Document:

ex10_263.htm

    
      

    

    Exhibit
      10.26.3

     

    SECOND
      AMENDMENT TO MASTER LEASE

    

    

    This
      SECOND AMENDMENT TO MASTER LEASE (the "Amendment")
is entered into as of January 2, 2007 (the
"Effective Date")
by and among NATIONWIDE HEALTH
      PROPERTIES, INC., a
      Maryland corporation, and NHP McCLAIN, LLC, a Delaware limited
      liability company (collectively, "Landlord"); SUMMERVILLE AT
CAMELOT PLACE LLC, a Delaware limited liability
      company, SUMMERVILLE AT HILLEN VALE LLC, a
      Delaware limited liability company, SUMMERVILLE AT LAKEVIEW LLC,
a Delaware limited liability company, and SUMMERVILLE AT
RIDGEWOOD GARDENS LLC, a Delaware limited liability
      company (individually and collectively, "Existing Tenant"); SUMMERVILLE
      AT NORTH HILLS LLC, a Delaware limited liability company, and
THE INN AT MEDINA LLC, a Delaware limited liability company
      (collectively, the "Additional Tenant" and, together with
      Existing Tenant, "Tenant"); and SUMMERVILLE SENIOR
      LIVING, INC., a Delaware corporation
("Guarantor").

    

    RECITALS

    

    A.    Landlord,
      as
      lessor, and Existing Tenant, as lessee, are parties to that certain Master
      Lease
      dated as of October 2, 2006, as amended by that certain First Amendment to
      Master Lease (the "First Amendment") dated as of December 1,
      2006 (as amended, the "Master Lease"),
pursuant to which, among other things,
      Landlord leases to Existing
      Tenant the "Premises" described therein. Initially capitalized terms used but
      not otherwise defined in this Amendment shall have the meanings given to them
      in
      the Master Lease.

    

    B.    In
      connection
      with the Master Lease, Landlord and Existing Tenant are also parties to that
      certain Letter of Credit Agreement dated as of October 2, 2006, as amended
      by
      the First Amendment (as amended, the "LC Agreement"), pursuant
      to which, among other things, Existing Tenant posted with Landlord the Letter
      or
      Letters of Credit described therein as partial collateral for the performance
      of
      its obligations under the Master Lease.

    

    C.    Pursuant
      to
      that certain Amended and Restated Guaranty of Lease dated as of October 2,
      2006,
      as amended by the First Amendment (as amended, the "Guaranty"),
Guarantor, among other things, guaranteed to Landlord the
      performance
      by Existing Tenant of its obligations under the Master Lease and LC
      Agreement.

    

    D.           Additional
      Tenant, as buyer, and North Hills Management Co., Inc., an Ohio corporation,
      The
      Inn at Medina Management Company, Inc., an Ohio corporation, and The Inn at
      Medina Limited, an Ohio limited liability company (collectively,
"Seller"), have entered into that certain Residential Facility
      Purchase Agreement dated as of December 7, 2006 (the "Purchase
Agreement"), pursuant to the terms and conditions of
      which Additional Tenant has agreed to acquire, among other things, fee title
      to
      (i) that certain real property located at 1575 Bowers Lane, Zanesville, Ohio
      and
      all improvements thereon, which is presently operated as a one hundred-three
      (103) unit assisted living facility, and (ii) that certain real property located
      at 100 High Point Drive, Medina, Ohio and all improvements thereon, which is
      presently operated as a ninety (90) unit assisted living facility (collectively,
      the "Additional Facilities").

    
      
        
        

      

      
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    E.    Additional
      Tenant has agreed to assign its rights to purchase the Additional Facilities
      to
      Landlord pursuant to the terms and conditions of that certain Assignment of
      Purchase Agreement dated of even date herewith between Additional Tenant and
      Landlord.

    

    F.    Additional
      Tenant desires to lease the Additional Facilities from Landlord upon the closing
      of Landlord's acquisition thereof Accordingly, Landlord and Tenant desire to
      amend the Master Lease to, among other things: (i) join Additional Tenant to
      the
      Master Lease, (ii) add the Additional Facilities to the Premises demised
      thereunder, and (iii) make certain other revisions and modifications, all as
      more particularly set forth herein. In connection therewith, Guarantor desires
      to affiim to Landlord its obligations under the Guaranty notwithstanding the
      amendment of the Master Lease set forth in this Amendment.

    

    AGREEMENT

    

    NOW,
      THEREFORE, taking into account the foregoing Recitals, and in
      consideration of the mutual covenants and agreements contained herein, and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereto agree as follows:

    

    1.            Joinder
      of Additional Tenant; Addition of Additional Premises. Additional
      Tenant is hereby joined to the Master Lease as a Tenant thereunder. The
      Additional Facility and associated Landlord Personal Property are hereby added
      to the Premises demised under the Master Lease.

    

    2.           Amendments
      to Master Lease. The Master Lease is hereby specifically amended as
      set forth in this Section 2.

    

    

    (a)           Exhibit
      A, Exhibits B-1 and B-2 and Exhibit F attached hereto are hereby
      added to and incorporated into Exhibit A, Exhibit B and Exhibit F
respectively, of the Master Lease.

    

    (b)           Schedule
      1 and Schedule 2 of the Master Lease are hereby deleted in their
      entirety and substituted with Schedule 1 and Schedule 2 attached
      hereto.

    

    (c)            Section
      2.1(a),   and f_cj of the Master Lease are hereby deleted and
      substituted with
      the
      following:

    

    "2.1            Initial
      Term Rent.

    

    (a)            During
      the Initial Term, the annual "Minimum Rent" shall be an
amount
      equal to the sum of (i) Landlord's Camelot Investment multiplied by
eight and sixty one-hundredths percent (8.60%),
      (ii) Landlord's Lakeview/HillenVale Investment multiplied by
eight and seventy one-hundredths percent (8.70%),
      (iii)
Landlord's Ridgewood Investment multiplied by eight
      and seventy one-hundredths percent (8.70%), and
      Landlord's North Hills/Medina Investment multiplied by eight
      and fifty one-hundredths percent (8.50%) (each rate,
      the "Lease Rate" for such Facility), payable in advance in
      twelve (12) equal monthly installments. Commencing with the second
      (2nd) Lease Year and continuing thereafter during the Term (excluding the first
      Lease Year of any Renewal Term), Tenant agrees to pay "Additional Rent"
to Landlord monthly in advance together with the payment
      of Minimum
      Rent. Such Additional Rent (which shall be expressed as an annual amount but
      shall be payable in equal monthly installments) shall be equal to the sum of
      (i)
      the Additional Rent for the immediately preceding Lease Year and (ii) the
      product of (A) the Minimum Rent and Additional Rent due for the immediately
      preceding Lease Year and (B) the lesser of (x) three percent (3.0%) or (y)
      a
      percentage equal to five (5) times the percentage increase (the "CPI
Increase") in the United States Department of Labor, Bureau of
      Labor Statistics Consumer Price Index for All Urban Wage Earners and Clerical
      Workers, United States Average, Subgroup "All Items" (1982 –1984 = 100) (the
      "CPI"). In no event shall the CPI Increase be a negative number. The applicable
      CPI Increase shall be calculated annually for each Lease Year by comparing
      the
      CPI in effect on the first calendar day of the Lease Year for which Additional
      Rent is being calculated to the first calendar day of the immediately preceding
      Lease Year.

    
      
        
        

      

      
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    (b)            As
      used herein, (i) "Landlord's Camelot Investment" means
Landlord's
      investment in the Facility located at 49-A Leisure Lane, Medina, Ohio (the
      "Camelot Facility") in the amount of Ten Million Six Hundred
      Sixty-Five Thousand Dollars ($10,665,000), plus any
      amounts advanced by Landlord pursuant to Section 8.6  with
      respect to the Camelot Facility, plus any other amount that, in
      accordance with any other term or provision of this Master Lease, is to be
      added
      to Landlord's Camelot Investment, and minus any amount that, in
      accordance with any term or provision of this Master Lease, is to be subtracted
      from Landlord's Camelot Investment; (ii) "Landlord's
Lakeview/HillenVale Investment" means Landlord's
      investment in (A) the Facility located at 4000 Lakeview Crossing, Groveport,
      Ohio (the "Lakeview Facility"), and (B) the
      Facility located at 1615 Yauger Road, Mt. Vernon, Ohio (the "HillenVale
      Facility"), in the aggregate amount of Twenty-Two Million Two Hundred
      Eighty Thousand Dollars ($22,280,000), plus any
      amounts advanced by Landlord pursuant to Section 8.6 with respect to the
      Lakeview Facility and/or HillenVale Facility, plus any other amount
      that, in accordance with any other term or provision of this Master Lease,
      is to
      be added to Landlord's Lakeview/HillenVale Investment, and minus any
      amount that, in accordance with any term or provision of this Master Lease,
      is
      to be subtracted from Landlord's Lakeview/HillenVale Investment; (iii)
      "Landlord's Ridgewood Investment" means Landlord's investment in the
      Facility located at 2001 Ridgewood Drive, Salem, Virginia (the
"Ridgewood Facility") in the amount of Eleven Million Two
      Hundred Thousand Dollars ($11,200,000), plus any
      amounts advanced by Landlord pursuant to Section 8.6  with
      respect to the Ridgewood Facility, plus any other amount that, in
      accordance with any other term or provision of this Master Lease, is to be
      added
      to Landlord's Ridgewood Investment, and minus any amount that, in
      accordance with any term or provision of this Master Lease, is to be subtracted
      from Landlord's Ridgewood Investment, and (iv)
"Landlord's North Hills/Medina Investment" means
      Landlord's investment in (X) the Facility located at 1575 Bowers Lane,
      Zanesville, Ohio (the "North Hills Facility"), and (Y) the
      Facility located at 100 High Point Drive, Medina, Ohio (the "Medina
      Facility"), in the aggregate amount of Twenty-Five Million Six Hundred
      Thirteen Thousand Dollars ($25,613,000), plus any
      amounts advanced by Landlord pursuant to Section 8.6 with respect to the
      North Hills Facility and/or the Medina Facility, plus any other amount
      that, in accordance with any other term or provision of this Master Lease,
      is to
      be added to Landlord's North Hills/Medina Investment, and minus any
      amount that, in accordance with any term or provision of this Master Lease,
      is
      to be subtracted from Landlord's North Hills/Medina Investment.

    
      
        
        

      

      
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    (c)            Concurrently
      with any increase or decrease in Landlord's Camelot Investment,
      Landlord's Lakeview/HillenVale Investment, Landlord's Ridgewood Investment
      and/or Landlord's North Hills/Medina Investment during the Term as described
      in
Section 2.1(b), the Rent then due and payable for the balance of the
      applicable Lease Year and Term shall be recalculated and reset based on the
      adjusted amount of Landlord's Camelot Investment, Landlord's Lakeview/HillenVale
      Investment, Landlord's Ridgewood Investment and/or Landlord's North Hills/Medina
      Investment, as the case may be."

    

    (d)             Section
      4 of the Master Lease is hereby deleted in its entirety and substituted with
      the
      following:

    

    "4.    Security
      Deposit: Guaranty.

    

    (a)            Pursuant
      to the parties' concurrent Letter of Credit Agreement, Tenant
      shall deposit with Landlord and maintain during the Term one (1) or more letters
      of credit in an undrawn face amount equal to Seven Hundred Fifty-Four
      Thousand Seven Hundred Fifty Dollars ($754,750) as a
"Security Deposit" against the faithful performance
      by Tenant
      of its obligations under this Master Lease.

    

    (b)            Notwithstanding
      the foregoing, (i) at the end of the first Lease Year the amount of the Security
      Deposit shall be increased by the amount of $325,960 if the
      Lakeview/HillenVale Rent Coverage Ratio is less than 1.01 to 1; and (ii) at
      the
      end of the second Lease Year the amount of the Security Deposit shall be
      increased by the amount of $162,980 if the Lakeview/HillenVale
      Rent Coverage Ratio is less than 1.26 to 1. As used herein,
"Lakeview/HillenVale Rent Coverage Ratio" means, as of the date
      of determination, the ratio of (i) the EBITDARM (as hereinafter defined) for
      the
      Lakeview Facility and HillenVale Facility for the immediately preceding two
      calendar quarters (a "Measuring Period"), minus (A) an
      assumed management fee equal to five percent (5%) of the Gross Revenues
(as hereinafter defined) generated during such Measuring
      Period from
      the Lakeview Facility and HillenVale Facility, and (B) one-half of the
      applicable annual CapEx Amount (as defined in Section 8.3 below) for the
      Lakeview Facility and HillenVale Facility at the commencement of the Measuring
      Period, multiplied by the aggregate number of assisted living units at
      the Lakeview Facility and HillenVale Facility, to (ii) the total amount of
      the
      Minimum Rent and Additional Rent due with respect to the Lakeview Facility
      and
      HillenVale Facility for the Measuring Period pursuant to the terms of this
      Master Lease.

    
      
        
        

      

      
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    (c)            If
      at any time following January 31, 2011, the Camelot Rent Coverage Ratio is
      less
      than 1.20 to 1, Tenant shall from time to time make deposits, which may be
      in
      the form of cash or supplemental letters of credit meeting the requirements
      of
      the Letter of Credit Agreement (the "Camelot Supplemental Deposits"),
to Landlord pursuant to Section 4(1) until such time as the
      total amount of the Security Deposit is increased as a result of such Camelot
      Supplemental Deposits by the amount of One Hundred Fifty-One Thousand
      Four Hundred Thirty-Five Dollars ($151,435); provided, however,
      Tenant's obligation to make such Camelot Supplemental Deposits shall not apply
      with respect to any Measuring Period for which the Camelot Rent Coverage Ratio
      equals or exceeds 1.20 to 1. As used herein, "Camelot Rent Coverage
Ratio" means, as of the date of determination,
      the
      ratio of (i) the EBITDARM for the Camelot Facility for the Measuring Period,
      minus (A) an assumed management fee equal to five percent (5%) of the
      Gross Revenues generated during such Measuring Period from the Camelot Facility,
      and (B) one-half of the applicable annual CapEx Amount for the Camelot Facility
      at the commencement of the Measuring Period, multiplied by the
      aggregate number of assisted living units at the Camelot Facility, to (ii)
      the
      total amount of the Minimum Rent and Additional Rent due with respect to the
      Camelot Facility for the Measuring Period pursuant to the terms of this Master
      Lease.

    

    (d)           If
      at any time following June 30, 2010, the Ridgewood Rent Coverage Ratio is less
      than 1.20 to 1, Tenant shall from time to time make deposits, which may be
      in
      the form of cash or supplemental letters of credit meeting the requirements
      of
      the Letter of Credit Agreement (the "Ridgewood Supplemental
Deposits"), to Landlord pursuant to Section 4(f)
until such time as the total amount
      of the Security Deposit is increased as
      a result of such Ridgewood Supplemental Deposits by the amount of
Eighty-Four Thousand Seven Hundred Fifty Dollars ($84,750);
provided, however, Tenant's obligation to make such Ridgewood
      Supplemental Deposits shall not apply with respect to any Measuring Period
      for
      which the Ridgewood Rent Coverage Ratio equals or exceeds 1.20 to 1. As used
      herein, "Ridgewood Rent Coverage Ratio" means,
      as of the date of determination, the ratio of (1) the EBITDARM for the Ridgewood
      Facility for the Measuring Period, minus (A) an assumed management fee
      equal to five percent (5%) of the Gross Revenues generated during such Measuring
      Period from the Ridgewood Facility, and (B) one-half of the applicable annual
      CapEx Amount for the Ridgewood Facility at the commencement of the Measuring
      Period, multiplied by the aggregate number of assisted living units at
      the Ridgewood Facility, to (ii) the total amount of the Minimum Rent and
      Additional Rent due with respect to the Ridgewood Facility for the Measuring
      Period pursuant to the terms of this Master Lease.

