Document:

exh4-2.htm

    
      

    

    Prepared
      by, and after recording

    return
      to:

    Moss
      & Barnett (EHK)

    A
      Professional Association

    4800
      Wells Fargo Center

    90
      South
      Seventh Street

    Minneapolis,
      MN  55402-4129

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    MULTIFAMILY
      MORTGAGE,

    ASSIGNMENT
      OF RENTS

    AND
      SECURITY AGREEMENT

     

    (KANSAS
      – REVISION DATE 05-11-2004)

     

    FHLMC
      Loan No.  981208630

     

     

     

     

     

     

     

     

     

    
 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    MULTIFAMILY
      MORTGAGE,

    ASSIGNMENT
      OF RENTS

    AND
      SECURITY AGREEMENT

    (KANSAS
      – REVISION DATE 05-11-2004)

     

    THIS
      MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
“Instrument”) is made as of September 14, 2007, between Chalet
      I Acquisition, L.L.C., a limited liability company organized and existing under
      the laws of Kansas,whose address is c/o Maxus Properties, Inc., 104 Armour
      Road,
      North Kansas City, Missouri  64116, as mortgagor
      (“Borrower”), and NorthMarq Capital, Inc., a corporation
      organized and existing under the laws of corporation, whose address is 3500
      American Boulevard West, Suite 500, Bloomington, Minnesota  55431, as
      mortgagee (“Lender”).  Borrower’s organizational
      identification number, if applicable, is 3055605.

    

    Borrower
      is indebted to Lender in the principal amount of $8,070,000.00, as evidenced
      by
      Borrower’s Multifamily Note payable to Lender, dated as of the date of this
      Instrument, and maturing on October 1, 2018 (the “Maturity
      Date”).

    

    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 hereby
      mortgages, warrants, grants, conveys and assigns to Lender the Mortgaged
      Property, including the Land located in Shawnee County, State of Kansas 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 grant, convey and assign
      the
      Mortgaged Property, and that the Mortgaged Property is unencumbered except
      as
      shown on the schedule of exceptions to coverage in the title policy issued
      to
      and accepted by Lender contemporaneously with the execution and recordation
      of
      this Instrument and insuring Lender’s interest in the Mortgaged Property (the
“Schedule of Title Exceptions”).  Borrower covenants
      that Borrower will warrant and defend generally the title to the Mortgaged
      Property against all claims and demands, subject to any easements and
      restrictions listed in the Schedule of Title Exceptions.

    

    UNIFORM
      COVENANTS

    REVISION
      DATE 01-30-2006

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          1

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          2

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          3

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          4

        
          

        

      

      
        
        

      

    

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

     

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

     

    
      	
               

            	
              (i)

            	
              the
                Land;

            

    

     

    
      	
               

            	
              (ii)

            	
              the
                Improvements;

            

    

     

    
      	
               

            	
              (iii)

            	
              the
                Fixtures;

            

    

     

    
      	
               

            	
              (iv)

            	
              the
                Personalty;

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

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

            

    

     

    
      	
               

            	
              (vii)

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

            

    

     

    
      	
               

            	
              (viii)

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

            

    

     

    
      	
               

            	
              (ix)

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

            

    

     

    
      
        
        

      

      
        PAGE
          5

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (x)

            	
              all
                Rents and Leases;

            

    

     

    
      	
               

            	
              (xi)

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

            

    

     

    
      	
               

            	
              (xii)

            	
              all
                Imposition Deposits;

            

    

     

    
      	
               

            	
              (xiii)

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

            

    

     

    
      	
               

            	
              (xiv)

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

            

    

     

    
      	
               

            	
              (xv)

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

            

    

     

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

     

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

     

    (bb)         “Personalty”
      means all:

     

    
      	
               

            	
              (i)

            	
              accounts
                (including deposit accounts) of Borrower related to the Mortgaged
                Property;

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

            	
              other
                tangible personal property owned by Borrower which is used now or
                in the
                future in connection with the ownership, management or operation
                of the
                Land or Improvements or is located on the Land or in the Improvements,
                including ranges, stoves, microwave ovens,
                refrigerators,

            

    

     

    
      
        
        

      

      
        PAGE
          6

        
          

        

      

      
        
        

      

    

    dishwashers,
      garbage disposers, washers, dryers and other appliances (other than
      Fixtures);

     

    
      	
               

            	
              (iv)

            	
              any
                operating agreements relating to the Land or the
                Improvements;

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

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

            

    

     

    
      	
               

            	
              (vii)

            	
              any
                rights of Borrower in or under letters of
                credit.

            

    

     

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

     

    (dd)           “Rents”
      means all rents (whether from residential or non-residential space), revenues
      and other income of the Land or the Improvements, parking fees, laundry and
      vending machine income and fees and charges for food, health care and other
      services provided at the Mortgaged Property, whether now due, past due, or
      to
      become due, and deposits forfeited by tenants.

     

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

     

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

     

    2.           UNIFORM
      COMMERCIAL CODE SECURITY AGREEMENT.

     

    (a)           This
      Instrument is also a security agreement under the Uniform Commercial Code for
      any of the Mortgaged Property which, under applicable law, may be subjected
      to a
      security interest under the Uniform Commercial Code, whether such Mortgaged
      Property is owned now or acquired in the future, and all products and cash
      and
      non-cash proceeds thereof (collectively, “UCC Collateral”), and
      Borrower hereby grants to Lender a security interest in the UCC
      Collateral.  Borrower hereby authorizes Lender to prepare and file
      financing statements, continuation statements and financing statement amendments
      in such form as Lender may require to perfect or continue the perfection of
      this
      security interest and Borrower agrees, if Lender so requests, to execute and
      deliver to Lender such financing statements, continuation statements
      and

     

    
      
        
        

      

      
        PAGE
          7

        
          

        

      

      
        
        

      

    

    amendments.  Borrower
      shall pay all filing costs and all costs and expenses of any record searches
      for
      financing statements and/or amendments that Lender may
      require.  Without the prior written consent of Lender, Borrower shall
      not create or permit to exist any other lien or security interest in any of
      the
      UCC Collateral.

