Document:

Prepared
      by, recorded and return to:

     

    
      	
              Cassin
                Cassin & Joseph LLP

              711
                Third Avenue, 20th
                Floor

              New
                York, New York 10017

              Attn:
                Carol M. Joseph, Esq.

            	 	County:
              Hillsborough
	 	 	 

    

     

    (Reserved)

     

    MULTIFAMILY
      MORTGAGE,

    ASSIGNMENT
      OF RENTS

    AND
      SECURITY AGREEMENT

     

    (FLORIDA)

    

     

    

     

    Isles
      Apartments

    6202
      and 6210 N. Sheldon Road

    Tampa,
      Florida 

     

     

     

    

      
        	 	 	 
	 	 	 
	
                FANNIE
                  MAE MULTIFAMILY SECURITY INSTRUMENT -

              	
                Form
                  4010

              	
                11/01

              
	
                FLORIDA 

              	 	 
	
                ©
                  1997-2001 Fannie Mae

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    TABLE
      OF CONTENTS

     

    
      	 	 	 	
              PAGE

            
	
              1.

            	
              DEFINITIONS.

            	 	
              1

            
	
              2.

            	
              UNIFORM
                COMMERCIAL CODE SECURITY AGREEMENT.

            	 	
              6

            
	
              3.

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

            	 	
              7

            
	
              4.

            	
              ASSIGNMENT
                OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.

            	 	
              9

            
	
              5.

            	
              PAYMENT
                OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
                PREMIUM.

            	 	
              11

            
	
              6.

            	
              EXCULPATION.

            	 	
              11

            
	
              7.

            	
              DEPOSITS
                FOR TAXES, INSURANCE AND OTHER CHARGES.

            	 	
              11

            
	
              8.

            	
              COLLATERAL
                AGREEMENTS.

            	 	
              12

            
	
              9.

            	
              APPLICATION
                OF PAYMENTS.

            	 	
              12

            
	
              10.

            	
              COMPLIANCE
                WITH LAWS.

            	 	
              13

            
	
              11.

            	
              USE
                OF PROPERTY.

            	 	
              13

            
	
              12.

            	
              PROTECTION
                OF LENDER’S SECURITY.

            	 	
              13

            
	
              13.

            	
              INSPECTION.

            	 	
              14

            
	
              14.

            	
              BOOKS
                AND RECORDS; FINANCIAL REPORTING.

            	 	
              14

            
	
              15.

            	
              TAXES;
                OPERATING EXPENSES.

            	 	
              16

            
	
              16.

            	
              LIENS;
                ENCUMBRANCES.

            	 	
              16

            
	
              17.

            	
              PRESERVATION,
                MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.

            	 	
              17

            
	
              18.

            	
              ENVIRONMENTAL
                HAZARDS.

            	 	
              17

            
	
              19.

            	
              PROPERTY
                AND LIABILITY INSURANCE.

            	 	
              23

            
	
              20.

            	
              CONDEMNATION.

            	 	
              24

            
	
              21.

            	
              TRANSFERS
                OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.

            	 	
              25

            
	
              22.

            	
              EVENTS
                OF DEFAULT.

            	 	
              28

            
	
              23.

            	
              REMEDIES
                CUMULATIVE.

            	 	
              29

            

    

     

    
      
         

      

      
        Page
          i

        
          

        

      

      
         

      

    

     

    
      	
              24.

            	
              FORBEARANCE.

            	 	
              29

            
	
              25.

            	
              LOAN
                CHARGES.

            	 	
              30

            
	
              26.

            	
              WAIVER
                OF STATUTE OF LIMITATIONS.

            	 	
              30

            
	
              27.

            	
              WAIVER
                OF MARSHALLING.

            	 	
              30

            
	
              28.

            	
              FURTHER
                ASSURANCES.

            	 	
              31

            
	
              29.

            	
              ESTOPPEL
                CERTIFICATE.

            	 	
              31

            
	
              30.

            	
              GOVERNING
                LAW; CONSENT TO JURISDICTION AND VENUE.

            	 	
              31

            
	
              31.

            	
              NOTICE.

            	 	
              32

            
	
              32.

            	
              SALE
                OF NOTE; CHANGE IN SERVICER.

            	 	
              32

            
	
              33.

            	
              SINGLE
                ASSET BORROWER.

            	 	
              32

            
	
              34.

            	
              SUCCESSORS
                AND ASSIGNS BOUND.

            	 	
              32

            
	
              35.

            	
              JOINT
                AND SEVERAL LIABILITY.

            	 	
              33

            
	
              36.

            	
              RELATIONSHIP
                OF PARTIES; NO THIRD PARTY BENEFICIARY.

            	 	
              33

            
	
              37.

            	
              SEVERABILITY;
                AMENDMENTS.

            	 	
              33

            
	
              38.

            	
              CONSTRUCTION.

            	 	
              33

            
	
              39.

            	
              LOAN
                SERVICING.

            	 	
              33

            
	
              40.

            	
              DISCLOSURE
                OF INFORMATION.

            	 	
              34

            
	
              41.

            	
              NO
                CHANGE IN FACTS OR CIRCUMSTANCES.

            	 	
              34

            
	
              42.

            	
              SUBROGATION.

            	 	
              34

            
	
              43.

            	
              ACCELERATION;
                REMEDIES; WAIVER OF PERMISSIVE COUNTERCLAIMS.

            	 	
              34

            
	
              44.

            	
              RELEASE.

            	 	
              34

            
	
              45.

            	
              FUTURE
                ADVANCES.

            	 	
              35

            
	
              46.

            	
              WAIVER
                OF TRIAL BY JURY.

            	 	
              35

            

    

    

    
      
         

      

      
        Page
          ii

        
          

        

      

      
         

      

    

     

    THIS
      IS A BALLOON MORTGAGE AND THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE
      DUE UPON MATURITY IS $26,204,468.90, TOGETHER WITH ACCRUED INTEREST, IF ANY,
      AND
      ALL ADVANCEMENTS MADE BY THE MORTGAGEE (LENDER) UNDER THE TERMS OF THIS
      MORTGAGE

     

    MULTIFAMILY
      MORTGAGE,

    ASSIGNMENT
      OF RENTS

    AND
      SECURITY AGREEMENT

     

    THIS
      MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
“Instrument”) is dated as of the 16th
      day of
      November, 2007, between LVP
      TAMPA ISLES LLC,
      a
      limited liability company organized and existing under the laws of Delaware,
      whose address is c/o The Lightstone Group, 326 Third Street, Lakewood, New
      Jersey 08701, as mortgagor (“Borrower”), and WACHOVIA
      MULTIFAMILY CAPITAL, INC.,
      a
      corporation organized and existing under the laws of Delaware, whose address
      is
      The Seagram Building, 375 Park Avenue - NY4060, New York, New York 10152, as
      mortgagee (“Lender”).