    

    (e)            If
      at any time following June 30, 2010, the North Hills/Medina Rent
      Coverage Ratio is less than 1.20 to 1, Tenant shall from time to time make
      deposits, which may be in the form of cash or supplemental letters of credit
      meeting the requirements of the Letter of Credit Agreement (the
"NH/Medina Supplemental Deposits"), to
      Landlord pursuant to Section 4(1) until such time as the total amount of
      the Security Deposit is increased as a result of such NH/Medina Supplemental
      Deposits by the amount of Three Hundred Sixty-Two Thousand Eight Hundred
      Fifty Dollars ($362,850); provided, however, Tenant's obligation to
      make such NH/Medina Supplemental Deposits shall not apply with respect to any
      Measuring Period for which the North Hills/Medina Rent Coverage Ratio equals
      or
      exceeds 1.20 to 1. As used herein, "North Hills/Medina Rent Coverage
      Ratio" means, as of the date of determination, the ratio of (i) the
      EBITDARM for the North Hills Facility and the Medina Facility for the Measuring
      Period, minus (A) an assumed management fee equal to five percent (5%)
      of the Gross Revenues generated during such Measuring Period from the North
      Hills Facility and the Medina Facility, (B) one-half of the applicable annual
      CapEx Amount for the North Hills Facility at the commencement of the Measuring
      Period, multiplied by the aggregate number of assisted living units at
      the North Hills Facility, and (C) one-half of the applicable annual CapEx Amount
      for the Medina Facility at the commencement of the Measuring Period,
multiplied by the aggregate number of assisted living units at the
      Medina Facility, to (ii) the total amount of the Minimum Rent and Additional
      Rent due with respect to the North Hills Facility and the Medina Facility for
      the Measuring Period pursuant to the tellas of this Master
      Lease.

    
      
        
        

      

      
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    (0            The
      Supplemental Deposits to be made by Tenant in accordance with
      Section 4(c), (d) and (e) above shall be due on the thirtieth
      (30th) day of
      each calendar month (or last day of the month, in the case of February)
      following the Measuring Period in which the actual Camelot Rent Coverage Ratio,
      Ridgewood Rent Coverage Ratio or North Hills/Medina Rent Coverage Ratio, as
      applicable, fails to equal or exceed 1.20 to 1. The Supplemental Deposits shall
      be equal to five percent (5%) of the Gross Revenues from the Camelot Facility,
      Ridgewood Facility or North Hills and Medina Facilities, as applicable, for
      the
      calendar month immediately preceding the date on which each Supplemental Deposit
      is due or such lesser amount as is required to fulfill the requirements of
      Section 4(c), (d) and (e) above.

    

    (g)             As
      used herein, "Gross Revenues" means all of the revenues of
the
      applicable Facility or Facilities other than the proceeds of the sale of any
      of
      the applicable Facility's or Facilities' equipment which has become worn out
      or
      obsolete, all insurance awards and condemnation proceeds, sales, use and
      occupancy or other taxes on receipts required to be accounted for by Tenant
      to
      governmental authorities and non­recurring revenues as reasonably approved
      by Landlord. As used herein, "EBITDARM" means, for any
      Measuring Period, the net income (or loss) of Tenant for such Measuring Period
      to the extent derived from the operation of the applicable Facility or
      Facilities, adjusted to add thereto any amounts deducted in determining such
      net
      income (or loss) for (v) interest expense, (w) income tax expense, (x)
      depreciation and amortization expense, (y) rental expense, and (z) management
      fee expense, in each case determined in conformity with generally accepted
      accounting principles, consistently applied."

    

    (e)             Section
      6.1(a) of the Master Lease is hereby deleted and substituted with the
following:

    

    "(a)
      Fire and Extended Coverage with respect to each Facility against loss
      or damage from all causes under standard "all risk" property insurance coverage
      with an agreed amount endorsement (such that the insurance carrier has accepted
      the amount of coverage and has agreed that there will be no co-insurance
      penalty), without exclusion for fire, lightning, windstorm, explosion, smoke
      damage, vehicle damage, sprinkler leakage, flood (if located in a 100-year
      or
      less flood zone), vandalism, earthquake (if located in an area known for risk
      of
      loss due to seismic activity), malicious mischief or any other risks normally
      covered under an extended coverage endorsement, in amounts that are not less
      than the actual replacement value of such Facility and all Tenant Personal
      Property associated therewith (including the cost of compliance with changes
      in
      zoning and building codes and other laws and regulations, demolition and debris
      removal and increased cost of construction);"

     

    
      
        
        

      

      
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    (f)           The
      following is hereby added at the beginning of the second paragraph of Section
8.3 of the Master Lease:

    

    "For
      purposes of determining the Applicable Annual Reserve with respect to the
      Ridgewood Facility, the Ridgewood Facility shall be deemed to have eighty (80)
      units."

    

    (g)           The
      third sentence of Section 13.4 of the Master Lease is hereby deleted and
      substituted with the following:

    

    "All
      sums
      so paid by Landlord and all necessary and incidental costs and expenses
      (including reasonable attorneys' fees and expenses) incurred in connection
      with
      the performance of any such act by it, together with interest at the Agreed
      Rate
      from the date of the making of such payment or the incurring of such costs
      and
      expenses, shall at Landlord's option either be payable by Tenant to Landlord
      on
      demand or added to Landlord's Camelot Investment, Landlord's Lakeview/HillenVale
      Investment, Landlord's Ridgewood Investment, and/or Landlord's North
      Hills/Medina Investment, as the case may be."

    

    (h)           The
      forth sentence of Section 18 of the Master Lease is hereby deleted and
substituted
      with the following:

    

    "In
      the
      event this Master Lease is terminated as to any Facility under this Section
      18, then the Minimum Rent and Additional Rent due hereunder shall be shall
      be reduced by the product of (x) the amount of the then current Minimum Rent
      and
      Additional Rent, and (y) a fraction, the numerator of which is the amount
      received by Landlord as a result of the Complete Taking and the denominator
      of
      which is the sum of Landlord's Camelot Investment, Landlord's
      Lakeview/HillenVale Investment, Landlord's Ridgewood Investment and Landlord's
      North Hills/Medina Investment."

    

    (1)           Section
      23 of the Master Lease is hereby deleted in its entirety and substituted
with
      the
      following:

    

      
        
          
          

        

        
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    "Option
      to Purchase. Provided no
      Event of Default exists on the Call Exercise Date or the closing date, Tenant
      shall have the option to purchase all but not less than all the Premises
      (excluding the Ridgewood Facility) by giving Landlord written notice thereof
      (the "Call Exercise Date") not more than fifteen (15) days
before or after the date which is_ fifteen (15) months prior to
      the end of the then current Term. The purchase price shall be the greater of
      (a)
      Landlord's Camelot Investment, Landlord's Lakeview/HillenVale Investment and
      Landlord's
      North Hills/Medina Investment, compounded each Lease Year (including any partial
      Lease Year if the closing does not occur on the last day of a Lease Year) after
      the commencement date of this Master Lease at a rate of three percent
      (3%) per Lease Year, or (b) Landlord's Camelot Investment, Landlord's
      Lakeview/HillenVale Investment and Landlord's North Hills/Medina Investment,
      compounded each Lease Year (including any partial Lease Year if the closing
      does
      not occur on the last day of a Lease Year) after the commencement date of this
      Master Lease at a rate equal to the actual percentage increase in the CPI each
      Lease Year during the period of determination. Once the purchase price is so
      established: (i) the parties shall sign the standard sale escrow instructions
      of
      a national title company (selected by Landlord and reasonably approved by
      Tenant) that are in form and substance reasonably satisfactory to Landlord
      and
      Tenant and without representations or warranties, due diligence or other
      contingencies in favor of Tenant except as otherwise provide for herein; (ii)
      Tenant shall deposit three percent (3%) of the purchase price
      with the title company, which may be retained by Landlord as liquidated damages
      as a result of the failure of escrow to close solely for any breach by Tenant
      of
      these terms or the escrow instructions (and which in no way shall liquidate
      or
      limit Landlord's damages by reason of any other breach of this Master Lease);
      (iii) the escrow shall close on the last day of the then current Term, at which
      time Tenant shall pay the purchase price in cash and Landlord shall deliver
      title to each of the Facilities subject only to those title exceptions shown
      in
Exhibit D  by customary limited warranty deed and other
      customary conveyancing documents; and (iv) Tenant shall pay all transaction
      costs. If Tenant fails to close the escrow for any reason other than a breach
      by
      Landlord, then Landlord shall have the right to extend the Term for an
      additional one (1) year period during which the Rent shall be
      calculated as if on the Call Exercise Date Tenant had instead exercised its
      right to extend the Term for a Renewal Term."

    

    Section
      25 of the Master Lease is hereby deleted in its entirety and substituted
      with the following:

    

    "1031
      Exchange. Tenant acknowledges that Nationwide Health Properties,
      Inc. ("NHP") elected to consummate the purchase of the Lakeview Facility and
      HillenVale Facility as a reverse like-kind exchange within the meaning of
      Section 1031 of Code (the "Exchange"). Accordingly, NHP entered
      into a Qualified Exchange Accommodation Agreement (the "QEAA") with an "Exchange
      Accommodation Titleholder" as that teim is defined in Internal Revenue Service
      Revenue Procedure 2000-37, 2000-40 I.R.B. 1 (September 15, 2000) for the purpose
      of effectuating such Exchange. Tenant acknowledges that NHP McClain, LLC, a
      Delaware limited liability company ("NHP McClain"), rather than
      NHP, took title to the Lakeview Facility and HillenVale Facility and leased
      the
      Lakeview Facility and HillenVale Facility to NHP pursuant to a written lease
      (the "Exchange Lease"). NHP McClain and Landlord acknowledge
      and agree that Tenant has no obligations under such Exchange Lease and Tenant's
      only duties, covenants, obligations and liabilities shall be those set forth
      in
      this Master Lease and the transaction documents relating thereto to which Tenant
      is a party. Effective as of December 1, 2006, Landlord completed the Exchange,
      acquired all of the membership interest in NHP McClain and terminated the
      Exchange Lease. Accordingly, NHP McClain is hereby joined as a "Landlord" under
      this Master Lease, for the purposes of continuing the lease of the Lakeview
      Facility and HillenVale Facility to Tenant pursuant to the terms of this Master
      Lease. Tenant hereby agrees to attorn to and recognize NHP McClain as a
      "Landlord" under this Master Lease with respect to the Lakeview Facility and
      HillenVale Facility."

    
      
        
        

      

      
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    2.            Tax
      Impound and CapEx Expenditures. From and after the date Landlord
      acquires fee title to the North Hills Facility and the Medina Facility, the
      North Hills Facility and Medina Facility shall be added as a portion of the
      Premises leased to Tenant under the terms of the Master Lease. Accordingly,
      with
      each payment of Minimum Rent payable by Tenant with respect to the North Hills
      Facility and the Medina Facility, Tenant shall make tax impound deposits and
      CapEx Reserve deposits for the North Hills Facility and the Medina Facility
      in
      accordance with the terms of Section 5.2 and Section 8.3 of the
      Master Lease.

    

    3.           Amendment
      to LC Agreement. In the LC Agreement and Exhibit A to the LC
      Agreement, all references to "Five Hundred Seventy-Three Thousand Three Hundred
      Twenty-Five Dollars ($573,325)" as the Letter of Credit Amount are hereby
      deleted and replaced with "Seven Hundred Fifty-Four Thousand Seven Hundred
      Fifty
      Dollars ($754,750)".

    

    4.           Enforcement
      of Rights. Landlord has the right to enforce the covenants,
      representations and warranties of Seller under the Purchase Agreement with
      respect to the Additional Facilities; provided, however, Landlord agrees upon
      request of Tenant either to enforce the same against Seller at Tenant's cost
      and
      expense or, to the extent assignable, to assign its rights thereto in order
      to
      enable Tenant to enforce the same against Seller.

    

    5.           Reaffirmation
      of Obligations.

    

    (a)            Notwithstanding
      the amendments to the Master Lease contained herein, Tenant and Landlord each
      hereby acknowledges and reaffillus its respective obligations under the Master
      Lease (as modified hereby), the LC Agreement and all other documents executed
      by
      such party in connection therewith.

    

    (b)            Notwithstanding
      the amendments to the Master Lease contained herein, Guarantor hereby
      acknowledges and reaffirms its obligations under the Guaranty and all documents
      executed by Guarantor in connection therewith, and further agrees that any
      reference made in the Guaranty to the Master Lease or any terms or conditions
      contained therein shall mean such Master Lease or such terms or conditions
      as
      amended by this Amendment.

    

    6.            Interpretation.
      This Amendment shall be construed as a whole and in accordance
      with
      its fair meaning. Headings are for convenience only and shall not be used in
      construing meaning.

    

    7.            Further
      Instruments. Each party will, whenever and as often as it shall be
      reasonably requested so to do by another party, cause to be executed,
      acknowledged or delivered any and all such further instruments and documents
      as
      may be necessary or proper, in the reasonable opinion of the requesting party,
      in order to carry out the intent and purpose of this Amendment.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    8.            Incorporation
      of Recitals. The Recitals to this Amendment are incorporated hereby
      by reference.

    

    9.            Counterparts.
      This Amendment may be executed in counterparts, all of which
      executed counterparts shall together constitute a single document. Signature
      pages may be detached from the counterparts and attached to a single copy of
      this document to physically form one document.

    

    10.            Attorneys'
      Fees. In the event of any dispute or litigation concerning the
      enforcement, validity or interpretation of this Amendment, or any part thereof,
      the losing party shall pay all costs, charges, fees and expenses (including
      reasonable attorneys' fees) paid or incurred by the prevailing party, regardless
      of whether any action or proceeding is initiated relative to such dispute and
      regardless of whether any such litigation is prosecuted to
      judgment.

    

    11.            Effect
      of Amendment. Except as specifically amended pursuant to the terms
      of this Amendment, the terms and conditions of the Master Lease shall remain
      unmodified and in full force and effect. In the event of any inconsistencies
      between the terms of this Amendment and any terms of the Master Lease, the
      terms
      of this Amendment shall govern and prevail.

    

    12.            Entire
      Agreement. This Amendment contains the entire agreement between the
parties
      relating to the subject matters contained herein. Any oral representations
      or
      statements concerning the subject matters herein shall be of no force or
      effect.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      

    

    
      IN
        WITNESS WHEREOF, the parties have executed this Amendment as of
        the date first above written.

