for corner, being the beginning of a curve to the
right;





Northwesterly with said curve to the right whose chord
bears North 63 degrees 23 minutes 33 seconds West a distance of 49.14 feet,
having a central angle of 05 degrees 07 minutes 15 seconds, a radius of 550.00
feet, and an arc length of 49.16 feet to a chisel mark set for corner, being the
southerly common corner between said Lot 4 and Lot 5, Block P/5450 of said
Lincolnshire Addition.





THENCE with the common line between said Lot 4 and said
Lot 5 as follows: North 11 degrees 45 minutes 52 seconds West a distance of
19.96 feet to a chisel mark set for corner;





Page
A-1




THENCE North 36 degrees 31 minutes 19 seconds East a
distance of 13.56 feet to a chisel mark set for corner, being the beginning of a
curve to the left;




THENCE in a Northeasterly direction with said curve to
the left whose chord bears North 17 degrees 52 minutes 07 seconds East a
distance of 93.07 feet, having a central angle of 37 degrees 18 minutes 24
seconds, a radius of 145.50 feet, and an arc length of 94.74 feet to a 1/2" iron
rod with yellow plastic cap stamped "RLG" set for corner;





THENCE North 00 degrees 47 minutes 05 seconds West a
distance of 69.74 feet to a 1/2" iron rod with yellow plastic cap stamped "RLG"
set for corner;





THENCE North 04 degrees 34 minutes 41 seconds West a
distance of 106.19 feet to a chisel mark set for corner;





THENCE North 89 degrees 12 minutes 55 seconds East a
distance of 281.01 feet to an aluminum monument found for corner in the West
line of said North Central Expressway;





THENCE South 01 degree 01 minute 52 seconds East with
the West line of said North Central Expressway a distance of 24.27 feet to a
1/2" iron rod with yellow plastic cap stamped "RLG" set for
corner;





THENCE South 01 degree 01 minute 57 seconds East with
the West line of said North Central Expressway a distance of 298.00 feet to a
1/2" iron rod with yellow plastic cap stamped "RLG" set for
corner;





THENCE South 26 degrees 42 minutes 20 seconds West with
the West line of said North Central Expressway a distance of 26.61 feet to the
POINT OF BEGINNING and containing 96,492 square feet or 2.2151 acres of land,
more or less.





Said 2.2152 acre tract is more particularly described on
the survey of The Matthews Company, Inc., certified to by Robert W. Schneeberg,
R.P.L.S. #4804, dated 10/27/09, last revised __/__/2009, and as
follows:





Tract 1 – Fee Simple





Description of a 2.2152 acre tract of land situated in
the Absalom Brandenburg Survey, Abstract No. 77, City of Dallas, Dallas County,
Texas and being all of Lot 4, Block P/5450, Lincolnshire Addition, an addition
to the City of Dallas, Texas according to the plat thereof recorded in Volume
97182, Page 4718, Map Records, Dallas County, Texas; said 2.2152 acre tract
being more particularly described by metes and bounds as
follows:





BEGINNING, at the intersection of the northeasterly line
of Caruth Haven Lane (variable width right-of-way) with the west line of U. S.
Highway 75 (North Central Expressway, variable width right-of-way) a disturbed
1/2-inch iron rod with illegible yellow plastic cap bears South 03 degrees 48
minutes 54 seconds East, 0.69 feet;





THENCE, with the said northeasterly line of Caruth Haven
Lane as follows:





South 58 degrees 35 minutes 23 seconds West, a distance
of 16.98 feet to a 1/2-inch iron rod with yellow plastic cap stamped "RLG" found
for corner;




North 89 degrees 31 minutes 33 seconds West, a distance
of 19.85 feet to a 1/2-inch iron rod with yellow plastic cap stamped "RLG" found
at the beginning of a curve to the right having a radius of 536.50
feet;


Page
A-2





northwesterly, with said curve to the right through a
central angle of 08 degrees 05 minutes 18 seconds, an arc distance of 75.74 feet
(chord bears North 85 degrees 28 minutes 54 seconds West, 75.67 feet) to the
beginning of a reverse curve to the left having a radius of 310.50 feet, a
leaning 1/2-inch iron rod found bears North 04 degrees 35 minutes 54 seconds
East, 0.50 feet;





northwesterly, with said curve to the left through a
central angle of 06 degrees 39 minutes 23 seconds, an distance of 36.07 feet
(chord bears North 84 degrees 45 minutes 57 seconds West, 36.05 feet) to a
1/2-inch iron rod with red plastic cap stamped "RLG" found at the beginning of a
reverse curve to the right having a central angle of 289.50
feet;





northwesterly, with said curve to the right through a
central angle of 22 degrees 08 minutes 27 seconds, an arc distance of 111.87
feet (chord bears North 77 degrees 01 minutes 25 seconds West, 111.18 feet) to
the beginning of a continuous curve to the right, a horizontal 1/2-inch iron rod
found bears South 45 degrees 32 minutes 38 seconds East, 0.63
feet;





northwesterly, with said curve to the right having a
central angle of 05 degrees 07 minutes 15 seconds, an arc distance of 49.16 feet
(chord bears North 63 degrees 23 minutes 33 seconds West, 49.14 feet) to a "+"
cut in concrete found at the southwest corner of said Lot 4, Block P/5450; said
point also being the western most southeast corner of Lot 5, Block P/5450 of
said Lincolnshire Addition;





