Document:

Exhibit 10.39 

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

dated as of December 22, 2010

among

ACADIA STRATEGIC OPPORTUNITY FUND II, LLC,

as Borrower,

and

BANK OF AMERICA, N.A.,

as Lender

and

BANK OF AMERICA, N.A., as Administrative
Agent

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE I

 	
  

 	
 PARTICULAR
 TERMS, DEFINITIONS AND RULES OF CONSTRUCTION

 	
  

 	
 2

 	
  

 
	
 Section 1.01.

 	
  

 	
 Definitions

 	
  

 	
 2

 	
  

 
	
 Section 1.02.

 	
  

 	
 Rules of
 Construction

 	
  

 	
 15

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 	
  

 	
 THE CREDIT
 FACILITY

 	
  

 	
 15

 	
  

 
	
 Section 2.01.

 	
  

 	
 Generally

 	
  

 	
 15

 	
  

 
	
 Section 2.02.

 	
  

 	
 Nature of
 Lenders’ Obligations

 	
  

 	
 16

 	
  

 
	
 Section 2.03.

 	
  

 	
 Purpose

 	
  

 	
 16

 	
  

 
	
 Section 2.04.

 	
  

 	
 Amounts of
 Loans

 	
  

 	
 16

 	
  

 
	
 Section 2.05.

 	
  

 	
 Procedure
 for Loans

 	
  

 	
 16

 	
  

 
	
 Section 2.06.

 	
  

 	
 Notes

 	
  

 	
 17

 	
  

 
	
 Section 2.07.

 	
  

 	
 Payments and
 Distributions

 	
  

 	
 17

 	
  

 
	
 Section 2.08.

 	
  

 	
 Interest

 	
  

 	
 18

 	
  

 
	
 Section 2.09.

 	
  

 	
 Default Rate

 	
  

 	
 18

 	
  

 
	
 Section 2.10.

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
 18

 	
  

 
	
 Section 2.11.

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
 18

 	
  

 
	
 Section 2.12.

 	
  

 	
 Late Payment
 Premium

 	
  

 	
 19

 	
  

 
	
 Section 2.13.

 	
  

 	
 Voluntary
 Prepayments

 	
  

 	
 19

 	
  

 
	
 Section 2.14.

 	
  

 	
 Adverse
 Events Regarding Investors

 	
  

 	
 19

 	
  

 
	
 Section 2.15.

 	
  

 	
 Mandatory
 Prepayments

 	
  

 	
 21

 	
  

 
	
 Section 2.16.

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
 21

 	
  

 
	
 Section 2.17.

 	
  

 	
 Permanent
 Loan/No Letters of Credit

 	
  

 	
 21

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
  

 	
 INTENTIONALLY
 OMITTED

 	
  

 	
 21

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
  

 	
 CONDITIONS
 PRECEDENT

 	
  

 	
 21

 	
  

 
	
 Section 4.01.

 	
  

 	
 Conditions
 Precedent to Initial Advance

 	
  

 	
 21

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
  

 	
 REPRESENTATIONS
 AND WARRANTIES

 	
  

 	
 24

 	
  

 
	
 Section 5.01.

 	
  

 	
 Due
 Formation, Power and Authority

 	
  

 	
 24

 	
  

 
	
 Section 5.02.

 	
  

 	
 Legally
 Enforceable Agreements

 	
  

 	
 25

 	
  

 
	
 Section 5.03.

 	
  

 	
 Financial
 Statements

 	
  

 	
 25

 	
  

 
	
 Section 5.04.

 	
  

 	
 Compliance
 With Laws; Payment of Taxes

 	
  

 	
 25

 	
  

 
	
 Section 5.05.

 	
  

 	
 Litigation

 	
  

 	
 25

 	
  

 
	
 Section 5.06.

 	
  

 	
 No Conflicts
 or Defaults

 	
  

 	
 25

 	
  

 
	
 Section 5.07.

 	
  

 	
 Solvency

 	
  

 	
 26

 	
  

 
	
 Section 5.08.

 	
  

 	
 Governmental
 Regulation

 	
  

 	
 26

 	
  

 
	
 Section 5.09.

 	
  

 	
 Insurance

 	
  

 	
 26

 	
  

 
	
 Section 5.10.

 	
  

 	
 ERISA

 	
  

 	
 26

 	
  

 
	
 Section 5.11.

 	
  

 	
 No Default

 	
  

 	
 26

 	
  

 
	
 Section 5.12.

 	
  

 	
 Liens

 	
  

 	
 26

 	
  

 
	
 Section 5.13.

 	
  

 	
 Federal
 Regulations

 	
  

 	
 27

 	
  

 
	
 Section 5.14.

 	
  

 	
 Subsidiaries

 	
  

 	
 27

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Section 5.15.

 	
  

 	
 Security
 Documents

 	
  

 	
 27

 	
  

 
	
 Section 5.16.

 	
  

 	
 Purpose of
 Credit

 	
  

 	
 27

 	
  

 
	
 Section 5.17.

 	
  

 	
 Environmental
 Matters

 	
  

 	
 27

 	
  

 
	
 Section 5.18.

 	
  

 	
 Capital
 Commitments

 	
  

 	
 28

 	
  

 
	
 Section 5.19.

 	
  

 	
 Accuracy of
 Information; Full Disclosure

 	
  

 	
 28

 	
  

 
	
 Section 5.20.

 	
  

 	
 Requisition
 as Reaffirmation

 	
  

 	
 28

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
  

 	
 AFFIRMATIVE
 COVENANTS OF BORROWER

 	
  

 	
 28

 	
  

 
	
 Section 6.01.

 	
  

 	
 Compliance
 with Laws; Payment of Taxes

 	
  

 	
 28

 	
  

 
	
 Section 6.02.

 	
  

 	
 Continuing
 Accuracy of Representations and Warranties

 	
  

 	
 28

 	
  

 
	
 Section 6.03.

 	
  

 	
 Payment of
 Costs

 	
  

 	
 28

 	
  

 
	
 Section 6.04.

 	
  

 	
 Brokers

 	
  

 	
 29

 	
  

 
	
 Section 6.05.

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
 29

 	
  

 
	
 Section 6.06.

 	
  

 	
 Reporting Requirements

 	
  

 	
 29

 	
  

 
	
 Section 6.07.

 	
  

 	
 Payment of
 Obligations

 	
  

 	
 31

 	
  

 
	
 Section 6.08.

 	
  

 	
 Conduct of
 Business and Maintenance of Existence

 	
  

 	
 31

 	
  

 
	
 Section 6.09.

 	
  

 	
 Maintenance
 of Property; Insurance

 	
  

 	
 32

 	
  

 
	
 Section 6.10.

 	
  

 	
 Inspection
 of Property; Books and Records; Discussions

 	
  

 	
 32

 	
  

 
	
 Section 6.11.

 	
  

 	
 Environmental
 Laws

 	
  

 	
 32

 	
  

 
	
 Section 6.12.

 	
  

 	
 Further
 Assurances

 	
  

 	
 32

 	
  

 
	
 Section 6.13.

 	
  

 	
 Subscription
 Account

 	
  

 	
 33

 	
  

 
	
 Section 6.14.

 	
  

 	
 Investor
 Reaffirmations and Guaranties

 	
  

 	
 33

 	
  

 
	
 Section 6.15.

 	
  

 	
 Sales by
 Subsidiaries

 	
  

 	
 33

 	
  

 
	
 Section 6.16.

 	
  

 	
 Refinancing
 by Subsidiaries

 	
  

 	
 34

 	
  

 
	
 Section 6.17.

 	
  

 	
 Projected
 Sources and Uses

 	
  

 	
 34

 	
  

 
	
 Section 6.18.

 	
  

 	
 Conditional
 Use of Funds on Deposit in the Deposit Account

 	
  

 	
 34

 	
  

 
	
 Section 6.19.

 	
  

 	
 Liquidity
 Covenants

 	
  

 	
 34

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 	
  

 	
 NEGATIVE
 COVENANTS

 	
  

 	
 35

 	
  

 
	
 Section 7.01.

 	
  

 	
 Limitation
 on Indebtedness and Guarantee Obligations

 	
  

 	
 35

 	
  

 
	
 Section 7.02.

 	
  

 	
 Material
 Adverse Effect

 	
  

 	
 35

 	
  

 
	
 Section 7.03.

 	
  

 	
 Limitation
 on Liens

 	
  

 	
 35

 	
  

 
	
 Section 7.04.

 	
  

 	
 Limitation
 on Fundamental Changes

 	
  

 	
 35

 	
  

 
	
 Section 7.05.

 	
  

 	
 Limitation
 on Dividends and Distributions

 	
  

 	
 36

 	
  

 
	
 Section 7.06.

 	
  

 	
 Limitation
 on New Investments

 	
  

 	
 36

 	
  

 
	
 Section 7.07.

 	
  

 	
 Limitation
 on Modifications of Agreements

 	
  

 	
 36

 	
  

 
	
 Section 7.08.

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
 36

 	
  

 
	
 Section 7.09.

 	
  

 	
 Limitation
 on Changes in Fiscal Year

 	
  

 	
 36

 	
  

 
	
 Section 7.10.

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
 36

 	
  

 
	
 Section 7.11.

 	
  

 	
 Capital
 Calls

 	
  

 	
 36

 	
  

 
	
 Section 7.12.

 	
  

 	
 No
 Additional Managing Members

 	
  

 	
 36

 	
  

 
	
 Section 7.13.

 	
  

 	
 Transfer of
 Managing Member’s Interests

 	
  

 	
 37

 	
  

 
	
 Section 7.14.

 	
  

 	
 Withdrawal
 Events

 	
  

 	
 37

 	
  

 
	
 Section 7.15.

 	
  

 	
 Compliance
 with the Operating Agreement

 	
  

 	
 37

 	
  

 
	
 Section 7.16.

 	
  

 	
 ERISA

 	
  

 	
 37

 	
  

 

ii

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 	
  

 	
 EVENTS OF
 DEFAULT

 	
  

 	
 37

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX

 	
  

 	
 ADMINISTRATIVE
 AGENT; RELATIONS AMONG LENDERS

 	
  

 	
 40

 	
  

 
	
 Section 9.01.

 	
  

 	
 Appointment,
 Powers and Immunities of Administrative Agent

 	
  

 	
 40

 	
  

 
	
 Section 9.02.

 	
  

 	
 Reliance by Administrative
 Agent

 	
  

 	
 41

 	
  

 
	
 Section 9.03.

 	
  

 	
 Defaults

 	
  

 	
 41

 	
  

 
	
 Section 9.04.

 	
  

 	
 Rights of
 Administrative Agent as Lender

 	
  

 	
 42

 	
  

 
	
 Section 9.05.

 	
  

 	
 Sharing of
 Costs by Lenders; Indemnification of Administrative Agent

 	
  

 	
 42

 	
  

 
	
 Section 9.06.

 	
  

 	
 Non-Reliance
 on Administrative Agent and Other Lenders

 	
  

 	
 43

 	
  

 
	
 Section 9.07.

 	
  

 	
 Failure of
 Administrative Agent to Act

 	
  

 	
 43

 	
  

 
	
 Section 9.08.

 	
  

 	
 Resignation
 or Removal of Administrative Agent

 	
  

 	
 43

 	
  

 
	
 Section 9.09.

 	
  

 	
 Amendments
 Concerning Agency Function

 	
  

 	
 44

 	
  

 
	
 Section 9.10.

 	
  

 	
 Liability of
 Administrative Agent

 	
  

 	
 44

 	
  

 
	
 Section 9.11.

 	
  

 	
 Transfer of
 Agency Function

 	
  

 	
 44

 	
  

 
	
 Section 9.12.

 	
  

 	
 Non-Receipt
 of Funds by Administrative Agent; Adjustments

 	
  

 	
 44

 	
  

 
	
 Section 9.13.

 	
  

 	
 Withholding
 Taxes

 	
  

 	
 45

 	
  

 
	
 Section 9.14.

 	
  

 	
 Sharing of
 Payments among Lenders

 	
  

 	
 45

 	
  

 
	
 Section 9.15.

 	
  

 	
 Possession
 of Documents

 	
  

 	
 45

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X

 	
  

 	
 GENERAL
 CONDITIONS AND PROVISIONS

 	
  

 	
 46

 	
  

 
	
 Section 10.01.

 	
  

 	
 Advance Not
 Waiver

 	
  

 	
 46

 	
  

 
	
 Section 10.02.

 	
  

 	
 Authorization
 to Advance for Interest, Etc

 	
  

 	
 46

 	
  

 
	
 Section 10.03.

 	
  

 	
 Concerning
 Irrevocable Authorizations

 	
  

 	
 46

 	
  

 
	
 Section 10.04.

 	
  

 	
 Ratification
 of Requisition by Acceptance of Advance

 	
  

 	
 46

 	
  

 
	
 Section 10.05.

 	
  

 	
 No
 Third-Party Beneficiaries

 	
  

 	
 46

 	
  

 
	
 Section 10.06.

 	
  

 	
 Documentation
 Etc. Satisfactory

 	
  

 	
 47

 	
  

 
	
 Section 10.07.

 	
  

 	
 Administrative
 Agent’s and Lenders’ Determination Conclusive

 	
  

 	
 47

 	
  

 
	
 Section 10.08.

 	
  

 	
 Notices

 	
  

 	
 47

 	
  

 
	
 Section 10.09.

 	
  

 	
 Amendments
 and Waivers

 	
  

 	
 47

 	
  

 
	
 Section 10.10.

 	
  

 	
 Assignment;
 Participation

 	
  

 	
 48

 	
  

 
	
 Section 10.11.

 	
  

 	
 Setoff

 	
  

 	
 50

 	
  

 
	
 Section 10.12.

 	
  

 	
 Successors
 and Assigns

 	
  

 	
 50

 	
  

 
	
 Section 10.13.

 	
  

 	
 Severability

 	
  

 	
 50

 	
  

 
	
 Section 10.14.

 	
  

 	
 Non-Waiver;
 Remedies Cumulative

 	
  

 	
 50

 	
  

 
	
 Section 10.15.

 	
  

 	
 Certain
 Waivers

 	
  

 	
 50

 	
  

 
	
 Section 10.16.

 	
  

 	
 Expenses;
 Indemnification

 	
  

 	
 51

 	
  

 
	
 Section 10.17.

 	
  

 	
 Counterparts

 	
  

 	
 52

 	
  

 
	
 Section 10.18.

 	
  

 	
 Governing
 Law; Jurisdiction

 	
  

 	
 52

 	
  

 
	
 Section 10.19.

 	
  

 	
 Integration

 	
  

 	
 52

 	
  

 
	
 Section 10.20.

 	
  

 	
 Gross-Up for
 Taxes

 	
  

 	
 52

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI

 	
  

 	
 PARTICULAR
 PROVISIONS

 	
  

 	
 53

 	
  

 
	
 Section 11.01.

 	
  

 	
 Capital
 Calls; Subscription Account

 	
  

 	
 53

 	
  

 

iii

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Section 11.02.

 	
  

 	
 Subordination
 of Claims

 	
  

 	
 55

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 SCHEDULES

 	
  

 	
  

 
	
  

 	
 A

 	
  

 	
 Individual
 Commitments

 
	
  

 	
  

 	
  

 
	
 EXHIBITS

 	
  

 	
  

 
	
  

 	
 A

 	
  

 	
 Authorization
 Letter

 
	
  

 	
 B

 	
  

 	
 Investors/Capital
 Commitments

 
	
  

 	
 C

 	
  

 	
 Investor
 Acknowledgment

 
	
  

 	
 D

 	
  

 	
 Note

 
	
  

 	
 E

 	
  

 	
 Closing
 Certificate

 
	
  

 	
 F

 	
  

 	
 Reserved

 
	
  

 	
 G

 	
  

 	
 Compliance
 Certificate

 
	
  

 	
 H

 	
  

 	
 Capital
 Stock of Subsidiaries

 
	
  

 	
 I

 	
  

 	
 Assignment
 and Assumption Agreement

 
	
  

 	
 J

 	
  

 	
 Reserved

 
	
  

 	
 K

 	
  

 	
 Form of
 Investor Reaffirmation

 
	
  

 	
 L

 	
  

 	
 Form of
 Gloster Principal Reaffirmation

 
	
  

 	
 M

 	
  

 	
 Form of
 Vanderbilt Principal Reaffirmation

 
	
  

 	
 N

 	
  

 	
 Sources Uses
 Statement

 

iv

          FOURTH
AMENDED AND RESTATED CREDIT AGREEMENT (“this Agreement”) dated as of
December 22, 2010 by and among ACADIA STRATEGIC OPPORTUNITY FUND II, LLC,
a Delaware limited liability company (“Borrower”), ACADIA REALTY ACQUISITION
II, LLC, a Delaware limited liability company (“Managing Member”), ACADIA
INVESTORS II, INC., a Maryland corporation (“Acadia Investors II”), BANK OF
AMERICA, N.A., successor by merger to Fleet National Bank (in its individual
capacity and not as Administrative Agent, “BofA”; BofA and each other lender
who may become a Lender pursuant to Section 10.10, each, a “Lender” and
collectively, “Lenders”) and BANK OF AMERICA, N.A., as Administrative Agent for
Lenders (together with its successors in such capacity, “Administrative Agent”).

          WHEREAS, Fleet National Bank (“Fleet”), Borrower, Managing Member and
Acadia Investors II entered into that certain Credit Agreement dated as of
March 9, 2005 (the “Original Credit Agreement”);

          WHEREAS,
BofA is the successor by merger to Fleet;

          WHEREAS,
BofA, The Bank of New York Mellon, formerly known as The Bank of New York,
Borrower (“BNYM”), Managing Member, Acadia Investors II and Administrative
Agent entered into that certain Amended and Restated Credit Agreement dated as
of March 21, 2006 (the “Amended Agreement”) and that certain Modification
of Amended and Restated Credit Agreement dated as of February 29, 2008
(the “Amendment”);

          WHEREAS,
BofA, BNYM, Borrower, Managing Member, Acadia Investors II and Administrative
Agent entered into that certain Second Amended and Restated Credit Agreement
dated as of February 27, 2009 (the “Second Amended Agreement”);

          WHEREAS,
pursuant to an Assignment and Assumption Agreement dated as of March 3,
2010 by and between BNYM, as assignor, and BofA, as assignee, BNYM assigned all
of its interest under the Original Agreement to BofA;

          WHEREAS,
pursuant to that certain Third Amended and Restated Credit Agreement dated as
of March 3, 2010 by and among BofA, Borrower, Managing Member, Acadia
Investors II and Administrative Agent (the “Third Amended Agreement”; the
Original Credit Agreement, as amended and restated by the Amended Agreement, as
modified by the Amendment, as amended and restated by the Second Amended Agreement
and as amended and restated by the Third Amended Agreement, collectively, the
“Original Agreement”);

          WHEREAS,
Borrower, Managing Member and Acadia Investors II have requested that Lenders
extend the Maturity Date of the Original Agreement and otherwise modify the
terms and provisions thereof and Lenders have agreed, on the terms and
conditions hereof, to do so; and

          WHEREAS,
Borrower desires that Lenders extend credit as provided herein, and Lenders are
prepared to extend such credit on the terms and conditions hereinafter set
forth.

