Exhibit 10.8

 

EXECUTION COPY

 

LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS
AND SECURITY AGREEMENT

 

Dated:  February 3, 2012
in the amount of
$27,000,000
(the “Mortgage Amount”)

 

From

 

TEACHERS VILLAGE SCHOOL QALICB URBAN RENEWAL, LLC,

a New Jersey limited liability company

 

having its principal office at:
c/o RBH Group

89 Market Street, 8th Floor

Newark, New Jersey 07102

Attention: Mr. Ron Beit

 

(the “Mortgagor”)

 

To

 

NJCC CDE ESSEX LLC,

a New Jersey limited liability company

 

having an office at:

c/o New Jersey Community Capital
108 Church Street, 3rd Floor
New Brunswick, New Jersey 08901

 

(“NJCC Lender”)

 

And

 

GATEWAY SUB-CDE I, LLC,

a Delaware limited liability company

 

having an office at:

c/o 2 Gateway Center, 5th Floor

Newark, New Jersey 07102

Attention: Wendy Houston

 

(“Gateway Lender”)

 

LOCATION OF LEASEHOLD PREMISES:

 

Street

Halsey Street, Pearl Street, Maiden Lane

 

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Address:

 

City of:

Newark

County of:

Essex

State of:

New Jersey

Block:

57.05, Lot 3.01

Block:

58 Lot 35.01; and

Block:

95 Lots 1, 2, 3, 4, 8 10,16 and 31

 

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES
OBLIGATIONS CONTAINING PROVISIONS FOR CHANGES IN INTEREST RATES, EXTENSIONS OF
TIME FOR PAYMENT AND OTHER “MODIFICATIONS,” AS DEFINED IN N.J. LAWS 1985, CH.
353, IN TERMS OF SUCH OBLIGATIONS.  UPON ANY SUCH MODIFICATION, THIS MORTGAGE
SHALL HAVE THE BENEFIT OF THE LIEN PRIORITY PROVISIONS OF THAT LAW.

 

After recording, please return to:
Nixon Peabody LLP
401 9th Street NW, Suite 900
Washington, D.C. 20004
Attn: Michael J. Goldman, Esq.

 

This instrument was prepared by the above named attorney.

 

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Recital

 

Mortgagor is the owner of a leasehold interest in the premises described in
Exhibit A hereto.  The Mortgagor proposes to construct or rehabilitate
improvements on the Leasehold Premises (as defined below) and, in order to
finance the construction thereof, will borrow amounts up to the Mortgage Amount
(the “Loan”) from each of NJCC Lender and Gateway Lender pursuant to a Building
Loan Agreement among the Mortgagor, NJCC Lender, Gateway Lender, and TD Bank,
N.A., a national banking association, as administrative agent (the
“Administrative Agent”), dated the date hereof (such agreement, together with
any modifications and/or amendments thereof, the “Loan Agreement”).  The
Mortgagor has executed and delivered to NJCC Lender and Gateway Lender the Loan
A-1 Note, Loan A-3 Note, Loan B-1 Note, Loan B-3 Note, Loan C-1 Note, Loan C-3
Note, Loan D-1 Note, and Loan D-3 Note (each as defined in the Loan Agreement,
and together with any modifications, extensions and amendments thereto
hereinafter collectively referred to as the “Note”), dated the date hereof,
obligating it to pay the Mortgage Amount, or so much thereof as may be advanced
in accordance with the terms of the Loan Agreement.

 

Certain Definitions

 

The Mortgagor, NJCC Lender, Gateway Lender, and Administrative Agent agree that,
unless the context otherwise specifies or requires the following terms shall
have the meanings herein specified, such definitions to be applicable equally to
the singular and the plural forms of such terms.

 

“Block 95 Parcels” shall mean the portion of the Mortgaged Property comprising
Block 95, Lots 1, 2, 3, 4, Lot 8, 10, 16 and 31, and, all on the current
official tax maps of the City of Newark, County of Essex, New Jersey.

 

“Chattels” means all fixtures, fittings, appliances, apparatus, equipment,
machinery and articles of personal property and replacements thereof, other than
those owned by lessees, now or at any time hereafter affixed to, attached to,
placed upon, or used in any way in connection with the complete and comfortable
use, enjoyment, occupancy or operation of the Improvements on the Leasehold
Premises.

 

“Construction Period” means the period from the date hereof to the completion of
the improvements required to be built pursuant to the terms and conditions of
the Loan Agreement.

 

“Events of Default” means the events and circumstances described as such in
Section 2.1 hereof.

 

“Family Members” shall mean the spouses, parents, children and grandchildren of
the partners, members or other equity interest holders in Mortgagor and any
trust established for estate planning purposes for the benefit of such partners,
members or other equity interest holders in Mortgagor or any of the foregoing
specified family members.

 

“Ground Lease” means that certain Ground Lease by and between Mortgagor and
RBH-TRB East Mezz Urban Renewal Entity, L.L.C., a New Jersey limited liability
company, dated as of the date hereof.

 

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“Improvements” means all structures and/or buildings, and replacements thereof,
to be erected or now or hereafter located upon the Leasehold Premises by the
Mortgagor, including all plant equipment, apparatus, machinery and fixtures of
every kind and nature whatsoever forming part of said structures and/or
buildings.

 

“Intangibles” means all “general intangibles” (as such quoted term is defined in
the Uniform Commercial Code of the state wherein the Leasehold Premises are
located) in any way relating to the Leasehold Premises and/or the Improvements
and in which the Mortgagor has any interest, all licenses, trade names, good
will and books and records relating to the business operated or to be operated
on the premises or any part thereof, and all unearned premiums, accrued,
accruing or to accrue under all insurance policies now or hereafter obtained by
the Mortgagor insuring the Mortgaged Property, as hereinafter defined, and all
rights and interest of the Mortgagor thereunder and all rights, claims and/or
causes of action which the Mortgagor may have now or may have in the future
against any party or parties with respect to the Leasehold Premises, the
Chattels and/or the Leasehold Premises.

 

“Involuntary Rate” means twelve and seventy-five hundredths percent (12.75%)
above the rate of interest that would otherwise be payable under the Note, but
in no event to exceed the maximum rate allowed by law.

 

“Leasehold Premises” means the leasehold estate created pursuant to the Ground
Lease with respect to certain premises situated in the City of Newark, County of
Essex and State of New Jersey and more fully described in Exhibit A attached
hereto and made a part hereof, which Ground Lease, or a memorandum thereof, has
been recorded on the date hereof in the Office of the Recorder of Deeds in and
for Essex County, New Jersey, including all of the air space, easements, rights,
privileges, royalties and appurtenances thereunto belonging or in anywise
appertaining, and all of the estate, right, title interest, claim or demand
whatsoever of the Mortgagor therein and in the streets, alleys and ways adjacent
thereto, either in law or in equity, in possession or expectancy, now or
hereafter acquired.

 

“Mortgagee” or “Mortgagees” means, collectively, NJCC Lender, Gateway Lender,
and Administrative Agent on behalf of NJCC Lender and Gateway Lender.

 

“Releases” has the meaning set forth in Section 3.15 hereof.

 

“Upper Tier Entity” shall mean, individually and collectively as the context
requires, (a) TRB Newark Assemblage, LLC, (b) TRB Newark TRS, LLC, (c) RBH
Partners, LLC and RBH Capital, LLC.

 

The terms used in this Leasehold Mortgage, Assignment of Leases and Rents and
Security Agreement (this “Mortgage”) which are not defined above or in the text
of this Mortgage shall have the meanings ascribed thereto in the Loan Agreement.

 

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Granting Clause

 

NOW, THEREFORE, for the purposes of securing the payment and performance of the
following obligations (collectively, all of such obligations are hereinafter
referred to as the “Indebtedness”):

 

(i)            the payment of both the principal of, and the interest and any
other sums payable on, the Note or under this Mortgage, together with interest
thereon and any and all fees with respect thereto as may be set forth in the
Note and/or the Loan Agreement, and all amounts expended by any Mortgagee to
maintain the lien of this Mortgage or protect any of the Mortgaged Property,
including without limitation, all amounts in respect of insurance premiums and
real estate taxes, charges and assessments, reasonable litigation expenses to
prosecute or defend the rights, remedies and lien of this mortgage or title to
the Mortgaged Property, and any costs, charges or amounts to which any Mortgagee
become subrogated upon payment, whether under recognized principles of law or
equity or under express statutory authority; and

 

(ii)           the performance and observance of all the provisions hereof and
of the Note and of the Loan Agreement, including the payment of any sums
advanced by any Mortgagee to complete the Improvements contemplated by the Loan
Agreement to the extent the aggregate of such sums and any other sums expended
pursuant hereto exceed the sum of the Mortgage Amount

 

the Mortgagor, for good and valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound hereby, gives, grants, bargains,
sells, warrants, aliens, remises, releases, conveys, assigns, transfers,
mortgages, hypothecates, deposits, pledges, sets over and confirms unto each
Mortgagee, all its estate, right, title and interest in, to and under any and
all of the following described property (the “Mortgaged Property”) whether now
owned or held or hereafter acquired:

 

(i)                                     the Leasehold Premises, subject to the
Releases;

 

(ii)                                  the Improvements:

 

(iii)                               the Chattels;

 

(iv)                              the Intangibles;

 

(v)           all rents, royalties, issues, profits, revenue, income and other
benefits of the Mortgaged Property (the “Rents”), the Lease (as such term is
defined in the Loan Agreement) and all leases and lettings of the Leasehold
Premises now or hereafter entered into and all right, title and interest of the
Mortgagor thereunder, including, without limitation, cash or securities
deposited thereunder to secure performance by the lessees of their obligations
thereunder, whether such cash or securities are to be held until the expiration
of the terms of such leases or applied to one or more of the installments of
rent coming due immediately prior to the expiration of such terms, including
further, the right upon the happening of an Event of Default, to receive and
collect the Rents thereunder;

 

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(vi)          all real estate tax refunds;

 

(vii)         all contracts of sale now or hereafter entered into in connection
with the Mortgaged Property or any part thereof and all right, title and
interest of Mortgagor thereunder, including, without limitation, cash or
securities deposited thereunder to secure performance of buyers of their
obligations thereunder and also including the right upon the happening of an
event of default thereunder to enforce the obligations of such buyers and to
receive and collect the amounts deposited thereunder and any and all further
amounts which may be due under such contracts of sale or due upon the
consummation of such contracts of sale;

 

(viii)        all right, title and interest of Mortgagor in and to all
agreements, or contracts, now or hereafter entered into for the sale, leasing,
brokerage, development, construction, management, maintenance and/or operation
of the Leasehold Premises (or any part thereof), including all moneys due and to
become due thereunder, and all permits, licenses, bonds, insurance policies,
plans and specifications relative to the construction and/or operation of the
Improvements upon the Mortgaged Property;

 

(ix)          all Mortgagor’s rights and remedies at any time arising under or
pursuant to Subsection 365(h) of the Bankruptcy Code, including, without
limitation, all of Mortgagor’s rights to remain in possession of the Leasehold
Premises;

 

(x)           all of Mortgagor’s claims and rights to the payment of damages
arising from any rejection of a lease under or pursuant to the Bankruptcy Code,
11 U.S.C. § 101 et seq.;

 

(xi)          any other property and rights which are, by the provisions of any
document entered into in connection with the making of the Loan (collectively,
the “Loan Documents”), required to be subject to the lien hereof, and any
additional property and rights that may from time to time hereafter by
installation in the Mortgaged Property, or by writing of any kind, or otherwise,
be subjected to the lien hereof by Mortgagor or by anyone on its behalf;

 

(xii)         all deposits in, and proceeds of, all operating accounts of
Mortgagor maintained at any Mortgagee; and

 

(xiii)        all proceeds of the conversion, voluntary or involuntary, of any
of the foregoing into cash or liquidated claims, including, without limitation,
proceeds of hazard and title insurance and condemnation awards and all rights of
the Mortgagor to refunds of real estate taxes and assessments.

 

TO HAVE AND TO HOLD unto each Mortgagee, its successors and assigns forever.