THENCE, with the common line of said Lot 4 and Lot 5,
Block P/5450 the following metes and bounds:





North 11 degrees 45 minutes 52 seconds West, a distance
of 19.96 feet to a "+" cut in concrete found for corner;





North 36 degrees 31 minutes 19 seconds East, a distance
of 13.56 feet to a "+" cut in concrete found at the beginning of a curve to the
left having a radius of 145.50 feet;





northeasterly, with said curve to the left through a
central angle of 37 degrees 27 minutes 52 seconds, an arc distance of 95.14 feet
(chord bears North 17 degrees 47 minutes 23 seconds East, 93.45 feet) (plat
calls a central angle of 37 degrees 18 minutes 24 seconds, a radius of 145.50
feet, and an arc distance of 94.74 feet, chord bearing North 17 degrees 52
minutes 07 seconds East, 93.07 feet) to a 1/2-inch iron rod with yellow plastic
cap stamped "RLG" found at the end of said curve;





North 00 degrees 47 minutes 05 seconds West, a distance
of 69.34 feet (plat calls 69.74 feet) to a 5/8-inch iron rod with yellow plastic
cap stamped "GSES, INC., RPLS 4804" found for corner;





North 04 degrees 34 minutes 41 seconds West, a distance
of 106.19 feet to a "+" cut in concrete found at the northwest corner of said
Lot 4, Block P/5450; said point also being an interior corner of said Lot 5,
Block P/5450;





North 89 degrees 12 minutes 55 seconds East, a distance
of 281.01 feet to the northeast corner of said Lot 4, Block P/5450; said point
also being the easternmost southeast corner of said Lot 5, Block P/5450; said
point also being on the said west right-of-way line of said U. S. Highway 75, a
5/8-inch iron rod found bears North 27 degrees 50 minutes 56 seconds West, 0.33
feet;





THENCE, with the said west right-of-way line of U. S.
Highway 75, the following metes and bounds;


Page
A-3





South 01 degree 01 minute 52 seconds East, a distance of
24.27 feet to a 1/2-inch iron rod with yellow plastic cap stamped "RLG" found
for corner (TXDOT Monument found bears South 68 degrees 16 minutes 37 seconds
East, 0.26 feet);





South 01 degree 01 minute 57 seconds East, a distance of
298.00 feet to a 5/8-inch iron rod with yellow plastic cap stamped "GSES, INC.,
RPLS 4804" found for corner;





South 26 degrees 42 minutes 20 seconds West, a distance
of 26.61 feet to the POINT OF BEGINNING;





CONTAINING 96,493 square feet or 2.2152 acres of land,
more or less.




Tract 2 - Easement Tract





Non-exclusive easement rights as set forth in Volume
97186, Page 4996, Real Property Records of Dallas County,
Texas.





Tract 3 - Easement Tract





Private Drive created by instrument recorded in Volume
97186, Page 4996, Real Property Records of Dallas County,
Texas.





Tract 4 - Easement Tract





Driveway Easement created by instrument recorded in
Volume 97207, Page 1290, Real Property Records, Dallas County, Texas, said
easement more particularly described in the instrument and incorporated herein
by reference.


Page
A-4


EXHIBIT
B





SENIORS
HOUSING RIDER





(Revision
Date 01-19-2007)





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





The
following new Sections are added to this Instrument:





53. 
         SENIOR HOUSING.





(a)
            Additions to Definitions.The following terms, when used in this Instrument, shall have the
      following meanings or shall add to the definitions in the main body of
      this Instrument, as applicable:





(1)
            “Activities
      of Daily Living” shall mean personal care services that provide the frail
      elderly with assistance in eating, dressing, bathing, incontinence care
      and assistance in moving from one place to another (such as from a bed to
      a wheelchair).





(2)
            “Assisted
      Living Residences” shall mean residences that are designed to accommodate
      and provide 24-hour protective oversight and assistance for individuals
      with functional limitations, including meals in a central location and
      assistance with Activities of Daily
Living.





(3)
            “Continuing
      Care Retirement Community” (“CCRC”) shall mean a property designed to
      provide a continuum of care within a single community. The living
      accommodations and care provided within a CCRC are a combination of the
      accommodations and services provided by Seniors Apartments, Independent
      Living Units, Assisted Living Residences and Skilled Nursing
      Beds.