          NOW,
THEREFORE, in consideration of the mutual promises and agreements herein
contained, Borrower, Administrative Agent and Lenders hereby agree to amend and
restate all of the terms and provisions of the Original Agreement as follows:

ARTICLE I

          PARTICULAR TERMS, DEFINITIONS AND RULES OF
CONSTRUCTION

          Section
1.01. Definitions. The following terms, as used herein, shall have the
following meanings:

“Administrative Agent’s Counsel” — Schiff
Hardin LLP, 900 Third Avenue, 23rd Floor, New York, New York 10022.

“Administrative Agent’s Office” —
Administrative Agent’s Office as set forth on its signature page of this
Agreement, or such other address in the United States as Administrative Agent
may designate by notice to Borrower and Lenders.

“Adverse Investor Event” — Has the
meaning given to such term in Section 2.14.

“Affiliate” — As to any Person, any
other Person (other than a Subsidiary thereof) which, directly or indirectly,
is in control of, is controlled by, or is under common control with, such
Person. For purposes of this definition, “control” of a Person (including, with
its correlative meanings, “controlled by” and “under common control with”)
means the power, directly or indirectly, either to (a) vote 50% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.

“Aggregate Outstanding Extensions of
Credit” — As to any Lender at any time, an amount equal to such Lender’s
Pro Rata Share of the sum of, without duplication, the aggregate Principal
Amount plus the aggregate face amount of all Letters of Credit then outstanding
plus the aggregate reimbursement obligations then outstanding.

“Allowable Construction Borrowing” —
(i) Loan proceeds under loans to Albee Development LLC and/or Acadia-P/A
Sherman Avenue LLC, which loans are solely for the purpose of providing such
Subsidiaries with funds to construct buildings on the properties owned by such
Subsidiaries, provided the loan budget for any such loan provides for an
interest reserve sufficient to pay all debt service related to such property
through the construction period, as reasonably determined by Administrative
Agent, and (ii) up to $5,000,000 in aggregate loan proceeds as

2

between all Subsidiaries of Borrower other than those referred to in
the preceding clause (i) which proceeds are solely for the purpose of improving
the real property owned by such Subsidiaries, provided the loan budget for any
such loan provides for an interest reserve sufficient, together with any net
operating income of such property, to pay all debt service related to such
property through the construction period, as reasonably determined by
Administrative Agent.

“Applicable Lending Office” — For each
Lender and for the portions of the outstanding principal balance under its Note
bearing interest based on the Prime Rate or the BBA LIBOR Daily Floating Rate,
as applicable, the lending office of such Lender (or of an affiliate of such
Lender) designated as such on the signature page hereof or in the applicable
Assignment and Assumption Agreement, or such other office of such Lender (or of
an affiliate of such Lender) as such Lender may from time to time specify to
Administrative Agent and Borrower as the office by which the portions of the
outstanding principal balance under its Note bearing interest based on the
Prime Rate or the BBA LIBOR Daily Floating Rate are to be made and maintained.

“Applicable Margin” — 2.90% per annum.

“Approved Use” — Has the meaning
specified in Section 5.16.

“Assignee” — Has the meaning specified
in Section 10.10.

“Assignment and Assumption Agreement”
— An Assignment and Assumption Agreement, substantially in the form of Exhibit
I, pursuant to which a Lender assigns and an Assignee assumes rights and
obligations in accordance with Section 10.10.

“Authorization Letter” — The letter in
the form of Exhibit A.

“Available Commitment” — The Total
Commitment.

“BBA LIBOR” — Has the meaning provided
to such term in Section 2.08.

“BBA LIBOR Daily Floating Rate” — Has
the meaning provided to such term in Section 2.08.

“Borrowing Date” — Any Business Day
specified in a notice pursuant to Section 2.05 as a date on which Borrower
requests Lenders to make Loans hereunder.

“Business Day” — Any day on which
commercial banks are not authorized or required to close in New York City; and,
whenever such day relates to BBA LIBOR, any such day in which dealings in
Dollar deposits are also carried out in the London interbank market and banks
are also open for business in London.

3

“Capital Call” — A call upon the
Investors in Borrower and/or Acadia Investors II to fund all or any portion of
the Capital Commitments pursuant to and in accordance with the Stockholders
Agreement and/or in accordance with the Operating Agreement.

“Capital Commitments” — The commitment
of each Investor to make Capital Contributions, directly or indirectly, to fund
Borrower in the amount set forth in, and pursuant to the terms of, the
Stockholders Agreement and the Operating Agreement.

“Capital Contributions” — With respect
to any partner or member in Borrower, cash payments or contributions by such
partner or member to Borrower pursuant to Article V of the Operating Agreement
and, with respect to any other Investor, cash payments or contributions by such
Investor to Acadia Investors II pursuant to Section 6 of the Stockholders
Agreement.

“Capital Contributions Pledge Agreement”
— Collectively, the Amended and Restated Capital Contributions Pledge
Agreements dated as of March 21, 2006 and executed and delivered by
Borrower and Acadia Investors II.

“Capital Demand Notice” — Any notice
sent to the Investors in connection with a Capital Call.

“Capital Events Collateral Security
Agreement” — That certain Capital Events Collateral Security Agreement
dated as of the date hereof between Borrower and Administrative Agent, as the
same may be amended, supplemented or otherwise modified from time to time.

“Capital Stock” — Any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all similar ownership interests in a Person
(other than a corporation) and any and all warrants or options to purchase any
of the foregoing.

“Cash Collateral Agreement” — The
Amended and Restated Cash Collateral Agreement to be executed and delivered by
Borrower dated as of March 21, 2006, as the same may be amended,
supplemented or otherwise modified from time to time.

“Cash Equivalents” — (a) Securities
with maturities of ninety (90) days or less from the date of acquisition issued
or fully guaranteed or insured by the United States Government or any agency
thereof, (b) certificates of deposit and eurodollar time deposits with
maturities of ninety (90) days or less from the date of acquisition and
overnight bank deposits of any Lender or of any commercial bank having capital
and surplus in excess of $500,000,000, (c) repurchase obligations of any Lender
or of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than seven (7) days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-2 or the
equivalent thereof by S&P or P-2 or the equivalent thereof by Moody’s and
in either case maturing within ninety (90) days after the date of acquisition,
(e) securities with maturities

4

of ninety (90) days or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States,
by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody’s, (f) securities with maturities of ninety (90) days or less from the
date of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.

“Closing Date” — The date of this
Agreement as first set forth above.

“Code” — The Internal Revenue Code of
1986, as amended from time to time.

“Collateral” — (i) The Deposit Account
and the Subscription Account, (ii) all funds now or hereafter deposited into
the Subscription Account and (iii) any other property upon which a Lien has
been or is purported or intended to have been granted to Administrative Agent,
for the benefit of Lenders, under the Capital Events Collateral Security
Agreement or the Cash Collateral Agreement.

“Credit Amount” — $40,000,000,
provided that (i) effective from and after October 31, 2013, the Credit
Amount shall reduce to $15,000,000, (ii) effective from and after February 1,
2014, the Credit Amount shall reduce to $11,250,000, (iii) effective from and
after May 1, 2014, the Credit Amount shall reduce to $7,500,000 and (iv)
effective from and after August 1, 2014, the Credit Amount shall reduce to
$3,750,000.

“Credit Documents” — This Agreement,
each Note, each application referred to in Section 2.17(f), the Guaranty, the
Security Documents, the Authorization Letter, the Investor Acknowledgments, any
guarantees or documents of assurance given by direct investors in Borrower to
Administrative Agent and/or Lenders, Uniform Commercial Code financing
statements in respect of the Collateral and any other collateral given as
security for the Credit Facility or the Obligations, and any other documents
which evidence or secure the Credit Facility or the Obligations.

“Credit Facility” — The credit
facility, in an amount up to the Credit Amount, to be provided pursuant to this
Agreement including both the making of Loans and the issuance of Letters of
Credit.

“Credit Parties” — Borrower, Managing
Member and Acadia Investors II.

“Default” — Any event or circumstance
which, with the giving of notice or the passage of time, or both, would become
an Event of Default.

“Default Rate” — The Prime Based Rate
plus 4% per annum.

5

“Deposit Account” — Has the meaning
set forth in the Capital Events Collateral Security Agreement.

“Dollars” and “$” — Lawful
money of the United States.

“Dore LP” — Dore Capital Real Estate,
L.P., a Delaware limited partnership.

“Employee Benefit Plan” — Any employee
benefit or other plan established or maintained, or to which contributions have
been made, by Borrower or Guarantor.

“Environmental Laws” — Any and all
foreign, Federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any Governmental
Authority or other requirements of Law regulating, relating to or imposing
liability or standards of conduct concerning protection of the environment or
for the protection of human health from environmental dangers, as now or may at
any time hereafter be in effect.

“ERISA” — The Employee Retirement
Income Security Act of 1974, as amended from time to time, including the rules
and regulations promulgated thereunder.

“ERISA Affiliate” — Any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as Borrower and/or Guarantor, or any
trade or business which is under common control (within the meaning of Section
414(c) of the Code) with Borrower and/or Guarantor, or any organization which
is required to be treated as a single employer with Borrower and/or Guarantor
under Section 414(m) or 414(o) of the Code.

“ERISA Investor” — An Investor that is
an “employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
subject to Title IV and Title I, Subtitle B, Part 3 of ERISA, a group trust, as
described in Revenue Ruling 81-100, or a partnership or commingled account or
fund which is subject to Title I of ERISA.

“ERISA Group” — Borrower and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.

“Event of Default” — Has the meaning
given to such term in Article VIII.

“Federal Funds Rate” — For any day,
the rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
on the Business Day next succeeding such day; provided that (a) if such day is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upwards to the next higher 1/100 of

6

1%) charged to Bank of America on such day on such transactions as
determined by Administrative Agent.

“Financial Statements” — Statements of
the assets, liabilities (direct or contingent), income, expenses and cash flow
of Borrower and Guarantor, prepared in accordance with GAAP.

“Financing Lease” — Any lease of
property, real or personal, the obligations of the lessee in respect of which
are required in accordance with GAAP to be capitalized on a balance sheet of
the lessee.

“GAAP” — Generally accepted accounting
principles in the United States of America as in effect from time to time and
consistently applied.

“Gloster Principal Reaffirmations” —
Has the meaning specified in Section 6.14.

“Governing Documents” — As to any
Person, its articles or certificate of incorporation and by-laws, its
partnership agreement, its certificate of formation and operating agreement,
and/or the other organizational or governing documents of such Person.

“Governmental Authorities” — The
United States, any state and any political subdivision, agency, department,
commission, board, bureau or instrumentality of either of them, including any
local authorities, which exercises jurisdiction over Borrower, Guarantor or any
of the other Credit Parties or any Investor.

“Governmental Plan Investor” — An
Investor that is a “governmental plan” as defined in Section 3(32) of ERISA.

“Guarantee Obligation” — As to any
Person (the “guaranteeing person”), any obligation of (a) the guaranteeing
person or (b) another Person (including, without limitation, any bank under any
letter of credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The terms “Guarantee”

7

and “Guaranteed” used as a verb shall have a correlative meaning. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for which such guaranteeing person may be liable pursuant
to the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by Borrower in good
faith.

“Guarantor” — Acadia Realty Limited
Partnership, a Delaware limited partnership, which is the sole member of Managing
Member.

“Guaranty” — That certain Guaranty
Agreement dated as of the date hereof made by Acadia Realty Limited Partnership
to Lenders and Administrative Agent.

“Indebtedness” — Of any Person at any
date, without duplication, (a) all indebtedness of such Person for borrowed
money (whether by loan or the issuance and sale of debt securities) including
any unfunded commitments to lend money to such Person, or for the deferred
purchase price of property or services (other than current trade liabilities incurred
in the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations of such Person in respect of
letters of credit, acceptances or similar instruments issued or created for the
account or upon the application of such Person and (e) all liabilities secured
by any Lien on any property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment thereof.

“Individual Commitment” — With respect
to each Lender, the amount set forth opposite the name of such Lender on Schedule
A attached hereto (subject to change in accordance with the terms of this
Agreement).

“Initial Advance” — The first advance
of proceeds of any Loan to be made hereunder.

“Investments” — Has the meaning
specified in the Operating Agreement.

“Investor Acknowledgment” — The
acknowledgment executed and delivered by each Investor, substantially in the
form of Exhibit C hereto, as the same may be reaffirmed, amended,
supplemented or otherwise modified from time to time in accordance with this
Agreement.

“Investor Claims” — All debts and
liabilities of an Investor, in its capacity as a member in Borrower, to
Borrower, and/or as a shareholder in Acadia Investors II, to Acadia Investors
II, in either case whether such debts and liabilities now exist or hereafter
are incurred or arise, or whether the obligations of such Investor therein be
direct,

8

contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such debts or liabilities are evidenced
by a note, contract, bargain account, or otherwise, and irrespective of the
Person or Persons in whose favor such debts or liabilities may, at their
inception, have been, or may hereafter be, created, or the manner in which they
have been or may hereafter be acquired by Borrower or Acadia Investors II.
“Investor Claims” shall include, without limitation, all rights and claims of
Borrower against an Investor under the Operating Agreement and of Acadia
Investors II against an Investor under the Stockholders Agreement.

“Investor Guarantor” — Any entity
which has guarantied to Lenders the payment and/or funding of all or any
portion of any Investor’s Capital Commitments.

“Investor Reaffirmations” — Has the
meaning specified in Section 6.14.

“Investors” — From time to time,
Managing Member, Acadia Investors II, each of the other members of Borrower and
all stockholders of Acadia Investors II.

“Law” — Any federal, state or local
law, statute, rule, regulation, ordinance, order, decree, directive,
requirement, code, notice of violation or rule of common law, now or hereafter
in effect, and in each case as amended, and any judicial or administrative
interpretation thereof by a Governmental Authority or otherwise, including any
judicial or administrative order, determination, consent decree or judgment.

“Lead Arranger” — Merrill Lynch,
Pierce, Fenner & Smith Incorporated, successor by merger to Banc of America
Securities LLC.

“Lender Reply Period” — Has the
meaning specified in Section 10.09.

“Lien” — Any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement and any Financing Lease having substantially the same economic effect
as any of the foregoing), and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction in respect of any
of the foregoing.

“Liquidity” — (x) Unpaid Capital
Commitments of Managing Member and Investors as to whom no Adverse Investor
Event has occurred, (y) unencumbered cash (excluding the Deposit Account and
all funds on deposit therein) and (z) unencumbered Cash Equivalents.

“Loan” — Has the meaning given to such
term in Section 2.01.

“Material Adverse Effect” — (a) A
material adverse effect on the business, operations, property, condition
(financial or otherwise) or prospects of Borrower or (b) a

9

material adverse effect on the validity or enforceability of this
Agreement or any of the other Credit Documents or the Investor Acknowledgments
or the rights or remedies of Administrative Agent or Lenders hereunder or
thereunder, or (c) any circumstances or events which could reasonably be
expected to materially impair, impede, or jeopardize the obligation and the
liability of Managing Member or Acadia Investors II to fulfill their
obligations under the Operating Agreement.

“Material Plan” — At any time a Plan
or Plans having aggregate Unfunded Liabilities in an amount that would have a
Material Adverse Effect if such Plans were terminated.

“Materials of Environmental Concern” —
Any gasoline or petroleum products (including crude oil) or any fraction
thereof or any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.

“Maturity Date” — December 22,
2014.

“Minimum Release Price” — As to each
Subsidiary and its assets (each of which constitutes and Investment), the
amount set forth on Exhibit H opposite the name of such Subsidiary.

“Moody’s” — Moody’s Investor Service,
Inc.

“Multiemployer Plan” — Any plan
defined as such in Section 3(37) of ERISA.

“Net Refinance Proceeds” — The excess
of (i) the principal amount borrowed by any Subsidiary since the date of the
most recent Financial Statements delivered by Borrower to Administrative Agent
over (ii) the sum of (x) the principal amount of the Indebtedness (excluding
interest) of such Subsidiary being repaid, (y) the reasonable and customary
out-of-pocket closing costs of such refinance, as reasonably approved by
Administrative Agent, and (z) the amount of such new borrowing which constitutes
Allowable Construction Borrowing.

“Note”; “Notes” — Have the
respective meanings specified in Section 2.06.

“Obligations” — The unpaid principal
amount of, and interest (including, without limitation, interest accruing after
the maturity of the Credit Facility and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) on the
Loans, and all other obligations and liabilities of the Credit Parties and
Guarantor to Administrative Agent and Lenders, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, or out of or in connection with, this Agreement, the
Notes, the Letters of Credit, the Security Documents and any other Credit
Documents and any other document made, delivered or given in

10

connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of
counsel to Administrative Agent or to Lenders that are required to be paid by a
Credit Party or Guarantor pursuant to the terms of the Credit Documents) or
otherwise.

“Operating Agreement” — That certain
Amended and Restated Operating Agreement of Borrower by and among Managing
Member and Acadia Investors II
dated as of October 15, 2004 (effective as of August 15, 2004), as
amended by First Amendment to Amended and Restated Operating Agreement of
Borrower by and among Managing Member and Acadia Investors II dated as of
August 15, 2004, as supplemented by that certain Pledge Agreement dated as
of June 15, 2004 from Acadia Investors II, Inc. to Borrower, as amended by
Second Amendment to Amended and Restated Operating Agreement of Borrower by and
among Managing Member and Acadia Investors II dated as of January 1, 2006
and as amended by action of Managing Member with the written consent of the
advisory committee of Borrower by required vote dated January 5, 2010, and
as the same may hereafter be modified in compliance with the terms of this
Agreement.

“Parent” – Acadia Realty Trust, a Maryland
real estate investment trust and the parent company of Guarantor.

“Participant”; “Participation”
— Have the meanings specified in Section 10.10.

“Payor” — Has the meaning given to
such term in Section 9.12(a).

“PBGC” — The Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its functions under
ERISA.

“Pending Capital Call” — A Capital
Call made upon the Investors of Borrower no more than fifteen (15) days prior
to the date of determination, which Capital Call has not yet been funded by any
of the Investors.

“Pension Plan” — Any employee pension
benefit plan within the meaning of Section 3(2) of ERISA with respect to which
Borrower, Guarantor or any ERISA Affiliate at any relevant time has liability
or an obligation to contribute.

“Person” — An individual, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture or other entity of whatever
nature.

“Plan” — At any time an employee
pension benefit plan within the meaning of Section 3(2) of ERISA that is
maintained or contributed to by any member of the ERISA Group.

“Prime Based Rate” — On any day, the
rate of interest per annum equal to the Applicable Margin plus the Prime Rate,
each change in said rates to be effective, without notice or demand of any
kind, as of the date of such change.

11

“Prime Rate” — On any day, the rate of
interest per annum then most recently established by the Person serving as
Administrative Agent as its “prime rate,” it being understood and agreed that
such rate is set by the Person serving as Administrative Agent as a general
reference rate of interest, taking into account such factors as the Person
serving as Administrative Agent may deem appropriate, that it is not necessarily
the lowest or best rate actually charged to any customer or a favored rate,
that it may not correspond with future increases or decreases in interest rates
charged by other lenders or market rates in general, and that the Person
serving as Administrative Agent may make various business or other loans at
rates of interest having no relationship to such rate. If the Person serving as
Administrative Agent (including any subsequent holder of such position) ceases
to exist or to establish or publish a prime rate from which the Prime Rate is
then determined, the applicable variable rate from which the Prime Rate is
determined thereafter shall be instead the prime rate reported in The Wall
Street Journal (or the average prime rate if a high and a low prime rate
are therein reported), and the Prime Rate shall change without notice with each
change in such prime rate as of the date such change is reported.

