Document:

Multistate

Exhibit 10.10

 

Federal Home Loan
Numbers:

Old Loan
#002649160

New Loan
#504180193

Sun RiverVillageApartments

 

AMENDED AND RESTATED

MULTIFAMILY NOTE

                                                  
MULTISTATE – FIXED RATE

(REVISION DATE 2-15-2008) 

 (Recast Transaction)

 

           
THIS AMENDED AND RESTATED MULTIFAMILY NOTE (“Amended and Restated Note”)
is made effective as of the 2nd day of October, 2009, by CENTURY SUN RIVER,
LIMITED PARTNERSHIP, an Arizona limited partnership ("Borrower")and the FEDERAL
HOME LOAN MORTGAGE CORPORATION (“Lender”).

 

                                                                   
RECITALS

 

A.       
Borrower is the maker of a Multifamily Note (the “Note”), dated May 23,
2001 in the original amount of Ten Million and 00/100 Dollars ($10,000,000.00)
evidencing a loan (the “Loan”) to Borrower in such amount from LEND
LEASE MORTGAGE CAPITAL, L.P., a Texas limited partnership (the “Original
Lender”).

B.        
The Note is secured by that certain Multifamily Deed of Trust, Assignment of
Rents and Security Agreement, dated May 23, 2001, from Borrower, as grantor, to
Original Lender, a beneficiary, recorded in the Office of the Maricopa County
Recorder, Arizona (the “Land Records”) as Instrument No. 2001-0438719
(the “Instrument”).  The Instrument encumbers, among other things,
Borrower’s interest in the land described in Exhibit A to the Instrument
and to the Amended and Restated Instrument.

C.       
Pursuant to a Limited Guaranty dated May 23, 2001, AIMCO
Properties, L.P., a Delaware limited partnership, guaranteed some or
all of Borrower’s obligations under the terms of the Note and the
Instrument.

D.       
Original Lender (i) endorsed the Note to Lender and (ii) assigned the Instrument
to Lender by Assignment of Security Instrument dated May 23, 2001 and recorded
in the Land Records as Instrument No. 2001-0438722.

E.        
Borrower has confirmed to Lender that Borrower has no defenses or offsets of any
kind against any of the indebtedness due under the Note.

F.        
Borrower and Lender now desire to amend and restate the Note as provided below
to, among other things, (i) reflect an aggregate current unpaid balance of
Seven Million Four Hundred Fifty-Two Thousand Three Hundred Eighty-Three and
00/100 Dollars ($7,452,383.00), and (ii) amend the terms of payment. 
Borrower and Lender now also desire to amend and restate the Instrument as
provided below.

           
NOW, THEREFORE, in consideration of these premises, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties agree that the Note is amended and restated in its entirety in the form
attached hereto and made a part hereof.

 

 

 

[NO FURTHER TEXT ON THIS
PAGE]

Federal
Home Loan Numbers:

Old Loan
#002649160

New Loan
#504180193

Sun RiverVillageApartments

 

 

MULTIFAMILY NOTE

                                                  
MULTISTATE – FIXED RATE

(REVISION DATE 2-15-2008) 

 

 

	
US
$7,452,383.00
	
Effective Date: October 2, 2009

 

 

           
FOR VALUE RECEIVED, the undersigned (together with such party's or parties'
successors and assigns, "Borrower") jointly and severally (if more than
one) promises to pay to the order of FEDERAL HOME LOAN MORTGAGE
CORPORATION, whose address is 8200 Jones Branch Drive, McLean, Virginia
22102, as beneficiary (“Lender”), the principal sum of Seven Million
Four Hundred Fifty-Two Thousand Three Hundred Eighty-Three and 00/100
Dollars(US $7,452,383.00),
with interest on the unpaid principal balance, as hereinafter provided.

           
1.         Defined Terms.  

 

           
(a)        As used in this Note: 

                       

"Base
Recourse" means a portion of the Indebtedness equal to ZERO percent
(0%) of the original principal balance of this Note.

 

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

 

"Default
Rate" means an annual interest rate equal to four (4) percentage points
above the Fixed Interest Rate.  However, at no time will the Default Rate
exceed the Maximum Interest Rate.

 

"Fixed
Interest Rate" means the annual interest rate of seven and forty-two
hundredths percent (7.42%). 

 

"Installment
Due Date" means, for any monthly installment of interest only or principal
and interest, the date on which such monthly installment is due and payable
pursuant to Section 3 of this Note. The "First Installment Due Date"
under this Note is December 1, 2009.

 

"Lender" means the holder from time to time of this
Note.

 

"Loan"
means the loan evidenced by this Note.

 

"Maturity
Date" means the earlier of (i) June 1, 2021 (the
"Scheduled Maturity Date"), and (ii) the date on which the
unpaid principal balance of this Note becomes due and payable by acceleration or
otherwise pursuant to the Loan Documents or the exercise by Lender of any right
or remedy under any Loan Document. 

 

"Maximum
Interest Rate" means the rate of interest that results in the maximum amount
of interest allowed by applicable law. 

 

"Prepayment
Premium Period" means the period during which, if a prepayment of principal
occurs, a prepayment premium will be payable by Borrower to Lender.  The
Prepayment Premium Period is the period from and including the date of this Note
until but not including the first day of the Window Period. 

 

"Security
Instrument" means the multifamily mortgage, deed to secure debt or deed of
trust effective as of the effective date of this Note, from Borrower to or for
the benefit of Lender and securing this Note.

 

                       
"Treasury Security" means the 7.875% U.S. Treasury Security due February
15, 2021.

 `         

"Window
Period" means the six (6) consecutive calendar month period prior to the
Scheduled Maturity Date.

 

"Yield
Maintenance Period" means the period from and including the date of this
Note until but not including June 1, 2016.

 

           
(b)        Other capitalized terms used but
not defined in this Note shall have the meanings given to such terms in the
Security Instrument.

 

           
2.         Address for
Payment.  All payments due under this Note shall be payable at P.O. Box
60253, Charlotte, North Carolina 28260-0253, or such other place as may be
designated by Notice to Borrower from or on behalf of Lender.

 

           
3.         Payments.  

 

           
(a)        Interest will accrue on the
outstanding principal balance of this Note at the Fixed Interest Rate, subject
to the provisions of Section 8 of this Note.  

 

           
(b)        Interest under this Note shall be
computed, payable and allocated on the basis of a 360-day year consisting of
twelve 30-day months.

           

           
(c)        Unless disbursement of principal
is made by Lender to Borrower on the first day of a calendar month, interest for
the period beginning on the date of disbursement and ending on and including the
last day of such calendar month shall be payable by Borrower simultaneously with
the execution of this Note.  If disbursement of principal is made by Lender
to Borrower on the first day of a calendar month, then no payment will be due
from Borrower at the time of the execution of this Note.  The Installment
Due Date for the first monthly installment payment under Section 3(d) of
interest only or principal and interest, as applicable, will be the First
Installment Due Date set forth in Section 1(a) of this Note.  Except as
provided in this Section 3(c) and in Section 10, accrued interest will be
payable in arrears. 

 

           
(d)        Beginning on the First
Installment Due Date, and continuing until and including the monthly installment
due on the Maturity Date, principal and accrued interest shall be payable by
Borrower in consecutive monthly installments due and payable on the first day of
each calendar month.  The amount of the monthly installment of principal
and interest payable pursuant to this Section 3(d) on an Installment Due Date
shall be Fifty-One Thousand Seven Hundred and 51/100 Dollars
($51,700.51).

 

           
(e)        All remaining Indebtedness,
including all principal and interest, shall be due and payable by Borrower on
the Maturity Date.  