(4)
            “Contract”
      shall mean any contract for the provision of goods or services in
      connection with the operation or management of the Mortgaged Property
      (other than residential care agreements or residential lease
      contracts).





(5)
            “Governmental
      Authority” shall also include all applicable licensing or accreditation
      bodies or agencies (whether federal, state, county, district, municipal,
      city or otherwise, whether now or hereafter in existence) that have or
      acquire jurisdiction over the Mortgaged Property or the use, operation or
      improvement of the Mortgaged
Property.


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(6)
            “Hazardous
      Materials” shall also include any medical products or devices, including,
      those materials defined as “medical waste” or “biological waste” under
      relevant statutes, ordinances or regulations pertaining to Hazardous
      Materials Law.





(7)
            “HIPAA”
      shall mean the Health Insurance Portability and Accountability Act of
      1996, as amended.





(8)
            “Independent
      Living Units” shall mean residential units that are accompanied by
      optional services designed to aid the residents’ independence, including,
      but not limited to, building security, optional meals, housekeeping,
      laundry, and at least some incidental services and activities not related
      to personal care, such as valet shopping, financial planning, unscheduled
      transportation, beautician services, recreational and social activities
      and 24-hour staff presence.





(9)
            “Lease”
      shall also include any occupancy agreements pertaining to occupants of the
      Mortgaged Property, including both residential and commercial agreements
      and patient admission or resident care
  agreements.





(10)
            “License”
      shall mean any license, permit, certificate, approval, certificate of need
      or authorization, governmental or otherwise, necessary to use, occupy or
      operate the Mortgaged Property.





(11)
            “Material
      Contract” shall mean Contracts:





(A)
            for
      preparing or serving food (but do not include food supply
      Contracts);


(B)
            for
      medical services or healthcare provider
  agreements;


(C)
            the
      average annual consideration of which, directly or indirectly, is at least
      $20,000;
or


(D)
            determined
      by Lender to be material to the operation of the Mortgaged
      Property.





(12)
            “Mortgaged
      Property” shall also include all of the
  following:





(A)
            All
      payments received from any sources, including entrance fees, application
      fees, processing fees, community fees and any other amounts or fees
      deposited by any resident or tenant, payment of second party charges added
      to base rental income, base and additional meal sales, payments received
      from commercial operations located on the Mortgaged Property or provided
      as a service to the occupants of the Mortgaged Property, rental from guest
      suites, seasonal lease charges, rental payments under furniture leases,
      income from laundry service, and income and fees from any and all other
      services provided to residents;


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(B)
            All
      rights to payments from Medicare, Medicaid or TRICARE programs or similar
      federal, state or local programs or agencies and rights to payment from
      private insurers, arising from the operation of the Mortgaged
      Property;





(C)
            All
      Licenses, approvals, permits, accreditations, determinations of need,
      certificates of need and other
certificates;





(D)
            All
      Contracts, operating contracts, franchises, license agreements, healthcare
      services contracts, food service contracts and other contracts for
      services related to the operation of the Mortgaged Property;
      and





(E)
            All
      utility deposits.





(13)
            “Privacy
      Laws” shall mean federal, state and local laws and regulations applicable
      to resident and tenant privacy.  Privacy Laws include, but are not
      limited to, HIPAA.





(14)
            “Seniors
      Apartments” shall mean age-restricted apartments for senior residents who
      are able to function independently.  These residences are typically
      restricted to residents 55 and older (or 62 and older).  Seniors
      Apartments do not provide healthcare services, medication assistance, meal
      services or other third-party contract
services.





(15)
            “Skilled
      Nursing Beds” shall mean a portion of a property that provides licensed
      skilled nursing care and related services for patients who require
      medical, nursing or rehabilitative
services.





(b)
            Intended Use.The
      residential units in the Mortgaged Property will be allocated as follows
      (the “Intended Use”):




1.
                                Independent
      Living Units
                                
                                0%2.
                                Assisted
      Living Residences
                                
                                100%3.
                                Skilled
      Nursing Beds
                                
                                0%4.
                                Continuing
      Care Retirement Community with the following percentages of use:a.
                                Seniors
      Apartments
                                
                                0%b.
                                Independent
      Living Units
                                
                                0%c.
                                Assisted
      Living Residences
                                
                                100%d.
                                Skilled
      Nursing Beds
                                
                                0%





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(c)
            Additional
      Covenants.  In addition to those covenants contained in this
      Instrument, Borrower covenants to Lender as
  follows:





(1)
            Borrower
      shall, or shall cause any operator of the Mortgaged Property to, operate
      the Mortgaged Property for its Intended Use and shall, or shall cause any
      operator of the Mortgaged Property to, provide, to Lender’s reasonable
      satisfaction, all of the facilities, services, staff, equipment and
      supplies required or normally associated with a typical high quality
      property devoted to the Intended
Use.