 

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ARTICLE I

 

PARTICULAR COVENANTS OF THE MORTGAGOR

 

The Mortgagor covenants and agrees as follows:

 

1.1          The Mortgagor represents and warrants that it has a good and
marketable title to a leasehold estate in the Leasehold Premises subject to no
lien, charge or encumbrance except such as are listed as exceptions to title in
the title policy insuring the lien of this Mortgage; that it will own the
Chattels free and clear of liens and claims; that this Mortgage is and will
remain a valid and enforceable first lien on the Mortgaged Property subject only
to the Releases and the exceptions referred to above; that the execution and
delivery of this Mortgage and the Note has been duly authorized by the Mortgagor
and that there is no provision in any document which evidences or establishes
the existence of the Mortgagor requiring further consent for such action by any
other entity or person; that it is duly organized, validly existing and is in
good standing under the laws of the state of its formation or incorporation, as
the case may be; that it has (i) all necessary licenses, authorizations,
registrations, permits and approvals and (ii) full power and authority to own
its properties and carry on its business as presently conducted and the
execution and delivery by it of and performance of its obligations under, this
Mortgage and the Note will not result in the Mortgagor being in default under
any provisions of any document which evidences or establishes the existence of
the Mortgagor or of any mortgage, credit or other agreement to which the
Mortgagor is a party or which affects the Mortgagor or the Leasehold Premises,
or any part thereof; that it will preserve such title, and will forever warrant
and defend the same to each Mortgagee and will forever warrant and defend the
validity and priority of the lien hereof against the claims of all Persons and
parties whomsoever.

 

1.2          The Mortgagor will, at the cost of the Mortgagor, and without
expense to either Mortgagee, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers and assurances as each Mortgagee shall from time to time
require, for the better assuring, conveying, assigning, transferring and
confirming unto each Mortgagee the property and rights hereby conveyed or
assigned or intended now or hereafter so to be, or which the Mortgagor may be or
may hereafter become bound to convey or assign to each Mortgagee, or for
carrying out the intention or facilitating the performance of the terms of this
Mortgage, or for filing, registering or recording this Mortgage and, on demand,
will execute and deliver, and hereby authorizes each Mortgagee to execute and
file in the name of the Mortgagor to the extent it may lawfully do so, one or
more financing statements, chattel mortgages or comparable security instruments,
to evidence more effectively the lien hereof upon the Mortgaged Property or any
part thereof.  Mortgagor will, at its sole cost and expense, do, execute,
acknowledge and deliver all and every such acts, information reports, returns
and withholding of monies as shall be necessary or appropriate to comply fully,
or to cause full compliance, with all applicable information reporting and
back-up withholding requirements of the Internal Revenue Code of 1986, as
amended (including all regulations promulgated thereunder) in respect of the
Leasehold Premises and all transactions related to the Leasehold Premises, and
will at all times upon any Mortgagee’s request provide such Mortgagee with
satisfactory evidence of such compliance and notify such Mortgagee of the
information reported in connection with such compliance.

 

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1.3          (a)           The Mortgagor forthwith upon the execution and
delivery of this Mortgage, and thereafter from time to time, will cause this
Mortgage, the Loan Agreement and any security instrument creating a lien or
evidencing the lien hereof upon the Chattels and/or the Intangibles and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien hereof upon, and the
interest of each Mortgagee in, the Mortgaged Property.

 

(b)           Subject to the right of Mortgagor to in good faith contest such
claims with the applicable authority, the Mortgagor will pay all filing,
registration or recording fees, and all expenses incident to the execution and
acknowledgment of this Mortgage, any mortgage supplemental hereto, any security
instrument with respect to the Chattels or the Intangibles, and any instrument
of further assurance, and all federal, state, county and municipal stamp taxes
and other taxes, duties, imposes, assessments and charges arising out of or in
connection with the execution and delivery of the Note, this Mortgage or any
mortgage supplemental hereto, any security instrument with respect to the
Chattels and/or the Intangibles or any instrument of further assurance.

 

1.4          The Mortgagor will punctually pay the principal and interest and
all other sums to become due in respect of the Note and the Loan Agreement at
the time and place and in the manner specified in the Note, according to the
true intent and meaning thereof, all in any coin or currency of the United
States of America which at the time of such payment shall be legal tender for
the payment of public and private debts and all such principal and interest due
in respect of the Note and the Loan Agreement is hereby deemed an obligation due
under this Mortgage.

 

1.5          The Mortgagor will, so long as it is leasehold owner of the
Mortgaged Property or any part thereof, do all things necessary to preserve and
keep in full force and effect its existence, franchises, rights and privileges
as a business and/or limited liability company under the laws of the state of
its formation and will comply with all regulations, rules, ordinances, statutes,
orders and decrees of any governmental authority or court applicable to the
Mortgagor or to the Mortgaged Property or any part thereof.

 

1.6          All right, title and interest of the Mortgagor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Mortgaged Property, hereafter
acquired by, or released to, the Mortgagor or constructed, assembled or placed
by the Mortgagor on the Leasehold Premises or any part thereof, and all
conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be, and in each such case, without any further mortgage, conveyance,
assignment or other act by the Mortgagor, shall become subject to the lien of
this Mortgage as fully and completely, and with the same effect, as though now
owned by the Mortgagor and specifically described in the granting clause hereof,
but at any and all times the Mortgagor will execute and deliver to each
Mortgagee any and all such further assurances, mortgages, conveyances or
assignments thereof as such Mortgagee may reasonably require for the purpose of
expressly and specifically subjecting the same to the lien of this Mortgage.

 

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1.7          (a)           The Mortgagor, from time to time when the same shall
become due and payable, will pay and discharge all taxes of every kind and
nature, all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges, and all other public
charges whether of a like or different nature, imposed upon or assessed against
the Mortgaged Property, or any part thereof, or upon the revenues, rents,
issues, income and profits of the Mortgaged Property or arising in respect of
the occupancy, use or possession thereof.  The Mortgagor will, upon the
reasonable request of any Mortgagee, deliver to such Mortgagee receipts
evidencing the payment of all such taxes, assessments, levies, fees, rents and
other public charges imposed upon or assessed against the Mortgaged Property, or
any part thereof, or the revenues, rents, issues, income or profits thereof.

 

Mortgagees may, at their reasonable option to be exercised by thirty (30) days
written notice to the Mortgagor, require the deposit by the Mortgagor, at the
time of each payment of an installment of interest or principal under the Note,
of an additional amount sufficient to discharge the obligations under this
subsection (a) when they become due.  The determination of the amount so payable
and of the fractional part thereof to be deposited with Mortgagees, so that the
aggregate of such deposit shall be sufficient for this purpose, shall be made by
Mortgagees in their reasonable discretion.  Such amounts shall be held by
Mortgagees with interest and applied to the payment of the obligations in
respect to which such amounts were deposited or, at the option of Mortgagees, to
the payment of said obligations in such order or priority as Mortgagees shall
determine, on or before the respective dates on which the same or any of them
would become delinquent.  If one month prior to the due date of any of the
aforementioned obligations the amounts then on deposit therefor shall be
insufficient for the payment of such obligation in full, the Mortgagor within
ten (10) days after demand shall deposit the amount of the deficiency with
Mortgagees.  Nothing herein contained shall be deemed to affect any right or
remedy of any Mortgagee under any provisions of this Mortgage or of any statute
or rule of law to pay any such amount and to add the amount so paid to the
Indebtedness.

 

(b)           The Mortgagor will pay, from time to time when the same shall
become due, all lawful claims and demands of mechanics, materialmen, laborers,
and others which, if unpaid, might result in, or permit the creation of, a lien
on the Mortgaged Property or any part thereof, or on the revenues, rents,
issues, income and profits arising therefrom and in general will do or cause to
be done everything necessary so that the lien of this Mortgage shall be fully
preserved, at the cost of the Mortgagor, without expense to any Mortgagee.

 

(c)           Nothing in this Section 1.7 shall require the payment or discharge
of any obligation imposed upon the Mortgagor by this Section so long as the
Mortgagor shall in good faith and at its own expense bond such obligation,
contest the same or the validity thereof by appropriate legal proceedings which
shall operate to prevent the collection thereof or other realization thereon and
the sale or forfeiture of the Leasehold Premises or any part thereof to satisfy
the same; provided that during such contest the Mortgagor shall, at the option
of any Mortgagee, provide security reasonably satisfactory to such Mortgagee,
assuring the discharge of the Mortgagor’s obligation hereunder and of any
additional charge, penalty or expense arising from or incurred as a result of
such contest; and provided further, that if at any time payment of any
obligation imposed upon the Mortgagor by subsection (a) of this Section shall
become necessary to prevent the delivery of a tax deed, or its equivalent,
conveying the Mortgaged

 

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Property, or any part thereof, because of non-payment, then the Mortgagor shall
pay the same in sufficient time to prevent the delivery of such tax deed or its
equivalent.

 

1.8          The Mortgagor will pay any and all taxes, governmental charges,
fees and/or levies by reason of each Mortgagee’s ownership of the Note or this
Mortgage and/or resulting from the exercise by any Mortgagee of any of its
rights and/or remedies provided for under this Mortgage, except for income taxes
of any Mortgagee, and any similar gains tax law which may hereafter be enacted. 
The obligations assumed by the Mortgagor pursuant to this Section 1.8 shall
survive the exercise by each Mortgagee of any of its rights and/or remedies
under this Mortgage.

 

1.9          (a)           Mortgagor shall keep the Premises and Chattels
insured against such perils and hazards, and in such amounts and with such
limits, as Mortgagee may from time to time require, and in any event will
continuously maintain, at Mortgagor’s sole cost and expense, the following
described policies of insurance (collectively, the “Insurance Policies”):

 

(i)        During any period of construction, repair or restoration, “All Risk”
Builder’s Risk insurance policy for the Project on which the work is to be
executed or which is to be constructed, for the full completed value of
Improvements and shall also cover material, equipment, and supplies of all kinds
incident to the Improvements, in temporary structures, in vehicles, or in the
open.

 

(ii)       Property insurance, covering the Mortgaged Property, including 100%
of the insurable replacement cost value of all tenant improvements and
betterments that any Agreement requires Mortgagor to insure, against all risks
of loss to the Improvements customarily covered by so-called “Cause of Loss —
Special Form” policies as available in the insurance market as of the closing
date.  Such policy shall cover at least the following perils: building collapse,
fire, flood, back-up of sewers and drains, water damage, tsunami, windstorm,
earthquake, earth movement, landslide, mudslide, subsidence, acts of terrorism,
impact of vehicles and aircraft, lightning, machinery breakdown, malicious
mischief, and vandalism.  The policy shall cover (i) 100% of the insurable
replacement cost value of the Mortgaged Property; (ii) 100% of the insurable
replacement cost value of all tenant improvements and betterments that any
agreement requires Mortgagor to insure; (iii) loss of the undamaged portion of
the Mortgaged Property and additional expense of demolition and increased cost
of construction, including, without limitation, increased costs that arise from
any changes in laws or other legal requirements with respect to such
restoration, in an amount as is acceptable to Mortgagee. Coverage to include
replacement cost valuation, no margin clause and a waiver of coinsurance or
agreed amount endorsement, and include such clauses as may be necessary to
ensure that the Mortgagee will not be deemed to be a co-insured thereunder.  The
policy shall have no deductible more than $25,000, except as agreed to by
Mortgagee, and shall be written with an unexpired term of at least one year,
issued by an insurer acceptable to the Mortgagee.  The policy shall also cover
business interruption and/or rent loss, on an actual loss sustained basis, in an
amount at least equal to 18 months of the Mortgagor’s actual or projected gross
revenue, including from the Ground Lease, and if applicable Mortgagor’s income,
with respect to subtenants under the Ground Lease, at 80% occupancy during such
period. The amount of such insurance shall be increased from time to time during
the term of

 

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the Note as and when receipts from the Premises increase, and shall be endorsed
to include an extended period of indemnity of at least 180 days. The policy
shall name the Mortgagee on a standard mortgagee endorsement for real property
and lender loss payee endorsement for loss of income coverage on forms
acceptable to Mortgagee.  With respect to property insurance sub limits and/or
annual or policy-term aggregate limits applicable to any insured peril,
including but not limited to earthquake, flood, named storm and any other peril
that may be subject to such sub limit and/or aggregate limit, Mortgagor agrees
that if the limit of insurance applicable to any insured peril is subject to an
annual aggregate or a policy-term aggregate, Mortgagor will notify Mortgagee if
and when applicable policy aggregate limits are eroded due to incurred losses by
50% or more of applicable limits during the term of the loan, and further, that
Mortgagor, as commercially reasonable, (as agreed to between the Mortgagor and
Mortgagee), will immediately cause the aggregate limits to be restored to 100%
of the pre-loss aggregate limit;

 

(iii)      Commercial general liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the Mortgaged
Property (such coverage to include provisions waiving subrogation against the
Authority and the Purchaser), including coverage for: (i) commercial general
liability insurance; (iii) umbrella liability insurance,  Liability insurance
shall be in the so-called “occurrence” form and shall provide coverage in
amounts not less than $25,000,000 per occurrence and $25,000,000 in the annual
aggregate.  All Liability Insurance shall name Mortgagee as an “Additional
Insured”, including both on-going and completed operations, by endorsements
satisfactory to Mortgagee;

 

(iv)      Worker’s Compensation and Employer’s Liability insurance shall be
provided in accordance with the requirements of the laws of New Jersey.

