Exhibit 10.38

 

 

 

 

 

MULTIFAMILY DEED OF TRUST,

ASSIGNMENT OF RENTS 

AND SECURITY AGREEMENT

 

(NORTH CAROLINA – REVISION DATE 05-11-2004)

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepared
by, and after recording

return
to:

 

Brian
J. Iwashyna, Esquire

Troutman
Sanders LLP

P.O. Box1122

Richmond, Virginia 
23218-1122




FHLMC Loan No. 487779258
Landmark
Apartments

MULTIFAMILY DEED OF TRUST,

ASSIGNMENT OF RENTS AND

SECURITY Agreement

(NORTH CAROLINA – REVISION DATE 05-11-2004)

THIS
MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Instrument") is made to be effective as of this 11th day of March, 2009,
among LANDMARK (NC), LLC, a limited liability company organized and
existing under the laws of Delaware, d/b/a Landmark-Raleigh (NC), LLC, in North
Carolina, whose address is c/o AIMCO, Stanford Place 3, 4582 South Ulster Street
Parkway, Suite 1100, Denver, Colorado 80237, as grantor ("Borrower"), to
MARK S. SHEIMBOB AND BERNICE H. CILLEY, as trustee ("Trustee"),
for the benefit of CAPMARK BANK, an industrial bank organized and
existing under the laws of Utah, whose address is 6955 Union Park Center, Suite
330, Midvale, Utah 84047, Attn:  President, with a copy to Capmark Finance
Inc., 116 Welsh Road, Horsham, Pennsylvania, 19044, Attn:  Servicing –
Executive Vice President, as beneficiary (“Lender”).  Borrower's
organizational identification number, if applicable, is 4628938.

Borrower,
in consideration of the Indebtedness and the trust created by this Instrument,
irrevocably grants, conveys and assigns to Trustee and Trustee's successors and
assigns, in trust, with power of sale, the Mortgaged Property, including the
Land located in the County of Wake, State of North Carolina and described in
Exhibit A attached to this Instrument.  To have and to hold the Mortgaged
Property unto Trustee and Trustee's successors and assigns, forever.

TO
SECURE TO LENDER the repayment of the Indebtedness evidenced by Borrower's
Multifamily Note payable to Lender dated as of the date of this Instrument, and
maturing on April 1, 2016 (the “Maturity Date”), in the principal amount
of $8,850,000.00 and all renewals, extensions and modifications of the
Indebtedness, and the performance of the covenants and agreements of Borrower
contained in the Loan Documents.

Borrower
represents and warrants that Borrower is lawfully seized of the Mortgaged
Property and has the right, power and authority to mortgage, 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 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," "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.

(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;

(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, 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 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
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 execution or termination of contracts providing
for the management, operation or maintenance of the Mortgaged Property, for the
purposes of enforcing the assignment of Rents pursuant to Section 3(a),
protecting the Mortgaged Property or the security of this Instrument, or for
such other purposes as Lender in its discretion may deem necessary or
desirable.  Alternatively, if an Event of Default has occurred and is
continuing, regardless of the adequacy of Lender's security, without regard to
Borrower's solvency and without the necessity of giving prior notice (oral or
written) to Borrower, Lender may apply to any court having jurisdiction for
the appointment of a receiver for the Mortgaged Property to take any or all of
the actions set forth in the preceding sentence.  If Lender elects to seek
the appointment of a receiver for the Mortgaged Property at any time after an
Event of Default has occurred and is continuing, Borrower, by its execution of
this Instrument, expressly consents to the appointment of such receiver,
including the appointment of a receiver ex parte if permitted by
applicable law.  If Borrower is a housing cooperative corporation or
association, Borrower hereby agrees that if a receiver is appointed, the order
appointing the receiver may contain a provision requiring the receiver to pay
the installments of interest and principal then due and payable under the Note
and the other amounts then due and payable under the other Loan Documents,
including Imposition Deposits, it being acknowledged and agreed that the
Indebtedness is an obligation of the Borrower and must be paid out of
maintenance charges payable by the Borrower's tenant shareholders under their
proprietary leases or occupancy agreements.  Lender or the receiver, as the
case may be, shall be entitled to receive a reasonable fee for managing the
Mortgaged Property.  Immediately upon appointment of a receiver or
immediately upon the Lender's entering upon and taking possession and control of
the Mortgaged Property, Borrower shall surrender possession of the Mortgaged
Property to Lender or the receiver, as the case may be, and shall deliver to
Lender or the receiver, as the case may be, all documents, records (including
records on electronic or magnetic media), accounts, surveys, plans, and
specifications relating to the Mortgaged Property and all security deposits and
prepaid Rents.  In the event Lender takes possession and control of the
Mortgaged Property, Lender may exclude Borrower and its representatives from the
Mortgaged Property.  Borrower acknowledges and agrees that the exercise by
Lender of any of the rights conferred under this Section 3 shall not be
construed to make Lender a mortgagee-in-possession of the Mortgaged Property so
long as Lender has not itself entered into actual possession of the Land and
Improvements.

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

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

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

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

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

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

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

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

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

(f)                
Borrower shall not lease any portion of the Mortgaged Property for
non-residential use except with the prior written consent of Lender and Lender's
prior written approval of the Lease agreement.  Borrower shall not modify
the terms of, or extend or terminate, any Lease for non-residential use
(including any Lease in existence on the date of this Instrument) without
the prior written consent of Lender.  However, Lender's consent shall not
be required for the modification or extension of a non-residential Lease if such
modification or extension is on terms at least as favorable to Borrower as those
customary at that time in the applicable market and the income from the extended
or modified Lease will not be less than the income received from the Lease as of
the date of this Instrument.  Borrower shall, without request by Lender,
deliver an executed copy of each non-residential Lease to Lender promptly after
such Lease is signed.  All non-residential Leases, including renewals or
extensions of existing Leases, shall specifically provide that (i) such
Leases are subordinate to the lien of this Instrument; (ii) the tenant
shall attorn to Lender and any purchaser at a foreclosure sale, such attornment
to be self-executing and effective upon acquisition of title to the Mortgaged
Property by any purchaser at a foreclosure sale or by Lender in any manner;
(iii) the tenant agrees to execute such further evidences of attornment as
Lender or any purchaser at a foreclosure sale may from time to time request;
(iv) the Lease shall not be terminated by foreclosure or any other transfer
of the Mortgaged Property; (v) after a foreclosure sale of the Mortgaged
Property, Lender or any other purchaser at such foreclosure sale may, at
Lender's or such purchaser's option, accept or terminate such Lease; and
(vi) the tenant shall, upon receipt after the occurrence of an Event of
Default of a written request from Lender, pay all Rents payable under the Lease
to Lender.

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

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

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

(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,

[Deferred]       
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. 

(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.

(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 perform such
obligations of Borrower and to protect Lender's interest, including
(i) payment of Attorneys' Fees and Costs, (ii) payment of fees and
out-of-pocket expenses of accountants, inspectors and consultants,
(iii) entry upon the Mortgaged Property to make repairs or secure the
Mortgaged Property, (iv) procurement of the insurance required by
Section 19, (v) payment of amounts which Borrower has failed to pay
under Sections 15 and 17, and (vi) advances made by Lender to pay,
satisfy or discharge any obligation of Borrower for the payment of money that is
secured by a pre-existing mortgage, deed of trust or other lien encumbering the
Mortgaged Property (a "Prior Lien").

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

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

13.             
INSPECTION.  

(a)               
Lender, its agents, representatives, and designees may make or
cause to be made entries upon and inspections of the Mortgaged Property
(including environmental inspections and tests) during normal business
hours, or at any other reasonable time, upon reasonable notice to Borrower if
the inspection is to include occupied residential units (which notice need not
be in writing).  Notice to Borrower shall not be required in the case of an
emergency, as determined in Lender's discretion, or when an Event of Default has
occurred and is continuing.