(2)
            Borrower
      shall, or shall cause any operator of the Mortgaged Property to, operate
      the Mortgaged Property in a manner such that all applicable Licenses will
      remain in full force and effect.  Borrower shall not, and shall not
      allow any operator or management agent to, (A) transfer any License to any
      location other than the Mortgaged Property, (B) pledge any License as
      collateral security for any other loan or indebtedness; or (C) terminate
      or modify any License if doing so would have a material effect on the
      Mortgaged Property.





(3)
            Borrower
      shall furnish to Lender, within ten (10) days after receipt by Borrower,
      any operator of the Mortgaged Property, or any management agent for the
      Mortgaged Property, any and all notices from any Governmental Authority
      that (A) any License is being downgraded to a substandard category,
      revoked, or suspended, or that action is pending or being considered to
      downgrade any such License, (B) any violation, fine, finding,
      investigation or corrective action concerning any License is pending or
      being considered or (C) any health or safety code violation or other
      deficiency at the Mortgaged Property has been
  identified.





(4)
            Borrower
      shall furnish to Lender, within ten (10) days after receipt by Borrower,
      any operator of the Mortgaged Property, or any management agent for the
      Mortgaged Property, a copy of any survey, report or statement of
      deficiencies by any Governmental Authority.  Within the time period
      specified by the Governmental Authority for furnishing a plan of
      correction, the Borrower shall furnish or shall cause to be furnished to
      Lender a copy of the plan of correction.  Borrower shall correct or
      shall cause to be corrected any deficiency the curing of which is a
      condition of continued licensure, certification or operation by the date
      required for cure by the Governmental
Authority.


Page
B-4





(5)
            Upon
      Lender’s request and subject to Privacy Laws, Borrower shall furnish to
      Lender true and correct copies of all Contracts and all occupancy
      agreements, admission agreements and resident care
    agreements.





(6)
            Without
      the prior written consent of Lender, which may be granted or withheld in
      Lender’s discretion, Borrower shall not, and shall not permit any operator
      of the Mortgaged Property or any management agent for the Mortgaged
      Property to, provide or contract for skilled nursing care for any of the
      residents other than that level of care which both (A) is consistent with
      the Intended Use and (B) is permissible for Borrower to provide under
      state or local statutes, regulations, ordinances, orders or
      standards.





(7)
            Borrower shall not, and shall not permit any
      operator of the Mortgaged Property or any management agent for the
      Mortgaged Property to, enter into any Material Contract, unless that
      Material Contract provides that it is terminable upon not more than 30
      days notice without the necessity of establishing cause and without
      payment of a penalty or termination fee by Borrower or its
      successors.





(8)
            Borrower
      shall not, and shall not allow any operator of the Mortgaged Property or
      any management agent for the Mortgaged Property to, pledge any receivables
      as collateral security for any other loan or
  indebtedness.





(9)
            Borrower
      shall fully perform all of its obligations under each Contract, and
      Borrower shall not amend, modify, assign or otherwise encumber its
      interest in any Material Contract without the prior written approval of
      Lender.  If Borrower enters into any Material Contract in the future,
      it shall, simultaneously with entering into the Material Contract, (A)
      assign its rights under and interest in the Material Contract to Lender as
      additional security for the Indebtedness and (B) obtain and provide to
      Lender a consent to that assignment by the other party(ies) to the
      Material Contract.  If in the future any operator of the Mortgaged
      Property enters into a Material Contract, Borrower shall cause the
      operator to (i) assign its rights under and interest in the Material
      Contract to Lender as additional security for the Indebtedness and (ii)
      obtain and provide to Lender a consent to that assignment by the other
      party(ies) to the Material Contract.  In either case, both the
      assignment and the consent shall be in a form acceptable to Lender in its
      discretion.


Page
B-5





(10)
            Borrower
      shall provide Lender with a copy of any License issued in the future by a
      Governmental Authority within thirty (30) days after its issuance or
      renewal.  To the extent that any such License is assignable, Borrower
      shall assign it to Lender as additional security for the Indebtedness,
      using a form of assignment acceptable to Lender in its discretion. 
      If any License is issued to an operator of the Mortgaged Property or
      management agent for the Mortgaged Property, to the extent such License is
      assignable, Borrower shall cause such operator or management agent to
      assign the License to Lender as additional security for the Indebtedness,
      using a form of assignment acceptable to Lender in its
      discretion.





(11)
            Subject
      to Privacy Laws, Borrower will furnish and will cause any management agent
      for the Mortgaged Property or any operator of the Mortgaged Property to
      furnish to Lender at Borrower’s expense all evidence, which Lender may
      from time to time reasonably request as to the accuracy and validity of or
      compliance with all representations and warranties made by Borrower in the
      Loan Documents and satisfaction of all conditions contained
      therein.