     

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

     

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

     

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

     

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

     

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

     

    (b)           After
      the occurrence of an Event of Default, Borrower authorizes Lender to collect,
      sue for and compromise Rents and directs each tenant of the Mortgaged Property
      to pay all Rents to, or as directed by, Lender.  However, until the
      occurrence of an Event of Default,

     

    
      
        
        

      

      
        PAGE
          8

        
          

        

      

      
        
        

      

    

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

     

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

     

    (d)           If
      an Event of Default has occurred and is continuing, Lender may, regardless
      of
      the adequacy of Lender’s security or the solvency of Borrower and even in the
      absence of waste, enter upon and take and maintain full control of the Mortgaged
      Property in order to perform all acts that Lender in its discretion determines
      to be necessary or desirable for the operation and maintenance of the Mortgaged
      Property, including the execution, cancellation or modification of Leases,
      the
      collection of all Rents, the making of repairs to the Mortgaged Property and
      the
      execution or termination of contracts providing for the management, operation
      or
      maintenance of the Mortgaged Property, for the purposes of enforcing the
      assignment of Rents pursuant to Section 3(a), protecting the Mortgaged
      Property or the security of this Instrument, or for such other purposes as
      Lender in its discretion may deem necessary or
      desirable.  Alternatively, if an

     

    
      
        
        

      

      
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          9

        
          

        

      

      
        
        

      

    

    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.

     

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

     

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

     

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

     

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

     

    (a)           As
      part of the consideration for the Indebtedness, Borrower absolutely and
      unconditionally assigns and transfers to Lender all of Borrower’s right, title
      and interest in, to and under the Leases, including Borrower’s right, power and
      authority to modify the terms of any

     

    
      
        
        

      

      
        PAGE
          10

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    (d)           Upon
      delivery of Notice by Lender to Borrower of Lender’s exercise of Lender’s rights
      under this Section 4 at any time after the occurrence of an Event of
      Default, and without

     

    
      
        
        

      

      
        PAGE
          11

        
          

        

      

      
        
        

      

    

    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 Borrower is a cooperative housing
      corporation, association or other validly organized entity under municipal,
      county, state or federal law, notwithstanding anything to the contrary contained
      in this subsection, so long as Borrower is not in breach of any covenant of
      this
      Instrument, Lender hereby consents to the execution of leases of apartments
      for
      a term in excess of two years from Borrower to a tenant shareholder of Borrower,
      to the surrender or termination of such leases of apartments where the
      surrendered or terminated lease is immediately replaced or where the Borrower
      makes its best efforts to secure such immediate replacement by a newly executed
      lease of the same apartment to a tenant shareholder of the
      Borrower.  However, no consent is hereby given by Lender to any
      execution, surrender, termination or assignment of a lease under terms that
      would waive or reduce the obligation of the resulting tenant shareholder under
      such lease to pay cooperative assessments in full when due or the obligation
      of
      the former tenant shareholder to pay any unpaid portion of such
      assessments.

     

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

     

    
      
        
        

      

      
        PAGE
          12

        
          

        

      

      
        
        

      

    

    Lease;
      and (vi) the tenant shall, upon receipt after the occurrence of an Event of
      Default of a written request from Lender, pay all Rents payable under the Lease
      to Lender.

     

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

     

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

     

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

     

    7.           DEPOSITS
      FOR TAXES, INSURANCE AND OTHER CHARGES.

     

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

     

    
       

      
        	 	
                [Deferred]

              	
                Hazard
                  Insurance premiums or other insurance premiums required

              
	 	 	
                by
                  Lender under Section 19,

              
	 	
                [Collect]

              	
                Taxes,

              
	 	
                [Deferred]

              	
                water
                  and sewer charges (that could become a lien on the

              
	 	 	
                Mortgaged
                  Property),

              
	 	
                [N/A]

              	
                ground
                  rents,

              
	 	
                [Deferred]

              	
                assessments
                  or other charges (that could become a lien on the

              
	 	 	
                Mortgaged
                  Property)

              

      

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

    

    
      
        
        

      

      
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          13

        
          

        

      

      
        
        

      

    

    Imposition
      Deposits and how much of the aggregate Imposition Deposits held by Lender are
      held for the purpose of paying Taxes, insurance premiums and each other
      Imposition.

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          14

        
          

        

      

      
        
        

      

    

    “Deferred”
      in such section, upon Notice to Borrower, (i) if Borrower does not timely
      pay any of the Impositions, (ii) if Borrower fails to provide timely proof
      to Lender of such payment, or (iii) at any time during the existence of an
      Event of Default.

     

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

     

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

     

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

     

    10.           COMPLIANCE
      WITH LAWS.  Borrower shall comply with all laws, ordinances,
      regulations and requirements of any Governmental Authority and all recorded
      lawful covenants and agreements relating to or affecting the Mortgaged Property,
      including all laws, ordinances, regulations, requirements and covenants
      pertaining to health and safety, construction of improvements on the Mortgaged
      Property, fair housing, disability accommodation, zoning and land use, and
      Leases.  Borrower also shall comply with all applicable laws that
      pertain to the maintenance and disposition of tenant security
      deposits.  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) allow changes in the use for which all or any part of the
      Mortgaged Property is being used at the time this Instrument was executed,
      except for any change in use approved by Lender, (b) convert any individual
      dwelling units or common areas to commercial use, (c) initiate a change in
      the zoning classification of the Mortgaged Property or acquiesce without Notice
      to and

     

    
      
        
        

      

      
        PAGE
          15

        
          

        

      

      
        
        

      

    

    consent
      of Lender in a change in the zoning classification of the Mortgaged Property,
      (d) establish any condominium or cooperative regime with respect to the
      Mortgaged Property, (e) combine all or any part of the Mortgaged Property
      with all or any part of a tax parcel which is not part of the Mortgaged
      Property, or (f) subdivide or otherwise split any tax parcel constituting
      all or any part of the Mortgaged Property without the prior consent of
      Lender.

     

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

     

    (a)           If
      Borrower fails to perform any of its obligations under this Instrument or any
      other Loan Document, or if any action or proceeding is commenced which purports
      to affect the Mortgaged Property, Lender’s security or Lender’s rights under
      this Instrument, including eminent domain, insolvency, code enforcement, civil
      or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent
      conveyance or reorganizations or proceedings involving a bankrupt or decedent,
      then Lender at Lender’s option may make such appearances, file such documents,
      disburse such sums and take such actions as Lender reasonably deems necessary
      to
      perform such obligations of Borrower and to protect Lender’s interest, including
      (i) payment of Attorneys’ Fees and Costs, (ii) payment of fees and
      out-of-pocket expenses of accountants, inspectors and consultants,
      (iii) entry upon the Mortgaged Property to make repairs or secure the
      Mortgaged Property, (iv) procurement of the insurance required by
      Section 19, and (v) 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 secured by this Instrument, shall be added to,
      and become part of, the principal component of the Indebtedness, shall be
      immediately due and payable and shall bear interest from the date of
      disbursement until paid at the “Default Rate,” as defined in the
      Note.

