Document:

Unassociated Document

    EXHIBIT
10.25

    

      PREPARED BY AND
UPON

      RECORDATION RETURN
TO:

       

      Weil,
Gotshal & Manges LLP

      767 Fifth
Avenue

      New York,
New York 10153

      Attn: W.
Michael Bond, Esq.

       

       

      
        

        

      

      

       

      1407 BROADWAY REAL ESTATE
LLC,
Mortgagor

       

      to

       

      LEHMAN BROTHERS HOLDINGS
INC.,
Mortgagee

       

      ___________________________________

       

       

      LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS, 

      SECURITY AGREEMENT AND FIXTURE
FINANCING STATEMENT

       

      AMOUNT OF MORTGAGE:
$106,000,000

       

      ___________________________________

       

      Dated:
January 4, 2007

       

      
        
          

        

      

      

      LOCATION
OF PREMISES

      

      
        	
                Street
      Address:

              	
                535
      Seventh Avenue, also known as 1407 Broadway 

              
	
                City
      of

              	
                New
      York

              
	
                County
      of

              	
                New
      York

              
	
                State
      of

              	
                New
      York

              
	
                Block:

              	
                814

              
	
                Lots:

              	
                15

              

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      TABLE OF CONTENTS

       

      Page

       

      
        	
                ARTICLE
      I

              	
                GRANTS
      OF SECURITY

              	
                1

              
	
                1.1

              	
                Property
      Mortgaged

              	
                1

              
	
                1.2

              	
                Pledge
      of Monies Held

              	
                6

              
	
                ARTICLE
      II

              	
                DEBT
      AND OBLIGATIONS SECURED

              	
                6

              
	
                2.1

              	
                Debt

              	
                6

              
	
                2.2

              	
                Other
      Obligations

              	
                7

              
	
                2.3

              	
                Debt
      and Other Obligations

              	
                7

              
	
                2.4

              	
                Payments

              	
                7

              
	
                2.5

              	
                Advances
      by Mortgagee

              	
                7

              
	
                ARTICLE
      III

              	
                MORTGAGOR
      COVENANTS

              	
                7

              
	
                3.1

              	
                Payment
      of Debt

              	
                7

              
	
                3.2

              	
                Warranty
      of Title

              	
                8

              
	
                3.3

              	
                Incorporation
      by Reference

              	
                8

              
	
                ARTICLE
      IV

              	
                FURTHER
      ASSURANCES

              	
                8

              
	
                4.1

              	
                Recording
      of Security Instrument, Etc.

              	
                8

              
	
                4.2

              	
                Further
      Acts, Etc.

              	
                9

              
	
                4.3

              	
                Changes
      in Tax, Debt Credit and Documentary Stamp Laws

              	
                9

              
	
                4.4

              	
                Leasehold
      Mortgage Provisions

              	
                9

              
	
                ARTICLE
      V

              	
                ASSIGNMENT
      OF RENTS

              	
                15

              
	
                5.1

              	
                Assignment
      of Rents

              	
                15

              
	
                ARTICLE
      VI

              	
                SECURITY
      AGREEMENT

              	
                16

              
	
                6.1

              	
                Security
      Agreement

              	
                16

              
	
                ARTICLE
      VII

              	
                DUE
      ON SALE/ENCUMBRANCE

              	
                17

              
	
                7.1

              	
                No
      Sale/Encumbrance

              	
                17

              
	
                ARTICLE
      VIII

              	
                PREPAYMENT

              	
                17

              
	
                8.1

              	
                Prepayment
      Only in Accordance with Note

              	
                17

              
	
                ARTICLE
      IX

              	
                DEFAULT

              	
                17

              
	
                9.1

              	
                Events
      of Default

              	
                17

              
	
                ARTICLE
      X

              	
                RIGHTS
      AND REMEDIES

              	
                17

              
	
                10.1

              	
                Remedies

              	
                17

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      

        TABLE OF CONTENTS

        (continued)

        Page

         

      

      
        	
                10.2

              	
                Other
      Rights, Etc.

              	
                21

              
	
                10.3

              	
                Right
      to Release Any Portion of the Property

              	
                22

              
	
                ARTICLE
      XI

              	
                WAIVERS

              	
                22

              
	
                11.1

              	
                Waiver
      of Trial By Jury

              	
                22

              
	
                11.2

              	
                Additional
      Waivers

              	
                22

              
	
                11.3

              	
                Mortgagor's
      Waivers

              	
                23

              
	
                ARTICLE
      XII

              	
                EXCULPATION

              	
                23

              
	
                12.1

              	
                Exculpation

              	
                23

              
	
                ARTICLE
      XIII

              	
                NOTICES

              	
                23

              
	
                13.1

              	
                Notices

              	
                23

              
	
                ARTICLE
      XIV

              	
                APPLICABLE
      LAW

              	
                23

              
	
                14.1

              	
                Choice
      of Law

              	
                23

              
	
                14.2

              	
                Provisions
      Subject to Applicable Law

              	
                24

              
	
                ARTICLE
      XV

              	
                MISCELLANEOUS
      PROVISIONS

              	
                24

              
	
                15.1

              	
                Survival

              	
                24

              
	
                15.2

              	
                No
      Oral Change

              	
                24

              
	
                15.3

              	
                Duplicate
      Originals; Counterparts

              	
                24

              
	
                15.4

              	
                Number
      and Gender

              	
                24

              
	
                15.5

              	
                Headings,
      Etc.

              	
                24

              
	
                15.6

              	
                Inapplicable
      Provision

              	
                25

              
	
                15.7

              	
                General
      Definitions

              	
                25

              
	
                15.8

              	
                Entire
      Agreement

              	
                25

              
	
                15.9

              	
                Time

              	
                25

              
	
                15.10

              	
                Liability

              	
                25

              
	
                15.11

              	
                Binding
      Effect

              	
                25

              
	
                15.12

              	
                Subrogation

              	
                25

              
	
                15.13

              	
                Exhibits

              	
                26

              
	
                15.14

              	
                Future
      Advances

              	
                26

              
	
                16.1

              	
                Trust
      Fund

              	
                26

              
	
                16.2

              	
                Property
      Encumbered

              	
                26

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      

        TABLE OF CONTENTS

        (continued)

        Page

         

      

      
        	
                16.3

              	
                Insurance

              	
                26

              
	
                16.4

              	
                Leases

              	
                27

              
	
                16.5

              	
                Statutory
      Construction

              	
                27

              
	
                16.6

              	
                Maximum
      Amount Secured

              	
                27

              
	
                16.7

              	
                Payment
      of Transfer Taxes

              	
                27

              
	
                16.8

              	
                Inconsistencies

              	
                28

              
	 	 	 

      

       

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      

      THIS
LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FINANCING STATEMENT (the "Security Instrument") is
made as of the 4th day of January, 2007, by 1407 BROADWAY REAL ESTATE LLC, a
Delaware limited liability company, having an address at c/o The Lightstone
Group, 326 Third Street, Lakewood, New Jersey 08701 ("Mortgagor"), to
LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation (individually and as lead
arranger and administrative agent for itself and certain co-lenders), having an
address at 399 Park Avenue, 8th Floor, New York, New York 10022 ("Mortgagee").

       

      RECITALS:

       

      A.  Borrower
owns the subleasehold estate in certain real property located at 1407 Broadway,
Borough of Manhattan, City of New York, New York pursuant to the terms of that
certain Sublease (as defined below), whose metes and bounds are more
particularly described on Exhibit
A attached
hereto. 

       

      B.  This
Security Instrument is given in connection with that certain Loan Agreement (the
"Loan Agreement") dated
of even date herewith, by and between the Mortgagor and the Mortgagee herewith
pursuant to which Mortgagor has obtained a loan in the amount of up to
$127,250,000 (the "Loan").

       

      C.  Mortgagor
desires to secure the payment of the Debt (hereinafter defined) and the
performance of all of Mortgagor's obligations under the Note and the other Loan
Documents. Capitalized terms used, but not defined, herein shall have the
meanings given to such terms in the Loan Agreement.

       

       

      ARTICLE I  GRANTS OF
SECURITY

       

      1.1  Property Mortgaged. NOW,
THEREFORE, in order to secure the payment of the Debt and the performance of the
Obligations (hereinafter defined) in the principal amount of $106,000,000 and in
consideration of Ten and No/100 Dollars ($10.00) in hand paid by Mortgagee to
Mortgagor, the Recitals above stated, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Mortgagor GRANTS, BARGAINS, SELLS, ASSIGNS, RELEASES, ALIENS, TRANSFERS,
WARRANTS, DEMISES, CONVEYS and MORTGAGES to Mortgagee and its successors and
assigns forever and grants to Mortgagee and its successors and assigns forever a
continuing security interest in and to all assets of Mortgagor, including all of
Mortgagor's right, title and interest including the Leasehold Estate
(hereinafter defined), together with all of Mortgagor's right, title and
interest in and to the following described property, all of which other property
is pledged primarily on a parity with the Leasehold Estate and not secondarily
(the Leasehold Estate and the following property are collectively referred to as
the "Property"):

       

      (a)  Premises. The
subleasehold estate pursuant to that certain lease agreement, dated as of
February 1, 1954, between Webb & Knapp, Inc. (“Webb & Knapp”) and
Gettinger Associates and recorded on February 6, 1954 in Liber 4868 cp 339 (the
“Sublease”),
together with all of the Mortgagor’s right, title, interest and privileges in,
to and otherwise by virtue of the Sublease (the "Leasehold Estate");

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)  Additional
Land. All
additional lands, estates and development rights hereafter acquired by Mortgagor
for use in connection with the Leasehold Estate and the development of the
Leasehold Estate that may, from time to time, by supplemental security
instrument or otherwise, be expressly made subject to the Lien of this Security
Instrument;

       

      (c)  Improvements. All
buildings, structures, fixtures, additions, enlargements, extensions,
modifications, repairs, replacements and improvements now or hereafter erected
or located on the Leasehold Estate, including, but not limited to, all
apparatus, equipment, and appliances used in the operation or occupancy of the
real property described above, it being intended by the parties that all such
items shall be conclusively considered to be a part of the Leasehold Estate,
whether or not attached or affixed to the Leasehold Estate (the "Improvements");
together with all mineral, oil and gas and other hydrocarbon substances in, on
or under the Leasehold Estate;

       

      (d)  After Acquired
Property. All
property acquired by Mortgagor after the date of this Security Instrument which
by the terms of this Security Instrument shall be subject to the Lien and/or the
security interest created hereby, shall immediately upon the acquisition thereof
by Mortgagor and without any further mortgage, conveyance or assignment become
subject to the Lien and security interest created by this Security
Instrument;

       

      (e)  Easements. All
easements, rights-of-way or use, rights, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights and credits, and all estates, rights,
titles, interests, privileges, liberties, servitudes, tenements, hereditaments
and appurtenances of any nature whatsoever, in any way now or hereafter
belonging, relating or pertaining to the Leasehold Estate and the Improvements
and the reversion and reversions, remainder and remainders, and all land lying
in the bed of any street, road or avenue, opened or proposed, in front of or
adjoining the Leasehold Estate, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Mortgagor of, in and to the Leasehold Estate and the Improvements and
every part and parcel thereof, with the appurtenances thereto; and all interest
or estate which Mortgagor may hereafter acquire in the property described above,
and all additions and accretions thereto, and the proceeds of any of the
foregoing;

       

      (f)  Fixtures and Personal
Property. All
goods, furnishings, work in progress, machinery, equipment, fixtures (including
all heating, air conditioning, plumbing, lighting, communications and elevator
fixtures) and other property of every kind and nature whatsoever owned by
Mortgagor, or in which Mortgagor has or shall have an interest, now or hereafter
located upon the Leasehold Estate or the Improvements, or appurtenant thereto,
and used in connection with the present or future operation and occupancy of the
Leasehold Estate and the Improvements and all building equipment, materials and
supplies of any nature whatsoever owned by Mortgagor, or in which Mortgagor has
or shall have an interest, now or hereafter located upon the Leasehold Estate
and the Improvements, or appurtenant thereto, or used in connection with the
present or future operation and occupancy of the Leasehold Estate and the
Improvements (collectively, the "Personal Property"), and
the right, title and interest of Mortgagor in and to any of the Personal
Property which may be subject to any security interests, as defined in the
Uniform Commercial Code, as adopted and enacted by the state or states where any
of the Leasehold Estate is located (the "Uniform Commercial
Code" or
"UCC"),
superior in lien to the Lien of this Security Instrument and all proceeds and
products of the above;

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (g)  Leases and
Rents. All
current and future leases, rental agreements, occupancy agreements and other
agreements of whatever form now or hereafter affecting the use, enjoyment or
occupancy of, or the conduct of any activity upon or in, all or any part of the
Leasehold Estate or the Improvements, including any guaranties, extensions,
renewals, replacements or modifications thereof, whether before or after the
filing by or against Mortgagor of any petition for relief under 11 U.S.C. § 101
et seq. (the
"Bankruptcy Code"), as
the same may be amended from time to time (the "Leases") and
all rents, rent equivalents, moneys payable as damages or in lieu of rent or
rent equivalents, royalties (including all oil and gas or other mineral
royalties and bonuses), income, receivables, receipts, revenues, deposits
(including security, utility and other deposits), accounts, cash, issues, fees,
profits, charges for services rendered, and other consideration of whatever form
or nature received by or paid to or for the account of or benefit of Mortgagor
or its agents or employees from any and all sources (including any warrants,
stock options or other rights granted to Mortgagor, any principal or their
Affiliates in connection with any Lease) arising from or attributable to the
Leasehold Estate and the Improvements, together with all proceeds from the sale
or other disposition of the Leases and the right to receive and apply the Rents
to the payment of the Debt and all right, title and interest of Mortgagor, its
successors and assigns therein and thereunder, including all guarantees, letters
of credit and any other credit support given by any guarantor in connection
therewith, cash or securities deposited under the Leases to secure the
performance by the lessees of their obligations thereunder and all rents,
additional rents, revenues, issues and profits (including all oil and gas or
other mineral royalties and bonuses) from the Leasehold Estate and the
Improvements whether paid or accruing before or after the filing by or against
Mortgagor of any petition for relief under the Bankruptcy Code (collectively,
the "Rents") and
all proceeds from the sale or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Debt;

       

      (h)  Condemnation
Awards. All
awards or payments, including interest thereon, which may heretofore and
hereafter be made with respect to the Leasehold Estate, whether from the
exercise of the right of eminent domain (including any transfer made in lieu of
or in anticipation of the exercise of the right), or for a change of grade, or
for any other injury to or decrease in the value of the Leasehold
Estate;