(d)
            Additional Representations and
      Warranties.  In addition to those representations and
      warranties contained in this Instrument, Borrower represents and warrants
      to Lender as follows:





(1)
            Borrower
      has obtained or has caused any operator of the Mortgaged Property to
      obtain all Licenses necessary to use, occupy or operate the Mortgaged
      Property for its Intended Use (such Licenses being in its own name or in
      the name of the operator of the Mortgaged Property or the management agent
      for the Mortgaged Property, if any, and in any event in the names of the
      persons and entities required by the applicable Governmental Authorities),
      and all such Licenses are in full force and effect.  Borrower has
      provided Lender with complete and accurate copies of all Licenses. 
      The Intended Use of the Mortgaged Property is in conformity with all
      certificates of occupancy and Licenses and any other restrictions or
      covenants affecting the Mortgaged Property.  The Mortgaged Property
      contains all equipment, staff and supplies necessary to use and operate
      the Mortgaged Property for its Intended
Use.




Page
B-6


(2)
            Borrower
      and the Mortgaged Property (and its operation) are in compliance with the
      applicable provisions of all laws, regulations, ordinances, orders or
      standards of any Governmental Authority having jurisdiction over the
      operation of the Mortgaged Property, including:  (A) health care and
      fire safety codes; (B) laws regulating the preparation and serving of
      food; (C) laws regulating the handling and disposal of medical or
      biological waste; (D) the applicable provisions of all laws, rules,
      regulations and published interpretations of them to which the Borrower or
      the Mortgaged Property is subject by virtue of its Intended Use; and (E)
      all criteria established to classify the Mortgaged Property as housing for
      older persons under the Fair Housing Amendments Act of
    1988.





(3)
            Borrower
      and the Mortgaged Property are not subject to any proceeding, suit or
      investigation by any Governmental Authority and neither Borrower, any
      operator of the Mortgaged Property nor any management agent for the
      Mortgaged Property has received any notice from any Governmental Authority
      which may result in the imposition of a fine or interim or final sanction
      or would (i) have a material adverse effect on Borrower or the operation
      of the Mortgaged Property, (ii) result in the appointment of a receiver,
      (iii) affect Borrower’s or any operator of the Mortgaged Property’s
      ability to accept and retain residents, or (iv) result in the revocation,
      transfer, surrender, suspension or other impairment of any
      License.





(4)
            Neither
      the execution and delivery of the Note, this Instrument or any other Loan
      Document, Borrower’s performance under the Loan Documents, the recordation
      of this Instrument, nor the exercise of any remedies by Lender, will
      adversely affect the Licenses.





(5)
            Borrower
      is not a participant in any federal program under which any Governmental
      Authority may have the right to recover funds by reason of the advance of
      federal funds.





(6)
            Borrower
      has received no notice of, and is not aware of, any violation of
      applicable antitrust laws.





(7)
            If
      any existing management agreement or operating lease is terminated or
      Lender acquires the Mortgaged Property through foreclosure or otherwise,
      none of the Borrower, Lender, any subsequent operator or management agent,
      or any subsequent purchaser (through foreclosure or otherwise) must obtain
      a certificate of need from any Governmental Authority (other than giving
      of any notice required under the applicable state law or regulation) prior
      to applying for any License, so long as neither the type of service nor
      any unit compliment is changed.


Page
B-7





(8)
            Exhibit C
      attached to this Instrument lists all Material Contracts now in
      effect.





(9)
            With
      regard to each Material Contract listed in Exhibit
      C:  (i) the Material Contract is assignable without the
      consent of the other party thereto or Borrower and any operator of the
      Mortgaged Property has obtained express written consent to the assignment
      from the other party thereto; (ii) no previous assignment of Borrower’s or
      any operator of the Mortgaged Property’s interest in the Material Contract
      has been made; (iii) the Material Contract is in full force and effect in
      accordance with its respective terms; and (iv) there is no default under
      the Material Contract.





(10)
            Each
      Material Contract listed in Exhibit C
      provides that it is terminable upon not more than 30 days notice without
      the necessity of establishing cause and without payment of a penalty or
      termination fee by Borrower or its
successors.





(11)
            Except
      for termination statements and continuation statements, during the 45-day
      period prior to the date of this Instrument, there have been no UCC
      financing statements filed with respect to any of the UCC Collateral
      listing as debtor the Borrower, any operator of the Mortgaged Property,
      any management agent for the Mortgaged Property or the Mortgaged
      Property’s common name.





(e)
            Additional Events of
      Default.  In addition to the Events of Default listed in
      Section 22 of this Instrument, each of the following shall also constitute
      an Event of Default:





(1)
            Borrower’s
      or any operator of the Mortgaged Property’s failure within the time
      deadlines set by any Governmental Authority to correct any deficiency that
      may cause any action by such agency with respect to the Mortgaged Property
      to have a material adverse affect on the income or operation of the
      Mortgaged Property or on Borrower’s or any operator of the Mortgaged
      Property’s interest in the Mortgaged Property, including a termination,
      revocation or suspension of any applicable License, or a ban on new
      resident admissions.