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

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

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

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

14.             
BOOKS AND RECORDS; FINANCIAL REPORTING.

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

(b)              
Within 120 days after the end of each fiscal year of Borrower,
Borrower shall furnish to Lender a statement of income and expenses for
Borrower's operation of the Mortgaged Property for that fiscal year, a statement
of changes in financial position of Borrower relating to the Mortgaged Property
for that fiscal year and, when requested by Lender, a balance sheet showing all
assets and liabilities of Borrower relating to the Mortgaged Property as of the
end of that fiscal year.  If Borrower's fiscal year is other than the
calendar year, Borrower must also submit to Lender a year-end statement of
income and expenses within 120 days after the end of the calendar year.

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

(i)                 
a rent schedule for the Mortgaged Property showing the name of
each tenant, and for each tenant, the space occupied, the lease expiration date,
the rent payable for the current month, the date through which rent has been
paid, and any related information requested by Lender;

(ii)               
an accounting of all security deposits held pursuant to all
Leases, including the name of the institution (if any) and the names and
identification numbers of the accounts (if any) in which such security
deposits are held and the name of the person to contact at such financial
institution, along with any authority or release necessary for Lender to access
information regarding such accounts; and

(iii)              
a statement that identifies all owners of any interest in Borrower
and any Controlling Entity and the interest held by each (unless Borrower or any
Controlling Entity is a publicly-traded entity in which case such statement of
ownership shall not be required), if Borrower or a Controlling Entity is a
corporation, all officers and directors of Borrower and the Controlling Entity,
and if Borrower or a Controlling Entity is a limited liability company, all
managers who are not members.

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

(i)                 
a balance sheet, a statement of income and expenses for Borrower
and a statement of changes in financial position of Borrower for Borrower's most
recent fiscal year;

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

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

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

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

(g)               
If Borrower fails to provide in a timely manner the statements,
schedules and reports required by Sections 14(b) through (e), Lender
shall give Borrower Notice specifying the statements, schedules and reports
required by Section 14(b) through (e) that Borrower has failed to
provide.  If Borrower has not provided the required statements, schedules
and reports within 10 Business Days following such Notice, then Lender shall
have the right to have Borrower's books and records audited, at Borrower's
expense, by independent certified public accountants selected by Lender in order
to obtain such statements, schedules and reports, and all related costs and
expenses of Lender shall become immediately due and payable and shall become an
additional part of the Indebtedness as provided in Section 12.  Notice
to Borrower shall not be required in the case of an emergency, as determined in
Lender's discretion, or when an Event of Default has occurred and is continuing.


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

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

15.             
TAXES; OPERATING EXPENSES.

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

(b)              
Subject to the provisions of Section 15(c), Borrower shall
(i) pay the expenses of operating, managing, maintaining and repairing the
Mortgaged Property (including utilities, repairs and replacements) before
the last date upon which each such payment may be made without any penalty or
interest charge being added, and (ii) pay insurance premiums at least
30 days prior to the expiration date of each policy of insurance, unless
applicable law specifies some lesser period. 

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

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

(e)               
Borrower shall promptly deliver to Lender a copy of all notices
of, and invoices for, Impositions, and if Borrower pays any Imposition directly,
Borrower shall furnish to Lender on or before the date this Instrument requires
such Impositions to be paid, receipts evidencing that such payments were made.


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

17.             
PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED
PROPERTY.  

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

(b)              
Borrower shall not abandon the Mortgaged Property.

(c)               
Borrower shall restore or repair promptly, in a good and
workmanlike manner, any damaged part of the Mortgaged Property to the equivalent
of its original condition, or such other condition as Lender may approve in
writing, whether or not insurance proceeds or condemnation awards are available
to cover any costs of such restoration or repair; however, Borrower shall not be
obligated to perform such restoration or repair if (i) no Event of Default
has occurred and is continuing, and (ii) Lender has elected to apply any
available insurance proceeds and/or condemnation awards to the payment of
Indebtedness pursuant to Section 19(h)(ii), (iii), (iv) or (v), or
pursuant to Section 20.

(d)              
Borrower shall keep the Mortgaged Property in good repair,
including the replacement of Personalty and Fixtures with items of equal or
better function and quality.

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

(f)                
Borrower shall give Notice to Lender of and, unless otherwise
directed in writing by Lender, shall appear in and defend any action or
proceeding purporting to affect the Mortgaged Property, Lender's security or
Lender's rights under this Instrument.  Borrower shall not (and shall not
permit any tenant or other person to) remove, demolish or alter the
Mortgaged Property or any part of the Mortgaged Property, including any removal,
demolition or alteration occurring in connection with a rehabilitation of all or
part of the Mortgaged Property, except (i) in connection with the
replacement of tangible Personalty, (ii) if Borrower is a cooperative
housing corporation or association, to the extent permitted with respect to
individual dwelling units under the form of proprietary lease or occupancy
agreement and (iii) repairs and replacements in connection with making an
individual unit ready for a new occupant. 

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

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

18.             
ENVIRONMENTAL HAZARDS.

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

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

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

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


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

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

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

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

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

(d)              
As required by Lender, Borrower shall also have established a
written operations and maintenance program with respect to certain Hazardous
Materials.  Each such operations and maintenance program and any additional
or revised operations and maintenance programs established for the Mortgaged
Property pursuant to this Section 18 must be approved by Lender and shall
be referred to herein as an "O&M Program."  Borrower shall
comply in a timely manner with, and cause all employees, agents, and contractors
of Borrower and any other persons present on the Mortgaged Property to comply
with each O&M Program.  Borrower shall pay all costs of performance of
Borrower's obligations under any O&M Program, and Lender's out‐of‐pocket
costs incurred in connection with the monitoring and review of each O&M
Program and Borrower's performance shall be paid by Borrower upon demand by
Lender.  Any such out-of-pocket costs of Lender that Borrower fails to pay
promptly shall become an additional part of the Indebtedness as provided in
Section 12.

(e)               
Borrower represents and warrants to Lender that, except as
previously disclosed by Borrower to Lender in writing (which written disclosure
may be in certain environmental assessments and other written reports accepted
by Lender in connection with the funding of the Indebtedness and dated prior to
the date of this Instrument):

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

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

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

(iv)             
to the best of Borrower's knowledge after reasonable and diligent
inquiry, Borrower has complied with all Hazardous Materials Laws, including all
requirements for notification regarding releases of Hazardous Materials. 
Without limiting the generality of the foregoing, Borrower has obtained all
Environmental Permits required for the operation of the Mortgaged Property in
accordance with Hazardous Materials Laws now in effect and all such
Environmental Permits are in full force and effect;  

(v)               
to the best of Borrower's knowledge after reasonable and diligent
inquiry, no event has occurred with respect to the Mortgaged Property that
constitutes, or with the passing of time or the giving of notice would
constitute, noncompliance with the terms of any Environmental Permit;