“Principal Amount” — At any time, the
aggregate outstanding principal amount of the Notes.

“Projected Sources” — Has the meaning
specified in Section 6.17.

“Projected Sources and Uses” — Has the
meaning specified in Section 6.17.

“Projected Uses” — Has the meaning
specified in Section 6.17.

“Pro Rata Share” — With respect to
each Lender, the ratio of such Lender’s Individual Commitment to the Credit
Amount. As of the date hereof, Lenders’ respective Pro Rata Shares are as
follows: 

	
  

 	
  

 
	
 Lender

 	
 Pro Rata Share

 
	

 	

 
	
  

 	
  

 
	
 BofA

 	
         100%

 

“Regulation D” and “Regulation U”
— Respectively, Regulation D and Regulation U of the Board of Governors of the
Federal Reserve System.

“Release Price” — With respect to the
sale of any Subsidiary or the assets of such Subsidiary, the greater of (i) the
gross sales price, including all consideration given to, or paid on behalf of,
Borrower and/or the applicable Subsidiary in connection with such sale less
only reasonable and customary out-of-pocket costs of such sale as reasonably
approved by Administrative Agent and (ii) the Minimum Release Price for such
Subsidiary.

“Required Lenders” — At any time,
those Lenders whose aggregate Pro Rata Shares exceed 50%.

“Required Payment” — Has the meaning
given to such term in Section 9.12(a).

12

“Requisition” — A written statement by
or on behalf of Borrower, in form and substance satisfactory to Administrative
Agent, setting forth in each instance the aggregate amount of the Loans
requested to be borrowed and certifying the purpose for which the proceeds of
such Loans are to be used.

“Responsible Party” — For any
Governmental Plan Investor, (a) if the state under which such Governmental Plan
Investor operates is obligated to fund such Governmental Plan Investor and is
liable to fund any shortfalls, such state, and (b) otherwise, the Governmental
Plan Investor itself.

“S&P” — Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc.

“Security Documents” — The collective
reference to the Capital Events Collateral Security Agreement and the Cash
Collateral Agreement, and all other security documents at any time delivered to
Lenders and/or Administrative Agent granting a Lien on any asset or assets of
any Person to secure any of the Obligations or to secure any guarantee of any
such Obligations.

“Sources and Uses Period” — Has the
meaning specified in Section 6.17.

“Sponsor” — For any ERISA Investor,
the “plan sponsor” within the meaning of Section 3(16)(B) of ERISA.

“Stockholders Agreement” — That
certain Amended and Restated Stockholders Agreement by and among Acadia
Investors II, Yale University, The Vanderbilt University, Carnegie Corporation
of New York, The Board of Trustees of the Leland Stanford Junior University,
Gloster, LLC, The Dupont Pension Trust and The William and Flora Hewlett
Foundation dated as of October 15, 2004 (effective as of August 15,
2004), as amended by First Amendment to Stockholders Agreement by and among
Acadia Investors II, Yale University, The Vanderbilt University, Carnegie
Corporation of New York, The Board of Trustees of the Leland Stanford
University, Gloster, LLC, The Dupont Pension Trust and The William and Flora
Hewlett Foundation dated as of August 15, 2004.

“Subscription Account” — The
collateral account established by Borrower at Bank of America, N.A., in the
name of Administrative Agent, as secured party, and identified as follows:
Acadia Strategic Opportunity Fund II, LLC, Account #9489651466, ABA #02120039,
Bank of America, N.A., One Bryant Park, 35th Floor, New York, New York 10036.

“Subsidiary” — As to any Person, a
corporation, partnership or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of
a contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise

13

qualified, all references to a “Subsidiary” or to “Subsidiaries” in
this Agreement shall refer to a Subsidiary or Subsidiaries of Borrower.

“Supplemental Fee Letter” —
Collectively, that certain letter agreement dated as of January 30, 2009
among BofA, Lead Arranger and Borrower, that certain letter agreement dated as
of March 3, 2009 among BofA, Lead Arranger and Borrower and that certain
letter agreement dated as of the date hereof among BofA, Lead Arranger and
Borrower, providing for Borrower’s payment to Lead Arranger and/or BofA on the
date hereof and from time to time hereafter certain fees in connection with the
Credit Facility, each such fee to be for Lead Arranger’s and/or BofA’s own
account.

“Termination Event” — (i) A
“reportable event”, as such term is described in Section 4043 of ERISA (other
than a “reportable event” not subject to the provision for thirty (30) day
notice to the PBGC), or an event described in Section 4062(e) of ERISA, (ii)
the withdrawal by any member of the ERISA Group from a Multiemployer Plan or
the incurrence of liability by any member of the ERISA Group upon the
termination of a Multiemployer Plan, (iii) the filing of a notice of intent to
terminate any Plan under Section 4041 of ERISA, other than in a standard
termination within the meaning of Section 4041 of ERISA, or the treatment of a
Plan amendment as a distress termination under Section 4041 of ERISA, (iv) the
institution by the PBGC of proceedings to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or cause a
trustee to be appointed to administer, any Plan or (v) any other event or
condition that might reasonably constitute grounds for the involuntary
termination of, or the appointment of a trustee by the PBGC to administer, any
Plan or the imposition of any Lien on the assets of any member of the ERISA
Group.

“Total Commitment” — The Credit Amount
(subject to change in accordance with the terms of this Agreement).

“Unfunded Liabilities” — With respect
to any Plan at any time, the amount (if any) by which (i) the value of all
benefit liabilities under such Plan, determined on a plan termination basis
using the assumptions prescribed by the PBGC for such purposes, exceeds (ii)
the fair market value of all Plan assets allocable to such liabilities under
Title IV of ERISA (excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for such Plan, but only to
the extent that such excess represents a potential liability of a member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.

“Unpaid Capital Commitments” — At any
time (x) the aggregate Capital Commitments, including amounts which are subject
to any Pending Capital Call under the Stockholders Agreement, provided,
however, that to avoid double counting, the Capital Commitment of Acadia
Investors II shall not be counted since such Capital Commitment is, in effect,
a pass-through of the Capital Commitments of Investors under the Stockholders
Agreement less (y) the aggregate Capital Calls

14

made upon the Investors regardless of whether the Investors have
actually funded all such Capital Calls.

“Unused Commitment” — At any time, an
amount equal to the excess, if any, of (a) the Total Commitment over (b) the
Aggregate Outstanding Extensions of Credit of all Lenders.

“Unused Fee” — 0.30%.

“United States” and “U.S.” —
The United States of America.

“Vanderbilt” — The Vanderbilt
University, a corporation organized under the laws of the State of Tennessee.

“Vanderbilt Guaranty” — That certain
Guaranty of Capital dated March 3, 2010 executed and delivered by
Vanderbilt.

“Vanderbilt Reaffirmation” — Has the
meaning specified in Section 6.14.

          Section 1.02. Rules of Construction.
Except as expressly provided otherwise, when used in this Agreement (i) “or” is
not exclusive, (ii) “hereunder”, “herein”, “hereof” and the like refer to this
Agreement as a whole, (iii) “Article”, “Section”, “Schedule” and “Exhibit”
refer to Articles, Sections, Schedules and Exhibits of this Agreement, (iv)
terms defined in the singular shall have a correlative meaning when used in the
plural and vice versa, (v) a reference to a Law includes any amendment,
modification or supplement to, or replacement of, such Law and (vi) a reference
to a document shall mean such document as the same may be amended, modified or
supplemented from time to time in accordance with its terms. The cover page and
the Exhibits and Schedules annexed hereto are incorporated as a part of this
Agreement with the same effect as if set forth in the body hereof. Any table of
contents and all captions and headings herein are for convenience only and
shall not affect the interpretation or construction hereof.

ARTICLE II

THE CREDIT FACILITY

          Section
2.01. Generally. 

               (a)
Subject to the terms and conditions of this Agreement, each Lender severally
agrees to make a loan to Borrower (each, a “Loan” and, collectively, “Loans”),
subject to the provisions of this Agreement, and on the basis of the
representations, warranties and covenants made herein and in the other Credit Documents,
in periodic disbursements as hereinafter set forth. On the date hereof
following principal payments made on the date hereof by Borrower under the
Original Agreement, the Principal Amount is $40,000,000. Following any
repayment of the principal amount of the Loans,

15

whether required pursuant to the terms hereof or voluntary, no amount
may be re-advanced or re-borrowed.

               (b)
Notwithstanding anything to the contrary contained herein, the aggregate
principal amount of Loans outstanding hereunder shall not at any time exceed
the Available Commitment.

          Section
2.02. Nature of Lenders’ Obligations. The obligations of Lenders under
this Agreement are several, and no
Lender shall be responsible for the failure of any other Lender to make
or participate in any extension of credit under the Credit Facility to be made
or participated in by such other Lender. However, the failure of any Lender to make
or participate in any extension of credit under the Credit Facility to be made
or participated in by it hereunder on the date specified therefor shall not
relieve any other Lender of its obligation to make or participate in any
extension of credit under the Credit Facility specified hereby to be made or
participated in by it on such date.

          Section
2.03. Purpose. Borrower shall use the proceeds of the Loans for business
purposes permitted under the Operating Agreement. In no event shall extensions
of credit under the Credit Facility be used in a manner that would violate
Regulation U or in connection with a hostile acquisition or for any illegal
purpose.

          Section
2.04. Amounts of Loans. The Initial Advance in the form of Loans by
Lenders shall be in the minimum amount of $100,000 and in integral multiples of
$25,000 above such amount unless otherwise agreed by Administrative Agent, and
shall be made upon satisfaction of the conditions set forth in Section 4.01.
Subsequent Loans by Lenders shall be made no more frequently than monthly
thereafter, upon satisfaction of the conditions set forth in Section 4.02. The
amount of each Loan by Lenders subsequent to the Initial Advance shall be in
the minimum amount of $100,000 (unless less than said amount is available for
disbursement pursuant to the terms hereof at the time of such Loan, in which
case the amount of such Loan shall be equal to such remaining availability) and
in integral multiples of $25,000 above such amount.

          Section
2.05. Procedure for Loans. Prior to the Maturity Date, Borrower may
borrow Loans under the Credit Facility on any Business Day in an aggregate
principal amount not exceeding the lesser of (A) the aggregate Unused
Commitments then in effect and (B) the Available Commitment then in effect
minus the Aggregate Outstanding Extensions of Credit of all Lenders, provided
that Borrower shall give Administrative Agent irrevocable Requisition (which
Requisition must be received by Administrative Agent prior to 10:00 a.m., New
York time, four (4) Business Days prior to the requested Borrowing Date, which
shall include a certification of Borrower specifying (i) the amount to be
borrowed, (ii) the requested Borrowing Date, and (iii) in reasonable detail,
the Approved Use for which such borrowing is being made and representing that
such Approved Use is in compliance in all respects with the terms of the
Operating Agreement, the Stockholders Agreement and the Credit Documents.
Administrative Agent, upon its receipt and approval of the request for a
borrowing of Loans, will notify all Lenders either by telephone or facsimile.
Not later than 10:00 a.m. (New York time) on the applicable Borrowing Date,
each Lender shall, through its Applicable Lending 

16

Office and subject to the conditions of this Agreement, make its Pro
Rata Share of the total amount of the Loan to be made on such Borrowing Date
available to Administrative Agent, at Administrative Agent’s Office and in
immediately available funds for the account of Borrower. The amount so received by
Administrative Agent shall, subject to the conditions of this Agreement, be
made available to Borrower, in immediately available funds, by Administrative
Agent’s crediting an account of Borrower designated by Borrower in its
Requisition for such Loans. Notwithstanding anything to the contrary contained
herein, Borrower and Lenders acknowledge that (i) the full amount of the Loans
was advanced under the Original Agreement and is outstanding as of the date
hereof and (ii) Borrower is not entitled to any further advances hereunder

          Section
2.06. Notes. The Loans shall be evidenced by a note or notes of Borrower
in the form of Exhibit D, duly completed and executed by Borrower (one
for each Lender in an amount equal to such Lender’s Individual Commitment,
payable for the account of such Lender’s Applicable Lending Office), in an
aggregate principal amount equal to the Credit Amount (such notes, as the same
may hereafter be amended, modified, extended, severed, assigned, substituted,
renewed or restated from time to time (including, without limitation, any
substitute notes pursuant to Section 10.10), each, a “Note” and collectively,
the “Notes”). The Notes include the existing Notes delivered to Lenders
pursuant to the Original Agreement. The Notes shall mature, and all outstanding
principal and other sums thereunder shall be paid in full, on the Maturity
Date, as the same may be accelerated or extended.

          In case of
any loss, theft, destruction or mutilation of any Lender’s Note, Borrower
shall, upon its receipt of an affidavit of an officer of such Lender as to such
loss, theft, destruction or mutilation and, in the case of any such loss, theft
or destruction, an appropriate indemnification, execute and deliver a
replacement Note to such Lender in the same principal amount and otherwise of
like tenor as the lost, stolen, destroyed or mutilated Note.

          Section
2.07. Payments and Distributions. Borrower shall make each payment under
this Agreement and under the Notes not later than 11:00 a.m. (New York time) on
the date when due to Administrative Agent at Administrative Agent’s Office in
immediately available funds. Administrative Agent will thereafter, on the day
of its receipt of each such payment, cause to be distributed to each Lender
such Lender’s appropriate share of the payments of principal and interest, and
its appropriate share of the payments of other sums, in like funds for the
account of such Lender’s Applicable Lending Office. Payments by Borrower
hereunder or under the Notes or other Credit Documents shall be made without
setoff or counterclaim.

          Except to
the extent otherwise provided in this Agreement, whenever any payment to be
made under this Agreement or under the Notes is due on any day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
the payment of interest and, if applicable, fees, as the case may be.

17

               Each Lender’s interest in the Credit Facility shall be of equal
priority with the interest of each other Lender.

          Section 2.08.
Interest. 

               (a)
The unpaid Principal Amount of the Loan from day to day outstanding which is
not past due, shall bear interest at a fluctuating rate of interest equal to
the BBA LIBOR Daily Floating Rate plus the Applicable Margin. The “BBA LIBOR
Daily Floating Rate” shall mean a fluctuating rate of interest equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters
(or other commercially available source providing quotations of BBA LIBOR as
selected by Administrative Agent from time to time) as determined for each
Business Day at approximately 11:00 a.m. London time two (2) London Banking
Days prior to the date in question, for U.S. Dollar deposits (for delivery on
the first day of such interest period) with a one month term, as adjusted from
time to time in Administrative Agent’s sole discretion for reserve
requirements, deposit insurance assessment rates and other regulatory costs. If
such rate is not available at such time for any reason, then the rate will be
determined by such alternative method as reasonably selected by Administrative
Agent. A “London Banking Day” is a day on which banks in London are open for
business and dealing in offshore dollars. Interest shall be computed for the
actual number of days which have elapsed, on the basis of a 360-day year.

               (b)
If Administrative Agent determines that no adequate basis exists for
determining the BBA LIBOR Daily Floating Rate or that the BBA LIBOR Daily
Floating Rate will not adequately and fairly reflect the cost to Lenders of
funding the Loan, or that any applicable law or regulation or compliance
therewith by any Lender prohibits or restricts or makes impossible the charging
of interest based on the BBA LIBOR Daily Floating Rate and such Lender so
notifies Administrative Agent and Borrower, then until Administrative Agent
notifies Borrower that the circumstances giving rise to such suspension no
longer exist, interest shall accrue and be payable on the unpaid principal
balance of this Loan from the date Administrative Agent so notifies Borrower
until the Maturity Date of this Loan (whether by acceleration, declaration,
extension or otherwise) at a fluctuating rate of interest equal to the Prime
Based Rate. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender.

          Section
2.09. Default Rate. If any amount payable by Borrower under any Credit
Document is not paid when due (without regard to any applicable grace periods),
such amount shall thereafter bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable law.

          Section
2.10. Intentionally Omitted. 

          Section
2.11. Intentionally Omitted. 

18

          Section
2.12. Late Payment Premium. Borrower shall pay to Administrative Agent
for the account of Lenders a late payment premium in the amount of 5% of any
payments of principal or interest of any Loan made more than ten (10) days
after the due date thereof, which late payment premium shall be due with any
such late payment.

          Section
2.13. Voluntary Prepayments. Borrower may, upon at least five (5)
Business Days’ notice (which notice shall be irrevocable) to Administrative
Agent (which shall promptly notify each Lender), prepay the Principal Amount,
in whole or part, without premium or penalty; provided, however,
that (i) any partial prepayment under this Section shall be in a principal
amount of not less than $100,000 and an integral multiple of $25,000 and (ii)
each prepayment under this Section shall include all interest accrued on the
amount of principal prepaid (and all late charges and other sums that may be
payable) through the date of prepayment. Amounts prepaid may be not reborrowed.