     

    Borrower
      is indebted to Lender in the principal amount of $27,712,300.00,
      as
      evidenced by Borrower’s Multifamily Note payable to Lender dated as of the date
      of this Instrument, and maturing on December
      1, 2014.

     

    TO
      SECURE
      TO LENDER the repayment of the Indebtedness, and all renewals, extensions and
      modifications of the Indebtedness, and the performance of the covenants and
      agreements of Borrower contained in the Loan Documents, Borrower mortgages,
      warrants, grants, conveys and assigns to Lender the Mortgaged Property,
      including the Land located in Hillsborough
      County, State of Florida
      and
      described in Exhibit
      A
      attached
      to this Instrument.

     

    Borrower
      represents and warrants that Borrower is lawfully seized of the Mortgaged
      Property and has the right, power and authority to mortgage, grant, convey,
      bargain, sell, transfer and assign the Mortgaged Property, and that the
      Mortgaged Property is unencumbered. Borrower covenants that Borrower will
      warrant and defend generally the title to the Mortgaged Property against all
      claims and demands, subject to any easements and restrictions listed in a
      schedule of exceptions to coverage in any title insurance policy issued to
      Lender contemporaneously with the execution and recordation of this Instrument
      and insuring Lender’s interest in the Mortgaged Property.

     

    Covenants.
      Borrower
      and Lender covenant and agree as follows:

     

    1. DEFINITIONS. 

     

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

     

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

     

    
      
         

      

      
        Page
          1

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        Page
          2

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    (l) [Intentionally
      omitted]

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        Page
          3

        
          

        

      

      
         

      

    

     

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

     

    
      	 	
              (1)

            	
              the
                Land;

            

    

     

    
      	 	
              (2)

            	
              the
                Improvements;

            

    

     

    
      	 	
              (3)

            	
              the
                Fixtures;

            

    

     

    
      	 	
              (4)

            	
              the
                Personalty;

            

    

     

    
      	 	
              (5)

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

            

    

     

    
      	 	
              (6)

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

            

    

     

    
      	 	
              (7)

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

            

    

     

    
      	 	
              (8)

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

            

    

     

    
      	 	
              (9)

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

            

    

     

    
      	 	
              (10)

            	
              all
                Rents and Leases;

            

    

     

    
      
         

      

      
        Page
          4

        
          

        

      

      
         

      

    

     

    
      	 	
              (11)

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

            

    

     

    
      	 	
              (12)

            	
              all
                Imposition Deposits; 

            

    

     

    
      	 	
              (13)

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

            

    

     

    
      	 	
              (14)

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

            

    

     

    
      	 	
              (15)

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

            

    

     

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

     

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

     

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

     

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

     

    (x) “Rents”
      means all rents (whether from residential or non-residential space), revenues
      and other income of the Land or the Improvements, including subsidy payments
      received from any sources (including, but not limited to payments under any
      Housing Assistance Payments Contract), parking fees, laundry and vending machine
      income and fees and charges for food, health care and other services provided
      at
      the Mortgaged Property, whether now due, past due, or to become due, and
      deposits forfeited by tenants. 

     

    
      
         

      

      
        Page
          5

        
          

        

      

      
         

      

    

     

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

     

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

     

    2. UNIFORM
      COMMERCIAL CODE SECURITY AGREEMENT. 

     

    This
      Instrument is also a security agreement under the Uniform Commercial Code for
      any of the Mortgaged Property which, under applicable law, may be subject to
      a
      security interest under the Uniform Commercial Code, whether acquired now or
      in
      the future, and all products and cash and non-cash proceeds thereof
      (collectively, “UCC Collateral”), and Borrower hereby grants to Lender a
      security interest in the UCC Collateral. Borrower hereby authorizes Lender
      to
      file financing statements, continuation statements and financing statement
      amendments in such form as Lender may require to perfect or continue the
      perfection of this security interest and Borrower agrees, if Lender so requests,
      to execute and deliver to Lender such financing statements, continuation
      statements and amendments. Borrower shall pay all filing costs and all costs
      and
      expenses of any record searches for financing statements that Lender may
      require. Without the prior written consent of Lender, Borrower shall not create
      or permit to exist any other lien or security interest in any of the UCC
      Collateral. If an Event of Default has occurred and is continuing, Lender shall
      have the remedies of a secured party under the Uniform Commercial Code, in
      addition to all remedies provided by this Instrument or existing under
      applicable law. In exercising any remedies, Lender may exercise its remedies
      against the UCC Collateral separately or together, and in any order, without
      in
      any way affecting the availability of Lender’s other remedies. This Instrument
      constitutes a financing statement with respect to any part of the Mortgaged
      Property which is or may become a Fixture. 

     

    
      
         

      

      
        Page
          6

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    
      
         

      

      
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          7

        
          

        

      

      
         

      

    

     

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

     

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

     

    
      
         

      

      
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          8

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        Page
          9

        
          

        

      

      
         

      

    

     

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

     

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

     

    (f) Borrower
      shall not lease any portion of the Mortgaged Property for non-residential use
      except with the prior written consent of Lender and Lender’s prior written
      approval of the Lease agreement. Borrower shall not modify the terms of, or
      extend or terminate, any Lease for non-residential use (including any Lease
      in
      existence on the date of this Instrument) without the prior written consent
      of
      Lender. Borrower shall, without request by Lender, deliver an executed copy
      of
      each non-residential Lease to Lender promptly after such Lease is signed. All
      non-residential Leases, including renewals or extensions of existing Leases,
      shall specifically provide that (1) such Leases are subordinate to the lien
      of
      this Instrument (unless waived in writing by Lender); (2) the tenant shall
      attorn to Lender and any purchaser at a foreclosure sale, such attornment to
      be
      self-executing and effective upon acquisition of title to the Mortgaged Property
      by any purchaser at a foreclosure sale or by Lender in any manner; (3) the
      tenant agrees to execute such further evidences of attornment as Lender or
      any
      purchaser at a foreclosure sale may from time to time request; (4) the Lease
      shall not be terminated by foreclosure or any other transfer of the Mortgaged
      Property; (5) after a foreclosure sale of the Mortgaged Property, Lender or
      any
      other purchaser at such foreclosure sale may, at Lender’s or such purchaser’s
      option, accept or terminate such Lease; and (6) the tenant shall, upon receipt
      after the occurrence of an Event of Default of a written request from Lender,
      pay all Rents payable under the Lease to Lender.