       

      (i)  Insurance
Proceeds. All
proceeds of and any unearned premiums on any insurance policies covering the
Leasehold Estate, including the right to receive and apply the proceeds of any
insurance judgments, or settlements made in lieu thereof, for damage to the
Property;

       

      (j)  Tax
Certiorari. All
refunds, rebates or credits in connection with a reduction in real estate taxes
and assessments charged against the Leasehold Estate as a result of tax
certiorari or any applications or proceedings for reduction;

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (k)  Rights. The
right, in the name and on behalf of Mortgagor, to commence any action or
proceeding to protect the interest of Mortgagee in the Leasehold Estate and
while an Event of Default remains uncured, to appear in and defend any action or
proceeding brought with respect to the Leasehold Estate;

       

      (l)  Agreements. All
agreements, contracts, certificates, instruments, franchises, permits, licenses,
plans, specifications and other documents, now or hereafter entered into, and
all rights therein and thereto, respecting or pertaining to the use, occupation,
construction, management or operation of the Leasehold Estate and any part
thereof and any Improvements or respecting any business or activity conducted on
the Property and any part thereof and all agreements with management agents,
leasing agents, sales agents, service and maintenance agents, contractors and
other third parties, whether now existing or hereafter arising, relating to the
management, operation, leasing, sale, maintenance or repair of the Property,
including equipment leases, personal property leases, purchase and sale
agreements, together with any amendments or modifications thereto and any
replacements thereof executed during the term of the Loan; any and all contract
rights (including any contract with any architect or engineer or with any other
provider of goods or services for or in connection with any construction, repair
or other work upon the Property) relating to the Property; and any and all
warranties and guaranties relating to the Property or any fixtures, equipment or
personal property owned by Mortgagor and located on and/or used in connection
with the Property now existing or hereafter arising; any and all plans, permits,
licenses, certificates of use and occupancy (or their equivalent), trade names,
insurance policies, applications and approvals issued by any Governmental
Authority or agency relating to the construction, ownership, operation and/or
use of the Property, whether now existing or hereafter arising; and any and all
rights, powers, privileges, claims, remedies and causes of action of every kind
which Mortgagor now has or may in the future have with respect to or by reason
of its interest in the contracts or any other items referenced above, and all
right, title and interest of Mortgagor therein and thereunder, including the
right, while an Event of Default remains uncured, to receive and collect any
sums payable to Mortgagor thereunder.

       

      (m)  Service
Rights. Any
agreements, contracts, rights, licenses or other interests of any type
(collectively, the "Service Rights")
(whether exclusive or non-exclusive) granted or given to any Person to provide
any products or services to or for or with respect to the Leasehold Estate, any
Tenant or any occupants of the Leasehold Estate, including any of the same
related to telecommunications, internet
products or services, including, but not limited to, personal computer hardware
and software, internet hardware and software, internet access services,
printers, video display systems, audio sound systems and communication
telephonic devices, as well as related and complementary products and services
and any substitutes for, and items that are a technological evolution of, any of
the foregoing products.

       

      (n)  Intangibles. All
accounts, escrows, documents, instruments, chattel paper, claims, deposits and
other general intangibles, as the foregoing terms are defined in the Uniform
Commercial Code of the state in which the Property is located; all franchises,
trade names, trademarks, symbols, service marks, logos, copyrights, goodwill,
books, records, plans, specifications, designs, drawings, permits, consents,
licenses, all rights, interest and privileges that now or hereafter relate to,
are derived from or are used in connection with the Leasehold Estate, the
Improvements or the Personal Property, or the use, operation, maintenance,
occupancy or enjoyment thereof or the conduct of any business or activities
thereon, including without limitation, any rights which Mortgagor or Mortgagor's
Affiliates now or may hereafter have as developer or declarant under any
covenants, conditions, restrictions or declarations now or hereafter relating to
the Leasehold Estate or the Improvements; and all approvals, actions, refunds of
real estate taxes and assessments (and any other governmental impositions
related to the Property), and causes of action that now or hereafter relate to,
are derived from or are used in connection with the Leasehold Estate, the
Improvements or the Personal Property, or the use, operation, maintenance,
occupancy or enjoyment thereof or the conduct of any business or activities
thereon (hereinafter collectively referred to as the "Intangibles");

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (o)  Options. All
options to purchase and rights of first refusal to purchase or acquire a fee
estate, easement interest or other real property right to land, both vacant and
improved, adjoining the Leasehold Estate now or hereafter in
effect;

       

      (p)  Conversion. All
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
including proceeds of insurance and condemnation awards, into cash or
liquidation claims;

       

      (q)  Other
Rights.
Inventory, cash receipts, deposit accounts, accounts receivable, contract
rights, licenses, agreements, notes, drafts, letters of credit, all proceeds of
the conversion, voluntary or involuntary, of any of the foregoing including
proceeds of insurance and condemnation awards, into cash or liquidation claims;
any other rights to the payment of money; all permits, consents, approvals,
licenses, authorizations and other rights granted by, given by or obtained from,
any Governmental Authority with respect to the Property; all deposits or other
security now or hereafter made with or given to utility companies by Mortgagor
with respect to the Property; all plans, drawings and specifications relating to
the Property; all loan funds held by Mortgagee, whether or not disbursed; all
funds deposited with Mortgagee pursuant to any loan agreement; all reserves,
deferred payments, deposits, accounts, refunds, cost savings and payments of any
kind related to the Property or any portion thereof (including, but not limited
to all refunds, rebates or credits in connection with a reduction in real estate
taxes and assessments charged against the Property as a result of tax certiorari
or any applications or proceedings for reduction of taxes); the right, in the
name and on behalf of Mortgagor, to commence any action or proceeding to protect
the interest of Mortgagee in the Property and while an Event of Default remains
uncured, to appear in and defend any action or proceeding brought with respect
to the Property; all options to purchase and rights of first refusal to purchase
or acquire a fee estate, easement interest or other real property right to land,
both vacant and improved, adjoining the Leasehold Estate now or hereafter in
effect; together with any proceeds, products, offspring, rents and profits from
any of the foregoing, including those from sale, exchange, transfer, collection,
loss, damage, disposition, substitution or replacement of any of the foregoing;
together with all books, records and files relating to any of the foregoing;
and

       

      (r)  Proceeds. All
proceeds, products, offspring, rents and profits from any of the foregoing,
including those from sale, exchange, transfer, collection, loss, damage,
disposition, substitution or replacement of any of the foregoing.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      As to all
of the above described Property which is or which hereafter becomes a "fixture"
under applicable law, this Security Instrument constitutes a fixture filing
under the UCC, as amended or recodified from time to time.

       

      1.2  Pledge of Monies
Held.
Mortgagor hereby pledges to Mortgagee, and grants to Mortgagee a security
interest in, any and all monies now or hereafter held by Mortgagee pursuant to
the Loan Agreement or the other Loan Documents (including the Reserves) as
additional security for the Obligations until expended or applied or required to
be applied as provided in this Security Instrument, the Loan Agreement and the
other Loan Documents.

       

      CONDITIONS TO
GRANT

       

      TO HAVE
AND TO HOLD the Property hereby mortgaged and conveyed, or so intended, unto the
Mortgagee and its successors and assigns, forever;

       

      PROVIDED,
HOWEVER, these presents are upon the express condition that, if Mortgagor shall
well and truly pay to Mortgagee the Debt at the time and in the manner provided
in the Note, this Security Instrument and the other Loan Documents, shall well
and truly perform the Other Obligations as set forth in this Security Instrument
and the other Loan Documents and shall well and truly abide by and comply with
each and every covenant and condition set forth in the Loan Documents, these
presents and the estate hereby granted shall cease, terminate and be void.

       

      ARTICLE II DEBT AND OBLIGATIONS
SECURED

       

      2.1  Debt. This
Security Instrument and the grants, assignments and transfers made in
Article I are
given for the purpose of securing the following, in such order of priority as
Mortgagee may determine in its sole discretion (the "Debt"): (1)
all principal, interest and other amounts due under or secured by the Loan
Documents; (2) the payment of all other monies agreed or provided to be paid by
Mortgagor in the Note or the other Loan Documents; (3) the payment of all sums
advanced pursuant to this Security Instrument to protect and preserve the
Property and the Lien and the security interest created hereby; (4) the payment
of all sums advanced and costs and expenses incurred by Mortgagee in connection
with the Debt or any part thereof, any renewal, extension, modification,
consolidation, change, substitution or restatement or any part thereof, or the
acquisition or perfection of the security therefor, whether made or incurred at
the request of Mortgagor or Mortgagee (including, without limitation, (i)
modifications of the required principal payment dates or interest payment dates
or both, as the case may be, deferring or accelerating payment dates wholly or
partly; or (ii) modifications, extensions or renewals of the Debt or any
part thereof at a different rate of interest whether or not in the case of a
note, the modification, extension or renewal is evidenced by a new or additional
promissory note or notes); (5) all principal, interest, and other amounts which
may hereafter be loaned by Mortgagee, its successors or assigns, to or for the
benefit of the owner of the Property, when evidenced by a promissory note or
other instrument which, by its terms, is secured hereby; (6) all other
indebtedness, obligations and liabilities now or hereafter existing of any kind
of Mortgagor to Mortgagee under documents which recite that they are intended to
be secured by this Security Instrument; and (7) payment and performance of all
covenants and obligations hereunder and under the Loan Documents, if
any.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      2.2  Other Obligations. This
Security Instrument and the grants, assignments and transfers made in
Article I are also
given for the purpose of securing the performance of all of the agreements,
covenants, conditions, warranties, representations and other obligations (other
than to repay the Debt) made or undertaken by Mortgagor or any other Person to
Mortgagee or others as set forth in the Loan Documents (the "Other Obligations").

       

      2.3  Debt and Other
Obligations. The
obligations of Mortgagor and all other Persons for the payment of the Debt and
the performance of the Other Obligations shall be referred to herein
collectively as the "Obligations". The
term "Obligations" is used
herein in its broadest and most comprehensive sense and shall be deemed to
include, without limitation, all interest and charges, prepayment premiums (if
any), late charges and loan fees at any time accruing or assessed on any of the
Debt.

       

      2.4  Payments. Unless
payments are made in the required amount in immediately available funds at the
place where the Note is payable, remittances in payment of all or any part of
the Debt shall not, regardless of any receipt or credit issued therefor,
constitute payment until the required amount is actually received by Mortgagee
in funds immediately available at the place where the Note is payable (or any
other place as Mortgagee, in Mortgagee's sole discretion, may have established
by delivery of written notice thereof to Mortgagor) and shall be made and
accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or banks.
Acceptance by Mortgagee of any payment in an amount less than the amount then
due shall be deemed an acceptance on account only, and the failure to pay the
entire amount then due (subject to applicable cure periods) shall be and
continue to be an Event of Default.

       

      2.5  Advances by
Mortgagee. It is
specifically understood and agreed that all funds which are advanced by
Mortgagee and employed in performance of the obligations of Mortgagor under this
Mortgage, the Loan Agreement or the other Loan Documents, including, without
limitation, advances made to pay any interest accrued on the principal under the
Note as the same becomes due from time to time under the terms of the Note
and/or Loan Agreement, or which are advanced in the exercise of Mortgagee's
judgment that the same are necessary or desirable to complete, operate, maintain
or market the Property or to protect Mortgagee's security under the Loan
Documents, shall, because of economic necessity and compulsion, be deemed
advanced by Mortgagee under an obligation to do so regardless of the identity of
the person or persons to whom such funds are furnished and shall be added to the
Debt evidenced by the Note and shall be equally secured by this Mortgage and
shall have the same priority as all amounts, if any, advanced as of the date
hereof.

       

      ARTICLE III MORTGAGOR
COVENANTS

       

      Mortgagor
covenants and agrees with Mortgagee that:

       

      3.1  Payment of Debt.
Mortgagor will pay the Debt at the time and in the manner provided in the Loan
Documents.

       

      
        
          
          

        

        
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      3.2  Warranty of Title.
Mortgagor hereby warrants that: (a) Mortgagor has good, marketable and
insurable title to the Leasehold Estate, including the right to encumber the
Property; (b) Mortgagor has the full power, authority and right to execute,
deliver and perform its Obligations under this Security Instrument and to
encumber, grant, bargain, sell, convey, assign and mortgage the Property in
accordance with the terms hereof; (c) Mortgagor possesses an unencumbered
interest in the Leasehold Estate and the Improvements and Mortgagor owns the
Property free and clear of all Liens, encumbrances and charges whatsoever except
for those exceptions shown in the title insurance policy insuring the Lien of
this Security Instrument; and (d) this Security Instrument is and will remain a
valid and enforceable first Lien on and security interest in the Property,
subject only to those exceptions shown in the title insurance policy insuring
the Lien of this Security Instrument. Mortgagor shall forever warrant, defend
and preserve such title and the validity and priority of the Lien of this
Security Instrument and shall forever warrant and defend the same to Mortgagee
against the claims of all Persons whomsoever. The foregoing warranty of title
shall survive the foreclosure of this Security Instrument and shall inure to the
benefit of and be enforceable by Mortgagee in the event Mortgagee acquires title
to the Property pursuant to any foreclosure or deed in lieu of foreclosure or
otherwise.

       

      3.3  Incorporation by
Reference. All the
covenants, conditions, terms, provisions and agreements contained in (a) the
Note and (b) the other Loan
Documents, are hereby made a part of this Security Instrument to the same extent
and with the same force as if fully set forth herein, including, but not
limited, to Section
5.20 of the
Loan Agreement (Operation of Property) and Section
6.2 of the
Loan Agreement (Tax and Insurance Escrows). All Persons who may have or acquire
an interest in the Property shall be deemed to have notice of the terms of the
Obligations and to have notice, if provided therein, that: (a) the Note or the
Loan Agreement may permit borrowing, repayment and re-borrowing so that
repayments shall not reduce the amounts of the Obligations; and (b) the rate of
interest on one or more Obligations may vary from time to time.

       

      ARTICLE IV FURTHER
ASSURANCES

       

      4.1  Recording of Security Instrument,
Etc.
Mortgagor forthwith upon the execution and delivery of this Security Instrument
and thereafter, from time to time, will cause this Security Instrument and any
of the other Loan Documents (including all UCC financing statements) creating a
Lien or security interest or evidencing the Lien hereof upon the Property 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 and perfect the Lien or security
interest hereof upon, and the interest of Mortgagee in, the Property. Mortgagor
will pay all taxes, filing, registration or recording fees, and all reasonable
expenses incident to the preparation, execution, acknowledgment and/or recording
of the Note, this Security Instrument, the other Loan Documents, any note or
mortgage supplemental hereto, any security instrument with respect to the
Property and any instrument of further assurance, and any modification or
amendment of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any
mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to
do.