          Section
2.14. Adverse Events Regarding Investors. In accordance with Section
6.06, Borrower shall promptly notify Administrative Agent of the occurrence of
any one of the following events or existence of any one of the following
conditions (each, an “Adverse Investor Event”):

	
  

 	
  

 
	
  

 	
           (i) such
 Investor or its Sponsor or Responsible Party or Investor Guarantor, if any,
 shall commence a voluntary case or other proceeding seeking liquidation,
 reorganization or other relief with respect to itself or its debts under any
 bankruptcy, insolvency or other similar law now or hereafter in effect or
 seeking the appointment of a trustee, receiver, liquidator, custodian or
 other similar official of it or any substantial part of its property, or
 shall consent to any such relief or to the appointment of or taking
 possession by any such official in an involuntary case or other proceeding
 commenced against it, or shall make a general assignment for the benefit of
 creditors, or shall fail generally to pay its debts as they become due;

 
	
  

 	
  

 
	
  

 	
           (ii) an
 involuntary case or other proceeding shall be commenced against such Investor
 or its Sponsor or Responsible Party or Investor Guarantor, if any, seeking
 liquidation, reorganization or other relief with respect to it or its debts
 under any bankruptcy, insolvency or other similar law now or hereafter in
 effect or seeking the appointment of a trustee, receiver, liquidator,
 custodian or other similar official of it or any substantial part of its
 property, and such involuntary case or other proceeding shall remain
 undismissed and unstayed for a period of sixty (60) days; or an order for relief
 shall be entered against such Investor or its Sponsor or Responsible Party or
 Investor Guarantor, if any, under the federal bankruptcy laws as now or
 hereafter in effect;

 
	
  

 	
  

 
	
  

 	
           (iii)
 such Investor shall fail to timely fund a Capital Call subject to notice and
 time to cure in accordance with the terms of the Operating Agreement or the
 Stockholders Agreement (which cure period shall in no event exceed thirty
 (30) days), shall repudiate, challenge or declare unenforceable its
 obligation to fund Capital Contributions, or shall otherwise disaffirm, opt
 out of, be excused 

 

19

	
  

 	
  

 
	
  

 	
 from or default under, or breach the terms of, the Stockholders
 Agreement or the Operating Agreement in any material respect;

 
	
  

 	
  

 
	
  

 	
           (iv) one
 or more judgments or decrees in an aggregate amount equal to ten percent
 (10%) or more of its net worth shall be entered by a court or courts of
 competent jurisdiction against such Investor or its Sponsor or Responsible
 Party or Investor Guarantor, if any (other than any judgment as to which, and
 only to the extent, a reputable insurance company has acknowledged coverage
 of such claim in writing or has acknowledged in writing its willingness to
 defend any such claim under a reservation of rights), and (A) any such
 judgments or decrees shall not be stayed, discharged, paid, bonded or vacated
 within thirty (30) days or (B) enforcement proceedings shall be commenced by
 any creditor on any such judgments or decrees;

 
	
  

 	
  

 
	
  

 	
           (v) such
 Investor or its Investor Guarantor, if any, shall breach any obligation
 acknowledged under or made to Administrative Agent and Lenders in its
 Investor Acknowledgment (excluding any obligation to honor a Capital Call
 made by Administrative Agent, as Administrative Agent, Lenders and Borrower
 shall agree, contemporaneously herewith, to terminate the Capital
 Contributions Pledge Agreement and Administrative Agent’s rights to make
 Capital Calls), in any guaranty related to such Investor Acknowledgment or in
 the Stockholders Agreement in any material respect, or any representation,
 warranty, certification or statement made by or on behalf of such Investor or
 its Investor Guarantor, if any, in the Stockholders Agreement, its Investor
 Acknowledgment, in any guaranty related to such Investor Acknowledgment or in
 any certificate, financial statement or other document delivered pursuant to
 this Agreement or such documents, shall have been false or misleading when
 made and such false or misleading statements could reasonably be expected to
 have a material adverse effect on the ability of such Investor to fund its
 Capital Commitment;

 
	
  

 	
  

 
	
  

 	
           (vi) if
 either Moody’s and/or S&P downgrade the credit rating of, or cease to
 provide a credit rating for, any Investor or its Investor Guarantor, if any,
 which as of the date hereof has a credit rating from Moody’s and/or S&P;

 
	
  

 	
  

 
	
  

 	
           (vii) the
 transfer or assignment of its indirect interest in Borrower, or withdrawal
 from, Borrower or Acadia Investors II by such Investor;

 
	
  

 	
  

 
	
  

 	
           (viii)
 the failure by such Investor to comply in any material respect with the terms
 of, or the provisions of the Operating Agreement or the Stockholders
 Agreement acknowledged in, its Investor Acknowledgment, after Administrative
 Agent has notified Borrower in writing that such failure has occurred and
 will be treated as an Adverse Investor Event, and such Investor fails to
 comply with such terms or provisions within fifteen (15) Business Days after
 Administrative Agent’s delivery of such notice to Borrower; or

 
	
  

 	
  

 
	
  

 	
           (ix) the
 failure by Managing Member or Acadia Investors II to deliver to
 Administrative Agent within forty-five (45) days after notice thereof is 

 

20

	
  

 	
  

 
	
  

 	
 delivered to Borrower (A) the financial statements required to be
 delivered by such Investor pursuant to the Investor Acknowledgment executed
 by such Investor, and (B) from time to time upon the reasonable request of
 Administrative Agent, a certificate for such Investor setting forth the
 remaining amount of its Capital Commitment which it is obligated to fund.

 

          Section
2.15. Mandatory Prepayments. If on any date the Aggregate Outstanding
Extensions of Credit of all Lenders exceed the Available Commitment, Borrower
shall immediately on such date prepay the Loans in an amount equal to the
amount of such excess.

          Section
2.16. Intentionally Omitted. 

          Section
2.17. Permanent Loan/No Letters of Credit. The credit facility under the
Original Agreement was a revolving credit facility which included availability
of letters of credit. As amended and restated hereby, the Credit Facility is
modified to be a permanent loan which has been fully advanced under the
Original Agreement. Neither Administrative Agent nor any Lender is obligated
to, or will, issue any letters of credit as part of the Credit Facility and
there are no existing letters of credit which are part of the Credit Facility.

 ARTICLE III

 INTENTIONALLY OMITTED

 ARTICLE IV

CONDITIONS PRECEDENT

          Section
4.01. Conditions Precedent to Initial Advance. Lenders shall not be
obligated to make the Initial Advance hereunder until the following conditions
shall have been satisfied:

	
  

 	
  

 
	
  

 	
           (a) There
 shall exist no Default or Event of Default, and no Default or Event of
 Default would result from the making of the Initial Advance;

 
	
  

 	
  

 
	
  

 	
           (b) The
 representations and warranties made to Administrative Agent or Lenders
 herein, in the other Credit Documents and in any other document, certificate
 or statement executed or delivered to Administrative Agent or Lenders in connection
 with the Credit Facility shall be true and correct on and as of the date of
 the advance with the same effect as if made on such date;

 
	
  

 	
  

 
	
  

 	
           (c)
 Lenders shall have received and approved each of the following:

 

21

	
  

 	
  

 
	
  

 	
           (1) Fees
 and Expenses. (i) Those fees required by the Supplemental Fee Letter to
 be paid on or before the date hereof, to be retained by Administrative Agent
 and/or BofA for its own account or as otherwise agreed among Lenders whether
 or not any Loan is advanced or any Letters of Credit are issued; and (ii) all
 fees and expenses incurred by Administrative Agent (including, without
 limitation, the reasonable fees and expenses of Administrative Agent’s
 Counsel);

 
	
  

 	
  

 
	
  

 	
           (2) Credit
 Documents and the Supplemental Fee Letter. This Agreement, each of the
 other Credit Documents, including, without limitation, the Supplemental Fee
 Letter, duly executed by the parties thereto, and, where applicable, duly
 acknowledged and in proper form for recording or filing, as the case may be,
 and all necessary or desirable recordings and filings shall have been duly
 made (Administrative Agent and Lenders hereby acknowledge that Administrative
 Agent has received all requisite Investor Acknowledgments in connection with
 the Original Agreement);

 
	
  

 	
  

 
	
  

 	
           (3) Financial
 Statements. Current Financial Statements and such other financial data as
 Administrative Agent shall require;

 
	
  

 	
  

 
	
  

 	
           (4) Actions
 to Perfect Liens. Evidence that all filings, recordings, registrations
 and other actions, including, without limitation, the filing of duly executed
 financing statements on form UCC-l, necessary or, in the reasonable opinion
 of Administrative Agent, desirable to perfect the Liens created by the
 Security Documents shall have been completed;

 
	
  

 	
  

 
	
  

 	
           (5)Insurance. Evidence that all of
 the requirements of Section 6.09 have been satisfied;

 
	
  

 	
  

 
	
  

 	
           (6) Closing
 Certificate. A certificate of Borrower and of Managing Member, each dated
 the Closing Date, substantially in the form of Exhibit E, with
 appropriate insertions and attachments, executed by Borrower or Managing
 Member, as the case may be;

 
	
  

 	
  

 
	
  

 	
           (7) Certificate
 regarding Capital Commitments. A certificate regarding Capital
 Commitments, substantially in the form of Exhibit G, showing the
 Capital Commitments and Unpaid Capital Commitments of all Investors as of the
 Closing Date with appropriate insertions and dated the Closing Date, executed
 by Borrower;

 
	
  

 	
  

 
	
  

 	
           (8) Corporate
 Proceedings of Borrower. A copy of the resolutions of the board of
 directors of Acadia Investors II and of Parent, as sole member of the
 Managing Member, on behalf of Borrower authorizing (i) the execution,
 delivery and performance of this Agreement and the other Credit Documents,
 (ii) the borrowings and other extensions of credit contemplated hereunder and
 (iii) the granting by it of the Liens

 

22

	
  

 	
  

 
	
  

 	
 created pursuant to the Security Documents to which it is a party,
 certified by the Secretary or an Assistant Secretary of such corporations as
 of the Closing Date, which certificate shall state that the resolutions
 thereby certified have not been amended, modified, revoked or rescinded;

 
	
  

 	
  

 
	
  

 	
           (9) Borrower
 Incumbency Certificate. A certificate, dated the Closing Date, as to the
 incumbency and signature of the officers of the Parent, Managing Member and
 Acadia Investors II executing any Credit Document, executed by the Secretary
 or any Assistant Secretary of such entities;

 
	
  

 	
  

 
	
  

 	
           (10) Investor
 Documents. True and complete copies of the financial statements
 contemplated by the Investor Acknowledgment of each Investor;

 
	
  

 	
  

 
	
  

 	
           (11) Additional
 Matters. All corporate and other proceedings, and all documents,
 instruments and other legal matters in connection with the transactions
 contemplated by this Agreement, the other Credit Documents, the Operating
 Agreement and the Stockholders Agreement and such other documents and legal
 opinions in respect of any aspect or consequence of the transactions
 contemplated hereby or thereby as Administrative Agent shall reasonably
 request;

 
	
  

 	
  

 
	
  

 	
           (12) Investor
 Acknowledgments. Investor Acknowledgments from each Investor, duly
 executed and delivered by each Investor;

 
	
  

 	
  

 
	
  

 	
           (13) Borrower
 Counsel Opinions. Opinions of counsel for Borrower, Managing Member and
 Acadia Investors II;

 
	
  

 	
  

 
	
  

 	
           (14) Organizational
 Documents. If Borrower, Guarantor or any general partner or member of
 Borrower is a corporation, current copies of the following documents with
 respect to each (unless otherwise indicated):

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i) a
 good-standing certificate from the jurisdiction of its incorporation, 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (ii) a
 resolution, certified by the corporate secretary, of the shareholders or
 directors of such corporation authorizing the consummation of the
 transactions contemplated hereby and the execution, delivery and performance
 of the Credit Documents and any other documents to be executed, delivered or
 performed by said corporation (including any substitute or replacement Notes
 to be executed and delivered pursuant to the terms hereof), and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iii) a
 certificate of the corporate secretary as to the incumbency of the officers
 executing any of the documents required hereby, 

 

23

	
  

 	
  

 	
  

 
	
  

 	
 and, if Borrower, Guarantor or any partner or member of Borrower is a
 partnership, venture, limited liability company or trust:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (iv) such
 entity’s organizational agreement and all amendments and attachments thereto,
 certified by a general partner, venturer, member or trustee to be true and
 complete,

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (v) any
 certificates filed or required to be filed by such entity in the
 jurisdictions of its formation and any other jurisdiction where it does
 business, and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (vi)
 evidence of the authorization of the consummation of the transactions
 contemplated hereby and the execution, delivery and performance of the Credit
 Documents and any other documents to be executed, delivered and performed by
 said entity (including any substitute or replacement notes to be executed and
 delivered pursuant to the terms hereof), and including any required consents
 by partners, venturers, members, trustees or beneficiaries;

 
	
  

 	
  

 	
  

 
	
  

 	
           (15) Chattel
 Searches. UCC, judgment and lien searches against Borrower to the effect
 that searches of proper public records disclose no financing statements filed
 or recorded against Borrower and no other breaches of this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
           (16) Requisition.
 A Requisition for the Initial Advance; and

 
	
  

 	
  

 	
  

 
	
  

 	
           (17) Additional
 Documentation. Such other approvals, opinions or documents as
 Administrative Agent may reasonably request;

 
	
  

 	
  

 	
  

 
	
           (d)
 Immediately after such extension of credit, the Aggregate Outstanding
 Extensions of Credit of all Lenders will not exceed the Available Commitment;
 and

 
	
  

 	
  

 	
  

 
	
           (e) No
 condition or event shall have occurred which has a Material Adverse Effect.

 

	
  

 
	
 ARTICLE V

 
	
  

 
	
 REPRESENTATIONS AND WARRANTIES

 

               Borrower
represents and warrants to Administrative Agent and Lenders that:

          Section
5.01. Due Formation, Power and Authority. If Borrower, Guarantor or any
general partner or member of Borrower is a corporation, partnership, venture,
limited liability company or trust, each such entity is duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
formation and has full power and authority to own or lease its property, to
conduct its business as presently and as proposed

24

to be conducted and to consummate the transactions contemplated hereby
and to execute, deliver and perform this Agreement and any other Credit
Document to which it is a party. 

          Section
5.02. Legally Enforceable Agreements. Each of the Supplemental Fee
Letter and each Credit Document to which Borrower, Managing Member, Acadia
Investors II or Guarantor is a party is a legal, valid and binding obligation
of such party, enforceable against Borrower or Guarantor, as the case may be,
in accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar Laws affecting
creditors’ rights generally.

          Section
5.03. Financial Statements. Financial Statements have been heretofore delivered
to Lenders which are true, correct and current in all respects and which fairly
present the respective financial conditions of the subjects thereof as of the
respective dates thereof; no material adverse change has occurred in the
financial conditions reflected therein since the respective dates thereof and
no borrowings or other extensions of credit (other than under the Credit
Facility) which might give rise to a lien or claim against the proceeds of the
Credit Facility have been made by or to Borrower or others since the dates
thereof.

          Section
5.04. Compliance With Laws; Payment of Taxes. Borrower and Guarantor are
in compliance with, and the transactions contemplated hereby and by the other
Credit Documents do not and will not violate any provision of, or require any
filing, registration, consent or approval under, any Law presently in effect
having applicability to Borrower or Guarantor; and Borrower has filed all tax
returns (federal, state and local) required to be filed and has paid all taxes,
assessments and governmental charges and levies due and payable, including
interest and penalties.

          Section
5.05. Litigation. There are no actions, suits or proceedings pending or
threatened against or affecting Borrower, Guarantor, the validity or
enforceability of any of the Security Documents or the priority of any of the
liens created thereby at law, in equity or before or by any Governmental
Authorities except actions, suits or proceedings which have been disclosed to
Administrative Agent and Lenders in writing and which are fully covered by
insurance or would, if adversely determined, not substantially impair the
ability of Borrower or Guarantor to pay when due any amounts which may become
payable hereunder or under the Notes or the Guaranty or the other Credit
Documents or to otherwise pay and perform their respective obligations in
connection with the Credit Facility; to Borrower’s knowledge, neither Borrower
nor Guarantor is in default with respect to any order, writ, injunction, decree
or demand of any court or Governmental Authority.

          Section
5.06. No Conflicts or Defaults. The consummation of the transactions
contemplated hereby and the performance hereof and of the other Credit
Documents have not resulted and will not result in any breach of, or constitute
a default under, any mortgage, deed of trust, lease, bank loan or credit
agreement, corporate charter, by-laws, partnership agreement or other
instrument to which Borrower or Guarantor is a party or by which Borrower may
be bound or affected.

25

          Section
5.07. Solvency. Borrower and Guarantor are, and upon consummation of the
transactions contemplated by this Agreement, the other Credit Documents and any
other related documents, will be, solvent.

          Section
5.08. Governmental Regulation. Borrower is not subject to regulation
under the Investment Company Act of 1940 or any Law limiting its ability to
incur indebtedness for money borrowed as contemplated hereby.

          Section
5.09. Insurance. Borrower has, with respect to its properties and
business, insurance covering risks, in amounts, with deductibles or other
retention amounts, and with carriers, which meet the requirements of Section
6.09 as of the date hereof.

          Section
5.10. ERISA. Neither Borrower nor Guarantor nor any other Person,
including any fiduciary, has engaged in any prohibited transaction (as defined
in Section 4975 of the Code or Section 406 of ERISA) which could subject
Borrower or Guarantor or any Person whom they have an obligation to indemnify
to any tax or penalty imposed under Section 4975 of the Code or Section 502 of
ERISA; neither Borrower nor Guarantor nor any ERISA Affiliate maintains,
contributes to or has any liability with respect to a Multiemployer Plan or any
other plan subject to Title IV of ERISA; each Employee Benefit Plan is
administered in accordance with its terms and in compliance with all applicable
Laws, including any reporting requirements; each Pension Plan intending to
qualify under Section 401(a) or 401(k) of the Code does so qualify; there is no
lien outstanding or security interest given in connection with a Pension Plan;
neither Borrower nor Guarantor nor any ERISA Affiliate has any liability with
respect to an accumulated funding deficiency (whether or not waived) under
Section 412 of the Code or Section 302 of ERISA; neither Borrower nor Guarantor
has any liability for retiree medical or death benefits (contingent or
otherwise) other than as required by Section 4980B of the Code; and no part of
the funds to be used by Borrower or Guarantor in satisfaction of Borrower’s
obligations under this Agreement and the other Credit Documents constitute
“plan assets” of any “employee benefit plan” within the meaning of ERISA or of
any “plan” within the meaning of Section 4975(e)(1) of the Code, as interpreted
by the Internal Revenue Service and the United States Department of Labor in
rules, regulations, releases or bulletins or as interpreted under applicable
case law. The DuPont Pension Trust and Gloster, LLC are the only investors in
Acadia Strategic Opportunity Fund II, LLC, Acadia Realty Acquisition II, LLC
and Acadia Investors II, Inc. that are either: (i) an employee benefit plan as
defined in Section 3(3) of ERISA; or (ii) an entity holding Plan Assets (within
the meaning of the plan assets regulation set forth in 29 C.F.R.
§ 2510.3-101) in which such an employee benefit plan holds an equity
interest.

          Section
5.11. No Default. There exists no Default or Event of Default.

          Section 5.12.
Liens. None of the Collateral is subject to any Lien except as created
by the Security Documents.

26

          Section
5.13. Federal Regulations. No part of the proceeds of any Loan made
under, and no other extension of credit under, the Credit Facility will be used
for “purchasing” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect, or for any purpose which violates, or which would be inconsistent
with, the provisions of the regulations of such Board of Governors. If
requested by any Lender or Administrative Agent, Borrower will furnish to
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U.

          Section
5.14. Subsidiaries. Exhibit H sets forth the name of each direct
or indirect Subsidiary, its form of organization, its jurisdiction of
organization, the total number of issued and outstanding shares or other
interests of Capital Stock thereof, the classes and number of issued and
outstanding shares or other interests of Capital Stock of each such class, the
name of each holder of Capital Stock thereof and the number of shares or other
interests of such Capital Stock held by each such holder and the percentage of
all outstanding shares or other interests of such class of Capital Stock held
by such holders.

          Section
5.15. Security Documents. 

               (a)
The provisions of each Security Document are effective to create in favor of
Administrative Agent for the ratable benefit of Lenders a legal, valid and
enforceable security interest in all right, title and interest of the Credit
Party party thereto in the “Collateral” described therein.

               (b)
The Cash Collateral Agreement and the Capital Events Collateral Security
Agreement constitute a fully perfected first Lien on, and security interest in,
all right, title and interest of Borrower in the Collateral.

          Section
5.16. Purpose of Credit. The proceeds of the Loans made under, and the
other extensions of credit under, the Credit Facility shall be used by Borrower
to make Investments, to pay expenses of Borrower in the ordinary course of
business and for such other uses as are expressly permitted by the Operating
Agreement (collectively, “Approved Uses”), all in accordance with, and subject
to the limitations and restrictions contained in, the Operating Agreement.

          Section
5.17. Environmental Matters. Borrower has not received any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any Investment, or of any release or threat of release of Materials
of Environmental Concern at or from any real property comprising or underlying
any Investment, in violation of or in amounts or in a manner that could
reasonably give rise to liability under Environmental Laws, nor does Borrower
have knowledge or reason to believe that any such notice will be received or is
being threatened, except in each case insofar as such notice or threatened
notice, or any aggregation thereof, does not involve a matter or matters that
is or are reasonably likely to have a Material Adverse Effect.

27

          Section
5.18. Capital Commitments. As of the date hereof, the aggregate amount
of Unpaid Capital Commitments of Managing Member and all Investors is $50,384,957.
Exhibit B sets forth in detail, as of the date hereof, the Capital
Commitments and Unpaid Capital Commitments of each Investor and of Managing
Member. As of the date hereof, no Investor has defaulted in paying its Capital
Calls.