     

    
      
         

      

      
        Page
          10

        
          

        

      

      
         

      

    

     

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

     

    5. PAYMENT
      OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT
      PREMIUM. 

     

    Borrower
      shall pay the Indebtedness when due in accordance with the terms of the Note
      and
      the other Loan Documents and shall perform, observe and comply with all other
      provisions of the Note and the other Loan Documents. Borrower shall pay a
      prepayment premium in connection with certain prepayments of the Indebtedness,
      including a payment made after Lender’s exercise of any right of acceleration of
      the Indebtedness, as provided in the Note.

     

    6. EXCULPATION. 

     

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

     

    7. DEPOSITS
      FOR TAXES, INSURANCE AND OTHER CHARGES. 

     

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

     

    
      
         

      

      
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          11

        
          

        

      

      
         

      

    

     

    (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. Borrower hereby pledges and
      grants to Lender a security interest in the Imposition Deposits as additional
      security for all of Borrower’s obligations under this Instrument and the other
      Loan Documents. Any amounts deposited with Lender under this Section 7 shall
      not
      be trust funds, nor shall they operate to reduce the Indebtedness, unless
      applied by Lender for that purpose under Section 7(e).

     

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

     

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

     

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

     

    8. COLLATERAL
      AGREEMENTS. 

     

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

     

    9. APPLICATION
      OF PAYMENTS. 

     

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

     

    
      
         

      

      
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          12

        
          

        

      

      
         

      

    

     

    10. COMPLIANCE
      WITH LAWS. 

     

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

     

    11. USE
      OF PROPERTY. 

     

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

     

    12. PROTECTION
      OF LENDER’S SECURITY. 

     

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

     

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

     

    
      
         

      

      
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          13

        
          

        

      

      
         

      

    

     

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

     

    13. INSPECTION. 

     

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

     

    14. BOOKS
      AND RECORDS; FINANCIAL REPORTING. 

     

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

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

    
      
         

      

      
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          14

        
          

        

      

      
         

      

    

     

    
      	 	
              (4)

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

            

    

     

    
      	 	
              (5)

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

            

    

     

    
      	 	
              (6)

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

            

    

     

    
      	 	
              (7)

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

            

    

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
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          15

        
          

        

      

      
         

      

    

     

    15. TAXES;
      OPERATING EXPENSES. 

     

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

     

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

     

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

     

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

     

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

     

    16. LIENS;
      ENCUMBRANCES. 

     

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

     

    
      
         

      

      
        Page
          16

        
          

        

      

      
         

      

    

     

    17. PRESERVATION,
      MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY. 

     

    (a) Borrower
      (1) shall not commit waste or permit impairment or deterioration of the
      Mortgaged Property, (2) shall not abandon the Mortgaged Property, (3) shall
      restore or repair promptly, in a good and workmanlike manner, any damaged part
      of the Mortgaged Property to the equivalent of its original condition, or such
      other condition as Lender may approve in writing, whether or not insurance
      proceeds or condemnation awards are available to cover any costs of such
      restoration or repair, (4) shall keep the Mortgaged Property in good repair,
      including the replacement of Personalty and Fixtures with items of equal or
      better function and quality, (5) shall provide for professional management
      of
      the Mortgaged Property by a residential rental property manager satisfactory
      to
      Lender under a contract approved by Lender in writing, and (6) shall give notice
      to Lender of and, unless otherwise directed in writing by Lender, shall appear
      in and defend any action or proceeding purporting to affect the Mortgaged
      Property, Lender’s security or Lender’s rights under this Instrument. Borrower
      shall not (and shall not permit any tenant or other person to) remove, demolish
      or alter the Mortgaged Property or any part of the Mortgaged Property except
      in
      connection with the replacement of tangible Personalty. 

     

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

     

    18. ENVIRONMENTAL
      HAZARDS. 

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      
         

      

      
        Page
          17

        
          

        

      

      
         

      

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

    
      	 	
              (4)

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

            

    

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        Page
          18

        
          

        

      

      
         

      

    

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

    
      	 	
              (4)

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

            

    

     

    
      	 	
              (5)

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

            

    

     

    
      	 	
              (6)

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

            

    

     

    
      	 	
              (7)

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

            

    

     

    
      
         

      

      
        Page
          19

        
          

        

      

      
         

      

    

     

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

     

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

     

    
      	 	
              (1)

            	
              Borrower’s
                discovery of any Prohibited Activity or Condition;
                

            

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

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

     

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

     

    
      
         

      

      
        Page
          20

        
          

        

      

      
         

      

    

     

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

     

    
      	 	
              (i)

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

            

    

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

    
      	 	
              (4)

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

            

    

     

    
      	 	
              (5)

            	
              the
                actual or alleged violation of any Hazardous Materials Law.
                

            

    

     

    
      
         

      

      
        Page
          21

        
          

        

      

      
         

      

    

     

    (j) 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. 

     

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

     

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

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

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

     

    (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.

     

    
      
         

      

      
        Page
          22

        
          

        

      

      
         

      

    

     

    19. PROPERTY
      AND LIABILITY INSURANCE. 

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        Page
          23

        
          

        

      

      
         

      

    

     

    (g) Lender
      shall not exercise its option to apply insurance proceeds to the payment of
      the
      Indebtedness if all of the following conditions are met: (1) no Event of Default
      (or any event which, with the giving of notice or the passage of time, or both,
      would constitute an Event of Default) has occurred and is continuing; (2) Lender
      determines, in its discretion, that there will be sufficient funds to complete
      the Restoration; (3) Lender determines, in its discretion, that the rental
      income from the Mortgaged Property after completion of the Restoration will
      be
      sufficient to meet all operating costs and other expenses, Imposition Deposits,
      deposits to reserves and loan repayment obligations relating to the Mortgaged
      Property; (4) Lender determines, in its discretion, that the Restoration will
      be
      completed before the earlier of (A) one year before the maturity date of the
      Note or (B) one year after the date of the loss or casualty; and (5) upon
      Lender’s request, Borrower provides Lender evidence of the availability during
      and after the Restoration of the insurance required to be maintained by Borrower
      pursuant to this Section 19.