     

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

     

    13.           INSPECTION.

     

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

     

    (b)          If
      Lender determines that Mold has developed as a result of a water intrusion
      event
      or leak, Lender, at Lender’s discretion, may require that a professional
      inspector inspect the Mortgaged Property as frequently as Lender determines
      is
      necessary until any issue with Mold

     

    
      
        
        

      

      
        PAGE
          16

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    14.           BOOKS
      AND RECORDS; FINANCIAL REPORTING.

     

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

     

    (b)           Within
      120 days after the end of each fiscal year of Borrower, Borrower shall furnish
      to Lender a statement of income and expenses for Borrower’s operation of the
      Mortgaged Property for that fiscal year, a statement of changes in financial
      position of Borrower relating to

     

    
      
        
        

      

      
        PAGE
          17

        
          

        

      

      
        
        

      

    

    the
      Mortgaged Property for that fiscal year and, when requested by Lender, a balance
      sheet showing all assets and liabilities of Borrower relating to the Mortgaged
      Property as of the end of that fiscal year.  If Borrower’s fiscal year
      is other than the calendar year, Borrower must also submit to Lender a year-end
      statement of income and expenses within 120 days after the end of the calendar
      year.

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      
        
        

      

      
        PAGE
          18

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

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

     

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

     

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

     

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

     

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

     

    15.           TAXES;
      OPERATING EXPENSES.

     

    
      
        
        

      

      
        PAGE
          19

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          20

        
          

        

      

      
        
        

      

    

    17.           PRESERVATION,
      MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.

     

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

     

    (b)           Borrower
      shall not abandon the Mortgaged Property.

     

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

     

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

     

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

     

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

     

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

     

    18.           ENVIRONMENTAL
      HAZARDS.

     

    
      
        
        

      

      
        PAGE
          21

        
          

        

      

      
        
        

      

    

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          22

        
          

        

      

      
        
        

      

    

    nonresidential
      use by any user that, in the ordinary course of its business, would cause or
      permit any Prohibited Activity or Condition.

     

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

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      
        
        

      

      
        PAGE
          23

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

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

            

    

     

    
      	
               

            	
              (vii)

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

            

    

     

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

     

    
      	
               

            	
              (i)

            	
              Borrower’s
                discovery of any Prohibited Activity or
                Condition;

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

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

     

    (g)           Borrower
      shall pay promptly the costs of any environmental inspections, tests or audits,
      a purpose of which is to identify the extent or cause of or potential for a
      Prohibited Activity or Condition (“Environmental
      Inspections”), required by Lender in connection with any
      foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s
      consent to any Transfer under Section 21, or required by Lender following a
      reasonable determination by Lender that Prohibited Activities or Conditions
      may
      exist.  Any such costs incurred by Lender (including Attorneys’ Fees
      and Costs and the costs of technical consultants whether incurred in connection
      with any judicial or administrative process or otherwise) that Borrower
      fails to pay promptly shall become an additional part of the Indebtedness as
      provided in Section 12.  As long as (i) no Event of Default
      has occurred and is continuing, (ii) Borrower has actually paid for
      or

     

    
      
        
        

      

      
        PAGE
          24

        
          

        

      

      
        
        

      

    

    reimbursed
      Lender for all costs of any such Environmental Inspections performed or required
      by Lender, and (iii) Lender is not prohibited by law, contract or otherwise
      from doing so, Lender shall make available to Borrower, without representation
      of any kind, copies of Environmental Inspections prepared by third parties
      and
      delivered to Lender.  Lender hereby reserves the right, and Borrower
      hereby expressly authorizes Lender, to make available to any party, including
      any prospective bidder at a foreclosure sale of the Mortgaged Property, the
      results of any Environmental Inspections made by or for Lender with respect
      to
      the Mortgaged Property.  Borrower consents to Lender notifying any
      party (either as part of a notice of sale or otherwise) of the results of
      any Environmental Inspections made by or for Lender.  Borrower
      acknowledges that Lender cannot control or otherwise assure the truthfulness
      or
      accuracy of the results of any Environmental Inspections and that the release
      of
      such results to prospective bidders at a foreclosure sale of the Mortgaged
      Property may have a material and adverse effect upon the amount that a party
      may
      bid at such sale.  Borrower agrees that Lender shall have no liability
      whatsoever as a result of delivering the results to any third party of any
      Environmental Inspections made by or for Lender, and Borrower hereby releases
      and forever discharges Lender from any and all claims, damages, or causes of
      action, arising out of, connected with or incidental to the results of, the
      delivery of any of Environmental Inspections made by or for Lender.

     

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

     

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

     

    (j)           Borrower
      shall indemnify, hold harmless and defend (i) Lender, (ii) any prior
      owner or holder of the Note, (iii) the Loan Servicer, (iv) any prior
      Loan Servicer, (v) the officers, directors, shareholders, partners,
      employees and trustees of any of the foregoing, and (vi) the

     

    
      
        
        

      

      
        PAGE
          25

        
          

        

      

      
        
        

      

    

    heirs,
      legal representatives, successors and assigns of each of the foregoing
      (collectively, the “Indemnitees”) from and against all
      proceedings, claims, damages, penalties and costs (whether initiated or sought
      by Governmental Authorities or private parties), including Attorneys’ Fees and
      Costs and remediation costs, whether incurred in connection with any judicial
      or
      administrative process or otherwise, arising directly or indirectly from any
      of
      the following:

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

            	
              the
                actual or alleged violation of any Hazardous Materials
                Law.

            

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          26

        
          

        

      

      
        
        

      

    

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

     

    
      	
               

            	
              (ii)

            	
              any
                extensions of time for performance required by any Loan
                Document;

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

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

            

    

     

    
      	
               

            	
              (vii)

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

            

    

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    (o)           The
      provisions of this Section 18 shall be in addition to any and all other
      obligations and liabilities that Borrower may have under applicable law or
      under
      other Loan Documents, and each Indemnitee shall be entitled to indemnification
      under this Section 18 without regard to whether Lender or that Indemnitee
      has exercised any rights against the Mortgaged Property or any other security,
      pursued any rights against any guarantor, or pursued any other rights available
      under the Loan Documents or applicable law. If Borrower consists of more than
      one person or entity, the obligation of those persons or entities to indemnify
      the

     

    
      
        
        

      

      
        PAGE
          27

        
          

        

      

      
        
        

      

    

    Indemnitees
      under this Section 18 shall be joint and several. The obligation of
      Borrower to indemnify the Indemnitees under this Section 18 shall survive
      any repayment or discharge of the Indebtedness, any foreclosure proceeding,
      any
      foreclosure sale, any delivery of any deed in lieu of foreclosure, and any
      release of record of the lien of this Instrument.  Notwithstanding the
      foregoing, if Lender has never been a mortgagee-in-possession of, or held title
      to, the Mortgaged Property, Borrower shall have no obligation to indemnify
      the
      Indemnitees under this Section 18 after the date of the release of record
      of the lien of this Instrument by payment in full at the Maturity Date or by
      voluntary prepayment in full.

