Exhibit 10.45  Prepared
by, and after recording return
to:  Moss &
Barnett (TLG) A Professional Association 4800
Wells Fargo Center 90
South Seventh Street Minneapolis,
MN  55402-4129  MULTIFAMILY OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (CONNECTICUT  REVISION DATE 05-11-2004)  FHLMC Deal No. 100101 FHLMC Loan No.  534384390  THIS INSTRUMENT IS NOT TO BE USED FOR AN OWNER-OCCUPIED PROPERTY
CONTAINING FEWER THAN FIVE UNITS


MULTIFAMILY OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (CONNECTICUT  REVISION DATE 05-11-2004)  THIS
MULTIFAMILY OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the Instrument) is made as of March 26, 2010, between
Behringer Harvard Orange, LLC, a limited liability company organized and
existing under the laws of Delaware, whose address is 15601 Dallas Parkway, Suite 600,
Addison, Texas 75001, as mortgagor (Borrower), and
NorthMarq Capital, LLC, a limited liability company organized and existing
under the laws of Minnesota, whose address is 3500 American Boulevard West, Suite 500,
Bloomington, Minnesota  55431, as
mortgagee (Lender).  Borrowers organizational identification
number, if applicable, is 4744403.  Borrower
is indebted to Lender for money borrowed up to the maximum principal amount of
$150,000,000.00 as evidenced by Borrowers Multifamily Revolving Credit Note
payable to Lender, dated as of the date of this Instrument, and maturing on April 1,
2017 (the Maturity Date).  Lender is specifically permitted, at its option
and discretion, to make additional advances under this Instrument as
contemplated by Conn. Gen. Stat § 49-2(c).  Borrower,
in consideration of the Indebtedness, grants, conveys, mortgages and assigns to
Lender and to Lenders successors and assigns the Mortgaged Property, including
the Land located in the Town of Orange, County of New Haven and the Town of New
Haven, County of New Haven, State of Connecticut and described in Exhibit A
attached to this Instrument.  To have and
to hold the Mortgaged Property to Lender and Lenders successors and assigns,
forever.  TO
SECURE TO LENDER the repayment of the Indebtedness, repayment of the
Indebtedness evidenced by (i) that certain Credit Agreement, dated as of
the date of this Instrument, by and among Borrower, Behringer Harvard
Multifamily OP I LP, a Delaware limited partnership, and Lender, (ii) that
certain Multifamily Revolving Credit Note, Multistate  Adjustable Rate, dated
as of the date of this Instrument, from Borrower payable to Lender, and
maturing on April 1, 2017, in the principal amount of $150,000,000.00, and
(iii) all renewals, extensions and modifications of the Indebtedness, and
the performance of the covenants and agreements of Borrower contained in the
Loan Documents.  Amount
Secured.  This Instrument secures all
present and future loan disbursements made by the Lender under the Credit
Agreement, (including amounts repaid by Borrower and then re-borrowed) all
other sums from time to time owing to Lender by Borrower under the other Loan
Documents, and all sums advanced in accordance herewith to protect the security
of this Instrument.  The original
principal amount secured hereby is $150,000,000.00.  1


Borrower
represents and warrants that Borrower is lawfully seized of the Mortgaged
Property and has the right, power and authority to grant, convey and assign the
Mortgaged Property, and that the Mortgaged Property is unencumbered 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:  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  2


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.  (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,  3


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.  (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.  4


(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.  (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;  5


(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;  (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,  6


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);  (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  7


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.  (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  8


Borrower that in this circumstance this
Instrument create and perfect a lien on Rents in favor of Lender, which lien
shall be effective as of the date of this Instrument.  (b)After the
occurrence of an Event of Default, Borrower authorizes Lender to collect, sue
for and compromise Rents and directs each tenant of the Mortgaged Property to
pay all Rents to, or as directed by, Lender. 
However, until the occurrence of an Event of Default, Lender hereby
grants to Borrower a revocable license to collect and receive all Rents, to
hold all Rents in trust for the benefit of Lender and to apply all Rents to pay
the installments of interest and principal then due and payable under the Note
and the other amounts then due and payable under the other Loan Documents,
including Imposition Deposits, and to pay the current costs and expenses of
managing, operating and maintaining the Mortgaged Property, including
utilities, Taxes and insurance premiums (to the extent not included in
Imposition Deposits), tenant improvements and other capital expenditures.  So long as no Event of Default has occurred
and is continuing, the Rents remaining after application pursuant to the
preceding sentence may be retained by Borrower free and clear of, and released
from, Lenders rights with respect to Rents under this Instrument. From and
after the occurrence of an Event of Default, and without the necessity of
Lender entering upon and taking and maintaining control of the Mortgaged
Property directly, or by a receiver, Borrowers license to collect Rents shall
automatically terminate and Lender shall without Notice be entitled to all
Rents as they become due and payable, including Rents then due and unpaid.  Borrower shall pay to Lender upon demand all
Rents to which Lender is entitled.  At
any time on or after the date of Lenders demand for Rents, (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.  (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  9