 

           
(f)         All payments under this Note
shall be made in immediately available U.S. funds.

           

           
(g)        Any regularly scheduled monthly
installment of interest only or principal and interest payable pursuant to this
Section 3 that is received by Lender before the date it is due shall be
deemed to have been received on the due date for the purpose of calculating
interest due.

 

           
(h)        Any accrued interest remaining
past due for 30 days or more, at Lender's discretion, may be added to and become
part of the unpaid principal balance of this Note and any reference to "accrued
interest" shall refer to accrued interest which has not become part of the
unpaid principal balance.  Any amount added to principal pursuant to the
Loan Documents shall bear interest at the applicable rate or rates specified in
this Note and shall be payable with such interest upon demand by Lender and
absent such demand, as provided in this Note for the payment of principal and
interest.    

 

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

                       

           
5.         Security.  The
Indebtedness is secured by, among other things, the Security Instrument, and
reference is made to the Security Instrument for other rights of Lender as to
collateral for the Indebtedness.

 

           
6.         Acceleration.  If an
Event of Default has occurred and is continuing, the entire unpaid principal
balance, any accrued interest, any prepayment premium payable under
Section 10, and all other amounts payable under this Note and any other
Loan Document, shall at once become due and payable, at the option of Lender,
without any prior notice to Borrower (except if notice is required by applicable
law, then after such notice).  Lender may exercise this option to
accelerate regardless of any prior forbearance.  For purposes of exercising such option, Lender shall
calculate the prepayment premium as if prepayment occurred on the date of
acceleration.  If prepayment occurs thereafter, Lender shall recalculate
the prepayment premium as of the actual prepayment date.

 

           
7.         Late Charge.

 

           
(a)        If any monthly installment of
interest or principal and interest or other amount payable under this Note or
under the Security Instrument or any other Loan Document is not received in full
by Lender within ten (10) days after the installment or other amount is due,
counting from and including the date such installment or other amount is due
(unless applicable law requires a longer period of time before a late charge may
be imposed, in which event such longer period shall be substituted), Borrower
shall pay to Lender, immediately and without demand by Lender, a late charge
equal to five percent (5%) of such installment or other amount due (unless
applicable law requires a lesser amount be charged, in which event such lesser
amount shall be substituted).  

 

           
(b)        Borrower acknowledges that its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the Loan and that it is extremely difficult and
impractical to determine those additional expenses.  Borrower agrees that
the late charge payable pursuant to this Section represents a fair and
reasonable estimate, taking into account all circumstances existing on the date
of this Note, of the additional expenses Lender will incur by reason of such
late payment.  The late charge is payable in addition to, and not in lieu
of, any interest payable at the Default Rate pursuant to Section 8.

 

           
8.         Default Rate.  

 

           
(a)        So long as (i) any
monthly installment under this Note remains past due for thirty (30) days or
more or (ii) any other Event of Default has occurred and is continuing,
then notwithstanding anything in Section 3 of this Note to the contrary,
interest under this Note shall accrue on the unpaid principal balance from the
Installment Due Date of the first such unpaid monthly installment or the
occurrence of such other Event of Default, as applicable, at the Default
Rate.  

 

           
(b)        From and after the Maturity Date,
the unpaid principal balance shall continue to bear interest at the Default Rate
until and including the date on which the entire principal balance is paid in
full.  

 

           
(c)        Borrower acknowledges that
(i) its failure to make timely payments will cause Lender to incur
additional expenses in servicing and processing the Loan, (ii) during the
time that any monthly installment under this Note is delinquent for thirty (30)
days or more, Lender will incur additional costs and expenses arising from its
loss of the use of the money due and from the adverse impact on Lender's ability
to meet its other obligations and to take advantage of other investment
opportunities; and (iii)  it is extremely difficult and impractical to
determine those additional costs and expenses.  Borrower also acknowledges
that, during the time that any monthly installment under this Note is delinquent
for thirty (30) days or more or any other Event of Default has occurred and is
continuing, Lender's risk of nonpayment of this Note will be materially
increased and Lender is entitled to be compensated for such increased
risk.  Borrower agrees that the increase in the rate of interest payable
under this Note to the Default Rate represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of this Note, of the
additional costs and expenses Lender will incur by reason of the Borrower's
delinquent payment and the additional compensation Lender is entitled to receive
for the increased risks of nonpayment associated with a delinquent loan.

 

           
9.         Limits on Personal
Liability. 

 

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

 

           
(b)        Borrower shall be personally
liable to Lender for the amount of the Base Recourse, plus any other amounts for
which Borrower has personal liability under this Section 9. 

 

           
(c)        In addition to the Base Recourse,
Borrower shall be personally liable to Lender for the repayment of a further
portion of the Indebtedness equal to any loss or damage suffered by Lender as a
result of the occurrence of any of the following events:

 

(i)        
Borrower fails to pay to Lender upon demand after an Event of Default all Rents
to which Lender is entitled under Section 3(a) of the Security Instrument
and the amount of all security deposits collected by Borrower from tenants then
in residence.  However, Borrower will not be personally liable for any
failure described in this subsection (i) if Borrower is unable to pay to
Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.

 

(ii)       
Borrower fails to apply all insurance proceeds and condemnation proceeds as
required by the Security Instrument.  However, Borrower will not be
personally liable for any failure described in this subsection (ii) if
Borrower is unable to apply insurance or condemnation proceeds as required by
the Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.

 

(iii)      
Borrower fails to comply with Section 14(g) or (h) of the Security
Instrument relating to the delivery of books and records, statements, schedules
and reports.  

 

(iv)      
Borrower fails to pay when due in accordance with the terms of the Security
Instrument the amount of any item below marked "Deferred"; provided
however, that if no item is marked "Deferred", this Section 9(c)(iv) shall
be of no force or effect.   

           
[Deferred]        Hazard Insurance
premiums or other insurance premiums,

[Deferred]       
Taxes, 

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

[N/A]  
            ground rents,

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

 

           
(d)        In addition to the Base Recourse,
Borrower shall be personally liable to Lender for:

 

                       
(i)         the performance of all of
Borrower's obligations under Section 18 of the Security Instrument
(relating to environmental matters);

 

                       
(ii)        the costs of any audit under
Section 14(g) of the Security Instrument; and 

 

                       
(iii)       any costs and expenses incurred by
Lender in connection with the collection of any amount for which Borrower is
personally liable under this Section 9, including Attorneys' Fees and Costs
and the costs of conducting any independent audit of Borrower's books and
records to determine the amount for which Borrower has personal liability.

 

           
(e)        All payments made by Borrower with
respect to the Indebtedness and all amounts received by Lender from the
enforcement of its rights under the Security Instrument and the other Loan
Documents shall be applied first to the portion of the Indebtedness for which
Borrower has no personal liability.   

 

           
(f)         Notwithstanding the Base
Recourse, Borrower shall become personally liable to Lender for the repayment of
all of the Indebtedness upon the occurrence of any of the following Events of
Default: 

 

                       
(i)         Borrower's ownership of any
property or operation of any business not permitted by Section 33 of the
Security Instrument;

 

                       
(ii)        a Transfer (including, but not
limited to, a lien or encumbrance) that is an Event of Default under
Section 21 of the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of a general partner
in a limited partnership or a manager in a limited liability company; or 

 

                       
(iii)       fraud or written material
misrepresentation by Borrower or any officer, director, partner, member or
employee of Borrower in connection with the application for or creation of the
Indebtedness or any request for any action or consent by Lender.