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

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

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

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


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

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

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

(g)               
Borrower shall pay promptly the costs of any environmental
inspections, tests or audits, a purpose of which is to identify the extent or
cause of or potential for a Prohibited Activity or Condition ("Environmental
Inspections"), required by Lender in connection with any foreclosure or
deed in lieu of foreclosure, or as a condition of Lender's consent to any
Transfer under Section 21, or required by Lender following a reasonable
determination by Lender that Prohibited Activities or Conditions may
exist.  Any such costs incurred by Lender (including Attorneys' Fees and
Costs and the costs of technical consultants whether incurred in connection with
any judicial or administrative process or otherwise) that Borrower fails to
pay promptly shall become an additional part of the Indebtedness as provided in
Section 12.  As long as (i) no Event of Default has occurred and
is continuing, (ii) Borrower has actually paid for or reimbursed Lender for
all costs of any such Environmental Inspections performed or required by Lender,
and (iii) Lender is not prohibited by law, contract or otherwise from doing
so, Lender shall make available to Borrower, without representation of any kind,
copies of Environmental Inspections prepared by third parties and delivered to
Lender.  Lender hereby reserves the right, and Borrower hereby expressly
authorizes Lender, to make available to any party, including any prospective
bidder at a foreclosure sale of the Mortgaged Property, the results of any
Environmental Inspections made by or for Lender with respect to the Mortgaged
Property.  Borrower consents to Lender notifying any party (either as part
of a notice of sale or otherwise) of the results of any Environmental
Inspections made by or for Lender.  Borrower acknowledges that Lender
cannot control or otherwise assure the truthfulness or accuracy of the results
of any Environmental Inspections and that the release of such results to
prospective bidders at a foreclosure sale of the Mortgaged Property may have a
material and adverse effect upon the amount that a party may bid at such
sale.  Borrower agrees that Lender shall have no liability whatsoever as a
result of delivering the results to any third party of any Environmental
Inspections made by or for Lender, and Borrower hereby releases and forever
discharges Lender from any and all claims, damages, or causes of action, arising
out of, connected with or incidental to the results of, the delivery of any of
Environmental Inspections made by or for Lender.

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

(i)                 
Borrower shall comply with all Hazardous Materials Laws applicable
to the Mortgaged Property.  Without limiting the generality of the previous
sentence, Borrower shall (i) obtain and maintain all Environmental Permits
required by Hazardous Materials Laws and comply with all conditions of such
Environmental Permits; (ii) cooperate with any inquiry by any Governmental
Authority; and (iii) comply with any governmental or judicial order that
arises from any alleged Prohibited Activity or Condition.

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

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

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

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

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

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

(k)              
Counsel selected by Borrower to defend Indemnitees shall be
subject to the approval of those Indemnitees.  In any circumstances in
which the indemnity under this Section 18 applies, Lender may employ its
own legal counsel and consultants to prosecute, defend or negotiate any claim or
legal or administrative proceeding and Lender, with the prior written consent of
Borrower (which shall not be unreasonably withheld, delayed or
conditioned) may settle or compromise any action or legal or administrative
proceeding.  However, unless an Event of Default has occurred and is
continuing, or the interests of Borrower and Lender are in conflict, as
determined by Lender in its discretion, Lender shall permit Borrower to
undertake the actions referenced in this Section 18 in accordance with this
Section 18(k) and Section 18(l) so long as Lender approves such
action, which approval shall not be unreasonably withheld or delayed. 
Borrower shall reimburse Lender upon demand for all costs and expenses incurred
by Lender, including all costs of settlements entered into in good faith,
consultants' fees and Attorneys' Fees and Costs.

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

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

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

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

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

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

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

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

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

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

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

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

(iii)              
reimburse Indemnitees for any and all expenses, including
Attorneys' Fees and Costs, paid or incurred in connection with the enforcement
by Indemnitees of their rights under this Section 18, or in monitoring and
participating in any legal or administrative proceeding.

(o)              
The provisions of this Section 18 shall be in addition to any
and all other obligations and liabilities that Borrower may have under
applicable law or under other Loan Documents, and each Indemnitee shall be
entitled to indemnification under this Section 18 without regard to whether
Lender or that Indemnitee has exercised any rights against the Mortgaged
Property or any other security, pursued any rights against any guarantor, or
pursued any other rights available under the Loan Documents or applicable law.
If Borrower consists of more than one person or entity, the obligation of those
persons or entities to indemnify the Indemnitees under this Section 18
shall be joint and several. The obligation of Borrower to indemnify the
Indemnitees under this Section 18 shall survive any repayment or discharge
of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any
delivery of any deed in lieu of foreclosure, and any release of record of the
lien of this Instrument.  Notwithstanding the foregoing, if Lender has
never been a mortgagee-in-possession of, or held title to, the Mortgaged
Property, Borrower shall have no obligation to indemnify the Indemnitees under
this Section 18 after the date of the release of record of the lien of this
Instrument by payment in full at the Maturity Date or by voluntary prepayment in
full.

19.             
PROPERTY AND LIABILITY INSURANCE.

(a)               
Borrower shall keep the Improvements insured at all times against
such hazards as Lender may from time to time require, which insurance shall
include but not be limited to coverage against loss by fire, windstorm and
allied perils, general boiler and machinery coverage, and business interruption
including loss of rental value insurance for the Mortgaged Property with extra
expense insurance.  If Lender so requires, such insurance shall also
include sinkhole insurance, mine subsidence insurance, earthquake insurance,
and, if the Mortgaged Property does not conform to applicable zoning or land use
laws, building ordinance or law coverage.  In the event any updated reports
or other documentation are reasonably required by Lender in order to determine
whether such additional insurance is necessary or prudent, Borrower shall pay for all such documentation at its sole
cost and expense.  Borrower acknowledges and agrees that Lender's insurance
requirements may change from time to time throughout the term of the
Indebtedness.  If any of the Improvements is located in an area identified
by the Federal Emergency Management Agency (or any successor to that
agency) as an area having special flood hazards, Borrower shall insure such
Improvements against loss by flood.  All insurance required pursuant to
this Section 19(a) shall be referred to as "Hazard Insurance."  All
policies of Hazard Insurance must include a non-contributing, non-reporting
mortgagee clause in favor of, and in a form approved by, Lender.

(b)              
All premiums on insurance policies required under this Section 19
shall be paid in the manner provided in Section 7, unless Lender has
designated in writing another method of payment.  All such policies shall
also be in a form approved by Lender.  Borrower shall deliver to Lender a
legible copy of each insurance policy (or duplicate original) and Borrower shall
promptly deliver to Lender a copy of all renewal and other notices received by
Borrower with respect to the policies and all receipts for paid premiums. 
At least 5 days prior to the expiration date of any insurance policy, Borrower
shall deliver to Lender evidence acceptable to Lender that the policy has been
renewed.  If Borrower has not delivered a legible copy of each renewal
policy (or a duplicate original) prior to the expiration date of any
insurance policy, Borrower shall deliver a legible copy of each renewal policy
(or a duplicate original) in a form satisfactory to Lender within 120 days
after the expiration date of the original policy.

(c)               
Borrower shall maintain at all times commercial general liability
insurance, workers' compensation insurance and such other liability, errors and
omissions and fidelity insurance coverages as Lender may from time to time
require.  All policies for general liability insurance must contain a
standard additional insured provision, in favor of, and in a form approved by,
Lender.

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

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

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

(g)               
Notwithstanding any provision to the contrary in this Section 19,
as long as no Event of Default, or any event which, with the giving of Notice or
the passage of time, or both, would constitute an Event of Default, has occurred
and is continuing,

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

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

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

(i)                 
an Event of Default (or any event, which, with the giving of
Notice or the passage of time, or both, would constitute an Event of
Default) has occurred and is continuing; 

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

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

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

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

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

(j)                
Unless Lender otherwise agrees in writing, any application of any
insurance proceeds to the Indebtedness shall not extend or postpone the due date
of any monthly installments referred to in the Note, Section 7 of this
Instrument or any Collateral Agreement, or change the amount of such
installments.