     

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

     

    20. CONDEMNATION. 

     

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

     

    
      
         

      

      
        Page
          24

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      	 	
              (2)

            	
              a
                Transfer of a Controlling Interest in
                Borrower;

            

    

     

    
      	 	
              (3)

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

            

    

     

    
      	 	
              (4)

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

            

    

     

    
      	 	
              (5)

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

            

    

     

    
      	 	
              (6)

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

            

    

     

    
      	 	
              (7)

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

            

    

     

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

     

    
      
         

      

      
        Page
          25

        
          

        

      

      
         

      

    

     

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

     

    
      	 	
              (1)

            	
              a
                Transfer to which Lender has
                consented;

            

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

    
      	 	
              (4)

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

            

    

     

    
      	 	
              (5)

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

            

    

     

    
      	 	
              (6)

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

            

    

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      	 	
              (2)

            	
              the
                absence of any Event of Default;

            

    

     

    
      	 	
              (3)

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

            

    

     

    
      
         

      

      
        Page
          26

        
          

        

      

      
         

      

    

     

    
      	 	
              (4)

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

            

    

     

    
      	 	
              (5)

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

            

    

     

    
      	 	
              (6)

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

            

    

     

    
      	 	
              (7)

            	
              Lender’s
                receipt of all of the following:

            

    

     

    
      	 	
              (A)

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

            

    

     

    
      	 	
              (B)

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

            

    

     

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

     

    
      	 	
              (1)

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

            

    

     

    
      	 	
              (2)

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

            

    

     

    
      	 	
              (i)

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

            

    

     

    
      
         

      

      
        Page
          27

        
          

        

      

      
         

      

    

     

    
      	 	
              (ii)

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

            

    

     

    
      	 	
              (iii)

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

            

    

     

    
      	 	
              (iv)

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

            

    

     

    
      	 	
              (v)

            	
              if
                such entity is a corporation (other than a Publicly-Held Corporation)
                with
                more than one class of voting stock, a Transfer of any voting stock
                which
                would cause the Initial Owners to own less than a sufficient number
                of
                shares of voting stock having the power to elect the majority of
                directors
                of such corporation; and

            

    

     

    
      	 	
              (vi)

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

            

    

     

    
      	 	
              (3)

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

            

    

     

    22. EVENTS
      OF DEFAULT. 

     

    The
      occurrence of any one or more of the following shall constitute an Event of
      Default under this Instrument:

     

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

     

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

     

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

     

    
      
         

      

      
        Page
          28

        
          

        

      

      
         

      

    

     

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

     

    (e) any
      Event
      of Default under Section 21;

     

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

     

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

     

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

     

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

     

    23. REMEDIES
      CUMULATIVE. 

     

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

     

    24. FORBEARANCE. 

     

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

     

    
      
         

      

      
        Page
          29

        
          

        

      

      
         

      

    

     

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

     

    25. LOAN
      CHARGES. 

     

    If
      any
      applicable law limiting the amount of interest or other charges permitted to
      be
      collected from Borrower is interpreted so that any charge provided for in any
      Loan Document, whether considered separately or together with other charges
      levied in connection with any other Loan Document, violates that law, and
      Borrower is entitled to the benefit of that law, that charge is hereby reduced
      to the extent necessary to eliminate that violation. The amounts, if any,
      previously paid to Lender in excess of the permitted amounts shall be applied
      by
      Lender to reduce the principal of the Indebtedness. For the purpose of
      determining whether any applicable law limiting the amount of interest or other
      charges 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.

     

    
      
         

      

      
        Page
          30

        
          

        

      

      
         

      

    

     

    28. FURTHER
      ASSURANCES. 

     

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

     

    29. ESTOPPEL
      CERTIFICATE. 

     

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

     

    30. GOVERNING
      LAW; CONSENT TO JURISDICTION AND VENUE. 

     

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

     

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

     

    
      
         

      

      
        Page
          31

        
          

        

      

      
         

      

    

     

    31. NOTICE. 

     

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

     

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

     

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

     

    32. SALE
      OF NOTE; CHANGE IN SERVICER. 

     

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

     

    33. SINGLE
      ASSET BORROWER. 

     

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

     

    34. SUCCESSORS
      AND ASSIGNS BOUND. 

     

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

     

    
      
         

      

      
        Page
          32

        
          

        

      

      
         

      

    

     

    35. JOINT
      AND SEVERAL LIABILITY. 

     

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

     

    36. RELATIONSHIP
      OF PARTIES; NO THIRD PARTY BENEFICIARY. 

     

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

     

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

     

    37. SEVERABILITY;
      AMENDMENTS. 

     

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

     

    38. CONSTRUCTION. 

     

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

     

    39. LOAN
      SERVICING. 

     

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

     

    
      
         

      

      
        Page
          33

        
          

        

      

      
         

      

    

     

    40. DISCLOSURE
      OF INFORMATION. 

     

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

     

    41. NO
      CHANGE IN FACTS OR CIRCUMSTANCES. 

     

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

     

    42. SUBROGATION. 

     

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

     

    43. ACCELERATION;
      REMEDIES; WAIVER OF PERMISSIVE COUNTERCLAIMS. 

     

    At
      any
      time during the existence of an Event of Default, Lender, at Lender’s option,
      may declare the Indebtedness to be immediately due and payable without further
      demand, and may foreclose this Instrument by judicial proceeding and may invoke
      any other remedies permitted by Florida law or provided in this Instrument
      or in
      any other Loan Document. Lender shall be entitled to collect all costs and
      expenses incurred in pursuing such remedies, including attorneys’ fees, costs of
      documentary evidence, abstracts and title reports. Borrower waives any and
      all
      rights to file or pursue permissive counterclaims in connection with any legal
      action brought by Lender under this Instrument, the Note or any other Loan
      Document.

     

    44. RELEASE. 

     

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

     

    
      
         

      

      
        Page
          34

        
          

        

      

      
         

      

    

     

    45. FUTURE
      ADVANCES. 

     

    Lender
      may from time to time, in Lender’s discretion, make optional future or
      additional advances (collectively, “Future Advances”) to Borrower, except that
      at no time shall the unpaid principal balance of all indebtedness secured by
      the
      lien of this Instrument, including Future Advances, be greater than an amount
      equal to two hundred percent (200%) of the original principal amount of this
      Note as set forth on the first page of this Instrument plus accrued interest
      and
      amounts disbursed by Lender under Section 12 or any other provision of this
      Instrument that treats a disbursement by Lender as being made under Section
      12.
      All Future Advances shall be made, if at all, within twenty (20) years after
      the
      date of this Instrument, or within such lesser period that may in the future
      be
      provided by law as a prerequisite for the sufficiency of actual or record notice
      of Future Advances as against the rights of creditors or subsequent purchasers
      for value. Borrower shall, immediately upon request by Lender, execute and
      deliver to Lender a promissory note evidencing each Future Advance together
      with
      a notice of such Future Advance in recordable form. All promissory notes
      evidencing Future Advances shall be secured, pari passu, by the lien of this
      Instrument, and each reference in this Instrument to the Note shall be deemed
      to
      be a reference to all promissory notes evidencing Future Advances. 