     

    19.           PROPERTY
      AND LIABILITY INSURANCE.

     

    (a)           Borrower
      shall keep the Improvements insured at all times against such hazards as Lender
      may from time to time require, which insurance shall include but not be limited
      to coverage against loss by fire and allied perils, general boiler and machinery
      coverage, rent loss and extra expense insurance.  If Lender so
      requires, such insurance shall also include sinkhole insurance, mine subsidence
      insurance, earthquake insurance, and, if the Mortgaged Property does not conform
      to applicable zoning or land use laws, building ordinance or law
      coverage.  Borrower acknowledges and agrees that Lender’s insurance
      requirements may change from time to time throughout the term of the
      Indebtedness.  If any of the Improvements is located in an area
      identified by the Federal Emergency Management Agency (or any successor to
      that
      agency) as an area having special flood hazards, Borrower shall insure such
      Improvements against loss by flood.  All insurance required pursuant
      to this Section 19(a) shall be referred to as “Hazard
      Insurance.”

     

    (b)           All
      premiums on Hazard 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 Hazard 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 5 days prior to
      the expiration date of any Hazard Insurance policy, Borrower shall deliver
      to
      Lender evidence acceptable to Lender that the policy has been
      renewed.  If Borrower has not delivered the original (or a duplicate
      original) of a renewal policy prior to the expiration date of any Hazard
      Insurance policy, Borrower shall deliver the original (or a duplicate
      original) of a renewal policy in a form satisfactory to Lender
      within  120  days after the expiration date of the original
      policy.

     

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

     

    
      
        
        

      

      
        PAGE
          28

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      
        
        

      

      
        PAGE
          29

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (h)

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

            

    

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

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

     

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

     

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

     

    20.           CONDEMNATION.

     

    (a)           Borrower
      shall promptly notify Lender in writing of any action or proceeding or notice
      relating to any proposed or actual condemnation or other taking, or conveyance
      in lieu

     

    
      
        
        

      

      
        PAGE
          30

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    (a)           “Transfer”
      means

     

    
      	
               

            	
              (i) 

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

            

    

     

    
      	
               

            	
              (ii) 

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

            

    

     

    
      	
               

            	
              (iii) 

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

            

    

     

    
      	
               

            	
              (iv) 

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

            

    

     

    
      	
               

            	
              (v) 

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

            

    

     

    
      
        
        

      

      
        PAGE
          31

        
          

        

      

      
        
        

      

    

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

     

    (b)           “Transfer”
      does not include

     

    
      	
               

            	
              (i) 

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

            

    

     

    
      	
               

            	
              (ii) 

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

            

    

     

    
      	
               

            	
              (iii) 

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

            

    

     

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

     

    
      	
               

            	
              (i)

            	
              a
                Transfer to which Lender has
                consented;

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

            	
              if
                Borrower is a housing cooperative, any Transfer of the shares in
                the
                housing cooperative or any assignment of the occupancy agreements
                or
                leases relating thereto by tenant shareholders of the housing cooperative;
                and

            

    

     

    
      	
               

            	
              (vii)

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

            

    

     

    
      
        
        

      

      
        PAGE
          32

        
          

        

      

      
        
        

      

    

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

    
      	
               

            	
              (B)

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

            

    

    
      	
               

            	
              (C)

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

            

    

    
      	
               

            	
              (D)

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

            

    

    
      	
               

            	
              (E)

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

            

    

    
      	
               

            	
              (F)

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

            

    

    
      	
               

            	
              (1)

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

            

    

     

    
      	
               

            	
              (2)

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

            

    

     

    
      	
               

            	
              (3)

            	
              Either
                directly or indirectly, Maxus Realty Trust, Inc. shall retain at
                all times
                a managing interest in the
                Borrower.

            

    

     

    
      	
               

            	
              (4)

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

            

    

     

    
      	
               

            	
              (5)

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

            

    

     

    
      	
               

            	
              (6)

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

            

    

     

    
      	
               

            	
              (7)

            	
              In
                the event of a Transfer prohibited by or requiring Lender’s approval under
                this Section 21, this Section (c)(vii) may be modified or
                rendered void by

            

    

     

    
      
        
        

      

      
        PAGE
          33

        
          

        

      

      
        
        

      

    

    Lender
      at
      Lender’s option by Notice to Borrower and the transferee(s), as a condition of
      Lender’s consent.

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

            	
              the
                merger of the Borrower with another entity when the Borrower is the
                surviving entity;

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      
        
        

      

      
        PAGE
          34

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

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

            

    

     

    
      	
               

            	
              (vii)

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

            

    

     

    
      	
               

            	
              (viii)

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

            

    

     

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

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      
        
        

      

      
        PAGE
          35

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (ii)

            	
              the
                absence of any Event of Default;

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

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

            

    

     

    
      	
               

            	
              (vii)

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

            

    

     

    
      	
               

            	
              (viii)

            	
              Lender’s
                receipt of all of the following:

            

    

     

    
      	
               

            	
              (A)

            	
              a
                review fee in the amount of
                $3,000;

            

    

    
      
        
        

      

      
        PAGE
          36

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (B)

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

            

    

    
      	
               

            	
              (C)

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

            

    

    

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

     

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

     

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

     

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

     

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

     

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

     

    (f)           any
      Event of Default under Section 21;

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          37

        
          

        

      

      
        
        

      

    

    or
      remedy
      under this Instrument, result in harm to Lender, impairment of the Note or
      this
      Instrument or any other security given under any other Loan
      Document;

     

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

     

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

     

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

     

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

     

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

     

    24.           FORBEARANCE.

     

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

     

    (b)           Any
      forbearance by Lender in exercising any right or remedy under the Note, this
      Instrument, or any other Loan Document or otherwise afforded by applicable
      law,
      shall not be a waiver of or preclude the exercise of any other right or remedy,
      or the subsequent exercise of any

     

    
      
        
        

      

      
        PAGE
          38

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    28.           FURTHER
      ASSURANCES.  Borrower shall execute, acknowledge, and
      deliver, at its sole cost and expense, all further acts, deeds, conveyances,
      assignments, estoppel certificates, financing statements or amendments,
      transfers and assurances as Lender may require

     

    
      
        
        

      

      
        PAGE
          39

        
          

        

      

      
        
        

      

    

    from
      time
      to time in order to better assure, grant, and convey to Lender the rights
      intended to be granted, now or in the future, to Lender under this Instrument
      and the Loan Documents.