       

      
        
          
          

        

        
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      4.2  Further Acts, Etc.
Mortgagor will, at the sole cost and expense of Mortgagor, and without any cost
or expense to Mortgagee, do, execute, acknowledge and deliver all and every such
further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Mortgagee shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Mortgagee, the Property and rights hereby mortgaged,
granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Mortgagor may be or
may hereafter become bound to convey or assign to Mortgagee, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security Instrument, or
for complying with all Legal Requirements. Mortgagor, on demand, will execute
and deliver and hereby authorizes Mortgagee to execute in the name of Mortgagor
or without the signature of Mortgagor to the extent Mortgagee may lawfully do
so, one or more financing statements, chattel mortgages or other instruments, to
evidence or perfect more effectively the security interest of Mortgagee in the
Property. Mortgagor grants to Mortgagee an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting any and all rights
and remedies available to Mortgagee pursuant to this Section
4.2, and
Mortgagor hereby acknowledges and agrees that Mortgagor shall have no claim or
cause of action against Mortgagee arising out of Mortgagee's execution and/or
recordation of any instruments by or on behalf of Mortgagor pursuant to the
foregoing power of attorney.

       

      4.3  Changes in Tax, Debt Credit and
Documentary Stamp Laws.
(a) If
any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Mortgagee's interest in the Property, Mortgagor will pay the tax, with
interest and penalties thereon, if any. If Mortgagee is advised by counsel
chosen by Mortgagee that the payment of tax by Mortgagor would be unlawful or
taxable to Mortgagee or unenforceable or provide the basis for a defense of
usury, then Mortgagee shall have the option by written notice of not less than
ninety (90) days to declare the Debt immediately due and payable.

       

      (b)  Mortgagor
will not claim or demand or be entitled to any credit or credits on account of
the Debt for any part of the Taxes or Other Charges assessed against the
Property, or any part thereof, and no deduction shall otherwise be made or
claimed from the assessed value of the Property, or any part thereof, for real
estate tax purposes by reason of this Security Instrument or the Debt. If such
claim, credit or deduction shall be required by law, Mortgagee shall have the
option, by written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable.

       

      (c)  If at any
time the United States of America, any State thereof or any subdivision of any
such State shall require revenue or other stamps to be affixed to the Note, this
Security Instrument, or any of the other Loan Documents or impose any other tax
or charge on the same, Mortgagor will pay for the same, with interest and
penalties thereon, if any.

       

      4.4  Leasehold Mortgage
Provisions. 

       

      (a)  Mortgagor
hereby covenants, warrants and represents as follows:

       

      
        
          
          

        

        
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      (i)  to
Mortgagor’s knowledge, that certain lease, dated as of January 14, 1954, between
The Prudential Insurance Company of America, as landlord, and Webb & Knapp,
as tenant (such lease, as amended and assigned, the “Ground Lease”) and
the Sublease are in full force and effect, unmodified by any writing or
otherwise, except as otherwise previously disclosed;

       

      (ii)  to
Mortgagor’s knowledge, all rent, additional rent and/or other charges reserved
in or payable under the Ground Lease and the Sublease have been paid to the
extent that they are due to the date hereof;

       

      (iii)  Mortgagor
enjoys the quiet and peaceful possession of the Leasehold Estate;

       

      (iv)  except
for the claims made in the Kamber Litigation and the letter from Kamber’s
attorneys and as otherwise previously disclosed to Mortgagee, Mortgagor and the
lessor under the Sublease (the “Sublessor”) have
not delivered or received any notices of default under the Ground Lease and/or
the Sublease and, to the best of Mortgagor's knowledge, is not in default under
any of the terms of the Ground Lease and/or the Sublease and there are no
circumstances which, with the passage of time or the giving of notice or both,
would constitute a default under the Ground Lease and/or the
Sublease;

       

      (v)  except as
previously disclosed to Mortgagee, the granting of this Mortgage does not
violate the terms of the Ground Lease and/or the Sublease nor is the consent of
the lessor under the Ground Lease (the "Ground Lessor") and/or
the consent of the Sublessor required to be obtained in connection with the
granting of this Mortgage;

       

      (vi)  to the
best of Mortgagor's knowledge, the Ground Lessor and/or Sublessor are not in
default under any of the terms of the Ground Lease and/or the Sublease on their
part to be observed or performed;

       

      (vii)  to the
best of Mortgagor's knowledge, Mortgagor has delivered to Mortgagee true,
accurate and complete copies of the Ground Lease and the Sublease;

       

      (viii)  Mortgagor
shall pay the rent and all other sums and charges mentioned in, and payable
under, the Sublease and shall cause the Sublessor to pay rent and other sums and
charges payable under the Ground Lease prior to same becoming
delinquent;

       

      (ix)  Mortgagor
shall timely perform and observe all of the terms, covenants and conditions
required to be performed and observed by the lessee under the Sublease, the
breach of which could permit any party to the Sublease to validly terminate the
Sublease (including, but without limiting the generality of the foregoing, any
payment obligations), shall do all things necessary to preserve and to keep
unimpaired its rights under the Sublease, shall not waive, excuse or discharge
any of the material obligations of the Sublease without Mortgagee's prior
written consent in each instance, and shall diligently and continuously enforce
the obligations of the Sublessor;

       

      
        
          
          

        

        
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      (x)  Mortgagor
shall cause the Sublessor to timely perform and observe all of the terms,
covenants and conditions required to be performed and observed by the lessee
under the Ground Lease, the breach of which could permit any party to the Ground
Lease to validly terminate the Ground Lease (including, but without limiting the
generality of the foregoing, any payment obligations), shall cause the Sublessor
to do all things necessary to preserve and to keep unimpaired its rights under
the Ground Lease, shall cause the Sublessor not to waive, excuse or discharge
any of the material obligations of the Ground Lease without Mortgagee's prior
written consent in each instance, and shall cause the Sublessor to diligently
and continuously enforce the obligations of the Ground Lessor;

       

      (xi)  Mortgagor
shall not do or knowingly and intentionally permit or suffer any event or
omission as a result of which there could occur a default under the Sublease
which would remain uncured after the applicable grace period or any event which,
with the giving of notice or the passage or time, or both, would constitute a
default under the Sublease, which could permit any party to the Sublease to
validly terminate the Sublease (including, but without limiting the generality
of the foregoing, a default in any payment obligation);

       

      (xii)  Mortgagor
shall cause the Sublessor not to do or knowingly and intentionally permit or
suffer any event or omission as a result of which there could occur a default
under the Ground Lease which would remain uncured after the applicable grace
period or any event which, with the giving of notice or the passage or time, or
both, would constitute a default under the Ground Lease, which could permit any
party to the Ground Lease to validly terminate the Ground Lease (including, but
without limiting the generality of the foregoing, a default in any payment
obligation);

       

      (xiii)  Mortgagor
shall not cancel, terminate, surrender, modify or amend or in any way permit the
alteration of any of the provisions of the Sublease or agree to any termination,
amendment, modification or surrender of the Sublease without Mortgagee's prior
written consent in each instance. Mortgagor hereby assigns to Mortgagee, as
further security for the payment of the Indebtedness and for the performance and
observance of the terms, covenants and conditions of the Loan Documents, all of
the rights, privileges and prerogatives of Mortgagor to surrender the Sublease
or to terminate, cancel, modify, change, supplement, alter or amend the
Sublease, and any such surrender of the Sublease or termination, cancellation,
change, supplement, alteration or amendment of the Sublease, without the prior
written consent of Mortgagee, shall be void and of no force and effect
(provided, however, so long as there is no breach of or default under any of the
covenants or agreements herein contained to be performed by Mortgagor, or in the
performance by Mortgagor of any of the terms, covenants and conditions contained
in the Sublease, Mortgagee shall have no right to terminate, cancel, modify,
change, supplement, alter or amend the Sublease);

       

      (xiv)  Mortgagor
shall promptly notify Mortgagee of any material defaults by any party under the
Sublease and shall deliver to Mortgagee copies of any notice of default by any
party under the Sublease, or of any notice from the Sublessor of its intention
to terminate the Sublease or to re-enter and take possession of the Property,
promptly upon delivery or receipt of such notice, as the case may
be;

       

      
        
          
          

        

        
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      (xv)  Mortgagor
shall notify Mortgagee of any material defaults by any party under the Ground
Lease and shall deliver to Mortgagee copies of any notice of default by any
party under the Ground Lease, or of any notice from the Ground Lessor of its
intention to terminate the Ground Lease or to re-enter and take possession of
the Property, promptly upon delivery or receipt of such notice, as the case may
be;

       

      (xvi)  Mortgagor
shall, in a timely manner, furnish to Mortgagee copies of such information and
evidence as Mortgagee may reasonably request concerning Mortgagor's due
observance, performance and compliance with the terms, covenants and conditions
of the Sublease;

       

      (xvii)  Mortgagor
shall, in a timely manner, furnish to Mortgagee copies of such information and
evidence as Mortgagee may reasonably request concerning Sublessor's due
observance, performance and compliance with the terms, covenants and conditions
of the Ground Lease;

       

      (xviii)  Subject
to the terms and conditions of the Sublease, Mortgagor shall not consent to the
subordination of the Sublease to any mortgages of the fee interest in the
Leasehold Estate;

       

      (xix)  Subject
to the terms and conditions of the Ground Lease, Mortgagor shall cause Sublessor
not to consent to the subordination of the Ground Lease to any mortgages of the
fee interest in the Leasehold Estate;

       

      (xx)  Any
default by Mortgagor under the Sublease, in each case not cured within the
applicable grace period, shall constitute a default hereunder; 

       

      (xxi)  Mortgagor,
at its sole cost and expense, shall execute and deliver to Mortgagee, within ten
(10) business days after request, such documents, instruments or agreements as
may be reasonably required to permit Mortgagee to cure any default under the
Sublease not cured within the applicable grace period; and 

       

      (xxii)  Mortgagor,
at its sole cost and expense, shall take all actions necessary and/or reasonably
required by Mortgagee to provide to Mortgagee all of the leasehold mortgagee
protections available under the Sublease.

       

      (b)  In the
event of default by Mortgagor in the performance of any of its obligations under
the Sublease not cured within the applicable grace period, including, but
without limiting the generality of the foregoing, any default in the payment of
any sums payable thereunder, then, in each and every case, Mortgagee may, at its
option, following notice to Mortgagor, cause the default or defaults to be
remedied and otherwise exercise any and all of the rights of Mortgagor
thereunder in the name of and on behalf of Mortgagor; provided, however, that
failure to provide notice to Mortgagor shall not be deemed a default by
Mortgagee. Mortgagor shall, within ten (10) business days of demand, reimburse
Mortgagee for all advances made and expenses incurred by Mortgagee in curing any
such default (including, without limiting the generality of the foregoing,
reasonable attorneys' fees and disbursements), together with interest thereon
computed at the Default Rate from the date demanded until paid to Mortgagee. All
such advances, together with interest thereon, shall be secured by this
Mortgage.

       

      
        
          
          

        

        
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      (c)  Mortgagor
shall give Mortgagee notice of its intention to exercise each and every option,
if any, including, without limitation, any purchase or extension options, at
least thirty (30) days prior to the expiration of the time to exercise such
option under the terms thereof. If Mortgagor intends to exercise any such
option, it shall deliver to Mortgagee, with the notice of such decision, a copy
of the notice of extension and/or purchase delivered to the lessor thereunder,
together with the terms and conditions of such extension and/or purchase.
Mortgagor hereby expressly acknowledges and appoints Mortgagee as its
attorney-in-fact to exercise any such option in the name of and on behalf of
Mortgagor, which power of attorney shall be irrevocable and shall be deemed
coupled with an interest.

       

      (d)  Mortgagor
shall use commercially reasonable efforts to obtain and deliver to Mortgagee
within twenty (20) business days after written demand by Mortgagee or such
longer period of time provided in the Sublease, an estoppel certificate from the
Sublessor providing the information the Sublessor is required to provide in an
estoppel letter pursuant to the terms of the Sublease.

       

      (e)  Anything
contained herein to the contrary notwithstanding, this Mortgage shall not
constitute an assignment of the Sublease within the meaning of any provision
thereof prohibiting its assignment and Mortgagee shall have no liability or
obligation thereunder by reason of its acceptance of this Mortgage. Mortgagee
shall be liable for the obligations of the lessee arising under the Sublease for
only that period of time which Mortgagee is in possession of the Leasehold
Estate or has acquired, by foreclosure or otherwise, and is holding all of
Mortgagor's right, title and interest therein.

       

      (f)  It is
hereby agreed that the fee title in the Leasehold Estate, the leasehold estate
under the Ground Lease and the Leasehold Estate shall not merge but shall always
be kept separate and distinct, notwithstanding the union of said estates in
either the Ground Lessor, the Sublessor, Mortgagor or a third party, whether by
purchase or otherwise. If Mortgagor shall acquire fee title to the property
leased to Mortgagor, or any other estate, title or interest in the property
demised under the Ground Lease and/or the Sublease, or any portion thereof,
then, immediately upon Mortgagor's acquisition thereof, this Mortgage
automatically shall spread to cover Mortgagor's fee interest in such leased
property on the same terms, covenants and conditions as set forth herein. Upon
such acquisition, Mortgagor, at its sole cost and expense, shall deliver to
Mortgagee an ALTA Form B Mortgage Title Insurance Policy insuring that this
Mortgage, as so spread to cover Mortgagor's fee interest in such leased
property, is a valid first lien on Mortgagor's interest therein, subject only to
the Permitted Exceptions. It is the intention of Mortgagor and Mortgagee that no
documents, instruments or agreements shall be necessary to confirm the foregoing
spread of this Mortgage to cover Mortgagor's fee interest in such leased
property, as aforesaid, and that such spreader shall occur automatically upon
the consummation of Mortgagor's acquisition of such estate, title or interest to
such leased property. Notwithstanding the foregoing, Mortgagor shall make,
execute, acknowledge and deliver to Mortgagee or so cause to be made, executed,
acknowledged and delivered to Mortgagee, in form reasonably satisfactory to
Mortgagee, all such further or other documents, instruments, agreements or
assurances as may be reasonably required by Mortgagee to confirm the foregoing
spread of this Mortgage to cover Mortgagor's fee interest in such leased
property. Mortgagor shall pay all reasonable expenses incurred by Mortgagee in
connection with the preparation, execution, acknowledgement, delivery and/or
recording of any such documents, including but without limiting the generality
of the foregoing, all filing, registration and recording fees and charges,
documentary stamps, mortgage taxes, intangible taxes, and reasonable attorneys'
fees, costs and disbursements.