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  10


not cure or waive any Event of Default or
invalidate any other right or remedy of Lender under applicable law or provided
for in this Instrument.  4.ASSIGNMENT
OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.  (a)As part of the
consideration for the Indebtedness, Borrower absolutely and unconditionally
assigns and transfers to Lender all of Borrowers right, title and interest in,
to and under the Leases, including Borrowers right, power and authority to
modify the terms of any such Lease, or extend or terminate any such Lease.  It is the intention of Borrower to establish
a present, absolute and irrevocable transfer and assignment to Lender of all of
Borrowers right, title and interest in, to and under the Leases.  Borrower and Lender intend this assignment of
the Leases to be immediately effective and to constitute an absolute present
assignment and not an assignment for additional security only.  For purposes of giving effect to this
absolute assignment of the Leases, and for no other purpose, the Leases shall
not be deemed to be a part of the Mortgaged Property.  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  11


Mortgaged Property.  The execution of this Instrument by Borrower
shall constitute conclusive evidence that all responsibility for the operation,
control, care, management and repair of the Mortgaged Property is and shall be
that of Borrower, prior to such actual entry and taking of possession.  (d)Upon delivery
of Notice by Lender to Borrower of Lenders exercise of Lenders rights under
this Section 4 at any time after the occurrence of an Event of Default,
and without the necessity of Lender entering upon and taking and maintaining
control of the Mortgaged Property directly, by a receiver, or by any other
manner or proceeding permitted by the laws of the Property Jurisdiction, Lender
immediately shall have all rights, powers and authority granted to Borrower
under any Lease, including the right, power and authority to modify the terms
of any such Lease, or extend or terminate any such Lease.  (e)Borrower shall,
promptly upon Lenders request, deliver to Lender an executed copy of each
residential Lease then in effect.  All
Leases for residential dwelling units shall be on forms approved by Lender,
shall be for initial terms of at least six months and not more than two years,
and shall not include options to purchase.  (f)Borrower shall
not lease any portion of the Mortgaged Property for non-residential use except
with the prior written consent of Lender and Lenders prior written approval of
the Lease agreement.  Borrower shall not
modify the terms of, or extend or terminate, any Lease for non-residential use
(including any Lease in existence on the date of this Instrument) without
the prior written consent of Lender. 
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.  12


(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  (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.  [Deferred]Hazard Insurance premiums or other insurance
premiums required by Lender under Section 19,  13


[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)  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.  14


(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.  (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.  15


(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.  (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  16


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, and (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).  (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  17


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.  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;  18


(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  (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  19


required for an accurate assessment of the
financial condition of Borrower or of the Mortgaged Property.  (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.  20


(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.  (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  21


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.  (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;  22


(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).  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  23


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;  (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:  24


(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  (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  25


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.  (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,  26


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.  (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:  27


(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;  (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  28


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.  (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  29


proceeds in accordance with Lenders
then-current policies relating to the restoration of casualty damage on similar
multifamily properties.  (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
followingconditions 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  30


(v)Lender
determines that the Restoration will not be completed within one year after the
date of the loss or casualty.  (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.  31


21.          TRANSFERS OF THE
MORTGAGED PROPERTY OR INTERESTS IN BORROWER. 
[NO RIGHT TO TRANSFER].  (a)           Transfer means  (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;  (iv)a Transfer of
obsolete or worn out Personalty or Fixtures that are contemporaneously replaced
by items of equal or better function and  32