          Section
5.19. Accuracy of Information; Full Disclosure. Neither this Agreement
nor any documents, financial statements, reports, notices, schedules,
certificates, statements or other writings furnished by or on behalf of
Borrower or Guarantor to Administrative Agent or Lenders in connection with the
negotiation of this Agreement or the other Credit Documents or the consummation
of the transactions contemplated hereby, or required herein or by the other
Credit Documents to be furnished by or on behalf of Borrower or Guarantor,
contains any untrue or misleading statement of a material fact or omits a
material fact necessary to make the statements herein or therein not
misleading; there is no fact which Borrower has not disclosed to Administrative
Agent and Lenders in writing which materially affects adversely nor, so far as
Borrower can now foresee, will materially affect adversely the business affairs
or financial condition of Borrower or Guarantor, or the ability of Borrower or
Guarantor to perform this Agreement and the other Credit Documents.

          Section
5.20. Requisition as Reaffirmation. Each Requisition submitted to
Administrative Agent, and the receipt of the proceeds of the Loan(s) requested
thereby, shall constitute an affirmation by Borrower that the representations
and warranties contained herein and in the other Credit Documents remain true
and correct as of the date of such Requisition.

ARTICLE VI

AFFIRMATIVE COVENANTS OF BORROWER

               Borrower
covenants and agrees that it will promptly:

          Section
6.01. Compliance with Laws; Payment of Taxes. Comply with all Laws
applicable to it, such compliance to include, without limitation, paying before
the same become delinquent all taxes, assessments and governmental charges
imposed on it and promptly furnish Administrative Agent and Lenders with
reports of any official searches made by Governmental Authorities and any
claims of violations thereof.

          Section
6.02. Continuing Accuracy of Representations and Warranties. Cause all
of the representations and warranties made to Administrative Agent or Lenders
herein and in the other Credit Documents to be continuously true and correct.

          Section
6.03. Payment of Costs. Pay all costs and expenses required for and the
satisfaction of the conditions hereof, including, without limitation, all
document and stamp taxes, recording and filing expenses and fees and
commissions lawfully due to brokers in connection with the transactions
contemplated hereby.

28

          Section
6.04. Brokers. Indemnify Administrative Agent and Lenders against claims
of brokers arising by reason of the execution hereof or the consummation of the
transactions contemplated hereby.

          Section
6.05. Intentionally Omitted. 

          Section
6.06. Reporting Requirements. Furnish to Administrative Agent (it being
understood that Administrative Agent shall provide, promptly following receipt,
to each Lender):

	
  

 	
  

 
	
  

 	
           (1) Annual
 Financial Statements; Tax Returns. As soon as available and in any event
 within one hundred twenty (120) days after the end of the respective fiscal
 years of Borrower and Parent, Financial Statements of Borrower and Parent, as
 of the end of and for such fiscal year, certified by the principal financial
 or accounting officer of Borrower or Parent, as the case may be, in
 reasonable detail, stating in comparative form the respective figures for the
 preceding fiscal year and audited by a firm of certified public accountants
 reasonably satisfactory to Administrative Agent; and complete copies of the
 federal and state income tax returns of Borrower and Guarantor, within thirty
 (30) days of filing, provided that, notwithstanding the foregoing, so long as
 Parent timely files 10Q and 10K reports with the Securities and Exchange
 Commission, Parent shall have complied with this Subsection and Subsection
 (2) below;

 
	
  

 	
  

 
	
  

 	
           (2) Quarterly
 Financial Statements. As soon as available and in any event within sixty
 (60) days after the end of each calendar quarter, Financial Statements of
 Borrower and Parent, as of the end of and for such calendar quarter,
 certified by the principal financial or accounting officer of Borrower or
 Parent, as the case may be, in reasonable detail and stating in comparative
 form the respective figures for the corresponding date and period in the
 preceding fiscal year together with an updated Projected Sources and Uses
 Statement in the form of Exhibit N;

 
	
  

 	
  

 
	
  

 	
           (3) Certificate
 of No Default. At the time of the delivery of the Financial Statements
 required by paragraph (2) above, a certificate of the principal financial or
 accounting officer of Borrower or Parent, as the case may be, dated within
 five (5) days of the delivery of such statements to Administrative Agent,
 stating that Borrower during the period covered by such Financial Statements
 has observed or performed all of its covenants and other agreements in all
 material respects, and satisfied every material condition, contained in this
 Agreement and the other Credit Documents to be observed, performed or
 satisfied by it, and that such officer knows of no Default or Event of
 Default which has occurred and is continuing, or, if any such Default or
 Event of Default has occurred and is continuing, specifying the nature and
 period of existence thereof and what action Borrower has taken or proposes to
 take with respect thereto;

 
	
  

 	
  

 
	
  

 	
           (4) Notice
 of Litigation. Promptly after the commencement and knowledge thereof,
 notice of all actions, suits and proceedings before any court or 

 

29

	
  

 	
  

 
	
  

 	
 arbitrator or any Governmental Authorities, affecting Borrower,
 Managing Member, Acadia Investors II, Guarantor, Parent or any of Borrower’s
 Investments, provided, however, that such notice shall not be required with
 respect to personal injury claims which are fully covered by applicable
 insurance policies in place or with respect to suits claiming damages of
 $50,000 or less;

 
	
  

 	
  

 
	
  

 	
           (5) Notices
 of Defaults. As soon as possible and in any event within ten (10) days
 after Borrower becomes aware of the occurrence of a Default or Event of
 Default, a written notice setting forth the details of such Default or Event
 of Default and the action that has been taken or is proposed to be taken with
 respect thereto;

 
	
  

 	
  

 
	
  

 	
           (6) Compliance
 Certificates. As soon as available and in any event within thirty (30)
 days after the end of each fiscal quarter of Borrower, a certificate of the
 principal financial or accounting officer of Borrower in the form attached as
 Exhibit G setting forth (i) the Capital Commitments and Unpaid Capital
 Commitment of the Managing Member and all of the Investors (all as of the end
 of the relevant quarter), (ii) a detailed calculation of Borrower’s Liquidity
 and (iii) specifying changes, if any, in the names of Investors. As soon as
 available and in any event within thirty (30) days after the end of each
 fiscal quarter of Guarantor, a certificate of the principal financial or
 accounting officer of Guarantor or Parent regarding compliance with the
 covenants set forth in the Guaranty, such certificate to be in the form
 prescribed in the Guaranty;

 
	
  

 	
  

 
	
  

 	
           (7) Financial
 Statements to Investors. To the extent not otherwise provided hereunder,
 promptly upon the mailing or other transmittal thereof to the Investors
 generally, copies of all financial statements, reports and other information
 related to Borrower or any Investments so mailed or otherwise transmitted;

 
	
  

 	
  

 
	
  

 	
           (8) Events
 Affecting Available Commitment. Promptly upon the receipt thereof, copies
 of all financial statements, notices of changes or possible changes in any
 Investor’s credit rating, and notices of default, notices relating in any way
 to an Investor’s funding obligation or change in such Investor’s financial
 condition and any notice containing any reference to misconduct of Managing
 Member or Borrower and promptly and in any event within five (5) Business
 Days after Borrower obtains actual knowledge of the occurrence of an Adverse
 Investor Event, a notice setting forth such Adverse Investor Event;

 
	
  

 	
  

 
	
  

 	
           (9) Environmental
 Matters. Promptly and in any event within ten (10) Business Days after
 Borrower obtains actual knowledge of any of the following events, a
 certificate of Borrower specifying the nature of such condition and
 Borrower’s proposed initial response thereto: (i) the receipt by Borrower of
 any written communication, whether from a Governmental Authority, citizens
 group, employee or otherwise, that alleges that Borrower is not in compliance
 with applicable Environmental Laws, and such noncompliance is likely to have
 a Material Adverse Effect, (ii) Borrower shall obtain actual knowledge that
 there 

 

30

	
  

 	
  

 
	
  

 	
 exists any environmental claim pending or threatened against Borrower
 which, if adversely determined is reasonably likely to have a Material
 Adverse Effect, or (iii) Borrower obtains actual knowledge of any release,
 emission, discharge or disposal of any Hazardous Material that is likely to
 form the basis of any environmental claim against Borrower which, if
 adversely determined is reasonably likely to have a Material Adverse Effect;

 
	
  

 	
  

 
	
  

 	
           (10) Capital
 Demand Notices. Copies of each Capital Demand Notice delivered to the
 Investors and any other notice, report or opinion of counsel sent to or
 received from any Investor relating to the funding of Capital Contributions
 or the making of Capital Calls within three (3) Business Days after the same
 is sent to or received from any Investor;

 
	
  

 	
  

 
	
  

 	
           (11) Investor’s
 Annual Financial Statements. Within thirty (30) days of request by
 Administrative Agent, given not earlier than ninety (90) days after the end
 of any calendar year, financial statements of The Dupont Pension Trust and
 The William and Flora Hewlett Foundation, as of the end of and for the most
 recently ended calendar year, in form and substance prepared, certified and
 formatted in the same manner as the financial statements previously delivered
 by such Investors to Administrative Agent, certified by the principal
 financial or accounting officer of each such entity, in reasonable detail,
 stating in comparative form the respective figures as of the end of and for
 the preceding fiscal year and audited by the firm of certified public
 accountants which audited the statements heretofore given to Administrative
 Agent or another firm of certified public accountants reasonably satisfactory
 to Administrative Agent;

 
	
  

 	
  

 
	
  

 	
           (12) Other
 Investor Information. (i) Promptly after receipt thereof, the financial
 information respecting each Investor required to be delivered by each
 Investor pursuant to the Investor Acknowledgment executed by such Investor,
 and (ii) from time to time upon the reasonable request of Administrative
 Agent, a certificate for any Investor setting forth the remaining amount of
 its Unpaid Capital Commitment; and

 
	
  

 	
  

 
	
  

 	
           (13) General
 Information. Promptly, such other information respecting the condition or
 operations, financial or otherwise, of Borrower, Guarantor, Parent, Managing
 Member or Acadia Investors II as Administrative Agent may from time to time
 reasonably request.

 

          Section 6.07.
Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except (other than with respect to the Credit
Facility) where the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of Borrower or its
Subsidiaries, as the case may be.

          Section
6.08. Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and
preserve, renew 

31

and keep in full force and effect its existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business; and comply with all of its contractual
obligations and all Laws except to the extent that failure to comply therewith
could not, in the aggregate, be reasonably expected to have a Material Adverse
Effect.

          Section
6.09. Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability insurance) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to Lender, upon written request, full information as to
the insurance carried.

          Section
6.10. Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Laws shall be made of all dealings and
transactions in relation to its business and activities; and permit
representatives of each Lender to visit the site of any Investment and
Borrower’s offices and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Borrower and its Subsidiaries with officers and employees of Borrower and
its Subsidiaries and with its independent certified public accountants.

          Section
6.11. Environmental Laws. Comply with, and take commercially reasonable
measures to ensure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material respects
with and maintain, and take commercially reasonable measures to ensure that all
tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.

          Section
6.12. Further Assurances. 

               (a)
Borrower shall deliver such security agreements, financing statements,
assignments and other collateral documents (all of which shall be deemed part
of the Security Documents), in form and substance reasonably satisfactory to
Administrative Agent, as Administrative Agent acting on behalf of Lenders may
reasonably request from time to time for the purpose of granting to, or
maintaining or perfecting in favor of, Lenders, first and exclusive security
interests in any of the Collateral, together with other reasonable assurances
as to the enforceability and priority of Lenders’ liens and assurances of due
recording and documentation of copies of the Security Documents, as
Administrative Agent may reasonably require to avoid impairment of the liens and
security interests granted or purported to be granted pursuant to the Credit
Documents.

32

               (b)
If Managing Member shall receive any request for transfer of the interest of
any Investor and Managing Member shall be prepared to grant such request, it
shall promptly notify Administrative Agent and shall send to Administrative
Agent all information about such proposed transfer as Managing Member shall
receive or otherwise become aware of. In the event that the Investor proposing
to transfer its interest (the “Transferor”) has not fully funded its Capital
Commitment, then, prior to the effectiveness of any such transfer, Managing
Member shall request in writing the consent of Administrative Agent to such
transfer. If Administrative Agent does not consent to the transfer, Managing
Member shall not, to the extent within Managing Member’s rights, permit such
transfer.

          Section
6.13. Subscription Account. Borrower shall establish and maintain with
Administrative Agent the Subscription Account into which all Capital
Contributions contributed by the Investors shall be deposited and maintained
until application of same in accordance with Section 11.01.

          Section
6.14. Investor Reaffirmations and Guaranties. Borrower shall cause each
Investor to execute and deliver to Administrative Agent a reaffirmation of such
Investor’s Capital Commitment dated as of a date not earlier than
November 1, 2010 in the form attached hereto as Exhibit K
(“Investor Reaffirmations”) on or before February 22, 2011. Borrower shall
cause each of Yale University, Fourth Century, LLC, Yale University Retirement
Plan for Staff Employees and Yale University Retiree Health Benefits Coverage
Trust to execute and deliver to Administrative Agent reaffirmations of the guaranty
and comfort letter from such entities regarding their credit support of Gloster
LLC dated as of a date not earlier than November 1, 2010 in the form
attached hereto as Exhibit L (collectively, the “Gloster Principal
Reaffirmations”) on or before February 22, 2011. Borrower shall cause
Vanderbilt to execute and deliver to Administrative Agent a reaffirmation of
the Vanderbilt Guaranty (the “Vanderbilt Reaffirmation”) in the form attached
hereto as Exhibit M on or before February 22, 2011.

          Section
6.15. Sales by Subsidiaries. Borrower shall not sell, assign, transfer
or convey any of its interests in any of its Subsidiaries, and shall not permit
any Subsidiary to sell any real estate interests owned by such Subsidiary,
unless within two (2) Business Days after such sale, Borrower causes the
Release Price applicable to such Subsidiary and its property to be paid to
Administrative Agent to be applied in reduction of the Principal Amount or, if
specified by Borrower in a notice to Administrative Agent given on or before
the date the applicable Release Price is paid to Administrative Agent, to be
deposited in the Deposit Account. If Borrower proposes to make a sale of any
less than all of its interest in any Subsidiary, or to have a Subsidiary sell less
than all of its real property, Borrower shall be required to notify
Administrative Agent at least thirty (30) days prior to any such sale with a
detailed description of the proposed transaction, and the Release Price with
respect to such partial sale shall be equitably adjusted from the full release
price, such adjustment to be determined by Administrative Agent in
Administrative Agent’s sole and absolute discretion. Borrower shall promptly
deliver true and complete copies of sales agreements and amendments thereto,
completed transfer tax forms and filings, and closing statements from any sale
referred to in this 

33

Section, together with such other information as Administrative Agent
shall reasonably request in advance to confirm the correct Release Price
applicable to such transaction.

          Section
6.16. Refinancing by Subsidiaries. Borrower shall not permit any
subsidiary to refinance any existing Indebtedness unless, within two (2)
Business Days after such refinance, Borrower causes the Net Refinance Proceeds
with respect to such transaction to be paid to Administrative Agent to be
applied in reduction of the Principal Amount or, if specified by Borrower in a
notice to Administrative Agent given on or before the date the applicable Net
Refinance Proceeds are paid to Administrative Agent, to be deposited in the
Deposit Account.

          Section
6.17. Projected Sources and Uses. Exhibit N attached hereto and
made a part hereof sets forth Borrower’s good faith projection of (i) the
amounts of funds which will be required in the operation of Borrower and its
Subsidiaries, and planned development of Investments (collectively, the
“Projected Uses”) and (ii) the sources of funds which will be available to
Borrower to fund such operations (collectively, the “Projected Sources”). Exhibit
N covers the period commencing with the most recently ended calendar
quarter through the Maturity Date and Borrower shall provide to Administrative
Agent on a quarterly basis an updated statement (a “Projected Sources and Uses
Statement”) of Projected Sources and Projected Uses for the remaining period
through the Maturity Date (the “Sources and Uses Period”). If at any time
Administrative Agent determines that Projected Uses exceed Projected Sources
(each as reasonably determined by Administrative Agent), Borrower shall be
required, within ten (10) days of notice from Administrative Agent to deposit
the amount specified by Administrative Agent into the Deposit Account so that
Projected Sources (which shall include amounts on deposit in the Deposit
Account) equal Projected Uses.

          Section
6.18. Conditional Use of Funds on Deposit in the Deposit Account.
Borrower may requisition funds in the Deposit Account to pay for Projected Uses
set forth on a Projected Sources and Uses Statement reasonably acceptable to
Administrative Agent and, provided the following conditions are satisfied,
Administrative Agent shall release such funds to Borrower: (i) no Default or
Event of Default exists; (ii) no more than $17,750,000 in the aggregate from
Release Prices and Net Refinance Proceeds may be released from the Deposit
Account; (iii) following any such release, Administrative Agent shall have
determined, in Administrative Agent’s reasonable discretion, that Projected
Uses will not exceed Projected Sources for the then current Sources and Uses
Period; (iv) Borrower shall provide such supporting documentation regarding the
incurrence of the items of cost and expense for such Projected Use as
Administrative Agent shall reasonably require; and (v) Borrower shall deliver
notice to Administrative Agent thirty (30) days in advance of the requested
date for any release of funds from the Deposit Account and Borrower shall not
be entitled to request such release more often than once per month.

          Section
6.19. Liquidity Covenants. At all times Borrower shall maintain in its
own name Liquidity of not less than $10,000,000.

34

ARTICLE VII

NEGATIVE COVENANTS

               Borrower,
Managing Member and Acadia Investors II hereby jointly and severally agree
that, so long as any of the Individual Commitments remains in effect or any
Principal Amount remains outstanding and unpaid or any amount is owing to any
Lender or Administrative Agent hereunder, under the Notes or under any other
Credit Document, Borrower, Managing Member and Acadia Investors II shall not,
and shall not permit any of their Subsidiaries to:

          Section
7.01. Limitation on Indebtedness and Guarantee Obligations. Create,
incur, assume or suffer to exist any Indebtedness, other than trade payables
due within sixty (60) days which are not delinquent, of Borrower or any
Guarantee Obligations of Borrower, other than Indebtedness and Guarantee
Obligations in existence on the date hereof. Create, incur, assume or suffer to
exist any Indebtedness of Borrower’s Subsidiaries or any Guarantee Obligations
of Borrower’s Subsidiaries, if (i) same would result in the aggregate amount of
Indebtedness and Guaranteed Obligations of Borrower and its Subsidiaries
exceeding seventy-five percent (75%) of the aggregate cost basis of all
Investments which Borrower continues to own or (ii) the agreements evidencing
any Indebtedness of Borrower do not contain an express acknowledgment of the
obligee that any rights thereunder against Borrower are expressly subordinate
to the Security Documents.

          Section
7.02. Material Adverse Effect. Permit any event or condition to occur
which has a Material Adverse Effect.

          Section
7.03. Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of (i) the right to make Capital Calls, (ii) the Capital
Commitments or (iii) any Collateral, except for Liens, if any, created in favor
of Administrative Agent and/or Lenders.