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

20.             
CONDEMNATION.

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


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

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

(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 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;

(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; and 

(vii)            
any Transfer of an interest in Borrower or any interest in a
Controlling Entity (which, if such Controlling Entity were Borrower, would
result in an Event of Default) listed in (A) through (F) below (a
"Preapproved Transfer"), under the terms and conditions listed as items
(1) through (7) below:

(A)             
a sale or transfer to one or more of the transferor's immediate
family members; or

(B)             
a sale or transfer to any trust having as its sole beneficiaries
the transferor and/or one or more of the transferor's immediate family members;
or

(C)             
a sale or transfer from a trust to any one or more of its
beneficiaries who are immediate family members of the transferor ; or

(D)             
the substitution or replacement of the trustee of any trust with a
trustee who is an immediate family member of the transferor; or

(E)              
a sale or transfer to an entity owned and controlled by the
transferor or the transferor’s immediate family members; or

(F)              
a sale or transfer to an individual or entity that has an existing
interest in the Borrower or in a Controlling Entity.

(1)              
Borrower shall provide Lender with prior written Notice of the
proposed Preapproved Transfer, which Notice must be accompanied by a
non-refundable review fee in the amount of $3,000.00.

(2)              
For the purposes of these Preapproved Transfers, a transferor's
immediate family members will be deemed to include a spouse, parent, child or
grandchild of such transferor.

(3)              
Either directly or indirectly, [See Exhibit B] shall retain at all
times a managing interest in the Borrower.

(4)              
At the time of the proposed Preapproved Transfer, no Event of
Default shall have occurred and be continuing and no event or condition shall
have occurred and be continuing that, with the giving of Notice or the passage
of time, or both, would become an Event of Default.

(5)              
Lender shall be entitled to collect all costs, including the cost
of all title searches, title insurance and recording costs, and all Attorneys'
Fees and Costs.

(6)              
Lender shall not be entitled to collect a transfer fee as a result
of these Preapproved Transfers.

(7)              
In the event of a Transfer prohibited by or requiring Lender's
approval under this Section 21, this Section (c)(vii) 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 consent.

(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; and

(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:

(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 in 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.

(f)                
Lender shall consent, without any adjustment to the rate at which
the Indebtedness secured by this Instrument bears interest or to any other
economic terms of the Indebtedness set forth in the Note, to a Transfer that
would otherwise violate this Section 21 if, prior to the Transfer, Borrower
has satisfied each of the following requirements:

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

(ii)               
the absence of any Event of Default;

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

(iv)             
the transferee's organization, credit and experience in the
management of similar properties are deemed by the Lender, in its discretion, to
be appropriate to the overall structure and documentation of the existing
financing;

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


(vi)             
in the case of a Transfer of all or any part of the Mortgaged
Property, (A) the execution by the transferee of Lender's then-standard
assumption agreement that, among other things, requires the transferee to
perform all obligations of Borrower set forth in the Note, this Instrument and
any other Loan Documents, and may require that the transferee comply with any
provisions of this Instrument or any other Loan Document which previously may
have been waived or modified by Lender, (B) if Lender requires, the
transferee causes one or more individuals or entities acceptable to Lender to
execute and deliver to Lender a guaranty in a form acceptable to Lender, and
(C) the transferee executes such additional Collateral Agreements as Lender
may require;

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

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

(A)             
a review fee in the amount of $3,000.00;

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

(C)             
the amount of Lender's out‐of‐pocket costs (including reasonable
Attorneys' Fees and Costs) incurred in reviewing the Transfer
request.

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

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

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

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

(d)              
fraud or material misrepresentation or material omission by
Borrower, any of its officers, directors, trustees, general partners or managers
or any guarantor in connection with (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;

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

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

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

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

24.             
FORBEARANCE.

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

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

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

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

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

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

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

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 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 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

(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.

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

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

If
Lender invokes the power of sale and if it is determined in a hearing held in
accordance with applicable law that Trustee can proceed to sale, Trustee shall
take such action regarding notice of sale and shall give such additional notices
to Borrower and to other persons as North Carolina law may require.  After
the lapse of such time as may be required by applicable law and after the
publication of the notice of sale, Trustee shall sell the Mortgaged Property
according to the laws of North Carolina.  Trustee may sell the Mortgaged
Property at the time and place and under the terms designated in the notice of
sale in one or more parcels and in such order as Trustee may determine. 
Trustee may postpone sale of all or any part of the Mortgaged Property by public
announcement at the time and place of any previously scheduled sale. 
Lender or Lender's designee may purchase the Mortgaged Property at any sale.

Trustee
shall deliver to the purchaser at the sale, within a reasonable time after the
sale, a deed conveying the Mortgaged Property so sold without any covenant or
warranty, express or implied.  The recitals in Trustee's deed shall be
prima facie evidence of the truth of the statements made therein.  Trustee
shall apply the proceeds of the sale in the following order:  (a) to all
costs and expenses of the sale, including Trustee's fees not to exceed 5% of the
gross sales price, reasonable fees and out-of-pocket expenses of attorneys and
costs of title evidence; (b) to the Indebtedness in such order as Lender, in
Lender's discretion, directs; and (c) the excess, if any, to the person or
persons legally entitled thereto.

44.             
RELEASE.  Upon payment of the Indebtedness, Lender
or Trustee shall cancel this Instrument.  Borrower shall pay the reasonable
costs incurred in canceling this Instrument.  If Trustee is requested to
cancel this Instrument, the Note shall be surrendered to Trustee.

45.             
SUBSTITUTE TRUSTEE.  Lender may from time to time
remove Trustee and appoint a successor trustee to any Trustee appointed under
this Instrument by an instrument recorded in the county in which this Instrument
is recorded.  Without conveyance of the Mortgaged Property, the successor
trustee shall succeed to all the title, powers and duties conferred upon the
Trustee herein and by applicable law.

46.             
WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER
EACH (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY
ISSUE ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS
BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT
TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT
EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.  

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

	
X
	
 
	
Exhibit A
	
Description of the Land (required)

	
 
	
 
	
 
	
 

	
X
	
 
	
Exhibit B
	
Modifications to Instrument



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


LANDMARK (NC), LLC, a Delaware limited
liability company, d/b/a Landmark-Raleigh (NC), LLC, in North Carolina

 

By:  Angeles Income Properties, LTD. II, a California limited
partnership, its member

 

By:  Angeles Realty Corporation II, a California corporation,
its managing general partner

 

 

 

By: /s/Patti K. Fielding

Patti K. Fielding

Executive Vice President and Treasurer

 

 

 

 

 

STATE
OFCOLORADO

COUNTYOF DENVER

 

I
certify that the following person personally appeared before me this day,
acknowledging to me that he or she voluntarily signed the foregoing document for
the purpose stated therein and in the capacity indicated:

Patti
K. Fielding, as Executive Vice President and Treasurer of Angeles Realty
Corporation II, a California corporation, the managing general partner of
Angeles Income Properties, LTD. II, a California limited partnership, the member
of Landmark (NC), LLC, a Delaware limited liability company, d/b/a
Landmark-Raleigh (NC), LLC, in North Carolina.

DATE: 
March 5, 2009.

 

 

/s/Gail
D. Coalson

Signature of Notary Public

Printed Name: Gail D. Coalson

My Commission expires: 02/17/2012

 

 

[NOTARY PUBLIC STAMP OR SEALS]

 

 




EXHIBIT A

[DESCRIPTION OF THE LAND]




EXHIBIT B

MODIFICATIONS TO INSTRUMENT

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

I.  TRANSACTION SPECIFIC

A.       
Section 21(c)(vii) is deleted in its entirety.

 

II.       
AIMCO STANDARD

A. 
      The definition of Attorneys Fees and Costs in
Section 1(a) is deleted and every reference in this Instrument to “Attorneys
Fees and Costs” is deleted and replaced with “attorneys fees and costs”.

 

B.        
Section 1(m) is changed to read as follows:

 

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

 

C.       
Section 1(q) is modified to read as follows:

 

(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 or to which consent is not required, own
in the aggregate 100 percent of the ownership interests in Borrower or that
entity.