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:  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.  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;  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 of Borrowers
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.  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  37


of
the other Loan Documents (or, if the Borrower is in default, describing such
default in reasonable detail); (v) whether or not there are then existing
any setoffs or defenses known to Borrower against the enforcement of any right
or remedy of Lender under the Loan Documents; and (vi) any additional
facts requested by Lender.  30.          GOVERNING LAW; CONSENT
TO JURISDICTION AND VENUE.  (a)           This Instrument, and
any Loan Document which does not itself expressly identify the law that is to
apply to it, shall be governed by the laws of the jurisdiction in which the
Land is located (the Property Jurisdiction).  (b)           Borrower agrees that
any controversy arising under or in relation to the Note, this Instrument, or
any other Loan Document 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.  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  38


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.  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  39


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  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.  (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.  41


(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.  [END OF UNIFORM COVENANTS;
STATE-SPECIFIC PROVISIONS FOLLOW]  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 any one or more remedies permitted by applicable law or
provided in this Instrument or in any other Loan Document.  Lender shall be entitled to collect all costs
and expenses incurred in pursuing such remedies, including but not limited to
attorneys fees, costs of documentary evidence, abstracts and title reports.  44.          RELEASE.Upon payment and discharge of the
Indebtedness, this Instrument shall become null and void.  Otherwise, this Instrument shall remain in
full force and effect.  Upon such payment
and discharge, Lender shall release this Instrument.  Borrower shall pay Lenders reasonable costs
incurred in releasing this Instrument.  45.          FORECLOSURE SALE.All references in this Instrument to foreclosure
sale, judicial foreclosure, non-judicial foreclosure and words of similar
import shall be deemed to include strict foreclosure or foreclosure by sale.  46.          WAIVER OF
PREJUDGMENT REMEDY, HEARING AND NOTICE. 
THE UNDERSIGNED ACKNOWLEDGES THAT THIS IS A COMMERCIAL TRANSACTION AS
SUCH IS DEFINED IN CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, AS
AMENDED.  THE UNDERSIGNED FURTHER
ACKNOWLEDGES THAT, PURSUANT TO SUCH SECTION, IT HAS A RIGHT TO NOTICE OF AND
HEARING PRIOR TO THE ISSUANCE OF ANY PREJUDGMENT REMEDY. NOTWITHSTANDING THE
FOREGOING, THE UNDERSIGNED HEREBY WAIVES ALL RIGHTS TO SUCH NOTICE, JUDICIAL
HEARING OR PRIOR COURT ORDER IN CONNECTION WITH ANY SUIT ON THIS MORTGAGE OR ON
THE NOTE OR ANY EXTENSIONS OR RENEWALS OF THE NOTE.  47.          WAIVER OF TRIAL BY
JURY.  BORROWER AND LENDER EACH (A) COVENANTS
AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT
OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND
LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT
EXISTS NOW OR IN THE FUTURE.  THIS WAIVER
OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY
WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.  ATTACHED EXHIBITS.The following Exhibits are attached to this
Instrument:  x
  Exhibit A
  Description
  of the Land (required).  42


x
  Exhibit B
  Modifications
  to Instrument  [The remainder of this page intentionally left blank; signature page follows.]  43


IN WITNESS WHEREOF, Borrower has duly signed
and delivered this Instrument before two witnesses or has caused this
Instrument to be signed and delivered by its duly authorized representative
before two witnesses, as of the date and year first written above.   Behringer
  Harvard Orange, LLC,a
  Delaware limited liability companyBy:
  /s/
  Mark T. AlfieriName:
  Mark
  T. AlfieriIts:
  Chief
  Operating Officer/s/
  Katie ArcementWitness/s/
  Rachel TrumphourWitnessSTATE OF TEXAS
  )) ss.COUNTY OF DALLAS
  )  This instrument was acknowledged before me this 16th day
of March, 2010, by Mark T. Alfieri, the Chief Operating Officer of Behringer
Harvard Orange, LLC, a Delaware limited liability company, on behalf of the
said limited liability company. /s/ Catherine E. MeaSignature of NotaryCatherine E. MeaTitle Notary PublicMy Commission expires: 7/26/2012  44