          Section
7.04. Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer, or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:

	
  

 	
  

 
	
  

 	
           (a) any
 Subsidiary may be merged or consolidated with or into Borrower (provided that
 Borrower shall be the continuing or surviving entity) or with or into any one
 or more wholly owned Subsidiaries (provided that the wholly owned Subsidiary
 or Subsidiaries shall be the continuing or surviving entity);

 
	
  

 	
  

 
	
  

 	
           (b) any
 Subsidiary may sell and dispose of Investments in compliance with Section 6.15;
 and

 

35

	
  

 	
  

 
	
  

 	
           (c) any
 wholly owned Subsidiary may sell, lease, transfer or otherwise dispose of any
 or all of its assets (upon voluntary liquidation or otherwise) to Borrower or
 any other wholly owned Subsidiary.

 

          Section
7.05. Limitation on Dividends and Distributions. Declare or pay any
dividend or distribution on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
Capital Stock of Borrower or Acadia Investors II or any warrants or options to
purchase any such Capital Stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof (including distributions to
Investors), either directly or indirectly, whether in cash or property or in
obligations of Borrower or any Subsidiary.

          Section
7.06. Limitation on New Investments. (a) Acquire any new investments
(other than Cash Equivalents) or Investments without the prior written consent
of Administrative Agent or (b) invest further funds in Acadia Marsh Investors
LLC, Acadia Shopko Investors LLC or any other Subsidiary which does not own an
Investment permitted hereunder.

          Section
7.07. Limitation on Modifications of Agreements. Amend, supplement,
waive or otherwise modify in any material respect the provisions of the
Operating Agreement, the Stockholders Agreement, or any Governing Documents of
Managing Member or Acadia Investors II or the Investor Acknowledgments relating
to the Capital Commitments, the making of Capital Contributions or the
obligation of any Investor to fund the same pursuant to Capital Calls or the
incurrence of Indebtedness or any other provisions that would adversely affect
the rights of Lenders.

          Section
7.08. Intentionally Omitted. 

          Section
7.09. Limitation on Changes in Fiscal Year. Permit the fiscal year of
Borrower to end on a day other than December 31.

          Section
7.10. Intentionally Omitted. 

          Section
7.11. Capital Calls. Make any Capital Call unless, simultaneously with
the delivery of a notice of such Capital Call to the Investors:

	
  

 	
  

 
	
  

 	
           (i) Borrower has provided Administrative Agent with a copy of the
 written notice of such Capital Call;

 
	
  

 	
  

 
	
  

 	
           (ii) except in the case of a Capital Call in accordance with Section
 11.01(f), no Event of Default shall have occurred and be continuing; and

 
	
  

 	
  

 
	
  

 	
           (iii) the proceeds of such Capital Call are deposited into the
 Subscription Account.

 

          Section 7.12.
No Additional Managing Members. Admit or name any additional managing
members to Borrower.

36

          Section
7.13. Transfer of Managing Member’s Interests. With respect to Managing
Member, withdraw as managing member from, or transfer any of Managing Member’s
interests in, Borrower (whether by way of sale, assignments, merger,
consolidation, liquidation or otherwise) without the consent of Administrative
Agent and the Required Lenders; provided, that any transferee consented to
under this Section 7.13 shall assume all of the obligations of Managing Member
under the Credit Documents pursuant to an instrument in form and substance
satisfactory to Administrative Agent. Upon any transfer consented to by this
Section 7.13 and such assumption of obligations, Managing Member and Borrower
shall cause such transferee promptly to be admitted as managing member of
Borrower and, upon such admission in accordance with the Operating Agreement,
such transferee shall be deemed to be Managing Member for all purposes of the
Credit Documents.

          Section
7.14. Withdrawal Events. Managing Member shall not permit any Investor
to withdraw from Borrower or Acadia Investors II without the prior written
consent of Administrative Agent and Required Lenders.

          Section
7.15. Compliance with the Operating Agreement. Make any Investment or
take or permit any action in contravention of the terms of the Operating
Agreement or the Stockholders Agreement.

          Section
7.16. ERISA. 

               (a)
Take any action, or omit to take any action, which would give rise to a
nonexempt prohibited transaction (as such term is defined in Section 4975 of
the Code or Section 406 of ERISA) that is reasonably likely to subject
Administrative Agent and/or any Lender to any material tax or penalty on
prohibited transactions imposed under Section 4975 of the Code or Section
502(i) of ERISA; or

               (b)
Raise any defense to Administrative Agent’s or Lenders’ enforcement of its or
their rights or remedies under the Investor Acknowledgments (or under the
Credit Documents relating to the Investor Acknowledgments) based on an
assertion that the provisions of the Investor Acknowledgments or the
enforcement by Administrative Agent or Lenders of its or their rights under the
Investor Acknowledgments (or under the Credit Documents relating to the
Investor Acknowledgments), would constitute a “prohibited transaction” under
Section 306(a) of ERISA or Section 4975(c)(1)(A)-(D) of the Code.

ARTICLE VIII

EVENTS OF DEFAULT

          If any of
the following events (each, an “Event of Default”) shall occur and be
continuing:

               (a)
Borrower shall fail to pay any principal of any Loan when due in accordance
with the terms hereof or of the Notes or any other Credit Document; or 

37

Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder or under the other Credit Documents, within five (5)
days after any such interest or other amount becomes due in accordance with the
terms thereof or hereof; or

               (b)
Any representation or warranty made or deemed made by Borrower or any other
Credit Party or Guarantor herein or in any other Credit Document or which is
contained in any certificate, document or financial or other written statement
furnished by it at any time under or in connection with this Agreement or any
such other Credit Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or

               (c)
Borrower or any other Credit Party or Guarantor shall default in the observance
or performance of any agreement contained in Article VII of this Agreement or
Section 19 of the Guaranty; or

               (d)
Borrower or any other Credit Party or Guarantor shall default in the observance
or performance of any agreement contained in this Agreement or any other Credit
Document which is not defined as an Event of Default elsewhere in this Article
VIII, and such default shall continue unremedied for a period of thirty (30)
days provided that such thirty (30) day period shall be extended (for a period
not to exceed sixty (60) days in addition to such thirty (30) day period) as to
defaults which cannot be cured by the payment of money but are not reasonably
capable of cure within such thirty (30) day period, provided that Borrower has
commenced to cure such default prior to the end of such thirty (30) day period
and diligently prosecutes such cure to completion; or

               (e)
(i) Any Credit Party or Guarantor shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or any Credit Party or Guarantor
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against any Credit Party or Guarantor any case, proceeding
or other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of sixty (60) days;
or (iii) there shall be commenced against any Credit Party or Guarantor any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or (iv) any Credit Party or
Guarantor shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) any Credit Party or Guarantor shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or

38

               (f)
Acadia Investors II shall default in its obligations under the Stockholders
Agreement, and such default shall continue unremedied for a period of thirty
(30) days provided that such thirty (30) day period shall be extended (for a
period not to exceed sixty (60) days in addition to such thirty (30) day
period) as to defaults which cannot be cured by the payment of money but are
not reasonably capable of cure within such thirty (30) day period, provided
that Acadia Investors II has commenced to cure such default prior to the end of
such thirty (30) day period and diligently prosecutes such cure to completion;
or

               (g)
Investors having Capital Commitments aggregating five percent (5%) or greater
of the total Capital Commitments of Investors who have previously delivered
Investor Acknowledgments to Administrative Agent shall default in their
obligation to fund any portion of their Capital Commitments under the
Stockholders Agreement or the Operating Agreement and such default continues
for fifteen (15) days, provided that one or more other Investors may cure such
default by (x) funding the amount of the defaulted Capital Commitment and (y)
agreeing in writing to fund the future Capital Commitment of the defaulting
Investor; or

               (h)
One or more judgments or decrees shall be entered against Borrower, any other
Credit Party, Guarantor or any of their respective Subsidiaries involving in
the aggregate a liability (not paid or fully covered by insurance) of
$1,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within sixty (60) days
from the entry thereof; or

               (i)
(i) Any of the Security Documents shall cease, for any reason, to be in full
force and effect, or Borrower or any other Credit Party which is a party to any
of the Security Documents shall so assert or (ii) the Lien created by any of
the Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or

               (j)
Any Termination Event with respect to a Material Plan shall occur as a result
of which Termination Event or Events any member of the ERISA Group has incurred
or may incur any liability to the PBGC or any other Person and the sum
(determined as of the date of occurrence of such Termination Event) of the
Unfunded Liabilities of such Material Plan and the Unfunded Liabilities of any
and all other Plans with respect to which such a Termination Event shall occur
and be continuing (or, in the case of a Multiemployer Plan with respect to
which a Termination Event described in clause (ii) of the definition of
Termination Event shall occur and be continuing, the liability of Borrower and
the Subsidiaries related thereto) is an amount that is reasonably likely to
have a Material Adverse Effect; or

               (k)
Any member of the ERISA Group shall commit a failure described in Section
302(f)(1) of ERISA or Section 412(n)(1) of the Code and the amount of the lien
determined under Section 302(f)(3) of ERISA or Section 412(n)(3) of the Code
that could reasonably be expected to be imposed on any member of the ERISA
Group or its assets in respect of such failure shall be an amount that is
reasonably likely to have a Material Adverse Effect; or

39

               (l)
The occurrence of any of the following: (i) Managing Member ceases, voluntarily
or involuntarily, to be the sole managing member of Borrower, (ii) any event
that causes a dissolution of liquidation of Borrower or Managing Member or
(iii) any material breach of the Operating Agreement by Managing Member which
shall continue for thirty (30) days; or

               (m)
Borrower fails to deliver any of the Investor Reaffirmations, Gloster Principal
Reaffirmations and the Vanderbilt Reaffirmation to Administrative Agent on or
before February 22, 2011.

then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (e) of this Section with respect
to Borrower, automatically the Individual Commitments shall immediately
terminate and the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Credit Documents shall immediately
become due and payable, in each case without presentment, demand, protest,
notice of protest or other notice of any kind whatsoever, and (B) if such event
is any other Event of Default, either or both of the following actions may be
taken: (i) Administrative Agent may, and upon the request of the Required
Lenders Administrative Agent shall, by notice to Borrower declare the
Individual Commitments to be terminated forthwith, whereupon the Individual
Commitments shall immediately terminate; and (ii) Administrative Agent may, and
upon the request of the Required Lenders Administrative Agent shall, by notice
to Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Credit Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable,
in each case without presentment, demand, protest, notice of protest or other
notice of any kind whatsoever other than any notice specifically provided for
above.

ARTICLE IX

ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS

          Section
9.01. Appointment, Powers and Immunities of Administrative Agent. Each
Lender hereby irrevocably appoints and authorizes Administrative Agent to act
as its agent hereunder and under any other Credit Document with such powers as
are specifically delegated to Administrative Agent by the terms of this
Agreement and any other Credit Document, together with such other powers as are
reasonably incidental thereto. Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and any
other Credit Document or required by Law, and shall not by reason of this
Agreement be a fiduciary or trustee for any Lender except to the extent that
Administrative Agent acts as an agent with respect to the receipt or payment of
funds, nor shall Administrative Agent have any fiduciary duty to Borrower or
any Lender have any fiduciary duty to Borrower or any other Lender. No implied
covenants, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against Administrative Agent. Neither
Administrative Agent nor any of its directors, officers, employees, agents,
attorneys-in-fact or affiliates 

40

shall be responsible to Lenders for any recitals, statements,
representations or warranties made by Borrower or any officer, partner or
official of Borrower or any other Person contained in this Agreement or any
other Credit Document, or in any certificate or other document or instrument
referred to or provided for in, or received by any of them under, this
Agreement or any other Credit Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Credit Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any lien
securing the obligations hereunder or thereunder or for any failure by Borrower
or Guarantor to perform any of its obligations hereunder or thereunder.
Administrative Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither Administrative
Agent nor any of its directors, officers, employees, agents, attorneys-in-fact
or affiliates shall be liable or responsible for any action taken or omitted to
be taken by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, except for its or their own gross negligence
or willful misconduct.

          Section
9.02. Reliance by Administrative Agent. Administrative Agent shall be
entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by Administrative Agent.
Administrative Agent may deem and treat each Lender as the holder of its Note
and interest in the Credit Facility for all purposes hereof and shall not be
required to deal with any Person who has acquired a Participation in the Credit
Facility from a Lender. As to any matters not expressly provided for by this
Agreement or any other Credit Document, Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, in accordance with
instructions signed by the Required Lenders, and such instructions of the
Required Lenders and any action taken or failure to act pursuant thereto shall
be binding on all Lenders and any other holder of all or any portion of the
Credit Facility or any Participation therein.

          Section
9.03. Defaults. Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default or of an Event of Default unless
Administrative Agent has actual knowledge thereof or has received notice from a
Lender or Borrower specifying such Default or Event of Default and stating that
such notice is a “Notice of Default.” In the event that Administrative Agent
has such actual knowledge or receives such a notice of the occurrence of a
Default or Event of Default, Administrative Agent shall give prompt notice
thereof to Lenders. Administrative Agent shall promptly send to each Lender a
copy of any notice of a Default or Event of Default that Administrative Agent sends
to Borrower or Guarantor. Administrative Agent, following consultation with
Lenders, shall (subject to Section 9.07 and Section 10.09) take such action
with respect to such Default or Event of Default which is continuing, including
with respect to the exercise of remedies or the realization on, or operation or
disposition of, any or all of the Collateral or any other collateral for the
Obligations, as shall be directed by the Required Lenders; provided, however,
that, unless and until Administrative Agent shall 

41

have received such directions, Administrative Agent may take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem to be in the best interest of Lenders. In no
event shall Administrative Agent be required to take any such action which it
determines would be contrary to the Credit Documents or to Law. Each of the
Lenders acknowledges and agrees that no individual Lender may separately
enforce or exercise any of the provisions of any of the Credit Documents
(including, without limitation, the Notes) other than through Administrative
Agent.

          Section
9.04. Rights of Administrative Agent as Lender. With respect to its Note
and interest in the Credit Facility, the Person serving as Administrative Agent
in its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as Administrative Agent, and the terms “Lender” and “Lenders” shall include
the Person serving as Administrative Agent in its capacity as a Lender. The
Person serving as Administrative Agent and its affiliates may (without having
to account therefor to any Lender) accept deposits from, lend money to (on a
secured or unsecured basis), and generally engage in any kind of banking, trust
or other business with, Borrower as if it were not acting as Administrative
Agent.

          Section
9.05. Sharing of Costs by Lenders; Indemnification of Administrative Agent.
Each Lender shall pay its ratable share, based on the respective outstanding
principal balances under its Note and the other Notes, of any expenses incurred
(and not paid or reimbursed by Borrower after demand for payment is made by
Administrative Agent) by or on behalf of Lenders in connection with any Default
or Event of Default, including, without limitation, costs of enforcement of the
Credit Documents to preserve the lien of any of the Security Documents or to
preserve or protect the Collateral. In the event a Lender fails to pay its
share of expenses as aforesaid, and all or a portion of such unpaid amount is
paid by Administrative Agent and/or one or more of the other Lenders, then the
defaulting Lender shall reimburse Administrative Agent and/or the other
Lender(s) for the portion of such unpaid amount paid by it or them, as the case
may be, together with interest thereon at the Prime Based Rate from the date of
payment by Administrative Agent and/or the other Lender(s). In addition, each
Lender agrees to reimburse and indemnify Administrative Agent (to the extent it
is not paid by on or behalf of Borrower, after demand for payment is made by
Administrative Agent, under Section 10.16 or under the applicable provisions of
any other Credit Document, but without limiting the obligation of Borrower
under said Section 10.16 or such provisions), for such Lender’s ratable share,
based upon the respective outstanding principal balances under its Note and the
other Notes, of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in any way relating to or arising out of this Agreement,
any other Credit Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which Borrower is obligated to pay under
Section 10.16 or under the applicable provisions of any other Credit Document)
or the enforcement of any of the terms hereof or thereof or of any such other
documents or instruments; provided, however, that no Lender shall
be liable for (i) any of the foregoing to the extent they arise from the gross 

42

negligence or willful misconduct of the party to be indemnified or (ii)
any loss of principal or interest with respect to the Note or interest in the
Credit Facility of the Person serving as Administrative Agent.

          Section
9.06. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender acknowledges that it has, independently and without reliance on
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own analysis of the
Collateral and of the credit of Borrower and Guarantor, and its own decision to
enter into this Agreement, and that it will, independently and without reliance
upon Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any other Credit Document. Administrative Agent shall not be required to keep
itself informed as to the performance or observance by Borrower of this
Agreement or any other Credit Document or any other document referred to or
provided for herein or therein or to inspect the properties or books of
Borrower. Except for notices, reports and other documents and information
expressly required to be furnished to Lenders by Administrative Agent
hereunder, Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of Borrower or Guarantor or any of their
affiliates which may come into the possession of Administrative Agent or any of
its affiliates. Administrative Agent shall not be required to file this
Agreement, any other Credit Document or any document or instrument referred to
herein or therein, for record or give notice of this Agreement, any other
Credit Document or any document or instrument referred to herein or therein, to
anyone.

          Section
9.07. Failure of Administrative Agent to Act. Except for action
expressly required of Administrative Agent hereunder, Administrative Agent
shall in all cases be fully justified in failing or refusing to act hereunder
unless it shall have received further assurances (which may include cash
collateral) of the indemnification obligations of Lenders under Section 9.05 in
respect of any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. If any indemnity
furnished to Administrative Agent for any purpose shall, in the opinion of
Administrative Agent, be insufficient or become impaired, Administrative Agent
may call for additional indemnity (other than against its gross negligence or
willful misconduct) and cease, or not commence, the action indemnified against
until such additional indemnity is furnished.

          Section
9.08. Resignation or Removal of Administrative Agent. Administrative
Agent may resign, or be removed with cause by the Required Lenders, at any time
provided that Borrower and the other Lenders shall be promptly notified
thereof. Upon such resignation or removal of Administrative Agent, the Required
Lenders shall have the right to appoint a successor Administrative Agent, which
successor Administrative Agent shall (provided there exists no Event of
Default) be subject to Borrower’s approval, such approval not to be
unreasonably withheld or delayed. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within twenty (20) days after the resignation or the 

43

Required Lenders’ removal of the retiring Administrative Agent, then
the retiring Administrative Agent may, on behalf of Lenders, appoint a
successor Administrative Agent, which shall be one of the Lenders, within ten
(10) days. The Required Lenders or the retiring Administrative Agent, as the
case may be, shall upon the appointment of a successor Administrative Agent
promptly so notify Borrower and the other Lenders. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent’s resignation or removal hereunder as Administrative Agent, the
provisions of this Article IX shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent.

          Section
9.09. Amendments Concerning Agency Function. Notwithstanding anything to
the contrary contained in this Agreement, Administrative Agent shall not be
bound by any waiver, amendment, supplement or modification of this Agreement or
any other Credit Document which affects its duties, rights, and/or function
hereunder or thereunder unless it shall have given its prior written consent
thereto.

          Section
9.10. Liability of Administrative Agent. Administrative Agent shall not
have any liabilities or responsibilities to Borrower on account of the failure
of any Lender to perform its obligations hereunder or to any Lender on account
of the failure of Borrower to perform its obligations hereunder or under any
other Credit Document.

          Section
9.11. Transfer of Agency Function. Without the consent of Borrower or
any Lender, Administrative Agent may at any time or from time to time transfer
its functions as Administrative Agent hereunder to any of its offices wherever
located in the United States, provided that Administrative Agent shall promptly
notify Borrower and Lenders thereof.

          Section
9.12. Non-Receipt of Funds by Administrative Agent; Adjustments. 