 

           
(g)        To the extent that Borrower has
personal liability under this Section 9, Lender may exercise its rights
against Borrower personally without regard to whether Lender has exercised any
rights against the Mortgaged Property or any other security, or pursued any
rights against any guarantor, or pursued any other rights available to Lender
under this Note, the Security Instrument, any other Loan Document or applicable
law.  To the fullest extent
permitted by applicable law, in any action to enforce Borrower's personal
liability under this Section 9, Borrower waives any right to set off the
value of the Mortgaged Property against such personal liability.

 

           
10.       Voluntary and Involuntary
Prepayments.

 

           
(a)        Any receipt by Lender of principal
due under this Note prior to the Maturity Date, other than principal required to
be paid in monthly installments pursuant to Section 3, constitutes a
prepayment of principal under this Note.  Without limiting the foregoing,
any application by Lender, prior to the Maturity Date, of any proceeds of
collateral or other security to the repayment of any portion of the unpaid
principal balance of this Note constitutes a prepayment under this Note. 

           
 

           
(b)        Borrower may voluntarily prepay
all of the unpaid principal balance of this Note on an
Installment Due Date so long as Borrower
designates the date for such prepayment in a Notice from Borrower
to Lender given at least 30 days prior to the date of such prepayment. 
If an Installment Due Date (as defined in Section
1(a)) falls on a day which is not a Business Day, then with
respect to payments made under this Section 10 only, the term "Installment Due
Date" shall mean the Business Day immediately preceding the scheduled
Installment Due Date.

 

           
(c)        Notwithstanding subsection (b)
above, Borrower may voluntarily prepay all of the unpaid principal balance of
this Note on a Business Day other than an
Installment Due Date if Borrower provides
Lender with the Notice set forth in subsection (b) and meets the other
requirements set forth in this subsection.  Borrower acknowledges that
Lender has agreed that Borrower may prepay principal on a Business Day other
than an Installment Due Date only because Lender shall deem any prepayment
received by Lender on any day other than an Installment Due Date to have been
received on the Installment Due Date immediately following such prepayment and
Borrower shall be responsible for all interest that would have been due if the
prepayment had actually been made on the Installment Due Date immediately
following such prepayment.

 

           
(d)        Unless otherwise expressly
provided in the Loan Documents, Borrower may not voluntarily prepay less than
all of the unpaid principal balance of this Note.  In order to voluntarily
prepay all or any part of the principal of this Note, Borrower must also pay to
Lender, together with the amount of principal being prepaid, (i) all
accrued and unpaid interest due under this Note, plus (ii) all other sums
due to Lender at the time of such prepayment, plus (iii) any prepayment
premium calculated pursuant to Section 10(e).

 

           
(e)        Except as provided in Section
10(f), a prepayment premium shall be due and payable by Borrower in connection
with any prepayment of principal under this Note during the Prepayment Premium
Period.  The prepayment premium shall be computed as follows:

 

                       
(i)         For any prepayment made
during the Yield Maintenance Period, the prepayment premium shall be whichever
is the greater of subsections (A) and (B) below:

 

                       
(A)       1.0% of the amount of principal being
prepaid; or 

 

                       
(B)       the product obtained by multiplying:

 

                                   
(1)        the amount of principal being
prepaid or accelerated, 

                                               
by

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

                                               
by

                                   
(3)        the Present Value Factor.

 

                       
For purposes of subsection (B), the following definitions shall apply:

 

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

 

                       
Prepayment Date:  in the case of a voluntary prepayment, the date on
which the prepayment is made; in the case of the application by Lender of
collateral or security to a portion of the principal balance, the date of such
application.

 

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

 

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

 

[1-{1/(1+ARR)}n]/ARR 

 

                       
n = the number of months remaining in Yield Maintenance Period; provided,
however, if a prepayment occurs on an Installment Due Date, then the number of
months remaining in the Yield Maintenance Period shall be calculated
beginning with the month in which such prepayment occurs and if such prepayment
occurs on a Business Day other than an Installment Due Date, then the number of
months remaining in the Yield Maintenance Period shall be calculated beginning
with the month immediately following the date of such prepayment. 

                       

                                   
ARR = Assumed Reinvestment Rate

 

(ii)       
For any prepayment made after the expiration of the Yield Maintenance Period but
during the remainder of the Prepayment Premium Period, the prepayment premium
shall be 1.0% of the amount of principal being prepaid.

           

           
(f)         Notwithstanding any other
provision of this Section 10, no prepayment premium shall be payable with
respect to (i) any prepayment made during the Window Period, or
(ii) any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security Instrument.

 

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

 

           
(h)        Borrower recognizes that any
prepayment of any of the unpaid principal balance of this Note, whether
voluntary or involuntary or resulting from an Event of Default by Borrower, will
result in Lender's incurring loss, including reinvestment loss, additional
expense and frustration or impairment of Lender's ability to meet its
commitments to third parties.  Borrower agrees to pay to Lender upon demand
damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such
damages.  Borrower therefore acknowledges and agrees that the formula for
calculating prepayment premiums set forth in this Note represents a reasonable
estimate of the damages Lender will incur because of a prepayment. 
Borrower further acknowledges that the prepayment premium provisions of this
Note are a material part of the consideration for the Loan, and that the terms
of this Note are in other respects more favorable to Borrower as a result of the
Borrower's voluntary agreement to the prepayment premium provisions. 

 

           
11.       Costs and Expenses.  To the
fullest extent allowed by applicable law, Borrower shall pay all expenses and
costs, including Attorneys' Fees and Costs incurred by Lender as a result of any
default under this Note or in connection with efforts to collect any amount due
under this Note, or to enforce the provisions of any of the other Loan
Documents, including those incurred in post-judgment collection efforts and in
any bankruptcy proceeding (including any action for relief from the automatic
stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure
proceeding.

 

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

 

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

 

           
14.       Loan Charges.  Neither this
Note nor any of the other Loan Documents shall be construed to create a contract
for the use, forbearance or detention of money requiring payment of interest at
a rate greater than the Maximum Interest Rate.  If any applicable law
limiting the amount of interest or other charges permitted to be collected from
Borrower in connection with the Loan is interpreted so
that any interest or other charge provided for in any Loan Document, whether
considered separately or together with other charges provided for in any other
Loan Document, violates that law, and Borrower is entitled to the benefit of
that law, that interest or charge is hereby reduced to the extent necessary to
eliminate that violation.  The amounts, if any, previously paid to Lender
in excess of the permitted amounts shall be applied by Lender to reduce the
unpaid principal balance of this Note. For the purpose of determining whether
any applicable law limiting the amount of interest or other charges permitted to
be collected from Borrower has been violated, all Indebtedness that constitutes
interest, as well as all other charges made in connection with the Indebtedness
that constitute interest, shall be deemed to be allocated and spread ratably
over the stated term of this 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 this
Note.  

 

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

 

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

 

           
17.       Governing Law.  This Note shall
be governed by the law of the Property Jurisdiction.

 

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

 

           
19.       Notices; Written Modifications.
 

 

           
(a)        All Notices, demands and other
communications required or permitted to be given pursuant to this Note shall be
given in accordance with Section 31 of the Security Instrument.  

 

           
(b)        Any modification or amendment to
this Note shall be ineffective unless in writing signed by the party sought to
be charged with such modification or amendment; provided, however, in the event
of a Transfer under the terms of the Security Instrument that requires Lender's
consent, any or some or all of the Modifications to Multifamily Note set forth
in Exhibit A to this Note may be modified or rendered void by Lender at
Lender's option, by Notice to Borrower and the transferee, as a condition of
Lender's consent.