    

    
      

    

    
      	
              TENANT:  

            	 
	 	 	 	 
	
              SUMMERVILLE
                AT CAMELOT PLACE LLC,

            	 
	
              a
                Delaware limited liability company

            	 
	 	 	 	 
	
              By:

            	
              /s/
                Granger Cobb 

            	 
	 	
              Granger
                Cobb 

            	 
	 	
              President 

            	 
	 	 	 	 
	
              SUMMERVILLE
                AT HILLEN VALE LLC,

            	 
	
              a
                Delaware limited liability company

            	 
	 	 	 	 
	
              By:

            	
              /s/
                Granger Cobb 

            	 
	 	
              Granger
                Cobb 

            	 
	 	
              President 

            	 
	 	 	 	 
	
              SUMMERVILLE
                AT LAKEVIEW LLC,

            	 
	
              a
                Delaware limited liability company

            	 
	 	 	 	 
	
              By:

            	
              /s/
                Granger Cobb 

            	 
	 	
              Granger
                Cobb 

            	 
	 	
              President 

            	 
	 	 	 	 
	
              SUMMERVILLE
                AT RIDGEWOOD GARDENS LLC,

            	 
	
              a
                Delaware limited liability company

            	 
	 	 	 	 
	
              By:

            	
              /s/
                Granger Cobb 

            	 
	 	
              Granger
                Cobb 

            	 
	 	
              President 

            	 
	 	 	 	 
	
              SUMMERVILLE
                AT NORTH HILLS LLC,

            	 
	
              a
                Delaware limited liability company

            	 
	 	 	 	 
	
              By:

            	
              /s/
                Granger Cobb 

            	 
	 	
              Granger
                Cobb 

            	 
	 	
              President 

            	 
	 	 	 	 
	
              THE
                INN AT MEDINA
                LLC,

            	 
	
              a
                Delaware limited liability company

            	 
	 	 	 	 
	
              By:

            	
              /s/
                Granger Cobb 

            	 
	 	
              Granger
                Cobb 

            	 
	 	
              President 

            	 

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              GURANTOR:  

            	 
	 	 	 	 
	
              SUMMERVILLE
                SENIOR LIVING, INC.,

            	 
	
              a
                Delaware corporation

            	 
	 	 	 	 
	
              By:

            	
              /s/
                Granger Cobb 

            	 
	 	
              Granger
                Cobb 

            	 
	 	
              President 

            	 
	 	 	 	 
	
              LANDLORD:  

            	 
	 	 	 	 
	
              NATIONWIDE
                HEALTH PROPERTIES, INC.,

            	 
	
              a
                Maryland corporation

            	 
	 	 	 	 
	
              By:

            	
              /s/David
                Snyder

            	 
	
              Name:

            	
              David
                Snyder

            	 
	
              Title:

            	
              Vice
                President & Controller

            	 
	 	 	 	 
	 	 	 	 
	
              NHP
                McCLAIN,LLC,

            	 
	
              a
                Delaware limited liability company

            	 
	 	 	 	 
	
              BY:

            	
              NATIONWIDE
                HEALTH PROPERTIES,INC.,

            	 
	 	
              a
                Maryland corporation,

            	 
	 	
              its
                sole member

            	 
	 	 	 	 
	 	
              By:

            	
              /s/David
                Snyder

            	 
	 	
              Name:

            	
              David
                Snyder

            	 
	 	
              Title:

            	
              Vice
                President & Controller

            	 

    

    

     

    12ex106602multifamilysecurity.htm

    
      

      

    

    Prepared
      by, and after recording return to:

    Ballard
      Spahr Andrews & Ingersoll, LLP

    300
      East
      Lombard Street, 18th Floor

    Baltimore,
      Maryland 21202

    Attention:  Anna
      A. Mahaney, Esq.

    

    

    

     

    

    

    

    

    INCREASED,
      CONSOLIDATED AND RESTATED

    MORTGAGE
      AND SECURITY AGREEMENT

    

    (NEW
      YORK)

    

    

    

    THIS
      INSTRUMENT IS FOR USE

    ONLY
      FOR MULTIFAMILY PROPERTIES

    CONTAINING
      MORE THAN 6 RESIDENTIAL UNITS

    

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              TABLE
                OF CONTENTS

            	 
	 	 	 
	 	 	
              Page

            
	
              1

            	
              DEFINITIONS

            	
              1

            
	
              2

            	
              UNIFORM
                COMMERCIAL CODE SECURITY AGREEMENT

            	
              6

            
	
              3

            	
              ASSIGNMENT
                OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION

            	
              7

            
	
              4

            	
              ASSIGNMENT
                OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY

            	
              9

            
	
              5

            	
              PAYMENT
                OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
                PREMIUM

            	
              11

            
	
              6

            	
              EXCULPATION

            	
              11

            
	
              7

            	
              DEPOSITS
                FOR TAXES, INSURANCE AND OTHER CHARGES

            	
              11

            
	
              8

            	
              COLLATERAL
                AGREEMENTS

            	
              12

            
	
              9

            	
              APPLICATION
                OF PAYMENTS

            	
              12

            
	
              10

            	
              COMPLIANCE
                WITH LAWS

            	
              12

            
	
              11

            	
              USE
                OF PROPERTY

            	
              13

            
	
              12

            	
              PROTECTION
                OF LENDER’S SECURITY

            	
              13

            
	
              13

            	
              INSPECTION

            	
              13

            
	
              14

            	
              BOOKS
                AND RECORDS; FINANCIAL REPORTING

            	
              14

            
	
              15

            	
              TAXES;
                OPERATING EXPENSES

            	
              15

            
	
              16

            	
              LIENS;
                ENCUMBRANCES

            	
              16

            
	
              17

            	
              PRESERVATION,
                MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY

            	
              16

            
	
              18

            	
              ENVIRONMENTAL
                HAZARDS

            	
              17

            
	
              19

            	
              PROPERTY
                AND LIABILITY INSURANCE

            	
              22

            
	
              20

            	
              CONDEMNATION

            	
              24

            

    

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        Page
          i

        
          

        

      

      
        
        

      

    

    
      	
              21

            	
              TRANSFERS
                OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER

            	
              24

            
	
              22

            	
              EVENTS
                OF DEFAULT

            	
              28

            
	
              23

            	
              REMEDIES
                CUMULATIVE

            	
              29

            
	
              24

            	
              FORBEARANCE

            	
              29

            
	
              25

            	
              LOAN
                CHARGES

            	
              29

            
	
              26

            	
              WAIVER
                OF STATUTE OF LIMITATIONS

            	
              30

            
	
              27

            	
              WAIVER
                OF MARSHALING

            	
              30

            
	
              28

            	
              FURTHER
                ASSURANCES

            	
              30

            
	
              29

            	
              ESTOPPEL
                CERTIFICATE

            	
              30

            
	
              30

            	
              GOVERNING
                LAW; CONSENT TO JURISDICTION AND VENUE

            	
              31

            
	
              31

            	
              NOTICE

            	
              31

            
	
              32

            	
              SALE
                OF NOTE; CHANGE IN SERVICER

            	
              31

            
	
              33

            	
              SINGLE
                ASSET BORROWER

            	
              32

            
	
              34

            	
              SUCCESSORS
                AND ASSIGNS BOUND

            	
              32

            
	
              35

            	
              JOINT
                AND SEVERAL LIABILITY

            	
              32

            
	
              36

            	
              RELATIONSHIP
                OF PARTIES; NO THIRD PARTY BENEFICIARY

            	
              32

            
	
              37

            	
              SEVERABILITY;
                AMENDMENTS

            	
              32

            
	
              38

            	
              CONSTRUCTION

            	
              32

            
	
              39

            	
              LOAN
                SERVICING

            	
              33

            
	
              40

            	
              DISCLOSURE
                OF INFORMATION

            	
              33

            
	
              41

            	
              NO
                CHANGE IN FACTS OR CIRCUMSTANCES

            	
              33

            
	
              42

            	
              SUBROGATION

            	
              33

            
	
              43

            	
              ACCELERATION;
                REMEDIES

            	
              33

            

    

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        Page
          ii

        
          

        

      

      
        
        

      

    

    
      	
              44

            	
              SATISFACTION
                OF DEBT

            	
              34

            
	
              45

            	
              LIEN
                LAW

            	
              34

            
	
              46

            	
              WAIVER
                OF TRIAL BY JURY

            	
              34

            
	
              47

            	
              NO
                NOVATION

            	
              34

            

    

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        Page
          iii

        
          

        

      

      
        
        

      

    

    INCREASED,
      CONSOLIDATED AND RESTATED

     

    MORTGAGE
      AND SECURITY AGREEMENT

     

    

     

    THIS
      INCREASED, CONSOLIDATED AND RESTATED MORTGAGE AND SECURITY AGREEMENT (the
“Instrument”) is dated as of the 31st day of August, 2007,
      between MERIWEG-SYRACUSE, LLC, a limited liability company organized and
      existing under the laws of Delaware, whose address is c/o Emeritus Corporation,
      3131 Elliott Avenue, #500, Seattle, Washington 98121, as mortgagor
      (“Borrower”), and RED MORTGAGE CAPITAL, INC., a corporation
      organized and existing under the laws of Ohio, whose address is Two Miranova
      Place, 12th
      Floor, Columbus, Ohio 43215, as mortgagee
      (“Lender”).

     

    Lender
      is
      the holder of those certain mortgages described on Schedule A-1
annexed hereto and made a part hereof, as the same have been
      and may
      hereafter be assigned, consolidated, amended and/or otherwise modified
      (collectively, the “Original Mortgages”), which Original
      Mortgages secure the unpaid principal balance of $8,404,296.21.

     

    The
      Borrower and Lender now desire to increase the amount of the Original Mortgages
      by $5,811,703.79 and to consolidate the Original Mortgage to secure the
      principal amount of $14,216,000.00 and amend and modify the terms of the
      Original Mortgages as each relates to the Mortgaged Property.  The
      Original Mortgages are being amended and restated in their entirety to reflect
      such consolidation and amendments.  Borrower and Lender hereby agree
      to consolidate, amend and restate the Original Mortgages and all of Borrower’s
      obligations, representations and warranties thereunder, in their entirety,
      as
      follows:

     

    Borrower
      is indebted to Lender in the principal amount of $14,216,000.00, as evidenced
      by
      Borrower’s Amended and Restated Multifamily Note payable to Lender, dated as of
      the date of this Instrument, and maturing on September 1, 2014.

     

    TO
      SECURE
      TO LENDER the repayment of the Indebtedness, 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 mortgages,
      warrants, grants, conveys and assigns to Lender the Mortgaged Property,
      including the Land located in Onondaga County, State of New York and described
      in Exhibit A attached to this Instrument.

     

    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.  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 a schedule of
      exceptions to coverage in any title insurance policy issued to Lender
      contemporaneously with the execution and recordation of this Instrument and
      insuring Lender’s interest in the Mortgaged Property.

     

    Covenants.  Borrower
      and Lender covenant and agree as follows:

     

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

     

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

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

     

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

     

    (c)           “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.

     

    (d)           “Event
      of Default” means the occurrence of any event listed in
      Section 22.

     

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

     

    (f)           “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.

     

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

     

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

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

     

    (i)           “Impositions”
      and “Imposition Deposits” are defined in
      Section 7(a).

     

    (j)           “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.

     

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

     

    (l)           [Intentionally
      omitted.]

     

    (m)           “Key
      Principal” means the natural person(s) or entity identified as such at
      the foot of this Instrument, and any person or entity who becomes a Key
      Principal after the date of this Instrument and is identified as such in an
      amendment or supplement to this Instrument.

     

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

     

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

     

    (p)           “Lender”
      means the entity identified as “Lender” in the first paragraph of this
      Instrument and its successors and assigns, or any subsequent holder of the
      Note.

     

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

     

    (r)           “Loan
      Servicer” means the entity that from time to time is designated by
      Lender to collect payments and deposits and receive notices under the Note,
      this
      Instrument and any

     

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

    other
      Loan Document, and otherwise to service the loan evidenced by the Note for
      the
      benefit of Lender.  Unless Borrower receives notice to the contrary,
      the Loan Servicer is the entity identified as “Lender” in the first paragraph of
      this Instrument.

     

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

     

    
      	
               

            	
              (1)

            	
              the
                Land;

            

    

     

    
      	
               

            	
              (2)

            	
              the
                Improvements;

            

    

     

    
      	
               

            	
              (3)

            	
              the
                Fixtures;

            

    

     

    
      	
               

            	
              (4)

            	
              the
                Personalty;

            

    

     

    
      	
               

            	
              (5)

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

            

    

     

    
      	
               

            	
              (6)

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

            

    

     

    
      	
               

            	
              (7)

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

            

    

     

    
      	
               

            	
              (8)

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

            

    

     

    
      	
               

            	
              (9)

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

            

    

     

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4033

        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (10)

            	
              all
                Rents and Leases;

            

    

     

    
      	
               

            	
              (11)

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

            

    

     

    
      	
               

            	
              (12)

            	
              all
                Imposition Deposits;

            

    

     

    
      	
               

            	
              (13)

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

            

    

     

    
      	
               

            	
              (14)

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

            

    

     

    
      	
               

            	
              (15)

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

            

    

     

    (t)           “Note”
      means the Amended and Restated Multifamily Note described on page 1 of this
      Instrument, including the Acknowledgment and Agreement of Key Principal to
      Personal Liability for Exceptions to Non-Recourse Liability (if any), and all
      schedules, riders, allonges and addenda, as such Multifamily Note may be amended
      from time to time.

     

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

     

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

     

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

     

    (x)           “Rents”
      means all rents (whether from residential or non-residential space), revenues
      and other income of the Land or the Improvements, including subsidy
      payments

     

    
      
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    received
      from any sources (including, but not limited to payments under any Housing
      Assistance Payments Contract), parking fees, laundry and vending machine income
      and fees and charges for food, health care and other services provided at the
      Mortgaged Property, whether now due, past due, or to become due, and deposits
      forfeited by tenants.

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
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    delivered
      to each tenant personally, by mail or by delivering such demand to each rental
      unit.  Borrower shall not interfere with and shall cooperate with
      Lender’s collection of such Rents.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (c)           Borrower
      acknowledges and agrees that the exercise by Lender, either directly or by
      a
      receiver, of any of the rights conferred under this Section 4 shall not be
      construed to make

     

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

     

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

     

    (e)           Borrower
      shall, promptly upon Lender’s request, deliver to Lender an executed copy of
      each residential Lease then in effect. All Leases for residential dwelling
      units
      shall be on forms approved by Lender, shall be for initial terms of at least
      six
      months and not more than two years, and shall not include options to
      purchase.  If customary in the applicable market, residential Leases
      with terms of less than six months may be permitted with Lender’s prior written
      consent.

     

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

     

    
      
        Fannie
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    Mortgaged
      Property, Lender or any other purchaser at such foreclosure sale may, at
      Lender’s or such purchaser’s option, accept or terminate such Lease; and (6) the
      tenant shall, upon receipt after the occurrence of an Event of Default of a
      written request from Lender, pay all Rents payable under the Lease to
      Lender.

     

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

     

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

     

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

     

    7.           DEPOSITS
      FOR TAXES, INSURANCE AND OTHER CHARGES.

     

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

     

    (b)           Imposition
      Deposits shall be held in an institution (which may be Lender, if Lender is
      such
      an institution) whose deposits or accounts are insured or guaranteed by a
      federal agency.  Lender shall not be obligated to open additional
      accounts or deposit Imposition

     

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

     

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

     

    (d)           If
      at any time the amount of the Imposition Deposits held by Lender for payment
      of
      a specific Imposition exceeds the amount reasonably deemed necessary by Lender,
      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.

     

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

     

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

     

    10.           COMPLIANCE
      WITH LAWS.  Borrower shall comply with all
      laws, ordinances, regulations and requirements of any Governmental Authority
      and
      all recorded lawful covenants and agreements relating to or affecting the
      Mortgaged Property, including all laws,

     

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

     

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

     

    12.           PROTECTION
      OF LENDER’S SECURITY.

     

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

     

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

     

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

     

    13.           INSPECTION.  Lender,
      its agents, representatives, and designees may make or cause to be made entries
      upon and inspections of the Mortgaged Property (including

     

    
      
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    environmental
      inspections and tests) during normal business hours, or at any other reasonable
      time.