     

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

     

    30.           GOVERNING
      LAW; CONSENT TO JURISDICTION AND VENUE.

     

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

     

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

     

    31.           NOTICE.

     

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

     

    
      
        
        

      

      
        PAGE
          40

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    36.           RELATIONSHIP
      OF PARTIES; NO THIRD PARTY BENEFICIARY.

     

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

     

    
      
        
        

      

      
        PAGE
          41

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        PAGE
          42

        
          

        

      

      
        
        

      

    

    41.           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.

     

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

     

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

     

    
      	
               

            	
              (i)

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

            

    

     

    
      	
               

            	
              (ii)

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

            

    

     

    
      	
               

            	
              (iii)

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

            

    

     

    
      	
               

            	
              (iv)

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

            

    

     

    
      	
               

            	
              (v)

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

            

    

     

    
      	
               

            	
              (vi)

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

            

    

     

    (b)          As
      additional security for Borrower’s obligation under the Loan Documents, Borrower
      hereby assigns and pledges to Lender all of Borrower’s right, title and interest
      in and to the Cap Collateral.  Borrower has instructed and will
      instruct each Cap Provider and any

     

    
      
        
        

      

      
        PAGE
          43

        
          

        

      

      
        
        

      

    

    guarantor
      of a Cap Provider’s obligations to make Cap Payments directly to Lender or to
      Loan Servicer on behalf of Lender.

     

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

     

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

     

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

    

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

    

    44.           RELEASE.  Upon
      payment of the Indebtedness, Lender shall, at its cost, release this
      Instrument.

    

    45.           FINANCING
      STATEMENT.  As provided in Section 2, this Instrument
      constitutes a financing statement with respect to any part of the Mortgaged
      Property which is or may become a Fixture and for the purposes of such financing
      statement: (a) the Debtor shall be Borrower and the Secured Party shall be
      Lender; (b) the addresses of Borrower as Debtor and of Lender as Secured Party
      are as specified above in the first paragraph of this Instrument; (c) the name
      of the record owner is Borrower; (d) the types or items of collateral consist
      of
      any part of the Mortgaged Property which is or may become a Fixture; and (e)
      the
      social security number or the federal employer identification number of Borrower
      as Debtor is 43-1938918.

    
      
        
        

      

      
        PAGE
          44

        
          

        

      

      
        
        

      

    

    46.           APPOINTMENT
      OF RECEIVER.  Section 3(b) and Section 4(d) are amended by
      (i) deleting the following phrase, each time it appears:  “Lender
      entering upon and taking and maintaining control of the Mortgaged Property,” and
      (ii) inserting the following new phrase in its place: “Lender entering upon and
      taking and maintaining control or possession of the Mortgaged Property or any
      equivalent action.”

    

    47.           WAIVER
      OF REDEMPTION.  Borrower waives all right of redemption of
      the Mortgaged Property.

    

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

    

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

    

    
      	
               

            	
              |X|

            	
              Exhibit
                A

            	
              Description
                of the Land (required).

            

    

    

    
      	
               

            	
              |X|

            	
              Exhibit
                B

            	
              Modifications
                to Instrument

            

    

    

    

     

    [The
      remainder of this page is intentionally left blank, signature page
      follows.]

     

     

     

     

     

     

     

    PAGE
      45

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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.

     

    
      	
               

            	
              BORROWER:

            

    

    

    
      	
               

            	
              Chalet
                I Acquisition, L.L.C.,

            

    

    
      	
               

            	
              a
                Kansas limited liability company

            

      	 	 

      	 	 

      	 	 By:    
/s/
              John W. Alvey

      	 	 Name:        John
              W. Alvey

      	 	 Title:          Manager

    

    

    
 

    

    STATE
      OF
      MISSOURI    )

                )
      ss.

    COUNTY
      OF  Clay                  
)

    

    On
      this
14th day of September, 2007, before me, Grace E. Bales, a Notary
      Public of said State, duly commissioned and sworn, personally appeared John
      W.
      Alvey, the Manager of Chalet I Acquisition, L.L.C., a Kansas limited liability
      company, personally known to me to be the person that executed the within
      instrument on behalf of the limited liability company, and acknowledged to
      me
      that such limited liability company executed the same.

    

    In
      Witness Whereof, I have hereunto set my hand and affixed my official seal the
      day and year in this certificate first above written.

    

                                    /s/
      Grace E.
      Bales

                                    Notary
      Public in and
      for Missouri

                                    My
      Commission
      Expires:August 24, 2010

    

    
      	 	 
	 	
              GRACE
                E. BALES

            
	 	
              Notary
                Public - Notary Seal

            
	 	
              STATE
                OF MISSOURI

            
	 	
              Clay
                County

            
	 	
              My
                Commission Expires Aug. 24, 2010

            
	 	
              Commission
                # 0642903

            

    

    

    

     

    

     
Signature
    Page - Chalet I & II Apartments
    - Security Instrument                                                PAGE
    S-1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    EXHIBIT
      A

     

    [DESCRIPTION
      OF THE LAND]

     

    

    

    Tract
      1:

    

    Lot
      1,
      EXCEPT the South 20 feet thereof, Prospect Place Subdivision in the City of
      Topeka, Shawnee County, Kansas, together with vacated Prospect Court lying
      East
      of and adjacent to said Lot 1, AND

    

    Lot
      3,
      Block A, Prospect Gardens Subdivision in the City of Topeka, Shawnee County,
      Kansas, together with vacated Prospect Court lying West of and Adjacent to
      said
      Lot 3, AND

    

    Lot
      1,
      Block A, Prospect Gardens No. 2 in the City of Topeka, Shawnee County, Kansas,
      EXCEPT a part of said Lot 1 described as follows:  Beginning at the
      Southeast corner of said Lot 1; thence on Az 268 degrees 28 minutes 09 seconds,
      190.00 feet coincident with the South line of said Lot 1; thence on Az 359
      degrees 58 minutes 36 seconds, 152.00 feet coincident with the West line of
      said
      Lot 1; thence on Az 88 degrees 28 minutes 09 seconds, 190.00 feet to the East
      line of said Lot 1; thence on Az 179 degrees 58 minutes 36 seconds, 152.00
      feet
      coincident with the East line of said Lot 1 to the point of
      beginning.  ALSO EXCEPT a part of Lot 1 described as
      follows:  Beginning at the Northwest corner of said Lot 1; thence East
      on Az 88 degrees 20 minutes 19 seconds, 169.93 feet coincident with the North
      line of said Lot 1; thence on Az 179 degrees 58 minutes 36 seconds, 302.40
      feet;
      thence on Az 269 degrees 28 minutes 09 seconds, 287.31 feet to the Westerly
      line
      of said Lot 1; thence on Az 28 degrees 47 minutes 25 seconds, 246.07 feet
      coincident with said Westerly line; thence on Az 359 degrees 10 minutes 40
      seconds, 89.50 feet coincident with said Westerly line to the point of
      beginning.