 

           
20.       Consent to Jurisdiction and
Venue.  Borrower agrees that any controversy arising under or in
relation to this Note may be litigated in the Property Jurisdiction.  The
state and federal courts and authorities with jurisdiction in the Property
Jurisdiction shall have jurisdiction over all controversies that shall arise
under or in relation to this Note.  Borrower irrevocably consents to
service, jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise.  However, nothing in this Note is intended
to limit any right that Lender may have to bring any suit,
action or proceeding relating to matters arising under this Note in any court of
any other jurisdiction.

 

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

 

           
22.       State-Specific Provisions. 

 

                 
Borrower agrees to pay an effective contracted rate of interest equal to the
rate of interest resulting from all interest payable as provided in this Note,
plus an additional rate of interest resulting from all "Other Sums."  The
"Other Sums" shall consist of all fees, charges, or any other sums (other than
interest payable as provided in this Note) paid or payable by Borrower, whether
pursuant to this Note, any of the Loan Documents, or any other document or
instrument in any way pertaining to this lending transaction that may be deemed
to be interest for the purpose of any law of the State of Arizona that may limit
the maximum amount of interest to be charged with respect to this lending
transaction.  The Other Sums shall be deemed to be interest for the
purposes of any such law only.

 

 

           
ATTACHED EXHIBIT.  The Exhibit noted below, if marked with an "X" in the
space provided, is attached to this Note:  

 

           
[ X ]       Exhibit A
      Modifications to Multifamily Note 

 

 

           
IN WITNESS WHEREOF, and in consideration of the Lender's agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative. 

 

 

	
 
	
BORROWER:

 

CENTURY SUN RIVER, LIMITED PARTNERSHIP, an

Arizona limited partnership

 

By:    CPF XIV/SUN RIVER, INC., an
Arizona corporation, 
its managing general partner

 

 

 

By:  /s/Patti K. Fielding

Name:  Patti K. Fielding

Title:     Executive Vice President and
Treasurer

 

 

 

                                                                       

                                                                       

 

	
LENDER:

 

FEDERAL HOME LOAN MORTGAGE CORPORATION

 

 

 

By:  /s/

Name:

Title:

 

 

	
 
	
SEEN AND AGREED:

 

AIMCO PROPERTIES,
L.P., a Delaware limited
partnership

 

By:    
AIMCO-GP, Inc., a Delaware corporation, its general partner

 

 

By:  /s/Patti K.
Fielding

Name:    Patti K.
Fielding

Title:      
Executive Vice President and Treasurer

 

 

 

EXHIBIT A 

 

MODIFICATIONS TO MULTIFAMILY NOTE

 

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

 

1.     
Intentionally Deleted.

 

2.      The
following definition is added to Section 1(a) of this Note:

”Prime
Rate” means the rate of interest announced by The Wall Street Journal
from time to time as the “Prime Rate”.

 

3.  
The second sentence of Section 9(c)(i) is deleted and replaced with the
following:

 

           
However, Borrower will not be personally liable for any failure described in
this subsection (i) if Borrower is unable to pay to Lender all Rents and
security deposits as required by the Security Instrument (a) because of a valid
order issued in a bankruptcy, receivership, or similar judicial proceeding, or
(b) if such funds have been applied by Borrower as required or permitted by the
Security Instrument prior to the occurrence of an Event of Default.

4. 
A new Section 9(c)(v) is hereby added to this Note immediately following the
text of Section 9(c)(iv):

 

                 
“(v) A casualty loss affecting the Mortgaged Property which results in loss or
damage to Lender because (A) the Mortgaged Property is a legal non-conforming
use under the applicable zoning laws, ordinances and/or regulations in the
Property Jurisdiction (the “Zoning Code”), (B) the affected Improvements cannot
be rebuilt to pre-casualty condition under the terms of the Zoning Code, and (C)
the Hazard Insurance proceeds available to Lender under the terms of the
Security Instrument are insufficient to repay the Indebtedness in full.”

 

5.  
Section 19(b) of this Note is modified by deleting: “provided, however, in the
event of a Transfer under the terms of the Security Instrument that requires
Lender's consent, any or some or all of the Modifications to Multifamily Note
set forth in Exhibit A to this Note may be modified or rendered void by
Lender at Lender's option, by Notice to Borrower and the transferee, as a
condition of Lender's consent” in the last sentence of the Section; and by
adding the following new sentence: 

 

The
Modifications to Multifamily Note set forth in this Exhibit A shall be null and
void unless title to the Mortgaged Property is vested in
an entity whose Controlling Interest(s) are directly or indirectly held by AIMCO
REIT or AIMCO OP.  The capitalized terms used in this Section are defined
in the Security Instrument.

6.             
Section 20 of this Note is deleted and replaced with the following:

 

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

Exhibit 10.11

 

	
RECORDING REQUESTED BY 

AND WHEN RECORDED MAIL TO:

 

Blank
Rome LLP

The
Chrysler Building

405
Lexington Avenue

New 
York, New  York  10174-0208

Attention: 
Carol M. Joseph, Esq.

 
	
Federal Home Loan
Numbers:

Old Loan
#002649160

New Loan
#504180193

Sun
RiverVillageApartments

 

 

 

County:  Maricopa

 

 

 

 

 

 

 

 

 

 

 

 

 

AMENDED AND RESTATED
MULTIFAMILY DEED OF
TRUST,

ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

 

(ARIZONA – REVISION DATE 05-11-2004)

 

(RECAST TRANSACTION)

 

 

 

 

 

 

 

 

 

 

Sun
River Village Apartments

505
W. Baseline Road
Tempe, Arizona 

 

Federal
Home Loan Numbers:

Old Loan
#002649160

New Loan
#504180193

Sun RiverVillageApartments

 

AMENDED AND RESTATED
MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING

(ARIZONA – REVISION DATE 05-11-2004)

(RECAST TRANSACTION)

           
THIS AMENDED AND RESTATED MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS AND
SECURITY AGREEMENT AND FIXTURE FILING (RECAST TRANSACTION) (the "Amended and
Restated Instrument") is made to be effective as of this 2nd day of October,
2009, between CENTURY SUN RIVER, LIMITED PARTNERSHIP, a limited partnership
organized and existing under the laws of Arizona, whose address is c/o AIMCO,
Stanford Place 3, 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado
80237, as trustor ("Borrower") and FEDERAL HOME LOAN MORTGAGE CORPORATION, as
beneficiary ("Lender").

RECITALS

A.       
Borrower is the maker of a Multifamily Note (the “Note”), dated May 23,
2001 in the original amount of Ten Million and 00/100 Dollars ($10,000,000.00)
evidencing a loan (the “Loan”) to Borrower in such amount from
LEND LEASE MORTGAGE CAPITAL, L.P., a Texas limited partnership (the
“Original Lender”).

B.        
The Note is secured by that certain Multifamily Deed of Trust, Assignment of
Rents and Security Agreement, dated May 23, 2001, from Borrower, as grantor, to
Original Lender, a beneficiary, recorded in the Office of the Maricopa County
Recorder, Arizona (the “Land Records”) as Instrument No.
2001-0438719 (the “Instrument”).  The Instrument encumbers, among
other things, Borrower’s interest in the land described in Exhibit A to
the Instrument and to the Amended and Restated Instrument.

C.       
Pursuant to a Limited Guaranty dated May 23, 2001, AIMCO
Properties, L.P., a Delaware limited partnership, guaranteed some or
all of Borrower’s obligations under the terms of the Note and the
Instrument.