       

      
        
          
          

        

        
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      (g)  If any
action or proceeding shall be instituted to evict Mortgagor or to recover
possession of the Property or any part thereof or interest therein or any action
or proceeding otherwise affecting the Ground Lease and/or the Sublease or this
Mortgage shall be instituted, then Mortgagor will, promptly upon service thereof
on or to Mortgagor, deliver to Mortgagee a true and complete copy of each
petition, summons, complaint, notice of motion, order to show cause and of all
other provisions, pleadings, and papers, however designated, served in any such
action or proceeding.

       

      (h)  Mortgagor
will not agree to arbitrate any disputes arising under the Sublease, except for
those certain disputes which by the terms of such Sublease must be arbitrated,
without the written consent of Mortgagee, which consent can be withheld at the
sole discretion of Mortgagee. In the event of any arbitration, Mortgagor will
give Mortgagee prompt written notice of the commencement of such arbitration and
so long as no Event of Default shall have occurred and be continuing hereunder,
(i) Mortgagee shall have the right to intervene and participate in any such
proceeding, (ii) Mortgagor shall confer with Mortgagee to the extent which
Mortgagee reasonably deems necessary for the protection of Mortgagee, upon the
written request of Mortgagee and (iii) Mortgagor shall select an arbitrator
who is reasonably approved in writing by Mortgagee; provided, however, that if
at the time any such proceeding shall be commenced or shall be in progress an
Event of Default shall have occurred and be continuing hereunder, Mortgagor
hereby irrevocably appoints and constitutes Mortgagee as its true and lawful
attorney-in-fact, which appointment is coupled with an interest, in its name,
place and stead, to exercise, at the expense of Mortgagor, all right, title and
interest of Mortgagor in connection with such arbitration, including the right
to appoint arbitrators and to conduct arbitration proceedings on behalf of
Mortgagor. Nothing contained herein shall obligate Mortgagee to participate in
such arbitration.

       

      (i)  Mortgagor
shall, within ten (10) business days after written demand therefor from
Mortgagee, deliver to Mortgagee proof of payment of all items that are required
to be paid by Mortgagor under the Sublease, including, without limitation, rent
and other charges required to be paid under the Sublease.

       

      (j)  Mortgagor
shall cause the Sublessor, within ten (10) business days after written demand
therefor from Mortgagee, to deliver to Mortgagee proof of payment of all items
that are required to be paid by Mortgagor under the Ground Lease, including,
without limitation, rent and other charges required to be paid under the Ground
Lease.

       

      (k)  If the
Ground Lease and/or the Sublease shall be terminated prior to the natural
expiration of their term, and if, pursuant to any provision of the Ground Lease
and/or the Sublease, Mortgagee or its designee shall acquire from the Ground
Lessor and/or the Sublessor a new lease of the Property demised thereunder and
the improvements located thereon, Mortgagor shall have no right, title or
interest in or to such new lease or the leasehold estate created thereby, or
renewal privileges therein contained.

       

      
        
          
          

        

        
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      (l)  Mortgagor
agrees to notify Mortgagee within ten (10) days after the filing of a petition
for relief by or against the Mortgagor under section 301, 302, or 303 of title
11 of the United States Code (as such statute or any such successor statute may
now or hereafter be in effect, the "Bankruptcy
Code"). The
failure of Mortgagor, within ten (10) days after the commencement of a case
under the Bankruptcy Code by or against Mortgagor (the "Bankruptcy
Case") to (i)
file a motion seeking approval of and authorization by the court overseeing the
Bankruptcy Case (the "Bankruptcy
Court") for
the assumption of the Sublease pursuant to section 365(a) of the Bankruptcy Code
or (ii) obtain such approval and authorization of the Bankruptcy Court and
actually assume the Sublease within forty (40) days after the commencement of
the Bankruptcy Case shall presumptively be deemed "cause" for granting Mortgagee
leave from the automatic stay pursuant to section 362(d)(i) of the Bankruptcy
Code. In addition to the other remedies provided to Mortgagee herein, Mortgagee
shall have the right, as the assignee of Mortgagor, to assume or to compel
timely assumption of the Sublease in the Bankruptcy Case. Mortgagor shall be
responsible for all costs required in connection with any such assumption of the
Sublease, including any amounts required to be spent to cure defaults
thereunder, and Mortgagor shall, on demand, reimburse Mortgagee for all advances
made and expenses incurred in curing any of such default (including, without
limitation, reasonable attorneys' fees and reasonable appellate attorneys' fees,
paralegal fees, court costs through all appellate level and disbursements),
together with interest thereon computed at the Default Rate from the date
demanded until paid to Mortgagee.

       

      (m)  Mortgagor
hereby irrevocably assigns to Mortgagee its right to make the election permitted
by section 365(h) of the Bankruptcy Code and Mortgagor hereby appoints Mortgagee
its attorney-in-fact for purposes of making such election. Mortgagor shall
notify Mortgagee of the existence of any case under the Bankruptcy Code
involving the Sublessor immediately after Mortgagor becomes aware thereof, but
in no event later than five (5) business days thereafter. Mortgagor shall file a
notice of appearance in any such case involving the Sublessor, which notice of
appearance shall specifically state that notices in such case should also be
provided to Mortgagee. Mortgagor shall provide Mortgagee with a copy of any
pleadings or other notices received in such case.

       

      (n)  Notwithstanding
anything to the contrary, in the event of a conflict between the provisions of
this Section 4.4 and the provisions of Section 5.31 of the Loan Agreement, the
provisions that offer the Mortgagee the greatest protection and/or most
favorable terms shall govern and control. 

       

      ARTICLE V ASSIGNMENT OF
RENTS

       

      5.1  Assignment of
Rents.
Mortgagor hereby absolutely and unconditionally assigns to Mortgagee all of
Mortgagor's right, title and interest in and to all current and future Leases
and Rents. Nevertheless, subject to the terms of this Article V, the
Assignment of Leases and the Lockbox Agreement, Mortgagee grants to Mortgagor a
revocable license to collect, receive and apply the Rents in accordance with the
Loan Agreement and the other Loan Documents. Mortgagor shall hold the Rents, or
a portion thereof, sufficient to discharge all current sums due on the Debt, for
use in the payment of such sums.

       

      
        
          
          

        

        
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      ARTICLE VI SECURITY
AGREEMENT

       

      6.1  Security Agreement. This
Security Instrument is both a real property mortgage and a "security agreement"
within the meaning of the Uniform Commercial Code. The Property includes both
real and personal property and all other rights and interests, whether tangible
or intangible in nature, of Mortgagor in the Property. Mortgagor by executing
and delivering this Security Instrument has granted and hereby grants to
Mortgagee, as security for the Obligations, a security interest in the Property
to the full extent that the Property may be subject to the Uniform Commercial
Code (said portion of the Property so subject to the Uniform Commercial Code
being referred to in this Paragraph as the "Collateral"). This
Security Instrument shall also constitute a "fixture filing" for the purposes of
the Uniform Commercial Code. As such, this Security Instrument covers all items
of the Collateral that are or are to become fixtures. Information concerning the
security interest herein granted may be obtained from the parties at the
addresses of the parties set forth in Section
13.1. If an
Event of Default shall occur, Mortgagee, in addition to any other rights and
remedies which it may have, shall have and may exercise, immediately and without
demand, any and all rights and remedies granted to a secured party upon default
under the Uniform Commercial Code, including the right to take possession of the
Collateral or any part thereof and to take such other measures as Mortgagee may
deem necessary for the care, protection and preservation of the Collateral or
the sale thereof. Upon request or demand of Mortgagee, Mortgagor shall at its
expense assemble the Collateral and make it available to Mortgagee at a
convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on
demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by Mortgagee in protecting its interest in the
Collateral and in enforcing its rights hereunder with respect to the Collateral.
The proceeds of any disposition of the Collateral, or any part thereof, may be
applied by Mortgagee to the payment of the Debt in such priority and proportions
as Mortgagee in its sole discretion shall deem proper. In the event of any
change in name, identity or structure of Mortgagor, Mortgagor shall notify
Mortgagee thereof and promptly after request shall execute (if required), file
and record such Uniform Commercial Code forms as are necessary to maintain the
priority of Mortgagee's lien upon and security interest in the Collateral and
shall pay all out-of-pocket expenses and fees in connection with the filing and
recording thereof. If Mortgagee shall require the filing or recording of
additional Uniform Commercial Code forms or continuation statements, Mortgagor
shall, promptly after request, execute, file and record such Uniform Commercial
Code forms or continuation statements as Mortgagee shall deem necessary, and
shall pay all expenses and fees in connection with the filing and recording
thereof. Mortgagor hereby irrevocably appoints Mortgagee as its
attorney-in-fact, coupled with an interest, to file with the appropriate public
office on Mortgagor's behalf any financing or other statements signed only by
Mortgagee, as secured party, in connection with the Collateral covered by this
Security Instrument, and Mortgagor hereby acknowledges and agrees that Mortgagor
shall have no claim or cause of action against Mortgagee arising out of
Mortgagee's execution and/or recordation of any instruments by or on behalf of
Mortgagor pursuant to the foregoing power of attorney. Any notice of sale,
disposition or other intended action by Mortgagee with respect to the Collateral
sent to Mortgagor in accordance with Section 13.1 at least
ten (10) days prior to such action, shall constitute commercially reasonable
notice to Mortgagor. In addition to the foregoing, Mortgagor hereby expressly
authorizes and agrees with Mortgagee that Mortgagee shall have full right and
authority to prepare and record and/or file, without the necessity of a
signature by Mortgagor, in form, scope and substance satisfactory to Mortgagee,
any and all financing statements, fixture financing statements, and any and all
renewals or extensions of said financing statements and such additional
financing statements as Mortgagee may, from time to time, consider necessary to
perfect and preserve Mortgagee's security interest herein granted and Mortgagee
may cause such statements and assurances to be recorded and filed at such times
and places as may be required or permitted by law to so perfect and preserve
such security interests.

       

      
        
          
          

        

        
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      ARTICLE VII DUE ON
SALE/ENCUMBRANCE

       

      7.1  No
Sale/Encumbrance. Except
as specifically permitted by the Loan Agreement, Mortgagor agrees that Mortgagor
shall not, without the prior written consent of Mortgagee, sell, convey,
mortgage, grant, bargain, encumber, pledge, assign, or otherwise transfer the
Property or any part thereof or permit the Property or any part thereof to be
sold, conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred. Mortgagor further agrees that Mortgagor will not allow
any Transfer or other similar action prohibited by the Loan
Agreement.

       

      ARTICLE VIII PREPAYMENT

       

      8.1  Prepayment Only in Accordance with
Note. The
Debt may be prepaid only in strict accordance with the express terms and
conditions of the Note and the Loan Agreement.

       

      ARTICLE IX DEFAULT

       

      9.1  Events of Default. The
occurrence of the following event(s) shall constitute an "Event of Default":

       

      (a)  the
occurrence of any Event of Default as defined in the Loan Agreement (which
includes but is not limited to a default by Mortgagor under this Security
Instrument beyond any applicable notice and cure periods).

       

      ARTICLE X RIGHTS AND
REMEDIES

       

      10.1  Remedies.

       

      (a)  Upon the
occurrence of any Event of Default, Mortgagee may take such action, without
notice or demand, as Mortgagee deems advisable to protect and enforce the rights
of Mortgagee against Mortgagor and in and to the Property, including the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as Mortgagee may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Mortgagee:

       

      (i)  declare
the entire Debt and all other Obligations to be immediately due and
payable;

       

      (ii)  institute
a proceeding or proceedings, judicial or nonjudicial, by advertisement or
otherwise, for the foreclosure of the Security Instrument under applicable Legal
Requirements in which case the Property or any interest therein may be sold for
cash or upon credit in one or more parcels or in several interests or portions
and in any order or manner, and to apply the proceeds received upon the
Obligations in such order and manner as Mortgagee determines in its sole
discretion;

       

      
        
          
          

        

        
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      (iii)  with or
without entry, to the extent permitted and pursuant to the procedures provided
by applicable Legal Requirements, institute proceedings for the partial
foreclosure of this Security Instrument for the portion of the Debt then due and
payable, subject to the continuing Lien and security interest of this Security
Instrument for the balance of the Debt not then due unimpaired and without loss
of priority;

       

      (iv)  sell for
cash or upon credit the Property or any part thereof and all estate, claim,
demand, right, title and interest of Mortgagor therein and rights of redemption
thereof, pursuant to the power of sale contained herein or otherwise, at one or
more sales, as an entirety or in parcels, at such time and place, upon such
terms and after such notice thereof as may be required or permitted by
law;

       

      (v)  institute
an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein, or in any of the other Loan
Documents;

       

      (vi)  recover
judgment on the Note either before, during or after any proceedings for the
enforcement of this Security Instrument or the other Loan
Documents;

       

      (vii)  apply for
the appointment of a trustee, receiver, liquidator or conservator of the
Property, without notice and without regard for the adequacy of the security for
the Obligations and without regard for the solvency of the Mortgagor, any
Guarantor or of any Person liable for the payment of the Obligations, without
the necessity of a declaration that the Obligations are immediately due and
payable, and Mortgagor hereby consents to such appointment;

       

      (viii)  subject
to any applicable Legal Requirement, the license granted to Mortgagor under
Section
5.1 shall
automatically be revoked and Mortgagee may enforce Mortgagee's interest in the
Leases and Rents (including revocation of any license granted to Mortgagor) and
enter into or upon the Property, either personally or by its agents, nominees or
attorneys and dispossess Mortgagor and its agents and servants therefrom,
without becoming a mortgagee in possession and without liability for trespass,
damages or otherwise and exclude Mortgagor and its agents or servants wholly
therefrom, and take possession of all books, records, papers and accounts
relating thereto and Mortgagor agrees to surrender possession of the Property
and of such books, records, papers and accounts to Mortgagee upon demand, and
thereupon Mortgagee may, with or without notice, without releasing Mortgagor
from any Obligations, and without any obligation to do so, cure any breach or
Event of Default and may therefore, without limitation, (A) use, operate,
manage, control, insure, maintain, repair, restore and otherwise deal with all
and every part of the Property and conduct the business thereat;
(B) complete any construction on the Property in such manner and form as
Mortgagee deems advisable; (C) make alterations, additions, renewals,
replacements and improvements to or on the Property; (D) exercise all rights and
powers of Mortgagor with respect to the Property, whether in the name of
Mortgagor or otherwise, including the right to make, cancel, enforce or modify
Leases, obtain and evict tenants, and demand, sue for, collect and receive all
Rents of the Property and every part thereof; and (E) apply the receipts from
the Property to the payment of Debt in such order, priority and proportions as
Mortgagee shall deem appropriate in Mortgagee's sole discretion, after deducting
therefrom all expenses (including reasonable attorneys' fees and disbursements)
incurred in connection with the aforesaid operations and all amounts necessary
to pay the taxes, assessments insurance and other charges in connection with the
Property, as well as reasonable compensation for the services of Mortgagee, its
counsel, agents and employees;

       

      
        
          
          

        

        
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      (ix)  require
Mortgagor to pay monthly in advance to Mortgagee, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of any portion of the Property occupied by Mortgagor or any Affiliate
and require Mortgagor or any Affiliate to vacate and surrender possession to
Mortgagee of the Property or to such receiver and, in default thereof, evict
Mortgagor and/or any Affiliate by summary proceedings or otherwise;

       

      (x)  Mortgagee
may proceed at its election, in any sequence: (a) to dispose of any
Collateral separately from the sale of the Property in accordance with the UCC
or other applicable Legal Requirements, and (b) to dispose of some or all of the
Property in any combination consisting of both real and personal property
together in one or more sales to be held in accordance with the UCC or other
applicable Legal Requirements; or

       

      (xi)  pursue or
enforce any other right or remedy allowed by any Loan Document or applicable
Legal Requirements including those rights and remedies available to a secured
party under the UCC or other applicable Legal Requirements.