     

    14.           BOOKS
      AND RECORDS; FINANCIAL REPORTING.

     

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

     

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

     

    
      	
               

            	
              (1)

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

            

    

     

    
      	
               

            	
              (2)

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

            

    

     

    
      	
               

            	
              (3)

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

            

    

     

    
      	
               

            	
              (4)

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

            

    

     

    
      	
               

            	
              (5)

            	
              upon
                Lender’s request, a monthly property management report for the Mortgaged
                Property, showing the number of inquiries made and
                rental

            

    

     

    
      
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              applications
                received from tenants or prospective tenants and deposits received
                from
                tenants and any other information requested by
                Lender;

            

    

     

    
      	
               

            	
              (6)

            	
              upon
                Lender’s request, a balance sheet, a statement of income and expenses for
                Borrower and a statement of changes in financial position of Borrower
                for
                Borrower’s most recent fiscal year;
                and

            

    

     

    
      	
               

            	
              (7)

            	
              if
                required by Lender, a statement of income and expense for the Mortgaged
                Property for the prior month or
                quarter.

            

    

     

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

     

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

     

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

     

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

     

    (g)           If
      an Event of Default has occurred and Lender has not previously required Borrower
      to furnish a quarterly statement of income and expense for the Mortgaged
      Property, Lender may require Borrower to furnish such a statement within 45
      days
      after the end of each fiscal quarter of Borrower following such Event of
      Default.

     

    15.           TAXES;
      OPERATING EXPENSES.

     

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

     

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

     

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

     

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

     

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

     

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

     

    17.           PRESERVATION,
      MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.

     

    (a)           Borrower
      (1) shall not commit waste or permit impairment or deterioration of the
      Mortgaged Property, (2) shall not abandon the Mortgaged Property, (3) 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, (4) shall keep the Mortgaged Property in good repair,
      including the replacement of Personalty and Fixtures with items of equal or
      better function and quality, (5) shall provide for professional management
      of
      the Mortgaged Property by a residential rental property manager satisfactory
      to
      Lender under a contract approved by Lender in writing, and (6) 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

     

    
      
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    shall
      not
      permit any tenant or other person to) remove, demolish or alter the Mortgaged
      Property or any part of the Mortgaged Property except in connection with the
      replacement of tangible Personalty.

     

    (b)           If,
      in connection with the making of the loan evidenced by the Note or at any later
      date, Lender waives in writing the requirement of Section 17(a)(5) above that
      Borrower enter into a written contract for management of the Mortgaged Property
      and if, after the date of this Instrument, Borrower intends to change the
      management of the Mortgaged Property, Lender shall have the right to approve
      such new property manager and the written contract for the management of the
      Mortgaged Property and require that Borrower and such new property manager
      enter
      into an Assignment of Management Agreement on a form approved by
      Lender.  If required by Lender (whether before or after an Event of
      Default), Borrower will cause any Affiliate of Borrower to whom fees are payable
      for the management of the Mortgaged Property to enter into an agreement with
      Lender, in a form approved by Lender, providing for subordination of those
      fees
      and such other provisions as Lender may require.  “Affiliate of
      Borrower” means any corporation, partnership, joint venture, limited liability
      company, limited liability partnership, trust or individual controlled by,
      under
      common control with, or which controls Borrower (the term “control” for these
      purposes shall mean the ability, whether by the ownership of shares or other
      equity interests, by contract or otherwise, to elect a majority of the directors
      of a corporation, to make management decisions on behalf of, or independently
      to
      select the managing partner of, a partnership, or otherwise to have the power
      independently to remove and then select a majority of those individuals
      exercising managerial authority over an entity, and control shall be
      conclusively presumed in the case of the ownership of 50% or more of the equity
      interests).

     

    18.           ENVIRONMENTAL
      HAZARDS.

     

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

     

    
      	
               

            	
              (1)

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

            

    

     

    
      	
               

            	
              (2)

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

            

    

     

    
      	
               

            	
              (3)

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

            

    

     

    
      
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              (4)

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

            

    

     

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

     

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

     

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

     

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

     

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

     

    
      	
               

            	
              (1)

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

            

    

     

    
      	
               

            	
              (2)

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

            

    

     

    
      	
               

            	
              (3)

            	
              except
                to the extent previously disclosed by Borrower to Lender in writing,
                the
                Mortgaged Property does not now contain any underground storage tanks,
                and, to the best of Borrower’s knowledge after
                reasonable

            

    

     

    
      
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              and
                diligent inquiry, the Mortgaged Property has not contained any underground
                storage tanks in the past.  If there is an underground storage
                tank located on the Property which has been previously disclosed
                by
                Borrower to Lender in writing, that tank complies with all requirements
                of
                Hazardous Materials Laws;

            

    

     

    
      	
               

            	
              (4)

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

            

    

     

    
      	
               

            	
              (5)

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

            

    

     

    
      	
               

            	
              (6)

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

            

    

     

    
      	
               

            	
              (7)

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

            

    

     

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

     

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

     

    
      	
               

            	
              (1)

            	
              Borrower’s
                discovery of any Prohibited Activity or
                Condition;

            

    

     

    
      	
               

            	
              (2)

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

            

    

     

    
      
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              (3)

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

            

    

     

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

     

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

     

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

     

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

     

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

     

    
      	
               

            	
              (1)

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

            

    

     

    
      	
               

            	
              (2)

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

            

    

     

    
      	
               

            	
              (3)

            	
              the
                existence or alleged existence of any Prohibited Activity or
                Condition;

            

    

     

    
      	
               

            	
              (4)

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

            

    

     

    
      	
               

            	
              (5)

            	
              the
                actual or alleged violation of any Hazardous Materials
                Law.

            

    

     

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

     

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

     

    (m)           Lender
      agrees that the indemnity under this Section 18 shall be limited to the assets
      of Borrower and Lender shall not seek to recover any deficiency from any natural
      persons who are general partners of Borrower.

     

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

     

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

     

    
      	
               

            	
              (2)

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

            

    

     

    
      	
               

            	
              (3)

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

            

    

     

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

     

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

     

    19.           PROPERTY
      AND LIABILITY INSURANCE.

     

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

     

    
      
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    and
      if
      flood insurance is available in that area, Borrower shall insure such
      Improvements against loss by flood.

     

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

     

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

     

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

     

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

     

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

     

    (g)           Lender
      shall not exercise its option to apply insurance proceeds to the payment of
      the
      Indebtedness if all of the following conditions are met:  (1) no Event
      of Default (or any event which, with the giving of notice or the passage of
      time, or both, would constitute an Event of Default) has occurred and is
      continuing; (2) Lender determines, in its discretion, that there
      will

     

    
      
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    be
      sufficient funds to complete the Restoration; (3) Lender determines, in its
      discretion, that the rental income from the Mortgaged Property after completion
      of the Restoration will be sufficient to meet all operating costs and other
      expenses, Imposition Deposits, deposits to reserves and loan repayment
      obligations relating to the Mortgaged Property; (4) Lender determines, in its
      discretion, that the Restoration will be completed before the earlier of (A)
      one
      year before the maturity date of the Note or (B) one year after the date of
      the
      loss or casualty; and (5) upon Lender’s request, Borrower provides Lender
      evidence of the availability during and after the Restoration of the insurance
      required to be maintained by Borrower pursuant to this Section 19.

     

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

     

    20.           CONDEMNATION.

     

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

     

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

     

    21.           TRANSFERS
      OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.

     

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

     

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

     

    
      	
               

            	
              (2)

            	
              a
                Transfer of a Controlling Interest in
                Borrower;

            

    

     

    
      	
               

            	
              (3)

            	
              a
                Transfer of a Controlling Interest in any entity which owns, directly
                or
                indirectly through one or more intermediate entities, a Controlling
                Interest in Borrower;

            

    

     

    
      	
               

            	
              (4)

            	
              a
                Transfer of all or any part of Key Principal’s ownership interests (other
                than limited partnership interests) in Borrower, or in any other
                entity
                which owns, directly or indirectly through one or more intermediate
                entities, an ownership interest in
                Borrower;

            

    

     

    
      	
               

            	
              (5)

            	
              if
                Key Principal is an entity, (A) a Transfer of a Controlling Interest
                in
                Key Principal, or (B) a Transfer of a Controlling Interest in any
                entity
                which owns, directly or indirectly through one or more intermediate
                entities, a Controlling Interest in Key
                Principal;

            

    

     

    
      	
               

            	
              (6)

            	
              if
                Borrower or Key Principal is a trust, the termination or revocation
                of
                such trust; and

            

    

     

    
      	
               

            	
              (7)

            	
              a
                conversion of Borrower from one type of legal entity into another
                type of
                legal entity, whether or not there is a
                Transfer.

            

    

     

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

     

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

     

    
      	
               

            	
              (1)

            	
              a
                Transfer to which Lender has
                consented;

            

    

     

    
      	
               

            	
              (2)

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

            

    

     

    
      	
               

            	
              (3)

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

            

    

     

    
      	
               

            	
              (4)

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

            

    

     

    
      	
               

            	
              (5)

            	
              the
                grant of an easement, if before the grant Lender determines that
                the
                easement will not materially affect the operation or value of
                the

            

    

     

    
      
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              Mortgaged
                Property or Lender’s interest in the Mortgaged Property, and Borrower pays
                to Lender, upon demand, all costs and expenses incurred by Lender
                in
                connection with reviewing Borrower’s request;
                and

            

    

     

    
      	
               

            	
              (6)

            	
              the
                creation of a tax lien or a mechanic’s, materialman’s or judgment lien
                against the Mortgaged Property which is bonded off, released of record
                or
                otherwise remedied to Lender’s satisfaction within 30 days of the date of
                creation.

            

    

     

    (c)           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, to a Transfer that would otherwise violate this Section 21
      if, prior to the Transfer, Borrower has satisfied each of the following
      requirements:

     

    
      	
               

            	
              (1)

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

            

    

     

    
      	
               

            	
              (2)

            	
              the
                absence of any Event of Default;

            

    

     

    
      	
               

            	
              (3)

            	
              the
                transferee meets all of the eligibility, credit, management and other
                standards (including any standards with respect to previous relationships
                between Lender and the transferee and the organization of the transferee)
                customarily applied by Lender at the time of the proposed Transfer
                to the
                approval of borrowers in connection with the origination or purchase
                of
                similar mortgages, deeds of trust or deeds to secure debt on multifamily
                properties;

            

    

     

    
      	
               

            	
              (4)

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

            

    

     

    
      	
               

            	
              (5)

            	
              in
                the case of a Transfer of all or any part of the Mortgaged Property,
                or
                direct or indirect ownership interests in Borrower or Key Principal
                (if an
                entity), if transferor or any other person has obligations under
                any Loan
                Document, the execution by the transferee or one or more individuals
                or
                entities acceptable to Lender of an assumption agreement (including,
                if
                applicable, an Acknowledgment and Agreement of Key Principal to Personal
                Liability for Exceptions to Non-Recourse Liability) that is acceptable
                to
                Lender and that, among other things, requires the transferee to perform
                all obligations of transferor or such person set forth in such Loan
                Document, and may require that the transferee comply with any provisions
                of this Instrument or any other Loan Document which previously may
                have
                been waived by Lender;

            

    

     

    
      
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              (6)

            	
              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

            

    

     

    
      	
               

            	
              (7)

            	
              Lender’s
                receipt of all of the following:

            

    

     

    
      	
               

            	
              (A)

            	
              a
                non-refundable review fee in the amount of $3,000 and a transfer
                fee equal
                to 1 percent of the outstanding Indebtedness immediately prior to
                the
                Transfer.

            

    

     

    
      	
               

            	
              (B)

            	
              In
                addition, Borrower shall be required to reimburse Lender for all
                of
                Lender’s out-of-pocket costs (including reasonable attorneys’ fees)
                incurred in reviewing the Transfer request, to the extent such expenses
                exceed $3,000.

            

    

     

    (d)           For
      purposes of this Section, the following terms shall have the meanings set forth
      below:

     

    
      	
               

            	
              (1)

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

            

    

     

    
      	
               

            	
              (2)

            	
              A
                Transfer of a “Controlling Interest” shall mean, with
                respect to any entity, the
                following:

            

    

     

    
      	
               

            	
              (i)

            	
              if
                such entity is a general partnership or a joint venture, a Transfer
                of any
                general partnership interest or joint venture interest which would
                cause
                the Initial Owners to own less than 51% of all general partnership
                or
                joint venture interests in such
                entity;

            

    

     

    
      	
               

            	
              (ii)

            	
              if
                such entity is a limited partnership, a Transfer of any general
                partnership interest;

            

    

     

    
      	
               

            	
              (iii)

            	
              if
                such entity is a limited liability company or a limited liability
                partnership, a Transfer of any membership or other ownership interest
                which would  cause the Initial Owners to own less than 51% of
                all membership or other ownership interests in such
                entity;

            

    

     

    
      	
               

            	
              (iv)

            	
              if
                such entity is a corporation (other than a Publicly-Held Corporation)
                with
                only one class of voting stock, a Transfer of any voting stock which
                would
                cause the Initial Owners to own less than 51% of voting stock in
                such
                corporation;

            

    

     

    
      	
               

            	
              (v)

            	
              if
                such entity is a corporation (other than a Publicly-Held Corporation)
                with
                more than one class of voting stock, a
                Transfer

            

    

     

    
      
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              of
                any voting stock which would cause the Initial Owners to own less
                than a
                sufficient number of shares of voting stock having the power to elect
                the
                majority of directors of such corporation;
                and

            

    

     

    
      	
               

            	
              (vi)

            	
              if
                such entity is a trust, the removal, appointment or substitution
                of a
                trustee of such trust other than (A) in the case of a land trust,
                or (B)
                if the trustee of such trust after such removal, appointment or
                substitution is a trustee identified in the trust agreement approved
                by
                Lender.

            

    

     

    
      	
               

            	
              (3)

            	
              “Publicly-Held
                Corporation” shall mean a corporation the outstanding voting
                stock of which is registered under Section 12(b) or 12(g) of the
                Securities and Exchange Act of 1934, as
                amended.

            

    

     

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

     

    (e)           any
      Event of Default under Section 21;

     

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

     

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

     

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

     

    (i)           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.

     

    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.  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

     

    
      
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    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 MARSHALING.  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 marshaling of assets or to require that any of the Mortgaged
      Property be sold in the inverse order of alienation or that any of the Mortgaged
      Property be sold in parcels or as an entirety in connection with the exercise
      of
      any of the remedies permitted by applicable law or provided in this
      Instrument.

     

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

     

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

     

    
      
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    30.           GOVERNING
      LAW; CONSENT TO JURISDICTION AND VENUE.

     

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

     

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

     

    31.           NOTICE.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    36.           RELATIONSHIP
      OF PARTIES; NO THIRD PARTY BENEFICIARY.

     

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

     

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

     

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

     

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

     

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

     

    40.           DISCLOSURE
      OF INFORMATION.  Lender may furnish
      information regarding Borrower or the Mortgaged Property to third parties with
      an existing or prospective interest in the servicing, enforcement, evaluation,
      performance, purchase or securitization of the Indebtedness, including trustees,
      master servicers, special servicers, rating agencies, and organizations
      maintaining databases on the underwriting and performance of multifamily
      mortgage loans.  Borrower irrevocably waives any and all rights it may
      have under applicable law to prohibit such disclosure, including any right
      of
      privacy.