D.       
Original Lender (i) endorsed the Note to Lender and (ii) assigned the Instrument
to Lender by Assignment of Security Instrument dated May 23, 2001 and recorded
in the Land Records as Instrument No. 2001-0438722.

E.        
Borrower has confirmed to Lender that Borrower has no defenses or offsets of any
kind against any of the indebtedness due under the Note.

F.        
By Amended and Restated Multifamily Note dated effective as of the date of this
Amended and Restated Instrument, Borrower and Lender have amended and restated
the Note so as to, among other things, (i) reflect an aggregate current unpaid
balance of Seven Million Four Hundred Fifty-Two Thousand Three Hundred
Eighty-Three and 00/100 Dollars ($7,452,383.00), and (ii) amend the terms of
payment.  Borrower and Lender now also desire to amend and restate the
Instrument as provided below.

NOW, THEREFORE, in consideration of these premises, and other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree that the Instrument is amended and restated in
its entirety in the form attached hereto and made a part hereof.

 

 

 

 

[NO FURTHER TEXT ON THIS PAGE]

	
 
	
BORROWER:

 

CENTURY
SUN RIVER, LIMITED PARTNERSHIP, an

Arizona
limited partnership

 

By:    CPF XIV/SUN RIVER, INC., an
Arizona corporation, 
its managing general partner

 

 

 

By: 
/s/Patti K. Fielding

Name: 
Patti K. Fielding

Title:    
Executive Vice President and Treasurer

 

 

 

FEDERAL HOME LOAN MORTGAGE CORPORATION 

 

 

 

 

By: 
/s/Joe W. Marsh
Name:  Joe W. Marsh

Title: 
Senior Director

Head
of Regional Underwriting & Credit

Multifamily
Sourcing Division

 

 

 

 

 

 

                                                                             

 

Federal
Home Loan Numbers:

Old Loan
#002649160

New Loan
#504180193

Sun RiverVillageApartments

 

 

                                              
MULTIFAMILY DEED OF TRUST,

                                                     
ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

(ARIZONA – REVISION DATE 05-11-2004)

 

 

THIS
MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FILING (the “Instrument”) is made to be effective this 2nd day
of October, 2009, by CENTURY SUN
RIVER, LIMITED PARTNERSHIP, a limited partnership organized and
existing under the laws of Arizona, whose address is c/o AIMCO, Stanford Place
3, 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, as
trustor (“Borrower”), to STEWART TITLE & TRUST OF PHOENIX, a
corporation organized and existing under the laws of Delaware whose address is
244 W. Osborn, Phoenix, Arizona 85013, as trustee (“Trustee”), for the
benefit of FEDERAL HOME LOAN MORTGAGE CORPORATION, whose address is 8200
Jones Branch Drive, McLean, Virginia 22102, as beneficiary
(“Lender”).  Borrower’s organizational identification number, if
applicable, is N/A.

Borrower,
in consideration of the Indebtedness and the trust created by this Instrument,
irrevocably grants, conveys and assigns to Trustee, in trust, with power of
sale, the Mortgaged Property, including the Land located in Maricopa County,
State of Arizona and described in Exhibit A attached to this Instrument.

TO
SECURE TO LENDER the repayment of the Indebtedness evidenced by Borrower’s
Multifamily Note payable to Lender, dated as of the date of this Instrument, and
maturing June 1, 2021 (the “Maturity Date”), in the principal
amount of $7,452,383.00 and all renewals, extensions and modifications of
the Indebtedness, and the performance of the covenants and agreements of
Borrower contained in the Loan Documents.

Borrower
represents and warrants that Borrower is lawfully seized of the Mortgaged
Property and has the right, power and authority to grant, convey and assign the
Mortgaged Property, and that the Mortgaged Property is unencumbered except as
shown on the schedule of exceptions to coverage in the title policy issued to
and accepted by Lender contemporaneously with the execution and recordation of
this Instrument and insuring Lender’s interest in the Mortgaged Property (the
“Schedule of Title Exceptions”).  Borrower covenants that Borrower
will warrant and defend generally the title to the Mortgaged Property against
all claims and demands, subject to any easements and restrictions listed in the
Schedule of Title Exceptions.

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

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

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

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

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

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

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

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

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

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

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

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

(k)              
“Hazard Insurance” is defined in Section 19.

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

(m)             
“Hazardous Materials Laws” means all federal, state, and local
laws, ordinances and regulations and standards, rules, policies and other
governmental requirements, administrative rulings and court judgments and
decrees in effect now or in the future and including all amendments, that relate
to Hazardous Materials or the protection of human health or the environment and
apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws
include, but are not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901,
et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601,
et seq., the Clean Water Act, 33 U.S.C. Section 1251, et
seq., and the Hazardous Materials Transportation Act, 49 U.S.C.
Section 5101 et seq., and their state analogs.

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

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

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

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

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

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

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

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

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

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

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

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

(i)                 
the Land;

(ii)               
the Improvements;

(iii)              
the Fixtures;

(iv)             
the Personalty;

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

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

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

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

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

(x)               
all Rents and Leases;

(xi)             
all earnings, royalties, accounts receivable, issues and profits from the
Land, the Improvements or any other part of the Mortgaged Property, and all
undisbursed proceeds of the loan secured by this Instrument; 

(xii)            
all Imposition Deposits; 

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

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

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

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

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

(bb)          
“Personalty” means all:

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

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

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

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

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

(vi)             
all other intangible property, general intangibles and rights relating to
the operation of, or used in connection with, the Land or the Improvements,
including all governmental permits relating to any activities on the Land and
including subsidy or similar payments received from any sources, including a
governmental authority; and

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

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

(dd)          
“Rents” means all rents (whether from residential or
non-residential space), revenues and other income of the Land or the
Improvements, parking fees, laundry and vending machine income and fees and
charges for food, health care and other services provided at the Mortgag ed
Property, whether now due, past due, or to become due, and deposits forfeited by
tenants, and, if Borrower is a cooperative housing corporation or association,
maintenance fees, charges or assessments payable by shareholders or residents
under proprietary leases or occupancy agreements, whether now due, past due, or
to become due.

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

(ff)              
“Transfer” is defined in Section 21. 

2.                 
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. 

(a)               
This Instrument is also a security agreement under the Uniform Commercial
Code for any of the Mortgaged Property which, under applicable law, may be
subjected to a security interest under the Uniform Commercial Code, whether such
Mortgaged Property is owned now or acquired in the future, and all products and
cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and
Borrower hereby grants to Lender a security interest in the UCC
Collateral.  Borrower hereby authorizes Lender to prepare and file
financing statements, continuation statements and financing statement amendments
in such form as Lender may require to perfect or continue the perfection of this
security interest and Borrower agrees, if Lender so requests, to execute and
deliver to Lender such financing statements, continuation statements and
amendments.  Borrower shall pay all filing costs and all costs and expenses
of any record searches for financing statements and/or amendments that Lender
may require.  Without the prior written consent of Lender, Borrower shall
not create or permit to exist any other lien or security interest in any of the
UCC Collateral.

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

(c)               
If an Event of Default has occurred and is continuing, Lender shall
have the remedies of a secured party under the Uniform Commercial Code, in
addition to all remedies provided by this Instrument or existing under
applicable law.  In exercising any remedies, Lender may exercise its
remedies against the UCC Collateral separately or together, and in any order,
without in any way affecting the availability of Lender’s other remedies.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7.                 
DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES. 