 

(v)       During any period of construction Mortgagor shall provide or ensure
that the following coverage is maintained:

 

(A)          “Special Perils” builders’ all risk insurance written in “100%
builders risk completed value, non-reporting form”, including coverage therein
for “completion and/or premises occupancy”, such insurance to be in the amounts
and terms specified in subparagraph (ii) above, plus, (1) coverage for all
materials which will become a part of the new building, whether at the
construction site, stored elsewhere, or in transit; (2) soft costs coverage
including 100% of the loan interest, and coverage for recurring expenses
including but not limited to plans, specifications, blueprints and models, real
estate taxes, real estate commissions, advertising, architectural and
engineering supervisory costs, legal and accounting costs, and delayed
completion business income/rental interruption (if any) on an actual loss
sustained basis; (3) provide for permission for partial occupancy.

 

(B)          Mortgagor shall ensure that the general contractor for this project
maintains (i) commercial general liability coverage, including products and
completed operations coverage, containing no EIFS (Exterior Insulation Finish
System) exclusion with respect to this project if the project will use EFIS,
that shall be continuously renewed for the statutory period during which claims
can be made following completion of the project, (ii) automobile liability
insurance (including owned, hired and non-owned liability) and
(iii) umbrella/excess liability insurance with no less than $25,000,000 in
limits per occurrence and in the annual aggregate per

 

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project or $50,000,000 if aggregates are shared among multiple projects, and in
addition all trade contractors shall provide similar liability insurance
coverage with umbrella liability limits that are commensurate with the risks
presented by their operations at the site as determined by the general
contractor, provided that any crane subcontractor shall provide limits of at
least $10,000,000 or such other amount as is acceptable to Mortgagee.  All
parties engaged in work on the Improvements or on any restoration shall maintain
any workers’ compensation and employer’s liability insurance required by law in
force for all workers on the job. A certificate of insurance shall be issued to
Mortgagee, naming Mortgagee as Additional Insured (except with respect to
workers’ compensation and employer’s liability), and evidencing all insurance
required in this subsection.  Mortgagee shall be named as Additional Insured
with respect to general contractor’s ongoing operations and completed operations
by endorsements satisfactory to Mortgagee.  Such insurance shall be primary and
any other insurance maintained by the additional insured shall be excess only
and not contributing with this insurance.

 

(C)          Contractor’s Pollution Legal Liability Insurance for the entire
term of the construction project, in a minimum amount of $5,000,000, and
including coverage for mold. Such policy shall name Mortgagee as Additional
Insured on a form acceptable to Mortgagee.

 

(D)          Architects and Engineers Professional Liability Insurance. 
Mortgagor shall cause the Architect and Engineers to obtain and maintain
Architect’s and Engineer’s Professional Liability Insurance during the period
commencing on the date of the Architect’s agreement or the date of contract with
the engineers, respectively, and continuously renewing for a period no less than
the statute of limitations in the state where the project is located during
which claims can be made after substantial completion.  Such insurance shall be
in an amount equal to at least $3,000,000 per claim and in the annual aggregate,
or such other amount acceptable to Mortgagee.  Any subcontractor to the
Architect shall maintain such insurance in an amount not less than $1,000,000
per claim and in the annual aggregate or such other amount acceptable to
Mortgagee.

 

(vi)      Borrower shall maintain environmental insurance covering unknown
environmental hazards in an amount not less than $10,000,000 per discovery and
in the Aggregate.  Such coverage shall identify Mortgagee as an “Additional
Named Insured” through an endorsement satisfactory to Mortgagee.  The carrier
shall agree that the policy rights for the project shall be automatically
assigned to Mortgagee, with no further action required by any person, if control
of the Mortgaged Property passes to Mortgagee or to any of their respective
designees as the direct or indirect result of an event of default or as the
direct or indirect result of the enforcement of any rights or remedies of
Mortgagee hereunder or under any of the Loan Documents (including, without
limitation, the transfer of the property and/or Improvements or any interest
therein to Mortgagee or its designee through foreclosure, by deed-in-lieu of
foreclosure or otherwise);

 

(vii)     Insurance against loss or damage from (A) leakage of sprinkler systems
and (B) explosion of steam boilers, air conditioning equipment, high pressure
piping, machinery and equipment, pressure vessels or similar apparatus now or
hereafter installed in the

 

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Improvements (without exclusion for explosions or testing procedures), in an
amount at least equal to the outstanding principal amount of the Note or
$5,000,000, whichever is less;

 

(viii)    If the Premises, or any part thereof, are located in an area that has
been identified by the Federal Emergency Management Agency as being located in a
special flood hazard area, Mortgagor will keep, for as long as any Indebtedness
remains unpaid, the Improvements covered by flood insurance in an amount equal
to the lesser of (A) the full replacement cost of the Premises or (B) the
maximum limit of coverage available for the Premises under the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as the same
may have been or may hereafter be amended or modified (and any successor act
thereto); and

 

(ix)      Such other types and amounts of insurance coverage as shall be
reasonably requested by Mortgagee and are customarily (A) maintained by owners
or operators of properties similarly situated to the Premises, or (B) required
by institutional lenders in like transactions.

 

(b)           Each of the Insurance Policies shall be endorsed to name Mortgagee
and its successors and assigns as mortgagee or lender loss payee, with loss
greater than $250,000.00 payable to Mortgagee and its successors and assigns,
without contribution or assessment, pursuant to a standard first mortgage
endorsement in the form of, or substantially equivalent to, the standard
mortgagee or lender loss payee endorsement used in the State of New Jersey,
provided that with respect to liability insurance or other policies of insurance
required hereunder where a mortgagee or lender loss payee endorsement is not
available, Mortgagee shall, to the fullest extent available, be named as an
additional insured in any such Insurance Policies.  All Insurance Policies and
endorsements required pursuant to this Section 1.09 shall be fully paid as
premiums are due and contain such provisions and expiration dates and be in such
form and amounts as indicated above and shall be issued by an insurance company
authorized to sell insurance in the State of New Jersey, and having an A.M. Best
General policyholders’ rating of A or better and a financial size category of 8
or better.  Subject to the Intercreditor Agreement, without limiting the
foregoing, each policy shall specifically provide that (A) such policy may not
be cancelled except upon thirty (30) days’ prior written notice to Mortgagee and
that no act or thing done by Mortgagor shall invalidate the policy as against
Mortgagee and (B) any and all insurance proceeds will be paid to Mortgagee so
long as Mortgagee certifies to the insurer that the unpaid Indebtedness exceeds
the proceeds of insurance.  Each policy shall provide a waiver of any right of
subrogation of the insurers thereunder against any Person insured under such
policy, and a waiver of any right of the insurers to any set off or counterclaim
or any other deduction, whether by attachment or otherwise, in respect of any
liability of any Person insured under such policy; and each policy shall provide
such other terms and provisions as any owner or operator of facilities similar
to the Borrower’s would, in the prudent management of its properties, require to
be provided in policies, binders or interim insurance contracts with respect to
facilities similar to the Project or the collateral owned or operated by it.  At
least thirty (30) days prior to the expiration of any such policy, the Mortgagor
shall furnish the Mortgagee with evidence that such policy has been renewed or
replaced, in formats acceptable to the Mortgagee.  Mortgagor shall provide
copies of all renewal or replacement policies within 60 days of the renewal
date.  Mortgagor shall assign and deliver the Insurance Policies to Mortgagee
and

 

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Mortgagee shall have and hold said Insurance Policies as collateral and further
security for the payment of the Indebtedness until the full payment of the
Indebtedness, or, if reasonably acceptable to Mortgagee, certificates of such
policies together with such other information regarding such policy as Mortgagee
shall reasonably require.  In addition, from time to time, upon occurrence of
any change in the use, operation or value of the Premises, or in the
availability of insurance in the area in which the Premises are located,
Mortgagor shall, within twenty (20) days after reasonable demand by Mortgagee,
take out such additional amounts and/or such other kinds of insurance as
Mortgagee may require. The Insurance Policies delivered by Mortgagor to
Mortgagee on the date hereof shall be deemed acceptable to Mortgagee.

 

(c)           Mortgagor shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section 1.09, unless Mortgagee is included thereon as a named insured with
loss payable to Mortgagee under the standard mortgage endorsement of the
character above described.  Mortgagor shall immediately notify Mortgagee
whenever any such separate insurance is taken out and shall promptly deliver to
Mortgagee the policy or policies of such insurance.

 

(d)           Subject to the Intercreditor Agreement and, for so long as it is
in effect, the Ground Lease, Mortgagor shall give Mortgagee prompt written
notice of any damage to, or destruction of, the Improvements, or any part
thereof, or of any other casualty or loss at or affecting the Premises or the
Chattels, and Mortgagee shall have the right to approve the adjustment of any
insurance claim in respect of any such damage, destruction, casualty or loss in
excess of $250,000.  To the fullest extent permitted by applicable law, the
proceeds of any insurance coming into the possession of Mortgagee in respect of
any damage, destruction, casualty or loss shall not be deemed trust funds, and
Mortgagee shall have the option, in its sole discretion, to apply any insurance
proceeds it may receive pursuant hereto or otherwise to the payment of the
Indebtedness, or to allow all or a portion of such proceeds to be used for the
restoration of the Mortgaged Property.  In the event any such insurance proceeds
shall be used to reduce the Indebtedness, the same shall be applied by
Mortgagee, after the deduction therefrom and repayment to Mortgagee of any and
all costs incurred by Mortgagee in the recovery thereof (including reasonable
attorneys’ fees and disbursements), in any manner it shall designate, including
but not limited to, the application of such proceeds to the then unpaid
installments of the principal balance due under the Note in the inverse order of
their maturity, such that the regular payments, if any, under the Note shall not
be reduced or altered in any manner.  Any prepayment of the Note from the
proceeds of insurance shall be without prepayment premium.  Notwithstanding the
foregoing, if the Improvements have been damaged or destroyed, Mortgagee shall
allow Mortgagor to use any such insurance proceeds for the restoration of the
Improvements, provided that Mortgagee shall reasonably determine that the
restoration of the Improvements can be completed prior to the Maturity Date (as
defined in the Note) of the Note, and that insurance proceeds shall be
sufficient to complete the restoration, or if the amount of such insurance
proceeds shall be insufficient to complete such restoration, Mortgagor deposits
with Mortgagee an amount equal to the difference between the Architect’s
Estimate (as defined below) of the cost of such restoration and the insurance
proceeds received.

 

(e)           Subject to the Intercreditor Agreement and, for so long as it is
in effect, the Ground Lease, unless the Indebtedness is paid in full to
Mortgagee within thirty (30) days of

 

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the date of any damage, destruction, loss or other casualty to the Improvements,
and provided that casualty insurance proceeds are made available to Mortgagor,
Mortgagor shall promptly commence and diligently continue to perform the
repairs, restoration and rebuilding of the portion of the Improvements so
damaged or destroyed (hereinafter the “Work”) so as to restore the Improvements
and Chattels in full compliance with all legal requirements and so that the
Mortgaged Property shall be at least equal in value and general utility as they
were prior to such damage or destruction, and if such damage or destruction, in
the reasonable judgment of Mortgagee, shall exceed Two Hundred Fifty Thousand
($250,000) Dollars (hereinafter, collectively “Major Work”), Mortgagor shall,
prior to the commencement of the Major Work, furnish to Mortgagee for its
approval:  (1) complete plans and specifications for the Major Work, with
satisfactory evidence of the approval thereof (i) by all governmental
authorities whose approval is required and (ii) by Borrower’s Architects (as
defined in the Loan Agreement) or other architect satisfactory to Mortgagee
(hereinafter, the “Architect”) and which shall be accompanied by the Architect’s
signed estimate, bearing the Architect’s seal, of the entire cost of completing
the Major Work; and (2) certified or photostatic copies of all permits and
approvals required by law in connection with the commencement and conduct of the
Major Work.  Mortgagor shall not commence any of the Major Work until Mortgagor
shall have complied with applicable requirements referred to in this subsection
(e), and after commencing the Major Work, Mortgagor shall perform the Major Work
diligently and in good faith in accordance with the plans and specifications
referred to in this subsection (e), if applicable.