     

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

     

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

     

    43.           ACCELERATION;
      REMEDIES.  At any time during the existence
      of an Event of Default, Lender, at Lender’s option, may declare the Indebtedness
      to be immediately due and payable without further demand, and may foreclose
      this
      Instrument by judicial proceeding, shall be entitled to the appointment of
      a
      receiver, without notice, and may invoke any other remedies permitted by New
      York law or provided in this Instrument or in any other Loan
      Document.  Lender may, at Lender’s option, also foreclose this
      Instrument for any portion of the Indebtedness which is then due and payable,
      subject to the continuing lien of this Instrument for the balance of the
      Indebtedness.  Lender shall be entitled to collect all costs and
      expenses allowed by New York law, including attorneys’ fees, costs of
      documentary evidence, abstracts, title reports statutory costs and any
      additional allowance made pursuant to Section 8303 of the Civil Practice Law
      and
      Rules.  The rights and remedies of Lender specified in this Instrument
      shall be in addition to Lender’s rights and remedies under New York law,
      specifically including Section 254 of the Real Property Law.  In the
      event of any conflict between the provision of this Instrument and the
      provisions of Section 254 of the Real Property Law, the provisions of this
      Instrument shall control.

     

    
      
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    44.           SATISFACTION
      OF DEBT.  Upon payment of the Indebtedness,
      Lender shall discharge this Instrument.  Borrower shall pay Lender’s
      reasonable costs incurred in discharging this Instrument.

     

    45.           LIEN
      LAW.  Borrower will receive advances under
      this Instrument subject to the trust fund provisions of Section 13 of the Lien
      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.

     

    47.           NO
      NOVATION.  This Instrument, the Note, and the Loan Documents
      contain all of the terms, covenants and conditions of the repayment of the
      Indebtedness.  This Instrument does not extinguish the original
      indebtedness or discharge or release the Original Mortgage or any other security
      and is not intended to be a substitution or novation of the original
      indebtedness.

     

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

    
      
        	
                 x   Exhibit
                  A

              	
                Description
                  of the Land (required).

              
	 	 
	
                 x   Exhibit
                  B-1

              	
                Modifications
                  to Instrument (Seniors Housing)

              
	 	 
	
                 x   Exhibit
                  B-2

              	
                Modifications
                  to Instrument (Cross-Default and
                  Cross-Collateralization)

              
	 	 
	
                 x   Exhibit
                  B-3

              	
                Modifications
                  to Instrument (Borrower Requested Modifications)

              
	 	 
	
                 x   Exhibit
                  C

              	
                Borrowers’
                  Projects

              
	 	 
	
                 x   Schedule
                  A-1

              	
                Schedule
                  of Mortgages

              

      

    
      
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    IN
      WITNESS WHEREOF, Borrower and Lender have signed and delivered this
      Instrument or have caused this Instrument to be signed and delivered by their
      duly authorized representatives.

     

    

    BORROWER:

    

    MERIWEG-SYRACUSE,
      LLC,

    a
      Delaware limited liability company

    

    By:           Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:           _/s/
      _Eric Mendelsohn________

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    

    Fannie
      Mae Commitment

    Number:  851888

    

    STATE
      OF
      _Washington                                  )

     

    )
      ss:

     

    COUNTY
      OF
      _King                                          )

     

    On
      this 29th day of August, 2007, before me, the undersigned, personally
      appeared Eric Mendelsohn, personally known to me or proved to me on the basis
      of
      satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
      to the within instrument and acknowledged to me that he/she/they executed the
      same in his/her/their capacity(ies), and that by his/her/their signature(s)
      on
      the instrument, the individual(s) or the person upon behalf of which the
      individual(s) acted, executed the instrument.

     

    _/s/
      Lloyd A. Chee________

    Notary
      Public

     

    My
      Commission Expires:

     

    ___05-09-11_____

     

    
      
        Fannie
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    LENDER:

    

    
      	
              RED
                MORTGAGE CAPITAL, INC.,

              an
                Ohio corporation

            
	 
	 
	 
	
              By:        /s/
                R. Barth Kallmerten   

            
	
              Name:                      R.
                Barth Kallmerten

            
	
              Title:                      Senior
                Managing Director

            

    

    

    Fannie
      Mae Commitment

    Number:  851888

     

    STATE
      OF
      OHIO                                                 )

     

    )
      ss:

     

    COUNTY
      OF
      FRANKLIN                                   )

     

    On
      this
      ___ day of August, 2007, before me, the undersigned, personally appeared R.
      Barth Kallmerten, personally known to me or proved to me on the basis of
      satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
      to the within instrument and acknowledged to me that he/she/they executed the
      same in his/her/their capacity(ies), and that by his/her/their signature(s)
      on
      the instrument, the individual(s) or the person upon behalf of which the
      individual(s) acted, executed the instrument.

     

    ______/s/
      Heather L. Cox

    Notary
      Public

     

    My
      Commission Expires:

     

    ____10-30-10_________

     

    

     

    

     

    
      
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    KEY
      PRINCIPAL

     

    

    Key
      Principal

    

    Name:                                Emeritus
      Corporation

    

    Address:                      3131
      Elliott Avenue, #500

    Seattle,
      Washington 98121

    

    

    

    

    

    

    
      
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    EXHIBIT
      A

     

    [DESCRIPTION
      OF THE LAND]

     

    [See
      attached]

     

    
      
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    EXHIBIT
      B-1

     

    MODIFICATIONS
      TO INSTRUMENT

     

    

     

    (Seniors
      Housing)

     

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

     

    1.  Section
      1
      of the Instrument is hereby amended to add the following paragraphs the end
      thereof:

     

    
      	
              “(aa)

            	
              ‘Accounts’
                means all money, funds, investment property, accounts, general
                intangibles, deposit accounts, chattel paper, documents, instruments,
                judgments, claims, settlements of claims, causes of action, refunds,
                rebates, reimbursements, reserves, deposits, subsidies, proceeds,
                products, rents and profits, now or hereafter arising, received or
                receivable, from or on account of the Borrower's management and operation
                of the Mortgaged Property as a Seniors Housing
                Facility.”

            

    

     

    
      	
              “(bb)

            	
              ‘Contract(s)’
                means any contract or other agreement for the provision of goods
                or
                services at or otherwise in connection with the operation, use or
                management of the Mortgaged Property, including cash deposited to
                secure
                performance by parties of their
                obligations.”

            

    

     

    
      	
              “(cc)

            	
              ‘Inventory’
                means all right, title and interest of Borrower in and to inventory
                of
                every type and description, now owned and hereafter acquired, including,
                without limitation, raw materials, work in process, finished goods,
                goods
                returned or repossessed or stopped in transit, goods used for
                demonstration, promotion, marketing or similar purposes, property
                in, on
                or with which any of the foregoing may be stored or maintained, all
                materials and supplies usable or used or consumed at the Mortgaged
                Property, and all documents and documents of title relating to any
                of the
                foregoing, together with all present and future parts, additions,
                accessories, attachments, accessions, replacements, replacement parts
                and
                substitutions therefor or thereto in any form
                whatsoever.”

            

    

     

    
      	
              “(dd)

            	
              ‘License(s)’
                means any operating licenses, certificates of occupancy, health department
                licenses, food service licenses, certificates of need, business licenses,
                permits, registrations, certificates, authorizations, approvals,
                and
                similar documents required by applicable laws and regulations for
                the
                operation of the Mortgaged Property as a Seniors Housing Facility,
                including replacements and additions
                thereto.”

            

    

     

    
      	
              “(ee)

            	
              ‘Operating
                Lease’ means any master lease, operating agreement, operating lease or
                similar document, preapproved by Lender, under which control of
                the

            

    

     

    
      
        Senior
          Housing Modifications to Instrument Form 4075

        
        

      

      
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          1

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              occupancy,
                use, operation, maintenance and administration of the Mortgaged Property
                as a Seniors Housing Facility has been granted to any individual
                or entity
                other than the Borrower.”

            

    

     

    
      	
               

            	
              “(ff)

            	
              ‘Operator’
                means any qualified and licensed (if so required by the applicable
                laws of
                the Property Jurisdiction) individual or entity obligated under the
                terms
                of an Operating Lease with the
                Borrower.”

            

    

     

    
      	
              “(gg)

            	
              ‘Seniors
                Housing Facility’ means a residential housing facility which qualifies as
                ‘housing for older persons’ under the Fair Housing Amendments Act of 1988
                and the Housing for Older Persons Act of 1995 comprised of assisted
                living
                units.”

            

    

     

    
      	
              “(hh)

            	
              ‘Third
                Party Payments’ means all payments and the rights to receive such payments
                from Medicaid programs, or similar federal, state or local programs,
                boards, bureaus or agencies, and from residents, private insurers
                or
                others.”

            

    

     

    2.  Section
      1(g) of the Instrument is hereby amended to add the following sentence at the
      end thereof:

     

    “The
      term
‘Hazardous Materials’ shall also include any medical
      products or devices, including, but not limited to, those materials defined
      as
‘medical waste’ or ‘biological waste’ under relevant statutes or regulations
      pertaining to any Hazardous Materials Law.”

     

    3.  Section
      1(o) of the Instrument is hereby amended to add the following sentence at the
      end thereof:

     

    “The
      term
‘Leases’ shall also include any residency, occupancy, admission and care
      agreements pertaining to residents of the Mortgaged Property and any Operating
      Lease.”

     

    4.  Section
      1(s) of the Instrument is hereby amended:

     

    A.           to
      revise subsection (14) to read as follows:

     

    “(14)
      all
      resident and tenant security deposits, entrance fees, application fees,
      processing fees, community fees and any other amounts or fees deposited by
      any
      resident or tenant upon execution of a Lease which have not been forfeited
      by
      the resident or tenant; and”

     

    
      	
               

            	
              and

            

    

     

    B.           to
      add the following subsections (16), (17), (18), and (19) at the end
      thereof:

     

    
      
        Senior
          Housing Modifications to Instrument Form 4075

        
        

      

      
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          2

        
          

        

      

      
        
        

      

    

    “(16)                      all
      payments due, or received, from residents, second party charges added to base
      rental income, base and/or additional meal sales, commercial operations located
      on the Mortgaged Property or provided as a service to the residents of the
      Mortgaged Property, rental from guest suites, seasonal lease charges, furniture
      leases, and laundry services, and any and all other services provided to
      residents in connection with the Mortgaged Property, and any and all other
      personal property on the Mortgaged Property, excluding personal property
      belonging to residents of the Mortgaged Property (other than Personalty
      belonging to Borrower);”

     

    “(17)                      subject
      to applicable law and regulations, all Licenses and Contracts relating to the
      operation and authority to operate the Mortgaged Property as a Seniors Housing
      Facility;”

     

    “(18)                      all
      Third Party Payments arising from the operation of the Mortgaged Property as
      a
      Seniors Housing Facility, utility deposits, unearned premiums, accrued, accruing
      or to accrue under insurance policies now or hereafter obtained by the Borrower
      and all proceeds of any conversion of the Mortgaged Property or any part thereof
      including, without limitation, proceeds of hazard, property, flood and title
      insurance and all awards and compensation for the taking by eminent domain,
      condemnation or otherwise, of all or any part of the Mortgaged Property or
      any
      easement therein; and, ”

     

    “(19)                      all
      of Borrower’s Accounts and Inventory.”

     

    5.  Section
      1(v) of the Instrument is hereby amended to add the following sentence at the
      end thereof:

     

    “The
      term
‘Personalty’ shall also include all personal property currently owned or
      acquired by Borrower after the date hereof used in connection with the ownership
      and operation of the Mortgaged Property as a Seniors Housing Facility, all
      kitchen or restaurant supplies and facilities, dining room supplies and
      facilities, medical supplies and facilities, leasehold improvements, or related
      furniture and equipment, together with all present and future parts, additions,
      accessories, replacements, attachments, accessions, replacement parts and
      substitutions thereof, and the proceeds thereof (cash and non-cash including
      insurance proceeds) and any other equipment, supplies or furniture owned by
      Borrower and  leased to any third party service provider or any
      Operator under any Operating Lease, use, occupancy, or lease agreements, as
      well
      as all Licenses, to the extent permitted by applicable law and regulations,
      including replacements and additions thereto.”

     

    6.  Section
      1(x) of the Instrument is hereby amended to provide as follows:

     

    “‘Rents’
      means all rents (whether from residential or non-residential space), revenues
      and other income of the Land or the Improvements, including rent paid under
      any
      Operating Lease, subsidy payments received from any sources

     

    
      
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    (including
      but not limited to payments under any Housing Assistance Payments Contract),
      parking fees, laundry and vending machine income and fees and charges for food,
      healthcare and other services provided at the Mortgaged Property, whether now
      due, past due, or to become due, security deposits, entrance fees, application
      fees, processing fees, community fees and any other amounts or fees forfeited
      by
      any resident or tenant, together with and including all proceeds from any
      private insurance for residents to cover rental charges and charges for services
      at or in connection with the Mortgaged Property, and the right to Third Party
      Payments due for the rents or services of residents at the Mortgaged
      Property.  Each of the foregoing shall be considered ‘Rents’ for the
      purposes of the actions and rights set forth in Section 3 of this
      Instrument.”

     

    7.  Section
      3(b) of the Instrument is hereby amended to add the following sentence at the
      end thereof:

     

    “After
      an
      Event of Default, Lender is further authorized to give notice to all Third
      Party
      Payment payors (other than governmental entities) at Lender’s option,
      instructing them to pay all Third Party Payments which would be otherwise paid
      to Borrower to Lender, to the extent permitted by law.  In the case of
      Third Party Payments from Third Party Payment payors which are governmental
      entities, including Medicaid, Lender and Borrower have executed a Depositary
      Agreement of even date herewith which establishes special procedures for the
      receipt and disposition of the Third Party Payments.”

     

    8.  Section
      3(c) of the Instrument is hereby amended to add the following sentence at the
      end thereof:

     

    “In
      order
      to induce Lender to lend funds hereunder, Borrower (together with any Operator
      or manager of the Mortgaged Property) hereby agrees, upon the occurrence of
      an
      Event of Default and at the option of Lender, that it shall continue to provide
      all necessary services required under any Operating Lease or applicable
      licensing or regulatory requirements and shall fully cooperate with Lender
      and
      any receiver as may be appointed by a court in performing these services and
      agrees to arrange for an orderly transition to a replacement operator, manager
      or provider of the necessary services, and to execute promptly all applications,
      assignments, consents and documents requested by Lender to facilitate such
      transition.”

     

    9.          The
      first sentence in Section 4(b) of the Instrument is hereby amended to add the
      following at the end thereof:

     

    
      	
               

            	
              “,
                with the exception of any Operating
                Lease.”

            

    

     

    10.           The
      last sentence in Section 4(e) of the Instrument is hereby amended to state
      as
      follows:

     

    
      
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    “If
      customary in the applicable market, residential Leases with a month-to-month
      term or with terms of less than six months shall be permitted with Lender's
      prior written consent.”

     

    11.           The
      first sentence in Section 4(f) of the Instrument is hereby amended to add the
      following at the end thereof:

     

    “with
      the
      exception of any Operating Lease which has previously been approved by
      Lender.”

     

    
      	
              12.  

            	
              Section
                4 of the Instrument is hereby amended to add the following as Section
                4(h):

            

    

    

    “Any
      Operating Lease is and shall be subject and subordinate in all respects to
      the
      liens, terms, covenants and conditions of the Instrument and the other Loan
      Documents, and to all renewals, modifications, consolidations, replacements
      and
      extensions thereof, and to all advances heretofore made or which may hereafter
      be made pursuant to the Instrument (including all sums advanced for the purposes
      of (x) protecting or further securing the lien of the Instrument, curing
      defaults by Borrower under the Loan Documents or for any other purposes
      expressly permitted by the Instrument, or (y) constructing, renovating,
      repairing, furnishing, fixturing or equipping the Mortgaged
      Property.”