(2)
            A
      default under any of the Material Contracts by Borrower, by any operator
      of the Mortgaged Property, or by any management agent for the Mortgaged
      Property, which continues beyond the expiration of any applicable cure
      period.




Page
B-8


(3)
            Any
      representation or warranty made by Borrower in this Instrument or any
      other Loan Document was false or misleading in any material respect when
      made.





(4)
            The
      Mortgaged Property is no longer classified as housing for older persons
      pursuant to the Fair Housing Amendments Act of
  1988.





(5)
            Borrower shall fail to comply with the terms and
      provisions of or shall commit a default under that certain Declaration of
      Covenants, Conditions, Restrictions and Reciprocal Easements dated
      effective as of March 31, 1997 filed of record against the Mortgaged
      Property on September 24, 1997 in the real property records of Dallas
      County, Texas in Volume 97186, Page 4996, as amended from time to
      time.





(f)
            Environmental
      Hazards.  In addition to the activities and conditions listed
      in Section 18(b), “Prohibited Activities or Conditions” shall not include
      the presence at the Mortgaged Property of medical products or devices or
      medical waste, so long as all of the foregoing are used, stored, handled,
      transported and disposed of in compliance with Hazardous Materials
      Laws.





(g)
            Financial Reporting [Assisted
      Living or Skilled Nursing Version].Section 14(b) is deleted
      and replaced with the following:





Within
120 days after the end of each fiscal quarter of Borrower, Borrower shall
furnish to Lender a statement of income and expenses for the operation of the
Mortgaged Property for that fiscal quarter, a
statement of changes in financial position of Borrowerrelating to the Mortgaged Property for that fiscal
quarter,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 quarter.  If Borrower’s fiscal year is other than the
calendar year, Borrower must also submit to Lender a year-end statement of
income and expenses within 120 days after the end of the calendar
year.





Section
      14(d)(ii) is deleted in its entirety and Section 14(d)(iii) is renumbered
      as 14(d)(ii).





(h)
            Section
      21(c)(i) of this Instrument is deleted and replaced with the
      following:


Page
B-9


(i)
            a
      Transfer to which Lender has consented in Lender’s sole discretion
      (without limiting Lender’s sole discretion, Lender will not consent to a
      Transfer while an Event of Default exists) so long as Lender has received
      (1) a $5,000 review fee as a condition of Lender’s considering any
      proposed Transfer, (2) a transfer fee in an amount equal to 1% of the
      unpaid principal balance of the Indebtedness immediately before the
      Transfer as a condition of Lender’s consent to the proposed Transfer, and
      (3) reimbursement for all of Lender’s out-of-pocket costs (including
      reasonable Attorney’s Fees and Costs) incurred in reviewing the proposed
      Transfer.




54.
              MEDICARE AND
      MEDICAID.





(a) 
         Borrower represents and warrants that neither
Borrower nor any management agent for the Mortgaged Property or any operator of
the Mortgaged Property currently participates in any Medicaid programs, Medicare
programs or any other third party payors’ programs or other similar provider
payment programs in connection with the operation of the Mortgaged
Property.





(b) 
         Without the prior written consent of Lender,
which may be granted or withheld in Lender’s discretion, Borrower shall not, and
shall not permit any management agent for the Mortgaged Property or any operator
of the Mortgaged Property to, participate in Medicare or Medicaid, or any
provider agreement under Medicare or Medicaid, or accept any resident whose
ability to reside in the Mortgaged Property requires that Borrower, the
Mortgaged Property or any management agent for the Mortgaged Property or any
operator of the Mortgaged Property participate in Medicare, Medicaid or any
similar provider program.





(c) 
         In addition to the Events of Default listed in
Sections 22 and 53,it also shall constitute
an Event of Default if Borrower participates, or permits any management agent
for the Mortgaged Property or operator of the Mortgaged Property to participate,
in Medicare, Medicaid, or any similar or successor payment provider
plan.







55.
            SENIOR HOUSING
      OPERATOR.





(a)
            Additions to Definitions.The following terms, when used in this Instrument, shall have the
      following meanings or shall add to the definitions in the main body of
      this Instrument, as applicable:


Page
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(1)
            The
      term “Lease” shall also include any master lease agreement or operating
      lease under which control of the use or operation of part or all of the
      Mortgaged Property has been granted to another
  entity.





(2)
            “Operating
      Lease” or “operating lease” shall mean that Lease, dated as of January 1,
      2009, entered into by and between Borrower, as landlord, and Operator, as
      tenant, leasing the Mortgaged Property, as amended by _______________
      dated December ___________,
      2009.