 

(f)            Subject to the Intercreditor Agreement and, for so long as it is
in effect, the Ground Lease, if the insurance proceeds, less the cost, if any,
to Mortgagee of such recovery and of paying out such proceeds (including
reasonable attorneys’ fees and costs allocable to inspecting the Work and the
plans and specifications therefor) should be paid towards restoration of the
Improvements and Chattels or if such insurance proceeds are applied toward such
restoration, then such insurance proceeds shall be applied by Mortgagee to the
payment of the cost of the Work and shall be paid out from time to time to
Mortgagor and/or, at Mortgagee’s option, directly to the contractor,
subcontractors, materialmen, laborers, engineers, architects and other persons
rendering services or materials for the Work, as said Work progresses except as
otherwise hereinafter provided, but subject to the following conditions, any of
which Mortgagee may freely waive, at Mortgagee’s sole discretion:

 

(i)            If the Work to be done is Major Work, as determined by Mortgagee,
the Architect shall be in charge of such Major Work;

 

(ii)           Each request for payment shall be made on fifteen (15) days prior
notice to Mortgagee and shall be accompanied by a certificate of the Architect
if one is required under subsection (e) above, otherwise by a certificate of an
officer of Mortgagor, stating (A) that all of the Work completed has been done
in compliance with the approved plans and specifications, if any be required
under said subsection (e) above, and in accordance with all provisions of law;
(B) the sum requested is justly required to reimburse Mortgagor for payments by
Mortgagor to, or is justly due to, the contractor, subcontractor, materialmen,
laborers, engineers, architects or other persons rendering services or materials
for the Work (giving a brief description of such services and materials), and
that when added to all sums, if any, previously paid out by Mortgagee does not
exceed the value of the Work done to date of

 

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such certificate, and (C) that the amount of such proceeds and other deposits
remaining in the hands of Mortgagee will be sufficient on completion of the Work
to pay for the same in full (giving in such reasonable detail as Mortgagee may
require an estimate of the cost of such completion);

 

(iii)          Each request shall be accompanied by waivers of liens
satisfactory to Mortgagee covering that part of the Work previously paid for, if
any, and by a search prepared by the title company which insured the lien of the
Mortgage or by other evidence satisfactory to Mortgagee, that there has not been
filed with respect to the Premises or any part thereof any mechanic’s lien or
other lien or instrument for the retention of title in respect of any part of
the Work not discharged of record and that there exist no encumbrances on or
affecting the Premises or any part thereof or any part of the other Mortgaged
Property, other than the Permitted Encumbrances, if any;

 

(iv)          The request for any payment after the Work has been completed
shall be accompanied by a copy of all certificates, permits, licenses, waivers
and/or other documents required by law to render occupancy of the Premises
legal; and

 

Upon completion of the Work and payment in full therefor, or upon failure on the
part of Mortgagor to commence, as provided in Section 1.09(e) above, or
diligently to continue the Work, or at any time upon request by Mortgagor,
Mortgagee may apply the amount of any such proceeds then or thereafter in the
hands of Mortgagee to the payment of the Indebtedness; provided, however, that
nothing herein contained shall prevent Mortgagee from applying at any time the
whole or any part of such proceeds to the curing of any default after expiration
of applicable notice and cure periods under this Mortgage, the Note or any other
Loan Documents.

 

1.10        Notwithstanding the foregoing, provided no Event of Default exists
hereunder, each Mortgagee shall allow the use of such proceeds for the
restoration of the “Improvements”, as defined in the Loan Agreement and
Chattels, provided each Mortgagee and “Construction Consultant,” as such term is
defined in the Loan Agreement, determine that the amount of such insurance
proceeds plus the undisbursed portion of the Loan for “Direct Costs”, as defined
in the Loan Agreement, and any available equity or other funds of the Mortgagor
shall be sufficient to complete the Improvements on or before the “Completion
Date”, as defined in the Loan Agreement.  In the event any Mortgagee shall allow
the use of such proceeds for the restoration of the “Improvements,” as defined
in the Loan Agreement, the Mortgagor shall diligently prosecute completion of
the Improvements in accordance with the terms of the Loan Agreement, and the
insurance proceeds and/or the amount of any such deposits shall be disbursed to
Mortgagor under the same terms and conditions for the advancing of loan proceeds
under the Loan Agreement except that if the damage is less than $250,000.00,
then the proceeds shall be disbursed to Mortgagor in one advance upon completion
of the restoration; amounts not required for such purposes shall be applied, at
such Mortgagee’s option, to the prepayment of the Note and to interest, if any,
accrued and unpaid thereon in such order and proportions as such Mortgagee may
elect.  In the event that such proceeds are reasonably determined by any
Mortgagee to be inadequate, such Mortgagee shall receive from Mortgagor a cash
deposit equal to the excess of said estimated cost of restoration over the
amount of said available proceeds.  If the conditions for the advance of
insurance proceeds for restoration set forth above are not

 

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satisfied within sixty (60) days of such Mortgagee’s receipt thereof or if the
actual restoration shall not have been commenced within such period, each such
Mortgagee shall have the option at any time thereafter to apply such insurance
proceeds to the payment of the Note and to interest, if any, accrued and unpaid
thereon in such order and proportions as such Mortgagee may elect.

 

1.11        If the Mortgagor shall fail to perform any of the covenants
contained in Section 1.1, 1.3, 1.7, 1.8, 1.9, 1.12 or 1.15, Mortgagees may make
advances to perform the same on Mortgagor’s behalf, and all sums so advanced
shall be a lien upon the Mortgaged Property and shall be secured hereby.  The
Mortgagor will repay on demand all sums so advanced on its behalf with interest
at the Involuntary Rate.  The provisions of this Section 1.10 shall not prevent
or delay any default in the observance of any covenant contained in said
Section 1.1, 1.3, 1.7, 1.8, 1.9, 1.12 or 1.15 from constituting an Event of
Default.

 

1.12        (a)           The Mortgagor will keep adequate records and books of
account in accordance with generally accepted accounting principles and will
permit each Mortgagee, by its respective agents, accountants and attorneys, to
visit and inspect the Leasehold Premises and examine its records and books of
account and to discuss its affairs, finances and accounts with the officers of
the Mortgagor, at such reasonable times as may be requested by such Mortgagee.

 

(b)           The Mortgagor will deliver to each Mortgagee with reasonable
promptness, but in no event later than ninety (90) days after the close of its
fiscal year, an audited balance sheet and statement of profit and loss setting
forth in each case, in comparative form, figures for the preceding year. 
Throughout the term of this Mortgage, the Mortgagor, with reasonable promptness,
will deliver to each Mortgagee such other information with respect to the
Mortgagor as such Mortgagee may reasonably request from time to time.  All
financial statements of the Mortgagor shall be prepared in accordance with
generally accepted accounting principles, shall be delivered in duplicate, and
shall be accompanied by the certificate of a principal financial or accounting
officer of the Mortgagor, dated within five (5) business days of the delivery of
such statements to each Mortgagee, stating that he knows of no Event of Default,
nor of any default which after notice or passage of time or both would
constitute an Event of Default, which has occurred and is continuing, or, if any
such default or Event of Default has occurred and is continuing, specifying the
nature and period of existence thereof and what action the Mortgagor has taken
or proposes to take with respect thereto, and, except as otherwise specified,
stating that the Mortgagor has fulfilled all its obligations under this Mortgage
which are required to be fulfilled on or prior to the date of such certificate.

 

(c)           The Mortgagor, within five (5) days after request therefore, shall
furnish a written statement duly acknowledged of the amount due whether for
principal or interest on the Note and whether any offsets, counterclaims or
defenses exist against any Mortgagee or the Indebtedness or any part thereof.

 

1.13        The Mortgagor will not commit any waste on the Mortgaged Property,
or any part thereof, or make any change in the use of the Mortgaged Property
(with the exception of the development of Building 7 as set forth in
Section 3.14 hereof), or any part thereof, which will in any material way
increase any ordinary fire or other hazard arising out of construction or
operation.  The Mortgagor will, at all times, maintain the Improvements in good
operating order

 

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and condition and will promptly make, from time to time, all repairs, renewals,
replacements, additions and improvements in connection therewith which are
needful or desirable to such end.

 

1.14        The Mortgagor, immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Leasehold Premises,
or any part thereof, will notify each Mortgagee of the pendency of such
proceedings.  Each Mortgagee may participate in any such proceedings and the
Mortgagor from time to time will deliver to the Mortgagee all instruments
requested by it to permit such participation.  In the event of such condemnation
proceedings, the award or compensation payable is hereby assigned to and shall
be paid to the Mortgagees.  Mortgagees shall be under no obligation to question
the amount of any such award or compensation and may accept the same in the
amount in which the same shall be paid subject to Mortgagor’s consent, which
shall not be unreasonably withheld.  In any such condemnation proceedings each
Mortgagee may be represented by counsel selected by each such Mortgagee.  The
proceeds of any award or compensation so received shall, at the option of each
Mortgagee, either be applied toward the payment of the Indebtedness,
notwithstanding the fact that the Indebtedness may not then be due and payable,
or to the restoration of the Improvements.  In the event that any portion of the
condemnation awards or compensation shall be used to reduce the Indebtedness,
the same shall be applied by the each Mortgagee in any manner it shall
designate, including, but not limited to, the application of such award or
compensation to the then unpaid installments of the principal balance due under
the Note in the inverse order of their maturity such that the regular payments
under the Note shall not be reduced or altered in any manner.  The Mortgagor,
upon request by any Mortgagee, shall make, execute and deliver any and all
instruments requested for the purpose of confirming the assignment of the
aforesaid awards and compensation to each Mortgagee free and clear of any liens,
charges or encumbrances of any kind or nature whatsoever.  Mortgagees shall not
be limited to the interest paid on the proceeds of any award or compensation,
but shall be entitled to the payment by the Mortgagor of interest at the
applicable rate provided for in the Note.

 

1.15        (a)           The Mortgagor will not (i) execute an assignment of
the rents, or any part thereof, from the Leasehold Premises except for the
assignment to the Fee Owner of the leases and rents from the Leasehold Premises
pursuant to the terms of the Ground Lease (the “Prior Assignment”),
(ii) terminate or consent to the cancellation or surrender of any lease of the
Leasehold Premises, or any part thereof, now existing or hereafter to be made,
(iii) modify or amend or consent to the modification or amendment of the Ground
Lease or any other lease or sublease of the Leasehold Premises, or any part
thereof, now existing or hereafter to be made, or (iv) accept prepayments of any
installments of rents to become due under such leases, except prepayments in the
nature of security for the performance of the lessees thereunder, in any other
manner materially impair the value of the Mortgaged Property or the security of
this Mortgage without the written consent of each Mortgagee, which consent shall
not be unreasonably withheld.

 

(b)           Except for the Ground Lease and the Leases, the Mortgagor will not
execute any lease of all or any portion of the Leasehold Premises, without first
obtaining the written consent of each Mortgagee, and will at all times promptly
and faithfully perform, or cause to be performed, all of the covenants,
conditions and agreements contained in all such approved leases, on the part of
the lessor thereunder to be kept and performed and will at all

 

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times do all things necessary to compel performance by the lessee under each
lease of all obligations, covenants and agreements by such lessee to be
performed thereunder.  Any and all leases entered into shall, unless otherwise
consented to by Mortgagee in writing, be subject and subordinate to the terms of
this Mortgage.  All leases entered into shall provide for the giving by the
lessee thereunder of certificates with respect to the state of such leases, and
Mortgagor shall exercise its right to request such certificates within ten
(10) business days of any demand thereof by any Mortgagee.  Mortgagor shall
furnish to any Mortgagee, within ten (10) business days after a request by such
Mortgagee to do so, an executed counterpart of all such leases. All lessees
under such leases shall execute such estoppel certificates, subordinations,
attornments and other agreements as each Mortgagee may require. Under no
circumstances shall any Mortgagee be liable for any obligation to pay any
leasing commission, brokerage fee or similar fee or charge in connection with
any lease nor shall any Mortgagee be obligated to complete any Improvements for
the benefit of any lessee.

 

(c)           The Mortgagor shall furnish to each Mortgagee, within fifteen (15)
business days after a request by any Mortgagee to do so, a written statement
containing the names of all lessees of the Leasehold Premises, the terms of
their respective leases, the space occupied and the rentals payable thereunder.

 

1.16        The Mortgagor will cause the Improvements to be constructed
substantially in accordance with the terms of the Loan Agreement, will prosecute
such construction with due diligence, and will comply with the covenants made by
it in the Loan Agreement, all of which are incorporated herein by reference as
though set forth herein, and will permit no “Event of Default”, as therein
defined, to occur thereunder.