    

    Tract
      2A:

    

    A
      part of
      Lot 1, Block A, Prospect Gardens No. 2, in the City of Topeka, Shawnee County,
      Kansas, more particularly described as follows:  Beginning at the
      Southeast corner of said Lot 1; thence on Az 268 degrees 28 minutes 09 seconds,
      190.00 feet coincident with the South line of said Lot 1; thence on Az 359
      degrees 58 minutes 36 seconds, 152.00 feet coincident with the West line of
      said
      Lot 1; thence on Az 88 degrees 28 minutes 09 seconds, 190.00 feet to the East
      line of said Lot 1; thence on Az 179 degrees 58 minutes 36 seconds, 152.00
      feet
      coincident with the East line of said Lot 1 to the point of beginning.
      AND

    

    Tract
      2B:

    
      
        
        

      

      
        PAGE
          A-1

        
          

        

      

      
        
        

      

    

    A
      part of
      Lot 1, Block A, Prospect Gardens No. 2, in the City of Topeka, Shawnee County,
      Kansas, more particularly described as follows:  Beginning at the
      Northwest corner of said Lot 1; thence East on Az 88 degrees 20 minutes 19
      seconds, 169.93 feet coincident with the North line of said Lot 1; thence on
      Az
      179 degrees 58  minutes 36 seconds, 302.40 feet; thence on Az 269
      degrees 28 minutes 09 seconds, 287.31 feet to the Westerly line of said Lot
      1;
      thence on Az 28 degrees 47 minutes 25 seconds, 246.07 feet coincident with
      said
      Westerly line; thence on Az 359 degrees 10 minutes 40 seconds, 89.50 feet
      coincident with said Westerly line to the point of beginning.

    

    Also
      Known As:

    

    Lot
      1,
      EXCEPT the South 20 feet thereof, Prospect Place Subdivision AND Lot 3, Block
      A,
      Prospect Gardens Subdivision AND Lot 1, Block A, Prospect Gardens No. 2 in
      the
      City of Topeka, Shawnee County, Kansas, together with vacated Prospect Court
      lying adjacent to above lots.

    

    

    

    
      
        
        

      

      
        PAGE
          A-2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    MODIFICATIONS
      TO INSTRUMENT

     

    

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

     

    

    NONE.

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    PAGE 
B-1termsdoc07-a8.htm

     

     

     

    
 

    Exhibit
      4.1

    

    

    CITIBANK
      CREDIT CARD ISSUANCE TRUST

    

    Citiseries

    Class
      2007-A8 Notes

    

    Issuer
      Certificate

    Pursuant
      to Sections 202 and 301(h) of the Indenture

    

    Reference
      is made to the Indenture, dated as of September 26, 2000, as amended by
      Amendment No. 1 thereto dated as of November 14, 2001, each between Citibank
      Credit Card Issuance Trust (the "Issuer") and Deutsche Bank Trust Company
      Americas, as trustee (the "Indenture").  Capitalized terms used herein
      that are not otherwise defined have the meanings set forth in the Indenture.
      All
      references herein to designated Sections are to the designated Sections of
      the
      Indenture.

    

    Section
      301(h) provides that the Issuer may from time to time create a tranche of Notes
      either by or pursuant to an Issuer Certificate setting forth the principal
      terms
      thereof.  Pursuant to this Issuer Certificate, there is hereby created
      a tranche of Notes having the following terms:

    

    Series
      Designation:  Citiseries.  This series is included
      in Group 1.

    

    Tranche
      Designation:  $1,750,000,000  5.65% Class 2007-A8
      Notes of September 2017 (Legal Maturity Date September 2019) (hereinafter,
      the
      "Class 2007-A8 Notes")

    

    Currency:  The
      Class 2007-A8 Notes will be payable, and denominated, in Dollars.

    

    Denominations:  The
      Class 2007-A8 Notes will be issuable in minimum denominations of $100,000 and
      multiples of $1,000 in excess of that amount.

    

    Issuance
      Date:  September 20, 2007

    

    Initial
      Principal Amount:  $1,750,000,000

    

    Issue
      Price:  99.435%

    

    Interest
      Rate:  5.65% per annum, calculated on the basis of a 360-day
      year of twelve 30-day months.

    

    Scheduled
      Interest Payment Dates:  The 20th day of each March and
      September, beginning March 2008.

    

    Each
      payment of interest on the Class 2007-A8 Notes will include all interest accrued
      from and including the preceding Interest Payment Date -- or, for the first
      interest period, from and including the Issuance Date -- to and including the
      day preceding the current Interest Payment Date, plus any interest accrued
      but
      not previously paid.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The
      first
      deposit targeted to be made to the Interest Funding sub-Account for the Class
      2007-A8 Notes will be on the October 19, 2007 Interest Deposit Date and in
      an
      amount equal to $8,788,888.89.

    

    Expected
      Principal Payment Date:  September 20, 2017

    

    Legal
      Maturity Date:  September 20, 2019

    

    Monthly
      Principal Date:  For the month in which the Expected
      Principal Payment Date occurs, September 20, 2017, and for each other month,
      the
      20th day of such month, or if such day is not a Business Day, the next following
      Business Day.

    

    Required
      Subordinated Amount of Class B
      Notes:  $104,700,925.

    

    Required
      Subordinated Amount of Class C
      Notes:  $139,601,175.

    

    Controlled
      Accumulation Amount:  $145,833,333.

    

    Form
      of Notes:  The Class 2007-A8 Notes will be issued as Global
      Notes.  The Global Notes will initially be registered in the name of
      Cede & Co., as nominee of The Depository Trust Company, and will be
      exchangeable for individual Notes only in accordance with the provisions of
      Section 204(c).