(3)
            “Operator”
      or “operator” shall mean Caruth Haven TRS, LLC, a Delaware limited
      liability company, the tenant of the Improvements under the Operating
      Lease, its successors and assigns.





(b)
            Additional
      Covenants.  In addition to those covenants contained in this
      Instrument, Borrower covenants to Lender as
  follows:





(1)
            Borrower
      shall furnish to Lender (i) within five (5) days after the receipt by
      Borrower from Operator, copies of any and all notices of Borrower’s
      default or failure to pay or perform an obligation under the Operating
      Lease, and/or (ii) immediately upon the issuance by Borrower to Operator
      of any and all notices of Operator’s default or failure to pay or perform
      an obligation under the Operating Lease.  Borrower shall not without Lender’s prior written
      consent declare a default under or pursue any remedies under the Operating
      Lease by reason of the Operator’s failure to pay any monthly rent or other
      sums due under the Operating Lease in excess of an amount of rent due
      thereunder equal to one hundred fifteen percent (115%) of the monthly
      installments of principal and interest due on the
    Loan.





(c)
            Additional Representations and
      Warranties.   In addition to those representations and
      warranties contained in this Instrument, Borrower represents and warrants
      to Lender as follows:





(1)
            Any
      management or Operating Lease between Borrower and Operator or between
      Operator and any management agent are in full force and effect and there
      is no default, breach or violation existing under any management agreement
      or Operating Lease by any party thereto and no event (other than payments
      due but not yet delinquent) which, with the passage of time or with notice
      and the expiration of any grace or cure period, would constitute a
      default, breach or violation by any party under any management agreement
      or Operating Lease.




Page
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(d)
            Additional Events of
      Default.  In addition to the Events of Default listed in
      Section 22 of this Instrument, each of the following shall also constitute
      an Event of Default:





(1)
            With
      regard to the Operating Lease, (i) if the Borrower or Operator terminates
      the Operating Lease prior to the stated term of the Operating Lease or
      during any renewal period of the Operating Lease, or (ii) if Operator
      fails to exercise any or all renewal options contained in the Operating
      Lease or (iii) if Borrower and Operator amend, modify or revise in any way
      the Operating Lease without the prior written consent of Lender, which
      consent shall be given in Lender’s sole and exclusive discretion. 
      Notwithstanding the foregoing, it shall not be an Event of Default upon
      the occurrence of either (i) or (ii), if Borrower has entered into and
      executed a new operating lease for the Mortgaged Property, containing the
      same terms and conditions of the Operating Lease or including such other
      terms and conditions as Lender may have approved in writing, with a new
      operator for the Mortgaged Property which Lender has approved in writing
      prior to the execution of the new operating lease, which approval shall be
      given in Lender’s sole and exclusive
discretion.




(2)
            Any
      change of the Operator of the Mortgaged Property or of any management
      agent of the Mortgaged Property as of the date of this Instrument without
      Lender’s prior written consent, which consent shall be given in Lender’s
      sole and exclusive discretion; provided, however, that Sections
      21(d)(i)-(iii) and 21(e)(ii)-(viii) and the definition of “Controlling
      Entity” shall apply to the Operator as modified solely for purposes of
      this subsection as follows:  the word “Borrower” used in these
      subsections shall be deleted and replaced with
  “Operator”.





(3)
            Any
      failure by Operator to perform any of its obligations as and when required
      under any Loan Document which continues beyond the applicable cure period,
      if any, specified in that Loan
Document.




Page
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EXHIBIT
C


(List
of Material Contracts)





1.
            Describe
      each Material Contract (type of contract, parties, and date of contract)
      or state, “Not Applicable.”


Page
C-1


EXHIBIT
D





MODIFICATIONS
TO INSTRUMENT





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





1.
            Section
      1(dd) of the Instrument is modified by adding after the word “all” and
      before the word “rents” in the first line, the words, “of Borrower’s
      right, title and interest in and
to”.





2.
            Section
      1(ee) of the Instrument is modified by deleting the words “vault rentals”
      from the first line thereof.





3.
            Section
      3(e) is modified by adding after the word “negligence” in the second
      sentence, the words, “, violation of applicable
  law,”.





4.
            Section
      4(c) is modified by adding after the word “negligence” in the third
      sentence, the words, “violation of applicable
  law,”.





5.
            Section
      10(a) is modified by adding after the words “Borrower shall” at the
      beginning of said subsection, the words, “, or shall cause Operator
      to,”.





6.
            Section
      10(a) is further modified by adding after the words “also shall” and
      before the word “comply” in the last sentence, the words, “, or shall
      cause Operator to,”.





7.
            Section
      10(b) is modified by adding after the words “Borrower shall” in the first
      line, the words, “, or shall cause Operator
  to,”.





8.
            Section
      10(c) is modified by adding after the words “Borrower shall” in the first
      line, the words, “, or shall cause Operator
  to,”.