 

1.17        To the extent not so provided by applicable law each sublease of the
Leasehold Premises, or of any part thereof, shall provide that, in the event of
the enforcement by any Mortgagee of the remedies provided for by law or by this
Mortgage, the sublessee thereunder will, upon request of any person succeeding
to the interest of the Mortgagor as a result of such enforcement, automatically
become the sublessee of said successor in interest, without change in the terms
or other provisions of such sublease, provided, however, that said successor in
interest shall not be bound by (i) any payment of rent or additional rent for
more than one month in advance, except prepayments in the nature of security for
the performance by said sublessee of its obligations under said sublease or
(ii) any amendment or modification of the sublease made without the consent of
each Mortgagee or such successor in interest.  Each sublease shall also provide
that, upon request by said successor in interest, such sublessee shall execute
and deliver an instrument or instruments confirming such attornment.

 

1.18        In the event any payment provided for herein or in the Note shall
become overdue for a period in excess of fifteen (15) days, a late charge of
five (5) cents for each dollar so overdue shall become immediately due to each
respective Mortgagee for the purpose of defraying the expenses incident to
handling such delinquent payment, and such charge shall be deemed to be part of
the Indebtedness and therefore secured by the lien of this Mortgage. Late
charges shall be payable with the next installment of principal and/or interest
due under the Note.

 

1.19        [RESERVED.]

 

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1.20        The Mortgagor agrees that it shall indemnify and hold each Mortgagee
harmless against any loss or liability, cost or expense, including without
limitation, any judgments, reasonable attorneys’ fees, costs of appeal bonds and
printing costs, arising out of or relating to any proceeding instituted by any
claimant alleging priority over the lien of this Mortgage.

 

1.21        The Mortgagor expressly covenants and agrees to pay in full the
reasonable fees and expenses of each Mortgagee’s counsel, promptly upon receipt
of a statement therefor, which are incurred prior to and after the date hereof
and which fees and expenses arise in connection with any matter incidental to
the loan which is evidenced by the Note and secured by this Mortgage.

 

1.22        The Mortgagor hereby represents, warrants, covenants and agrees that
other than as set forth in the Environmental Report (as defined in the Loan
Agreement), to the best of Mortgagor’s knowledge after due inquiry, the
Leasehold Premises and the Improvements comply and shall hereafter comply with
all laws, rules, regulations and ordinances of the state and the local
governmental authorities where the Leasehold Premises are located and the United
States of America relating to the storage, use, disposal, generation,
transportation, and/or treatment of hazardous, toxic and/or radioactive matter
and/or waste, including without limitation asbestos (collectively “Toxic
Materials”).  If the presence of Toxic Materials on the Leasehold Premises or in
any Improvements has resulted in, and/or shall hereafter result in
(a) contamination or deterioration of water or soil to a level of contamination
greater than the levels permitted or established by any governmental agency or
authority having jurisdiction over such contamination, (b) the termination or
modification of any permit or authorization as to the use and/or occupancy of
the Leasehold Premises or Improvements and/or (c) the inability to obtain or
maintain insurance policies satisfactory to each Mortgagee, then the Mortgagor
covenants and agrees to promptly take any and all action necessary to clean up
such contamination to the extent required by any such governmental agency or
authority and/or issuer of an insurance policy. The Mortgagor covenants and
agrees to indemnify each Mortgagee and any affiliate or nominee of each
Mortgagee and hold each Mortgagee and any affiliate or nominee of each Mortgagee
harmless from any and all liabilities, losses, costs and/or expenses arising out
of and/ or resulting from the existence and/or the removal of any Toxic
Materials at, on, and/or in the Leasehold Premises or any part or parts thereof
or the Improvements or any part or parts thereof and/or the effects of any such
Toxic Materials located at, on and/or in the Leasehold Premises or any part or
parts thereof or the Improvements or any part or parts thereof except for
matters caused by any Mortgagee.  The foregoing indemnity shall survive any
foreclosure sale of the Leasehold Premises and any delivery by the Mortgagor and
the acceptance by each Mortgagee of a deed in lieu of foreclosure of the
Leasehold Premises.

 

1.23        Mortgagor will not consent to, join in, permit or allow any change
in the zoning laws or ordinances relating to or affecting the Leasehold
Premises, and will promptly notify each Mortgagee of any changes to the zoning
laws affecting the Leasehold Premises of which it has received written notice
thereof.

 

1.24        Except for the Prior Assignment, the Leases and the Releases,
Mortgagor will not, directly or indirectly, transfer, mortgage, convey, sell,
assign, lease, pledge or encumber the Mortgaged Property, or any part thereof or
any direct or indirect interest therein, without the

 

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express prior written consent of each Mortgagee.  Mortgagor shall not, directly
or indirectly, create, incur, assume or suffer to exist any liability for
indebtedness (including subordinated indebtedness), whether secured or
unsecured, except indebtedness due with respect to the Loan.  Neither the
structure of Mortgagor nor the direct or indirect ownership of Mortgagor may be
changed from that existing on the date hereof, nor may Mortgagor consolidate
with, be acquired by, or merge into or with any Person (as defined in the Loan
Agreement), without the express prior written consent of each Mortgagee. 
Mortgagor shall not change the management structure of the Mortgagor or the
Leasehold Premises, nor shall Mortgagor enter into any management and/or leasing
agency or similar agreements with respect to the Leasehold Premises without the
prior written consent of each Mortgagee.  Notwithstanding anything contained
herein in or in the Loan Documents to the contrary, the following transfers
shall be permitted hereunder: (a) the direct or indirect transfer in any Upper
Tier Entity to one or more Family Members for estate planning purposes, provided
that the transferor of any such interest shall at all times retain all
decision-making authority with respect to such transferred interest, including
all voting and consent rights with respect thereto, (b) the direct or indirect
transfer, in one or a series of transactions, in any Upper Tier Entity,
provided, however, as a condition to each such transfer set forth in (a) or
(b) above: (i) Mortgagee shall receive not less than thirty (30) days prior
written notice with respect to any direct transfer by an Upper Tier Entity of
its direct interests in RBH-TRB Newark Holdings LLC, including, without
limitation, the name of the proposed transferee and the date the transfer is
expected to be effective, and Mortgagee shall be informed of any indirect
transfer of any interests in the direct or indirect constituent members of any
Upper Tier Entity which such Upper Tier Entity receives, or has the right to
consent to, pursuant to its organizational documents, by such Upper Tier Entity
delivering notice thereof to Mortgagee, (ii) the transferee must be in full
compliance with all applicable orders, rules, regulations and recommendations of
The Office of Foreign Assets Control of the U.S. Department of the Treasury and
must not be listed on any restricted list published by the Federal Government of
the United States of America, (iii) at all times Nicolas Berggruen shall
continue to own (legally and beneficially), directly or indirectly, no less than
a forty percent (40%) interest in RBH Partners, LLC, and (iv) at all times Ron
Beit-Halachmy shall (A) continue to control, directly or indirectly, Mortgagor,
and (B) continue to own (legally and beneficially), directly or indirectly, no
more than a twenty-five percent (25%) interest in Mortgagor.

 

1.25        Except for the Releases, in the event of any sale, conveyance,
transfer, pledge or further encumbrance, by operation of law or otherwise, of
all or any part of the Mortgaged Property, of any interest therein, or in the
event of any change in the ownership or composition of Mortgagor, or (except for
the Prior Assignment) any further assignment of rents from the Mortgaged
Property, or (except for the Leases) any lease of all or substantially all of
the Mortgaged Property, the Leasehold Premises or the Improvements, without the
prior written consent of each Mortgagee, then, at each Mortgagee’s option (and
in addition to any other rights each Mortgagee may have pursuant to the terms of
this Mortgage), each Mortgagee may declare that portion of the Loan secured by
this Mortgage to be due and payable immediately, and upon such declaration such
portion shall immediately become and be due and payable without demand or
notice.  Each Mortgagee’s consent shall be within its sole and absolute
discretion, and each Mortgagee specifically reserves the right to condition its
consent upon (by way of illustration but not by way of limitation) its approval
of the financial and/or management ability of the purchaser, transferee, lessee,
pledge or assignee, upon an agreement to escalate the interest rate

 

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of the Note to each such Mortgagee’s then current interest rate for similarly
situated properties, upon the assumption of the obligations and liabilities of
the Note and this Mortgage by the purchaser, transferee, lessee, pledge or
assignee, upon the receipt of guarantees of the Loan satisfactory to each such
Mortgagee and/or additional collateral satisfactory to each such Mortgagee and
upon payment to each such Mortgagee of an assumption fee.  Mortgagor covenants
and agrees that it shall not take any of the actions, or suffer any of the
events, that would be a cause for acceleration of the portion of the Loan
secured by this Mortgage pursuant to this Section, without the prior written
consent of each Mortgagee.  Any purchaser, transferee, lessee, pledge or
assignee referred to above shall be deemed to have assumed and agreed to pay the
portion of the Loan secured by this Mortgage and to have assumed and agreed to
be bound by the terms and conditions of this Mortgage (including, without
limitation, the terms of this Section 1.25) unless each Mortgagee specifically
agrees in writing to the contrary.  Mortgagor agrees that, in the event
ownership of all or any part of the Mortgaged Property becomes vested in a
person other than Mortgagor, each Mortgagee may, without notice to the
Mortgagor, deal in any way with such successor or successors in interest with
reference to this Mortgage, the other Loan Documents and the indebtedness,
without in any way vitiating or discharging Mortgagor’s liability with respect
thereto.  No sale, conveyance, transfer, pledge, encumbrance, assignment or
lease referred to above, and no forbearance, extension or assumption by or to
any person with respect to the Indebtedness or any of the Loan Documents, shall
operate to release, discharge, modify, change or affect the liability of
Mortgagor either in whole or in part, unless each Mortgagee specifically agrees
in writing to the contrary.

 

1.26        In addition to making payment of all rent, additional rent, tax and
other payments and charges required to be made by Mortgagor, Mortgagor, as
tenant under and pursuant to the provisions of the Ground Lease, covenants that
it will:

 

(a)           Diligently perform and observe all of the material terms,
conditions and covenants of the Ground Lease required to be performed and
observed by Mortgagor, to the end that all things shall be done which are
reasonably necessary to keep unimpaired Mortgagor’s rights under the Ground
Lease, and Mortgagor covenants that no release or forbearance of any of the
obligations of Mortgagor under the Ground Lease, pursuant to the Ground Lease or
otherwise shall release Mortgagor from any of its obligations under this
Mortgage, including, without limitation, Mortgagor’s obligations under this
Section 1.26(a);

 

(b)           Upon having actual knowledge thereof, promptly notify Mortgagees
in writing of any default by any party in the performance and observance of any
of the terms, conditions or covenants to be performed or observed under the
Ground Lease;

 

(c)           Promptly notify Mortgagees in writing of the giving of any notice
under the Ground Lease of any default of Mortgagor in the observance of any
terms, covenants or conditions of the Ground Lease and deliver to Mortgagees a
true copy of each such notice; and

 

(d)           Not surrender the Leasehold Premises nor terminate or cancel the
Ground Lease or enter into any agreement (whether oral or written) modifying,
supplementing or amending the Ground Lease without the prior written consent of
Mortgagees, and as security for the repayment of the obligations secured hereby
Mortgagor hereby assigns to Mortgagees all

 

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rights and options to extend, renew, terminate or modify the Ground Lease in any
manner whatsoever.

 

(e)           Mortgagees shall have the right (but shall not be obligated) to
take any action Mortgagees deem necessary or desirable to prevent or to cure any
default by Mortgagor in the performance of or compliance with any of Mortgagor’s
obligations under the Ground Lease.  Upon receipt by Mortgagees of any written
notice of default by Mortgagor under the Ground Lease, Mortgagees may rely
thereon and take any action as aforesaid to cure such default even though the
existence of such default or the nature thereof be questioned or denied by
Mortgagor or by any party on behalf of Mortgagor.  Mortgagor hereby expressly
grants to Mortgagees, and agrees that Mortgagees shall have, the absolute and
immediate right to enter in and upon the Mortgaged Property or any part thereof
to such extent and as often as Mortgagees, in their sole discretion, deem
necessary or desirable in order to prevent or to cure any such default by
Mortgagor.  Mortgagees may pay and expend such sums of money as Mortgagees in
their sole discretion deem necessary for any such purpose, and Mortgagor hereby
agrees to pay to Mortgagees, immediately and without demand, all such sums so
paid and expended by Mortgagees, together with interest thereon from the date of
each such payment at the Involuntary Rate.  All sums so paid and expended by
Mortgagees, and the interest thereon, shall be added to and be secured by the
lien of this Mortgage.