    

    13.           Section
      11 of the Instrument is hereby amended to add the following sentences at the
      end
      thereof:

     

    “Borrower
      acknowledges that as of the date of this Instrument, Borrower and the Mortgaged
      Property are not certified to participate in the Medicaid assisted living waiver
      program administered by the Property Jurisdiction
      (“Program”).  Borrower covenants and agrees that it will notify Lender
      in writing 30 days prior to Borrower’s submission of its request to participate
      in the Program, and will provide Lender with copies of all correspondence and
      documentation received from the Property Jurisdiction or any authorizing entity
      concerning its submission.  In the event the Mortgaged Property or
      Borrower becomes eligible to participate in the Program, Borrower agrees to
      execute then-current Fannie Mae forms of Medicaid reserve agreement and
      depositary agreement as Lender may require.”

     

    “Borrower
      further covenants and agrees that it shall not permit more than 20% of its
      effective gross income to be derived from units relying on Medicaid
      payments.  If by reason of applicable law or regulation more than 20%
      of effective gross income becomes derived from units relying on Medicaid
      payments, the Borrower shall diligently and expeditiously take all reasonable
      steps necessary to bring the Mortgaged Property into compliance with the
      preceding sentence to the extent permissible by applicable law or
      regulation.  Borrower further covenants and agrees that it shall limit
      the use and occupancy of the Mortgaged Property to residents that meet the
      standards for independent living or assisted living, and that it shall not
      accept residents that require skilled nursing care or permit
      residents

     

    
      
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    requiring
      skilled nursing care to remain at the Mortgaged Property as a routine
      matter.”

     

    14.           Section
      12(a) of the Instrument is hereby amended to add the following at the end
      thereof:

     

    “and,
      (5)
      payments for any required licensing fees, permits, or other expenses related
      to
      the operation of the Mortgaged Property as a Seniors Housing Facility, any
      fines
      or penalties that may be assessed against the Mortgaged Property, any costs
      incurred to bring the Mortgaged Property into full compliance with applicable
      codes and regulatory requirements, and any fees or costs related to Lender’s
      employment of any operator or service provider for the Mortgaged
      Property.”

     

    15.           Section
      14(b) of the Instrument is hereby deleted in its entirety and replaced with
      the
      following:

     

    
      	
               

            	
              “(b)

            	
              Subject
                to federal, state and local laws and regulations applicable to resident
                and tenant privacy, including but not limited to the Health Insurance
                Portability and Accountability Act (“HIPAA”) (collectively, the “Privacy
                Laws”), Borrower shall furnish to Lender all of the
                following:

            

    

     

    
      	
               

            	
              (1)

            	
              within
                30 days after the end of each fiscal quarter, a statement of income
                and
                expenses for Borrower’s or any Operator’s operation of the Mortgaged
                Property for that quarter, a statement of changes in financial position
                of
                Borrower relating to the Mortgaged Property for that quarter and
                a balance
                sheet showing all assets and liabilities of Borrower relating to
                the
                Mortgaged Property as of the end of that
                quarter;

            

    

     

    
      	
               

            	
              (2)

            	
              within
                90 days after the end of each twelve consecutive month fiscal year,
                a
                statement of income and expenses for Borrower’s or any Operator’s
                operation of the Mortgaged Property for that fiscal year, prepared
                in
                accordance with generally accepted accounting principles (“GAAP”), a
                statement of changes in financial position of Borrower relating to
                the
                Mortgaged Property for that fiscal year, and a balance sheet showing
                all
                assets and liabilities of Borrower relating to the Mortgaged Property
                as
                of the end of that fiscal year;

            

    

     

    
      	
               

            	
              (3)

            	
              within
                30 days after the end of each quarter of Borrower, and at any other
                time
                upon Lender's request, a rent schedule for the Mortgaged Property
                showing
                the name of each resident and tenant, and for each resident and tenant,
                the space occupied, the lease expiration date, the rent payable for
                the
                current month, the date through which rent has been paid, any income
                attributable to additional resident services, and any related information
                requested by Lender;

            

    

     

    
      
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              (4)

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

            

    

     

    

    
      	
               

            	
              (5)

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

            

    

    

    
      	
               

            	
              (6)

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

            

    

    

    
      	
               

            	
              (7)

            	
              if
                required by Lender, a statement of income and expense for the Mortgaged
                Property for the prior month or
                quarter;

            

    

    

    
      	
               

            	
              (8)

            	
              within
                10 days of Borrower’s receipt, copies of all inspection reports, surveys,
                reviews, and certifications prepared by, for, or on behalf of any
                licensing or regulatory authority relating to the Mortgaged Property
                and
                any legal actions, orders, notices, or reports relating to the Mortgaged
                Property issued by the applicable regulatory or licensing
                authorities;

            

    

     

    
      	
               

            	
              (9)

            	
              upon
                the request of Lender, copies of all reports relating to the services
                and
                operations of the Mortgaged Property, including, if applicable, Medicaid
                cost reports and records relating to account balances due to or from
                Medicaid or any private insurer;
                and

            

    

     

    
      	
               

            	
              (10)

            	
              within
                10 days of submission by Borrower, copies of all incident reports
                submitted to any liability insurance carrier or any elderly affairs,
                regulatory or licensing authority.”

            

    

     

    16.           Section
      17(a)(5) is hereby amended to state the following:

     

    
      
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    “shall
      provide for professional management of the Mortgaged Property as a Seniors
      Housing Facility either by Borrower, an Operator under an Operating Lease
      approved by Lender in writing, or a management company engaged either by the
      Borrower or any Operator under a Contract approved by Lender in
      writing.”

     

    17.           Section
      17(a) of the Instrument is hereby amended to add the following sentence at
      the
      end thereof:

     

    “Borrower
      further covenants and agrees that it shall maintain and operate the Mortgaged
      Property as a Seniors Housing Facility at all times in accordance with the
      standards required by any applicable Licenses and as required by any regulatory
      authority, that it shall maintain in good standing all Licenses, and that it
      shall cause to renew and extend all such required Licenses, and shall not fail
      to take any action necessary to keep all such Licenses in good standing and
      full
      force and effect.  Borrower will immediately provide Lender with any
      notice or order of a violation which may otherwise have an adverse impact on
      the
      Mortgaged Property, its operations or its compliance with licensing and
      regulatory requirements.”

     

    18.           Section
      17 of the Instrument is hereby amended to add the following as subsection
      (c):

     

    “Borrower
      has entered into the Contracts previously identified to Lender for the provision
      of goods or services, at or otherwise in connection with the operation, use
      or
      management of the Mortgaged Property.  Borrower may in the future
      enter into Contracts for the provision of additional goods or services at or
      otherwise in connection with the operation, use or management of the Mortgaged
      Property.  Until Lender gives notice to Borrower of Lender's exercise
      of its rights under this Instrument, Borrower shall have all rights, power
      and
      authority granted to Borrower under any Contract (except as otherwise limited
      by
      this subsection or any other provision of this Instrument), including the right,
      power and authority to modify the terms of any Contract, or extend or terminate
      any Contract, with the exception of any Operating Lease.  Upon the
      occurrence of an Event of Default and at the option of Lender, the permission
      given to Borrower pursuant to the preceding sentence to exercise all rights,
      power and authority under Contracts shall terminate.  Upon Lender's
      delivery of notice to Borrower of an Event of Default, Lender shall immediately
      have all rights, powers and authority granted to Borrower under any Contract,
      including the right, power and authority to modify the terms of, extend or
      terminate any such Contract.  Borrower hereby represents and warrants
      and agrees with Lender that:  (1) the Contracts are assignable and no
      previous assignment of Borrower's interest in the Contracts has been made;
      (2)
      the Contracts are in full force and effect in accordance with their respective
      terms and there are no defaults thereunder; (3) Borrower shall fully perform
      all
      of its obligations under the Contracts, and Borrower agrees not to amend,
      modify, assign, sell, pledge, transfer, mortgage or otherwise encumber its
      interests in any

     

    
      
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    of
      the
      Contracts so long as this Instrument is in effect, or consent to any transfer,
      assignment or other disposition thereof without the written approval of Lender;
      and (4) each Contract entered into by Borrower subsequent to the date hereof,
      the average annual consideration of which, directly or indirectly, is at least
      $20,000, shall provide:  (i) that it shall be terminable for cause;
      and (ii) that it shall be terminable, at Lender's option, upon the occurrence
      of
      an Event of Default.”

     

    

    19.           Section
      18(b) of the Instrument is hereby amended to add the following sentence at
      the
      end thereof:

     

    “Prohibited
      Activities and Conditions also shall not include the safe and lawful use and
      storage of medical products and devices customarily used in the operation of
      a
      Seniors Housing Facility.”

     

    20.           Section
      19(c) is hereby amended to provide as follows:

     

    “Borrower
      shall maintain or cause any Operator to maintain at all times commercial
      professional liability and general liability insurance, workers' compensation
      insurance and such other insurance as Lender may require from time to
      time.”

    

    21.           Section
      21(a) of the Instrument is hereby amended to add the following Sections (8)
      and
      (9) at the end thereof:

    

    “(8)           a
      Transfer or change in the holder of the Licenses authorizing the Mortgaged
      Property to operate as a Seniors Housing Facility; and

     

    (9)           a
      Transfer of the Borrower’s or any Operator’s respective interest(s) in any
      Operating Lease.”

     

    22.           Section
      22 of the Instrument is hereby amended to add the following as Sections (g),
      (h), (i) and (j):

     

    “(g)           any
      failure by Borrower, Operator or any manager (as applicable) to comply with
      the
      use and licensing requirements set forth in Sections 10 and 11;

     

    (h)           any
      loss by Borrower, Operator or any manager (as applicable) of any License or
      other legal authority necessary to operate the Mortgaged Property as a Seniors
      Housing Facility, or any failure by Borrower, Operator or any manager (as
      applicable) to comply strictly with any consent order or decree or to correct,
      within the time deadlines set by any federal, state or local licensing agency,
      any deficiency where such failure results, or under applicable laws and
      regulations is reasonably likely to result, in an action by such agency with
      respect to the Mortgaged Property that may have a material adverse effect on
      the
      income and operations of the Mortgaged Property or Borrower’s interest in the
      Mortgaged Property, including, without limitation, a termination, revocation
      or
      suspension of

     

    
      
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    any
      applicable Licenses necessary for the operation of the Mortgaged Property as
      a
      Seniors Housing Facility;

     

    (i)           if,
      without the consent of Lender, Borrower, Operator or any manager (as
      applicable):

     

    
      	
               

            	
              (i)

            	
              ceases
                to operate the Mortgaged Property as a Seniors Housing
                Facility;

            

    

     

    
      	
               

            	
              (ii)

            	
              ceases
                to provide such kitchens, separate bathrooms, and areas for eating,
                sitting and sleeping in each independent living or assisted living
                unit or
                at a minimum, central bathing facilities for Alzheimer’s/dementia care, as
                are provided as of the date of this
                Instrument;

            

    

     

    
      	
               

            	
              (iii)

            	
              ceases
                to provide other facilities and services normally associated with
                independent living or assisted living units, including, without
                limitation, (A) central dining services providing up to three meals
                per
                day, (B) periodic housekeeping, (C) laundry services, (D) customary
                transportation services, and (E) social
                activities;

            

    

     

    
      	
               

            	
              (iv)

            	
              provides
                or contracts for skilled nursing care for any of the
                units;

            

    

     

    
      	
               

            	
              (v)

            	
              leases
                or holds available for lease to commercial tenants non-residential
                space
                (i.e., space other than the units, dining areas, activity rooms,
                lobby,
                parlors, kitchen, mailroom, marketing/management offices) exceeding
                ten
                percent (10%) of the net rental area;
                or,

            

    

     

    
      	
               

            	
              (vi)

            	
              takes
                any action or permits to exist any condition that causes the Mortgaged
                Property to be no longer classified as housing for older persons
                pursuant
                to the Fair Housing Amendments Act of 1988 and the Housing for Older
                Persons Act of 1995; and

            

    

     

    (j)           a
      default under any Operating Lease or under the Subordination, Assignment and
      Security Agreement executed by Borrower, Operator and Lender in connection
      with
      this Loan which continues beyond any applicable cure period, or the termination
      of any Operating Lease without Lender's prior written approval.”

     

    

    23.           The
      former Sections 22 (g), (h) and (i) are hereby amended to be Sections 22 (k),
      (l), and (m), respectively and are amended to read as follows:

     

    “(k)           any
      failure by Borrower to perform any of its obligations under this Instrument
      (other than those specified in Sections 22(a) through (j)), as and
      when

     

    
      
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    required,
      which continues for a period of 30 days after notice of such failure by Lender
      to Borrower, but no such notice or grace period shall apply in the case of
      any
      such failure which could, in Lender's judgment, absent immediate exercise by
      Lender of a right or remedy under this Instrument, result in harm to Lender,
      impairment of the Note or this Instrument or any other security given under
      any
      other Loan Document;

     

    (l)           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;
      and

     

    (m)           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.”

     

    

    24.             Section
      43 of the Instrument is hereby amended to add the following sentences at the
      end
      thereof:

     

    “In
      addition to the remedies set forth herein and elsewhere in this Instrument,
      upon
      an Event of Default Lender shall be entitled to mandate the use of a lockbox
      bank account or other depositary account, to be maintained under the control
      and
      supervision of Lender,  for all income of the Mortgaged Property,
      including, but not limited to, Rents, service charges, insurance payments,
      and
      Third Party Payments.  Lender may, upon an Event of Default, cause the
      removal of Borrower, Operator or any manager (as applicable) from any Mortgaged
      Property operations.  Until such time as Lender has located a
      replacement Operator, Borrower, the acting Operator or manager shall continue
      to
      provide all required services to maintain the Mortgaged Property in full
      compliance with all licensing and regulatory requirements as a Seniors Housing
      Facility.  Borrower acknowledges that its failure to perform or to
      cause the performance of this service shall constitute a form of waste of the
      Mortgaged Property, causing irreparable harm to Lender and the Mortgaged
      Property, and shall constitute sufficient cause for the appointment of a
      receiver.”

