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Exhibit 10.131
New Jersey
NM Loan No. 338136
NY Life Loan No. 374-0185
RECORDING REQUESTED BY
 

 
WHEN RECORDED MAIL TO
 
The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Avenue - Rm N16WC
Milwaukee, WI 53202
Attn: Sheila Lawton
 
SPACE ABOVE THIS LINE FOR RECORDER’S USE
 
This Instrument was prepared by (Carol C. Stern) Attorney, for The Northwestern
Mutual Life Insurance Company, 720 East Wisconsin Ave., Milwaukee, WI 53202 and
New York Life Insurance Company, 51 Madison Ave., New York, NY 10010.
 
MORTGAGE and SECURITY AGREEMENT
and FINANCING STATEMENT
 
THIS MORTGAGE and SECURITY AGREEMENT and FINANCING STATEMENT is made as of the
28th day of October, 2008 between M-C PLAZA V L.L.C., a New Jersey limited
liability company (“Ground Lessor”), CAL-HARBOR V URBAN RENEWAL ASSOCIATES L.P.,
a New Jersey limited partnership (“Ground Lessee” and/or “Master Lessor”) and
CAL-HARBOR V LEASING ASSOCIATES L.L.C., a New Jersey limited liability company
(“Plaza V Leasing” and/or “Master Lessee”), whose mailing address is c/o
Mack-Cali Realty Corporation, 343 Thornall Street, Edison, NJ 08837-2206, herein
(whether one or more in number) collectively called “Mortgagor”, and THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation, whose
mailing address is 720 E. Wisconsin Avenue, Milwaukee, WI 53202 (“Northwestern
Mutual”), and NEW YORK LIFE INSURANCE COMPANY, a New York mutual insurance
company, whose mailing address is c/o New York Life Investment Management LLC,
51 Madison Avenue, New York, NY 10010 (“New York Life”; Northwestern Mutual and
New York Life, herein together called “Mortgagee”):
 
WITNESSETH, That Mortgagor, in consideration of the indebtedness herein
mentioned, does hereby grant, convey, mortgage and warrant unto Mortgagee
forever, the following property (herein referred to collectively as the
“Property”):
 
 
 
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A.  
The (i) land in Jersey City, Hudson County, New Jersey, described in Exhibit “A”
attached hereto and incorporated herein (the “Land”), (ii) the leasehold estate
in the land created by that certain Ground Lease between Harborside Exchange
Place Limited Partnership (“HEPLP”) and Plaza V Urban Renewal Associates L.P.
(“PVURA”) dated December 4, 1995, which lease was assigned by HEPLP to Cali
Harborside (Fee) Associates L.P. (“Cali Harborside (Fee)”,
predecessor-in-interest to Ground Lessor) and by PVURA to Ground Lessee by
separate assignments each dated as of November 1, 1996, as amended by Amendment
to Plaza V Ground Lease dated as of November 1, 1996 and further amended by
Second Amendment to Ground Lease dated as of March 29, 1999, and the landlord’s
interest in which was conveyed to Ground Lessor by Warranty Deed from Cali
Harborside (Fee) dated July 27, 2006 and recorded in the Hudson County
Register’s Office in Deed Book 7967, Page 308 et seq. (collectively, the “Ground
Lease”), and (iii) the subleasehold interest in the Property created by that
certain Master Lease between Master Lessor and Plaza V Leasing dated as of June
2, 1999 (the “Master Lease”); and

 
B.  
All easements, appurtenances, tenements and hereditaments including, but not
limited to all waters, water rights, water courses, ways, trees, rights,
liberties and privileges, belonging to or benefiting the Land; and

 
C.  
All improvements to the Land including, but not limited to, all buildings,
structures and improvements now existing or hereafter erected on the Land; all
fixtures of every description including, but not limited to, all engines,
boilers, elevators, machinery, heating apparatus, electrical equipment,
air-conditioning and ventilating equipment, water and gas fixtures, which are or
may be placed or used upon the Land and which are attached to the buildings,
structures, improvements or the Land; all of which, to the extent permitted by
applicable law, shall be deemed an accession to the freehold and a part of the
realty as between the parties hereto; and

 
D.  
Mortgagor’s interest in all articles of personal property of every kind and
nature whatsoever including, but not limited to, all furniture and easily
removable equipment now or hereafter located upon the Land or in or on the
buildings and improvements and now owned or hereafter acquired by Mortgagor.

 
 
 
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Without limiting the foregoing grants, but subject to the terms and conditions
of this Mortgage, Mortgagor hereby pledges to Mortgagee, and grants to Mortgagee
a security interest in, all of Mortgagor’s present and hereafter acquired right,
title and interest in and to the Property and any and all:
 
E.  
Cash and other funds now or at any time hereafter deposited by or for Mortgagor
on account of tax, special assessment, replacement or other reserves that may be
required to be maintained pursuant to the Loan Documents (as hereinafter
defined) with Mortgagee or a third party, or otherwise deposited with, or in the
possession of, Mortgagee pursuant to the Loan Documents; and

 
F.  
To the extent assignable or to the extent that a valid lien can be created with
respect thereto, surveys, soils reports, environmental reports, guaranties,
warranties, architect’s contracts, construction contracts, drawings and
specifications, applications, permits, surety bonds and other contracts relating
to the acquisition, design, development, construction and operation of the
Property; and

 
G.  
Accounts, chattel paper, deposit accounts, instruments, equipment, inventory,
documents, general intangibles, letter-of-credit rights, investment property and
all other personal property of Mortgagor, in each case, to the extent associated
with or arising from the ownership, development, operation, use or disposition
of any portion of the property described, above (including, without limitation,
any and all rights in the property name “Plaza V”); and

 
H.  
Present and future rights to condemnation awards, insurance proceeds or other
proceeds at any time payable to or received by Mortgagor on account of the
Property or any of the foregoing personal property.

 
All personal property hereinabove described is hereinafter collectively referred
to as the “Personal Property”.
 
If any of the Property is of a nature that a security interest therein can be
perfected under the Uniform Commercial Code, this Mortgage shall constitute a
security agreement and financing statement if permitted by applicable law and
Mortgagor authorizes Mortgagee to file a financing statement describing such
Property and, at Mortgagee’s request, agrees to join with Mortgagee in the
execution of any financing statements and to execute any other instruments that
may be necessary or desirable, in Mortgagee’s determination, for the perfection
or renewal of such security interest under the Uniform Commercial Code.
 
 
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TO HAVE AND TO HOLD the same unto Mortgagee for the purpose of securing:
 
(a) Payment to the order of Northwestern Mutual of the indebtedness evidenced by
a promissory note of even date herewith (and any restatement, extension or
renewal thereof and any amendment thereto) executed by Mortgagor for the
principal sum of ONE HUNDRED TWENTY MILLION DOLLARS, with final maturity no
later than November 1, 2018 and with interest as therein expressed (which
promissory note, as such instrument may be amended, restated, renewed and
extended, is hereinafter referred to as the “Northwestern Note”); and
 
(b) Payment to the order of New York Life of the indebtedness evidenced by a
promissory note of even date herewith (and any restatement, extension or renewal
thereof and any amendment thereto) executed by Mortgagor for the principal sum
of ONE HUNDRED TWENTY MILLION DOLLARS, with final maturity no later than
November 1, 2018 and with interest as therein expressed (which promissory note,
as such instrument may be amended, restated, renewed and extended, is
hereinafter referred to as the “NYL Note”; the Northwestern Note and the NYL
Note are together referred to as the “Notes”); and
 
(c) Payment of all sums that may become due Mortgagee under the provisions of,
and the performance of each agreement of Mortgagor contained in, the Loan
Documents.
 
“Loan Documents” means this Mortgage, the Notes, that certain Loan Application
dated as of August 5, 2008 from Mortgagor to Mortgagee and that certain
acceptance letter issued by Mortgagee dated September 24, 2008 (together, the
“Commitment”), that certain Absolute Assignment of Leases and Rents of even date
herewith between Mortgagor and Mortgagee (the “Absolute Assignment”), that
certain Certification of Borrowers of even date herewith, that certain Limited
Liability Company Supplement and that certain Limited Partnership Supplement
each dated contemporaneously herewith, any other supplements and authorizations
required by Mortgagee and all other agreements entered into or documents
executed by Mortgagor and delivered to Mortgagee in connection with the
indebtedness evidenced by the Notes, except for that certain Environmental
Indemnity Agreement of even date herewith given by Mortgagor and Mack-Cali
Realty, L.P., a Delaware limited partnership (the “Principal”) to Mortgagee (the
“Environmental Indemnity Agreement”), as any of the foregoing may be amended
from time to time.
 
 
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TO PROTECT THE SECURITY OF THIS MORTGAGE, MORTGAGOR COVENANTS AND AGREES:
 
Payment of Debt.  Mortgagor agrees to pay the indebtedness hereby secured (the
“Indebtedness”) promptly and in full compliance with the terms of the Loan
Documents.
 
Ownership.
 
Ground Lessor represents that: (i) subject to the Ground Lease, it owns the
portion of the Property described in Paragraph A, clause (i) and Paragraph B,
above; and (ii) pursuant to the Ground Lease, it holds a reversionary interest
in the portion of the Property described in Paragraph C, above.
 
Ground Lessee represents that, pursuant to the Ground Lease, it owns: (i) a
leasehold interest in the portion of the Property described in Paragraph A,
clauses (i) and (ii) and Paragraph B, above; and (ii) the Property described in
Paragraph C, above, and it has leased the Property to Plaza V Leasing pursuant
to the Master Lease.
 
Plaza V Leasing represents that, pursuant to the Master Lease, it owns: (i) a
subleasehold interest in the portion of the Property described in Paragraph A,
clauses (i) and (iii) and Paragraphs B and C, above; and (ii) the portion of the
Property described in Paragraph D, above.
 
Each Mortgagor represents that it has good and lawful right to convey its
respective interest in the Property and that its respective interest in the
Property is free and clear from any and all encumbrances whatsoever, except as
appears in the title insurance commitment received by Mortgagee on the date
hereof (the “Title Commitment”).  Each Mortgagor does hereby forever warrant and
shall forever defend the title and possession thereof against the claims of any
and all persons whomsoever, except such rights, interests and claims as appear
in the Title Commitment.
 
Ground Lessor and Ground Lessee each represent and covenant to Mortgagee that:
 
(a)  
Ground Lessor and Ground Lessee have each approved the Indebtedness represented
by the Notes;

 
(b)  
Default under the Ground Lease by any party thereto may result in foreclosure by
Mortgagee of Ground Lessor’s interest in the Property;

 
(c)  
The terms of the Ground Lease will be subordinate to the terms of this Mortgage,
with any conflict resolved in favor of this Mortgage, and all rent and other
payments due Ground Lessor under the Ground Lease shall be deferred as necessary
to ensure that income from the Property after payment of all expenses is
sufficient to first pay in full all amounts payable under the Loan Documents and
all operating costs of the Property;

 
 
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(d)  
Ground Lessor and Ground Lessee will fully perform their respective obligations
under the Ground Lease;

 
(e)  
The Ground Lease is in full force and effect and has not been amended, except as
included within the defined term “Ground Lease” and as may have been disclosed
to Mortgagee in writing prior to the date hereof and approved by Mortgagee, and
there are no defaults, claims or offsets thereunder nor any matters that may
ripen into a default, claim or offset by any party thereto, except as may have
been disclosed to Mortgagee in writing prior to the date hereof and reasonably
approved by Mortgagee;

 
(f)  
Any default by Ground Lessor or Ground Lessee under the Ground Lease shall
constitute a default under this Mortgage;

 
(g)  
Simultaneously with serving a default or other notice upon the other, Ground
Lessor and/or Ground Lessee shall serve a copy of such notice upon Mortgagee;

 
(h)  
Mortgagee shall have the right (but not the obligation) to cure any default by
Ground Lessor or Ground Lessee within the applicable time for cure set forth in
the Ground Lease, plus a reasonable period of time thereafter;

 
(i)  
Neither Ground Lessor nor Ground Lessee shall take any action to cause or permit
the termination or modification of the Ground Lease or the merger of the fee
interest and the leasehold interest in the Property, and no agreement modifying,
cancelling or surrendering the Ground Lease shall be effective, in each case,
without Mortgagee’s prior written consent, and any purported termination,
modification, amendment, cancellation, surrender or merger without Mortgagee’s
consent shall be void and constitute a default under this Mortgage; provided,
however, that Mortgagee shall not unreasonably withhold, delay or condition its
consent; and

 
(j)  
In the event of termination of the Ground Lease by process of law prior to the
expiration of its term, Ground Lessor shall, at Mortgagee’s option and request,
enter into a new lease with Mortgagee (or such party designated by Mortgagee)
for the remainder of the term of the Ground Lease at the rent and with all the
agreements, terms, covenants and conditions thereof, including any applicable
rights of renewal.