 

(f)            As further security for the repayment of the obligations secured
hereby and for the performance of the covenants contained herein and in the
Ground Lease, Mortgagor hereby assigns to Mortgagees all of its rights,
privileges and prerogatives as lessee under the Ground Lease to terminate,
cancel, modify, change, supplement, alter or amend the Ground Lease, and any
such termination, cancellation, modification, change, supplement, alteration or
amendment by Mortgagor without the prior written consent thereto by Mortgagees
shall be void and of no force and effect; provided, however, that so long as no
Event of Default has occurred or is continuing under this Mortgage, Mortgagees
shall have no right to terminate, cancel, modify, change, supplement, alter or
amend the Ground Lease.  Mortgagor represents and warrants that it has delivered
to Mortgagees a true and accurate copy of the Ground Lease, together with all
amendments thereto, if any.

 

(g)           Unless Mortgagees shall otherwise expressly consent in writing,
Mortgagor shall not cause or consent to the fee title to the Leasehold Premises
merging with the leasehold estate in the Leasehold Premises and during
Mortgagor’s ownership of the Leasehold Premises shall endeavor to always keep
such interests separate and distinct, notwithstanding the union of said estates
either in the lessor or in the lessee under the Ground Lease, or in a third
party by purchase or otherwise.

 

(h)           Mortgagor shall, from time to time, use commercially reasonable
efforts to obtain from the lessor under the Ground Leases such certificates of
estoppel with respect to compliance by Mortgagor with the terms of the Ground
Leases as may be requested by Mortgagees.

 

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ARTICLE II

 

EVENTS OF DEFAULT AND REMEDIES

 

2.1          If one or more of the following Events of Default shall happen,
that is to say:

 

(a)           if (i) default shall be made in the payment of any interest due
under the Note, or in the payment of any installment of principal due under the
Note, in either such case, when and as the same shall become due and payable,
and such default shall have continued for a period of five (5) days or
(ii) default shall be made in any other payment of the principal of the Note,
when and as the same shall become due and payable, whether at maturity or by
acceleration or as part of any prepayment or otherwise, in each case, as in the
Note and this Mortgage provided or (iii) default in the payment of any other
Indebtedness due to any Mortgagee under this Mortgage and such default shall
have continued for a period of five (5) days after written notice thereof, or
(iv) default shall be made in the payment of any tax required by Section 1.7 to
be paid and said default shall have continued for a period of five (5) days
after written notice thereof; provided, however, that if Mortgagor, within any
twelve (12) month period, shall fail to make more than two (2) such payments by
their due dates, said five (5) day period shall become null and void and of no
further force or effect and failure to make payment shall become an immediate
Event of Default, or

 

(b)           if default shall be made in the due observance or performance of
any covenant or agreement on the part of the Mortgagor contained in Section 1.1,
1.3, 1.8, or 1.9, and such default shall have continued for a period of thirty
(30) days after written notice thereof shall have been given to the Mortgagor by
Mortgagees.  For the purposes of this clause if any representation made in
Section 1.1 shall be incorrect, it shall be deemed to be a default; or

 

(c)           if default shall be made in the due observance or performance of
any other covenant or condition on the part of the Mortgagor in the Note, the
Loan Agreement or in this Mortgage contained, and such default shall have
continued for a period of thirty (30) days after written notice specifying such
default and demanding that the same be remedied shall have been given to the
Mortgagor by Mortgagees; provided, however, if, in Mortgagees’ sole judgment
said failure to comply is not capable of being cured within said thirty (30) day
period and is not curable by the payment of money, then the Mortgagor shall have
such additional time as Mortgagees deem reasonably necessary to cure such
failure (but in no event will such additional time exceed sixty (60) days after
the initial notice of such default) provided that (i) Mortgagor promptly
proceeds to commence curing said failure to comply upon receipt of notice of
said failure from Mortgagees, (ii) in the sole judgment of Mortgagees, Mortgagor
thereafter diligently and continuously proceeds to cure said failure so as to
cure said failure in the shortest time possible, (iii) such additional time to
cure does not materially impair any rights and/or remedies of Mortgagees and
will not adversely affect the completion of the Improvements by the Completion
Date and (iv) the Mortgagor furnishes to Mortgagees, upon demand of Mortgagees,
such documents and information with respect to Mortgagor’s curing of said
failure to comply, as Mortgagees may reasonably request; or

 

(d)           if by the order of a court of competent jurisdiction, a trustee,
receiver or liquidator of the Mortgaged Property, or any part thereof, or of the
Mortgagor shall be appointed and such order shall not be discharged or dismissed
within ninety (90) days after such appointment; or

 

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(e)           if the Mortgagor shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case under any such law or to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Mortgagor or of any substantial part of its property,
or if the Mortgagor shall make any general assignment for the benefit of
creditors, or if the Mortgagor shall fail generally to pay its debts as such
debts become due, or if the Mortgagor shall take any action in furtherance of
any of the foregoing; or

 

(f)            if any of the creditors of the Mortgagor shall commence against
the Mortgagor an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect and if such case shall not be
discharged or dismissed within ninety (90) days after the date on which such
case was commenced; or

 

(g)           if final judgment for the payment of money in excess of $50,000 in
the aggregate shall be rendered against the Mortgagor and the Mortgagor shall
not discharge the same or cause it to be discharged within sixty (60) days from
the entry thereof, or shall not appeal therefrom or from the order, decree or
process upon which or pursuant to which said judgment was granted, based or
entered, and secure a stay of execution pending such appeal; or

 

(h)           except for the Releases, if any sale, conveyance, transfer, pledge
or further encumbrance, by operation of law or otherwise, of all or any part of
the Mortgaged Property, of any interest therein, or in the event of any change
in the ownership or composition of Mortgagor, or any further assignment of rents
from the Mortgaged Property (except for the Prior Assignment), or any lease of
all or substantially all of the Mortgaged Property (except for the Leases), the
Leasehold Premises or the Improvements, shall occur, without the prior written
consent of each Mortgagee; or

 

(i)            if Mortgagor shall fail to maintain its legal existence in good
standing in its state of incorporation; or

 

(j)            if the Mortgagor defaults beyond any applicable notice and cure
periods under any other agreement with any Mortgagee; or

 

(k)           if any easement over, across, under or otherwise affecting the
Mortgaged Property or any portion thereof shall be granted or released without
each Mortgagee’s prior written consent or if there shall be a default by
Mortgagor under any easement, covenant or restriction affecting the Leasehold
Premises or any portion thereof or if any easement in favor of the Leasehold
Premises or any portion thereof shall be terminated or modified; or

 

(l)            if Mortgagor shall assign any lease or the rents from any lease
for all or a part of the Leasehold Premises other than the Prior Assignment,
without the prior written consent of each Mortgagee, or shall enter into, amend,
extend, renew, abridge or otherwise modify, any lease, or shall cancel or
consent to the cancellation or surrender of any lease unless in the ordinary
course and in accordance with reasonably prudent management practice, or shall
in any other manner materially impair the security of any Mortgagee for the
payment of the debt secured by this Mortgage; or

 

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(l)            if Mortgagor incurs any additional indebtedness, with the
exception of the Loan and trade payables customarily incurred in the ordinary
course of business without the prior written consent of each Mortgagee; or

 

(m)          if the Mortgaged Property or any material part thereof shall be
condemned; or

 

(n)           if any material adverse change in the Mortgagor, any Guarantor, or
the Mortgaged Property shall occur; or

 

(o)           if any person or entity having or claiming an interest in the
Mortgagor or the Mortgaged Property commences an action or proceeding against
the Mortgagor, the Mortgaged Property or any person or entity having or claiming
an interest in the Mortgagor or the Mortgaged Property and such action or
proceeding shall be finally determined in a manner that adversely affects any
Mortgagee’s rights, remedies and/or position hereunder,

 

then and in every such case:

 

(I)            During the continuance of any such Event of Default each
Mortgagee, by written notice given to the Mortgagor, may declare the entire
principal of the Note then outstanding (if not then due and payable), and all
accrued and unpaid interest thereon together with all other Indebtedness, to be
due and payable immediately, and upon any such declaration the principal of the
Note, said accrued and unpaid interest thereon and all other Indebtedness shall
become and be immediately due and payable, anything in the Note, in this
Mortgage or in the Loan Agreement to the contrary notwithstanding;

 

(II)          During the continuance of any such Event of Default, each
Mortgagee personally, or by its agents or attorneys, may enter into and upon all
or any part of the Leasehold Premises, and each and every part thereof, and may
exclude the Mortgagor, its agents and servants wholly therefrom; and having and
holding the same, may use, operate, manage and control the Leasehold Premises
and conduct the business thereof, either personally or by its superintendents,
managers, agents, servants, attorneys or receivers; and upon every such entry,
any such Mortgagee, at the expense of the Mortgaged Property, from time to time,
either by purchase, repairs or construction, may maintain and restore the
Mortgaged Property, whereof it shall become possessed as aforesaid, may complete
the construction of the Improvements and in the course of such completion may
make such changes in the contemplated Improvements as it may deem desirable and
may insure the same; and likewise, from time to time, at the expense of the
Mortgaged Property, any such Mortgagee may make all necessary or proper repairs,
renewals and replacements and such useful alterations, additions, betterments
and improvements thereto and thereon as to it may seem advisable; and in every
such case each Mortgagee shall have the right to manage and operate the
Mortgaged Property and to carry on the business thereof and exercise all rights
and powers of the Mortgagor with respect thereto either in the name of the
Mortgagor or otherwise as it shall deem best; and each Mortgagee shall be
entitled to collect and receive all earnings, revenues, rents, issues, profits
and income of the Mortgaged Property and every part thereof, all of which shall
for all purposes constitute property of the Mortgagor; and after deducting the
expenses of conducting the business thereof and of all maintenance, repairs,
renewals, replacements, alterations, additions, betterments and improvements and
amounts

 

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necessary to pay for taxes, assessments, insurance and prior or other proper
charges upon the Mortgaged Property, or any part thereof, as well as just and
reasonable compensation for the services of each Mortgagee and for all
attorneys, counsel, agents, clerks, servants and other employees by it properly
engaged and employed, each such Mortgagee shall apply the moneys arising as
aforesaid, first, to the payment of the principal of the Note and the interest
thereon, when and as the same shall become payable and second, to the payment of
any other Indebtedness and sums required to be paid by the Mortgagor under this
Mortgage;

 

(III)        Each Mortgagee, with or without entry, personally or by its agents
or attorneys, insofar as applicable, may:

 

(1)           [Reserved]

 

(2)           institute proceedings for the complete or partial foreclosure of
this Mortgage; or

 

(3)           take such steps to protect and enforce its rights whether by
action, suit or proceeding in equity or at law for the specific performance of
any covenant, condition or agreement in the Note or in the Loan Agreement or in
this Mortgage, or in aid of the execution of any power herein granted, or for
any foreclosure hereunder, or for the enforcement of any other appropriate legal
or equitable remedy or otherwise as each Mortgagee shall elect.

 

(IV)         Each Mortgagee also shall have such other rights and/or remedies
provided to a mortgagee and/or secured party by the Uniform Commercial Code, as
that model statute is enacted and in effect in the jurisdiction wherein the
Leasehold Premises are situated.

 

2.2          (a)           Each Mortgagee may adjourn from time to time any sale
by it to be made under or by virtue of this Mortgage by announcement at the time
and place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law, each Mortgagee,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.

 

(b)           Upon the completion of any sale or sales made by any Mortgagee
under or by virtue of this Article II, any such Mortgagee, or an officer of any
court empowered to do so, shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument, or good and sufficient instruments,
conveying, assigning and transferring all estate, right, title and interest in
and to the property and rights sold and shall execute and deliver to the
appropriate governmental authority any affidavit, instrument, document and/or
filing required pursuant to any applicable statute, ordinance, rule and/or
regulation.  Each Mortgagee is hereby irrevocably appointed the true and lawful
attorney of the Mortgagor, in its name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the Mortgaged Property and
rights so sold and for that purpose the Mortgagee may execute all necessary
instruments of conveyance, assignment and transfer, including, without
limitation, any affidavit, instrument, document or filing required pursuant to
any applicable statute, rule or regulation and may substitute one or more
persons with like power, the Mortgagor hereby ratifying and confirming all that
its said attorney or such substitute or substitutes shall lawfully do by virtue
hereof.

 

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Nevertheless the Mortgagor, if so requested by any Mortgagee, shall ratify and
confirm any such sale or sales by executing and delivering to such Mortgagee or
to such purchaser or purchasers all such instruments as may be advisable, in the
reasonable judgment of such Mortgagee, for that purpose, and as may be
designated in such request.  Any such sale or sales made under or by virtue of
this Article II, whether made under the power of sale herein granted or under or
by virtue of judicial proceedings of sale, herein granted or under or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and sale,
shall operate to divest all the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of the Mortgagor in and to the
properties and rights so sold, and shall be a perpetual bar both at law and in
equity against the Mortgagor and against any and all persons claiming or who may
claim the same, or any part thereof, from, through or under the Mortgagor.  In
addition, Mortgagor expressly agrees that any powers of attorney executed by
Mortgagor subsequent to the date hereof shall expressly state that the power of
attorney provided for in this Mortgage shall continue to be in full force and
effect until terminated in accordance with the terms of this Mortgage.