    

    Additional
      Issuances of Class 2007-A8 Notes:  The Issuer may at any time
      and from time to time issue additional Class 2007-A8 Notes, subject to the
      satisfaction of (i) the conditions precedent set forth in Section 311(a) and
      (ii) the following conditions:

    

    
      	
               

            	
              (a)
                the Issuer has obtained written confirmation from each Rating Agency
                that
                there will be no Ratings Effect with respect to the then outstanding
                Class
                2007-A8 Notes as a result of the issuance of such additional Class
                2007-A8
                Notes;

            

    

    

    
      	
               

            	
              (b)
                as of the date of issuance of the additional Class 2007-A8 Notes,
                all
                amounts due and owing to the Holders of the then outstanding Class
                2007-A8
                Notes have been paid and there is no Nominal Liquidation Amount Deficit
                with respect to the then outstanding Class 2007-A8
                Notes;

            

    

    

    
      	
               

            	
              (c)
                the additional Class 2007-A8 Notes will be fungible with the original
                Class 2007-A8 Notes for federal income tax
                purposes;

            

    

    

    
      	
               

            	
              (d)
                if Holders of the then outstanding Class 2007-A8 Notes have benefit
                of a
                Derivative Agreement, the Issuer will have obtained a Derivative
                Agreement
                for the benefit of the Holders of the additional Class 2007-A8 Notes;
                and

            

    

    

    
      	
               

            	
              (e)
                the ratio of the Controlled Accumulation Amount to the Initial Dollar
                Principal Amount of the Class 2007-A8 Notes, including the additional
                Class 2007-A8 Notes, will be equal to the ratio of the Controlled
                Accumulation Amount (before giving effect to the additional issuance)
                to
                the Initial Dollar Principal Amount of the Class 2007-A8 Notes, excluding
                the additional Class 2007-A8
                Notes.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    As
      of the
      date of issuance of additional Class 2007-A8 Notes, the Outstanding Dollar
      Principal Amount and Nominal Liquidation Amount of the Class 2007-A8 Notes
      will
      be increased to reflect the Initial Dollar Principal Amount of the additional
      Class 2007-A8 Notes.

    

    Any
      outstanding Class 2007-A8 Notes and any additional Class 2007-A8 Notes will
      be
      equally and ratably entitled to the benefits of the Indenture without
      preference, priority or distinction.

    

    Optional
      Redemption Provisions other than Section 1202 "Clean-Up
      Call":  None

    

    Additional
      Early Redemption Events or changes to Early Redemption
      Events:  None

    

    Additional
      Events of Default or changes to Events of
      Default:  None

    

    Business
      Day: means any day other than (a) a Saturday or Sunday or (b) any other
      day on which national banking associations or state banking institutions in
      New
      York, New York or South Dakota, or any other state in which the principal
      executive offices of any Additional Seller are located, are authorized or
      obligated by law, executive order or governmental decree to be
      closed.

    

    Securities
      Exchange Listing:  Application will be made to list the Class
      2007-A8 Notes on the Irish Stock Exchange.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    The
      Class
      2007-A8 Notes shall have such other terms as are set forth in the form of Note
      attached hereto as Exhibit A.  Pursuant to Section 202, the form of
      Note attached hereto has been approved by the Issuer.

    

    CITIBANK
      CREDIT CARD ISSUANCE TRUST

    

    
      	
               

            	
              By

            	
              Citibank
                (South Dakota), National
                Association,

            

    

    as
      Managing Beneficiary

    

    

    /s/
      Douglas C. Morrison

    --------------------------------------------

    Douglas
      C. Morrison

    Vice
      President

    

    Dated:  September
      20, 2007

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Citiseries

     

    Class
      2007-A8 Notes

    

    Reference
      is made to the resolutions adopted by the Board of Directors of Citibank (South
      Dakota), National Association ("Citibank (South Dakota)") on April 26, 2000,
      as
      amended on September 25, 2001 and October 25, 2006. The resolutions authorize
      Citibank (South Dakota) from time to time to issue and sell, or to arrange
      for
      or participate in the issuance and sale of, one or more series and/or classes
      of
      pass-through certificates, participation certificates, commercial paper, notes
      or other securities representing ownership interests in, or backed by, pools
      of
      credit card receivables or interests therein ("Receivables") in an aggregate
      principal amount such that up to $125,000,000,000 of such certificates,
      commercial paper, notes or securities are outstanding at any one time and to
      sell, transfer, convey or assign Receivables to trusts or other special purpose
      entities in connection therewith on such terms as to be determined by the
      Citibank (South Dakota) Pricing and Loan Committee (the "Pricing and Loan
      Committee").

    

    The
      undersigned, a duly authorized member of the Pricing and Loan Committee, on
      behalf of such Pricing and Loan Committee, does hereby certify that the terms
      of
      the tranche of Notes set forth in and to be created by the preceding Issuer
      Certificate and the increase in the Invested Amount of the Collateral
      Certificate resulting from the issuance of such Notes have been approved by
      such
      Pricing and Loan Committee. In addition, the following underwriting/selling
      agent terms with respect to this tranche of Notes have been approved by such
      Pricing and Loan Committee:

    

    Issue
      Price:  99.435%

    

    Underwriting
      Commission:  0.375%

    

    Proceeds
      to Issuer:  99.060%

    

    Representative
      of the Underwriters:  Citigroup Global Markets Inc.

    

    

    The
      preceding Issuer Certificate and this certification of Pricing and Loan
      Committee approval shall be, continuously from the time of their execution,
      official records of Citibank (South Dakota).

    

    

    

    
      	
              /s/
                Douglas C. Morrison

              -------------------------------------

            
	
              Douglas
                C. Morrison

            
	
              Member
                of the Pricing and Loan Committee

            
	
              Citibank
                (South Dakota), National
                Association

            

    

    

    

    Dated:  September
      20, 2007

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    Exhibit
      A

    

    FORM
      OF

    

    CITISERIES

    

    5.65%
      CLASS 2007-A8 NOTES OF SEPTEMBER 2017

    (Legal
      Maturity Date September 2019)

    

    

    
      	
              $___,000,000

            	 	
              REGISTERED

            
	
              CUSIP
                No. 17305E DY 8

            	 	
              No.
                R-__

            

    

    

    UNLESS
      THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
      COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
      REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
      IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
      AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
      TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
      ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
      PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
      AN INTEREST HEREIN.

    

    THE
      PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN AND IN THE INDENTURE
      REFERRED TO BELOW. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE
      AT
      ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

    

    

    CITIBANK
      CREDIT CARD ISSUANCE TRUST

    

    CITISERIES

    

    5.65%
      CLASS 2007-A8 NOTES OF SEPTEMBER 2017

    (Legal
      Maturity Date September 2019)

    

    

    CITIBANK
      CREDIT CARD ISSUANCE TRUST, a trust formed and existing under the laws of the
      State of Delaware (including any successor, the "Issuer"), for value received,
      hereby promises to pay to CEDE & CO., or its registered assigns, the
      principal amount of ________ HUNDRED MILLION DOLLARS
      ($___,000,000).  The Expected Principal Payment Date for this Note is
      September 20, 2017.  The Legal Maturity Date for this Note is
      September 20, 2019.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Issuer hereby promises to pay interest on this Note at the rate of 5.65% per
      annum on the 20th day of each March and September, beginning March 2008, until
      the principal of this Note is paid or made available for payment, subject to
      certain limitations set forth in the Indenture.  Interest will accrue
      on the principal amount of this Note outstanding on the preceding Interest
      Payment Date (after giving effect to any payments of principal made on the
      preceding Interest Payment Date), or with respect to the first Interest Payment
      Date, the initial principal amount of this Note.  Interest will accrue
      from September 20, 2007 and be computed on the basis of a 360-day year of twelve
      30-day months.