 
 
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Notwithstanding anything to the contrary set forth above, Ground Lessor and
Ground Lessee may terminate the Ground Lease, without the consent of Mortgagee,
after the expiration or earlier termination of that certain Financial Agreement
dated June 2, 1999 by and between Ground Lessee and the City of Jersey City, as
amended by that certain Amendment to Financial Agreement effective as of
December 1, 2000 (together, the “Financial Agreement”).
 
Notwithstanding anything to the contrary contained in this Mortgage, Mortgagor
shall have the right to terminate the Financial Agreement, without the consent
of Mortgagee, but in such event, Mortgagor shall indemnify and hold Mortgagee
harmless from and against any actual damages sustained by Mortgagee after an
Event of Default as a result of such termination (which may include pre-Event of
Default real estate taxes in excess of the Annual Service Charge) (as such term
is defined in the Financial Agreement).
 
 
Master Lessor and Master Lessee each represent and covenant to Mortgagee that:

 
(a)  
Master Lessor and Master Lessee have each approved the Indebtedness represented
by the Notes;

 
(b)  
Default under the Master Lease or the Ground Lease by any party thereto may
result in foreclosure by Mortgagee of Master Lessor’s interest in the Property;

 
(c)  
The terms of the Master Lease will be subordinate to the terms of this Mortgage,
with any conflict resolved in favor of this Mortgage, and all rent and other
payments due Master Lessor under the Master Lease shall be deferred during any
period that the Property’s income is insufficient to first pay in full all
amounts payable under the Loan Documents and all operating costs of the
Property;

 
(d)  
Master Lessor and Master Lessee will fully perform their respective obligations
under the Master Lease;

 
(e)  
The Master Lease is in full force and effect and has not been amended, except as
may have been disclosed to Mortgagee in writing prior to the date hereof and
approved by Mortgagee, and there are no defaults, claims or offsets thereunder
nor any matters that may ripen into a default, claim or offset by any party
thereto, except as may have been disclosed to Mortgagee in writing prior to the
date hereof and reasonably approved by Mortgagee;

 
 
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(f)  
Any default by Master Lessor or Master Lessee under the Master Lease shall
constitute a default under this Mortgage;

 
(g)  
Simultaneously with serving a default or other notice upon the other, Master
Lessor and/or Master Lessee shall serve a copy of such notice upon Mortgagee;

 
(h)  
Mortgagee shall have the right (but not the obligation) to cure any default by
Master Lessor or Master Lessee within the applicable time for cure set forth in
the Master Lease, plus a reasonable period of time thereafter;

 
(i)  
Neither Master Lessor nor Master Lessee shall take any action to cause or permit
the termination or modification of the Master Lease or the merger of the Master
Lessor’s and Master Lessee’s interest in the Property created by the Master
Lease, and no agreement modifying, cancelling or surrendering the Master Lease
shall be effective, in each case, without Mortgagee’s prior written consent, and
any purported termination, modification, amendment, cancellation, surrender or
merger without Mortgagee’s prior consent shall be void and constitute a default
under this Mortgage; provided, however, that Mortgagee shall not unreasonably
withhold, condition or delay its consent; and

 
(j)  
In the event of termination of the Master Lease by process of law prior to the
expiration of its term, Master Lessor shall, at Mortgagee’s option and request,
enter into a new lease with Mortgagee (or such party designated by Mortgagee)
for the remainder of the term of the Master Lease at the rent and with all the
agreements, terms, covenants and conditions thereof, including any applicable
rights of renewal.

 
Notwithstanding anything to the contrary set forth above, Master Lessor and
Master Lessee may terminate the Master Lease, without the consent of Mortgagee,
after the expiration or earlier termination of the Financial Agreement.
 
Maintenance of Property and Compliance with Laws.  Mortgagor agrees to keep the
buildings and other improvements now or hereafter erected on the Land in good
condition and repair; not to commit or suffer any waste; to comply with all
laws, rules and regulations affecting the Property; and to permit Mortgagee to
enter at all reasonable times for the purpose of inspection and of conducting,
in a reasonable and proper manner, at its sole cost and expense except as may be
otherwise set forth in the Loan Documents, such tests as Mortgagee reasonably
determines to be necessary in order to monitor Mortgagor’s compliance with
applicable laws and regulations regarding hazardous materials affecting the
Property.  Notwithstanding the foregoing however, if, and for so long as,
Mortgagor is not in default pursuant to any of the Loan Documents, Mortgagor
shall have the right, at its sole cost and expense, after prior written notice
to Mortgagee, to contest, by appropriate legal proceedings, diligently conducted
in good faith and without cost or expense to Mortgagee, the validity or
application of any rule or regulation as same may apply to or affect Mortgagor
or the Property, subject to the following: (i) funds sufficient to satisfy the
contested rule or regulation (including the applicable penalty or fine) have
been deposited in an escrow or other reserve or a guaranty satisfactory to
Mortgagee shall be established; (ii) such contest shall not subject Mortgagee or
Mortgagor to any civil or criminal liability; (iii) by the terms of any such
rule or regulation, compliance therewith pending the prosecution of any such
legal proceedings may legally be delayed without incurring (or increasing the
risk of incurring) any damage or injury of any kind to the Property or any
person or property and without incurring any lien or charge of any kind against
the Property or any fine or penalty against Mortgagor (excepting the fine or
penalty which is the subject of the contest); and (iv) such contest shall not
cause a breach of any of the terms, conditions or covenants of any leases at the
Property or other agreement on Mortgagor’s part to be performed.  In the event
of such an ongoing contest in accordance with the foregoing conditions, the
failure to comply with the law, rule or regulation being contested shall not
constitute a default under this Mortgage.
 
 
 
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Business Restriction Representation and Warranty.  Mortgagor represents and
warrants that each Mortgagor, all persons and entities owning (directly or
indirectly) an ownership interest in each Mortgagor (other than shareholders of
Mack-Cali Realty Corporation, a Maryland corporation), all guarantors of all or
any portion of the Indebtedness, and all persons and entities executing any
separate indemnity agreement in favor of Mortgagee in connection with the
Indebtedness: (i) is not, and shall not become, a person or entity with whom
Mortgagee is restricted from doing business with under regulations of the Office
of Foreign Assets Control (“OFAC”) of the Department of the Treasury (including,
but not limited to, those named on OFAC’s Specially Designated Nationals and
Blocked Persons list) or under any statute, executive order (including, but not
limited to, the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action; (ii) is not, and shall not become, a
person or entity with whom Mortgagee is restricted from doing business with
under the International Money Laundering Abatement and Financial Anti-Terrorism
Act of 2001 or the regulations or orders thereunder; and (iii) is not knowingly
engaged in, and shall not knowingly engage in, any dealings or transaction or be
otherwise associated with such persons or entities described in (i) and (ii),
above.
 
ERISA.
 
 
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(a) Neither Mortgagor nor any entity that holds a direct or indirect interest in
Mortgagor (a “Constituent Entity”) is or shall be (i) an employee benefit plan
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974 (“ERISA”) regardless of whether such plan is actually subject to
ERISA, (ii) a plan to which Internal Revenue Code Section 4975 applies, or (iii)
an entity the underlying assets of which include ERISA “plan assets” by reason
of a plan’s investment in the entity (e.g., insurance company general or
separate account; bank commingled fund).
 
(b) Transactions by or with Mortgagor are not and will not be subject to any
legal requirements regulating investments of and fiduciary obligations with
respect to an employee benefit plan (within the meaning of Section 3(3) of
ERISA), regardless of whether such plan is actually subject to ERISA.
 
(c) Any liability or obligation that Mortgagor (or any Constituent Entity) may
have in respect of an employee benefit plan as defined in Section 3(3) of ERISA,
regardless of whether such plan is actually subject to ERISA, has been and shall
continue to be satisfied in full.
 
Insurance.  Mortgagor agrees to keep the Property insured for the protection of
Mortgagee and Mortgagee’s wholly owned subsidiaries and agents in such manner,
in such amounts and in such companies as Mortgagee may from time to time
approve, and to keep the policies therefor, properly endorsed, on deposit with
Mortgagee, or at Mortgagee’s option, to keep certificates of insurance (Acord 28
(2003/10) for all property insurance and Acord 25 for all liability insurance)
evidencing all insurance coverages required hereunder on deposit with Mortgagee,
which certificates shall provide at least thirty (30) days notice of
cancellation to Mortgagee and shall list Mortgagee as the certificate holder
with Mortgagee’s correct mailing address and the Loan number(s) assigned to the
Indebtedness.  If Mortgagor requests Mortgagee to accept a different form of
insurance certificate, Mortgagee shall not unreasonably withhold its consent to
the provision of such different form of insurance certificate provided a copy of
a standard mortgagee endorsement in favor of Mortgagee stating that the insurer
shall provide Mortgagee with thirty (30) days notice of cancellation accompanies
such certificate.  Insurance loss proceeds from all property insurance policies,
whether or not required by Mortgagee (less expenses of collection) shall, at
Mortgagee’s option, be applied on the Indebtedness, whether due or not, or to
the restoration of the Property, but such application shall not cure or waive
any default under any of the Loan Documents.  If Mortgagee elects to apply the
insurance loss proceeds on the Indebtedness, no prepayment fee shall be due
thereon.
 
Notwithstanding the foregoing provision, Mortgagee agrees that: (i) if the
insurance loss proceeds do not exceed $2,000,000, such proceeds shall be paid to
Mortgagor and shall be used by Mortgagor to restore the Property substantially
to its condition prior to the casualty; and (ii) if the insurance loss proceeds
exceed $2,000,000 but are less than the unpaid principal balance of the Notes
and if the casualty occurs prior to the last two (2) years of the term of the
Notes, then the insurance loss proceeds (less reasonable expenses of collection)
shall be applied to restoration of the Property substantially to its condition
prior to the casualty, subject to satisfaction of the following conditions:
 
 
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(a)  
There is no existing Event of Default at the time of the casualty.

 
(b)  
The casualty insurer has not denied liability for payment of insurance loss
proceeds to Mortgagor as a result of any act, neglect, use or occupancy of the
Property by Mortgagor or any tenant of the Property.

 
(c)  
Mortgagee shall be satisfied that all insurance loss proceeds so held, together
with supplemental funds to be made available by Mortgagor, shall be sufficient
to complete the restoration of the Property.  Any remaining insurance loss
proceeds shall be released to Mortgagor.

 
(d)  
If required by Mortgagee, Mortgagee shall be furnished a satisfactory report
addressed to Mortgagee from an environmental engineer or other qualified
professional satisfactory to Mortgagee to the effect that no adverse
environmental impact to the Property resulted from the casualty.

 
(e)  
Mortgagee shall hold the proceeds in an escrow account earning a competitive
rate of interest for the benefit of Mortgagor.  In such event, Mortgagee shall
release casualty insurance proceeds once per month as restoration of the
Property progresses provided that Mortgagee is furnished satisfactory evidence
of the costs of restoration and if, at the time of such release, there shall
exist no Monetary Default (as hereinafter defined) under the Loan Documents and
no Non-Monetary Default with respect to which Mortgagee shall have given
Mortgagor notice pursuant to the Notice of Default provision herein.  If a
Monetary Default shall occur or Mortgagee shall give Mortgagor notice of a
Non-Monetary Default pursuant to the Notice of Default provision hereof,
Mortgagee shall have no further obligation to release insurance loss proceeds
hereunder unless such default is cured within the cure period set forth in the
Notice of Default provision contained herein.  The drawings and specifications
for the restoration shall be approved by Mortgagee in writing prior to
commencement of the restoration and Mortgagee shall receive an administration
fee equal to one percent (1%) of the insurance proceeds to be disbursed by
Mortgagee but not to exceed $25,000.  Mortgagee shall not unreasonably withhold,
delay or condition its approval of the drawings and specifications for the
restoration.