 

D.       
Section 1(bb) is modified to read as follows:

 

(bb)     
"Personalty" means all

 

(i)        
accounts (including deposit accounts);

 

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

 

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

 

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

 

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

 

(vi)      
all other intangible property, general intangibles and rights relating
exclusively to the operation of, or used exclusively in connection with, the
Land or the Improvements, including all governmental permits relating
exclusively 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 which is issued now or in
the future exclusively in connection with the ownership, management or operation
of the Land or the Improvements.

 

E.        
The second and third sentences of Section 2 (a) are modified to read as
follows:

 

Borrower
hereby authorizes Lender to prepare and file financing statements, continuation
statements and financing statement amendments in such form as Lender may
reasonably require to perfect or continue the perfection of this Security
Instrument 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 reasonably may
require.

 

F.        
Section 4(b) is changed to read as follows:

 

(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 and during the continuance 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.

 

G.       
Except in a case where Lender in its discretion determines that an
emergency exists, Lender may take actions specified in Section 12(a) only if
Lender has provided Borrower with Notice of Borrower's failure to perform any of
its obligations under this Instrument or any other Loan Document and Borrower
does not cure the failure within 10 days after such Notice.  If Lender so
determines that an emergency exists, Lender shall notify Borrower of the action
taken within ten days after the action is taken.

 

H.       
Section 11(f) is deleted and replaced with the following:

 

(f)
subdivide or otherwise split any tax parcel constituting all or any part of the
Mortgaged Property without the prior consent of Lender, which consent shall not
be unreasonably withheld.

 

I.         
The first sentence of Section 13(a) is deleted and replaced with the
following:

 

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 at least 48 hours prior written notice to Borrower.

 

J.         
The last sentence of Section 14(b) is deleted.

 

K.       
Sections 14(c)(iii) and 14(d)(ii) are modified to read as follows:

 

(c)(iii)  
a statement that identifies all owners of any interest in Borrower and each
general partner in Borrower, and confirming that the ownership of each other
Controlling Entity has not changed in a manner that violates Section 21 of this
Instrument;

 

(d)
(ii)   a quarterly or year to date income and expense statements for
the Mortgaged Property relating to a quarterly period ending no later than 45
days before the request;

 

L.        
For purposes of Section 14(b) through (e), Borrower shall be deemed to have
delivered any statement or document "upon Lender's request" if Borrower has
delivered the document promptly following Lender's request.

 

M.       
Notwithstanding Section 14(f) or (g), unless an Event of Default has occurred
and is continuing, Lender may require that the financial statements required by
Sections 14(b), 14(c)(i) and 14(c)(ii) be audited, but may not require that any
other financial statements required by Section 14 be audited. 
Certification of a statement by the chief financial officer of the entity that
is the subject of the statement or, in the case of a partnership, the chief financial officer of the general partner, will be
acceptable to Lender as certification by an individual having authority to bind
Borrower.

 

N.       
Section 15(b) is deleted and replaced with the following:

 

(b)       
Subject to the provisions of Section 15(c) and Section 19(b), Borrower shall pay
the expenses of operating, managing, maintaining and repairing the Mortgaged
Property (including insurance premiums, utilities, repairs and replacements)
before the last date upon which each such payment may be made without any
penalty or interest charge being added.

 

O.        So long as
Borrower is contesting the amount and validity of any Imposition other than
insurance premiums diligently and in good faith as described in Section 15(d)
and all of the conditions specified in clauses (i) through (iv) of Section 15(d)
are satisfied, Lender will refrain from applying Imposition Deposits to payment
of the contested Imposition.

 

P.        
Section 16 is modified to read as follows:

 

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 (i) the lien of this
Instrument, and (ii) the Subordinate Debt defined in Section RR of Exhibit B to
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.

 

Q.       
The following is added to the end of Section 17(f):

 

,
and (iv) in connection with repairs to the Mortgaged Property which are required
to address life safety issues or that result in the displacement of tenants
occupying less than ten percent of the occupied units at the Mortgaged Property
at any one time.

 

R.         For
purposes of Section 18(b), "pre-packaged supplies, cleaning materials and
petroleum products customarily used in the operation and maintenance of
comparable multifamily properties" shall include, without limitation, pool, spa,
maintenance and gardening materials.

 

S.        
The second sentence of Section 18(c) is modified to read as follows:

 

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 be reasonably expected to
cause or permit any Prohibited Activity or Condition.

 

T.         For
purposes of Section 18(d), Borrower shall only be obligated to pay out-of-pocket
expenses incurred by Lender in connection with the monitoring and review of an
O&M Program and Borrower's performance to the extent such expenses are
reasonable.

 

U.       
Borrower's representation and warranty in Section 18(e)(iv) regarding
requirements for notification regarding releases of Hazardous Materials shall
relate only to such releases, if any, at the Mortgaged Property.

 

V.       
Section 18(e)(iii) is modified by inserting the following at the beginning
thereof:

 

(iii)      
except to the extent previously disclosed by Borrower to Lender in writing,

 

W.      
Section 18(e)(v) is modified to read as follows:

 

(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 reasonably be expected to
constitute, noncompliance with the terms of any Environmental Permit;

 

X.       
Section 18(f)(ii) is deleted and replaced with the following:

 

(ii)       
Borrower’s receipt of or knowledge of any written complaint, order, notice of
violation or other communication from any Governmental Authority or other person
with regard to present or future alleged Prohibited Activities or Conditions,
affecting the Mortgaged Property or any other property of Borrower that is
adjacent to the Mortgaged Property; 

 

Y.       
Section 18(g) is modified to read as follows:

 

(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 or in preparation for any foreclosure
or deed in lieu of foreclosure.  Borrower shall also pay promptly the
reasonable costs of any Environmental Inspections required by Lender in
connection with, or as a condition of Lender's consent to any Transfer under
Section 21, or required by Lender following a reasonable determination by Lender
that Prohibited Activities or Conditions may exist.  Any such costs
incurred by Lender (including the fees and out-of-pocket costs of attorneys and
technical consultants whether incurred in connection with any judicial or
administrative process or otherwise) which Borrower fails to pay promptly shall
become an additional part of the Indebtedness as provided in Section 12. The
results of all Environmental Inspections made by Lender in connection with or in
preparation for any foreclosure or deed in lieu of foreclosure shall at all
times remain the property of Lender and Lender shall have
no obligation to disclose such results to or otherwise make such results
available to Borrower or any other party.  Lender will make available to
Borrower the results of all other Environmental Inspections made by
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.  Except in the case of an Environmental
Inspection performed in connection with a foreclosure or deed in lieu of
foreclosure, or a disclosure of Environmental Inspection results that Lender is
required by law to make, Lender shall notify Borrower of its intention to
disclose such information and shall give Borrower ten days to provide
supplemental information, explanations or corrections to accompany the
disclosure. Borrower acknowledges that Lender cannot control or otherwise assure
the truthfulness or accuracy of the results of any Environmental Inspections
made by or for Lender and that the release of such results to prospective
bidders at a foreclosure sale of the Mortgaged Property may have a material and
adverse effect upon the amount which a party may bid at such sale. 
Borrower agrees that Lender shall have no liability whatsoever as a result of
delivering the results of any of its Environmental Inspections to any third
party, and Borrower hereby releases and forever discharges Lender from any and
all claims, damages, or causes of action, arising, out of, connected with or
incidental to the results of, the delivery of any Environmental Inspections made
by or for Lender.

 

Z.        
Lender shall not commence Remedial Work under the second sentence of Section
18(h) unless Lender has given Borrower notice of its intention to do so and
Borrower has not begun performing the Remedial Work within 10 days after such
notice.