       

      In the
event of a sale, by foreclosure, power of sale or otherwise, of less than all of
the Property, this Security Instrument shall continue as a Lien and security
interest on the remaining portion of the Property unimpaired and without loss of
priority.

       

      (b)  The
proceeds of any sale made under or by virtue of this Section, together with any
other sums which then may be held by Mortgagee under this Security Instrument or
any other Loan Document, whether under the provisions of this Section
10.1 or
otherwise, less all Enforcement Costs, shall be applied by Mortgagee, to the
payment of the Debt and the Obligations in such order, priority and proportion
as Mortgagee in its sole discretion shall deem proper.

       

      (c)  Mortgagee
may adjourn from time to time any sale by Mortgagee to be made under or by
virtue of this Security Instrument 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 Legal Requirements, Mortgagee, without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.

       

      
        
          
          

        

        
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      (d)  Upon the
completion of any sale or sales pursuant hereto, 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. Mortgagee is hereby irrevocably appointed
the true and lawful attorney of Mortgagor, in Mortgagor's name and stead, to
make all necessary conveyances, assignments, transfers and deliveries of the
Property and rights so sold and for that purpose Mortgagee may execute all
necessary instruments of conveyance, assignment and transfer, and may substitute
one or more Persons with like power, Mortgagor hereby ratifying and confirming
all that its said attorney or such substitute or substitutes shall lawfully do
by virtue hereof. Any sale or sales made under or by virtue of this Section
10.1, 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, shall operate to
divest all the estate, right, title, interest, claim and demand whatsoever,
whether at law or in equity, of Mortgagor in and to the properties and rights so
sold, and shall be a perpetual bar both at law and in equity against Mortgagor
and against any and all Persons claiming or who may claim the same, or any part
thereof from, through or under Mortgagor.

       

      (e)  Mortgagee
shall have the right to appear in and defend any action or proceeding brought
with respect to the Property and to bring any action or proceeding, in the name
and on behalf of Mortgagor, which Mortgagee, in Mortgagee's discretion, decides
should be brought to protect Mortgagee's interest in the Property.

       

      (f)  Upon any
sale made under or by virtue of this Security Instrument, 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, Mortgagee may bid for and acquire
the Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Debt the net sales price
after deducting therefrom the expenses of the sale and costs of the action and
any other sums which Mortgagee is authorized to deduct under the Security
Instrument.

       

      (g)  No
recovery of any judgment by Mortgagee and no levy of an execution under any
judgment upon the Property or upon any other property of Mortgagor shall affect
in any manner or to any extent the Lien of this Security Instrument upon the
Property or any part thereof, or any Liens, rights, powers or remedies of
Mortgagee hereunder, but such Liens, rights, powers and remedies of Mortgagee
shall continue unimpaired as before.

       

      (h)  Upon the
occurrence of any Event of Default, Mortgagee may, but without any obligation to
do so and without notice to or demand on Mortgagor and without releasing
Mortgagor from any Obligation, cure the same in such manner and to such extent
as Mortgagee may deem necessary to protect the security hereof. Mortgagee is
authorized to enter upon the Property (subject to rights of tenants)for such
purposes, or appear in, defend, or bring any action or proceeding to protect
Mortgagee's interest in the Property or to foreclose this Security Instrument or
collect the Debt.

       

      (i)  Mortgagee
may terminate or rescind any proceeding or other action brought in connection
with its exercise of the remedies provided in this Section
10.1 at any
time before the conclusion thereof, as determined in Mortgagee's sole discretion
and without prejudice to Mortgagee.

       

      (j)  All costs
and expenses of Mortgagee in exercising its rights and remedies under this
Section
10.1 or
incurred as a result of any of the events described in Section 7.4 of the
Loan Agreement, including reasonable attorneys' fees and disbursements to the
extent permitted by law, shall be paid by Mortgagor immediately upon notice from
Mortgagee, with interest at the Default Rate for the period after notice from
Mortgagee and such costs and expenses shall constitute a portion of the Debt and
shall be secured by this Security Instrument and shall be immediately due and
payable upon demand by Mortgagee therefor.

       

      
        
          
          

        

        
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      (k)  The
interests and rights of Mortgagee under the Note, this Security Instrument or in
any of the other Loan Documents shall not be impaired by any indulgence,
including (i) any renewal, extension or modification which Mortgagee may grant
with respect to any of the Debt, (ii) any surrender, compromise, release,
renewal, extension, exchange or substitution which Mortgagee may grant with
respect to the Property or any portion thereof; (iii) any modification,
waiver or failure to enforce any provisions of the Loan Documents; or
(iv) any release or indulgence granted to any maker, endorser, Guarantor,
indemnitor or surety of any of the Debt.

       

      (l)  After the
occurrence and during the continuance of an Event of Default, Mortgagee shall
have the right to appear in and defend any action or proceeding brought with
respect to the Property and to bring any action or proceeding, in the name and
on behalf of Mortgagor, which Mortgagee, in Mortgagee's discretion, decides
should be brought to protect Mortgagee's interest in the Property.

       

      (m)  Mortgagee
shall have the right from time to time to take action to recover any sum or sums
which constitute a part of the Debt as the same become due, without regard to
whether or not the balance of the Debt shall be due, and without prejudice to
the right of Mortgagee thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Mortgagor existing at the time such
earlier action was commenced.

       

      10.2  Other Rights, Etc. 

       

      (a)  The
failure of Mortgagee to insist upon strict performance of any term hereof, shall
not be deemed to be a waiver of such term or any other term of this Security
Instrument or the other Loan Documents. Mortgagor shall not be relieved of
Mortgagor's obligations hereunder by reason of (i) the failure of Mortgagee to
comply with any request of Mortgagor or any Guarantor to take any action to
foreclose this Security Instrument or otherwise enforce any of the provisions
hereof or of the Note or the other Loan Documents, (ii) the release, regardless
of consideration, of the whole or any part of the Property, or of any Person
liable for the Debt or any portion thereof, or (iii) any agreement or
stipulation by Mortgagee extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Security Instrument or the other Loan
Documents.

       

      (b)  It is
agreed that Mortgagor bears the risk of loss or damage to the Property, and
Mortgagee shall have no liability whatsoever for decline in value of the
Property, for failure to maintain the Policies, or for failure to determine
whether insurance in force is adequate as to the amount of risks insured, unless
Mortgagee is in possession of the Property. Possession by Mortgagee shall not be
deemed an election of judicial relief, if any such possession is requested or
obtained, with respect to any Property or Collateral not in Mortgagee's actual
and/or physical possession.

       

      
        
          
          

        

        
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      (c)  Mortgagee
may resort for the payment of the Debt to any other security held by Mortgagee
in such order and manner as Mortgagee, in its sole discretion, may elect.
Mortgagee may take action to recover the Debt or any portion thereof, or to
enforce any covenant hereof without prejudice to the right of Mortgagee
thereafter to foreclose this Security Instrument. The rights of Mortgagee under
this Security Instrument shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of Mortgagee shall
be construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Mortgagee shall not be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.

       

      10.3  Right to Release Any Portion of the
Property.
Mortgagee may release any portion of the Property, for such consideration as
Mortgagee may require (or as may be required pursuant to the Loan Agreement)
without, as to the remainder of the Property, in any way impairing or affecting
the Lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Mortgagee for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Mortgagee
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a Lien and security interest in the
remaining portion of the Property.

       

      ARTICLE XI WAIVERS

       

      11.1  Waiver of Trial By
Jury.
MORTGAGOR AND MORTGAGEE HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
SECURITY INSTRUMENT. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY MORTGAGOR AND MORTGAGEE, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO TRIAL BY JURY
WOULD OTHERWISE ACCRUE OR ARISE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY
OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER THE
OTHER PARTY.

       

      11.2  Additional Waivers.
Mortgagee may resort to any remedies and the security given by the Note, this
Security Instrument or any of the other Loan Documents, in whole or in part, and
in such portions and in such order as determined by Mortgagee in Mortgagee's
sole discretion. No such action shall in any way be considered a waiver of any
rights, benefits or remedies evidenced or provided by the Note, this Security
Instrument or any of the other Loan Documents. The failure of Mortgagee to
exercise any right, remedy or option provided in the Note, this Security
Instrument or any of the other Loan Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation secured by the
Note, this Security Instrument or any of the other Loan Documents. No acceptance
by Mortgagee of any payment after the occurrence of any Event of Default and no
payment by Mortgagee of any obligation for which Mortgagor is liable hereunder
shall be deemed to waive or cure any Event of Default with respect to Mortgagor,
or Mortgagor's liability to pay such obligation. No sale of all or any portion
of the Property, no forbearance on the part of Mortgagee and no extension of
time for the payment of the whole or any portion of the Debt, or any other
indulgence given by Mortgagee to Mortgagor, shall operate to release or in any
manner affect the interest of Mortgagee in the remaining Property or the
liability of Mortgagor to pay the Debt. No waiver by Mortgagee shall be
effective unless it is in writing and then only to the extent specifically
stated. In case Mortgagee shall have proceeded to invoke any right, remedy or
recourse permitted hereunder or under any of the other Loan Documents and shall
thereafter elect to discontinue or abandon the same for any reason, Mortgagee,
shall have the unqualified right to do so and, in such event, Mortgagor,
Mortgagee shall be restored to their former positions with respect to the Debt
secured hereby, this Security Instrument, the other Loan Documents, the Property
and otherwise, and the rights, remedies, recourses and powers of Mortgagee,
shall continue as if the same had never been invoked.

       

      
        
          
          

        

        
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      11.3  Mortgagor's
Waivers.
Mortgagor waives, to the extent permitted by law, (a) the benefit of all laws
now existing or that may hereafter be enacted providing for any appraisement
before sale of any portion of the Property, (b) all rights and remedies which
Mortgagor may have or be able to assert by reason of the laws of the state where
the Property is located pertaining to the rights and remedies of sureties, (c)
the right to assert any statute of limitations as a bar to the enforcement of
the lien of this Mortgage or to any action brought to enforce the Note or any of
the Obligations, (d) any rights, legal or equitable, to require marshalling of
assets or to require foreclosure sales in a particular order. Mortgagee shall
have the right to determine the order in which any portion of the Property is
subject to the remedies herein and the order in which the Obligations are
satisfied by proceeds realized by such remedies. To the extent permitted by law,
Mortgagor hereby waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Mortgage or under any sale pursuant to
any statute, order, decree or judgment of any court, on its own behalf, and on
behalf of each and every person acquiring any interest in or title to the
Property or any portion thereof.

       

      ARTICLE XII EXCULPATION

       

      12.1  Exculpation. The
provisions of Article IX of the Loan Agreement are hereby incorporated by
reference to the fullest extent as if the text of such Article were set forth in
its entirety herein.

       

      ARTICLE XIII NOTICES

       

      13.1  Notices. All
notices given under this Security Instrument shall be given and become effective
as provided in the Loan Agreement.

       

      ARTICLE XIV APPLICABLE
LAW

       

      14.1  Choice of Law. This
Security Instrument shall be interpreted, construed and enforced according to
the laws of the State of New York. This choice of law is made pursuant to New
York General Obligation Law Section 5-1401. Should any obligation or remedy
under this Security Instrument be invalid or unenforceable pursuant to the laws
provided herein to govern, the laws of the other state referred to hereinabove
or of another state whose laws can validate and apply thereto shall
govern.

       

      
        
          
          

        

        
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      14.2  Provisions Subject to Applicable
Law. All
rights, powers and remedies provided in this Security Instrument may be
exercised only to the extent that the exercise thereof does not violate any
applicable Legal Requirements and are intended to be limited to the extent
necessary so that they will not render this Security Instrument invalid,
unenforceable or not entitled to be recorded, registered or filed under the
provisions of any Legal Requirements.

       

      ARTICLE XV MISCELLANEOUS
PROVISIONS

       

      15.1  Survival. This
Security Instrument and all covenants, agreements, representations and
warranties made herein and in the certificates delivered in connection with the
Loan Documents shall survive the making by Mortgagee of the Loan and the
execution and delivery to Mortgagee of the Note, and shall continue in full
force and effect so long as all or any of the Debt is outstanding and unpaid
unless a longer period is expressly set forth herein or in the other Loan
Documents. Whenever in this Security Instrument any of the parties hereto is
referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such party. All covenants, promises
and agreements in this Security Instrument, by or on behalf of Mortgagor, shall
inure to the benefit of the legal representatives, successors and assigns of
Mortgagee.

       

      15.2  No Oral Change. No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Security Instrument, the Note, or any other Loan Document, nor
consent to any departure by Mortgagee therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to or demand on Mortgagor, shall
entitle Mortgagor to any other or future notice or demand in the same, similar
or other circumstances.

       

      15.3  Duplicate Originals;
Counterparts. This
Security Instrument may be executed in any number of duplicate originals and
each duplicate original shall be deemed to be an original. This Security
Instrument may be executed in several counterparts, each of which counterparts
shall be deemed an original instrument and all of which together shall
constitute a single Security Instrument. The failure of any party hereto to
execute this Security Instrument, or any counterpart hereof, shall not relieve
the other signatories from their obligations hereunder.