 
(f)  
Prior to each release of funds, Mortgagor shall obtain for the benefit of
Mortgagee an endorsement to Mortgagee’s title insurance policy insuring
Mortgagee’s lien as a first and valid lien on the Property subject only to liens
and encumbrances theretofore approved by Mortgagee or permitted, pursuant to the
Loan Documents, to be entered into by Mortgagor without Mortgagee’s consent.

 
 
 
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(g)  
Mortgagor shall pay all reasonable, third party out-of-pocket costs and expenses
incurred by Mortgagee, including, but not limited to, outside legal fees, title
insurance costs, third-party disbursement fees, third-party engineering reports
and inspections deemed necessary by Mortgagee.

 
(h)  
All reciprocal easement and operating agreements benefiting the Property, if
any, shall remain in full force and effect between the parties thereto on and
after restoration of the Property.

 
(i)  
Mortgagee shall be satisfied that Projected Debt Service Coverage of at least
1.25 will be produced from then-existing leases at the Property (which are not
subject to termination by the tenant as a result of the casualty either by the
terms of the lease or pursuant to a waiver of such right executed by the tenant)
and any new leases reasonably satisfactory to Mortgagee for terms of at least
five (5) years to commence not later than thirty (30) days following completion
of such restoration (such existing leases not subject to termination, together
with such new leases, the “Approved Leases”).

 
“Projected Debt Service Coverage” means a number calculated by dividing
Projected Operating Income Available for Debt Service for the first fiscal year
following restoration of the Property by the debt service during the same fiscal
year under all indebtedness secured by any portion of the Property.  For
purposes of the preceding sentence, “debt service” means the greater of (x) debt
service due under all such indebtedness during the first fiscal year following
completion of the restoration of the Property or (y) debt service that would be
due and payable during such fiscal year if all such indebtedness were amortized
over thirty (30) years (whether or not amortization is actually required) and if
interest on such indebtedness were due as it accrues at the face rate shown on
the notes therefor (whether or not such loans require interest payments based on
such face rates).
 
“Projected Operating Income Available for Debt Service” means projected gross
annual rent from the Approved Leases for the first full fiscal year following
completion of the restoration of the Property less:
 
(A)  
The operating expenses of the Property for the last fiscal year preceding the
casualty and

 
(B)  
The following:

 
 
 
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(i)  
a replacement reserve for future tenant improvements, leasing commissions and
structural items based on not less than $2.11 per square foot per annum;

 
(ii)  
the amount, if any, by which actual gross income during such fiscal period
exceeds that which would be earned from the rental of 94% of the gross leaseable
area in the Property;

 
(iii)  
the amount, if any, by which the actual management fee is less than 3% of gross
revenue during such fiscal period;

 
(iv)  
the amount, if any, by which the actual real estate taxes or payments in lieu of
taxes (“PILOT”) are less than $3.25 per square foot per annum; and

 
(v)  
the amount, if any, by which total operating expenses, excluding management
fees, real estate taxes and replacement reserves, are less than $10.24 per
square foot per annum.

 
All projections referenced above shall be calculated in a manner reasonably
satisfactory to Mortgagee.
 
If (i) the casualty occurs during the last two years of the term of the Notes,
and the insurance loss proceeds exceed $2,000,000, or (ii) any of the foregoing
conditions to the obligation of Mortgagee to make the insurance proceeds
available for restoration have not been satisfied, and, in either such event,
Mortgagee elects to apply the proceeds toward prepayment of the Notes, then
Mortgagor shall have the right to prepay the entire loan secured by this
Mortgage without paying a prepayment fee.
 
Condemnation.  Mortgagor hereby assigns to Mortgagee (i) any award and any other
proceeds resulting from damage to, or the taking of, all or any portion of the
Property, and (ii) the proceeds from any sale or transfer in lieu thereof
(collectively, “Condemnation Proceeds”) in connection with condemnation
proceedings or the exercise of any power of eminent domain or the threat thereof
(hereinafter, a “Taking”); if the Condemnation Proceeds are less than the unpaid
principal balance of the Notes and such damage or Taking occurs prior to the
last two years of the term of the Notes, such Condemnation Proceeds (less
expenses of collection) shall be applied to restoration of the Property to its
condition, or the functional equivalent of its condition prior to the Taking,
subject to the conditions set forth above in the section entitled “Insurance”
and subject to the further condition that restoration or replacement of the
improvements on the Land to their functional and economic utility prior to the
Taking be possible.  Any portion of such award and proceeds not applied to
restoration shall, at Mortgagee’s option, be applied on the Indebtedness,
whether due or not, or be released to Mortgagor, but such application or release
shall not cure or waive any default under any of the Loan Documents.
 
 
 
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Taxes and Special Assessments.  Mortgagor agrees to pay before delinquency all
taxes, special assessments and PILOT of any kind that have been or may be levied
or assessed against the Property, this Mortgage, the Notes or the Indebtedness,
or upon the interest of Mortgagee in the Property, this Mortgage, the Notes or
the Indebtedness, and to procure and deliver to Mortgagee within 30 days after
Mortgagee shall have given a written request to Mortgagor, the official receipt
of the proper officer showing timely payment of all such taxes, assessments
and/or PILOT; provided, however, that Mortgagor shall not be required to pay any
such taxes, special assessments and/or PILOT if the amount, applicability or
validity thereof shall currently be contested in good faith by appropriate
proceedings and funds sufficient to satisfy the contested amount have been
deposited in an escrow or other reserve or a guaranty satisfactory to Mortgagee
shall be established; and provided further that no escrow, reserve or additional
guaranty shall be required in connection with a contest involving the matters
set forth on Schedule 1 of the Commitment.
 
Personal Property.  With respect to the Personal Property, Mortgagor hereby
represents, warrants and covenants as follows:
 
(a) Except for the security interest granted hereby, Mortgagor is, and as to
portions of the Personal Property to be acquired after the date hereof will be,
the sole owner of the Personal Property, free from any other lien, security
interest, encumbrance or adverse claim thereon of any kind
whatsoever.  Mortgagor shall notify Mortgagee of, and shall indemnify and defend
Mortgagee and the Personal Property against, all claims and demands of all
persons at any time claiming the Personal Property or any part thereof or any
interest therein.
 
(b) Mortgagor agrees not to sell, transfer, assign, convey, lease or remove
Personal Property now or hereafter located on the Land without the prior written
consent from Mortgagee unless (i) such action does not constitute a sale or
removal of any buildings or structures or the sale or transfer of waters or
water rights, and (ii) such action results in the substitution or replacement of
such Personal Property with similar items of equivalent value.
 
(c) Ground Lessor is a limited liability company organized under the laws of the
State of New Jersey; Ground Lessee is a limited partnership organized under the
laws of the State of New Jersey; and Master Lessee is a limited liability
company organized under the laws of the State of New Jersey.  Until the
Indebtedness is paid in full, each Mortgagor shall: (i) not change its legal
name without providing Mortgagee with at least fifteen (15) business days prior
written notice; (ii) not change its state of organization without providing
Mortgagee with at least fifteen (15) business days prior written notice; and
(iii) preserve its existence and shall not, in one transaction or a series of
transactions, merge into or consolidate with any other entity, unless permitted
under the section hereof entitled “Prohibition on Transfer/One-Time
Transfer”.  In the event that any Mortgagor shall elect to change its legal name
and/or change its state of organization, such Mortgagor shall first provide a
Uniform Commercial Code search(es) of such new legal name and/or new state of
organization, which shall be satisfactory in all respects to
Mortgagee.  Mortgagor shall then promptly and duly execute and deliver any and
all such further instruments and documents and take such further action as
Mortgagee may reasonably deem necessary or desirable to obtain the full benefits
of this Mortgage with respect to the Personal Property including, without
limitation, delivering and causing to be filed new financing statements under
the Uniform Commercial Code with respect to the security interests granted
hereby and such supplemental instruments, documents and agreements as Mortgagee
shall require for the purpose of confirming and perfecting, and continuing the
perfection of, Mortgagee’s security interest in any or all of the Personal
Property.
 
 
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(d) At the request of Mortgagee, Mortgagor shall join Mortgagee in executing one
or more financing statements and continuations and amendments thereof pursuant
to the Uniform Commercial Code in form satisfactory to Mortgagee, and Mortgagor
shall pay the cost of filing the same in all public offices wherever filing is
deemed by Mortgagee to be necessary or desirable.  Mortgagor shall also, at
Mortgagor’s expense, take any and all other action requested by Mortgagee to
perfect Mortgagee’s security interest under the Uniform Commercial Code with
respect to the Personal Property including, without limitation, exercising
Mortgagor’s commercially reasonable efforts to obtain any consents, agreements
or acknowledgments required of third parties to perfect Mortgagee’s security
interest in Personal Property consisting of deposit accounts, letter-of-credit
rights, investment property and electronic chattel paper.
 
Other Liens.  Mortgagor agrees to keep the Property and any Personal Property
free from all other liens either prior or subsequent to the lien created by this
Mortgage.  The: (i) creation of any other lien on any portion of the Property or
on any Personal Property, whether or not prior to the lien created hereby; (ii)
assignment or pledge by Mortgagor of its revocable license to collect, use and
enjoy rents and profits from the Property; or (iii) granting or permitting of a
security interest in or other lien on the direct or indirect ownership interests
in Mortgagor, shall constitute a default under the terms of this Mortgage;
except that upon written notice to Mortgagee, Mortgagor may, without the
existence of such lien constituting a default under this Mortgage, proceed to
contest in good faith and by appropriate proceedings any mechanics’ liens, tax
liens or judgment liens with respect to the Property or any Personal Property
described herein, provided funds sufficient to satisfy the contested amount have
been deposited in an escrow or other reserve satisfactory to Mortgagee or, in
the case of a mechanics’ lien, Mortgagor shall have furnished a bond or other
security or indemnity as Mortgagee may request insuring Mortgagee against all
loss, damage or expense (including the cost of defense) arising from such
mechanics’ lien.
 
Environmental.
 
 
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A. Definitions.  As used in this Mortgage, the following terms shall have the
following meanings:
 
(a) Environment: Ambient air, surface water, building interior, groundwater,
surface or subsurface soil or other geologic media, sediment and all plants and
wildlife present therein or thereon.
 
(b) Environmental Conditions: Any environmental contamination or pollution or
threatened contamination or pollution of, or the Release or threatened Release
of Hazardous Substances into, the Environment.
 
(c) Environmental Documents: Any and all documents including, without
limitation, all reports, work plans, proposals, data, audits, evaluations,
analyses, correspondence and sampling results, concerning environmental matters
of any kind or nature whatsoever respecting the Property including, without
limitation, Environmental Conditions on, at, under or emanating from the
Property (i) received by the Mortgagor from or submitted by the Mortgagor to any
Governmental Authority, or (ii) otherwise in the possession, custody or control
of the Mortgagor.
 