(a)               
Unless this requirement is waived in writing by Lender, which waiver
may be contained in this Section 7(a), Borrower shall deposit with Lender
on the day monthly installments of principal or interest, or both, are due under
the Note (or on another day designated in writing by Lender), until the
Indebtedness is paid in full, an additional amount sufficient to accumulate with
Lender the entire sum required to pay, when due, the items marked “Collect”
below.  Lender will not require the Borrower to make Imposition Deposits
with respect to the items marked “Deferred” below.

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

[Deferred]       
Taxes, 

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

[N/A]              
ground rents, 

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

The
amounts deposited under the preceding sentence are collectively referred to in
this Instrument as the “Imposition Deposits.”  The obligations of
Borrower for which the Imposition Deposits are required are collectively
referred to in this Instrument as “Impositions.”  The amount of the
Imposition Deposits shall be sufficient to enable Lender to pay each Imposition
before the last date upon which such payment may be made without any penalty or
interest charge being added.  Lender shall maintain records indicating how
much of the monthly Imposition Deposits and how much of the aggregate Imposition
Deposits held by Lender are held for the purpose of paying Taxes, insurance
premiums and each other Imposition. 

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

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

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

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

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

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

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

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

10.             
COMPLIANCE WITH LAWS AND ORGANIZATIONAL DOCUMENTS. 

(a)               
Borrower shall comply with all laws, ordinances, regulations and
requirements of any Governmental Authority and all recorded lawful covenants
and agreements relating to or affecting the Mortgaged Property, including all
laws, ordinances, regulations, requirements and covenants pertaining to health
and safety, construction of improvements on the Mortgaged Property, fair
housing, disability accommodation, zoning and land use, and Leases. 
Borrower also shall comply with all applicable laws that pertain to the
maintenance and disposition of tenant security deposits.  

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

(c)               
Borrower shall take appropriate measures to prevent, and shall not engage
in or knowingly permit, any illegal activities at the Mortgaged Property
that could endanger tenants or visitors, result in damage to the Mortgaged
Property, result in forfeiture of the Mortgaged Property, or otherwise
materially impair the lien created by this Instrument or Lender’s interest in
the Mortgaged Property.  Borrower represents and warrants to Lender that no
portion of the Mortgaged Property has been or will be purchased with the
proceeds of any illegal activity. 

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

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

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

(a)               
If Borrower fails to perform any of its obligations under this Instrument
or any other Loan Document, or if any action or proceeding is commenced
which purports to affect the Mortgaged Property, Lender’s security or Lender’s
rights under this Instrument, including eminent domain, insolvency, code
enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials
Laws, fraudulent conveyance or reorganizations or proceedings involving a
bankrupt or decedent, then Lender at Lender’s option may make such appearances,
file such documents, disburse such sums and take such actions as Lender
reasonably deems necessary to perform such obligations of Borrower and to
protect Lender’s interest, including (i) payment of Attorneys’ Fees and Costs, (ii) payment of fees and
out-of-pocket expenses of accountants, inspectors and consultants,
(iii) entry upon the Mortgaged Property to make repairs or secure the
Mortgaged Property, (iv) procurement of the insurance required by
Section 19, (v) payment of amounts which Borrower has failed to pay
under Sections 15 and 17, and (vi) advances made by Lender to pay,
satisfy or discharge any obligation of Borrower for the payment of money that is
secured by a pre-existing mortgage, deed of trust or other lien encumbering the
Mortgaged Property (a “Prior Lien”).

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

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

13.             
INSPECTION.  

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

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

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

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

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

14.             
BOOKS AND RECORDS; FINANCIAL REPORTING.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

15.             
TAXES; OPERATING EXPENSES.

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

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

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

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

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

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

17.             
PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED
PROPERTY.  

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

(b)              
Borrower shall not abandon the Mortgaged Property.

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

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

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

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

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

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

18.             
ENVIRONMENTAL HAZARDS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

19.             
PROPERTY AND LIABILITY INSURANCE.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

20.             
CONDEMNATION.

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

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

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

(a)               
“Transfer” means 

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

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

(iii)              
the issuance or other creation of an ownership interest in a legal
entity, including a partnership interest, interest in a limited liability
company or corporate stock; 

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

(v)               
the merger, dissolution, liquidation, or consolidation of a legal entity
or the reconstitution of one type of legal entity into another type of legal
entity.  

For
purposes of defining the term “Transfer,” the term “partnership” shall mean a
general partnership, a limited partnership, a joint venture and a limited
liability partnership, and the term “partner” shall mean a general partner, a
limited partner and a joint venturer.

(b)              
“Transfer” does not include 

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

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

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

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

(i)                 
a Transfer to which Lender has consented;

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

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

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

(v)               
the creation of a mechanic’s, materialman’s, or judgment lien against the
Mortgaged Property, which is released of record or otherwise remedied to
Lender’s satisfaction within 60 days of the date of creation;

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

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

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

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

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

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

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

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

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

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

(3)              
Either directly or indirectly, N/A shall retain at all times a managing
interest in the Borrower.

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

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

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

(7)              
In the event of a Transfer prohibited by or requiring Lender’s
approval under this Section 21, this Section (c)(vii) may be
modified or rendered void by Lender at Lender’s option by Notice to Borrower and
the transferee(s), as a condition of Lender’s consent.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(viii)          
(viii)      a Transfer of any interest in a
Controlling Entity which, if such Controlling Entity were Borrower, would result
in an Event of Default under any of Sections 21(e)(i) through
(vii) above.

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

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

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

(ii)               
the absence of any Event of Default;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(f)                
any Event of Default under Section 21;

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

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

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

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

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

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

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

24.             
FORBEARANCE.

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

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

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

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

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

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

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

30.             
GOVERNING LAW; CONSENT TO JURISDICTION AND
VENUE.

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

(b)              
Borrower agrees that any controversy arising under or in relation to the
Note, this Instrument, or any other Loan Document may be litigated in the
Property Jurisdiction.  The state and federal courts and authorities with
jurisdiction in the Property Jurisdiction shall have jurisdiction over all
controversies that shall arise under or in relation to the Note, any security
for the Indebtedness, or any other Loan Document.  Borrower irrevocably
consents to service, jurisdiction, and venue of such courts for any such
litigation and waives any other venue to which it might be entitled by virtue of
domicile, habitual residence or otherwise.  However, nothing in this
Section 30 is intended to limit Lender’s right to bring any suit, action or
proceeding relating to matters under this Instrument in any court of any other
jurisdiction.

31.             
NOTICE.

(a)               
All Notices, demands and other communications
(“Notice”) under or concerning this Instrument shall be in
writing.  Each Notice shall be addressed to the intended recipient at
its address set forth in this Instrument, and shall be deemed given on the
earliest to occur of (i) the date when the Notice is received by the
addressee; (ii) the first Business Day after the Notice is delivered to a
recognized overnight courier service, with arrangements made for payment of
charges for next Business Day delivery; or (iii) the third Business Day
after the Notice is deposited in the United States mail with postage prepaid,
certified mail, return receipt requested.  

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

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

32.             
SALE OF NOTE; CHANGE IN SERVICER; LOAN
SERVICING.  The Note or a partial interest in the Note (together with
this Instrument and the other Loan Documents) may be sold one or more times
without prior Notice to Borrower.  A sale may result in a change of the
Loan Servicer.  There also may be one or more changes of the Loan Servicer
unrelated to a sale of the Note.  If there is a change of the Loan
Servicer, Borrower will be given Notice of the change. All actions
regarding the servicing of the loan evidenced by the Note, including the
collection of payments, the giving and receipt of Notice, inspections of the
Mortgaged Property, inspections of books and records, and the granting of
consents and approvals, may be taken by the Loan Servicer unless Borrower
receives Notice to the contrary.  If Borrower receives conflicting Notices
regarding the identity of the Loan Servicer or any other subject, any such
Notice from Lender shall govern.