       

      15.4  Number and Gender.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.

       

      15.5  Headings, Etc.. The
headings and captions of various Sections of this Security Instrument are for
convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.

       

      
        
          
          

        

        
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      15.6  Inapplicable
Provision. If any
term of this Security Instrument or any application thereof shall be invalid or
unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.

       

      15.7  General
Definitions. Unless
the context clearly indicates a contrary intent or unless otherwise specifically
provided herein, words used in this Security Instrument may be used
interchangeably in singular or plural form and the word "Mortgagor" shall
mean "each Mortgagor and any subsequent owner or owners of the Property or any
part thereof or any interest therein," the word "Mortgagee" shall
mean "Mortgagee and any subsequent holder of the Note," the
word "Note" shall
mean "the Note and any other evidence of indebtedness secured by this Security
Instrument," the word "Person" or
"person" shall
include an individual, corporation, limited liability company, partnership,
trust, unincorporated association, government, governmental authority, and any
other entity, the word "Property" shall
include any portion of the Property and any interest therein, and the phrases
"attorneys' fees" and
"counsel fees" shall
include any and all attorneys', paralegal and law clerk fees and disbursements,
including fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Mortgagee in protecting its interest in the Property, the
Leases and the Rents, enforcing its rights under this Security Instrument and
any and all attorneys', paralegal and law clerk fees and disbursements arising
as a result of or during the course of any case or proceeding by or against any
Mortgagor Party for relief under any Bankruptcy Laws. Section
1.1 and
Schedule I
of the
Loan Agreement are incorporated herein by reference for all
purposes.

       

      15.8  Entire Agreement. This
Security Instrument and the other Loan Documents together constitute a written
agreement and represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties.
Mortgagor hereby acknowledges that, except as incorporated in writing in the
Note, this Security Instrument and the other Loan Documents, there are not, and
were not, and no Persons are or were authorized by Mortgagee to make, any
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the transaction which is the subject of the Note, this
Security Instrument and the other Loan Documents.

       

      15.9  Time. Time is
of the essence with respect to all provisions of this Security
Instrument.

       

      15.10  Liability. If
Mortgagor consists of more than one Person, the obligations and liabilities of
each such Person hereunder shall be joint and several. 

       

      15.11  Binding Effect. This
Security Instrument shall be binding upon and inure to the benefit of Mortgagor
and Mortgagee and their respective permitted successors and assigns
forever.

       

      15.12  Subrogation. If any
or all of the proceeds of the Note have been used to extinguish, extend or renew
any indebtedness heretofore existing against the Property, then, to the extent
of the funds so used, Mortgagee shall be subrogated to all of the rights,
claims, Liens, titles, and interests existing against the Property heretofore
held by, or in favor of, the holder of such indebtedness and such former rights,
claims, Liens, titles, and interests, if any, are not waived but rather are
continued in full force and effect in favor of Mortgagee and are merged with the
Lien and security interest created herein as cumulative security for the
repayment of the Debt, the performance and discharge of Mortgagor's obligations
hereunder, under the Note and the other Loan Documents and the performance and
discharge of the Other Obligations.

       

      
        
          
          

        

        
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      15.13  Exhibits. All
exhibits attached hereto are hereby incorporated herein by reference and made a
part of this Security Instrument.

       

      15.14  Future Advances. This
Mortgage is given to secure payment of the Note, whether the entire amount
thereof shall have been advanced to the Mortgagor at the date hereof, or at a
later date, and to secure the payment and performance of all other Obligations
of Mortgagor under the Note, and any other amount or amounts that may be added
to the Debt under the terms of this Mortgage, all of which Debt shall be equally
secured with and have the same priority as any amounts advanced at the date
hereof. It is agreed that any future advances made by Mortgagee to or for the
benefit of Mortgagor from time to time under this Mortgage shall be deemed to be
obligatory, and the amount of any such advances and all interest accruing
thereon, shall be equally secured by this Mortgage and have the same priority as
all amounts, if any, advanced as of the date hereof and be subject to all of the
terms and provisions of this Mortgage. The total amount of indebtedness that may
be so secured may increase or decrease from time to time, but the total unpaid
balance so secured at any one time, plus interest thereon, plus any
disbursements made for the payment of taxes, levies, insurance or other liens,
charges or encumbrances on the Property, plus interest on such disbursements at
the Default Rate, shall not exceed Two Hundred Percent (200%) of the aggregate
of the face amount of the Note.

       

      ARTICLE XVI 

       

      LOCAL LAW
PROVISIONS

       

      16.1  Trust Fund.
Pursuant to Section 13 of the
Lien Law of New York, Mortgagor shall receive the advances secured hereby and
shall hold the right to receive such advances as a trust fund to be applied
first for the purpose of paying the cost of any improvement and shall apply such
advances first to the payment of the cost of any such improvement on the
Mortgaged Property before using any part of the total of the same for any other
purpose.

       

      16.2  Property
Encumbered. This
Mortgage does not cover real property principally improved by one or more
structures containing in the aggregate six (6) or less residential dwelling
units having their own separate cooking facilities.

       

      16.3  Insurance. The
provisions of subsection 4 of Section
254 of the
New York Real Property Law covering the insurance of buildings against loss by
fire shall not apply to this Mortgage or any of the other documents evidencing
or securing the Secured Obligations, including the Loan Agreement. In the event
of any conflict, inconsistency or ambiguity between the provisions of any of the
documents evidencing or securing the Secured Obligations, including this
Mortgage, the Loan Agreement and the provisions of subsection 4 of Section
254 of the
New York Real Property Law covering the insurance of buildings against loss by
fire, the provisions of the documents evidencing or securing the Secured
Obligations, including this Mortgage, the Loan Agreement shall
control.

       

      
        
          
          

        

        
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      16.4  Leases. Lender
shall have all of the rights against lessees of the Mortgaged Property set forth
in Section
291-f of the
Real Property Law of New York. 

       

      16.5  Statutory
Construction. The
clauses and covenants contained in this Mortgage that are construed by
Section
254 of the
New York Real Property Law shall be construed as provided in those sections
(except as otherwise provided herein). The additional clauses and covenants
contained in this Mortgage shall afford rights supplemental to and not exclusive
of the rights conferred by the clauses and covenants construed by Section
254 and
shall not impair, modify, alter or defeat such rights (except as otherwise
provided herein), notwithstanding that such additional clauses and covenants may
relate to the same subject matter or provide for different or additional rights
in the same or similar contingencies as the clauses and covenants construed by
Section
254. The
rights of Mortgagee arising under the clauses and covenants contained in this
Mortgage shall be separate, distinct and cumulative and none of them shall be in
exclusion of the others. No act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision, anything herein or otherwise to the contrary notwithstanding. In the
event of any inconsistencies between the provisions of Section 254 and the
provisions of this Mortgage, the provisions of this Mortgage shall
prevail.

       

      16.6  Maximum Amount
Secured.
Notwithstanding anything contained herein to the contrary, the maximum amount of
indebtedness secured by this Mortgage at execution or which under any
contingency may become secured hereby at any time hereafter is $106,000,000,
together with Interest and late charges thereon to be computed from the date
hereof at the rate or rates specified in the Loan Agreement;

       

      (a)  The
amounts paid by Mortgagee for real estate taxes, charges or assessments which
are imposed by law upon the Mortgaged Property upon failure of Mortgagor to do
so;

       

      (b)  The
amounts paid by Mortgagee for insurance premiums covering the Mortgaged Property
upon failure by Mortgagor to do so; 

       

      (c)  Any
amount, cost or charge to which Mortgagee becomes subrogated upon payment,
provided such payment is made as a result of Mortgagor's failure to pay the same
and such payment is required hereunder;

       

      (d)  Expenses
incurred in upholding or enforcing the lien of this Mortgage including, but not
limited to, the expenses of any litigation to prosecute or defend the rights and
lien created by this Mortgage; and

       

      (e)  Interest
on all of the foregoing amounts in clauses (b) through (e) at such rates as
provided for in the Loan Agreement.

       

      16.7  Payment of Transfer
Taxes. Upon
any foreclosure of this Mortgage or any transfer in lieu of foreclosure,
Mortgagor shall pay: (i) any New York State Real Estate Transfer Tax payable
pursuant to Article
31 of the
Tax Law of the State of New York, as the same may be amended, supplemented
and/or replaced from time to time (hereinafter referred to as the "State Transfer Tax
Law"); and
(ii) any New York City Real Property Transfer Tax payable pursuant to the
applicable laws of the City of New York, as the same may be amended,
supplemented and/or replaced from time to time (hereinafter referred to as the
"City Transfer Tax
Law").

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      (a)  Mortgagor
shall, at any time immediately upon request therefor by Mortgagee, execute and
deliver such affidavits, questionnaires and documents as may be necessary or
desirable to enable Mortgagee to comply with the State Transfer Tax Law and the
City Transfer Tax Law.

       

      (b)  Mortgagor
hereby indemnifies and agrees to hold Mortgagee harmless from and against any
loss, cost, damage and expense (including, without limitation, attorneys' fees)
that Mortgagee may suffer or incur by reason of Mortgagor's failure to comply
with its obligations under this Section
16.7. The
foregoing indemnity shall survive any termination of this Mortgage, whether by
foreclosure, deed in lieu of foreclosure, or otherwise.

       

      16.8  Inconsistencies. In the
event of any inconsistencies between the terms and conditions of this
Article
16 and the
other provisions of this Mortgage, the terms and conditions of this Article
16 shall
control and be binding.

       

      

      [SIGNATURES ON FOLLOWING
PAGE]

      

      
        
          
          

        

        
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      IN
WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by Mortgagor the day
and year first above written.

       

      
        	 	 	 
	 	 
	 	
                MORTGAGOR:

              
	 	 
	 	
                1407
      BROADWAY REAL ESTATE LLC, 

                a
      Delaware limited liability company

              
	 
 	 
 	 
 
	 	By:  	/s/
      David Lichtenstein
	 	
                
      Name: David Lichtenstein
	 	
                Title:
      President

              

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
A

       

      (Description
of the Subleasehold Estate)

       

      

       

      ALL that
certain plot, piece or parcel of land, situate, lying and being in the Borough
of Manhattan, County, City and State of New York, bounded and described as
follows:

       

      BEGINNING
at the corner formed by the intersection of the southerly side of 39th Street
with the westerly side of Broadway;

       

      RUNNING
THENCE southeasterly along the westerly side of Broadway 205 feet more or less
to the corner formed by the intersection of the northerly side of 38th Street
with the said westerly side of Broadway;

       

      THENCE
westerly along the northerly side of 38th Street 156 feet 2-3/8 inches, more or
less to a point distant 200 feet East of 7th Avenue;

       

      THENCE
northerly at right angles to 38th Street 98 feet 9 inches to the center line of
block;

       

      THENCE
westerly along said center line of the block and parallel with 38th Street 200
feet to the easterly side of 7th Avenue;

       

      THENCE
northerly along the easterly side of 7th Avenue 98 feet 9 inches to the corner
formed by the intersection of the said easterly side of 7th Avenue with the
southerly side of 39th Street;

       

      THENCE
easterly along the southerly side of 39th Street 301 feet 2-5/8 inches to the
corner aforesaid, the point or place of BEGINNING.Unassociated Document

    EXHIBIT
10.26

     

    
 

    PROMISSORY NOTE

     

    
      	U.S. $127,250,000.00	
              January 4,
2007

            

    

    New York,
New York

     

    FOR VALUE RECEIVED, 1407
BROADWAY REAL ESTATE LLC, a Delaware limited liability company, having its
principal place of business at c/o The Lightstone Group, 326 Third Street,
Lakewood, New Jersey 08701 (“Borrower”)
absolutely and unconditionally promises to pay to the order of LEHMAN BROTHERS
HOLDINGS INC., a Delaware corporation (individually and as lead arranger and
administrative agent for itself and certain co-lenders), at Lender’s offices at
399 Park Avenue, 8th Floor, New York, New York 10022 (“Lender”), the
principal sum of ONE HUNDRED TWENTY-SEVEN MILLION TWO HUNDRED FIFTY THOUSAND AND
NO/100 Dollars (U.S. $127,250,000.00), with interest on the unpaid principal
balance to be computed from the date of this Promissory Note (this “Note”) on
funds advanced from time to time at the Applicable Interest Rate (defined
below), in lawful money of the United States of America, in immediately
available funds, which shall at the time of payment be legal tender for payment
of all debts and dues, public and private. This Note is secured by, among other
things, that certain Leasehold Mortgage Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Financing Statement dated of even date herewith,
executed by Borrower in favor of Lender (as amended, restated, supplemented or
otherwise modified from time to time, the “Security
Instrument”). All
capitalized terms used in the Note and not otherwise defined in Section
1.10 hereof
or elsewhere in this Note shall have the meanings assigned to such terms in the
Loan Agreement (as hereinafter defined), all of the terms of the Loan Agreement
being hereby incorporated into and made a part of this Note by reference for all
purposes.

     

    1.  PAYMENT OF PRINCIPAL AND
INTEREST.

     

    1.1  Payments. The
principal, interest and all other sums due under this Note shall be payable at
the office of Lender as set forth above, or at such other place as Lender may
from time to time designate in writing, as follows:

     

    (a)  Commencing
on the ninth (9th) day of February, 2007 and continuing on the ninth (9th) day
of each and every successive month thereafter or, if such day is not a Business
Day, the immediately preceding Business Day (each, a “Payment Date”)
through and including the Maturity Date, Borrower shall pay (i) monthly
installments of interest on the outstanding principal balance of this Note as of
such Payment Date at the Applicable Interest Rate for the Interest Period in
which such Payment Date occurs. Notwithstanding the foregoing, interest on the
outstanding principal amount of this Note for the period from the date hereof
through and including January 14, 2007 shall be paid by Borrower on the date
hereof.

     

    (b)  Subject
to Section
1.11 hereof,
the entire outstanding principal balance of this Note, together with accrued and
unpaid interest and any other amounts due under this Note and the other Loan
Documents shall be due and payable on the Maturity Date and after a
Securitization shall include, without limitation, all interest that would have
accrued on the outstanding principal balance of this Note through the end of the
Interest Period during which the Maturity Date occurs (even if such period
extends beyond the Maturity Date).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  All
amounts due under this Note shall be payable without setoff, counterclaim or any
other deduction whatsoever.

     

    (d)  Additionally,
payments shall be made on this Note as required by the Loan Agreement and the
other Loan Documents.