(d) Environmental Laws: Any and all federal, state, regional and local laws,
statutes, ordinances, common law, regulations, rules, guidance, codes, consent
decrees, judicial or administrative orders or decrees, directives or judgments
relating to pollution, damage to or protection of the Environment, Environmental
Conditions, or the use, handling, processing, distribution, generation,
treatment, storage, disposal, manufacture or transport of Hazardous Substances
at or with respect to the Property, presently in effect or hereafter amended,
modified or adopted from time-to-time during the term hereof including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act (“CERCLA” or the “Federal Superfund Act”), as amended by the Superfund
Amendments and Reauthorization Act of 1986 (“SARA”) (42 U.S.C. § 9601-9675); the
Resource Conservation and Recovery Act of 1976, as amended (“RCRA”) (42 U.S.C. §
6901, et seq.); the Clean Water Act, as amended (33 U.S.C. § 1251, et seq.); the
Clean Air Act, as amended (42 U.S.C. § 7401, et seq.); the Federal Insecticide,
Fungicide and Rodenticide Act, as amended (“FIFRA”) (7 U.S.C. § 136, et seq.);
the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801,
et seq.); the Toxic Substances Control Act (15 U.S.C. 2601, et seq.); the New
Jersey Spill Compensation and Control Act, as amended (the “Spill Act”) (N.J.S.
58:10-23.11, et seq.); the Industrial Site Recovery Act, as amended (“ISRA”)
(N.J.S. 13:1K-6, et seq.); the New Jersey Solid Waste Management Act, as amended
(N.J.S. 13:1E-1, et seq.); the New Jersey Underground Storage of Hazardous
Substances Act (“New Jersey UST Act”), as amended (N.J.S. 58:10A-21, et seq.);
the New Jersey Water Pollution Control Act, as amended (N.J.S. 58:10A-1, et
seq.); the New Jersey Air Pollution Control Act (N.J.S. 26:2C-1, et seq.); the
Safe Drinking Water Act (33 U.S.C. 1251, et seq.); the New Jersey Worker and
Community Right to Know Act (N.J.S. 34:5A-1, et seq.); the New Jersey Toxic
Catastrophe Prevention Act (N.J.S. 13:1-19, et seq.); the New Jersey
Environmental Rights Act (N.J.S. 2A:35A-1, et seq.); and the rules and
regulations promulgated thereunder.
 
 
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(e) Environmental Engineer’s Report: That certain Environmental Site Assessment
prepared by Pennoni Associates Inc., dated September 29, 2008.
 
(f) Governmental Authority: Any nation or government, any state, city, locality,
municipality or political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any government authority, agency, department, board,
commission or instrumentality, including, without limitation, the United States
Environmental Protection Agency (“USEPA”), the New Jersey Department of
Environmental Protection (“NJDEP”) and all other federal, state, regional,
county or local government authorities authorized or having jurisdiction to
enforce Environmental Laws.
 
(g) Hazardous Substances: Any substance, material or waste, whether liquid,
gaseous or solid, and any pollutant or contaminant, that is toxic, hazardous,
explosive, corrosive, infectious or radioactive, or that is defined, listed or
regulated under any Environmental Laws including, without limitation, petroleum,
polychlorinated biphenyls, urea formaldehyde and asbestos and asbestos
containing materials.
 
(h) Losses: All actions, suits, claims, liabilities, losses, damages, penalties,
fines, fees, costs and expenses, including, without limitation, sampling,
monitoring and remediation costs, natural resource damages, damages on account
of personal injuries, death or property damages, attorneys’, consultants’ and
engineering fees and disbursements, costs of defense and interest.
 
(i) Regulatory Actions: Any claim, demand, action or proceeding initiated by a
third party, including without limitation, any Governmental Authority, under
Environmental Laws, with respect to Losses allegedly arising from the ownership,
use, operation, management or control of the Property or the acts or omissions
of Mortgagor.
 
(j) Release: The intentional or unintentional spilling, leaking, disposing,
discharging, emitting, depositing, injecting, leaching, escaping, release or
threatened release, burial, pumping, pouring, emptying or dumping into the
Environment.
 
(k) Remediation: All (i) investigations of Environmental Conditions of any kind
or nature whatsoever, including site assessments, site investigations, remedial
investigations, soil, groundwater, surface water, sediment sampling or
monitoring, or (ii) actions of any kind or nature whatsoever taken to remove,
abate or remediate Environmental Conditions, including the use, implementation,
application, installation, operation or maintenance of removal actions, in-situ
or ex-situ remediation technologies applied to surface or subsurface soils,
encapsulation or stabilization of soils, excavation and off-site treatment or
disposal of soils, systems for recovery and/or treatment of groundwater or free
product, Engineering Controls or Institutional Controls (as such terms are
defined under N.J.S. 58:10B-1, et seq.).
 
 
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(l) Third-Party Claims: Any notice, notification, demand, directive, citation,
summons, order, complaint or assessment issued by any third party, including but
not limited to a Governmental Authority, relating Environmental Conditions at or
affecting the Property.
 
B. Representations and Warranties.  Mortgagor represents and warrants to the
best of its knowledge, as of the date hereof that, except as disclosed in the
Environmental Engineer’s Report and the Environmental Documents delivered by
Mortgagor to Mortgagee prior to the date hereof (such Environmental Documents
consist of the following: (1) Phase I Environmental Site Assessment dated
October 15, 1996 prepared by Environmental Waste Management Associates, Inc.;
(2) Remedial Investigation Report dated August 16, 1999 prepared by
Environmental Waste Management Associates, LLC [“EWMA”]; (3) Deed Notice made by
M-C Plaza V L.L.C. dated February 20, 2007 and recorded June 26, 2007; (4) No
Further Action Letter and Covenant Not to Sue dated September 17, 2008 issued by
the NJDEP; and (5) Letter dated October 23, 2008 from EWMA to M-C Plaza V L.L.C.
including Operations and Maintenance Plan prepared by EWMA for Engineering
Controls at Harborside Financial Center, Plaza V, and associated Health and
Safety Plan prepared by Phase Associates, LLC) (collectively, the “Existing
Environmental Documents”):
 
(a) No part of the Property was ever used, nor is it being used now, as a
landfill, dump or other disposal, storage or treatment area for Hazardous
Substances or as a gasoline service station or a facility with its primary
operations involving the selling, dispensing, storing, transferring or handling
of petroleum and/or petroleum products;
 
(b) (i) There are not now nor has there ever been located on the Property or in
the buildings at the Property any (1) underground storage tanks, above ground
storage tanks or any other vessels or areas used or intended for the treatment,
storage or disposal of Hazardous Substances, or (2) urea formaldehyde materials,
asbestos, asbestos-containing materials, polychlorinated biphenyls (PCBs) or
nuclear fuels or wastes; and (ii) Except for such substances in such amounts
that are customary for routine cleaning, maintenance, repair and operation of an
office building, office space and typical office equipment, which substances
shall be stored, used and disposed of in accordance with all Environmental Laws,
neither Mortgagor nor any other occupant of the Property has transported for
storage, treatment or disposal by contract, agreement or otherwise, or arranged
for the transportation, storage, treatment or disposal, of any Hazardous
Substance at or to any location including, without limitation, any location used
for the treatment, storage or disposal of Hazardous Substances;
 
(c) There are no Environmental Conditions or other facts, circumstances or
activities including, without limitation, the Release of Hazardous Substances,
arising out of or relating to the use, operation or occupancy of the Property
that result or reasonably could be expected to result in: (i) any obligation of
Mortgagor to file any report or notice or to conduct any Remediation, whether
on-site or off-site; or (ii) liability, either to a Governmental Authority or
third parties, for Losses;
 
 
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(d) Mortgagor’s use, if any, and/or disposal, if any, of Hazardous Substances on
the Property and/or disposal elsewhere, if any, of Hazardous Substances
generated on or from the Property, is now and at all times has been in
compliance with all applicable Environmental Laws;
 
(e) The Property and the use and operation thereof are currently, and at all
times during Mortgagor’s occupancy, operation or control of the Property have
been, in compliance with all applicable Environmental Laws;
 
(f) Mortgagor has not received any notice that Mortgagor or the Property: (i) is
in violation of the requirements of any Environmental Laws; (ii) is the subject
of any Regulatory Action or Third Party Claim; or (iii) has actual or potential
liability under Environmental Laws including, without limitation, CERCLA, RCRA,
the Spill Act or any comparable Environmental Laws;
 
(g) Mortgagor has not transported or arranged for the transportation of any
Hazardous Substances from the Property to any location which is: (i) listed on
the National Priorities List under CERCLA; (ii) listed for possible inclusion on
the National Priorities List by the USEPA under CERCLA or on any similar state
list; or (iii) the subject of any Regulatory Action which may lead to any Third
Party Claims against the Mortgagee for Remediation or other Losses;
 
(h) Mortgagor has not received and is not in possession of any Environmental
Documents which have not been made reasonably available by Mortgagor to
Mortgagee;
 
(i) The Property has not been used at any time nor is it now being used as a
“Major Facility”, as such term is defined in N.J.S. 58:10-23.11b.  Mortgagor
will not use or permit the use of the Property in the future as a “Major
Facility”;
 
(j) No Governmental Authority has obtained or asserted an encumbrance or lien
upon any revenues or any real or personal property owned by Mortgagor including,
but not limited to, the Property, as a result of any Release, use or Remediation
of any Hazardous Substances for which Mortgagor is legally responsible, nor has
any such Release, use or Remediation occurred which could result in the
assertion or creation of such a lien or encumbrance; and
 
(k) None of the operations conducted at the Property at any time during
Mortgagor’s ownership of such Property has constituted an “industrial
establishment”, as such term is defined under ISRA.
 
 
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C. Covenants.
 
(a) Mortgagor will not permit or conduct on the Property: (i) the disposal of
any Hazardous Substances; and (ii) the generation, treatment, manufacture, use,
handling or storage of any Hazardous Substances, except as may be disclosed in
the Environmental Engineer’s Report and the Existing Environmental Documents
(which substances shall be generated, treated, manufactured, used, handled
and/or stored in accordance with Environmental Laws), and except for such
substances in such amounts that are customary for routine cleaning, maintenance,
repair and operation of an office building, office space and typical office
equipment, which substances shall be stored, used and disposed of in accordance
with all Environmental Laws.  Without in any way limiting the generality of the
foregoing, Mortgagor shall not permit (y) any dry cleaning operations on the
Property, or (z) any use of chlorinated solvents by any tenant, occupant,
operator or lessee of the Property (other than amounts that are customarily used
to routinely clean, maintain, repair and operate office buildings, office space
and typical office equipment, and which shall be stored, used and disposed of in
accordance with Environmental Laws).
 
(b) Except for those matters that are disclosed in the Environmental Engineer’s
Report and the Existing Environmental Documents, Mortgagor will promptly notify
Mortgagee in writing of any material existing, pending or threatened: (i)
investigation, inquiry, claim, demand, proceeding, directive, notice, order or
action pertaining to the Property by any Governmental Authority in connection
with any Environmental Laws; (ii) Third-Party Claims; (iii) Regulatory Actions;
or (iv) Environmental Conditions at, on, under, emanating from, relating to or
surrounding the Property of which it has knowledge or notice, except for such
substances in such amounts that are customary for routine cleaning, maintenance,
repair and operation of an office building, office space and typical office
equipment, which substances are stored, used and disposed of in accordance with
all Environmental Laws.
 
(c) In the event that any Remediation is required to be performed by Mortgagor
at, on or under the Property pursuant to the requirements of Environmental Laws
as a result of or relating to any of the following, then Mortgagor shall
complete or cause to be completed, at its own expense, such Remediation in
accordance with the requirements of Environmental Laws and the provisions of
subsection (j), below: (i) any Release of any Hazardous Substance on, at or
under the Property or the presence of any Hazardous Substance which has come to
be located on or under the Property from another location; (ii) any injury to
human health or safety or the Environment by reason of any Environmental
Conditions on, at, under or emanating from, or activities on or under, the
Property; or (iii) any violation of any applicable Environmental Law.
 
(d) From and after the date of execution of this Mortgage, Mortgagor shall, upon
request, promptly make available to Mortgagee, until the Indebtedness has been
paid in full, complete copies of any and all Environmental Documents not
previously delivered to Mortgagee.
 
 
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(e) Mortgagor will keep the Property free of any lien imposed pursuant to any
Environmental Law.  In the event that there shall be filed a lien against the
Property by any Governmental Authority pursuant to the provisions of any
Environmental Laws including, without limitation, the Spill Act, then Mortgagor
shall, within sixty (60) days from the date that Mortgagor is given notice that
the lien has been placed against the Property (or within such shorter period of
time in the event that the Governmental Authority has commenced steps to cause
the Property to be sold pursuant to the lien), either: (i) pay the claim and
remove the lien from the Property; or (ii) furnish to Mortgagee either (1) a
bond satisfactory to Mortgagee in the amount of the claim out of which the lien
arises, (2) a cash deposit in the amount of the claim out of which the lien
arises, or (3) other security, guaranty or indemnity reasonably satisfactory to
Mortgagee in an amount sufficient to discharge the claim out of which the lien
arises.
 