9.
            Section
      13(a) is modified by deleting after the words “to Borrower” in the first
      sentence, the words, “if the inspection is to include occupied residential
      units (which notice need not be in
writing).”


Page
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10.
            Section
      13(c) is modified by adding after the words “received any” and before the
      words, “written complaint” the word
“credible.”





11.
            Section
      14(c)(iii) is modified by adding after the words “publicly-traded” and
      before the words, “entity in which” the words “or
      publicly-held.”





12.
            Section
      14(h) is modified by adding after the words, “Borrower shall” and before
      the words, “deliver to” the following, “to the extent permitted by
      applicable law.”





13.
            Section
      17(e) is modified by adding after the words
      “must be terminable” and before the words “upon not more than” the words
      “at Lender’s written
request”.





14.
            Section
      17(f) is modified by adding after the words “demolish or” in the second
      sentence, the word “materially”.





15.
            Section
      18(a)(ii) is modified by deleting the semi-colon at the end thereof and
      adding the words, “other than incident to the operation of the business on
      the Mortgaged Property in accordance with all Hazardous Materials
      Laws;”





16.
            Section
      18(c) is modified by adding after the words “Borrower shall” in the first
      line, the words, “or shall cause Operator
to,”.





17.
            Section
      18(e)(iv) is modified by adding after the word “Borrower” in the fourth
      line, the words, “, Operator or
Manager”.





18.
            Section
      18(i) is modified by adding after the words “Borrower shall” in the second
      sentence, the words “, or shall cause Operator or Manager
      to,”.





19.
            Section
      19(a) is modified by adding after the words “Borrower shall” in the first
      line, the words, “, or shall cause Operator or Manager to,” and by adding
      before the comma after the words “from time to time require,” and before
      the words, “which insurance shall” the words, “for similarly situated
      Borrowers, and similarly situated senior housing
    facilities.”





20.
            Section
      19(c) is modified by adding after the words “Borrower shall” in the first
      line, the words, “, or shall cause Operator or Manager
    to,”.


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21.
            Section
      19 is hereby modified to add the following new subsection
    (l):





“(l)
            Borrower
      or an operator of the Mortgaged Property must submit annually to Lender a
      claims history (“Claims
      History”) for the Mortgaged Property comprised of a detailed list
      of all claims made against Borrower’s or an operator of the Mortgaged
      Property’s general or professional liability insurance policies or the
      general or professional liability insurance policy of the management agent
      for the Mortgaged Property or any other entity if such management agent or
      other entity has procured general or professional liability insurance for
      the Mortgaged Property on behalf of Borrower, and a summary of any pending
      or settled actions, suits, claims or proceedings filed against the
      Borrower, an operator of the Mortgaged Property, the Mortgaged Property,
      or a Controlling Entity.  The Claims History shall be submitted
      within thirty (30) days after the anniversary of the date of this
      Instrument for each year until the Indebtedness is paid in
      full.”





22.
            Section 21(e)(v) is deleted in its entirety and
      replaced with the following:  “if Borrower is a corporation, (A) if
      the outstanding voting stock in Borrower is held by less than 100
      shareholders, the Transfer of any voting stock in Borrower which would
      cause the Initial Owners to own less than a Controlling Interest 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 10
      percent or more of that
stock,”





23.
            Section
      22(a) is modified by adding after the word “deposit” in the first line,
      the words, “, or cause to be paid or
  deposited,”.





24.
            Section
      22(b) is modified by adding after the word “maintain” in the first line,
      the words, “, or cause to be
maintained,”.





25.
            Section
      22(l) is modified by deleting the words “representations and warranties”
      and replacing them with the words “representation or
      warranty”.


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D-3


26.
            Section
      33(b) is modified by deleting the words “management and operation” and
      replacing them with the words, “ownership and leasing to
      Operator”.





27.
            Section
      46 is deleted in its entirety.





28.
            Section
      47 is modified by adding to the beginning of said Section, the words,
      “Except to the extent provided by applicable
  law,”.


Page
D-4





29.
              The
      following new section is hereby added to the
  Instrument:





“56.
            ADVISOR/SUB-ADVISOR.





Unless
otherwise approved by Lender, Cornerstone Leveraged Realty Advisors, LLC
(“Realty Advisors”) must remain as advisor of Borrower or
CornerstoneGrowth & Income REIT, Inc.,
a Maryland corporation (“Cornerstone”).  Further, unless otherwise approved by Lender,
Servant Healthcare Investments, LLC (“Servant”) must remain as the advisor or
sub-advisor to the Borrower or Cornerstone.Lender shall have the
right to approve or disapprove in its sole discretion, any person or entity who
replaces (a)either Realty Advisors as
advisor of Borrower or Borrower’s principal, Cornerstone, or(b) Servant , as sub-advisor of Borrower or
Cornerstone.”


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