 

AA.     
The following sentence is added at the end of Section 18(j):

 

However,
Borrower shall have no obligation to indemnify any of the foregoing parties to
the extent that the proceedings, claims, damages, penalties or costs arise out
of the gross negligence or willful misconduct of Lender, any prior owner or
holder of the Note, the Loan Servicer or any prior Loan Servicer.

 

BB.     
Section 18(k) is deleted and replaced with the following:

 

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

 

CC.     
For purposes of Section 19(d), an insurance company will be acceptable to Lender
if it has a rating in Best's Key Rating Guide of at least "A-" and a financial
size category of at least "v".

 

DD.      Section 19(g) is
deleted and replaced with the following:

 

(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 $250,000 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 $250,000 but less than $500,000 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.

 

EE.      
For purposes of Section 19(i), Lender shall automatically succeed to rights of
Borrower in and to insurance policies and unearned premiums only to the extent
permitted by the applicable policies and insurance companies.

 

FF.      
Section 21(e)(iv) is modified to read as follows:

 

(iv)      
if Borrower is a limited liability company, a Transfer of (A) any managing
membership interest (except for a Transfer to a Qualified REIT Subsidiary, as
defined in Section 856(i)(2) of the Internal Revenue Code of 1986, of Apartment
Investment and Management Company, a Maryland corporation or to a Qualified REIT
Subsidiary, as defined in Section 856(1)(i) of the Internal Revenue Code of
1986, 100% owned by AIMCO OP), or (B) membership interests in Borrower that
would cause the Initial Owners of Borrower to own less than 51% of all
membership interests in Borrower;

 

GG.     
New Sections 21(c)(viii), 21(c)(ix), 21(c)(x), and 21(c)(xi) are added, as
follows:

 

(viii)     
The Transfer of any membership interests in Borrower provided no Change of
Control occurs as a result of such Transfer.

 

(ix)      
The Transfer of shares of common stock, limited partnership interests or other
beneficial or ownership interests or other forms of securities in AIMCO REIT or
AIMCO OP, and the issuance of all varieties of convertible debt, equity and other similar securities of AIMCO REIT or
AIMCO OP, and the subsequent Transfer of such securities; provided, however,
that no Change of Control occurs as a result of such Transfer, either upon such
Transfer or upon the subsequent conversion to equity of such convertible debt or
other securities.

 

(x)       
The issuance by AIMCO REIT or AIMCO OP of additional common stock, limited
partnership interests or other beneficial or ownership interests, convertible
debt, equity and other similar securities, and the subsequent Transfer of such
convertible debt or securities;  provided, however, that no Change of
Control occurs as the result of such Transfer, either upon such Transfer or upon
the subsequent conversion to equity of such convertible debt or other
securities. 

 

(xi)      
So long as AIMCO REIT owns 100% of the stock of AIMCO-LP, Inc., a Transfer of
limited partnership interests that results in AIMCO-LP, Inc. owning not less
than 50.1% of the limited partnership interests in AIMCO OP. 

 

HH.     
Section 21(c)(ix) shall apply only to a Transfer of an interest in a Controlling
Entity that is prohibited by Section 21(e)(viii).

 

II.        
A new Section 21(g) is added, as follows:

 

(g)       
For purposes of this Section 21, the following terms shall be defined as
follows:

 

(i)        
"Change of Control" shall mean the earliest to occur of 

 

(A)
      the date an Acquiring Person becomes (by
acquisition, consolidation, merger or otherwise), directly or indirectly, the
beneficial owner of more than forty percent (40%) of the total Voting Equity
Capital of AIMCO REIT then outstanding, or 

 

(B)
      the date on which AIMCO REIT shall cease to hold
(whether directly or indirectly through a wholly owned intermediary entity such
as AIMCO-LP, Inc. or AIMCO-GP, Inc.) at least 50.1% of the limited partnership
interests in AIMCO OP, or

 

(C)
      the date on which AIMCO REIT shall cease for any
reason to hold (whether directly or indirectly) (1) the interests in the
Managing Member held as of the date of this Instrument (as
evidenced by organizational charts and documents submitted to Lender as of such
date) and (2) the Controlling Interest(s) in the Borrower, or 

 

(D)
      the replacement (other than solely by reason of
retirement at age sixty-five or older, death or disability) of more than 50% (or
such lesser percentage as is required for decision making by the board of
directors of trustees, if applicable) of the members of the board of directors
(or trustee, if applicable) of AIMCO REIT over a one-year period where such
replacement shall not have been approved by a vote of at least a majority of the
board of directors (or trustees, if applicable) of AIMCO REIT then still in
office who either were members of such board of directors (or trustees, if
applicable) at the beginning of such one ­year period or whose election as
members of the board of directors (or trustees, if applicable) was previously so
approved.

 

(ii)       
"Acquiring Person" shall mean a "person" or group of "persons" within the
meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended.  However, notwithstanding the foregoing, “Acquiring Person” shall
not be deemed to include any member of the Borrower Control Group unless such
member has, directly or indirectly, disposed of, sold or otherwise transferred
to, or encumbered or restricted (whether by means of voting trust agreement or
otherwise) for the benefit of an Acquiring Person, all or any portion of the
Voting Equity Capital of AIMCO REIT directly or indirectly owned or controlled
by such member or such member directly or indirectly votes all or any portion of
the Voting Equity Capital of AIMCO REIT, directly or indirectly, owned or
controlled by such member for the taking of any action which, directly or
indirectly constitutes or would result in a Change of Control, in which event
such member of the Borrower Control Group shall be deemed to constitute an Acquiring Person to the extent of the Voting Equity
Capital of AIMCO REIT owned or controlled by such member.

 

(iii)      
"Borrower Control Group" shall mean a majority of the board of directors of
AIMCO REIT.



(iv)     
A "Person" shall mean an individual, an estate, a trust, a corporation, a
partnership, a limited liability company or any other organization or entity
(whether governmental or private).

 

(v)       
"Security" shall have the same meaning as in Section 2(1) of the Securities Act
of 1933, as amended.

 

(vi)       "Controlling
Interest(s)" shall mean (A) with respect to a partnership, such majority and/or
managing general partner interests which, together with a majority of limited
partnership interests if necessary for consent purposes, vest in the holder of
such interests the sole power, right and authority to control the day to day
operations of the Borrower; including, without limitation, the authority to
manage, operate and finance the Mortgaged Property, (b) with respect to a
corporation, the number of shares which entitle the holder to elect a majority
of the board of directors of the Borrower, and (C) with respect to a limited
liability company, such majority and/or managing member interests as vest in the
holder of such interests the sole power, right and authority to control the day
to day operations of the Borrower; including, without limitation, the authority
to manage, operate and finance the Mortgaged Property.

 

(vii)     
"AIMCO REIT" shall mean Apartment Investment and Management Company, a
corporation organized and existing under the laws of the State of Maryland.

 

(viii)     
"AIMCO OP" shall mean AIMCO Properties, L.P., a limited partnership organized
and existing under the laws of the State of Delaware.

 

(ix)      
"Managing Member" shall mean the entity executing ­this Instrument on
behalf of the Borrower, or its successors and/or assigns in interest.



(x)       
“Voting Equity Capital” shall mean Securities of any class or classes,
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the board of directors (or Persons performing similar
functions).

 

JJ. 
Section 21(f)(vi) is modified to replace clause (A) with the following:

 

(A)
the execution by Borrower, Guarantor, the transferee, and any new guarantor of
Lender’s then-standard assumption agreement that, among other things, (1)
requires the transferee to perform all obligations of Borrower set forth in the
Note, this Instrument and any other Loan Documents, (2) if Borrower has provided
Lender with a current environmental report pertaining to the Mortgaged Property
establishing to Lender’s reasonable satisfaction that no Prohibited Activities
or Conditions exist, releases the transferor Borrower and the original Guarantor
from liability under Section 18 of this Instrument other than for conditions
that may have existed prior to the date of the transfer, and (3) may require
that the transferee comply with any provisions of this Instrument or any other
Loan document that previously may have been waived or modified by Lender.