EXHIBIT A  [DESCRIPTION OF THE LAND]  All
that certain piece or parcel of land, with the buildings and improvements
thereon, situated partly in the Town of Orange and partly in the Town of West
Haven, County of New Haven and State of Connecticut, consisting of Lot 1 and
Lot 3 as shown on a map entitled Property Being Conveyed to AvalonBay
Communities, Inc. Lots 1 & 3 Cuzzocreo Acres Resubdivision
Prindle Hill Road Orange Connecticut made by Codespoti & Associates
P.C. dated May 15, 1997, revised to October 15, 1999, and recorded in
the Orange Town Clerks office as Map 114-A and in the West Haven Town Clerks
office as Map 1621. Said premises are more particularly bounded and described
as follows:  LOT
1 - 45 Prindle Hill Road:  Beginning
on the south side of Prindle Hill Road at the northwest corner of Lot 3;  Thence
S 03° 11 44 W, 238.17 feet to a point in the northeast corner of Lot 2, now
of Wallach Surgical Devices;  Thence
along the northerly side of land of Wallach Surgical Devices N 86° 48 16 W,
618.58 feet to a point on the east side of Edison Road;  Thence
along the east side of Edison Road N 03° 11 44 E, 220.68 feet to a point of
curve;  Thence
along a curved line whose interior angle is 94° 12 20 and whose radius is 50
feet, 82.21 feet to a point on the southerly side of Prindle Hill Road;  Thence
along the southerly side of Prindle Hill Road S 82° 36 16 E, 352.93 feet to a
point of curve;  Thence
continuing along the southerly side of Prindle Hill Road by a curved line whose
interior angle is 04° 53 02 and whose radius is 2500.00 feet, 213.10 feet to
the point of beginning.  LOT
3 - 75 Prindle Hill Road:  Beginning
at a point on the southerly side of Prindle Hill Road, a distance of 4.52 feet
east of the Orange/West Haven town line;  Thence
along a stone wall S 04°39 08 W, 115.81 feet to a point;  Thence
continuing along stone wall S 03° 01 15 W, 265.67 feet to a point;  A-1


Thence
continuing along stone wall S 00° 33 34 W, 155.48 feet to a point in the
northerly line of Cuzz Acres Orange Limited Partnership;  Thence
along northerly line of other land of Cuzz Acres Orange Limited Partnership N
88° 54 23 W, 450.52 feet to a point in the southeast corner of land of
Wallach Surgical Devices;  Thence
along a portion of land of Wallach Surgical Devices N 09° 13 08 W, 298.78
feet to a point;  Thence
N 03° 11 44 E, 238.17 feet along the east line of Lot 1 to a point on the
south side of Prindle Hill Road;  Thence
along the south side of Prindle Hill Road, along a curve whose radius is
2500.00 feet and whose interior angle is 02° 07 53, 93.00 feet to a point of
tangency;  Thence
continuing along the south side of Prindle Hill Road S 89° 37 11 E, 416.98
feet to the point of beginning.  Together
with an easement for storm water drainage as more particularly set forth in a
Stormwater Drainage Easement Agreement by and among Ernest J. Cuzzocreo, Jr.,
Cuzz-Acres-Orange Limited Partnership and AvalonBay Communities, Inc.
dated October 22, 1999 and recorded in Volume 437 at Page 463 of the
Orange Land Records and in Volume 1103 at Page 463 of the West Haven Land
Records.  A-2


EXHIBIT B  MODIFICATIONS TO INSTRUMENT  The
following modifications are made to the text of the Instrument that precedes
this Exhibit:  1.Section 1(p) is
hereby modified by inserting the words the Credit Agreement, immediately
after the second reference in said Section to the term Note,.  2.Section 1
is hereby modified by adding the following definition as Section 1(gg):  (gg)         Credit
Agreement means the Credit Agreement described on page 1 of
this Instrument, including all joinders, amendments and modifications thereto.  3.             The second sentence of Section 4(e) is
modified to read as follows:  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
(except not more than 5% of the residential dwelling units may have initial
terms of at least one month), and shall not include options to purchase.  4.             Section 14(a) is modified
to read as follows:  (a)           Borrower shall keep and maintain at
all times at the Mortgaged Property or the management agents office(or, at Borrowers
option, at the management agents office or at the corporate offices of
Behringer Harvard Real Estate Services, LLC, in Addison, Texas), and, within 2
Business Days of Lenders request, shall make available at the Mortgaged
Property, complete and accurate books of account and records (including copies
of supporting bills and invoices) adequate to reflect correctly the operation
of the Mortgaged Property, and copies of all written contracts, Leases, and
other instruments which affect the Mortgaged Property; provided,
however, that each of the following must be maintained on and available at the
Mortgaged Property:  i.lease files, ii.information regarding the
leasing status of each unit, iii.documentation regarding
marketing efforts, iv.any Moisture Management Plan
(MMP), v.any operations &
maintenance (O&M) plans, vi.any lead-based paint (LBP)
compliance documentation, and vii.income compliance reports
for income-restricted units.  The books, records,
contracts, Leases and other instruments shall be subject to examination and
inspection by Lender at any reasonable time.  B-1