     

    1.2  Interest.
Interest on the outstanding principal balance of this Note shall accrue at the
Applicable Interest Rate from the date hereof to the Maturity Date and after a
Securitization through the end of the Interest Period in which the Maturity Date
occurs; provided, however, notwithstanding anything to the contrary contained
herein or in any other Loan Document, any principal payments made on this Note
from and including any Payment Date through and including the last day of the
Interest Period in which such Payment Date occurs (each, a “Gap Period”) shall
be disregarded for purposes of determining the interest payment due and payable
on such Payment Date with respect to interest accruing during the corresponding
Gap Period and shall be treated as if such principal payments were made on the
first day of the next Interest Period. Adjustments to the Applicable Interest
Rate in connection with changes in the LIBOR Rate (or the Treasury Rate, if
applicable) shall be made on the first day of each Interest Period
(“Interest Rate Adjustment Date”).

     

    1.3  Computation.
Interest on the outstanding principal balance of this Note shall be calculated
by multiplying (a) the actual number of days elapsed in the period for which the
calculation is being made by (b) a daily rate equal to the Applicable Interest
Rate divided by three hundred sixty (360) by (c) the outstanding principal
balance of this Note. In computing the number of days during which interest
accrues, the day on which funds are advanced shall be included regardless of the
time of day such advance is made, and the day on which funds are repaid shall be
included unless repayment is credited prior to Lender's close of business. The
amount of interest shall be rounded up to the nearest one eighth percent
(.125%).

     

    1.4  Determination. Each
determination of an Applicable Interest Rate by Lender pursuant to any provision
of this Note shall be conclusive and binding on Borrower absent manifest error.
Payments under this Note or any other Loan Document made in federal funds
immediately available in the place designated for payment which are received by
Lender prior to 2:00 p.m. local time at said place of payment shall be
considered by Lender as having been received prior to close of business, while
other payments may, at the option of Lender, not be credited until immediately
available to Lender in federal funds in the place designated for payment prior
to 2:00 p.m. local time at said place of payment on a day on which Lender is
open for business.

     

    1.5  Making of
Payments. Each
payment by Borrower hereunder or under the Loan Agreement or any other Loan
Document shall be made in funds settled through the New York Clearing House
Interbank Payments System or other funds immediately available to Lender on the
date such payment is due to Lender, without presentment, demand, protest or
notice of any kind, all such notices being hereby waived and without setoff,
counterclaim or other deduction of any nature. Whenever any payment hereunder or
under the Loan Agreement or any other Loan Document shall be stated to be due on
a day which is not a Business Day such payment shall be made on the next
following Business Day.

     

    
      
        
        

      

      
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    1.6  Application. Prior
to an Event of Default and except as otherwise expressly provided herein or in
the Loan Agreement or any other Loan Document, payments under this Note shall be
applied first, to the
payment of late fees and other costs and charges due in connection with this
Note, as Lender determines in its sole discretion, second to the
payment of interest on the outstanding principal balance of this Note through
the prepayment date; provided, however that after a Securitization interest
shall be paid through the end of the Interest Period in which such payment is
made and, if applicable, through the end of the Succeeding Interest Period,
notwithstanding that such Interest Period or Succeeding Interest Period extends
beyond the date of such payment, and third, to the
reduction of the outstanding principal balance (in inverse order of maturity
whether or not then due). After an Event of Default, payments under this Note
shall be applied as Lender may determine in Lender's sole discretion. No
principal amount repaid may be reborrowed.

     

    1.7  Additional Costs; Alternate
Interest Rate.
Anything herein to the contrary notwithstanding, if (i) on any date on
which the LIBOR Rate would otherwise be set, Lender shall have determined in
good faith (which determination shall be conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the LIBOR Rate, or
(ii) at any time Lender shall have determined in good faith (which determination
shall be conclusive absent manifest error) that the making, maintenance or
funding of any part of the Loan based on the LIBOR Rate has been made
impracticable or unlawful by compliance by Lender in good faith with any law or
guideline or interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof or with any
request or directive of any such Governmental Authority (whether or not having
the force of law); then and in any such event, Lender may notify Borrower of
such determination (any such notice being referred to herein as a “Treasury Rate
Notice”) which
Treasury Rate Notice shall be given to Borrower by telephone at least one (1)
Business Day prior to the last day of the related Interest Period, with a
written confirmation of such determination promptly thereafter. If Lender gives
Borrower a Treasury Rate Notice, the obligation of Lender to charge interest to
Borrower at the LIBOR Rate shall be suspended until Lender shall have later
notified Borrower of Lender's determination in good faith (which determination
shall be conclusive absent manifest error) that the circumstances giving rise to
such previous determination no longer exist as provided below. If Lender gives
Borrower a Treasury Rate Notice, the LIBOR Rate shall automatically be converted
to the sum of the Treasury Rate plus the LIBOR To Treasury Spread (such sum
being the “Adjusted Treasury
Rate”), and
commencing on the first day of the next succeeding Interest Period, this Note
shall bear interest at a rate of interest per annum equal to the greater of (i)
the Adjusted Treasury Rate from time to time, as determined by Lender, plus the
Margin, and (ii) the Eurodollar Rate in effect at the time Lender delivers the
Treasury Rate Notice (in either case, rounded up, if necessary, to the nearest
one eighth percent (.125%)) (such rate being referred to herein as the
“Alternate Interest
Rate”). This
Note shall continue to bear interest at the Alternate Interest Rate until Lender
determines that the Eurodollar Rate can be determined in accordance with the
provisions of this Note and gives notice to the Borrower by telephone of such
determination, confirmed in writing, as soon as reasonably practical, but in no
event later than one (1) Business Day prior to the last day of the then current
Interest Period. If such notice is given, this Note shall bear interest at such
Eurodollar Rate commencing on the first day of the next succeeding Interest
Period. Notwithstanding anything to the contrary contained herein, in no event
shall the Borrower have the right to elect to have the Loan bear interest at
either the Eurodollar Rate or the Alternate Interest Rate.

     

    
      
        
        

      

      
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    1.8  Capital
Adequacy. If
Lender determines that compliance with any law or regulation or with any
guideline or request from any central bank or other governmental agency (whether
or not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by Lender, or any corporation controlling
Lender, as a consequence of, or with reference to, Lender's or such
corporation's commitments or its making or maintaining advances below the rate
which Lender or such corporation controlling Lender could have achieved but for
such compliance (taking into account the policies of Lender or such corporation
with regard to capital), then Borrower shall, from time to time, within thirty
(30) days after written demand by Lender, pay to Lender additional amounts
sufficient to compensate Lender or such corporation controlling Lender to the
extent that Lender determines such increase in capital is allocable to Lender's
obligations hereunder. A certificate as to such amounts, submitted to Borrower
by Lender shall be conclusive and binding for all purposes, absent manifest
error. 

     

    1.9  Indemnification.
Borrower agrees to indemnify Lender and to hold Lender harmless from any actual
loss or expense which Lender sustains or incurs as a consequence of (I) any
default by Borrower in payment of the principal of or interest on this Note
while bearing interest at the Eurodollar Rate, including, without limitation,
any such loss or expense arising from interest or fees payable by Lender to
lenders of funds obtained by it in order to maintain the Eurodollar Rate, (II)
any prepayment (whether voluntary or mandatory) of this Note on a day that (A)
is not a Payment Date or (B) is a Payment Date if Borrower did not give the
prior written notice of such prepayment required pursuant to the terms of this
Note or the Loan Agreement, including, without limitation, such loss or expense
arising from interest or fees payable by Lender to lenders of funds obtained by
it in order to maintain the Eurodollar Rate hereunder and (III) the conversion
of the Applicable Interest Rate from the Eurodollar Rate to the Alternate
Interest Rate pursuant to Section
1.7 on a
date other than a Payment Date, including, without limitation, such loss or
expenses arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain the Eurodollar Rate hereunder (the amounts
referred to in clauses (I), (II) and (III) are herein referred to collectively
as the “Breakage Costs”). This
provision shall survive payment of the Note and the satisfaction of all other
obligations of Borrower hereunder and under the Loan Agreement and the other
Loan Documents.

     

    1.10  Definitions. In
addition to other terms defined elsewhere in this Note, as used herein, the
following terms shall have the following meanings:

     

    “Applicable Interest
Rate” shall
mean an interest rate per annum equal to (i) the Eurodollar Rate or (ii) the
Alternate Interest Rate, if the Loan begins bearing interest at the Alternate
Interest Rate in accordance with the provisions of Section
1.7
hereof.

     

    “Assumed Note Rate” shall
mean an interest rate equal to the sum of one percent (1.00%) plus the LIBOR
Rate as determined on the preceding LIBOR Determination Date plus three percent
(3.00%).

     

    
      
        
        

      

      
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    “Business Day” shall
mean a day on which commercial banks are not authorized or required by law to
close in the State of New York.

     

    “Eurodollar Rate” shall
mean, with respect to any Interest Period, an interest rate equal to the LIBOR
Rate plus three percent (3.00%) per annum.

     

    “Interest Period” shall
mean, in connection with the calculation of interest accrued with respect to any
specified Payment Date, the period from and including the fifteenth (15th)
calendar day of the prior calendar month to and including the fourteenth (14th)
day of the calendar month in which the applicable Payment Date occurs. Each
Interest Period shall be a full month and shall not be shortened by reason of
any payment of the Loan prior to the expiration of such Interest
Period.

     

    “LIBOR Business Day” shall
mean any day upon which United States dollar deposits may be dealt in on the
London and the New York interbank markets and on which commercial banks and
foreign exchange markets are open in London and New York City.

     

    “LIBOR Rate” shall
mean with respect to each Interest Period, the quoted offered rate for one-month
United States dollar deposits with leading banks in the London interbank market
that appears on Dow Jones Market Services (formerly Telerate) page 3750 (or the
successor thereto) (“Page 3750”)
(provided that at least two offered rates appear on Page 3750)) as of 11:00
a.m., London time, on the date which is two (2) LIBOR Business Days prior to the
relevant Interest Rate Adjustment Date (“LIBOR Determination
Date”)
(rounded upward, if necessary, to the nearest one-sixteenth of one percent
(1/16%)). If as of such time on any LIBOR Determination Date, no quotation is
given on such Page 3750, then the Lender shall establish LIBOR on such LIBOR
Determination Date by requesting four Reference Banks meeting the criteria set
forth herein to provide the quotation offered by its principal London office for
making one-month United States dollar deposits with leading banks in the London
interbank market as of 11:00 a.m., London time, on such LIBOR Determination
Date. If two or more Reference Banks provide such offered quotations, then the
LIBOR Rate for the next Interest Period shall be the arithmetic mean of such
offered quotations (rounded upward if necessary to the nearest whole multiple of
1/1,000%. If only one or none of the Reference Banks provides such offered
quotations, then the LIBOR Rate for the next Interest Period shall be the
Reserve Rate. If on any LIBOR Determination Date, Lender is required but is
unable to determine the LIBOR Rate in the manner provided in the immediately two
preceding sentences, the LIBOR Rate for the next Interest Period shall be
determined in accordance with the provisions of Section
1.7
hereof.

     

    “LIBOR To Treasury
Spread” shall
mean the difference, if positive, between the LIBOR Rate and the Treasury Rate
on the date of any Treasury Rate Notice. If such difference is negative, the
LIBOR To Treasury Spread shall be deemed to be equal to zero.

     

    “Loan Agreement” shall
mean that certain Loan Agreement dated as of even date herewith between Borrower
and Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

     

    “Margin” shall
mean three percent (3.00%).

     

    
      
        
        

      

      
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    “Maturity Date” shall
mean (i) January 9, 2010, or
upon the valid exercise of the First Extension Option, January 9, 2011, or upon
the valid exercise of the Second Extension Option, January 9, 2012 or (ii) any
earlier date on which this Note is required to be paid in full, by acceleration
or otherwise. 

     

    “Reference Bank” shall
mean a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market that has an established place of business in
London. If any such Reference Bank should be removed from Page 3750 or in any
other way fail to meet the qualifications of a Reference Bank, Lender may in its
reasonable discretion designate alternative Reference Banks meeting the criteria
specified above. 

     

    “Reserve Rate” shall
mean the rate per annum which Lender determines to be the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 1/1,000%) of the
one-month United States dollar lending rates that at least three major New York
City banks selected by Lender are quoting, at 11:00 a.m. (New York time) on the
relevant LIBOR Determination Date, to the principal London offices of at least
two of the Reference Banks. In the event that at least two such rates are not
obtained, Reserve Rate shall mean the lowest one-month United States dollar
lending rate which New York City banks reasonably selected by Lender are quoting
as of 11:00 a.m. (New York time) on such LIBOR Determination Date to leading
European banks.

     

    “Treasury Rate” shall
mean with respect to each Interest Rate Adjustment Date, the weekly average
yield on United States Treasury Securities adjusted to a constant maturity of
six months last published by the Federal Reserve Board prior to such Interest
Rate Adjustment Date.

     

    1.11  Payment on Maturity
Date.
Borrower shall pay to Lender on the Maturity Date the outstanding principal
balance of this Note, all accrued and unpaid interest hereon and all other
amounts due hereunder and under the Agreement and the other Loan Documents,
including, without limitation, all interest that would have accrued on the
outstanding principal balance of this Note through and including the Maturity
Date; provided, however, that after a Securitization, interest shall be paid
through the end of the Interest Period in which the Maturity Date occurs (even
if such Interest Period extends beyond the Maturity Date).

     

    2.  DEFAULT.

     

    2.1  Late Fee. If any
sum payable under this Note or any other Loan Document is not paid on or before
the date on which it is due, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5.0%) of such unpaid sum or, if prohibited
or restricted by Legal Requirements, the maximum amount permitted by applicable
law to defray the expenses incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment and such amount shall be secured by the Security Instrument
and the other Loan Documents.

     

    2.2  Remedies. The
entire outstanding principal sum of this Note, together with all interest
accrued and unpaid thereon and all other sums due under this Note, the Security
Instrument, or any of the other Loan Documents, or any portion thereof,
including without limitation, any amounts described in Section
12.9 of the
Loan Agreement shall without notice become immediately due and payable at the
option of Lender upon the occurrence of any Event of Default including without
limitation, an Event of Default resulting from a Transfer in violation of the
terms of the Loan Agreement. Time is of the essence in this Note, the Security
Instrument and the other Loan Documents. All of the terms, covenants and
conditions contained in the Security Instrument and the other Loan Documents are
hereby made part of this Note to the same extent and with the same force as if
they were fully set forth herein. If Borrower’s obligations under this Note or
any of the other Loan Documents are enforced by Lender through an
attorney-at-law, or any payment due under this Note or the other Loan Documents
is collected by or through an attorney-at-law or collection agency, Borrower
agrees to pay all out of pocket costs incurred by Lender in connection
therewith, including, but not limited to, reasonable fees and disbursements of
legal counsel (whether with respect to a retained firm or Lender’s in-house
staff), collection agency costs, whether or not suit be brought, and any and all
costs or fees arising as a result of the filing of or during the course of any
case under any Bankruptcy Laws with respect to any of the Borrower
Parties.