     

    46. WAIVER
      OF TRIAL BY JURY. 

     

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

     

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

     

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

     

    |X| Exhibit
      B Modifications
      to Instrument

     

    THIS
      IS A BALLOON MORTGAGE AND THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE
      DUE UPON MATURITY IS $26,204,468.90, TOGETHER WITH ACCRUED INTEREST, IF ANY,
      AND
      ALL ADVANCEMENTS MADE BY THE MORTGAGEE (LENDER) UNDER THE TERMS OF THIS
      MORTGAGE

     

    
      
         

      

      
        Page
          35

        
          

        

      

      
         

      

    

    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. 

     

    
      	
              WITNESSES:

               

                

              

              Print
                Name:

              
                
 

               

              
                

              

              Print
                Name:

              
                
 

            	 	
              BORROWER:

               

              LVP
                TAMPA ISLES LLC,
                a

              Delaware
                limited liability company

               

               

              By: 

              
                

              

              Name:   David
                Lichtenstein 

              Title:     President

            

    

     

    
      	STATE OF NEW JERSEY	)	 	 
	 	)	 	 
	COUNTY OF OCEAN	)	 	 

    

     

    The
      foregoing instrument was acknowledged before me this ____ day of November,
      2007,
      by DAVID
      LICHTENSTEIN,
      as
      PRESIDENT
      of
LVP
      TAMPA ISLES LLC, a
      Delaware limited liability company.

     

    
      	 	 	 	 
	[NOTARIAL SEAL]	 	 	Notary: 
	
            	 	 	
              
                

              

              Print
                Name:

              
                

              

              
                Notary
                  Public, State of 

              

              
                

              

              My
                Commission expires:

              
                
 

            

    

     

    
      	 	o
              Personally Known        OR       
              o Produced
              Identification
	 	Type of Identification
              Produced:
	 	
              
                
 

            
	 	 	 	 	 

    

     

    
      
         

      

      
        Page
          36

        
          

        

      

      
         

      

    

    KEY
      PRINCIPAL

    

    
      	
              Key
                Principal

            	 	 
	 	 	 
	
              Name:

            	
              Lightstone
                Value Plus Real Estate Investment Trust, Inc.

            	 
	 	 	 
	
              Address

            	
              326
                Third Street

            	 
	 	
              Lakewood,
                New York 08701 

            	 

    

     

     

    
 

    
      
         

      

      
        Page
          37

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    [DESCRIPTION
      OF THE LAND]

     

    

     

     

     

    
      
         

      

      
        Page
          A-1

        
          

        

      

      
         

      

    

    EXHIBIT
      B

     

    MODIFICATIONS
      TO INSTRUMENT

     

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

     

     

     

     

     

     

    
      
         

      

      
        Page
          B-1Unassociated Document

    SUPPLEMENTAL
      INDENTURE

    

    SUPPLEMENTAL
      INDENTURE (this “Supplemental Indenture”), dated as of January 11, 2008, among
      American Casino & Entertainment Properties LLC, a Delaware limited liability
      company, as issuer (“ACEP”), American Casino & Entertainment Properties
      Finance Corp., a Delaware corporation, as co-issuer (“ACEP Finance” and,
      together with ACEP, the “Company”), the Guarantors and Wilmington Trust Company,
      as trustee under the Indenture (the “Trustee”). 

    

    W
      I T N E
      S S E T H

    

    WHEREAS,
      the Company, the Guarantors and the Trustee have heretofore entered into an
      indenture, dated as of January 29, 2004 (as heretofore supplemented and
      currently in effect, the “Indenture”), providing for the issuance of the
      Company’s 7.85% Senior Secured Notes due 2012 (the “Notes”);

    

    WHEREAS,
      this Supplemental Indenture sets forth certain proposed amendments to the
      Indenture (the “Proposed Amendments”) to (i) eliminate substantially all of the
      restrictive and reporting covenants, certain events of default and certain
      other
      provisions contained in the Indenture, as set forth in Section 2 hereof, (ii)
      release the security interest in the collateral securing the Indenture, the
      Notes and the Note Guarantees, as set forth in Section 3(a) hereof (the
“Collateral Release”), and (iii) release each Guarantor from its obligations
      under its Note Guarantee, as set forth in Section 3(b) hereof (the “Guarantor
      Release,” and, together with the Collateral Release, the
“Releases”);

    

    WHEREAS,
      the board of directors of American Entertainment Properties Corp., a Delaware
      corporation, the sole member of ACEP (“AEP”) has determined that it is in the
      best interests of AEP to authorize and approve the Proposed Amendments set
      forth
      in this Supplemental Indenture;

    

    WHEREAS,
      pursuant to Section 9.02 of the Indenture, the Proposed Amendments (other than
      the Proposed Amendments to effect the Releases) require the consent of the
      Holders of at least a majority in aggregate principal amount of the then
      outstanding Notes (the “Requisite Consents”), and the Proposed Amendments to
      effect the Releases require the consent of Holders of at least 75% in aggregate
      principal amount of the then outstanding Notes (the “Release
      Consents”);

    

    WHEREAS,
      ACEP has offered to purchase for cash (the “Offer”) any and all of the
      outstanding Notes and has solicited consents from Holders of the Notes to the
      Proposed Amendments, upon the terms and subject to the conditions set forth
      in
      the Offer to Purchase and Consent Solicitation Statement, dated as of December
      28, 2007 (together with any amendments, the “Statement”);

    

    WHEREAS,
      the Offer is conditioned upon, among other things, the execution of a
      supplemental indenture providing for the Proposed Amendments;

    

    WHEREAS,
      ACEP has received, pursuant to the Offer, the Requisite Consents with respect
      to
      the Proposed Amendments (other than the Proposed Amendments to effect the
      Releases) and the Release Consents with respect to the Proposed Amendments
      to
      effect the Releases, and all other conditions precedent, if any, provided for
      in
      the Indenture relating to the execution of this Supplemental Indenture, the
      release of the security interests in the Note Collateral under the Indenture,
      the Notes, the Note Guarantees and the Collateral Documents, and the release
      of
      the Guarantors under the Note Guarantees have been complied with as of the
      date
      hereof; 

    

    WHEREAS,
      the execution and delivery of this Supplemental Indenture have been duly
      authorized by the Company and the Guarantors and all conditions and requirements
      necessary to make this Supplemental Indenture a valid and binding agreement
      of
      the Company and the Guarantors have been duly performed and complied with;
      and

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    WHEREAS,
      pursuant to Section 9.02 of the Indenture, the Trustee is authorized to execute
      and deliver this Supplemental Indenture.