     

    25.           The
      following new Section is added to the Instrument after the last numbered
      Section:

     

    “48.           BORROWER’S
      REPRESENTATIONS AND WARRANTIES.  In addition to any other
      representations and warranties contained in this Instrument, Borrower hereby
      represents and warrants to Lender as follows:

     

    (a)           The
      Mortgaged Property is duly licensed as a Private Proprietary Adult Home and
      is
      in all respects otherwise legally authorized to operate as a Seniors Housing
      Facility, under the applicable laws of the Property Jurisdiction;

     

    
      
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    (b)           Borrower
      and the Mortgaged Property (and the operation thereof) are in compliance in
      all
      material respects with the applicable provisions of all laws, statutes,
      regulations, ordinances, orders, standards, restrictions and rules of any
      federal, state or local government or quasi-government body, agency, board
      or
      authority having jurisdiction over the operation of the Mortgaged Property,
      including, without limitation: (i) health care and fire safety codes; (ii)
      design and construction requirements, (iii) laws regulating the handling and
      disposal of medical or biological waste; (iv) the applicable provisions of
      Seniors Housing Facility laws, rules, regulations and published interpretations
      thereof to which the Borrower or the Mortgaged Property is subject; (v) privacy,
      security and billing standards such as those set forth in HIPAA; and (vi) all
      criteria established to classify the Mortgaged Property as housing for older
      persons under the Fair Housing Amendments Act of 1988 and the Housing for Older
      Persons Act of 1995;

     

    (c)           If
      required, Borrower has a current provider agreement under any and all applicable
      federal, state and local laws for reimbursement: (a) to a Seniors Housing
      Facility; or (b) for other type of care provided at such
      facility.  There is no decision not to renew any provider agreement
      related to the Mortgaged Property, nor is there any action pending or threatened
      to impose alternative, interim or final sanctions with respect to the Mortgaged
      Property;

     

    (d)           Borrower
      and the Mortgaged Property are not subject to any proceeding, suit or
      investigation by any federal, state or local government or quasi-government
      body, agency, board authority or any other administrative or investigative
      body
      which may result in the imposition of a fine or an alternative, interim or
      final
      sanction, or which would have a material adverse effect on Borrower or the
      operation of the Mortgaged Property, or which would result in the appointment
      of
      a receiver or manager or would result in the revocation, transfer, surrender,
      suspension or other impairment of the Licenses for the Mortgaged Property to
      operate as a Seniors Housing Facility;

     

    (e)           Upon
      Lender’s request and subject to Privacy Laws, copies of resident care agreements
      and resident occupancy agreements shall be provided to Lender.  All
      resident records at the Mortgaged Property are true and correct in all material
      respects;

     

    (f)           Neither
      the execution and delivery of the Note, the Instrument or the Loan Documents,
      Borrower’s performance thereunder, nor the recordation of the Instrument will
      adversely affect the Licenses necessary for the operation of the Mortgaged
      Property as a Seniors Housing Facility in the Property
      Jurisdiction;

     

    (g)           Borrower
      is not a participant in any federal program whereby any federal, state or local
      governmental or quasi-governmental body, agency, board or other authority may
      have the right to recover funds by reason of the advance of federal
      funds.  Borrower has received no notice, and is not aware of any
      violation of applicable antitrust laws of any federal, state or local,
      government or quasi-government body, agency, board or other authority;
      and,

     

    
      
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    (h)           Except
      as otherwise specifically disclosed to the Lender in writing, in the event
      any
      existing Operating Lease or management agreement is terminated or Lender
      acquires the Mortgaged Property through foreclosure or otherwise, neither
      Borrower, Lender, any subsequent Operator or manager, nor any subsequent
      purchaser (through foreclosure or otherwise) must obtain a certificate of need
      from any applicable state health care regulatory authority or agency (other
      than
      giving such notice required under the applicable state law or regulation) prior
      to applying for any applicable License necessary for the operation of the
      Mortgaged Property as a Seniors Housing Facility, provided that no service
      or
      unit complement is changed.”

     

    26.           All
      capitalized terms used in this Exhibit not specifically defined herein shall
      have the meanings set forth in the text of the Instrument that precedes this
      Exhibit.

     

    [INITIALS
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        Senior
          Housing Modifications to Instrument Form 4075

        
        

      

      
        Page
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    BORROWER’S
      INITIALS: __/s/ EM_____

     

    LENDER’S
      INITIALS: ___/s/ BK______

    
      
        Senior
          Housing Modifications to Instrument Form 4075

        
        

      

      
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    EXHIBIT
      B-2

     

    

     

    MODIFICATIONS
      TO INSTRUMENT

     

    (Cross-Default
      and Cross-Collateralization)

     

    

     

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

     

    1.           The
      following new Sections are added to the Instrument after the last numbered
      Section:

     

    “49.                      CROSS-DEFAULT
      AND CROSS COLLATERALIZATION.

     

    (a)  The
      Borrower and the affiliates of Borrower acknowledging and agreeing to the terms
      of this Exhibit B-2, and identified on Exhibit C to this
      Instrument (collectively, with the Borrower, the “Borrowers”),
      each own their respective multifamily property described on
Exhibit C to this Instrument.  All of the
      properties described on Exhibit C, which includes the
      Mortgaged Property, are referred to herein individually as a “Borrower’s
      Project” and collectively as the “Borrowers’
Projects.”  Contemporaneous with the closing and funding of
      the loan to the Borrower evidenced by the Note, the Lender has extended
      additional loans to the other Borrowers, each loan being secured by a
      Multifamily Mortgage, Assignment of Rents and Security Instrument (a
“Security Instrument”) against each of the Borrowers’ Projects,
      respectively, each such Security Instrument containing cross-collateralization
      and cross-default provisions in form and substance identical to this Exhibit
      B-2.

     

    (b)           The
      Borrowers acknowledge that the Lender is unwilling to extend the loan evidenced
      by the Note to the Borrower unless the Borrowers agree that all of the
      Borrowers’ Projects will be treated as a single project through the imposition
      of cross-collateralization, cross-default and release provisions.

     

    (c)           The
      Borrowers hereby respectively agree and consent that as additional security
      to
      the Lender, each of the Borrowers’ Projects shall be subject to the lien of the
      Lender’s Security Instrument for each of the Borrowers’ Projects, and that each
      of the respective Borrowers’ Projects shall collateralize the other Borrowers’
Projects as follows: all Mortgaged Property (as defined in the respective
      Security Instrument) for each of the Borrowers’ Projects shall be considered
      part of the “Mortgaged Property” under this Instrument, and shall be collateral
      under this Instrument and the Loan Documents.

     

    (d)           The
      Borrowers hereby agree and consent that if an Event of Default occurs under
      the
      Security Instrument securing one of the Borrowers’ Projects, then an Event of
      Default shall exist under all of the Security Instruments with respect to the
      other

     

    
      
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    Borrowers’
      Projects.  No notice shall be required to be given to the Borrowers in
      connection with such Event of Default.  In the event of an Event of
      Default under the Security Instrument with respect to any one of the Borrowers’
Projects, the Lender shall have the right, in its sole and absolute discretion,
      to exercise and perfect any and all rights in and under the Loan Documents
      with
      regard to any or all of the other Borrowers’ Projects, including, but not
      limited to, an acceleration of one or all of the Notes and the sale of one
      or
      all of the Borrowers’ Projects in accordance with the terms of the respective
      Security Instruments.  No notice, except as may be required by the
      respective Security Instruments, shall be required to be given to the Borrowers
      in connection with the Lender’s exercise of any and all of its rights after an
      Event of Default has occurred.

     

    (e)           The
      Borrowers may request that Lender make a determination whether any of the
      Borrowers’ Projects may be released from the cross-default and cross-collateral
      provisions of this Section if (i) one of the Borrowers proposes to pay off
      its respective loan held by Lender and secured by the Borrowers’ Projects, or
      (ii) one of the Borrowers proposes to sell its respective Borrower’s
      Project and have such Borrower’s loan on that project assumed by a buyer
      acceptable to Lender.  Upon such request from the Borrowers, Lender
      shall consent to the release of the respective Borrower’s Project from the
      cross-default and cross-collateral provisions of this Section,
      provided:

     

    (1)           The
      remaining loans to the Borrowers secured by the remaining Borrowers’ Projects
      that are not requested to be released have, in the aggregate, a minimum overall
      1.45 debt service coverage, based on the remaining respective Borrowers’
Projects’ collective Net Operating Income for the 12 months of operation
      immediately prior to the Borrowers’ request for such release; and

     

    (2)           If
      one of the Borrowers’ loans is to be assumed by a buyer acceptable to and
      approved by Lender, the assumed loan must also have a minimum 1.45 debt service
      coverage, based on that project’s Net Operating Income for the 12 months of
      operation immediately prior to the Borrowers’ request for such
      release.

     

    For
      purposes of (1) and (2) of this paragraph (e), “Net Operating
      Income” is defined as:

     

    (i)           the
      lesser of the actual rents collected for the 12 month period (net of any
      concession) or 90% of the gross potential rental income for the 12 month period;
      plus

     

    (ii)           the
      actual laundry income (coin operated machines), cable and alarm fees,
      application fees, level of care (ancillary services) charges, late fees and
      forfeited deposits for the 12 month period; less

     

    (iii)           the
      greater of the actual operating expenses for the 12 month period (including
      the required Replacement Reserves funding

     

    
      
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    for
      the
      period) or the operating expenses used by Lender in its final underwriting
      (including Replacement Reserves), increased at the rate of 3% per
      annum.

     

    (f)           Notwithstanding
      any provision of this Section to the contrary, the Borrowers shall not be
      permitted to request a release of any of the Borrowers’ Projects from the
      cross-default and cross-collateral provisions of this Section if, at the time
      of
      such request, a default or Event of Default exists under any of the loans held
      by Lender on any of the Borrowers’ Projects.  No release of any of the
      Borrowers’ Projects from the cross-default and cross-collateral provisions of
      this Section shall be permitted by Lender unless the Borrowers have paid all
      costs and expenses of Lender incurred in connection with its processing of
      the
      requested release, including, without limitation, all title endorsement
      premiums, recording fees, inspection fees, and attorney fees.

     

    50.           EXHIBIT
      C.  Exhibit C is attached to this
      Instrument.”

     

    [INITIALS
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          to Instrument

        Cross
          Default & Cross Collateralization Form 4068

        
        

      

      
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    BORROWER’S
      INITIALS: __/s/ EM_____

     

    LENDER’S
      INITIALS: ____/s/ BK______

    
      
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              ACKNOWLEDGED
                AND AGREED:

            	
              BORROWERS:

            

    

    

     

    MERIWEG-FAIRPORT,
      LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:__/s/
      Eric Mendelsohn________

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    MERIWEG-FAYETTEVILLE,
      LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:__s/
      Eric Mendelsohn________

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    MERIWEG-LATHAM,
      LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:____s/
      Eric Mendelsohn______

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal
      Affairs

    
      
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          to Instrument

        Cross
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    MERIWEG-LIVERPOOL,
      LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:___s/
      Eric Mendelsohn______

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    MERIWEG-ROCHESTER,
      LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:__s/
      Eric Mendelsohn____

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    MERIWEG-SYRACUSE,
      LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:___s/
      Eric Mendelsohn_______

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal
      Affairs

    
      
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          to Instrument

        Cross
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    MERIWEG-WILLIAMSVILLE
      BM, LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:__s/
      Eric Mendelsohn_____

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    MERIWEG-WILLIAMSVILLE
      BPM, LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:___s/
      Eric Mendelsohn____

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    MERIWEG-VESTAL,
      LLC, a Delaware limited liability company

    

    

    By:          Emeritus
      Corporation,

    a
      Washington corporation

    

    

    By:___s/
      Eric Mendelsohn___

    Eric
      Mendelsohn

    Director
      of Real Estate

    Business
      Legal Affairs

    

    

    

     

    
      
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          to Instrument

        Cross
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    EXHIBIT
      B-3

     

    

     

    MODIFICATIONS
      TO INSTRUMENT

     

    (Borrower
      Requested Modifications)

     

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

    

    1.           Section
      1(v), as amended pursuant to Exhibit B-1, is hereby further amended by adding
      the following sentence to the end thereof:

    

    “Personalty
      shall not include any computer software or hardware owned by the Operator that
      is not specifically and exclusively used for the operation of the
      Improvements.”

    

    2.           The
      first sentence of Section 4(f) is amended by adding the clause “other than for
      use as a hair salon or physical therapy office” following the words
“non-residential use”.

    

    3.           Section
      7 is amended to add the following paragraph as Section 7(f):

     

    “(f)           Notwithstanding
      the foregoing, Borrower may, in lieu of making Imposition Deposits on a monthly
      basis as provided above, deposit with Lender on the day that the initial monthly
      installment of principal or interest, or both, is due under the Note (the
“Initial Note Payment Date”) an amount equal to the estimated
      amount of Imposition Deposits due in the twelve month period following the
      Initial Note Payment Date.  If Borrower so elects, then Borrower shall
      pay the Impositions directly to the appropriate public office or insurance
      company, as applicable, and shall provide to Lender, at least fifteen (15)
      days
      prior to the last date on which such payment may be made without any penalty
      or
      interest charge being added, evidence of such payment.  Lender shall
      continue to hold the Imposition Deposits.  Not fewer than ninety (90)
      days prior to each anniversary of the Initial Note Payment Date during the
      term
      of the Note, Lender shall notify Borrower of any additional amounts Borrower
      must deposit so that the amount held by Lender as Imposition Deposits will
      cover
      the reasonably estimated cost of the Impositions due in the next twelve month
      period following the Initial Note Payment Date anniversary.  During
      the last twelve month period of the term, Borrower may withdraw funds each
      month
      to pay the Impositions.  Should any Imposition Deposits remain held by
      Lender at the end of the term of the Note, Lender shall immediately release
      such
      funds to Borrower.  Provided, however, the foregoing option of
      Borrower to make annual

    
      
        Modifications
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        Borrower
          Requested Modifications

        
        

      

      
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    Imposition
      Deposits rather than making Imposition Deposits on a monthly basis may be
      revoked by Lender, in Lender’s sole but reasonable discretion, at any time upon
      notice to Borrower.”

    

    4.           In
      Sub-Sections 14(b)(1) and 14(b)(3), the words, “30 days”, shall be replaced with
      the words, “45 days”.

    

    5.           The
      second sentence of Section 18(d) is amended by inserting the word “reasonable”
prior to the words “out-of-pocket costs”.

    

    6.           The
      first sentence of Section 18(g) is amended by inserting the word “reasonable”
prior to the word “costs”.

    

    7.           The
      second sentence of Section 18(h) is amended by inserting the word “reasonable”
prior to the word “cost”.

    

    8.           The
      third sentence of Section 18(g) is amended by deleting “have no obligation to”
and adding the word “promptly”.  The fourth sentence of Section 18(g)
      is amended by adding the following provisions to the end thereof:

    

    “;provided,
      however, so long as no Event of Default exists under the Loan
      Documents, Lender's right to make such information available to any
      party other than third party consultants or professionals engaged by Lender,
      shall be subject to Borrower’s prior written approval, which approval may be
      withheld by Borrower in its sole discretion.”

    

    9.           Section
      18(m) is amended by inserting the words “or members” following the words
“general partners”.

    

    10.           Section
      18(n)(2) is amended by inserting the word “reasonable” prior to the word
“expenses”.

    

    11.           The
      first clause of Section 18(n)(3) is amended by inserting the word “reasonable”
prior to the word “expenses”.

    

    12.           The
      final sentence of Section 18(o) is amended by inserting the word “reasonable”
prior to the word “costs” in each instance that it appears and inserting the
      word “reasonable” prior to the word “fees”.

    

    13.           The
      first sentence of Section 20(b) is amended by inserting the word “reasonable”
prior to the word “expenses”.

    

    14.           Section
      10 of Exhibit B-1, which amends Section 4(e) of the Instrument, is
      hereby

    
      
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        Borrower
          Requested Modifications

        
        

      

      
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    deleted.  Section
      4(e) is amended by adding the following sentence to the end
      thereof:

    

    “Notwithstanding
      the foregoing, Leases also may be on a month-to-month basis.”

    

    All
      capitalized terms used in this Exhibit not specifically defined herein shall
      have the meanings set forth in the text of the Instrument that precedes this
      Exhibit.

    

    [INITIALS
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          to Instrument

        Borrower
          Requested Modifications

        
        

      

      
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    BORROWER’S
      INITIALS: __/s/ EM__

     

    LENDER’S
      INITIALS: ____/s/ BK___

    
      
        Modifications
          to Instrument

        Borrower
          Requested Modifications

        
        

      

      
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    EXHIBIT
      C

    

    BORROWERS’
      PROJECTS

    

    Property                                                                           Owner

    

    
      	
              1.  

            	
              Colonie
                Manor                                                           Meriweg-Latham,
                LLC

            

    

    Latham,
      New York

    

    
      	
              2.  