     

    
      
        
        

      

      
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    2.3  Default
Rate. Upon
the occurrence of an Event of Default, Lender shall be entitled to receive and
Borrower shall pay interest on the entire unpaid principal sum at the Applicable
Interest Rate plus five percent (5.0%) (the “Default Rate”). The
Default Rate shall be automatically computed from the occurrence of the Event of
Default until the actual receipt and collection of this Note in full or, if
permitted by Lender or otherwise provided in the Loan Documents, the date such
Event of Default is cured. This charge shall be added to this Note, and shall be
deemed secured by the Security Instrument and the other Loan Documents. This
clause, however, shall not be construed as an agreement or privilege to extend
the date of the payment of this Note or any other sums payable under the Loan
Documents, nor as a waiver of any other right or remedy accruing to Lender by
reason of the occurrence of any Event of Default. In the event the Default Rate
would otherwise exceed the maximum rate permitted by applicable law, the Default
Rate shall be the maximum rate permitted by applicable law.

     

    2.4  Post-Judgment.
Interest shall accrue on any judgment obtained by Lender in connection with the
enforcement or collection of this Note or the other Loan Documents (including
foreclosure of the Security Instrument) until such judgment amount is
irrevocably paid in full at a rate equal to the greater of (a) the Default
Rate or (b) the highest legal rate applicable to judgments within such
jurisdiction; provided, however, that interest shall not accrue at a rate in
excess of the maximum rate of interest, if any, which may be charged by Lender
or collected from Borrower under applicable law.

     

    2.5  Remedies
Cumulative. The
remedies available to Lender under this Note and in the other Loan Documents, or
at law or in equity, shall be cumulative and concurrent, and may be pursued
singly, successively or together in Lender’s sole discretion and as often as
occasion therefor shall arise.

     

    
      
        
        

      

      
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    3.  PREPAYMENT.

     

    3.1  Prepayment.
Provided no Event of Default exists, the principal balance of this Note may be
prepaid in whole or in part at any time provided (i) written notice of such
prepayment specifying the intended date of prepayment is received by Lender not
more than sixty (60) days and not less than thirty (30) days prior to the date
of such prepayment, (ii) such prepayment is accompanied by all interest accrued
hereunder and all other sums due hereunder or under the other Loan Documents
through the date of prepayment, (iii) in addition to the payment required in
clause (ii) above, if a Securitization has occurred, such prepayment includes an
amount equal to the interest that would have accrued at the Applicable Interest
Rate on the amount of principal being prepaid through the end of the Interest
Period in which such prepayment occurs, notwithstanding that such Interest
Period extends beyond the date of prepayment, (iv) in addition to the payments
required in clauses (ii) and (iii) above, if a Securitization has occurred and
if such prepayment is made during the period from and including the first day
after a Payment Date through and including the last day of the Interest Period
in which such prepayment occurs, such prepayment includes all interest on the
principal amount being prepaid which would have accrued from the first day of
the Interest Period immediately following the Interest Period in which the
prepayment occurs (the “Succeeding Interest
Period”)
through and including the end of the Succeeding Interest Period, calculated at
(1) the Applicable Interest Rate if such prepayment occurs on or after the LIBOR
Determination Date for the Succeeding Interest Period or (2) the Assumed Note
Rate if such prepayment occurs before the LIBOR Determination Date for the
Succeeding Interest Period (the sums due under clauses (ii), (iii) and (iv) of
this Section
3.1
hereinafter collectively referred to as the “Interest Shortfall”), (v)
such prepayment includes all Breakage Costs, if any, without duplication of any
sums paid pursuant to the preceding clause (iv); and (vi) such prepayment
includes all other sums then due under this Note, the Loan Agreement or the
other Loan Documents. Notwithstanding anything to the contrary in this Note, the
Security Instrument or the other Loan Documents, any notice of prepayment
pursuant to this Section shall be irrevocable and the principal balance of the
Note shall be absolutely and unconditionally due and payable on the date
specified in any notice given pursuant to this Section
3.1 unless
Borrower (i) revokes such notice of prepayment in writing at least two (2) days
prior to the date designated as the prepayment date in such notice of
prepayment, and (ii) pays all of Lender's costs and expenses incurred related to
such prospective prepayment, including, without limitation, any Breakage Costs.
Notwithstanding the foregoing or anything to the contrary contained herein or in
any other Loan Document, Borrower shall not be permitted to prepay the principal
balance of this Note in whole or in part at any time prior to the Lockout Date
except for and to the extent of prepayments of principal resulting from the
application of any Casualty/Condemnation Involuntary Prepayments. No principal
amount repaid may be reborrowed. 

     

    If the
Interest Shortfall (or any portion thereof) was calculated based upon the
Assumed Note Rate, upon determination of the LIBOR Rate on the LIBOR
Determination Date for the Succeeding Interest Period, (i) if the Applicable
Interest Rate for such Succeeding Interest Period is less than the Assumed Note
Rate, Lender shall promptly refund to Borrower the amount of such Interest
Shortfall paid, calculated at a rate equal to the difference between the Assumed
Note Rate and the Applicable Interest Rate, or (ii) if the Applicable Interest
Rate for such Succeeding Interest Period is greater than the Assumed Note Rate,
Borrower shall promptly (and in no event later than the ninth (9th) day of the
following month) pay Lender, without additional interest or other late charges
or penalties, the amount of such additional Interest Shortfall calculated at a
rate equal to the excess of the Applicable Interest Rate over the Assumed Note
Rate.

     

    
      
        
        

      

      
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    3.2  Mandatory Prepayments
Resulting From Casualty and Condemnation. The
Loan is subject to mandatory prepayment (unless otherwise agreed to by Lender)
in certain instances of Casualty and Condemnation (each, a “Casualty/Condemnation Involuntary
Prepayment”), in
the manner and to the extent set forth in the Loan Agreement. Each
Casualty/Condemnation Involuntary Prepayment shall be made in accordance with
the Loan Agreement. On the Payment Date immediately following the date on which
Borrower actually receives any Insurance Proceeds and/or Condemnation Proceeds
or sooner, if requested by Borrower, if and to the extent Lender is not
obligated to or does not otherwise agree to make such Insurance Proceeds and/or
Condemnation Proceeds available to Borrower for the Restoration of the Property,
Borrower shall prepay (without Prepayment Premium) the outstanding principal
balance of this Note in an amount equal to one hundred percent (100%) of such
Insurance Proceeds and/or Condemnation Proceeds. Provided no Event of Default
has occurred and is continuing, such prepayment shall be applied, (a)
first, to
interest on the outstanding principal balance of this Note accrued at the
Applicable Interest Rate on the amount prepaid through and including the date of
prepayment and, if a Securitization has occurred, to interest on the outstanding
principal balance of the Loan that would have accrued at the Applicable Interest
Rate on the amount prepaid through the end of the Interest Period in which such
prepayment occurs, notwithstanding that such Interest Period extends beyond the
date of prepayment, (b) second, to
Breakage Costs, if any, and any other sums due under this Note, the Loan
Agreement or the other Loan Documents and (c) third, toward
the outstanding principal balance of this Note.

     

    3.3  Prepayment Upon
Default. If
following the occurrence of any Event of Default, Lender shall accelerate the
Loan, Borrower shall pay all amounts payable under this Note or any of the other
Loan Documents (which amounts shall include all amounts payable under
Section
3.1). If
Borrower shall tender payment of an amount sufficient to satisfy the Debt at any
time prior to a sale of the Property or any part thereof, either through
foreclosure or the exercise of the other remedies available to Lender under the
Loan Documents, such tender by Borrower shall be deemed to be voluntary and
Borrower shall pay all amounts due and payable under the Loan Documents and any
other amounts described in this Section 3.

     

    4.  SECURITY. The
indebtedness evidenced by this Note is governed by the Loan Agreement and the
obligations created hereby (including without limitation the amounts authorized
by Section 2 to be
collected by Lender) are secured by, among other things, the Security Instrument
and other Loan Documents.

     

    5.  EXCULPATION.
Notwithstanding anything to the contrary contained in this Note, the liability
of Borrower to pay this Note and for the performance of the other agreements,
covenants and obligations contained herein and in the other Loan Documents shall
be limited as set forth in Article IX of the
Loan Agreement, the terms of which are incorporated herein by this
reference.

     

    6.  GENERAL.

     

    6.1  Written Amendment
Only. This
Note may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by Borrower and
Lender.

     

    
      
        
        

      

      
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    6.2  Certain
Waivers. Except
for any notices specifically required by the Loan Agreement, Borrower and all
others who may become liable for the payment of all or any part of the Debt do
hereby severally waive presentment and demand for payment, notice of dishonor,
protest and notice of protest, notice of non-payment and notice of intent to
accelerate the maturity hereof (and of such acceleration). No release of any
security for the Loan or extension of time for payment of this Note or any
installment hereof, and no alteration, amendment or waiver of any provision of
this Note or the other Loan Documents made by agreement between Lender and any
other Person shall release, modify, amend, waive, extend, change, discharge,
terminate or affect the liability of Borrower, or any other Person who may
become liable for the payment of all or any part of the Debt, under this Note
and the other Loan Documents. Lender may release any guarantor or indemnitor of
the Loan from liability, in every instance without the consent of Borrower
hereunder, and without waiving any rights the Lender may have hereunder, the
other Loan Documents or by virtue of the laws of the State in which the Property
is located or any other state of the United States.

     

    6.3  Severability. If any
provision or obligation under this Note and the other Loan Documents shall be
determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that provision shall be deemed severed from the Loan Documents
and the validity, legality and enforceability of the remaining provisions or
obligations shall remain in full force as though the invalid, illegal, or
unenforceable provision had never been a part of the Loan
Documents.

     

    6.4  Notices. All
notices or other written communications hereunder shall be given and become
effective as provided Section
12.5 of the
Loan Agreement.

     

    6.5  Set-Off
Preference.
Borrower is and shall be obligated to pay principal, interest, and any and all
other amounts which become payable hereunder or under the other Loan Documents
absolutely and unconditionally and without any abatement, postponement,
diminution or deduction and without any reduction for counterclaim or setoff. In
the event that at any time any payment received by Lender hereunder shall be
deemed by a court of competent jurisdiction to have been a voidable preference
or fraudulent conveyance under any bankruptcy, insolvency or other debtor relief
law, then the obligation to make such payment shall survive any cancellation or
satisfaction of this Note or return thereof to Borrower and shall not be
discharged or satisfied with any prior payment thereof or cancellation of this
Note, but shall remain a valid and binding obligation enforceable in accordance
with the terms and provisions hereof, and such payment shall be immediately due
and payable upon demand.

     

    6.6  Successors and
Assigns. The
terms and provisions hereof shall be binding upon and inure to the benefit of
Borrower and Lender and their respective heirs, executors, legal
representatives, successors, successors-in-title and permitted assigns, whether
by voluntary action of the parties or by operation of law. As used in this Note
and the other Loan Documents, the terms “Borrower” and
“Lender” shall
be deemed to include their respective heirs, executors, legal representatives,
successors, successors-in-title and permitted assigns (no right to assign on the
part of Borrower being implied hereby), whether by voluntary action of the
parties or by operation of law.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    6.7  Interpretation.
Section
1.2 of the
Loan Agreement is hereby incorporated into this Note by reference for all
purposes.

     

    6.8  WAIVER OF TRIAL BY
JURY. BORROWER AND LENDER BY ACCEPTING
THIS NOTE HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY
SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS NOTE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO TRIAL BY JURY WOULD OTHERWISE ACCRUE OR ARISE. EACH
PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTY.

     

    6.9  GOVERNING
LAW. THIS NOTE WAS NEGOTIATED IN WHOLE
OR IN PART IN THE STATE OF NEW YORK AND ACCEPTED BY LENDER IN THE STATE OF NEW
YORK, AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM
THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY,
AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND
ANY LEGAL REQUIREMENTS OF THE UNITED STATES OF AMERICA. AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS CREATED PURSUANT TO THE LOAN DOCUMENTS SHALL BE GOVERNED BY
AND CONSTRUED ACCORDING TO THE LAW OF THE STATE OF NEW YORK. THIS CHOICE OF
GOVERNING LAW IS MADE PURSUANT TO NEW YORK GENERAL OBLIGATION LAW SECTION
5-1401.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    ANY SUIT, ACTION OR PROCEEDING
AGAINST BORROWER ARISING OUT OF OR RELATING TO THIS NOTE MAY AT LENDER’S OPTION
BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF
NEW YORK, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE
BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. ANY SUIT, ACTION OR PROCEEDING
BROUGHT BY BORROWER ARISING OUT OF OR RELATING TO THIS NOTE OR THE OTHER LOAN
DOCUMENTS OR THE LENDER-BORROWER RELATIONSHIP CREATED THEREBY (WHETHER IN
CONTRACT OR IN TORT) SHALL ONLY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
THE CITY OF NEW YORK, COUNTY OF NEW YORK, AND BORROWER WAIVES ANY OBJECTIONS
WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF
ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER
DOES HEREBY DESIGNATE AND APPOINT HERRICK, FEINSTEIN LLP, 2 PARK
AVENUE, NEW YORK, NEW YORK 10016, ATTENTION: SHELDON CHANALES,
ESQ. AS ITS AUTHORIZED AGENT TO ACCEPT
AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED
IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW
YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID
ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN
THE MANNER PROVIDED IN THE LOAN AGREEMENT SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. 

     

    BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED
WITHOUT LEAVING A SUCCESSOR.

     

    6.10  COUNTERPARTS. This
Note may be executed in any number of counterparts, each of which shall be an
original, but all of which shall constitute one and the same
instrument.

     

    [SIGNATURE
PAGE FOLLOWS]

     

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, Borrower has duly executed this Note the day and year first
above written.

     

    
      	 	 	 
	 	
              1407 BROADWAY REAL ESTATE
      LLC,

              a
      Delaware limited liability company

            
	 
 	 
 	 
 
	 	By:  	/s/
      David Lichtenstein
	 	
              
      Name: David Lichtenstein
	 	
              Title:
      President

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