(f) In the event Mortgagee at any time (even after the occurrence of or during
the continuance of any Event of Default under this Mortgage or any of the other
Loan Documents) reasonably believes that: (i) there has been a violation of any
Environmental Laws at the Property; or (ii) any Environmental Conditions exist
at, on, or under, or are emanating from, relating to or surrounding the
Property, Mortgagor shall, upon the written request of Mortgagee, have an
environmental review or audit and report of the affected or potentially affected
portions of the Property prepared for Mortgagee within forty-five (45) days of
such request.  The duty of Mortgagor to provide an environmental review or audit
and report shall continue after the occurrence of and during the continuance of
any Event of Default under the terms of this Mortgage or any of the other Loan
Documents.
 
(g) In the event that Mortgagor fails to comply with its obligations pursuant to
subsection (f), above, then Mortgagee may, itself or by its employees, agents,
contractors or representatives, enter upon the Property for the purposes of
conducting such soil, groundwater and chemical tests or other invasive or
non-invasive investigations, examinations, or analyses (hereafter referred to as
“Investigation”) as Mortgagee may reasonably desire.  Mortgagee shall provide
Mortgagor with reasonable notice before entering the Property to conduct any
such Investigation, and Mortgagor shall cooperate fully in such Investigation
and provide Mortgagee with reasonable access to the Property to conduct the
Investigation.
 
(h) Mortgagee and its employees, agents, contractors, consultants and/or
representatives shall conduct any such Investigation in a manner which does not
unreasonably interfere with Mortgagor’s and its tenants’ use of and operations
on the Property.  In the event that this Mortgage is foreclosed, Mortgagor shall
deliver the Property to Mortgagee free of all Hazardous Substances, except those
disclosed in the Environmental Engineer’s Report and the Existing Environmental
Documents, and further excepting such substances in such amounts that are
customary for routine cleaning, maintenance and operation of an office building,
office space and typical office equipment, which substances shall have been
stored, used and disposed of in accordance with all Environmental Laws, and in
compliance with all Environmental Laws.
 
 
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(i) Mortgagor shall use its diligent and commercially reasonable efforts to
ensure compliance with all Environmental Laws by all lessees, tenants,
subtenants, occupants, licensees, operators and users of the Property.
 
(j) In the event Mortgagor performs any Remediation at the Property, Mortgagor
agrees to:
 
(i) Perform and cause all consultants and contractors retained by Mortgagor to
perform all such Remediation in a workman-like manner and consistent with all
applicable Environmental Laws;
 
(ii) Comply with all Environmental Laws applicable to the implementation of such
Remediation at the Property and obtain all permits, authorizations and consents
that may be required under applicable Environmental Laws or by any Governmental
Authority in order to implement such Remediation at the Property;
 
(iii) Select and propose to the Governmental Authority Remediation that shall
minimize interference with the current use of the Property or the operations
currently conducted by Mortgagor, and will not preclude or prevent the future
use of the Property for the same use or any use similar to the current use of
the Property.  Without in any way limiting the generality of the foregoing,
except for those disclosed in the Environmental Engineer’s Report and the
Existing Environmental Documents, Mortgagor shall not select, propose or use at
the Property any Engineering Controls or Institutional Controls (as such terms
are defined under N.J.S. 58:10B-1, et seq.) without the prior written consent of
Mortgagee, which consent shall not be unreasonably withheld;
 
(iv) Promptly upon the completion of the Remediation, restore the Property to
substantially the same condition it was in prior to the performance of the
Remediation;
 
(v) Provide Mortgagee with copies of any documents that Mortgagor: (i) submits
to any Governmental Authority in connection with the Remediation at the same
time Mortgagor submits such documents to the Governmental Authority; and (ii)
receives from any Governmental Authority in connection with the Remediation
within five (5) business days of Mortgagor’s receipt of same; and
 
 
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(vi) Obtain and provide to Mortgagee a No Further Action Letter/Covenant Not to
Sue issued by the NJDEP pursuant to N.J.S. 58:10B-13.1 or, if the Remediation is
under the supervision of a Governmental Authority other than the NJDEP, obtain a
comparable determination from such other Governmental Authority.
 
D. Mortgagee’s Rights of Self-Help.
 
(a) If Mortgagor fails to comply with any of the provisions of this Section,
and/or to initiate and diligently pursue to completion any Remediation required
at or with respect to the Property by any Governmental Authority or under any
applicable Environmental Laws, and such failure continues for thirty (30) days
after Mortgagee provides Mortgagor written notice thereof (provided, however,
that if such Remediation requires work to be done, actions to be taken or
conditions to be remedied which by their nature cannot be fully done, taken or
remedied, as the case may be, within such thirty (30) day period, then no such
failure shall be deemed to have occurred with respect to any such work, actions
or Remediation so long as Mortgagor commences performance of any such work,
actions or Remediation within such thirty (30) day period and thereafter
diligently and continuously prosecutes same to completion), Mortgagee may, in
its sole discretion: (i) upon prior written notice to Mortgagor, cause the
Remediation of any Release of a Hazardous Substance or other Environmental
Conditions on, at, under, emanating from, relating to or surrounding the
Property; (ii) pay on behalf of Mortgagor any Losses imposed on Mortgagor as a
result of any Regulatory Actions; and/or (iii) make any other payment or perform
any other reasonable act which will prevent a lien in favor of any Governmental
Authority from attaching to the Property as a result of such failure.  The costs
of such Remediation and/or exercise of the remedies hereinabove set forth by
Mortgagee shall be added to the Indebtedness and said costs shall become due and
payable, with interest thereon, at the Default Rate.  After the occurrence of an
Event of Default hereunder, Mortgagor shall give Mortgagee and its employees,
agents, contractors and representatives, access to the Property to conduct any
Remediation that Mortgagee, in its sole discretion, deems appropriate; however,
Mortgagee has no affirmative obligation to conduct any such Remediation, and
none of this Mortgage or any of the other Loan Documents shall be construed as
creating any such obligation or any such liability on the part of Mortgagee.
 
(b) Any partial exercise by Mortgagee of the remedies set forth in this Section
D., or any partial undertaking on the part of Mortgagee to cure the failure of
Mortgagor to comply with any Environmental Laws, shall not obligate Mortgagee to
complete the actions taken or require Mortgagee to expend further sums to cure
such non-compliance; nor shall the exercise of any such remedies operate to
place upon Mortgagee any responsibility for the operation, control, care,
management or repair of the Property or make Mortgagee, or be construed to deem
Mortgagee to be, an “owner” or “operator” of the Property within the meaning of
or under any Environmental Laws.  Mortgagee, by making any such payment or
incurring any such costs, shall be subrogated to any rights of Mortgagor to seek
reimbursement from any third parties including, without limitation, a
predecessor-in-interest to Mortgagor’s title to the Property, who may be a
“responsible party” or otherwise liable for any or all of such payments or costs
under any Environmental Laws, common law, equity or contract.
 
 
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(c) Mortgagor acknowledges and agrees that the representations and warranties of
Mortgagor contained in Section B. hereof are based on its investigation of the
Property and Mortgagee is entitled to rely thereon notwithstanding any
independent investigations by Mortgagee or its employees, agents, contractors or
representatives.
 
(d) Mortgagor and its successors and assigns hereby forfeit and forever waive,
release and covenant not to sue Mortgagee with respect to, any claims, rights,
remedies or causes of action that Mortgagor may have now or in the future or
that may arise against Mortgagee under Environmental Laws or any other theory of
liability with respect to any environmental matters of any kind or nature
whatsoever respecting the Property including, without limitation, any
Environmental Conditions on, at, under or emanating from the Property, except to
the extent such claim, right, remedy or cause of action arises or results from
the negligent acts or omissions of Mortgagee or its successors or assigns after
any foreclosure pursuant to the terms hereof or after Mortgagee becomes a
mortgagee-in-possession prior to such foreclosure.
 
(e) Mortgagee’s rights and remedies against Mortgagor under this Section shall
be in addition to and not in lieu of all other rights and remedies of Mortgagee
under this Mortgage or any of the other Loan Documents, at law or in equity.
 

Indemnification, Duty to Defend and Costs, Fees and Expenses. In addition to any
other indemnities contained in the Loan Documents, Mortgagor shall indemnify,
defend and hold Mortgagee harmless from and against any and all losses,
liabilities, claims, demands, damages, costs and expenses (including, but not
limited to, costs of title evidence and endorsements to Mortgagee’s title
insurance policy with respect to the Property and reasonable attorney fees and
other costs of defense) which may be imposed upon, incurred by or asserted
against Mortgagee, whether or not any legal proceeding is commenced with regard
thereto, in connection with: (i) the enforcement of any of Mortgagee’s rights or
powers under the Loan Documents; (ii) the protection of Mortgagee’s interest in
the Property; or (iii) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Property or on any sidewalk,
curb, parking area, space or street located adjacent thereto.  If any claim or
demand is made or asserted against Mortgagee by reason of any event as to which
Mortgagor is obligated to indemnify or defend Mortgagee, then, upon demand by
Mortgagee, Mortgagor, at Mortgagor’s sole cost and expense, shall defend such
claim, action or proceeding in Mortgagee’s name, if necessary, by such attorneys
as Mortgagee shall reasonably approve.  Notwithstanding the foregoing, if
Mortgagee in good faith believes that its interests in such claim, action or
proceeding are divergent from Mortgagor’s interests, Mortgagee may, in
Mortgagee’s sole discretion, engage its own attorneys to defend it or assist in
its defense and Mortgagor shall pay the reasonable fees and disbursements of
such attorneys.
 
 
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Failure of Mortgagor to Act.  If, after notice to Mortgagor and the expiration
of any grace or cure period provided for under the sections hereof entitled
“Event of Default” and “Notice of Default”, Mortgagor fails to make any payment
or do any act as herein provided, Mortgagee may, without obligation to do so,
without additional notice to or demand upon Mortgagor and without releasing
Mortgagor from any obligation hereof: (i) make or do the same in such manner and
to such extent as Mortgagee may deem necessary to protect the security hereof,
Mortgagee being authorized to enter upon the Property for such purpose; (ii)
appear in and defend any action or proceeding purporting to affect the security
hereof, or the rights or powers of Mortgagee; (iii) pay, purchase, contest or
compromise any encumbrance, charge or lien which in the judgment of Mortgagee
appears to be prior or superior hereto, but subject to Mortgagor’s rights to
contest same pursuant to other provisions of this Mortgage; and (iv) in
exercising any such powers, pay necessary expenses, employ counsel and pay its
reasonable fees.  Sums so expended and all losses, liabilities, claims, damages,
costs and expenses required to be reimbursed by Mortgagor to Mortgagee hereunder
shall be payable by Mortgagor immediately upon demand with interest from the
latter of the date of expenditure or demand, as the case may be, at the Default
Rate (as defined in the Notes).  All sums so expended and demanded by Mortgagee
and the interest thereon shall be included in the Indebtedness and secured by
the lien of this Mortgage.
 
Event of Default.  Any default by Mortgagor in making any required payment of
the Indebtedness or any default in any provision, covenant, agreement, warranty
or certification contained in any of the Loan Documents shall, except as
provided in the two immediately succeeding paragraphs, constitute an “Event of
Default”.
 
Notice of Default.  A default in any payment required in the Notes or any other
Loan Document, whether or not payable to Mortgagee (a “Monetary Default”), shall
not constitute an Event of Default unless Mortgagee shall have given a written
notice of such Monetary Default to Mortgagor and Mortgagor shall not have cured
such Monetary Default by payment of all amounts in default (including, in the
event that the payment was payable to Mortgagee, payment of interest at the
Default Rate, as defined in the Notes, from the date of default to the date of
cure) within five (5) business days after the date on which Mortgagee shall have
given such notice to Mortgagor.
 