    

    If
      any
      Interest Payment Date or Principal Payment Date of this Note falls on a day
      that
      is not a Business Day, the required payment of interest or principal will be
      made on the following Business Day.

    

    This
      Note
      is one of the Citiseries, Class 2007-A8 Notes issued pursuant to the Indenture,
      dated as of September 26, 2000 (as amended and otherwise modified from time
      to
      time, the "Indenture") between the Issuer and Deutsche Bank Trust Company
      Americas, as Trustee. For purposes of this Note, the term "Indenture" includes
      any supplemental indenture or Issuer Certificate relating to the Citiseries,
      Class 2007-A8 Notes. This Note is subject to all of the terms of the Indenture.
      All terms used in this Note that are not otherwise defined herein and that
      are
      defined in the Indenture will have the meanings assigned to them
      therein.

    

    The
      principal of and interest on this Note are payable in such coin or currency
      of
      the United States of America as at the time of payment is legal tender for
      payment of public and private debts.

    

    Each
      Holder by acceptance of this Note, and each owner of a beneficial interest
      in
      this Note by acceptance of a beneficial interest in this Note, is deemed to
      have
      consented to such amendments to the Pooling and Servicing Agreement and other
      operative documents as are necessary to permit the Seller to retain sale
      treatment for accounting purposes of the transfer of assets to the Master Trust,
      in accordance with the provisions of Financial Accounting Standards Board SFAS
      No. 140.

    

    Reference
      is made to the further provisions of this Note set forth on the reverse hereof,
      which will have the same effect as though fully set forth on the face of this
      Note.

    

    Unless
      the certificate of authentication hereon has been executed by the Trustee whose
      name appears below by manual signature, this Note will not

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    be
      entitled to any benefit under the Indenture, or be valid or obligatory for
      any
      purpose.

    

    IN
      WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
      or
      in facsimile, by an Issuer Authorized Officer.

    

    
      	 	
              CITIBANK
                CREDIT CARD ISSUANCE TRUST

            
	 	 
	 	
              By:           CITIBANK
                (SOUTH DAKOTA),

            
	 	
              NATIONAL
                ASSOCIATION,

            
	 	
              as
                Managing Beneficiary of

            
	 	
              Citibank
                Credit Card Issuance Trust

            
	 	 
	 	 
	 	
              By:
                __________________________________

            
	 	
              Douglas
                C.
                Morrison

            
	 	
              Vice
                President

            

    

    

    Dated:  September
      20, 2007

    

    

    

    

    TRUSTEE'S
      CERTIFICATE OF AUTHENTICATION

    

    

    This
      is
      one of the Notes designated above and referred to in the within mentioned
      Indenture.

    

    

    
      	 	
              DEUTSCHE
                BANK TRUST COMPANY AMERICAS,

            
	 	
              as
                Trustee under the Indenture

            
	 	 
	 	 
	 	
              By:
                _________________________________

            
	 	
              Authorized
                Signatory

            

    

    

    Dated:  September
      20, 2007

    

    

    

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    REVERSE
      OF NOTE

    

    This
      Note
      is one of a duly authorized issue of Notes of the Issuer, designated as its
      Citiseries 5.65% Class 2007-A8 Notes of September 2017 (Legal Maturity Date
      September 2019) (herein called the "Notes"), all issued under an Indenture,
      to
      which Indenture reference is hereby made for a statement of the respective
      rights and obligations thereunder of the Issuer, the Trustee and the Holders
      of
      the Notes.

    

    This
      Note
      ranks pari passu with all other Class A Notes of the same series, as set forth
      in the Indenture. This Note is secured to the extent, and by the collateral,
      described in the Indenture.

    

    The
      Issuer will pay interest on overdue interest as set forth in the Indenture
      to
      the extent lawful.

    

    Each
      Holder by acceptance of this Note, and each owner of a beneficial interest
      in
      this Note by acceptance of a beneficial interest in this Note, agrees that
      no
      recourse may be taken, directly or indirectly, with respect to the obligations
      of the Issuer or the Trustee on the Notes, against the Issuer, the Issuer
      Trustee, Citibank (South Dakota), the Trustee or any affiliate, officer,
      employee or director of any of them, and the obligation of the Issuer to pay
      principal of or interest on this Note or any other amount payable to the Holder
      of this Note will be subject to Article V of the Indenture.

    

    Each
      Holder by acceptance of this Note, and each owner of a beneficial interest
      in
      this Note by acceptance of a beneficial interest in this Note, agrees that
      this
      Note is intended to be debt of Citibank (South Dakota) for federal, state and
      local income and franchise tax purposes, and agrees to treat this Note
      accordingly for all such purposes, unless otherwise required by a taxing
      authority.

    

    Each
      Holder by acceptance of this Note, and each owner of a beneficial interest
      in
      this Note by acceptance of a beneficial interest in this Note, agrees that
      it
      will not at any time institute against the Issuer, or join in any institution
      against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
      or liquidation proceeding, or other proceedings under any United States federal
      or state bankruptcy or similar law in connection with any obligations relating
      to this Note, the Indenture or any Derivative Agreement.

    

    This
      Note
      and the Indenture will be construed in accordance with and governed by the
      laws
      of the State of New York.

    

    No
      reference herein to the Indenture and no provision of this Note or of the
      Indenture will alter or impair the obligation of the Issuer, which is absolute
      and unconditional, to pay the principal of and interest on this Note at the
      times, place and rate, and in the coin or currency, herein
      prescribed.

    

    Certain
      amendments may be made to the Indenture without the consent of the Holder of
      this Note.  This Note must be surrendered for final payment of
      principal and interest.

    

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    ASSIGNMENT

    

    

    Social
      Security or taxpayer I.D. or other identifying number of
      assignee:____________________

    

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto

    

    ___________________________________________________________________

    

    ___________________________________________________________________

    (name
      and
      address of assignee)

    

    the
      within Note and all rights thereunder, and hereby irrevocably constitutes and
      appoints __________________________________________________________, attorney,
      to transfer said Note on the books kept for registration thereof, with full
      power of substitution in the premises.

    

    Dated:  ____________________________

    

    _________________________*

    
      	
               

            	
              Signature
                Guaranteed:

            

    

    

    

    

    

    ----------------

    *    NOTE:
      The signature to this assignment must correspond with the name of the registered
      owner as it appears on the face of the within Note in every particular without
      alteration, enlargement or any change whatsoever.

    

    

    

    

    5

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