               (a)
Unless Administrative Agent shall have received notice from a Lender or
Borrower (either one as appropriate being the “Payor”) prior to the date on
which such Lender is to make payment hereunder to Administrative Agent of
proceeds of any Loan or Borrower is to make payment to Administrative Agent, as
the case may be (either such payment being a “Required Payment”), which notice
shall be effective upon receipt, that the Payor will not make the Required
Payment in full to Administrative Agent, Administrative Agent may assume that
the Required Payment has been made in full to Administrative Agent on such
date, and Administrative Agent in its sole discretion may, but shall not be
obligated to, in reliance upon such assumption, make the amount thereof
available to the intended recipient on such date. If and to the extent the
Payor shall not have in fact so made the Required Payment in full to
Administrative Agent, the recipient of such payment shall repay to
Administrative Agent forthwith on demand such amount made available to it
together with interest thereon, for each day from the date such 

44

amount was so made available by Administrative Agent until the date
Administrative Agent recovers such amount, at the Federal Funds Rate.

               (b)
If, after Administrative Agent has paid each Lender’s share of any payment
received or applied by Administrative Agent in respect of the Credit Facility,
that payment is rescinded or must otherwise be returned or paid over by
Administrative Agent, whether pursuant to any bankruptcy or insolvency Law, or
otherwise, such Lender shall, at Administrative Agent’s request, promptly
return its share of such payment to Administrative Agent, together with such Lender’s
proportionate share of any interest or other amount required to be paid by
Administrative Agent with respect to such payment. In addition, if a court of
competent jurisdiction shall adjudge that any amount received and distributed
by Administrative Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to Administrative Agent
its share of the amount so adjudged to be repaid or shall pay over the same in
such manner and to such Persons as shall be determined by such court.

          Section
9.13. Withholding Taxes. Each Lender represents that it is entitled to
receive any payments to be made to it hereunder without the withholding of any
tax and will furnish to Administrative Agent such forms, certifications,
statements and other documents as Administrative Agent may reasonably request
from time to time to evidence such Lender’s exemption from the withholding of
any tax imposed by any jurisdiction or to enable Administrative Agent to comply
with any applicable Laws relating thereto. Without limiting the effect of the
foregoing, if any Lender is not created or organized under the Laws of the
United States or any state thereof, such Lender will furnish to Administrative
Agent Form W-8ECI or Form W-8BEN of the U.S. Internal Revenue Service, or such
other forms, certifications, statements or documents, duly executed and
completed by such Lender, as evidence of such Lender’s complete exemption from
the withholding of United States tax with respect thereto. Administrative Agent
shall not be obligated to make any payments hereunder to such Lender in respect
of the Credit Facility until such Lender shall have furnished to Administrative
Agent the requested form, certification, statement or document.

          Section
9.14. Sharing of Payments among Lenders. If a Lender shall obtain
payment of any principal of its Note or of interest thereon through the
exercise of any right of setoff, banker’s lien or counterclaim, or by any other
means (including direct payment), and such payment results in such Lender
receiving a greater payment than it would have been entitled to had such
payment been paid directly to Administrative Agent for disbursement to Lenders,
then such Lender shall promptly purchase for cash from the other Lenders
Participations in the Credit Facility in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all
Lenders shall share ratably the benefit of such payment. To such end Lenders
shall make appropriate adjustments among themselves (by the resale of
Participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.

          Section
9.15. Possession of Documents. Each Lender shall maintain possession of
its own Note. Administrative Agent shall hold all other Credit Documents and
related documents in its possession and maintain separate records and accounts
with respect to 

45

the Credit Facility, reflecting the interests of Lenders in the Credit
Facility, and shall permit Lenders and their representatives access at all
reasonable times to inspect such Credit Documents, related documents, records
and accounts.

ARTICLE X

GENERAL CONDITIONS AND PROVISIONS

          Section
10.01. Advance Not Waiver. Any Loan by any Lender hereunder made prior
to or without the fulfillment by Borrower of all of the conditions precedent
thereto, whether or not known to Lenders, shall not constitute a waiver by
Administrative Agent or Lenders of the requirement that all conditions,
including the non-performed conditions, shall be required with respect to all
future Loans.

          Section
10.02. Authorization to Advance for Interest, Etc. Borrower hereby
irrevocably authorizes Administrative Agent and Lenders to make Loans to pay
interest accrued on the Notes as it comes due, or to satisfy any of the
conditions hereof, including, without limitation, the payment of the fees and
expenses of Administrative Agent’s Counsel.

          Section
10.03. Concerning Irrevocable Authorizations. Any and all Loans made at
any time by any Lender pursuant to the irrevocable authorizations granted by
Sections 2.17 and 10.02 shall require no further direction, authorization or
request for disbursement from Borrower and may be made whether or not there
exists a Default or Event of Default. Any and all such disbursements shall be
added to the outstanding principal balance evidenced by the Notes and shall be
secured by the Security Documents. The aforesaid authorizations shall (i) not
prevent Borrower from paying the interest, or from satisfying the conditions
and obligations referred to in said Sections, out of its own funds, (ii) in no
event be construed so as to relieve Borrower or others from their obligations
to pay interest as and when due under the Notes, or to satisfy such conditions
and obligations and (iii) in no event obligate any Lender to disburse proceeds
of the Loans for any such purposes.

          Section
10.04. Ratification of Requisition by Acceptance of Advance. Borrower
agrees that, by its acceptance of any proceeds of any Loan hereunder, it shall
be bound in all respects by the Requisition submitted on its behalf in
connection therewith with the same force and effect as if Borrower had itself
executed and submitted such Requisition and whether or not such Requisition is
executed and/or submitted by an authorized person.

          Section
10.05. No Third-Party Beneficiaries. This Agreement is solely for the
benefit of Administrative Agent, Lenders and Borrower. All conditions of the
obligations of Lenders to make credit available hereunder are imposed solely
and exclusively for the benefit of Lenders and may be freely waived or modified
in whole or in part by Lenders at any time if in their sole discretion they
deem it advisable to do so, and no person other than Borrower (provided,
however, that all conditions have been satisfied) shall have 

46

standing to require Lenders to make any credit available or to be a
beneficiary of this Agreement.

          Section
10.06. Documentation Etc. Satisfactory. All documentation and
proceedings deemed by Administrative Agent or Administrative Agent’s Counsel to
be necessary or required in connection herewith and the documents relating
hereto shall be subject to the prior approval of, and satisfactory to, both of
them as to form and substance. In addition, the Persons responsible for the
execution and delivery of, and signatories to, all of such documentation, shall
be acceptable to, and subject to the approval of, Administrative Agent and
Administrative Agent’s Counsel. Administrative Agent or Administrative Agent’s
Counsel shall receive copies, certified if requested by either of them, of all
documents which they may require in connection with the transactions
contemplated hereby.

          Section
10.07. Administrative Agent’s and Lenders’ Determination Conclusive.
Administrative Agent and each Lender shall, at all times, be free to
independently establish to its satisfaction and in its absolute discretion the
existence or nonexistence of any fact or facts the existence or nonexistence of
which is a condition hereof.

          Section
10.08. Notices. Except as expressly provided otherwise, all notices,
demands, consents, approvals and statements required or permitted hereunder
shall be in writing and shall be deemed to have been sufficiently given or
served for all purposes when presented personally, three (3) days after mailing
by registered or certified mail, postage prepaid, or one (1) day after delivery
to a nationally recognized overnight courier service providing evidence of the
date of delivery, addressed to a party at its address on the signature page
hereof or of the applicable Assignment and Assumption Agreement, or at such
other address of which a party shall have notified the party giving such notice
in writing in accordance with the foregoing requirements.

          Section
10.09. Amendments and Waivers. No amendment or material waiver of any
provision of this Agreement or any other Credit Document, nor consent to any
material departure by Borrower or Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the party against
whom such amendment, waiver or consent is sought to be enforced (it being
understood, however, that the signatures of the Required Lenders and, solely
for purposes of its acknowledgement thereof, Administrative Agent, shall be
sufficient to bind Lenders to any such amendment, waiver or consent), and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all
Lenders, do any of the following: (i) reduce the principal of, or interest on,
the Notes or any fees due hereunder or any other amount due hereunder or under
any other Credit Document; (ii) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees due hereunder or any other
amount due hereunder or under any other Credit Document; (iii) change the definition
of Required Lenders; (iv) release any material portion of the Collateral or
other collateral for the Obligations other than in accordance with the Credit
Documents; (v) amend this Section, Section 2.17(d) or any provision requiring
the consent of all Lenders; (vi) release, in whole or in part, 

47

Guarantor other than in accordance with the Credit Documents; or (vii)
increase the Credit Amount. Without limiting the foregoing, acceptance by
Administrative Agent or Lenders of any sum required to be paid pursuant hereto
or pursuant to any other Credit Document, after its due date, or in an amount
less than the sum then due, shall not constitute a waiver by Administrative
Agent or Lenders of their right to require prompt payment when due of all other
such sums or to declare a default or to exercise such other rights provided
herein or in the other Credit Documents for such late or reduced payment.

               All
communications from Administrative Agent to Lenders requesting Lenders’
determination, consent, approval or disapproval (i) shall be given in the form
of a written notice to each Lender, (ii) shall be accompanied by or include a
description or copy of the matter or thing as to which such determination,
approval, consent or disapproval is requested and (iii) shall include
Administrative Agent’s recommended course of action or determination in respect
thereof. Each Lender shall reply promptly, but in any event within ten (10)
Business Days (or five (5) Business Days with respect to any decision to
accelerate or stop acceleration of any of the Obligations) after receipt of the
request therefor by Administrative Agent (the “Lender Reply Period”). Unless a
Lender shall give written notice to Administrative Agent that it objects to the
recommendation or determination of Administrative Agent (together with a
written explanation of the reasons behind such objection) within the Lender
Reply Period, such Lender shall be deemed to have approved or consented to such
recommendation or determination.

          Section
10.10. Assignment; Participation. Any Lender may at any time grant to
one or more banks or other institutions not affiliated with Borrower or
Guarantor (each a “Participant”) participating interests in its Pro Rata Share
of the Credit Facility (the “Participations”). In the event of any such grant
by a Lender of a Participation to a Participant, such Lender shall remain
responsible for the performance of its obligations hereunder, and Borrower,
each other Lender and Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations hereunder. Any agreement pursuant to which any Lender may grant a
Participation shall provide that such Lender shall retain the sole right and
responsibility to enforce the obligations of Borrower hereunder and under any
other Credit Document, including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement or any
other Credit Document; provided that such participation agreement may
provide that such Lender will not agree to any modification, amendment or
waiver described in clauses (i) through (vii) of Section 10.09 without the
consent of the Participant.

               Upon
request by Borrower, each Lender agrees to provide Borrower with notice of all
Participations sold by such Lender. Borrower agrees to provide all assistance
reasonably requested by a Lender to enable such Lender to sell Participations
as aforesaid, or make assignments of its interest in the Credit Facility as
hereinafter provided in this Section.

               A
Lender may at any time assign to any bank or other institution not affiliated
with Borrower or Guarantor with the consent of Administrative Agent, which
consents shall not be unreasonably withheld or delayed (such assignee, a
“Consented Assignee”), 

48

or to one or more banks or other institutions which are majority owned
subsidiaries of a Lender or of the parent of a Lender (each Consented Assignee
or subsidiary bank or institution, an “Assignee”) all or a proportionate part
of all of its rights and obligations under this Agreement and its Note and the
other Credit Documents, and such Assignee shall assume rights and obligations,
pursuant to an Assignment and Assumption Agreement executed by such Assignee
and the assigning Lender, provided that, after giving effect to such
assignment, the Assignee’s portion of the Credit Facility and, in the case of a
partial assignment of a Lender’s interest, the assigning Lender’s portion of
the Credit Facility will each be equal to or greater than $5,000,000. Upon (i)
execution and delivery of such instrument, (ii) payment by such Assignee to the
assigning Lender of an amount equal to the purchase price agreed between such
Lender and such Assignee and (iii) payment by such Assignee to Administrative
Agent of a fee, for Administrative Agent’s own account, in the amount of
$3,500, such Assignee shall be a party to this Agreement and shall have all the
rights and obligations of a Lender as set forth in such Assignment and
Assumption Agreement, and the assigning Lender shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this paragraph, substitute notes, in the form of Exhibit D,
shall be issued to the assigning Lender (in the case of a partial assignment)
and Assignee by Borrower, in exchange for the return of the assigning Lender’s
original Note. Without limiting the provisions of Section 2.04, all such
substitute notes shall constitute “Notes” and the obligations evidenced by such
substitute notes shall constitute obligations secured by the Security
Documents. In connection with Borrower’s execution of substitute notes as
aforesaid, Borrower shall deliver to Administrative Agent such evidence of the
due authorization, execution and delivery of the substitute notes and any
related documents as Administrative Agent may reasonably request. If the Assignee
is not incorporated under the Laws of the United States or a state thereof, it
shall, prior to the first date on which interest or fees are payable hereunder
for its account, deliver to Borrower and Administrative Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 9.13.

               Borrower,
Administrative Agent and Lenders shall execute such modifications to the Credit
Documents as shall, in the reasonable judgment of Administrative Agent, be
necessary or desirable in connection with assignments in accordance with the
foregoing provisions of this Section.

               Any
Lender may at any time assign all or any portion of its rights under this
Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Lender from its obligations hereunder.

               Borrower
recognizes that in connection with a Lender’s selling of Participations or
making of assignments, any or all documentation, financial statements,
appraisals and other data, or copies thereof, relevant to Borrower, Guarantor
or the Credit Facility may be exhibited to and retained by any such Participant
or Assignee or prospective Participant or Assignee.

49

          Section
10.11. Setoff. In addition to (and without limitation of) any right of
setoff, bankers’ lien or counterclaim Administrative Agent or any Lender may
otherwise have, Administrative Agent and each Lender shall be entitled to
offset balances (general or special, time or demand, provisional or final) held
by it for the account of Borrower at any of Administrative Agent’s or such
Lender’s offices against any amount payable by Borrower to Administrative Agent
or such Lender hereunder or under any other Credit Document which is not paid
when due (regardless of whether such balances are then due to Borrower), in
which case it shall promptly notify Borrower and (in the case of a Lender)
Administrative Agent thereof; provided, however, that
Administrative Agent’s or such Lender’s failure to give such notice shall not
affect the validity thereof.

          Section
10.12. Successors and Assigns. Except as herein provided, this Agreement
shall be binding upon and inure to the benefit of Borrower, Administrative
Agent and Lenders and their respective heirs, personal representatives,
successors and assigns. Notwithstanding the foregoing, Borrower may not assign,
transfer or set over to another, in whole or in part, all or any part of its
benefits, rights, duties and obligations hereunder and under the other Credit
Documents, including, but not limited to, performance of and compliance with
conditions hereof and the right to receive the proceeds of Loans made under,
and other extensions of credit under, the Credit Facility without the prior
written consent of all of the Lenders (and any attempted such assignment,
transfer or setting over without such consent shall be null and void).

          Section
10.13. Severability. The provisions hereof are intended to be severable.
Any provisions hereof, or the application thereof to any Person or
circumstance, which, for any reason, in whole or in part, is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof (or the remaining portions of such
provision) or the application thereof to any other Person or circumstance, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision (or portion thereof) or the
application thereof to any Person or circumstance in any other jurisdiction.

          Section
10.14. Non-Waiver; Remedies Cumulative. No failure or delay on
Administrative Agent’s or any Lender’s part in exercising any right, remedy,
power or privilege hereunder or under any of the other Credit Documents or
provided by law (hereinafter in this Section, each a “Remedy”) shall operate as
a waiver of any such Remedy or shall be deemed to constitute Administrative
Agent’s or any Lender’s acquiescence in any default by Borrower or Guarantor
under any of said documents. A waiver by Administrative Agent or any Lender of
any Remedy on any one occasion shall not be construed as a bar to any other or
future exercise thereof or of any other Remedy. The Remedies are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
Remedies.

          Section
10.15. Certain Waivers. Each Credit Party hereby irrevocably and
unconditionally waives (i) promptness and diligence, (ii) notice of any actions
taken by Administrative Agent or any Lender hereunder or under any other Credit
Document or any other agreement or instrument relating hereto or thereto except
to the extent 

50

otherwise provided herein, (iii) all other notices, demands and
protests, and all other formalities of every kind, in connection with the
enforcement of a Credit Party’s obligations hereunder and under the other
Credit Documents, the omission of or delay in which, but for the provisions of
this Section, might constitute grounds for relieving any Credit Party of any of
its obligations hereunder or under the other Credit Documents, (iv) any
requirement that Administrative Agent or any Lender protect, secure, perfect or
insure any lien on any collateral for the Obligations or exhaust any right or
take any action against Borrower, any other Credit Party, Guarantor or any
other Person or against any collateral for the Obligations, (v) any right or
claim of right to cause a marshalling of Borrower’s assets and (vi) all rights
of subrogation or contribution, whether arising by contract or operation of law
or otherwise by reason of payment by Borrower pursuant hereto or pursuant to
any other Credit Document. EACH CREDIT PARTY FURTHER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING
BROUGHT BY OR ON BEHALF OF ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR THE OTHER CREDIT DOCUMENTS OR OTHERWISE IN RESPECT OF
THE LOANS OR THE CREDIT FACILITY, ANY AND EVERY RIGHT SUCH CREDIT PARTY MAY
HAVE TO (W) INJUNCTIVE RELIEF, (X) A TRIAL BY JURY, (Y) INTERPOSE ANY
COUNTERCLAIM THEREIN, OTHER THAN A COMPULSORY COUNTERCLAIM, AND/OR (Z) HAVE THE
SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING.
NOTHING CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL PREVENT OR
PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST
ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO ANY ASSERTED CLAIM.

          Section
10.16. Expenses; Indemnification. Borrower covenants and agrees to pay
all costs, expenses and charges (including, without limitation, all fees and
charges of engineers, appraisers and Administrative Agent’s Counsel) incurred
by Administrative Agent or any Lender in connection with (i) the preparation
for and consummation of the transactions contemplated hereby or for the
performance hereof and of the other Credit Documents, and for any services
which may be required in addition to those normally and reasonably contemplated
hereby and (ii) the enforcement hereof or of any or all of the other Credit
Documents. If Borrower fails to pay promptly any costs, charges or expense
required to be paid by it as aforesaid, and Administrative Agent or any Lender
pays such costs, charges or expenses, Borrower shall reimburse Administrative
Agent or such Lender, as appropriate, on demand for the amounts so paid,
together with interest thereon at the Default Rate. Borrower further agrees to
indemnify Administrative Agent and each Lender and their respective directors,
officers, employees and agents from, and hold each of them harmless against,
(x) any and all losses arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to any actual or proposed use by
Borrower of the proceeds of any of the Loans or of any other extension of
credit under the Credit Facility, including, without limitation, the fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceedings and (y) any and all claims, actions, suits,
proceedings, costs, expenses, losses, damages and 

51

liabilities of any kind, including in tort, penalties and interest,
arising out or by reason of any matter relating, directly or indirectly, to the
ownership, condition, development, construction, sale, rental or financing of
any of Borrower’s Investments or any part thereof (but excluding any such
losses, liabilities, claims, damages or expenses incurred solely by reason of
the gross negligence or willful misconduct of the party to be indemnified). The
obligations of Borrower under this Section and under Sections 3.01, 3.03, 6.03
and 6.04 shall survive the repayment of all amounts due under or in connection
with any of the Credit Documents and the termination of the Credit Facility.