5.Section 19(g)(i) is revised to
replace $10,000 with $100,000.  6.Section 19(g)(ii) is revised to
replace the words more than $10,000 but less than $50,000 with the words more
than $100,000 but less than $250,000.  7.Section 21(e)(viii) is
revised to read as follows:  (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 the Sections 21(e)(i) through
(vii), above; provided, however, that the following will not constitute an
Event of Default:  A.a Transfer
under Section 21(e)(v) with respect to Behringer Harvard Multifamily
REIT I, Inc., a Maryland corporation (BH REIT I), or  B.a Transfer
under Section 21(e)(ii)(B) with respect to Behringer Harvard
Multifamily OP I LP, a Delaware limited partnership (BHMOP),  but only if in each case (X) Behringer
Harvard Multifamily Advisors I LLC, a Texas limited liability company (the Advisor)
is managing the day-to-day operations, either internally or externally, of BH
REIT I or BHMOP, as applicable, and (Y) there is not a Transfer of a
Controlling Interest in the Advisor; provided, however, that it will not be an
Event of Default if a Transfer of the Advisor is made to BH REIT I or BHMOP.  8.Section 22
is hereby modified by adding the following as Section 22(m):  Without
in any way limiting any other provision of this Section 22, any Event of
Default (as defined in the Credit Agreement) under the Credit Agreement.  9.Section 33
of the Instrument is deleted in its entirety and replaced with the following:  33.          SPECIAL
PURPOSE BORROWER.Until the
Indebtedness is paid in full, Borrower (a) shall not own any real or
personal property other than the Mortgaged Properties, as defined in Section 50
of this Instrument as the same is modified by this Exhibit B, and personal
property related to the operation and maintenance of the Mortgaged
Properties;  (b) shall not operate
any business other than the management and operation of the Mortgaged
Properties; and (c) shall not maintain its assets in a way difficult to
segregate and identify.  10.           A new Section 48 is added as
follows:  B-2


48.          OPEN-END PROVISION.This Instrument is an open-end mortgage and
the holder hereof shall have all the rights, powers and protection to which the
holder of any open-end mortgage is entitled under Connecticut law, including,
without limitation, Section 49.2 of the Connecticut General Statutes.  Upon request of Borrower, Lender may
hereafter, at its option and in its sole discretion, at any time before full
payment of the Indebtedness, make further advances to Borrower under said
Indebtedness in such amounts and at such rates of interest as Lender shall
determine in accordance with the Loan Documents, and every such further
advance, with interest, shall be secured by this Instrument, provided, however,
that the amount of principal of such Indebtedness secured by this Instrument
and remaining unpaid shall at no time exceed the original principal sum of the
Indebtedness, and provided that the time of repayment of such advances shall
not extend the time of repayment beyond the original maturity of the
Indebtedness.  11.A new Section 49
is added as follows:  49.          AFFORDABLE HOUSING
AGREEMENT.Lender
acknowledges that the Mortgaged Property is subject to a Declaration Regarding
Affordability Plan dated February 12, 2004, and recorded in the Orange
Land Records on February 18, 2004, in Volume 514 at Page 275, (the Agreement) in favor of the Orange Town Plan and Zoning
Commission (the City).  Borrower represents and warrants to Lender as
follows:  (a)           Annual Compliance.  Borrower will submit to Lender on an annual
basis, evidence that the Mortgaged Property is in ongoing compliance with all
income, occupancy and rent restrictions under the Agreement relating to the
Mortgaged Property.  Such submissions to
Lender will be made contemporaneously with the submission of reports to the
City and the Orange Tax Assessor as required under the Agreement.  (b)           Reporting
Requirements.  Borrower will promptly
provide Lender with a copy of any notice Borrower receives alleging that
Borrower is in breach of the Agreement. 
Borrower will provide Lender with Notice at such time as the Agreement
is terminated  (c)           Cross-Default.  Borrower acknowledges and agrees that any
default, event of default, or breach (however such terms may be defined) after
the expiration of any applicable notice and/or cure periods under the Agreement
will be an Event of Default under this Instrument and that any costs, damages
or other amounts, including reasonable attorneys fees incurred by the Lender
as a result of such an Event of Default by Borrower, including amounts paid to
cure any default or event of default, under the Agreement will be an obligation
of Borrower and become a part of the Indebtedness secured by this Instrument.  (d)           Lenders Consent.
 Borrower agrees to obtain Lenders prior
approval for an amendment or modification of the Agreement.  B-3