 

KK.    
Section 21(h) is hereby added as follows:

 

(h)       
Lender shall consent to a one-time substitution of the Mortgaged Property for
another multifamily apartment rental property (the "Substitution"),
which shall not result in an adjustment to the rate at which the
Indebtedness secured by this Instrument bears interest provided that Borrower
has satisfied each of the following requirements:

 

(i)        
there shall exist no Event of Default uncured within any applicable grace
period.

 

(ii)       
the loan to value ratio with respect to the substituted property (the
"Substituted Property") at the time of the proposed Substitution is not greater
than the lesser of (A) the loan to value ratio of the Mortgaged Property which
exists as of the date hereof, or (B) the then current loan to value ratio of the
Mortgaged Property at the time of any such Substitution based on an MAI
appraisal (prepared by an appraiser acceptable to Lender and paid for by
Borrower) at the time of any such Substitution. (As used herein, "loan to value
ratio” means the ratio of (A) the outstanding principal balance of the
Indebtedness to (B) the value of the Substituted Property as determined by
Lender in its discretion, expressed as a percentage);

 

(iii)      
the debt service coverage ratio with respect to the Substituted Property for the
last twelve full months preceding the proposed Substitution is not less than the
greater of (A) the debt service coverage ratio for the Mortgaged Property which
exists as of the date hereof, or (B) the then current debt service coverage
ratio for the Mortgaged Property at the time of any such Substitution.  (As
used herein, the term "debt service coverage ratio" means the ratio of (1) the
annual net operating income from the Substituted Property's operations during
the preceding twelve month period which is available for repayment of debt,
after deducting reasonable and customary operating expenses, to (2) the annual
principal and interest payable under the Note);

 

(iv)      
any such Substitution shall be approved only following the date which is ten
years from the date of this Instrument;

 

(v)       
Lender shall have received an environmental report on the Substituted Property
showing that no Phase II environmental report is required;

 

(vi)      
Lender shall have received an engineering report on the Substituted Property
showing that there are at least ten (10) years of useful life remaining with
respect to the Substituted Property;

 

(vii)     
Lender shall have received the amount of Lender's out-of-pocket costs
(including, without limitation, reasonable Attorneys' Fees and the costs of
engineering reports, appraisals and environmental reports) incurred in reviewing
the Substitution request and implementing the Substitution;

 

(viii)     
Lender shall have received a new currently dated mortgagee's title insurance
policy in the form and containing the exceptions acceptable to Lender according
to its standards for title insurance policies in place at the time of the
Substitution, insuring the mortgage secured by the Substituted Property;

 

(ix)       Lender shall have
received a currently dated survey of the Substituted Property, acceptable to
Lender in accordance with its standards and requirements for surveys in place at
the time of the substitution;

 

(x)       
The physical condition, location and other aspects of the Substituted Property
shall be substantially comparable to the Mortgaged Property as determined by
Lender in its reasonable discretion;

 

(xi)      
If the Substitution is approved, (A) Borrower shall have executed and delivered
to Lender for recordation an amendment to this Instrument in form and substance
acceptable to Lender in its discretion, substituting the Substituted Property
for the Mortgaged Property; and (B) Borrower shall have executed and delivered
such additional documentation, including without limitation new Uniform
Commercial Code Financing Statements, as Lender may reasonably require to grant
Lender a perfected first lien and security interest in the Substituted Property
and to otherwise implement the Substitution in accordance with this Section.

 

LL.      
Section 22(a) is modified to read as follows:

 

(a)       
any failure by Borrower to pay or deposit (i) any payment of principal or
interest or any Imposition Deposit within three days after it is due, or (ii)
any other amount required by the Note, this Instrument, or any other Loan
Document when due.

 

MM.   
Section 22(e) is deleted and replaced with the following:

 

(e)               
Intentionally omitted.

 

NN.
Section 22(l) is deleted and replaced with the following:

 

(l)        
any of Borrower’s representations and warranties in this Instrument is knowingly
false or misleading in any material respect.

 

OO.    
Section 28 shall obligate Borrower to provide only such further assurances as
Lender reasonably may require.

 

PP.      
The words "Except as otherwise disclosed to Lender in writing, before the date
of this Instrument" are added at the beginning of the second sentence of Section
39.

 

QQ.    
Section 30(b) is deleted and replaced with the following:

 

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

 

RR.     
Section 47 Subordinate Debt is added as follows:

 

47       
SUBORDINATE DEBT.  Borrower may incur indebtedness other than
the Indebtedness provided each of the following terms and conditions are
satisfied:

 

(a)       
any such indebtedness ("Subordinate Debt") shall be incurred by Borrower
solely for or in respect of the operation of the Mortgaged Property in the
ordinary course of business as a residential apartment rental project. 
Such Subordinate Debt shall be and remain payable to, held by, and in favor of
only an “AIMCO Subordinate Lender”, which shall be defined as: AIMCO
REIT, AIMCO OP or any entity in which AIMCO REIT or AIMCO OP holds Controlling
Interest(s), whether directly or indirectly, and which entity shall have a term
of existence not expiring prior to 10 years after the maturity date of the
Note;

 

(b)       
except (1) as set forth in Subsection (c), or (2) for any debt secured by an
ownership interest in Borrower, any such Subordinate Debt shall be unsecured,
and shall not be evidenced by a note or any like instrument;

 

(c)       
any Subordinate Debt may be evidenced by a note  and/or secured by a lien
on the Mortgaged Property and/or the other assets of Borrower provided that:

 

(i)        
the total debt service coverage ratio with respect to the Mortgaged Property
after the proposed Subordinate Debt is incurred and/or secured by the Mortgaged
Property will equal at least a ratio of 1.10:1, as determined by Lender in its
reasonable discretion. (As used herein, the term "total debt service coverage
ratio" means the ratio of (A) the annual net operating income from the Mortgaged
Property during the preceding 12 month period which is available for repayment
of debt, after deducting reasonable and customary operating expenses, to (B) the
aggregate annual principal and interest payable under the Note, the proposed
Subordinate Debt and any other then existing Subordinate Debt encumbering the
Mortgaged Property);

 

(ii)       
the principal amount of such Subordinate Debt, together with the Indebtedness
and all other Subordinate Debt then encumbering the Mortgaged Property, shall
not exceed 85% of the value of the Mortgaged Property at the time the Borrower
incurs the proposed Subordinate Debt, as determined by Lender, in Lender’s sole
discretion; 

 

(iii)      
any note and security instrument evidencing or securing such Subordinate Debt
(A) shall by its terms be expressly subordinate to the Indebtedness and to all
amendments, extensions and renewals thereof; (B) shall provide that the AIMCO
Subordinate Lender cannot exercise its remedies for a default under such
Subordinate Debt without the prior written consent of the Lender; (C) shall
provide that, so long as the Indebtedness is outstanding, all payments under any
such note and/or security therefor shall accrue if the same are unpaid; (D)
shall provide that payments shall be made in the following order:  (1)
amounts due with respect to the operation and maintenance of the Mortgaged
Property, including, without limitation, all monthly installments of principal
and interest on the Indebtedness and any other operating expenses, capital
expenses and tax and insurance payments, (2) amounts due with respect to any
Subordinate Debt which is secured by a lien on the Mortgaged Property, and (3)
amounts due with respect to any Subordinate Debt not secured by a lien on the
Mortgaged Property; (E) shall provide that the AIMCO Subordinate Lender shall
provide Lender with notice of any default under the Subordinate Debt not cured
within any applicable grace period at the same time it provides such notice to
the Borrower; and (F) shall prominently state that the instrument and the
Subordinate Debt are not assignable or otherwise transferable except to another
AIMCO Subordinate Lender; 

 

(iv)      
Borrower delivers to Lender evidence in writing that the Subordinate Debt loan
documents, the total debt service coverage ratio and the aggregate loan to value
ratio limitations set forth herein comply in all respects with the provisions of
this Section; and

 

(v)       
Borrower's incurring of Subordinate Debt and, if applicable, placement of a
subordinate lien on the Mortgaged Property securing such Subordinate Debt shall
not constitute an Event of Default under this instrument.