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

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

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

36.             
RELATIONSHIP OF PARTIES; NO THIRD PARTY
BENEFICIARY.

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

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

37.             
SEVERABILITY; AMENDMENTS.  The invalidity or
unenforceability of any provision of this Instrument shall not affect the
validity or enforceability of any other provision, and all other provisions
shall remain in full force and effect.  This Instrument contains the entire
agreement among the parties as to the rights granted and the obligations assumed
in this Instrument.  This Instrument may not be amended or modified except
by a writing signed by the party against whom enforcement is sought; provided, however, that in the event of
a Transfer prohibited by or requiring Lender’s approval under
Section 21, any or some or all of the Modifications to Instrument set forth
in Exhibit B (if any) may be modified or rendered void by Lender at
Lender’s option by Notice to Borrower and the transferee(s).

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

39.             
DISCLOSURE OF INFORMATION.  Lender may furnish
information regarding Borrower or the Mortgaged Property to third parties
with an existing or prospective interest in the servicing, enforcement,
evaluation, performance, purchase or securitization of the Indebtedness,
including but not limited to trustees, master servicers, special servicers,
rating agencies, and organizations maintaining databases on the underwriting and
performance of multifamily mortgage loans, as well as governmental regulatory
agencies having regulatory authority over Lender.  Borrower irrevocably
waives any and all rights it may have under applicable law to prohibit such
disclosure, including but not limited to any right of privacy.

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

41.             
SUBROGATION.  If, and to the extent that, the
proceeds of the loan evidenced by the Note, or subsequent advances under
Section 12, are used to pay, satisfy or discharge a Prior Lien, such loan
proceeds or advances shall be deemed to have been advanced by Lender at
Borrower’s request, and Lender shall automatically, and without further action
on its part, be subrogated to the rights, including lien priority, of the owner
or holder of the obligation secured by the Prior Lien, whether or not the Prior
Lien is released. 

42.             
ADJUSTABLE RATE MORTGAGE - THIRD PARTY CAP AGREEMENT “CAP
COLLATERAL.”  

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

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

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

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

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

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

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

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

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

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

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

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

If
Lender invokes the power of sale, Lender shall give written notice to Trustee of
the occurrence of an Event of Default and of Lender’s election to cause the
Mortgaged Property to be sold.  Trustee shall record a notice of sale in
each county in which the Mortgaged Property or some part of the Mortgaged
Property is located and shall mail copies of the notices in the manner required
by Arizona law to Borrower and to all other persons entitled to receive such
notice under Arizona law.  Trustee shall give public notice of the sale and
shall sell the Mortgaged Property according to Arizona law.  Trustee may
sell the Mortgaged Property at the time and place and under the terms designated
in the notice of sale in one or more parcels and in such order as Trustee may
determine.  Trustee may postpone the sale of all or any part of the
Mortgaged Property by public announcement at the time and place of any
previously scheduled sale.  Lender or Lender’s designee may purchase the
Mortgaged Property at any sale.

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

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

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

46.             
TIME OF ESSENCE.  Time is of the essence of each
covenant of this Instrument.

47.             
WAIVERS BY SURETY.  Any party who has signed this
Instrument as a surety or accommodation party, or who has subjected his property
to this Instrument to secure the indebtedness of another, expressly waives the
benefits of the provision of Arizona Revised Statutes §§ 12-1641 et seq.

48.             
WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER EACH
(A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE
ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS
BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT
TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT
EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL. 

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

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

 

                       
|X||       Exhibit
B                     
Modifications to Instrument 

 

                       

 

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

 

                           
[SIGNATURES AND ACKNOWLEDGMENTS FOLLOW]

 

 

	
 
	
BORROWER:

 

CENTURY
SUN RIVER, LIMITED PARTNERSHIP, an

Arizona
limited partnership

 

By:    CPF XIV/SUN RIVER, INC., an
Arizona corporation, 
its managing general partner

 

 

 

By: 
/s/Patti K. Fielding

Name: 
Patti K. Fielding

Title:    
Executive Vice President and Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B

 

MODIFICATIONS TO INSTRUMENT

 

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

 

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

 

           
(m)       "Hazardous Materials Laws" means
all federal, state, and local laws, ordinances, rules, regulations,
administrative rulings, court judgments, and decrees, and all mandatory
standards, policies and other governmental requirements in effect now or in the
future, including all amendments, that relate to Hazardous Materials and apply
to Borrower or to the Mortgaged Property.  Hazardous Materials Laws
include, but are not limited to, the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901,
et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601,
et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and
the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101, and their
state analogs.

 

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

           
(q)        “Initial Owners” means,
with respect to Borrower or any other entity, the persons or entities that (i)
on the date of the Note, or (ii) on the date of a Transfer to which Lender has
consented or to which consent is not required, own in the aggregate 100 percent
of the ownership interests in Borrower or that entity.

 

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

 

           
(bb)      "Personalty" means all

 

(i)        
accounts (including deposit accounts);

 

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

 

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

 

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

 

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

 

(vi)      
all other intangible property, general intangibles and rights relating
exclusively to the operation of, or used exclusively in connection with, the
Land or the Improvements, including all governmental permits relating
exclusively to any activities on the Land and including subsidy or similar
payments received from any sources, including a governmental authority; and

 

(vii)     
any rights of Borrower in or under letters of credit which is issued now or in
the future exclusively in connection with the ownership, management or operation
of the Land or the Improvements.

 

 

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

 

Borrower
hereby authorizes Lender to prepare and file financing statements, continuation
statements and financing statement amendments in such form as Lender may
reasonably require to perfect or continue the perfection of this Security
Instrument and Borrower agrees, if Lender so requests, to execute and deliver to
Lender such financing statements, continuation statements and amendments. 
Borrower shall pay all filing costs and all costs and expenses of any record
searches for financing statements and/or amendments that Lender reasonably may
require.

 

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

 

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

 

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

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

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

 

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

Lender, its agents, representatives, and designees may
make or cause to be made entries upon and inspections of the Mortgaged Property
(including environmental inspections and tests) during normal business hours, or
at any other reasonable time upon at least 48 hours prior written notice to
Borrower.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

 

P.        
Section 16 is modified to read as follows:

 

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

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

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

 

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

 

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

 

Borrower
shall not lease or allow the sublease or use of all or any portion of the
Mortgaged Property to any tenant or subtenant for nonresidential use by any user
that, in the ordinary course of its business, would be reasonably expected to
cause or permit any Prohibited Activity or Condition.

 

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

 

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

 

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

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

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

 

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

 

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

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

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

 

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

 

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

 

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

 

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

 

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

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

 

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

 

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

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

 

          
(i)          in the event of a
casualty resulting in damage to the Mortgaged Property which will cost $250,000
or less to repair, the Borrower shall have the sole right to make proof of loss,
adjust and compromise the claim and collect and receive any proceeds directly
without the approval or prior consent of the Lender so long as the insurance
proceeds are used solely for the Restoration of the Mortgaged Property; and

 

          
(ii)          in the event of a
casualty resulting in damage to the Mortgaged Property which will cost more than
$250,000 but less than $500,000 to repair, the Borrower is authorized to make
proof of loss and adjust and compromise the claim without the prior consent of
Lender, and Lender shall hold the applicable insurance proceeds to be used to
reimburse Borrower for the cost of Restoration of the Mortgaged Property and
shall not apply such proceeds to the payment of sums due under this
Instrument.