    

    NOW,
      THEREFORE, in consideration of the foregoing and for other good and valuable
      consideration, the receipt of which is hereby acknowledged, the Company, the
      Guarantors and the Trustee mutually covenant and agree, for the benefit of
      each
      other and for the equal and ratable benefit of the Holders of the Notes, as
      follows: 

    

    1. Capitalized
      Terms.
      Capitalized terms used herein without definition shall have the meanings
      assigned to them in the Indenture.

    

    2. Amendments.
      The
      Proposed Amendments set forth in Section 2 hereof shall become operative, and
      the terms of the Indenture, the Notes and the Note Guarantees shall be amended,
      supplemented, modified or deleted hereby, in each case only upon the Payment
      Date (as defined herein). 

    

    (a) The
      following Sections of the Indenture, and any corresponding provisions in the
      Notes, are hereby deleted in their entirety and replaced with “[Intentionally
      Omitted.]”: 

    

      
        	
                Indenture
                  Section Reference

              	 	
                Caption

              
	
                4.02

              	
                 

              	
                Maintenance
                  of Office or Agency

              
	
                4.03

              	
                 

              	
                Reports
                  

              
	
                4.04

              	
                 

              	
                Compliance
                  Certificates

              
	
                4.05

              	
                 

              	
                Taxes

              
	
                4.06

              	
                 

              	
                Stay,
                  Extension and Usury Laws

              
	
                4.07

              	
                 

              	
                Restricted
                  Payments

              
	
                4.08

              	
                 

              	
                Dividend
                  and Other Payment Restrictions  
                  Affecting
                    Subsidiaries

                

              
	
                4.09

              	
                 

              	
                Incurrence
                  of Indebtedness and Issuance of 
                  Preferred
                    Stock

                

              
	
                4.10

              	
                 

              	
                Asset
                  Sales

              
	
                4.11

              	
                 

              	
                Transactions
                  with Affiliates

              
	
                4.12

              	
                 

              	
                Liens

              
	
                4.13

              	
                 

              	
                Business
                  Activities

              
	
                4.14

              	
                 

              	
                Corporate
                  Existence

              
	
                4.15

              	
                 

              	
                Offer
                  to Purchase Upon Change of Control

              
	
                4.16

              	
                 

              	
                Event
                  of Loss

              
	
                4.17

              	
                 

              	
                Sale
                  and Leaseback Transactions

              
	
                4.18

              	
                 

              	
                Insurance

              
	
                4.19

              	
                 

              	
                Limitation
                  on Issuances and Sales of 
                  Capital
                    Stock of Restricted Subsidiaries

                

              
	
                4.20

              	
                 

              	
                Additional
                  Note Guarantees

              
	
                4.21

              	
                 

              	
                Restrictions
                  on Leasing and Dedication of Property

              
	
                4.22

              	
                 

              	
                Designation
                  of Restricted and Unrestricted Subsidiaries 

              
	
                4.23

              	
                 

              	
                Further
                  Assurances

              

      

       

    

    (b) Section
      5.01 of the Indenture is hereby deleted in its entirety and restated as
      follows:

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    “ACEP
      shall not, directly or indirectly: (1) consolidate or merge with or into another
      Person (whether or not ACEP is the surviving corporation), or (2) sell, assign,
      transfer, convey or otherwise dispose of all or substantially all of the
      properties or assets of ACEP taken as a whole, in one or more related
      transactions, to another Person, unless the Person formed by or surviving any
      such consolidation or merger (if other than ACEP) or the Person to which such
      sale, assignment, transfer, conveyance or other disposition has been made
      assumes all the obligations of ACEP under the Notes and this Indenture pursuant
      to agreements reasonably satisfactory to the Trustee.” 

    

    (c) Section
      6.01 of the Indenture is hereby amended by deleting clauses (3), (4), (5),
      (6),
      (7), (8), (9), (10), (11) and (12) thereof.

    

    (d) Section
      8.04 of the Indenture is hereby deleted in its entirety and restated as follows:
      

     

    
      	 	
              “In
                order to exercise either Legal Defeasance or Covenant Defeasance
                under
                either Section 8.02 or 8.03
                thereof:

            

    

     

    
      	 	
              (1)
                the Company must irrevocably deposit with the Trustee, in trust,
                for the
                benefit of the Holders, cash in U.S. dollars, non-callable Government
                Securities, or a combination thereof, in such amounts as will be
                sufficient, in the opinion of a nationally recognized investment
                bank,
                appraisal firm, or firm of independent public accountants, to pay
                the
                principal of, premium and Liquidated Damages, if any, and interest
                on the
                outstanding Notes on the stated date for payment thereof or on the
                applicable redemption date, as the case may be, and the Company must
                specify whether the Notes are being defeased to such stated date
                for
                payment or to a particular redemption
                date;

            

    

    

    
      	 	
              (2)
                in the case of an election under Section 8.02 hereof, the Company
                must
                deliver to the Trustee an Opinion of Counsel confirming
                that:

            

    

    

    (A)
      the
      Company has received from, or there has been published by, the Internal Revenue
      Service a ruling; or

    

    (B)
      since
      the date of this Indenture, there has been a change in the applicable federal
      income tax law,

    

    in
      either
      case to the effect that, and based thereon such Opinion of Counsel shall confirm
      that, the Holders of the outstanding Notes will not recognize income, gain
      or
      loss for federal income tax purposes as a result of such Legal Defeasance and
      will be subject to federal income tax on the same amounts, in the same manner
      and at the same times as would have been the case if such Legal Defeasance
      had
      not occurred;

     

    
      	 	(3) in the case of an election under Section 8.03
              hereof,
              the Company must deliver to the Trustee an Opinion of Counsel confirming
              that the Holders of the outstanding Notes will not recognize income,
              gain
              or loss for federal income tax purposes as a result of such Covenant
              Defeasance and will be subject to federal income tax on the same amounts,
              in the same manner and at the same times as would have been the case
              if
              such Covenant Defeasance had not
              occurred;

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    
      	 	(4) no Default or Event of Default shall have occurred
              and be continuing on the date of such deposit and the deposit will
              not
              result in a breach or violation of, or constitute a default under,
              any
              other instrument to which the Company or any Guarantor is a party or
              by
              which the Company or any Guarantor is bound;

      	 	 

      	 	(5) the Legal Defeasance or Covenant Defeasance
              will not
              result in a breach or violation of, or constitute a default under,
              this
              Indenture or any other material agreement or instrument to which the
              Company or any of its Subsidiaries is a party or by which the Company
              or
              any of its Subsidiaries is bound; and

      	 	 

      	 	
              (6)
                the Company must deliver to the Trustee an Officers' Certificate
                and an
                Opinion of Counsel, each stating that all conditions precedent provided
                for or relating to the Legal Defeasance or the Covenant Defeasance
                have
                been complied with.”