 

(d)       
Borrower and the AIMCO Subordinate Lender shall execute such instruments
and documents in connection with the status of such Subordinate Debt as Lender
shall from time to time reasonably request, such document to be in the form of
the subordination agreement attached hereto as Appendix 1. Borrower shall
bear any and all expenses necessary in connection with its compliance with the
provisions of this subsection (d), including, without limitation, reasonable
Attorneys' Fees.

 

SS.       Section 37 is
modified by deleting: “; provided, however, that in the event of a Transfer
prohibited by or requiring Lender's approval under Section 21, any or some or
all of the Modifications to Instrument set forth in Exhibit B (if any) may be
modified or rendered void by Lender at Lender’s option by notice to Borrower and
the transferee(s)”. Except for Section TT below and except for the definitions
of the terms used in Section TT and not defined therein, the modifications set
forth in this Exhibit B shall be null and void unless title to the Mortgaged
Property is vested in an entity whose Controlling Interest(s) are directly or
indirectly held by AIMCO REIT or AIMCO OP.

 

TT.      
Section 48 AIMCO- Held Subordinate Debt is added as follows:

 

48    AIMCO-HELD SUBORDINATE
DEBT.  In connection with a Transfer of the Mortgaged Property
which has been consented to by Lender pursuant to Section 21(f), and provided
that no Change of Control of Borrower has occurred prior to such Transfer, the
proposed transferee (the “New Borrower”) may incur indebtedness, other
than the Indebtedness and such other indebtedness as is permitted under the
terms of this Instrument, secured by a lien upon the Mortgaged Property,
provided each of the following terms and conditions are satisfied:

 

(a)       
any such indebtedness ("AIMCO-Held Subordinate Debt") shall be incurred
by the New Borrower solely in connection with its purchase of  the
Mortgaged Property;

 

(b)       
The AIMCO-Held Subordinate Debt (and any and all documents evidencing such
Subordinate Debt) shall be and remain held by and in favor of an AIMCO
Subordinate Lender; 

 

(c)       
on the date of the Transfer, Lender and the AIMCO Subordinate Lender shall
execute and record among the applicable land records a subordination agreement
in the form of the subordination agreement attached hereto as Appendix 1,
or at Lender’s option in substantially the form of any subordination agreement
which may have been entered into by and between Lender (or predecessor to
Lender’s interest hereunder) and any entity in which AIMCO REIT or AIMCO OP
holds Controlling Interest(s), whether directly or indirectly, prior to the
Transfer and whether or not in connection with the Mortgaged Property, with such
modifications as Lender reasonably requires; provided, however, that (i) the
AIMCO Subordinate Lender shall have the right to further sell or otherwise
transfer the AIMCO-Held Subordinate Debt to AIMCO REIT, AIMCO OP or any entity
in which AIMCO REIT or AIMCO OP holds Controlling Interest(s), whether directly
or indirectly, and (ii) the AIMCO Subordinate Lender shall have the right,
without Lender’s consent, to accept a Transfer of title to
the Mortgaged Property from Borrower by (A) deed in lieu of foreclosure or
(B) a foreclosure which results in AIMCO Subordinate Lender or an entity in
which AIMCO REIT or AIMCO OP hold Controlling Interest(s), directly or
indirectly, holding title to the Mortgaged Property, in satisfaction of the
AIMCO-Held Subordinate Debt, and such Transfer shall not constitute an Event of
Default under this Instrument.  As a prerequisite to foreclosure in
satisfaction of the AIMCO-Hold Subordinate Debt, AIMCO Subordinate Lender shall
provide Lender with thirty (30) days prior written notice of the commencement of
such foreclosure.  Lender shall acknowledge its receipt of such notice in
writing within ten (10) business days, and with such acknowledgement shall
provide an estimate of the reasonable fees and expenses it expects to incur in
connection with the foreclosure.  AIMCO Subordinate Lender shall deposit
such estimated sum in escrow with Lender or a representative designated by
Lender.  Promptly upon the conclusion of the foreclosure, any excess sums
not expended shall be returned to AIMCO Subordinate Lender or AIMCO Subordinate
Lender shall pay to Lender the amount by which the Lender’s actual reasonable
expenditures exceed the deposited sum.

 

(d)       
the combined debt service coverage ratio with respect to the Mortgaged Property
after the proposed AIMCO-Held Subordinate Debt is incurred will equal at least a
ratio of 1.10:1, as determined by Lender in its reasonable discretion (if the
AIMCO-Held Subordinate Debt requires a balloon payment, such payment cannot be
due prior to the Maturity Date of the Note.); and Lender has advised the
Borrower and New Borrower in writing of such determination prior to the
Transfer; 

 

(e)       
the principal amount of the AIMCO-Held  Subordinate Debt, together with the
Indebtedness and all other Subordinate Debt then encumbering the Mortgaged
Property, shall not exceed  85% of the value of the Mortgaged Property at
the time the Borrower incurs the proposed AIMCO-Held Subordinate Debt, as
determined by Lender in its sole discretion; and Lender has advised the Borrower
and New Borrower in writing of such determination prior to the Transfer; 

 

(f)        
(i) not less than 40 days prior to the Transfer, the New Borrower must have
submitted to Lender or, if Lender is then Freddie Mac, to a party designated by
Freddie Mac (the “Designated Seller”), a complete and accurate application,
together with all required supporting documentation including a written term
sheet specifying all of the terms of the proposed AIMCO-Held Subordinate Debt,
for a subordinate mortgage loan in the principal amount of the proposed
AIMCO-Held Subordinate Debt (the “Subordinate Loan”); and (ii) 10 days prior to
the Transfer, Lender or the Designated Seller must have failed to issue to the
proposed transferee a written commitment to provide the Subordinate Loan at an
interest rate and upon terms at least as favorable to the proposed transferee as
those of the proposed AIMCO-Held Subordinate Debt (and if such commitment is issued, Lender or the Designated Seller shall provide
financing to the New Borrower in the amount of the proposed AIMCO-Held
Subordinate Loan);  and

 

(g)        Borrower
has paid all costs and expenses incurred by Lender in connection with the
AIMCO-Held Subordinate Debt, including, without limitation, a review fee equal
to 0.1% of the outstanding principal balance of the Loan and reasonable
attorneys' fees.

 

Notwithstanding
anything in this Instrument which may be deemed to be to the contrary, (i) AIMCO
Subordinate Lender shall have the right to sell or otherwise transfer the
AIMCO-Held Subordinate Debt to AIMCO REIT, AIMCO OP or any entity in which AIMCO
REIT or AIMCO OP holds Controlling Interest(s), whether directly or indirectly,
and (ii) shall have the right, without Lender’s consent, to accept a Transfer of
title to the Mortgaged Property from Borrower by deed-in-lieu of foreclosure or
a foreclosure which results in AIMCO Subordinate Lender or an entity in which
AIMCO REIT or AIMCO OP hold Controlling Interest(s), directly or indirectly,
holding title to the Mortgaged Property, as more specifically set forth above.
Such Transfer shall not constitute an Event of Default under this Instrument,
and this entire Exhibit B shall automatically be reinstated in its entirety
including and without limitation, Sections RR and TT.