12.The Instrument is hereby
amended by adding the following as Section 50 to the Instrument:  50.          TERMS
OF CREDIT AGREEMENT.  In the
event that any of the terms of this Instrument conflict with any of the terms
of the Credit Agreement, the terms of the Credit Agreement shall govern and
control.  13.The Instrument is hereby
amended by adding the following as Section 51 to the Instrument:  51.          CROSS-COLLATERALIZATION
AND CROSS-DEFAULT.  (a)           The Indebtedness evidenced by the
Note and the Credit Agreement are also secured by a mortgage, deed to secure
debt or deed of trust (each a Security
Instrument) on the real property identified in the following table
(including properties hereafter added to the Collateral Pool pursuant to Section 2.9
of the Credit Agreement or hereafter released from the Collateral Pool pursuant
to Section 2.10 of the Credit Agreement, collectively, the Mortgaged Properties):  Property
  Name
  County
  and StateGrand
  Reserve Orange
  New
  Haven, Connecticut  (Note that the Mortgaged
Property is also listed in the above table for purposes of having an
all-inclusive list containing the Mortgaged Property and Mortgaged Properties
as of the date of this Instrument.)  (b)           This Instrument secures the
Indebtedness.  Borrower acknowledges
that, in asking Lender to enter into the Credit Agreement, it intends that the
Mortgaged Properties secure all of the Indebtedness without apportionment or
allocation between or among the Mortgaged Property or any of the other
Mortgaged Properties or any portion of either (except that the recovery of the
Indebtedness may be limited in certain Security Instruments for the purpose of
limiting the amount of transfer or recordation taxes or documentary stamp taxes
required in connection with the recordation of a Security Instrument).  (c)           Upon the occurrence of an Event of
Default, Lender may, in its discretion, but shall not be obligated to, exercise
any or all of its rights and remedies under any Security Instrument or any
other Loan Document.  Lender
may exercise such remedies in one or more proceedings, whether contemporaneous
or consecutive or a combination of both, to be determined by Lender in its sole
discretion.  Lender may enforce its
rights against the Mortgaged Property or any other Mortgaged Property or
portions of either or both, in such order and manner as it may determine in its
discretion.  The  B-4


enforcement
of this Instrument, any Loan Document or any other Security Instrument shall
not constitute an election of remedies, and shall not limit or preclude the
enforcement of any of the remaining Loan Documents, through one or more
additional proceedings.  Lender may bring
any action or proceeding, including but not limited to judicial or non-judicial
foreclosure proceedings, without regard to the fact that one or more other
proceedings may have been commenced elsewhere with respect to the same
Mortgaged Property or Mortgaged Properties or any portion of them.  Borrower, for itself and any and all persons
or entities now or in the future holding or claiming any lien on, security
interest in, or other interest or right of any nature in and to the Mortgaged
Property or any other Mortgaged Property, and who have actual or constructive
notice of this Instrument, hereby unconditionally and irrevocably waives any
rights it may have, now or in the future, whether at law or in equity, to
require Lender to enforce or exercise any of its rights or remedies under this
Instrument, any Loan Document, or any other Security Instrument in any
particular manner or order or in any particular state or county, or to apply
the proceeds of any foreclosure sale or sales in any particular manner or
order.  No
judgment obtained by Lender in any one or more enforcement proceedings shall
merge the related Indebtedness into that judgment, and all Indebtedness which
remains unpaid shall remain a continuing obligation of Borrower.  Proceeds
of the enforcement or foreclosure of this Security Instrument shall be applied
first to the repayment of the Indebtedness.  B-5