            

    

    

    (e) Certain
      definitions in the Indenture shall be deemed deleted when references to such
      definitions would be eliminated as a result of the amendments described herein;
      cross-references to provisions in the Indenture that have been deleted as a
      result of the Proposed Amendments shall be deemed deleted; and certain other
      changes to the Indenture of a technical or conforming nature shall be deemed
      made to the extent necessary to reflect the deletion of the provisions described
      herein. Any definitions used exclusively in the provisions of the Notes that
      are
      hereby deleted, and any definitions used exclusively within such definitions,
      are hereby deleted in their entirety from the Notes, and all references in
      the
      Notes to paragraphs, Sections, Articles or other terms or provisions of the
      Indenture that have been otherwise deleted as a result of the Proposed
      Amendments are hereby deleted in their entirety or revised to conform herewith,
      as the case may be.

     

      3. Release
      of Note Collateral and Release of Note Guarantees.

    

    (a)
      In
      accordance with and subject to Section 10.03(b)(3) of the Indenture,

    the
      Note
      Collateral will be released from the Lien and security interest created by
      the
      Indenture and the Collateral Documents at such time as (but not before), (i)
      the
      Officer’s Certificate required by Section 10.03(b) shall have been delivered to
      the Collateral Agent, which the Company covenants to deliver prior to the
      Acceptance Date (as defined in the Statement), and the Trustee shall have been
      provided with a copy thereof, (ii) the Company shall have delivered to the
      Trustee all documents specified in Section 10.04 of the Indenture and an Opinion
      of Counsel as specified in Section 10.04(2) of the Indenture, which the Company
      covenants to deliver prior to the Acceptance Date, (iii) the applicable
      provisions of Article 10 of the Indenture and each of the Collateral Documents
      with respect to the release of the collateral thereunder shall have otherwise
      been complied with, (iv) the Collateral Agent shall have executed, delivered
      or
      acknowledged any necessary or proper instruments of termination, satisfaction
      or
      release to evidence the release of any Note Collateral permitted to be released
      pursuant to the Indenture or the Collateral Documents, and the Trustee shall
      have been provided with copies thereof, and (v) the Company shall have delivered
      to the Trustee an Officer’s Certificate and an Opinion of Counsel (which may be
      included in the Opinion of Counsel provided under clause (ii) above) stating
      that all conditions to the release of the Note Collateral under the Indenture,
      Supplemental Indenture and the Collateral Documents have been satisfied. From
      and after such time, the provisions of Sections 10.01 and 10.02 of the Indenture
      shall be deemed to be repealed and of no further force or affect.

     

    (b)
      In
      accordance with Section 11.05(d) of the Indenture, each Guarantor shall be
      released and relieved of any and all of its Obligations under its Note Guarantee
      at such time as (but not before) the Proposed Amendments shall become operative
      in accordance with Section 11 hereof. From and after such time, the provisions
      of Section 11.01 through Section 11.04 of the Indenture, and any notation of
      Note Guarantee executed and delivered by any Guarantor, shall be deemed to
      be
      repealed and of no further force or affect. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c)
      Upon
      satisfaction of the conditions to the release of the Note Collateral as
      specified in clauses (i) through (v) of Section 3(a) above, the Trustee is
      hereby instructed to deliver to the Collateral Agent the certificates of the
      Trustee contemplated by Section 10.05 and Section 10.08 of the Indenture;
      provided, however, that the certificate pursuant to Section 10.08 of the
      Indenture shall not state that the Obligations of the Company under the
      Indenture and the Notes have been paid in full.

     

    4. Effects
      of Supplemental Indenture.
      Each
      reference in the Indenture to “this Indenture,” “hereunder,” “hereof” or
“herein” shall mean and be a reference to the Indenture as amended and
      supplemented by this Supplemental Indenture unless the context otherwise
      requires. The Indenture as amended and supplemented by this Supplemental
      Indenture shall be read, taken and construed as one and the same instrument,
      and
      every holder heretofore or hereafter authenticated and delivered under the
      Indenture as supplemented by this Supplemental Indenture shall be bound thereby.
      

     

              
      5. Existing
      Indenture Remains in Full Force and Effect.  Except
      as amended and supplemented by this Supplemental Indenture, all provisions
      in
      the Indenture shall remain in full force and effect. 

     

              
      6. Conflict
      with Trust Indenture Act.  If
      any provision of this Supplemental Indenture limits, qualifies or conflicts
      with
      any provision of the Trust Indenture Act of 1939 (the “Act”) that is required
      under such Act to be part of and govern any provision of this Supplemental
      Indenture, the provision of such Act shall control. If any provision of this
      Supplemental Indenture modifies or excludes any provision of the Act that may
      be
      so modified or excluded, the provision of such Act shall be deemed to apply
      to
      the Indenture as so modified or shall be deemed to be excluded by this
      Supplemental Indenture, as the case may be.

     

              
      7. Separability
      Clause.  In
      case any provision in this Supplemental Indenture shall be invalid, illegal
      or
      unenforceable, the validity, legality and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby.

     

              
      8. Effect
      of Headings.  The
      Section headings herein are for convenience only and shall not affect the
      construction hereof. 

     

              
      9. Benefits
      of Supplemental Indenture, etc.  Nothing
      in this Supplemental Indenture, the Indenture, the Notes or the Note Guarantees,
      express or implied, shall give to any Person, other than the parties hereto
      and
      thereto and their successors hereunder and thereunder and the holders of the
      Notes, any benefit of any legal or equitable right, remedy or claim under the
      Indenture, this Supplemental Indenture, the Notes or the Note
      Guarantees.

     

              
      10. Successors
      and Assigns.  All
      covenants and agreements in this Supplemental Indenture by the Company and
      the
      Guarantors shall bind their respective successors and assigns, whether so
      expressed or not.