 

(c)           In the event of any sale made under or by virtue of this
Article II (whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale), the entire principal of, and interest on, the Note, if not previously due
and payable, and all other sums required to be paid by the Mortgagor pursuant to
this Mortgage, immediately thereupon shall, anything in the Note or in this
Mortgage to the contrary notwithstanding, become due and payable.

 

(d)           The purchase money, proceeds or avails of any sale made under or
by virtue of this Article II, together with any other sums which then may be
held by each Mortgagee under this Mortgage, whether under the provisions of this
Article II or otherwise, shall be applied as follows:

 

First:  To the payment of the costs and expenses of such sale, including, but
not limited to, the reasonable compensation to each Mortgagee, the agents and
counsel of each, and any sums that may be due under and/or pursuant to any
statute, rule, regulation and/or law which imposes any tax, charge, fee and/or
levy in connection with and/or arising from the exercise of any right and/or
remedy under this Mortgage or the requirement that any sum be paid in order to
record and/or file any deed, instrument of transfer or other such document in
connection with any such sale, and of any judicial proceedings wherein the same
may be made, and of all expenses, liabilities and advances made or incurred by
each Mortgagee under this Mortgage, together with interest at the Involuntary
Rate on all advances made by each Mortgagee and all taxes or assessments, except
any taxes, assessments or other charges subject to which the Mortgaged Property
shall have been sold.

 

Second:  To the payment of the whole amount then due, owing or unpaid upon the
Note for principal and interest, with interest on the unpaid principal at the
Involuntary Rate from and after the happening of any Event of Default described
in Section 2.1 from the due date of any such payment of principal until the same
is paid.

 

Third:  To the payment of any other Indebtedness and any other sums required to
be paid by the Mortgagor pursuant to any provision of this Mortgage, the Note or
the Loan Agreement.

 

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Fourth:  To the payment of the surplus, if any, to whomsoever may be lawfully
entitled to receive the same.

 

(e)           Upon any sale made under or by virtue of this Article II whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, each Mortgagee
may bid for and acquire the Mortgaged Property, or any part thereof, and in lieu
of paying cash therefor may make settlement for the purchase price by crediting
upon the indebtedness of the Mortgagor secured by this Mortgage the net sales
price after deducting therefrom the expenses of the sale and the costs of the
action and any other sums which each Mortgagee is authorized to deduct under
this Mortgage.

 

2.3          (a)           In case an Event of Default described in Section 2.1
shall have happened and be continuing, then, upon written demand of any
Mortgagee, the Mortgagor will pay to each such Mortgagee the whole amount which
then shall have become due and payable on the Note, for principal or interest or
both, as the case may be, and after the happening of said Event of Default will
also pay to each such Mortgagee interest at the Involuntary Rate on the then
unpaid principal of the Note, and the sums required to be paid by the Mortgagor
pursuant to any provision of this Mortgage, and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable compensation to each such Mortgagee, its agents, and
counsel and any reasonable expenses incurred by each such Mortgagee hereunder. 
In the event the Mortgagor shall fail forthwith to pay such amounts upon such
demand, each Mortgagee shall be entitled and empowered to institute such action
or proceedings at law or in equity as may be advised by its counsel for the
collection of the sums so due and unpaid, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Mortgagor and collect, out of the property of the
Mortgagor wherever situated, as well as out of the Mortgaged Property, in any
manner provided by law, money adjudged or decreed to be payable.

 

(b)           Each Mortgagee shall be entitled to recover judgment as aforesaid
either before or after or during the pendency of any proceedings for the
enforcement of the provisions of this Mortgage; and the right of each Mortgagee
to recover such judgment shall not be affected by any entry or sale hereunder,
or by the exercise of any other right, power or remedy for the enforcement of
the provisions of this Mortgage, or the foreclosure of the lien hereof; and in
the event of a sale of the Mortgaged Property, or any part thereof, and of the
application of the proceeds of sale, as in this Mortgage provided, to the
payment of the debt hereby secured, each Mortgagee shall be entitled to enforce
payment of, and to receive all amounts then remaining due and unpaid upon the
Note, and to enforce payment of all other charges, payments, costs and amounts
due under this Mortgage, and shall be entitled to recover judgment for any
portion of the debt remaining unpaid, with interest at the Involuntary Rate.  In
case of the commencement of any case against the Mortgagor under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect or any
proceedings for its reorganization or involving the liquidation of its assets,
then each Mortgagee shall be entitled to prove the whole amount of principal and
interest due upon the Note to the full amount thereof, and all other payments,
charges, costs and amounts due under this Mortgage, without deducting therefrom
any proceeds obtained from the sale of the whole or any part of the Mortgaged
Property, provided, however,

 

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that in no case shall any Mortgagee receive a greater amount than such principal
and interest and such other payments, charges and costs from the aggregate
amount of the proceeds of the sale of the Mortgaged Property and the
distribution from the estate of the Mortgagor.

 

(c)           No recovery of any judgment by any Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of the Mortgagor shall affect in any manner or to any extent, the lien
of this Mortgage upon the Mortgaged Property, or any part thereof, of any liens,
rights, powers or remedies of each Mortgagee hereunder, but such liens, rights,
powers and remedies of the Mortgagee shall continue unimpaired as before.

 

(d)           Any moneys thus collected by each Mortgagee under this Section 2.3
shall be applied by each Mortgagee in accordance with the provisions of
subsection (d) of Section 2.2.

 

2.4          After the happening of any Event of Default and immediately upon
the commencement of any action, suit or other legal proceedings by any Mortgagee
to obtain judgment for the principal of, or interest on, the Note and/or all
other Indebtedness and/or other sums required to be paid by the Mortgagor
pursuant to any provision of this Mortgage, or of any other nature in aid of the
enforcement of the Note or of this Mortgage, the Mortgagor will (a) waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, and (b) if required by any Mortgagee, consent to the
appointment of a receiver or receivers of the Mortgaged Property, or any part
thereof, and of all the earnings, revenues, rents, issues, profits and income
thereof. After the happening of any Event of Default and during its continuance,
or upon the commencement of any proceedings to foreclose this Mortgage or to
enforce the specific performance hereof or in aid thereof or upon the
commencement of any other judicial proceeding to enforce any right of any
Mortgagee, such Mortgagee shall be entitled, as a matter of right, if it shall
so elect, without the giving of notice to any other party and without regard to
the adequacy or inadequacy of any security for the Indebtedness, forthwith
either before or after declaring the unpaid principal of the Note to be due and
payable, to the appointment of such a receiver or receivers.

 

2.5          Notwithstanding the appointment of any receiver, liquidator or
trustee of the Mortgagor, or of any of its property, or of the Mortgaged
Property or any part thereof, the Mortgagor shall be entitled to retain
possession and control of all Property now or hereafter held under this
Mortgage.

 

2.6          No remedy herein conferred upon or reserved to each Mortgagee is
intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or under the Loan Agreement or now or hereafter existing at law
or in equity or by statute.  No delay or omission of each Mortgagee to exercise
any right or power accruing upon any Event of Default shall impair any such
right or power, or shall be construed to be a waiver of any such Event of
Default or any acquiescence therein; and every power and remedy given by this
Mortgage to each Mortgagee may be exercised from time to time as often as may be
deemed expedient by each Mortgagee.  Nothing in this Mortgage or in the Note
shall affect the obligation of the Mortgagor to pay the principal of, and
interest on, the Note in the manner and at the time and place therein
respectively expressed.

 

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2.7           The Mortgagor will not at any time insist upon, or plead, or in
any manner whatever claim or take any benefit or advantage of any stay or
extension or moratorium law, any exemption from execution or sale of the
Mortgaged Property, or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance of
this Mortgage, nor claim, take or insist upon any benefit or advantage of any
law now or hereafter in force providing for the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior to any sale or sales thereof
which may be made pursuant to any provision herein, or pursuant to the decree,
judgment or order of any court of competent jurisdiction; nor, after any such
sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to redeem the property so sold, or any part thereof, and the
Mortgagor hereby expressly waives all benefit or advantage of any such law or
laws, and covenants not to hinder, delay or impede the execution of any power
herein granted or delegated to each Mortgagee, but to suffer and permit the
execution of every power as though no such law or laws had been made or enacted.
The Mortgagor, for itself and all who may claim under it, waives, to the extent
that it lawfully may, all right to have the Mortgaged Property marshaled upon
any foreclosure hereof.

 

2.8           During the continuance of any Event of Default and pending the
exercise by each Mortgagee of its right to exclude the Mortgagor from all or any
part of the Mortgaged Property, Mortgagor agrees to pay the fair and reasonable
rental value for the use and occupancy of the Mortgaged Property, or any part
thereof, which are in its possession for such period, and upon default of any
such payment, will vacate and surrender possession of the Mortgaged Property to
each Mortgagee or to a receiver, if any, and if in default thereof may be
evicted by any summary action or proceeding for the recovery of possession of
premises for non-payment of rent, however designated.

 

ARTICLE III

 

MISCELLANEOUS

 

3.1           In the event any one or more of the provisions contained in this
Mortgage or in the Note or in the Loan Agreement shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall, at the option of each Mortgagee, not affect any other
provision of this Mortgage, but this Mortgage shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein or
therein.

 

3.2           All notices and/or consents, hereunder shall be in writing and
shall be deemed to have been sufficiently given or served for all purposes when
delivered in person or one (1) day after being sent by a nationally recognized
overnight delivery service (e.g. FedEx) or three (3) days after being sent by
registered or certified mail, return receipt requested, to Mortgagor at its
address above stated, with a copy to McManimon & Scotland, LLC,  Attention:
Glenn F. Scotland, Esq.; in the case of each Mortgagee, at its respective
address above stated, with copy to Administrative Agent at 317 Madison Avenue,
2nd Floor, New York, New York 10017, Attention: Matthew Schatz, or at such other
address of which it shall have notified the party giving such notice in writing
as aforesaid.

 

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3.3           Whenever in this Mortgage the giving of notice by mail or
otherwise is required, the giving of such notice may be waived in writing by the
person or persons entitled to receive such notice.

 

3.4           All of the grants, terms, conditions, provisions and covenants of
this Mortgage shall run with the land, shall be binding upon the Mortgagor and
shall inure to the benefit of each Mortgagee, subsequent holders of this
Mortgage and their respective successors and assigns.  For the purpose of this
Mortgage, the term “Mortgagor” shall include and refer to the Mortgagor named
herein, any subsequent owner of the Mortgaged Property, or any part thereof, and
their respective heirs, executors, legal representatives, successors and
assigns. If there is more than one Mortgagor, all their undertakings hereunder
shall be deemed joint and several.

 

3.5           The enforcement of this Mortgage shall be governed, construed and
interpreted by the laws of the State where the Leasehold Premises are located. 
Nothing in this Mortgage, the Note or in any other agreement between the
Mortgagor and each Mortgagee shall require the Mortgagor to pay, or each
Mortgagee to accept, interest in an amount which would subject each Mortgagee to
pay any penalty or forfeiture under applicable law.  In the event that the
payment of any charges, fees or other sums due hereunder or under the Note or
any such other agreement which are or could be held to be in the nature of
interest and which would subject each Mortgagee to any penalty or forfeiture
under applicable law, then ipso facto the obligations of the Mortgagor to make
such payment shall be reduced to the highest rate authorized under applicable
law.  Should any Mortgagee receive any payment which is or would be in excess of
the highest rate authorized under law, such payment shall have been, and shall
be deemed to have been, made in error and shall automatically be applied to
reduce the outstanding balance of the Indebtedness.

 

3.6           The truth, accuracy, adequacy and completeness of the
representations, warranties and covenants contained in this Mortgage and the
Note shall survive, and not merge with, the execution and delivery of this
Mortgage and the Note.

 

3.7           Whenever the consent or approval of each Mortgagee is required,
the decision whether to consent or approve shall be in the sole and absolute but
reasonable discretion of each Mortgagee.

 

3.8           This Mortgage, the Note and all other documents executed and
delivered in connection herewith or therewith shall be given a fair and
reasonable construction in accordance with the intention of the parties as
expressed herein and therein and without regard for any rule of law requiring
construction against the party who prepares such instruments.