 

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

FF.      
Section 21(c)(vii)(F)(3) is modified to read as follows:

 

(3)       
Either directly or indirectly, AIMCO REIT shall retain at all times a
Controlling Interest in the Borrower and manage the day-to-day operations of the
Borrower. 

 

 

GG.     
Section 21(e)(ii) is modified to read as follows:

 

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

 

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

 

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

 

(ix)      
The Transfer of shares of common stock or other beneficial or ownership
interests or other forms of securities in AIMCO REIT, and the issuance by AIMCO
REIT of common stock or other beneficial or ownership interests, convertible
debt, equity and other similar securities, and the subsequent Transfer of any of
the foregoing.

 

(x)       
The Transfer of limited partnership interests or other beneficial or ownership
interests or other forms of securities in AIMCO OP, and the issuance by AIMCO OP
of limited partnership interests or other beneficial or ownership interests,
convertible debt, equity and other similar securities, and the subsequent
Transfer of any of the foregoing; provided that, after
giving effect thereto, (A) AIMCO REIT owns 100% of the shares of AIMCO-LP Trust,
(B) AIMCO-GP, Inc. or another subsidiary of AIMCO REIT is the general partner of
AIMCO OP, (C) AIMCO REIT owns 100% of the ownership interests of the general
partner of AIMCO OP., and (D) AIMCO-LP Trust owns not less than 50.1% of the
limited partnership interests in AIMCO OP.

(xi)      
The Transfer of the general partnership interest of AIMCO OP currently held by
AIMCO-GP, Inc. to another entity (the “OP GP Entity”) provided that the OP GP
Entity must be, directly or indirectly, one hundred percent (100%) owned and
controlled by AIMCO REIT and may not be a Capital Restricted Entity.

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

 

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

 

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

 

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

 

(B)             
the date on which AIMCO REIT shall cease to hold (whether directly or
indirectly through a wholly owned intermediary entity such as AIMCO-LP Trust or
AIMCO-GP, Inc.) at least 50.1% of the limited partnership interests in AIMCO OP,
and 100% of the shares of AIMCO-GP, Inc., or

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

(D)             
the date on which an entity (a “Capital Restricted Entity”)
obtains a direct or indirect ownership interest in the Borrower if such Capital
Restricted Entity is (i) a Controlling Entity and is owned directly or
indirectly, in whole or in part, by AIMCO REIT, and (ii) contains restrictions
and/or prohibitions in its organizational documents or by applicable law or
statute with regard to the pass through of funds, distributions, or the raising of additional capital or contributions,
whether in either instance by the Capital Restricted Entity itself or any
individual or entity controlling such Capital Restricted Entity, provided,
however, that such restrictions and/or prohibitions shall not include provisions
in the applicable organizational documents relating to matching, anti-dilution,
or similar rights granted to partners, members, or shareholders.

 

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

 

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

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

 

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

 

(vi)
"Controlling Interest(s)" shall mean (A) with respect to a partnership, such
majority and/or managing general partner interests which, together with a
majority of limited partnership interests if necessary for consent purposes,
vest in the holder of such interests the sole power, right and authority to
control the day to day operations of the Borrower; including, without
limitation, the authority to manage, operate and finance the Mortgaged Property,
but in no event less than a fifty-one percent (51%) interest unless otherwise
stated in this Exhibit B, (b) with respect to a corporation, the number of
shares which entitle the holder to elect a majority of the board of directors of
the Borrower, but in no event less than a fifty-one percent (51%) interest
unless otherwise stated in this Exhibit B,, and (C) with respect to a limited
liability company, such majority and/or managing member interests as vest in the
holder of such interests the sole power, right and authority to control the day
to day operations of the Borrower; including, without limitation, the authority
to manage, operate and finance the Mortgaged Property, but in no event less than
a fifty-one percent (51%) interest unless otherwise stated in this Exhibit
B.

 

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

 

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

 

(ix)             
"AIMCO-LP Trust" shall mean AIMCO-LP Trust, a statutory trust organized
and existing under the laws of the State of Delaware.  

 

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

 

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

 

 

JJ.       
The following unnumbered paragraph is added at the end of Section 21(f):

 

In
connection with any Transfer that is an arms length sale of the Mortgaged
Property to a third ‎party purchaser of the Mortgaged Property which purchaser
has no ‎direct or indirect relationship to Borrower or any affiliate of
‎Borrower and to which Lender has consented, if Borrower has provided Lender
with a current environmental report pertaining to the Mortgaged Property
establishing in Lender’s sole discretion that no Prohibited Activities or
Conditions exist, then provided that Borrower shall have complied with the
requirements of Section 21(f)(vii), Lender shall release the transferor Borrower
and the original Guarantor from liability under Section 18 of this Instrument
other than for conditions that may have existed prior to the date of the
transfer.  

 

KK.    
Intentionally deleted.

 

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

 

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

 

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

 

(e)               
Intentionally omitted.

 

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

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

 

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

 

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

 

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

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

 

 

RR.     
Section [__] Subordinate Debt is added as follows:

 

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

 

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

                       

           
(b)        except for any debt secured by an
ownership interest in Borrower, any such Subordinate Debt shall be unsecured,
and shall not be evidenced by a note, lien on the Mortgaged Property, or any
like instrument;

 

           
(c)        any Subordinate Debt secured by an
ownership interest in the Borrower must meet the following requirements:

 

(i)        
the total debt service coverage ratio with respect to the Mortgaged Property
after the proposed Subordinate Debt is incurred will equal at least a ratio of
1.05:1, as determined by Lender in its reasonable discretion. (As used herein,
the term "total debt service coverage ratio" means the ratio of (A) the annual
net operating income from the Mortgaged Property during the preceding 12 month
period which is available for repayment of debt, after deducting reasonable and
customary operating expenses, to (B) the aggregate annual principal and interest
payable under the Note, the proposed Subordinate Debt, any other then existing
Subordinate Debt secured by an ownership interest in the Borrower, and any other
debt encumbering the Mortgaged Property (without implying any obligation on the
part of Lender to approve any other debt encumbering the Mortgaged
Property));

 

(ii)       
the principal amount of such Subordinate Debt, together with the Indebtedness,
all other existing Subordinate Debt secured by an ownership interest in the
Borrower, and any other debt encumbering the Mortgaged Property (without
implying any obligation on the part of Lender to approve
any other debt encumbering the Mortgaged Property), shall not exceed 100% of the
value of the Mortgaged Property at the time the Borrower incurs the proposed
Subordinate Debt, as determined by Lender, in Lender’s sole discretion; 

 

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

           

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

 

(v)       
Borrower's incurring of Subordinate Debt shall not constitute an Event of
Default under this instrument.

 

 

SS.      
Section 37 is modified by deleting: “; provided, however, that in the event of a
Transfer prohibited by or requiring Lender's approval under Section 21, any or
some or all of the Modifications to Instrument set forth in Exhibit B (if any)
may be modified or rendered void by Lender at Lender’s option by notice to
Borrower and the transferee(s)”.  The modifications set forth in this
Exhibit B shall be modified or rendered void byLender at Lender’s option by
Notice to Borrower and any transferee of Borrower if title to the Mortgaged
Property is no longer vested in an entity whose Controlling Interest(s) are
directly or indirectly held by AIMCO REIT or AIMCO OP.

 

TT.            
Intentionally deleted.

UU.          
Section 17 of this Instrument is hereby amended to add the following
subsection (i) immediately following Section 17(h):

 

“(i)
Borrower shall maintain the contract for termite control services with a
qualified service provider at the Mortgaged Property for so long as the
Indebtedness remains outstanding.”

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