Any other default under the Notes or under any other Loan Document (a
“Non-Monetary Default”) shall not constitute an Event of Default unless
Mortgagee shall have given a written notice of such Non-Monetary Default to
Mortgagor and Mortgagor shall not have cured such Non-Monetary Default within
thirty (30) days after the date on which Mortgagee shall have given such notice
of default to Mortgagor (or, if the Non-Monetary Default is not curable within
such 30-day period, Mortgagor shall not have diligently undertaken and continued
to pursue the curing of such Non-Monetary Default and deposited an amount
sufficient to cure such Non-Monetary Default in an escrow account satisfactory
to Mortgagee).
 
 
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In no event shall the notice and cure period for Monetary Default provisions
recited above constitute a grace period for the purposes of commencing interest
at the Default Rate (as defined in the Notes).
 
Appointment of Receiver.  Upon the occurrence and continuance of an Event of
Default under this Mortgage, Mortgagee (without limitation or restriction by any
present or future law, without regard to the solvency or insolvency at that time
of any party liable for the payment of the Indebtedness, without regard to the
then value of the Property, whether or not there exists a threat of imminent
harm, waste or loss to the Property and or whether the same shall then be
occupied by the owner of the equity of redemption as a homestead) shall have the
absolute right to the appointment of a receiver of the Property and of the
revenues, rents, profits and other income therefrom, and said receiver shall
have (in addition to such other powers as the court making such appointment may
confer) full power to collect all such income and, after paying all necessary
expenses of such receivership and of operation, maintenance and repair of said
Property, to apply the balance to the payment of any of the Indebtedness then
due.
 
Foreclosure.  Upon the occurrence of an Event of Default, the entire unpaid
Indebtedness shall, at the option of Mortgagee, become immediately due and
payable for all purposes without any notice or demand, except as required by law
(ALL OTHER NOTICE OF THE EXERCISE OF SUCH OPTION, OR OF THE INTENT TO EXERCISE
SUCH OPTION, BEING HEREBY EXPRESSLY WAIVED), and Mortgagee may, in addition to
exercising any rights it may have with respect to the Personal Property under
the Uniform Commercial Code of the jurisdiction in which the Property is
located, institute proceedings in any court of competent jurisdiction to
foreclose this instrument as a mortgage, or to enforce any of the covenants
hereof.  Mortgagee, to the extent permitted by applicable law, shall, out of the
proceeds or avails of a foreclosure sale, after first paying and retaining all
fees, charges, costs of advertising the Property and of making said sale, and
attorneys’ fees as herein provided, apply such proceeds to the Indebtedness,
including all sums advanced or expended by Mortgagee or the legal holder of the
Indebtedness pursuant to any of the Loan Documents, with interest from date of
advance or expenditure at the Default Rate (as defined in the Notes), rendering
the excess, if any, as provided by law.  At the foreclosure sale, the legal
holder of the Indebtedness may purchase the Property or any part thereof.  It
shall not be obligatory upon any other purchaser at any such foreclosure sale to
see to the application of the purchase money.
 
Prohibition on Transfer/One-Time Transfer.  The present ownership and management
of the Property is a material consideration to Mortgagee’s in making the loan
secured by this Mortgage, and Mortgagor shall not: (i) convey title to all or
any part of the Property; (ii) enter into any contract to convey (land
contract/installment sales contract/contract for deed) title to all or any part
of the Property which gives a purchaser possession of, or income from, the
Property prior to a transfer of title to all or any part of the Property
(“Contract to Convey”); or (iii) cause or permit a change in the proportionate
ownership of any of the entities, directly or indirectly, constituting
Mortgagor.  Any such conveyance, entering into a Contract to Convey or change in
the proportionate ownership of Mortgagor shall constitute a default under the
terms of this Mortgage.
 
 
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Notwithstanding the foregoing, a “change in the proportionate ownership of any
of the entities, directly or indirectly, constituting Mortgagor” and a “change
in the proportionate ownership of Mortgagor” means any conveyance, assignment,
grant of security interest or other transfer resulting in Mack-Cali Realty, L.P.
not being in direct or indirect control of all of the entities constituting
Mortgagor and/or Mack-Cali Realty, L.P. owning, directly or indirectly, less
than a 51% lien-free interest in any of the entities constituting
Mortgagor.  Accordingly, assignments of the Ground Lease and Master Lease shall
be permitted as long as: (a) the assignee is controlled, directly or indirectly,
by Mack-Cali Realty, L.P.; (b) Mack-Cali Realty, L.P., directly or indirectly,
owns at least 51% of the assignee; (c) the assignee makes the representation and
warranty to Mortgagee set forth in the section entitled “Business Restriction
Representation and Warranty”; and (d) at the time of such transfer, Mortgagor
re-makes representations and warranties acceptable to Mortgagee and
substantially equivalent to those set forth in the Loan Documents (exclusive of
any modifications thereto set forth in side letters, if any, which are
“personal” to Mortgagor) relating to compliance with OFAC and any similar
regulations or statutes and ERISA, as same may have been amended.
 
Notwithstanding anything to the contrary contained in this Mortgage, in no event
shall the sale of Mack-Cali Realty Corporation and/or Mack-Cali Realty, L.P., or
a sale of all or substantially all of their assets, or a merger involving either
or both entities, be deemed to constitute or shall otherwise trigger a
conveyance or transfer of the Property, and no consent of Mortgagee or payment
of a fee to Mortgagee will be required in connection with any such transaction.
 
Notwithstanding the above, provided the loan secured by this Mortgage is not in
default, upon the prior written request from Mortgagor, Mortgagee shall not
withhold its consent to a one-time transfer of all, but not less than all, of
the Property, provided:
 
(i)  
the Property shall have achieved Debt Service Coverage (as hereinafter defined)
of at least 1.25 for the last full fiscal year as determined from audited
financial statements, and there are no junior liens on the Property, other than
those that may be consented to or approved by Mortgagee;

 
(ii)  
the transferee (the “Transferee”) or an owner of a controlling interest in the
Transferee (in either case, the “Creditworthy Party”) has a net worth,
determined in accordance with generally accepted accounting principles, of at
least $1,000,000,000, with reasonably available liquidity (in the form of bank
demand accounts, available lines of credit that are reasonably anticipated to
remain available for a reasonable period of time and publicly traded securities)
of at least $100 million after funding the equity needed to close the purchase;

 
 
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(iii)  
if (x) the transfer of the Property is not being effected via a purchase of the
entity or entities that own the Property, and (y) provided that compliance with
this requirement does not prevent consummation of a sale transaction or increase
a sale transaction’s costs by more than a nominal amount, then the Transferee
and its general partner(s) or managing member(s), if any, must each be a
bankruptcy remote, single purpose entity (“SPE”), the sole real property and
material assets of which will be the Property (or in the case of a general
partner or managing member, its interest in the Transferee).  In addition, in
such event, the loan assumption documents will include a covenant that the
Transferee will not engage in any business other than owning and operating the
Property, and the Transferee’s ownership structure and organizational documents
shall be in form and substance reasonably acceptable to Mortgagee and shall
contain, among other things, acceptable restrictions on the Transferee’s purpose
and its ability to incur indebtedness, “separateness covenants” and such other
bankruptcy-remote, single purpose provisions that Mortgagee may reasonably
require.  The loan assumption documents will also contain such representations,
warranties and covenants as Mortgagee may reasonably require relating to the
Transferee’s bankruptcy-remote, single purpose status.  The foregoing provisions
shall also apply to any general partner(s) or managing member(s) of the
Transferee.  Notwithstanding the foregoing, Mortgagee will not require (a) that
the Transferee’s organizational structure include an independent director, and
(b) a non-consolidation opinion;

 
(iv)  
the Transferee or the Creditworthy Party is experienced in the ownership and
management of at least 10 million square feet of commercial office buildings;

 
(v)  
neither the Transferee nor the Creditworthy Party is subject to any bankruptcy,
reorganization or insolvency proceedings or any criminal charges or proceedings
and is not a current or past litigant, plaintiff or defendant in any suit
brought against or by Mortgagee;

 
(vi)  
the Transferee assumes all obligations under the Loan Documents (except side
letters, if any, which are “personal” to Mortgagor) pursuant to an assumption
agreement, in form and substance reasonably acceptable to Mortgagee, which
includes representations, warranties and covenants substantially equivalent to
those set forth in the Loan Documents (exclusive of any modification thereto set
forth in side letters, if any, which are “personal” to Mortgagor) relating to
compliance with OFAC and any similar regulations or statutes and ERISA, as same
may be amended and, if applicable, with respect to being an SPE, bankruptcy
remote entity, and Mortgagee receives a satisfactory enforceability opinion with
respect to the assumption agreement from counsel approved by Mortgagee, and
Mortgagor shall remain liable under the Loan Documents, except as provided in
clause (ix), below;

 
 
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(vii)  
the Creditworthy Party executes a form of Guarantee of Recourse Obligations and
Environmental Indemnity Agreement comparable to the forms executed by the
Principal, and Mortgagee receives a reasonably satisfactory enforceability
opinion with respect thereto from counsel approved by Mortgagee;

 
(viii)  
an environmental report (a copy of which shall be given to Mortgagor) on the
Property which meets Mortgagee’s then current requirements and is updated to no
earlier than ninety (90) days prior to the date of transfer, is provided to
Mortgagee at least thirty (30) days prior to the date of transfer and said
report shall be satisfactory to Mortgagee at the time of transfer;

 
(ix)  
Mortgagor and the Principal shall remain liable under all of the Loan Documents
(including the Environmental Indemnity Agreement dated of even date herewith),
except for (a) Mortgagor’s obligations expressly assumed by the Transferee
and/or Principal’s obligations expressly assumed by the Creditworthy Party, in
each case required by the Loan Documents to be performed after the date of the
transfer of the Property, and (b) acts or occurrences after the date of transfer
of the Property to the extent liability for such acts and occurrences has in
fact been assumed by the Creditworthy Party;

 
(x)  
Mortgagee receives an endorsement to its policy of title insurance, satisfactory
to Mortgagee; and

 
(xi)  
the outstanding balance of the Notes at the time of the transfer is not more
than 65% of the gross purchase price of the Property.

 
If Mortgagor shall make a one-time transfer pursuant to the above conditions,
Mortgagee shall be paid a fee equal to one percent (1%) of the then outstanding
balance of the Notes, and Mortgagor, the Transferee or another person or entity
shall pay all reasonable third-party costs, fees and expenses (including
reasonable legal fees) incurred by Mortgagee in connection with such
transfer.  The fee shall be paid on or before the closing date of such one-time
transfer.  At the time of such transfer, no modification of the interest rate or
repayment terms of the Notes will be required.
 
 
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After such one-time transfer, no subsequent transfers of the Property shall be
allowed and no Change in the Proportionate Ownership of Transferee (as
hereinafter defined) shall be allowed without Mortgagee’s prior written
consent.  “Change in the Proportionate Ownership of Transferee” means a change
in control of the Transferee or the Creditworthy Party, or the existence of a
lien on, the direct or indirect ownership interests in the Transferee or the
Creditworthy Party which could result in such a change in control, except for
publicly traded securities.
 
“Debt Service Coverage” means a number calculated by dividing Net Income
Available for Debt Service (as hereinafter defined) for a fiscal period by the
debt service during the same fiscal period under all indebtedness (including the
Indebtedness) secured by any portion of the Property.  For purposes of the
preceding sentence, “debt service” means the actual debt service due under all
indebtedness secured by any portion of the Property based upon a thirty (30)
year amortization schedule (whether or not amortization is actually required)
and, if an accrual loan, as if interest and principal on such indebtedness were
due monthly.
 