     

              
      11. Effectiveness.  
      This Supplemental Indenture shall become effective and binding on the Company,
      the Guarantors and the Trustee upon the execution and delivery by the parties
      to
      this Supplemental Indenture; provided, however, that the Proposed Amendments
      shall become operative, and the terms of the Indenture shall be amended,
      supplemented, modified or deleted hereby, in each case only upon (i)
      satisfaction of the conditions to the release of the Note Collateral as
      specified in Section 3 above, (ii) the Company depositing with the Tender Agent
      (as defined in the Statement) in immediately available funds the Total
      Consideration or the Tender Offer Consideration, as applicable (each as defined
      in the Statement), together with accrued and unpaid interest payable up to
      but
      not including such time (the “Payment Date”) in respect of Notes accepted
      pursuant to the Offer and (iii) the Company paying in cash or other immediately
      available funds all outstanding fees and expenses of the Trustee owing under
      the
      Indenture and of the Collateral Agent, including payment of the fees and
      expenses of their counsel. If there is no Payment Date in accordance with the
      terms of the Statement, or any of the other foregoing conditions are not
      satisfied, then the Proposed Amendments set forth herein shall not become
      operative, and the terms of the Indenture shall not be amended, supplemented,
      modified or deleted hereby. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

              
      12. Trustee
      Makes No Representation.  The
      Trustee makes no representation as to the validity or sufficiency of this
      Supplemental Indenture. 

     

              
      13. Certain
      Duties and Responsibilities of the Trustee.
      In
      entering into this Supplemental Indenture, the Trustee shall be entitled to
      the
      benefit of every provision of the Indenture relating to the conduct or affecting
      the liability of or affording protection to the Trustee, whether or not
      elsewhere herein so provided. 

     

              
      14. Governing
      Law.  THE
      INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
      THIS
      SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
      CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
      JURISDICTION WOULD BE REQUIRED THEREBY.

     

              
      15. Counterparts.  This
      Supplemental Indenture may be executed in counterparts, each of which, when
      so
      executed, shall be deemed to be an original, but all such counterparts shall
      together constitute but one and the same instrument.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
      to
      be duly executed and attested, all as of the date first above
      written.

     

    
      	 	 	 
	 	129-133
              WCA
              LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

     

    
      	 	 	 
	 	CHICAGO
              AVENUE LV
              HOLDINGS LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

     

    
      	 	 	 
	 	LV
              ACQUISITIONS
              LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

     

    
      	 	 	 
	 	PITTSFIELD
              ASSOCIATES LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

     

    
      	 	 	 
	 	FARRAGUT
              LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

     

    
      	 	 	 
	 	
              AMERICAN
                CASINO & ENTERTAINMENT 

              PROPERTIES
                LLC

            
	 
 	 
 	 
 
	 	By:  	
              American
                Entertainment Properties Corp., its sole member

            
	 	 	 
	 	By:	/s/ Richard P. Brown
	 	 	
              
Name:
              Richard P. Brown
	 	 	Title: President and Chief Executive
              Officer

    

    

    
      	 	 	 
	 	
              AMERICAN
                CASINO & ENTERTAINMENT 

              PROPERTIES
                FINANCE CORP.

            
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      
        	 	 	 
	 	
                CHARLIE’S
                  HOLDING LLC

              
	 
 	 
 	 
 
	 	By:  	
                American
                  Casino & Entertainment 
                  Properties
                    LLC, its sole member

                

              
	 	 	 
	 	By:	/s/ Richard P. Brown
	 	 	
                
Name:
                Richard P. Brown
	 	 	Title: President and Chief Executive
                Officer

      

      

        	 	 	 
	 	FRESCA,
                LLC
	 
 	 
 	 
 
	 	By:  	Charlie’s
                Holding
                LLC, its sole member

        
          	 	 	 
	 	By:  	
                  American
                    Casino
                    & Entertainment

                  Properties LLC, its sole
                    member

                

        

        
          	 	 	 
	 	By:  	/s/
                  Richard P.
                  Brown
	 	Name: Richard P.
                  Brown
	 	
                  Title:
                    President and Chief 

                  Executive
                    Officer

                

        

        	 	 	 
	 	STRATOSPHERE
                DEVELOPMENT, LLC
	 
 	 
 	 
 
	 	By:  	Stratosphere
                Corporation, member

         

        
          	 	By:  	/s/
                  Richard P.
                  Brown
	 	Name: Richard P.
                  Brown
	 	
                  Title:
                    President and Chief 

                  Executive
                    Officer

                

        

        	 	 	 
	 	By:  	Arizona
                Charlie’s, LLC, member

         

        
          	 	By:  	/s/
                  Richard P.
                  Brown
	 	Name: Richard P.
                  Brown
	 	
                  Title:
                    President and Chief 

                  Executive
                    Officer

                

        

        	 	 	 
	 	By:  	Fresca,
                LLC, member

         

        
          	 	By:  	Charlie’s
                  Holding
                  LLC, its sole member

          	 	 	 

        

        
          	 	By:  	
                  American
                    Casino
                    & Entertainment

                  Properties LLC, its sole
                    member

                

        

        
          	 	 	 
	 	By:  	/s/
                  Richard P.
                  Brown
	 	Name: Richard P.
                  Brown
	 	
                  Title:
                    President and Chief 

                  Executive
                    Officer

                

        

      

      
      

      
        8

        
          

        

      

      
      

    

    
      	 	 	 
	 	STRATOSPHERE
              CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

     

    
      	 	 	 
	 	STRATOSPHERE
              GAMING CORP.
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    

    

    
      	 	 	 
	 	ARIZONA
              CHARLIE’S, LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President and Chief Executive Officer

    
      	 	 	 
	 	STRATOSPHERE
              LEASING, LLC
	 
 	 
 	 
 
	 	By:  	Stratosphere
              Corporation, its sole member

    

    
      	 	 	 
	 	By:  	/s/
              Richard P. Brown
	 	
              
Name:
              Richard P. Brown
	 	Title:
              President
              and Chief Executive Officer

    

     

    
      
        	 	 	 
	 	STRATOSPHERE
                ADVERTISING AGENCY
	 
 	 
 	 
 
	 	By:  	/s/
                Richard P. Brown
	 	
                
Name:
                Richard P. Brown
	 	Title:
                President and Chief Executive Officer

         

        
          
            	 	 	 
	 	STRATOSPHERE
                    LAND CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/
                    Richard P. Brown
	 	
                    
Name:
                    Richard P. Brown
	 	Title:
                    President and Chief Executive Officer

             

            
              
                	 	 	 
	 	WILMINGTON
                        TRUST COMPANY, as Trustee
	 
 	 
 	 
 
	 	By:  	/s/
                        Michael G. Oller, Jr.
	 	
                        
Name:
                        Michael G. Oller, Jr.
	 	
                        Title:
                          Senior Financial Services Officer

                      

              

              
                
                  
                  

                

                
                  9

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