            	
              West
                Side Manor -
                Rochester                             
                 Meriweg-Rochester, LLC

            

    

    Rochester,
      New York

    

    
      	
              3.  

            	
              Bellevue
                Manor                                                        Meriweg-Syracuse,
                LLC

            

    

    Syracuse,
      New York

    

    
      	
              4.  

            	
              Bassett
                Park
                Manor                                                 Meriweg-Williamsville
                BPM, LLC

            

    

    Buffalo,
      New York

    

    
      	
              5.  

            	
              Woodland
                Manor                                                    Meriweg-Vestal,
                LLC

            

    

    Vestal,
      New York

    

    
      	
              6.  

            	
              East
                Side
                Manor                                                       Meriweg-Fayetteville,
                LLC

            

    

    Fayetteville,
      New York

    

    
      	
              7.  

            	
              West
                Side Manor -
                Liverpool                                 Meriweg-Liverpool,
                LLC

            

    

    Liverpool,
      New York

    

    
      	
              8.  

            	
              Perinton
                Park
                Manor                                                Meriweg-Fairport,
                LLC

            

    

    Fairport,
      New York

    

    
      	
              9.  

            	
              Bassett
                Manor                                                         Meriweg-Williamsville
                BM, LLC

            

    

    Buffalo,
      New York

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4006

        
        

      

      
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    SCHEDULE
      A-1

     

    Schedule
      of Mortgages

     

    
      	
              1.

            	
              Mortgage
                made by E.J. Wegman and Sons Development Corp. to Columbia Banking
                Federal
                Savings and Loan Association securing the principal sum of $2,000,000.00
                dated January 18, 1983 and recorded January 19, 1983 in Erie
                County Clerk's Office in Liber 8598 of Mortgages at page
                375.

            

    

    

    
      	
              2.

            	
              Mortgage
                made by E.J. Wegman and Sons Development Corp. to Columbia Banking
                Federal
                Savings and Loan Association securing the principal sum of $150,000.00
                dated October 20, 1983 and recorded October 27, 1983 in Erie
                County Clerk's Office in Liber 8744 of Mortgages at page
                358.

            

    

    

    
      	
               

            	
              Mortgages
                at 1 and 2 above being consolidated to constitute a single lien of
                $2,150,000.00 and interest by instrument dated October 20, 1983 and
                recorded October 27, 1983 in Erie County Clerk's Office
                in Liber 9275 of Mortgages at page
                262.

            

    

    

    
      	
              3.

            	
              Mortgage
                made by Bassett Manor Home for Adults to Columbia Banking Federal
                Savings
                and Loan Association securing the principal sum of $380,366.24 dated
                April
                25, 1988 and recorded April 26, 1988 in Erie County Clerk's
                Office in Liber 9989 of Mortgages at page
                644.

            

    

    

    
      	
               

            	
              The
                above mortgages at 1, 2 and 3 being consolidated to form a single
                lien
                securing the principal sum of $2,440,000.00 by instrument dated April
                25,
                1988 and recorded April 26, 1988 in Erie County Clerk's
                Office in Liber 9853 of Deeds at page
                265.

            

    

    

    
      	
               

            	
              The
                above mortgages being assigned to National Home Life Assurance Company,
                People's Security Life Insurance Company and Commonwealth Life Insurance
                Company by assignment of mortgage dated January 9, 1990 and recorded
                January 22, 1990 in Erie County Clerk's Office in Liber
                10601 of Mortgages at page 276.

            

    

    

    
      	
              4.

            	
              Mortgage
                made by Bassett Manor Home for Adults to Columbia Banking Federal
                Savings
                and Loan Association securing the principal sum of $250,000.00 dated
                August 3, 1989 and recorded August 10, 1989 in Erie County Clerk's
                Office in Liber 10430 of Mortgages at page
                639.

            

    

    

    
      	
               

            	
              The
                above mortgage at 4 being assigned to National Home Life Assurance
                Company, People's Security Life Insurance Company and Commonwealth
                Life
                Insurance Company by assignment of mortgage dated January 9, 1990
                recorded
                January 22, 1990 in Erie County Clerk's Office in Liber
                10601 of Mortgages at page 278.

            

    

    

    
      	
              5.

            	
              Mortgage
                made by Holmes Manor Inc. to Syracuse Savings Bank securing the principal
                sum of $950,000.00 dated September 18, 1973 and recorded September
                19,
                1973 in Onondaga County Clerk's Office in Liber 2508 of
                Mortgages at page 599, which

            

    

    
      
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              mortgage
                was assigned to Norstar Bank by assignment recorded November 12,
                1986 in
                Onondaga County Clerk's Office in Liber 4230 of Mortgages
                at page 158.

            

    

    

    
      	
              6.

            	
              Mortgage
                made by Holmes Manor Inc. to Norstar Bank securing the principal
                sum of
                $248,288.58 dated November 6, 1986 and recorded November 12, 1986
                in
                Onondaga County Clerk's Office in Liber 4230 of Mortgages
                at page 159.

            

    

    

    
      	
               

            	
              The
                above mortgages at 5 and 6 being consolidated to form a single lien
                securing the principal sum of $950,000.00 by instrument recorded
                November
                12, 1986 in Onondaga County Clerk's Office in Liber 4230
                of Mortgages at page 159.

            

    

    

    
      	
               

            	
              The
                above mortgages at 5 and 6 being assigned to National Home Life Assurance
                Company, People's Security Life Insurance Company and Commonwealth
                Life
                Insurance Company by assignment of mortgage recorded January 22,
                1990 in
                Onondaga County Clerk's Office in Liber 5419 of
                Assignment of Mortgages at page 96.

            

    

    

    
      	
              7.

            	
              Mortgage
                made by E.J. Wegman and Sons Development Corp. to Lincoln First Bank
                of
                Rochester securing the principal sum of $1,100,000.00 dated October
                12,
                1976 and recorded October 13, 1976 in Onondaga County Clerk's
                Office in Liber 2591 of Mortgages at page 539, which mortgage
                was
                assigned to Columbia Banking Federal Savings and Loan Association
                by
                assignment recorded March 31, 1977 in Onondaga County Clerk's
                Office in Liber 2604 of Mortgages at page 781, and which mortgage
                was further assigned to National Home Life Assurance Company, People's
                Security Life Insurance Company and Commonwealth Life Insurance Company
                by
                assignment of mortgage recorded January 22, 1990 in Onondaga
                County Clerk's Office in Liber 5419 of Mortgages at page
                90.

            

    

    

    
      	
              8.

            	
              Mortgage
                made by Manor Care Inc. to Columbia Banking Federal Savings and Loan
                Association securing the principal sum of $2,500,000.00 dated December
                12,
                1984 and recorded December 13, 1984 in Onondaga County Clerk's
                Office in Liber 3643 of Mortgages at page
                172.

            

    

    

    
      	
              9.

            	
              Mortgage
                made by Manor Care Inc. to Columbia Banking Federal Savings and Loan
                Association securing the principal sum of $50,000.00 dated September
                12,
                1985 and recorded September 16, 1985 in Onondaga County Clerk's
                Office in Liber 3835 of Mortgages at page
                150.

            

    

    

    
      	
               

            	
              The
                above mortgages at 8 and 9 being consolidated to form a single lien
                securing $2,550,000.00 by instrument recorded September 16, 1985
                in
                Onondaga County Clerk's Office in Liber 3835 of Mortgages
                at page 166.

            

    

    

    
      	
               

            	
              The
                above mortgages at 8 and 9 being assigned to National Home Life Assurance
                Company, People's Security Life Insurance Company and Commonwealth
                Life
                Insurance Company by assignment of mortgage recorded January 22,
                1990 in
                Onondaga County Clerk's Office in Liber 5419 of
                Assignment of Mortgages at page
                93.

            

    

    
      
        Fannie
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              10.

            	
              Mortgage
                made by Holmes Manor Inc. to Syracuse Savings Bank securing the principal
                sum of $750,000.00 dated November 4, 1971 and recorded November 8,
                1971 in
                Monroe County Clerk's Office in Liber 3405 of Mortgages
                at page 140.

            

    

    

    
      	
              11.

            	
              Mortgage
                made by Holmes Manor Inc. to Syracuse Savings Bank securing the principal
                sum of $50,000.00 dated June 1, 1972 and recorded June 5, 1972 in
                Monroe County Clerk's Office in Liber 3484 of Mortgages
                at page 113.

            

    

    

    
      	
               

            	
              The
                above mortgage at 10 and 11 being consolidated and modified so as
                to
                constitute a single lien securing $800,000.00 by instrument recorded
                June
                5, 1972 in Monroe County Clerk's Office in Liber 3484 of
                Mortgages at page 117.

            

    

    

    
      	
               

            	
              The
                above mortgages at 10 and 11 being assigned to Norstar Bank by assignment
                of mortgage recorded November 13, 1986 in Monroe County Clerk's
                Office in Liber 583 of Assignment of Mortgages at page
                115.

            

    

    

    
      	
              12.

            	
              Mortgage
                made by Holmes Manor Inc. to Norstar Bank securing the principal
                sum of
                $543,114.68 dated November 6, 1986 and recorded November 13, 1986
                in
                Monroe County Clerk's Office in Liber 7793 of Mortgages
                at page 226.

            

    

    

    
      	
               

            	
              The
                above mortgages at 10, 11, and 12 being consolidated and modified
                to
                constitute a single lien securing $950,000.00 by instrument recorded
                November 13, 1986 in Monroe County Clerk's Office in
                Liber 7793 of Mortgages at page
                226.

            

    

    

    
      	
               

            	
              The
                above mortgages at 10, 11 and 12 being assigned to National Home
                Life
                Assurance Company, People's Security Life Insurance Company and
                Commonwealth Life Insurance Company by assignment of mortgage recorded
                January 19, 1990 in Monroe County Clerk's Office in Liber
                787 of Assignment of Mortgages at page
                328.

            

    

    

    
      	
              13.

            	
              Mortgage
                made by Woodland Village on the Green, Ltd. to Delaware County Federal
                Savings and Loan Association securing the principal sum of $1,900,000.00
                dated April 20, 1972 and recorded April 20, 1972 in Broome
                County Clerk's Office in Liber 871 of Mortgages at page 486,
                which mortgage was assigned to Security Norstar Bank by assignment
                of
                mortgage recorded December 31, 1985 in Broome County Clerk's
                Office in Liber 1386 of Mortgages at page
                295.

            

    

    

    
      	
              14.

            	
              Mortgage
                made by Manor Care Inc. to Security Norstar Bank securing the principal
                sum of $601,078.96 dated September 30, 1985 and recorded December
                31, 1985
                in Broome County Clerk's Office in Liber 1386 of
                Mortgages at page 13.

            

    

    

    
      	
               

            	
              The
                above mortgages at 13 and 14 being consolidated as to form a single
                lien
                securing the principal sum of $2,000,000.00 by instrument recorded
                December 31, 1985 in Broome County Clerk's Office in
                Liber 1386 of Mortgages at page 13 and further modified by a mortgage
                spreader agreement recorded December 31, 1985 in Broome County
                Clerk's Office in Liber 1386 of Mortgages at page
                20.

            

    

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4006

        
        

      

      
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              The
                above mortgages at 13 and 14 being assigned to National Home Life
                Assurance Company, People's Security Life Insurance Company and
                Commonwealth Life Insurance Company by assignment recorded January
                21,
                1990 in Broome County Clerk's Office in Liber 2070 of
                Mortgages at page 135.

            

    

    

    
      	
              15.

            	
              Mortgage
                made by Philip R. Wegman to National Home Life Assurance Company,
                People's
                Security Life Insurance Company and Commonwealth Life Insurance Company
                securing the principal sum of $4,612,645 dated January 18, 1990 and
                recorded January 22, 1990 in Erie County Clerk's
                Office in Liber 10131 of Deeds at page 301, on January 22, 1990
                and re-recorded in the Erie County Clerk’s Office on
                November 20, 1996 in Liber 12727 of Mortgages at page 4431, recorded
                in
                the Onondaga County Clerk’s Office on January 22, 1990 in
                Liber 5419 of Mortgages, at page 99, in the Monroe County Clerk’s
                Office on January 19, 1990 in Liber 9939 of Mortgages, at page
                1
                and in the Broome County
                Clerk’s Office on January 22, 1990 in Liber
                2070 of Mortgages, at page 26, which mortgage by its terms consolidated
                the lien of the above referenced mortgages at numbers 1 through 15
                so as
                to constitute a single lien securing the principal sum of
                $14,275,000.00.

            

    

    

    
      	
               

            	
              The
                above mortgages at 1 through 15, as consolidated and modified were
                assigned to GMAC Commercial Mortgage Corporation by Assignment of
                Mortgage
                dated November 6, 1996 and recorded in the Erie County Clerk’s
                Office on November 20, 1996 in Liber 12727 of Mortgages at page
                4844, recorded in the Onondaga County Clerk’s Office on
                November 19, 1996 in Liber 8788 of Mortgages, at pages 235, 237 and
                239,
                in the Broome County Clerk’s Office
                on November 21, 1996 in Liber 2429 of Mortgages, at page 1058, in
                the
                Monroe County Clerk’s Office on
                November 18, 1996 in Liber 1151 of Assignment of Mortgages at page
                327.

            

    

    

    
      	
               

            	
              The
                above mortgages at 1 through 15, as consolidated and modified were
                spread,
                split and modified by Mortgage Modification, Spreader and Splitting
                Agreement between Philip R. Wegman and GMAC Commercial Mortgage
                Corporation dated November 14, 1996 and recorded in the Onondaga
                County Clerk’s Office on November 19, 1996 in Liber 8788 of
                Mortgages, at page 248 to constitute a single lien of $5,000,000.00
                on
                premises located at 4055 Long Branch Road, Town of Salina; 7164 East
                Genesee Street, Town of Manlius and 4330 Onondaga Boulevard all in
                County
                of Onondaga, New York.

            

    

    

    
      	
              16.

            	
              Increased,
                Consolidated and Restated Mortgage and Security Agreement dated November
                14, 1996 by and between Wegman/Manors Number Two, LLC and GMAC Commercial
                Mortgage Corporation securing the principal sum of $5,470,000.00
                and
                recorded in the Onondaga County Clerk’s
                Office on November 19, 1996 in Liber 8789 of Mortgages, page 1,
                which mortgage by its terms is consolidated with the lien of the
                mortgages
                at Numbers 1 through 15 so as to constitute a single lien securing
                the
                principal sum of $10,470,000.00 and is a lien on premises located
                at 4055
                Long Branch Road, Town of Salina; 7164 East Genesee Street, Town
                of
                Manlius and 4330 Onondaga Boulevard all in County of Onondaga, State
                of
                New York.

            

    

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4006

        
        

      

      
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              The
                above mortgages were assigned by GMAC Commercial Mortgage Corporation
                to
                Red Mountain Funding, LLC by Assignment of Mortgage and Secured
                Indebtedness recorded in the Onondaga County
                Clerk’s Office on August 10, 1997 in Liber
                9109 of Mortgages at Page 225.

            

    

    

    
      	
               

            	
              The
                above mortgages were further assigned to LaSalle National Bank, as
                Trustee
                for RMF Commercial Mortgage Pass-Through Certificates, Series 1997-1,
                by
                Assignment of Mortgage and Secured Indebtedness recorded in the
                Onondaga County Clerk’s Office on August 18, 1997 in
                Liber 9124 of Mortgages at page 67.

            

    

    

     

    
      
        Fannie
          Mae Multifamily Security Instrument - Form 4006

        
        

      

      
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