“Net Income Available for Debt Service” means net income (prior to giving effect
to any capital gains or losses and any extraordinary items) from the Property,
determined in accordance with generally accepted accounting principles (“GAAP”),
consistently applied, for a fiscal period, plus (to the extent deducted in
determining net income from the Property):
 
A)  
interest on indebtedness secured by any portion of the Property for such fiscal
period;

 
B)  
depreciation, if any, of fixed assets at or constituting the Property for such
fiscal period;

 
C)  
amortization, if any, over the term of the lease, of standard tenant finish
expenditures at the Property (but specifically excluding the amortization of
tenant finish expenditures by Mortgagor in excess of $40.00 per square foot for
new tenants and $10.00 per square foot for renewal tenants (i.e., above standard
tenant finishes)); and

 
D)  
amortization of loan costs (over the term of the loan) incurred in connection
with any indebtedness secured by any portion of the Property and leasing
commissions (over the term of the lease) which have been prepaid;

 
less:
 
E)  
an amount (positive or negative) to offset any rent averaging adjustment
resulting from adherence to FASB-13;

 
 
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F)  
the amortization of free rent and any other tenant concessions and promotional
items not deducted in the calculation of net income above;

 
G)  
a replacement reserve for future tenant improvements, leasing commissions and
structural items based on not less than $2.11 per square foot per annum;

 
H)  
the amount, if any, by which actual gross income during such fiscal period
exceeds that which would be earned from the rental of 94% of the gross leaseable
area in the Property;

 
I)  
the amount, if any, by which the actual management fee is less than 3% of gross
revenue during such fiscal period;

 
J)  
the amount, if any, by which the actual real estate taxes or PILOT are less than
$3.25 per square foot per annum; and

 
K)  
the amount, if any, by which total operating expenses, excluding management
fees, real estate taxes and replacement reserves, are less than $10.24 per
square foot per annum.

 
All adjustments to net income referenced above shall be calculated in a manner
reasonably satisfactory to Mortgagee.
 
Financial Statements.
 
(A) Mortgagor shall furnish the following items to Mortgagee within 120 days
after the close of each fiscal year of Mortgagor (the “Property Financial
Statements Due Date” or “Financial Statements Due Date”):
 
(i)  
combined financial statements for the Mortgagor/Property, which will include an
unaudited statement of operations for such fiscal year, an unaudited balance
sheet as of the last day of such fiscal year and an unaudited statement of cash
flows as of the last day of such fiscal year;

 
(ii)  
a copy of the most recent Form 10K of the Principal filed with the Securities
and Exchange Commission, which includes an audited balance sheet and audited
statement of cash flows for the Principal as of the last day of the Principal’s
fiscal year;

 
(iii)  
a current rent roll identifying location, leased area, lease begin and end
dates, current contract rent, rent increases and increase dates, percentage
rent, expense reimbursements, and any other recovery items; and

 
(iv)  
an operating budget for the current fiscal year.

 
 
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(B) Furthermore, Mortgagor shall furnish to Mortgagee, within 20 days after
receipt of a written request from Mortgagee, such reasonable financial and
management information in the possession of, or accessible to, Mortgagor which
Mortgagee determines to be useful in Mortgagee’s monitoring of the value and
condition of the Property, Mortgagor or the Principal.
 
All unaudited financial statements shall contain a certification by an officer
of Mortgagor stating that they have been prepared in accordance with GAAP in all
material respects and that they are true, accurate and complete in all material
respects.  The expense of preparing all of the financial statements required in
(A), above shall be borne by Mortgagor.
 
In addition to all other remedies available to Mortgagee hereunder, at law and
in equity, if any financial statement, additional information or proof of
payment of property taxes, assessments and/or PILOT is not furnished to
Mortgagee, as required in this section entitled “Financial Statements” and in
the section entitled “Taxes and Special Assessments”, within 30 days after
Mortgagee shall have given written notice to Mortgagor that it has not been
received as required,
 
 
(x)
interest on the unpaid principal balance of the Indebtedness shall, as of the
applicable Financial Statements Due Date or the date such additional information
or proof of payment of property taxes, assessments and/or PILOT was due, accrue
and become payable at a rate equal to the sum of the Interest Rate (as defined
in the Notes) plus one percent (1%) per annum (the “Increased Rate”); and

 
 
(y)
Mortgagee may elect to obtain an independent audit of the Property at
Mortgagor’s expense, and Mortgagor agrees that it will, upon request, promptly
make Mortgagor’s books and records regarding the Property available to Mortgagee
and the person(s) performing the audit (which obligation Mortgagor agrees can be
specifically enforced by Mortgagee).

 
The Increased Rate shall continue to be in effect until the financial
statements, additional information and/or proof of payment of property taxes,
assessments and/or PILOT (as requested by Mortgagee) shall be furnished to
Mortgagee as required.  The Increased Rate shall be calculated and paid as
follows: additional interest on the then unpaid principal balance of the Notes
shall: (a) accrue at the rate of one percent (1%) per annum (the “Increased
Interest”); (b) be added to the regular monthly payments due under the Notes and
be due and payable monthly in arrears; and (c) be calculated based on the actual
number of days that the financial statements, additional information and/or
proof of payment of property taxes, assessments and/or PILOT (as requested by
Mortgagee) are outstanding in the prior month and the actual number of days in
the calendar year, except to the extent that the number of days that such items
are outstanding consists of a full calendar month, in which case such
calculation shall be based on a year consisting of 360 days.  In the months in
which the Increased Interest shall be due and payable, there shall be no change
in the amortization of principal or the amortization schedule under the
Notes.  Commencing on the date on which the financial statements, additional
information and/or proof of payment of property taxes, assessments and/or PILOT
are received by Mortgagee, the Increased Rate shall terminate and expire, and
interest on the unpaid principal balance shall again accrue at the Interest
Rate.  Notwithstanding the foregoing, Mortgagee shall have the right to conduct
an independent audit at its own expense at any time.
 
 
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Defeasance.  Mortgagor may obtain a release of the Property from the operation,
effect and lien of this Mortgage and all other Loan Documents securing repayment
of the Notes, other than the Environmental Indemnity Agreement, and thereafter
Mortgagee’s recourse shall be limited to the Adequate Substitute Collateral (as
hereinafter defined) and Mortgagee’s rights under the Environmental Indemnity
Agreement, subject to the satisfaction of the conditions set forth in the
following clauses (a) through (f), below:
 
(a) The payment of a service fee to Mortgagee in the amount of $10,000, plus
payment of all reasonable costs and expenses (including reasonable legal fees of
outside counsel) incurred by Mortgagee in connection with the defeasance.
 
(b) The deposit with Mortgagee (or with an escrow holder satisfactory to
Mortgagee) of the Adequate Substitute Collateral.
 
(c) No Event of Default shall have occurred and be continuing on the date of the
deposit of the Adequate Substitute Collateral.
 
(d) The delivery to Mortgagee of an instrument executed by Mortgagor, reasonably
satisfactory in scope, form and content to Mortgagee, granting a security
interest in the Adequate Substitute Collateral and providing that Mortgagee may
apply the Adequate Substitute Collateral to the payment of principal and
interest due under the Notes when such payments become due.
 
(e) Mortgagor’s execution and delivery to Mortgagee of such UCC financing
statements as Mortgagee may reasonably require.
 
(f) The delivery to Mortgagee of an opinion of counsel approved by Mortgagee in
form and substance reasonably satisfactory to Mortgagee to the effect that:
 
(1)  
The Adequate Substitute Collateral has been pledged to Mortgagee and is not
subject to any valid interest, lien, claim or encumbrance of any other person or
entity or by any court or trustee in bankruptcy;

 
 
 
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(2)  
The deposit of the Adequate Substitute Collateral will not constitute a
preferential transfer or fraudulent conveyance under any bankruptcy or similar
law;

 
(3)  
The Adequate Substitute Collateral cannot be recovered by either creditors of
Mortgagor (other than Mortgagee) or the trustee or custodian, for the benefit of
such creditors, in any bankruptcy or insolvency proceeding prior to payment in
full of the Indebtedness evidenced by the Notes; and

 
(4)  
Mortgagee will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit of such Adequate Substitute Collateral, and
Mortgagee will be subject to federal income tax on the same amount and in the
same manner and at the same times as would have been in the case if such deposit
of Adequate Substitute Collateral had not occurred.

 
Such opinion shall cover such other matters as Mortgagee may reasonably require
in connection with the deposit of Adequate Substitute Collateral and matters
relating thereto.
 
As used herein, “Adequate Substitute Collateral” means non-callable U.S.
Treasury Obligations (as hereinafter defined), not payable or redeemable prior
to their expressed maturities, which through the payment of principal and
interest in respect thereof in accordance with their terms, without any
reinvestment or further investment of the principal of or interest earned on
such U.S. Treasury Obligations, will absolutely and unconditionally provide for
payment in any and all circumstances on the due date of each payment of interest
and principal required by the terms of the Notes, timed so that no prepayment
occurs, an amount equal to the amount of interest and principal due and payable
on each such due date, through and including a payment date selected by
Mortgagor occurring during the last 60 days of the term of the Notes.
 
As used herein, “U.S. Treasury Obligations” means direct obligations of the
United States of America, or obligations of United States agencies or
instrumentalities reasonably acceptable to Mortgagee, in either case, the
payment or guarantee of which constitutes a full faith and credit obligation of
the United States of America.
 
Within five (5) business days after defeasance, Mortgagee shall return to
Mortgagor, by wire transfer, any reserves held by Mortgagee.
 
Property Management.  The management company for the Property shall be
reasonably satisfactory to Mortgagee.  Any change in the management company
without the prior written consent of Mortgagee shall constitute a default under
this Mortgage.  Management by Mack-Cali Realty, L.P., Mack-Cali Realty
Corporation or any management company owned and/or controlled, directly or
indirectly, by Mack-Cali Realty Corporation or Mack-Cali Realty, L.P. shall be
satisfactory to Mortgagee, and any change in management to such an entity will
not require Mortgagee’s prior written consent.
 
 
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Leasehold Property.  With respect to the leasehold and subleasehold portions of
the Property (but not any sub-subleasehold portions of the Property):
 
(a) This Mortgage expressly includes the grant, conveyance, mortgage and warrant
of all improvements on the demised premises and all additional title, estate,
interest or right which may at any time be acquired by Ground Lessee and/or
Master Lessee.  It is expressly agreed that this Mortgage shall constitute a
lien upon the fee simple title, the leasehold estate, the subleasehold estate or
any other interest acquired by Ground Lessee and/or Master Lessee in any of such
demised premises.
 
(b) Ground Lessor and Ground Lessee warrant that there is no present default
under the terms and conditions of the Ground Lease, and there are no claims,
offsets, counterclaims or other matters that may ripen into a default.  If a
default shall occur in the future, Ground Lessor and Ground Lessee covenant that
written notice thereof shall be promptly served on Mortgagee.  A default by
Ground Lessee under the Ground Lease shall constitute a default under this
Mortgage.
 
(c) Master Lessor and Master Lessee warrant that there is no present default
under the terms and conditions of the Master Lease, and there are no claims,
offsets, counterclaims or other matters that may ripen into a default.  If a
default shall occur in the future, Master Lessor and Master Lessee covenant that
written notice thereof shall be promptly served on Mortgagee.  A default by
Master Lessee under the Master Lease shall constitute a default under this
Mortgage.
 
Deposits by Mortgagor.  To assure the timely payment of real estate taxes and
special assessments (including personal property taxes, if appropriate), upon
the occurrence of an Event of Default, Mortgagee shall thence forth have the
option to require Mortgagor to deposit funds with Mortgagee, in monthly or other
periodic installments in amounts reasonably estimated by Mortgagee from time to
time sufficient to pay real estate taxes and special assessments as they become
due.  If at any time the funds so held by Mortgagee shall be insufficient to pay
any of said expenses, Mortgagor shall, upon receipt of notice thereof,
immediately deposit such additional funds as may be necessary to remove the
deficiency.  All funds so deposited shall be irrevocably appropriated to
Mortgagee to be applied to the payment of such real estate taxes and special
assessments and, at the option of Mortgagee after the occurrence of an Event of
Default, the Indebtedness.
 