 

3.9           The Mortgagor expressly agrees, intending that each Mortgagee rely
thereon, that this Mortgage also shall constitute a “security agreement,” as
such term is defined in the Uniform Commercial Code in the jurisdiction wherein
the Leasehold Premises are situated (the “Code”) the Mortgaged Property
includes, and shall be deemed to include, inter alia, the Chattels and the
Intangibles, regardless of whether they are held or hereafter acquired, of the
Mortgagor in, to and under the Mortgaged Property.  By executing and delivering
this Mortgage, the Mortgagor has granted, in the same manner and with the same
effect described in the Granting Clause hereof, to each Mortgagee, as additional
security, a security interest in the Chattels and the Intangibles

 

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which are subject to the Code.  If any Event of Default shall occur, each
Mortgagee shall have, in addition to any and all other rights and remedies set
forth in this Mortgage, and may exercise without demand, any and all rights and
remedies granted to a secured party under the Code, including, but not limited
to, the right to take possession of the Chattels and the Intangibles, or any
part thereof, and the right to advertise and sell the Chattels and the
Intangibles, or any part thereof, pursuant to and in accordance with the power
of sale provided for in this Mortgage.  The Mortgagor agrees that any notice of
sale or other action intended by each Mortgagee with respect to the Chattels and
the Intangibles, or any part thereof, shall constitute reasonable notice if it
is sent to the Mortgagor not less than ten (10) days prior to any such sale or
intended action.  The proceeds of any such sale of the Chattels and the
Intangibles, or any part thereof, shall be applied in the manner set forth in
clauses First through Fourth of Section 2.2Artic(d) of this Mortgage.

 

3.10         [RESERVED.]

 

3.11         This Mortgage and all of the terms, covenants, provisions,
conditions and grants contained in this Mortgage cannot be altered, amended,
waived, modified or discharged orally and no executory agreement shall be
effective to modify, waive or discharge, in whole or in part, anything contained
in this Mortgage unless it is in writing and signed by the party against whom
enforcement of the modification, alteration, amendment, waiver or discharge is
sought.

 

3.12         The Mortgagor acknowledges that it has received a true copy of this
Mortgage.

 

3.13         This Mortgage may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original;
and all such counterparts shall together constitute but one and the same
mortgage.

 

3.14         Block 95 Release.

 

(a)           The Block 95 Parcels consist of Tax Lots 1, 2, 3, 4, 8, 10, 16, 31
all as shown on the current official tax maps of the City of Newark, County of
Essex, New Jersey. The Block 95 Parcels are currently and will remain in use as
a parking lot with 102 parking spaces for the benefit of the Mortgaged Property.

 

(b)           Mortgagor represents to Mortgagee that lots 10 and 16 in Block 95
(as the same may be consolidated into a new tax lot, collectively, the “Block 95
Release Parcels”) are intended by Mortgagor to be used in connection for the
development of Building 7 as part of the residential phase (“Residential Phase”)
of the “Teachers Village Project”. Mortgagee agrees, that provided that all
Block 95 Release Parcels Conditions (defined below) have been met by Mortgagor
to Mortgagee’s satisfaction, at the time that the Block 95 Release Parcels are
to be conveyed to an affiliate of Mortgagor and the intended owner and developer
of the Building 7, Mortgagee shall release the Block 95 Release Parcels from the
lien of the Mortgage (the “Block 95 Release”). Mortgagor acknowledges that tax
lots 1, 2, 3, 8, and 31 in Block 95 (“Block 95 Retained Parcels”), together with
the balance of the Mortgaged Property, shall continue to be subject to the lien
of the Mortgage and all requirements of the Loan Documents.

 

(c)           The Block 95 Release Parcels Conditions are as follows:

 

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(i)            No Event of Default has occurred, and no default which, with the
giving of notice and the expiration of any applicable cure period could ripen
into an event of default has occurred.

 

(ii)           The release is to occur only in connection with the conveyance of
the Block 95 Release Parcels in conjunction with the closing of the acquisition
and construction financing for Building 7.

 

(iii)          A consolidation and subdivision of Block 95 has been completed
and signed by the City of Newark and all relevant parties (and has been
perfected by recording) such that the Block 95 Retained Parcels comprise one tax
lot and the Block 95 Release Parcels are in a tax lot or lots which are separate
and distinct from the Block 95 Retained Parcel tax lot Such consolidation and
subdivision shall be otherwise consistent with the terms of the “Final
Subdivision Plat Teachers Village at Four Corners, Portion of Blocks 57, 58, 93,
94 & 95,” prepared by Omland Engineering, Inc. dated January 19, 2011, and
approved by the Central Planning Board of the City of Newark by Memorializing
Resolution signed March 21, 2011, (the “Subdivision Plat”).

 

(iv)          All conveyance and release documents have been reviewed and
approved by Mortgagee, such approval not to be unreasonably withheld or delayed,
in advance of any conveyance, and all of Mortgagee’s costs and expenses,
including but not limited to reasonable attorneys fees, in connection with any
actions taken by Mortgagee in connection with the Block 95 Release Parcels,
shall have been fully paid for by Mortgagor.

 

(v)           Mortgagee shall have received a title endorsement confirming that,
after release of the Block 95 Release Parcels, the lien of the Mortgage will
continue to encumber the Retained Block 95 Parcel together with the balance of
the Mortgage Property as a first mortgage lien subject to no other exceptions
other than the Permitted Encumbrances.

 

(vi)          If such an opinion is being given to the holder of any first
mortgage lien, Mortgagee shall have received a legal opinion confirming to its
satisfaction that the Mortgaged Property, after the release of the Block 95
Release Parcels, will continue to conform to applicable law, including, but not
limited to, all applicable zoning requirements.

 

(d)                               Mortgagee recognizes and acknowledges
that Mortgagor has stated its intention to possibly develop the Block 95
Retained Parcels, and agrees to release the lien of the the Mortgage from the
Block 95 Retained Parcels in connection with a closing for the financing for the
development of the Block 95 Retained Parcels, provided that in addition to being
in compliance with all of the other conditions of Subsection C above, Mortgagor
complies with the following additional release conditions (the subsection C
conditions, and the conditions contained in this section, collectively, the
“Block 95  Retained Parcels  Release Conditions”), which are as follows:

 

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(i)            provide evidence to Mortgagee of site plan approval for the
proposed development of the Block 95 Retained Parcels;

 

(ii)           provide evidence to Mortgagee of immediately available
alternative parking which satisfies statutory and contractual parking
requirements for the Premises; and

 

(iii)          if such an opinion is being given to the holder of any first
mortgage lien, provide a legal opinion from Mortgagor’s counsel stating that
the  retained Premises, which remains after the release of the Block 95 Retained
Parcel will continue to satisfy all parking obligations set forth in (a) the
Lease and (b) site plan approvals obtained for the Project as of the date
hereof  and all other applicable law and regulation,  in form and
substance reasonably satisfactory to Mortgagee.

 

Upon satisfaction of all conditions set forth herein, Mortgagee shall release
the Block 95 Retained Parcels from the lien of the Mortgage (the “Block 95
Retained Parcels Release”); and the balance of the Mortgaged Property shall
continue to be subject to the lien of the Mortgage and all requirements of the
Loan Documents.

 

3.15         Block 57.05 and 58 Partial Release.

 

(a)           Pursuant to the Subdivision Plat, Mortgagor has proposed to offer
to dedicate portions of the Mortgaged Property located in Blocks 57.05 and 58
which are adjacent to Maiden Lane and Halsey Streets (collectively, the “Blocks
57.05-58 Release Parcels”), to the City of Newark. The conveyance to the City of
Newark is expected to take place at such time as is completed.

 

(b)           Mortgagee agrees to release the Blocks 57.05-58 Release Parcels
(the “Blocks 57.05-58 Release”, and together with the Block 95 Release and the
Block 95 Retained Parcels Release, the “Releases”) upon the satisfaction of the
following conditions (collectively, the “Release Conditions for Blocks 57.05-58
Release Parcels”):

 

(i)            No Event of Default has occurred, and no default which, with the
giving of notice and the expiration of any applicable cure period could ripen
into an event of default has occurred.

 

(ii)           Construction of the Improvements has been completed.

 

(iii)          The release is being granted in connection with the conveyance of
the Blocks 57.05-58 Release Parcels to the City of Newark.

 

(iv)          All conveyance and release documents have been reviewed and
approved by Mortgagee, such approval not to be unreasonably withheld or delayed,
in advance of any conveyance, and all of Mortgagee’s costs and expenses,
including but not limited to reasonable attorneys fees, in connection

 

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with any actions taken by Mortgagee in connection with the Blocks 57.05-58
Release Parcels, are fully paid for by Mortgagor.

 

(v)           Mortgagee shall have received a title endorsement confirming that,
after release of the Blocks 57.05-58 Release Parcels, the lien of the Mortgage
will continue to encumber the remainder of the Mortgaged Property as a first
mortgage lien subject to no other exceptions other than the Permitted
Encumbrances.

 

(vi)          If such an opinion is being given to the holder of any first
mortgage lien, Mortgagee shall have received a legal opinion confirming to its
satisfaction that the Mortgaged Property, after the release of the release of
the Blocks 57.05-58 Release Parcels, will continue to conform to applicable law,
including, but not limited to, all applicable zoning requirements.

 

3.16         The information set forth on the cover hereof is hereby
incorporated herein.

 

3.17         The Mortgagor represents and warrants that it has no offsets,
defenses or counterclaims to the payment of the Mortgage Amount.

 

3.18         The Mortgage and the rights and obligations of the parties
hereunder shall in all respects be governed by, and construed and enforced in
accordance with the laws of the State of New Jersey (without giving effect to
New Jersey’s principles of conflicts of law).  Mortgagor and each Mortgagee
hereby irrevocably submit to the non-exclusive jurisdiction of any New Jersey
State or Federal court sitting in the City of Newark (or any county where the
property is located) over any suit, action or proceeding arising out of or
relating to this Mortgage, and Mortgagor hereby agrees and consents that, in
addition to any methods of service of process provided for under applicable law,
all service of process in any such suit, action or proceeding in any New Jersey
State or Federal court sitting in the City of Newark (or such other county in
New Jersey State) may be made by certified or registered mail, return receipt
requested, directed to Mortgagor at the address indicated on the cover
page hereof, with a copy to the Mortgagor’s Counsel, and service so made shall
be complete five (5) days after the same shall be complete five (5) days after
the same shall have been so mailed.

 

3.19         Each Mortgagee hereby notifies the Mortgagor that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (Signed into
law October 26, 2001) (the “Act”), each Mortgagee is required to obtain, verify
and record information that identifies the Mortgagor, which information includes
the name and address of the Mortgagor and other information that will allow each
Mortgagee to identify the Mortgagor in accordance with the Act.

 

3.20         The Mortgagor hereby knowingly, voluntarily and intentionally
waives any right it may have to consequential or punitive damages arising out
of, under or in connection with the Loan Documents or the transactions
contemplated therein.  Further, the Mortgagor hereby certifies that no
representative of any Mortgagee, or counsel to any Mortgagee, has represented,
expressly or otherwise, that any Mortgagee would not, in the event of such
litigation, seek to enforce this wavier of consequential and punitive damages.
The Mortgagor acknowledges that

 

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each Mortgagee has been induced to accept this Mortgage by, inter alia, the
provisions of this Section.

 

3.21         THE MORTGAGOR AND EACH MORTGAGEE WAIVE THE RIGHT TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED
TO THIS MORTGAGE AND/OR ANY OTHER LOAN DOCUMENTS.

 

3.22         THE MORTGAGOR ACKNOWLEDGES THAT THE MORTGAGOR HAS RECEIVED, WITHOUT
CHARGE, A TRUE AND CORRECT COPY OF THIS MORTGAGE.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, this Mortgage has been duly executed by the Mortgagor as of
the date first above written.

 

 

TEACHERS VILLAGE SCHOOL QALICB URBAN RENEWAL, LLC, a New Jersey limited
liability company

 

 

 

By:

/s/ Ron Beit-Halachmy

 

 

Ron Beit-Halachmy

 

 

Authorized Signatory

 

 

 

 

STATE OF

)

 

) ss.:

COUNTY OF

)

 

On the                  , 2012 before me,                               , Notary
Public, personally appeared                     , who proved to me on the basis
of satisfactory evidence to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity and that by his/her signature on the instrument the person,
or the entity on behalf of which the person acted, executed the instrument.

 

 

WITNESS my hand and official seal.

 

 

 

 

 

Signature:

 

(seal)

 

 

 

Signature Page

QLICI Leasehold Mortgage (Insured)

 

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EXHIBIT A

 

DESCRIPTION OF PREMISES

 

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