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200103932 EXHIBIT B MODIFICATIONS TO INSTRUMENT (Section 8 HAP Contract) 1. The following new Section is added to the Instrument after the last numbered Section: "48. SECTION 8 HAP CONTRACT. (a) Borrower is a party to that certain Housing Assistance Payments Contract between the Borrower and the United States Department of Housing and Urban Development ( "HUD ") identified as HAP Contract Number KC -77 -088 dated March 22, 1977, as subsequently amended (the "HAP Contract "), for the Mortgaged Property (HUD Project No. NE26- 0038 -008), which HAP Contract has been collaterally assigned to Lender pursuant to that certain Assignment/Pledge of Housing Assistance Payments Contract (the "Assignment of HAP Contract ") from Borrower to Lender. (b) Borrower represents that Borrower has at all times been and presently is in full compliance with the HAP Contract and that Borrower has not in the past defaulted and is presently not in default under the HAP Contract. (c) Borrower acknowledges and agrees that any default, event of default, or breach (however such terms may be defined) under the HAP Contract or the Assignment of HAP Contract shall be an Event of Default under this Instrument and that any costs, damages or other amounts, including reasonable attorneys' fees incurred by Lender as a result of such an Event of Default by Borrower, including amounts paid to cure any default or event of default, under the HAP Contract or under the Assignment of HAP Contract, shall be an obligation of Borrower and become a part of the Indebtedness secured by this Instrument. Notwithstanding the foregoing, it shall not be an Event of Default if the HAP Contract is not renewed and the Mortgaged Property is converted to multi - family housing at market rate rental provided that the Borrower deposits with Lender an amount equal to $104,832.66 for a restabilizing reserve account, such account to be created and maintained in a manner then required by Lender in its sole discretion (the "HAP Contract Account "). The amounts in the HAP Contract Account shall be considered and treated just as the Imposition Deposits. The HAP Contact Account shall be maintained until such time that the Mortgaged Property (a) has a 90% occupancy level at market rental rates for 90 consecutive days and (b) debt service coverage ratio for 90 consecutive days comparable to that which was used to size the original loan, and upon such time, Lender shall return to Borrower (together with any interest earned thereon) the amount deposited in the HAP Contract Account. Furthermore, upon any Transfer under Section 21 of this Deed of Trust, Lender may require in its sole discretion the creation and maintenance of a HAP Contract Account as hereinabove provided in this paragraph (c); and Section 8 HAP Contract Modifications to Instrument Form 4066 12/97 Page B -1 01- 327535.02