 
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Notices.  Any notices, demands, requests and consents permitted or required
hereunder or under any other Loan Document shall be in writing, may be delivered
personally or sent by certified mail, return receipt requested, with postage
prepaid, or by reputable overnight courier service.  Any notice or demand sent
to Mortgagor shall be addressed to Mortgagor c/o Mack-Cali Realty Corporation,
343 Thornall Street, Edison, NJ 08837-2206, Attention: Mitchell E. Hersh,
President and Chief Executive Officer, with a copy to the attention of Roger W.
Thomas, Esq., Executive Vice President and General Counsel, at the same address,
or to such other address(es) in the United States of America as Mortgagor shall
designate in a notice to Mortgagee given in the manner described herein.  Any
notice given to Mortgagee shall refer to NM Loan No. 338136 and NY Life Loan No.
374-0185.  Any notice sent to Mortgagee shall be sent to Servicer (as defined
below), shall be sent by certified mail, return receipt requested, or reputable
overnight courier service and, as of the date hereof, shall be addressed to The
Northwestern Mutual Life Insurance Company to the attention of the Real Estate
Investment Department at 720 East Wisconsin Avenue, Milwaukee, WI 53202, or at
such other address(es) as Northwestern Mutual shall designate in a notice given
in the manner described herein.  Mortgagor shall have no obligation to determine
the identity of the Servicer.  Notwithstanding the foregoing, all submissions,
notices and requests for approvals, waivers or consents required to be made or
obtained by Mortgagor, or given by Mortgagee, shall be made or obtained from, or
given by, the Servicer, but a copy of all submissions, notices and requests for
approvals, waivers or consents (together with supporting materials) shall be
delivered, in the same manner as the original, to the holder of each of the
Notes of which Mortgagor has notice (except that no copy needs to be provided to
the holder of a Note if such holder is also the Servicer).  A copy of all
submissions, notices and requests for approvals, waivers or consents (together
with supporting materials) shall be addressed to the holder of the NYL Note at
New York Life Insurance Company, c/o New York Life Investment Management LLC, to
the attention of the Real Estate Group, Director Loan Administration Division at
51 Madison Avenue, New York, NY 10010, or at such other address(es) as New York
Life Insurance Company shall designate in a notice given to Mortgagor in the
manner described herein.  Any notice or demand hereunder shall be deemed given
when received.  Any notice or demand which is rejected, the acceptance of
delivery of which is refused or which is incapable of being delivered on a
business day during normal business hours at the address specified herein or
such other address designated pursuant hereto shall be deemed received as of the
date of attempted delivery.
 
Modification of Terms.  Without affecting the liability of Mortgagor or any
other person (except any person expressly released in writing) for payment of
the Indebtedness or for performance of any obligation contained herein and
without affecting the rights of Mortgagee with respect to any security not
expressly released in writing, Mortgagee may, at any time and from time to time,
either before or after the maturity of the Notes, without notice or consent: (i)
release any person liable for payment of all or any part of the Indebtedness or
for performance of any obligation; (ii) make any agreement extending the time or
otherwise altering the terms of payment of all or any part of the Indebtedness,
or modifying or waiving any obligation, or subordinating, modifying or otherwise
dealing with the lien or charge hereof; (iii) exercise or refrain from
exercising or waive any right Mortgagee may have; (iv) accept additional
security of any kind; or (v) release or otherwise deal with any property, real
or personal, securing the Indebtedness, including all or any part of the
Property.
 
 
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No Waiver.  Neither Mortgagee’s failure to exercise any right or remedy nor any
acceptance by Mortgagee of payment of Indebtedness in default shall in any event
be construed as a waiver of any default then existing and continuing or
thereafter occurring, or as a release of any right or remedy.
 
Nature and Succession of Agreements.  Each of the provisions, covenants and
agreements contained herein shall inure to the benefit of, and be binding on,
the heirs, executors, administrators, successors, grantees, and assigns of the
parties hereto, respectively, and the term “Mortgagee” shall include the owner
and holder of the Notes.  The liability of Mortgagor hereunder shall be joint
and several.
 
Legal Enforceability.  No provision of this Mortgage, the Notes or any other
Loan Documents shall require the payment of interest or other obligation in
excess of the maximum permitted by law.  If any such excess payment is provided
for in any Loan Documents or shall be adjudicated to be so provided, the
provisions of this paragraph shall govern and Mortgagor shall not be obligated
to pay the amount of such interest or other obligation to the extent that it is
in excess of the amount permitted by law.
 
Limitation of Liability.  Notwithstanding any provision contained herein to the
contrary, the personal liability of Mortgagor hereunder shall be limited as
provided in the Notes, the terms and conditions of which are incorporated herein
by reference as though set forth fully herein at length.
 
Consent of Mortgagee.  In connection with Mortgagor, the Servicer shall be
authorized to act on behalf of and for the benefit of Mortgagee and the holders
of the Notes.  The initial Servicer is Northwestern Mutual and Mortgagor shall
be given prior written notice by Northwestern Mutual and New York Life in the
event of a change in the identity of the Servicer.  All submissions, notices and
requests for approvals, waivers or consents required to be made or obtained by
Mortgagor, or given by Mortgagee, shall be made or obtained solely from, or
given solely by, the Servicer, but a copy of all submissions, notices and
requests for approvals, waivers or consents (together with supporting materials)
shall be delivered to the holder of each of the Notes of which Mortgagor has
notice (except to the extent that the holder of a Note is also the
Servicer).  Mortgagor shall be entitled to rely on any actions taken or
consents, approvals and waivers granted by the Servicer as being taken in
accordance with the terms of any servicing agreement between the Servicer and
Mortgagee and the holders of the Notes, and pursuant to authority from Mortgagee
and the holders of the Notes, and any actions taken or consents, approvals and
waivers granted by the Servicer shall be binding upon and enforceable against
Mortgagee and the holders of the Notes.
 
 
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Changes in GAAP.  For purposes of calculating Debt Service Coverage, Projected
Debt Service Coverage, Net Income Available for Debt Service and Projected
Operating Income Available for Debt Service, if any change in GAAP after the
date of that certain Loan Application dated as of August 5, 2008 from Mortgagor
to Mortgagee (the “Application”) results in a change in the calculation, solely
as a result of such change in GAAP, then (i) such calculation shall be made on
the basis of GAAP in effect as of the date of the Application, and (ii)
Mortgagee and Mortgagor shall negotiate in good faith a modification of any
covenant(s), requirement(s) or precondition(s) that are based on such
calculations so that the economic effect of the calculation of such covenant(s),
requirement(s) or precondition(s) utilizing GAAP as so changed is as close as
feasible to what the economic effect of the calculation of such covenant(s),
requirement(s) or precondition(s) would have been using GAAP as in effect as of
the date of the Application.
 
Miscellaneous.  Time is of the essence in each of the Loan Documents.  The
remedies of  Mortgagee as provided herein or in any other Loan Document or at
law or in equity shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of Mortgagee, and may be
exercised as often as occasion therefor shall occur.  Neither this Mortgage nor
any other Loan Document may be modified or terminated orally but only by
agreement or discharge in writing and signed by Mortgagor and Mortgagee.  If any
of the provisions of any Loan Document or the application thereof to any persons
or circumstances shall to any extent be invalid or unenforceable, the remainder
of such Loan Document and each of the other Loan Documents, and the application
of such provision or provisions to persons or circumstances other than those as
to whom or as to which it is held invalid or unenforceable, shall not be
affected thereby, and every provision of each of the Loan Documents shall be
valid and enforceable to the fullest extent permitted by law.
 
Conflict or Inconsistency with Commitment.  If any provision contained in this
Mortgage is in conflict with, or inconsistent with, any provision in the
Commitment, the provision contained in this Mortgage shall govern and control.
 
Waiver of Jury Trial.  Mortgagor and Mortgagee, by its acceptance of this
Mortgage, hereby waive any right to trial by jury with respect to any action or
proceeding (a) brought by Mortgagor, Mortgagee or any other person relating to
(i) the obligations secured hereby and/or any understandings or prior dealings
between the parties hereto, or (ii) the Loan Documents or the Environmental
Indemnity Agreement, or (b) to which Mortgagee is a party.
 
Captions.  The captions contained herein are for convenience and reference only
and in no way define, limit or describe the scope or intent of, or in any way
affect this Mortgage.
 
 
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Governing Law.  This Mortgage, the interpretation hereof and the rights,
obligations, duties and liabilities hereunder shall be governed and controlled
by the laws of the state in which the Property is located.
 
(Remainder of page intentionally left blank)

 
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IN WITNESS WHEREOF, this Mortgage has been executed by the Mortgagor as of the
day and year first above written.
 
M-C PLAZA V L.L.C., a New Jersey limited liability company
 
By:       Mack-Cali Realty, L.P.,
a Delaware limited partnership, its sole member
 
 
By:
Mack-Cali Realty Corporation,

 
a Maryland corporation, its general partner

 
By:/s/ Barry Lefkowitz
Name: Barry Lefkowitz
 
Title: Executive Vice President and Chief
        Financial Officer

 
CAL-HARBOR V URBAN RENEWAL ASSOCIATES L.P., a New Jersey limited partnership
By:       Mack-Cali Sub X, Inc.,
a Delaware corporation, its general partner
 
By:/s/ Barry Lefkowitz
Name: Barry Lefkowitz
 
Title: Executive Vice President and Chief Financial
        Officer

 

 
CAL-HARBOR V LEASING ASSOCIATES L.L.C., a New Jersey limited liability company
 
By:       Mack-Cali Realty, L.P.,
a Delaware limited partnership, its sole member
 
 
By:
Mack-Cali Realty Corporation,

 
a Maryland corporation, its general partner

 
By:/s/ Barry Lefkowitz
Name: Barry Lefkowitz
 
Title: Executive Vice President and Chief
        Financial Officer

 
(Acknowledgments on following pages)

 
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STATE OF NEW JERSEY                 )
)ss.
COUNTY OF MIDDLESEX              )
 
I CERTIFY that on October 27, 2008, Barry Lefkowitz, the Executive Vice
President and Chief Financial Officer of Mack-Cali Realty Corporation, the
General Partner of Mack-Cali Realty, L.P., the sole member of M-C PLAZA V
L.L.C., a New Jersey limited liability company, personally came before me and
stated to my satisfaction that this person:
 
(a) was the maker of the attached Instrument; and
 
(b) was authorized to and did execute this Instrument as the Executive Vice
President and Chief Financial Officer of Mack-Cali Realty Corporation, the
General Partner of Mack-Cali Realty, L.P., the sole member of M-C PLAZA V
L.L.C., a New Jersey limited liability company, the entity named in this
Instrument.
 
/s/ Susan M. Epstein
 
Susan M. Epstein
Notary Public of New Jersey
My Commission Expires: October 8, 2012
 
STATE OF NEW JERSEY                 )
)ss.
COUNTY OF MIDDLESEX              )
 
I CERTIFY that on October 27, 2008, Barry Lefkowitz, the Executive Vice
President and Chief Financial Officer of Mack-Cali Sub X, Inc., the General
Partner of CAL-HARBOR V URBAN RENEWAL ASSOCIATES L.P., a New Jersey limited
partnership, personally came before me and stated to my satisfaction that this
person:
 
(a) was the maker of the attached Instrument; and
 
(b) was authorized to and did execute this Instrument as the Executive Vice
President and Chief Financial Officer of Mack-Cali Sub X, Inc., the General
Partner of CAL-HARBOR V URBAN RENEWAL ASSOCIATES L.P., a New Jersey limited
partnership, the entity named in this Instrument.
 
/s/ Susan M. Epstein
 
Susan M. Epstein
Notary Public of New Jersey
My Commission Expires: October 8, 2012
 

 
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STATE OF NEW JERSEY                 )
)ss.
COUNTY OF MIDDLESEX              )
 
I CERTIFY that on October 27, 2008, Barry Lefkowitz, the Executive Vice
President and Chief Financial Officer of Mack-Cali Realty Corporation, the
General Partner of Mack-Cali Realty, L.P., the sole member of CAL-HARBOR V
LEASING ASSOCIATES L.L.C., a New Jersey limited liability company, personally
came before me and stated to my satisfaction that this person:
 
(a) was the maker of the attached Instrument; and
 
(b) was authorized to and did execute this Instrument as the Executive Vice
President and Chief Financial Officer of Mack-Cali Realty Corporation, the
General Partner of Mack-Cali Realty, L.P., the sole member of CAL-HARBOR V
LEASING ASSOCIATES L.L.C., a New Jersey limited liability company, the entity
named in this Instrument.
 
/s/ Susan M. Epstein
 
Susan M. Epstein
Notary Public of New Jersey
My Commission Expires: October 8, 2012
 

 
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