          Section
10.17. Counterparts. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing any such counterpart.

          Section
10.18. Governing Law; Jurisdiction. This Agreement and the rights and obligations
of the parties hereunder shall in all respects be governed by, and construed
and enforced in accordance with, the Laws of the State of New York (without
giving effect to New York’s principles of conflicts of law). Each Credit Party,
Administrative Agent and each Lender hereby irrevocably submit to the
non-exclusive jurisdiction of any New York State or Federal court sitting in
The City of New York over any suit, action or proceeding arising out of or
relating to this Agreement and the other Credit Documents, and each Credit
Party hereby agrees and consents that, in addition to any methods of service of
process provided for under applicable Law, all service of process in any such
suit, action or proceeding in any New York State or Federal court sitting in
The City of New York (or such other county in New York State) may be made by
certified or registered mail, return receipt requested, directed to such Credit
Party at the address for Borrower indicated on the signature page hereof, and
service so made shall be complete five (5) days after the same shall have been
so mailed.

          Section
10.19. Integration. The Credit Documents and the Supplemental Fee Letter
constitute the entire agreement among Administrative Agent, Borrower and
Lenders relating to the transactions contemplated thereby (except with respect
to agreements among Lenders or with Administrative Agent relating solely to
compensation, consideration and the syndication of the Credit Facility) and
supersede any prior oral or written statements or agreements with respect to
such transactions.

          Section
10.20. Gross-Up for Taxes. All payments made by Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income taxes and franchise or other
taxes (imposed in lieu of income taxes) imposed on a Lender as a result of a
present or former connection between such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely
from such Lender’s having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or its Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“Non-

52

Excluded Taxes”) are required to be withheld from any amounts payable
to such Lender hereunder or under its Note, the amounts so payable to such
Lender shall be increased to the extent necessary to yield to such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable with respect to the Credit Facility at the rates or in the amounts
specified in this Agreement and its Note; provided, however, that
Borrower shall not be required to increase any such amounts payable to such
Lender if such Lender is not organized under the Laws of the United States or a
state thereof and such Lender fails to comply with the requirements of Section
9.13. Whenever any Non-Excluded Taxes are payable by Borrower, as promptly as
possible thereafter Borrower shall send to Administrative Agent for the account
of such Lender a certified copy of an original official receipt received by
Borrower showing payment thereof. If Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to
Administrative Agent the required receipts or other required documentary
evidence, Borrower shall indemnify such Lender for any incremental taxes,
interest or penalties that may become payable by such Lender as a result of any
such failure. The agreements in this Section shall survive the termination of
this Agreement and the payment of all amounts payable hereunder. 

ARTICLE XI

PARTICULAR PROVISIONS

               The
foregoing Articles of this Agreement are subject to the following further
provisions: 

          Section
11.01. Capital Calls; Subscription Account. 

               (a)
Borrower and Acadia Investors II shall direct all Investors to wire transfer to
the Subscription Account all monies or sums paid or to be paid by any Investor
to Borrower or Managing Member to fund its Capital Contribution as and when
such Investor is required pursuant to the Operating Agreement and/or the
Stockholders Agreement to fund such Capital Contribution. In addition, to the
extent that Borrower or Acadia Investors II receives any Capital Contributions
from the Investors during the term of this Agreement, they shall immediately
deposit such Capital Contributions upon receipt into the Subscription Account
and to the extent that Borrower or Acadia Investors II receives any amounts
from an Investor while an Event of Default is continuing, they shall
immediately deposit such amounts upon receipt into the Subscription Account. 

               (b)
Notwithstanding anything to the contrary contained herein, it is expressly
understood and agreed that neither Administrative Agent nor any Lender
undertakes any duties, responsibilities, or liabilities with respect to the
Capital Calls, the Stockholder Agreement or the Operating Agreement. Neither
Administrative Agent nor any Lender shall be required to refer to Borrower’s
organizational documents or the Stockholders Agreement or take any other action
with respect to any other matter which might arise in connection with
Borrower’s organizational documents or the Stockholder Agreement or any Capital
Call. Neither Administrative Agent nor any Lender has any duty to 

53

determine or inquire into any happening or occurrence or any
performance or failure of performance of Borrower. Neither Administrative Agent
nor any Lender has any duty to inquire into the use, purpose, or reasons for
the making of any Capital Call or with respect to the investment or use of the
proceeds thereof. 

               (c)
Provided that no Default or Event of Default has occurred and is then
continuing, Administrative Agent shall release funds from the Subscription
Account to Borrower for Approved Uses, subject to the terms hereof and of the
Cash Collateral Agreement. Except as provided in Section 11.01(f), upon the
occurrence and during the continuance of a Default or any Event of Default,
Borrower shall have no right to any funds from the Subscription Account. 

               (d)
Borrower and Acadia Investors II hereby irrevocably authorize and direct
Lenders, acting through Administrative Agent, at any time following the
occurrence and during the continuance of an Event of Default while any
Obligations are outstanding, to charge from time to time the Subscription
Account and any other accounts of Borrower at Lenders for amounts due Lenders or
any of them hereunder and under the Notes and the other Credit Documents. 

               (e)
Intentionally Omitted. 

               (f)
Notwithstanding anything to the contrary contained in this Agreement, upon the
occurrence and during the continuation of an Event of Default, Borrower and
Acadia Investors II shall be permitted to make a single Capital Call provided
(i) the proceeds of such Capital Call are deposited into the Subscription
Account, (ii) Borrower directs that such proceeds together with any other funds
held in the Subscription Account shall be released by Administrative Agent to
prepay the Notes in their entirety and/or held by Administrative Agent, for the
benefit of the Lenders, as cash collateral for the Obligations, including,
without limitation, the full amount of the Aggregate Outstanding Extensions of
Credit, for application by Administrative Agent and Lenders to amounts due
Administrative Agent and Lenders hereunder until the expiration, or return for
cancellation, of all Letters of Credit and payment of all other outstanding
Obligations hereunder, together with costs, expenses, funding losses, interest
and penalties incurred therein as expressly contemplated in this Agreement and
(iii) Borrower terminates the Credit Facility and agrees that upon the
occurrence of an Event of Default Borrower shall have no further right to the
making of any Loan hereunder. 

               (g)
The application by Lenders of such funds hereunder shall, unless Administrative
Agent shall agree otherwise in writing, be first to the payment of reasonable
costs and expenses due Lenders under this Agreement, second to the payment of
accrued interest due hereunder or under the Notes and last to the payment of
the principal due hereunder. Borrower acknowledges that all funds so
transferred into the Subscription Account shall be the property of Borrower
only and not subject to any Lien of any party, other than Administrative Agent
and Lenders. 

54

          Section
11.02. Subordination of Claims. 

               (a)
Until the Obligations shall be paid and satisfied in full and except as
expressly permitted under Section 11.01, Borrower, Managing Member and Acadia
Investors II shall not receive or collect, directly or indirectly, from any
Investor any amount upon the Investor Claims other than pursuant to this
Section 11.02. 

               (b)
Without the prior written consent of Administrative Agent, after the occurrence
and during the continuation of an Event of Default Borrower and Acadia
Investors II shall not (i) exercise or enforce any creditor or other right it
may have against an Investor on account of any Investor Claims, (ii) foreclose,
repossess, sequester or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including, without limitation, the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any liens, mortgages,
deeds of trust, security interest, collateral rights, judgments or other
encumbrances on assets of such Investor held by Borrower and/or Acadia
Investors II as security for any Investor Claims, or (iii) exercise any rights
or remedies against an Investor under a Stockholders Agreement or the Operating
Agreement. 

               (c)
Managing Member hereby agrees that its right to receive the Asset Management
Fees as set forth in the Operating Agreement is subordinated to the
Obligations, provided, however, so long as no Event of Default has occurred and
is continuing, Acadia Investors II shall be entitled to receive the Asset
Management Fees pursuant to the terms of the Operating Agreement. 

[Remainder of page intentionally left blank]

55

          IN WITNESS
WHEREOF, the parties have executed and delivered this Agreement as of the day
and year first above written. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ACADIA
STRATEGIC OPPORTUNITY FUND II,

LLC, a Delaware limited liability company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Acadia
Realty Acquisition II, LLC, a

Delaware limited liability company, its

managing member

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Acadia
Realty Limited Partnership,

	
 

	
 

	
 

	
 

	
its sole
member

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Acadia
Realty Trust, its

general partner

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By

	
/s/ Robert
Masters

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
Robert
Masters

	
 

	
 

	
 

	
 

	
 

	
 

	
Senior Vice
President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Address for
notices:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
c/o Acadia
Realty Trust

	
 

	
 

	
1311
Mamaroneck Avenue, Suite 260

	
 

	
 

	
White
Plains, New York 10605

	
 

	
 

	
 

	
 

	
 

	
ACADIA
REALTY ACQUISITION II, LLC, a

Delaware limited liability company

	
 

	
 

	
 

	
 

	
 

	
By:

	
Acadia
Realty Limited Partnership, its sole

member

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
Acadia
Realty Trust, its general

partner

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By

	
/s/ Robert
Masters

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
Robert
Masters

	
 

	
 

	
 

	
 

	
 

	
Senior Vice
President

	
 

	
 

	
 

	
 

	
 

	
 

	
ACADIA
INVESTORS II, INC., a Maryland

corporation

	
 

	
 

	
 

	
 

	
 

	
By

	
/s/ Robert
Masters

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name: Robert
Masters

	
 

	
 

	
 

	
Title:
Senior Vice President

	
 

	
 

	
 

	
 

	
 

	
 

	
BANK OF
AMERICA, N.A.

	
 

	
 

	
 

	
 

	
 

	
 

	
By

	
/s/ Gregory
Egli

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Gregory Egli

	
 

	
 

	
 

	
Senior Vice
President

	
 

	
 

	
 

	
 

	
 

	
 

	
Address for
notices and Applicable Lending Office:

	
 

	
 

	
 

	
 

	
 

	
 

	
One Bryant
Park, 35th Floor

	
 

	
 

	
New York,
New York 10036

	
 

	
 

	
Attention:     Mr.
Gregory Egli

	
 

	
 

	
 

	
 

	
 

	
BANK OF
AMERICA, N.A.

(as Administrative Agent)

	
 

	
 

	
 

	
 

	
 

	
 

	
By

	
/s/ Gregory
Egli

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Gregory Egli

	
 

	
 

	
 

	
Senior Vice
President

	
 

	
 

	
 

	
 

	
 

	
 

	
Administrative
Agent’s Office and address for notices:

	
 

	
 

	
 

	
 

	
 

	
One Bryant
Park, 35th Floor

	
 

	
 

	
New York, New
York 10036

	
 

	
 

	
Attention:     Mr. Gregory
Egli

SCHEDULE A

INDIVIDUAL COMMITMENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Lender

	
 

	
Individual

Commitment

until

October 31, 2013

	
 

	
Individual

Commitment

from

November 1, 2013

to January 31, 2014

	
 

	
Individual

Commitment

from

February 1, 2014

to April 30, 2014

	
 

	
Individual

Commitment

from

May 1, 2014

to July 31, 2014

	
 

	
Individual

Commitment

from and after

August 1, 2014

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	
BofA

	
 

	
$

	
40,000,000

	
 

	
$

	
15,000,000

	
 

	
$

	
11,250,000

	
 

	
$

	
7,500,000

	
 

	
$

	
3,750,000

	
 

EXHIBIT A

AUTHORIZATION LETTER

                                         ____________,
2010

[Name and
address of Administrative Agent]

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Fourth Amended and Restated Credit Agreement dated as of December 22,
 2010 (the “Credit Agreement”; capitalized terms not otherwise defined herein
 shall have the meanings ascribed to such terms in the Credit Agreement) among
 us, as Borrower, Acadia Realty Acquisition II, LLC, Acadia Investors II,
 Inc., the Lenders named therein, and you, as Administrative Agent for said
 Lenders

 

Dear
Sir/Madam:

          In
connection with the captioned Credit Agreement, we hereby designate any of the
following persons to give to you instructions, including notices required
pursuant to the Credit Agreement, orally, by telephone or teleprocess, or in
writing: 

	
  

 	
  

 
	
  

 	
 Michael
 Nelsen

 
	
  

 	
 Robert
 Masters

 
	
  

 	
 Richard
 Hartmann

 

          Instructions
may be honored on the oral, telephonic, teleprocess or written instructions of
anyone purporting to be any one of the above designated persons even if the
instructions are for the benefit of the person delivering them. We will furnish
you with written confirmation of each such instruction signed by any person
designated above (including any telecopy which appears to bear the signature of
any person designated above) on the same day that the instruction is provided
to you, but your responsibility with respect to any instruction shall not be
affected by your failure to receive such confirmation or by its contents. 

          You and
Lenders shall be fully protected in, and shall incur no liability to us for,
acting upon any instructions which you in good faith believe to have been given
by any person designated above, and in no event shall you or Lenders be liable
for special, consequential or punitive damages. In addition, we agree to hold
you and Lenders and your and their respective agents harmless from any and all
liability, loss and expense arising directly or indirectly out of instructions
that we provide to you in connection with 

the Credit Agreement except for liability, loss or expense occasioned
by your gross negligence or willful misconduct. 

          Upon notice
to us, you may, at your option, refuse to execute any instruction, or part
thereof, without you or any Lender incurring any responsibility for any loss,
liability or expense arising out of such refusal if you in good faith believe
that the person delivering the instruction is not one of the persons designated
above or if the instruction is not accompanied by an authentication method that
we have agreed to in writing. 

          We will
promptly notify you in writing of any change in the persons designated above
and, until you have actually received such written notice and have had a
reasonable opportunity to act upon it, you are authorized to act upon
instructions, even though the person delivering them may no longer be
authorized. 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ACADIA
 STRATEGIC OPPORTUNITY FUND II, LLC, a Delaware limited liability company

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Acadia
 Realty Acquisition II, LLC, a Delaware limited liability company, its
 managing member

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
 Acadia
 Realty Limited Partnership, its sole member

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By:

 	
 Acadia
 Realty Trust, its general partner

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Senior Vice
 President

 

2

EXHIBIT B

INVESTORS/CAPITAL COMMITMENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Investors

 	
  

 	
 Capital

 Commitment

 	
  

 	
 Percentage

 Interest

 	
  

 	
 Paid

 Capital

 Contributions

 	
  

 	
 Unpaid

 Capital

 Commitments

 	
  

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Yale University

 	
  

 	
 $

 	
 52,383,677

 	
  

 	
 20.00

 	
 %

 	
 $

 	
 42,306,686

 	
  

 	
 $

 	
 10,076,991

 	
  

 
	
 The Vanderbilt University

 	
  

 	
  

 	
 8,730,611

 	
  

 	
 3.33

 	
 %

 	
  

 	
 7,051,116

 	
  

 	
  

 	
 1,679,495

 	
  

 
	
 The Board of Trustees of the Leland
 Stanford Junior University

 	
  

 	
  

 	
 43,653,064

 	
  

 	
 16.67

 	
 %

 	
  

 	
 35,255,570

 	
  

 	
  

 	
 8,397,493

 	
  

 
	
 Gloster, LLC

 	
  

 	
  

 	
 43,653,064

 	
  

 	
 16.67

 	
 %

 	
  

 	
 35,255,570

 	
  

 	
  

 	
 8,397,493

 	
  

 
	
 Carnegie Corporation of New York

 	
  

 	
 $

 	
 17,461,226

 	
  

 	
 6.67

 	
 %

 	
  

 	
 14,102,228

 	
  

 	
  

 	
 3,358,998

 	
  

 
	
 The William and Flora Hewlett Foundation

 	
  

 	
  

 	
 21,826,532

 	
  

 	
 8.33

 	
 %

 	
  

 	
 17,627,786

 	
  

 	
  

 	
 4,198,747

 	
  

 
	
 The Dupont Pension Trust

 	
  

 	
  

 	
 21,826,532

 	
  

 	
 8.33

 	
 %

 	
  

 	
 17,627,786

 	
  

 	
  

 	
 4,198,747

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	

 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 
	
 Total

 	
  

 	
 $

 	
 209,534,706

 	
  

 	
 80.00

 	
 %*

 	
 $

 	
 169,226,742

 	
  

 	
 $

 	
 40,307,964

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	

 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Managing Member

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia Realty Acquisition II, LLC

 	
  

 	
 $

 	
 52,383,678

 	
  

 	
 20.00

 	
 %

 	
 $

 	
 42,306,685

 	
  

 	
 $

 	
 10,076,993

 	
  

 

	
  

 	
  

 
	

 

 
	
 * Note:
 Acadia Realty Acquisition II, LLC holds a 20% interest

 

EXHIBIT C

INVESTOR ACKNOWLEDGMENT

[Investor Acknowledgment - Investor to
copy/print on letterhead]

[Note: Executed in connection with the Original
Agreement]

                                               ____________,
200___

Bank of
America, N.A.

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit Facility (the “Credit Facility”) established
 pursuant to that certain Credit Agreement dated as of March 9, 2005 (the
 “Original Credit Agreement”), among Acadia Strategic Opportunity Fund II, LLC
 (“Borrower”), Acadia Realty Acquisition II, LLC (“Managing Member”), Acadia
 Investors II, Inc. (“Investor”) and Fleet National Bank (“Fleet”), as amended
 and restated by that certain Amended and Restated Credit Agreement dated as
 of March 21, 2006 by and among Borrower, Managing Member, Investor and Fleet
 (the “First Restated Agreement”), as modified by that certain Modification of
 Amended and Restated Credit Agreement dated as of February, 2008 by and among
 Borrower, Managing Member, Investor, Bank of America, N.A., as successor by
 merger to Fleet (in its individual capacity, “BofA”) and The Bank of New York
 (the “Amendment”, as amended and restated by that certain Third Amended and
 Restated Credit Agreement dated as of February 27, 2009 (the “Second Restated
 Agreement”) among Borrower, Managing Member, Investor, BofA, certain other
 lenders which are, or may become, lenders pursuant to such Agreement (BofA
 and such other lenders, collectively, “Lenders”) and Bank of America, N.A.,
 as administrative agent (“Administrative Agent”), as further amended and
 restated by that certain Third Amended and Restated Agreement dated as of
 March 3, 2010 by and among Borrower, Managing Member, Investor, Lenders and
 Administrative Agent (the “Third Restated Agreement”, and, as amended,
 supplemented or otherwise modified from time to time, the “Credit Agreement”)

 

Ladies and
Gentlemen:

          In
order to induce Lenders to provide the Credit Facility to Borrower, the undersigned
hereby acknowledges and agrees as follows:

          We
have entered into that certain that certain Stockholders Agreement by and among
Investor, Yale University, The Vanderbilt University, Carnegie Corporation of 

New York, The Board of Trustees of the Leland Stanford Junior
University, State Street Bank and Trust Company as Trustee for the Dupont
Pension Trust and The William and Flora Hewlett Foundation dated as of October
15, 2004 (effective as of August 15, 2004) as amended by First Amendment to
Stockholders Agreement dated as of August 15, 2004, as the same may hereafter
be modified in compliance with the terms of this Agreement (the “Stockholders
Agreement”; all capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Stockholders Agreement), pursuant to
which we have (i) purchased shares of stock in Investor, which is a member in
Borrower and (ii) committed to make cash contributions of capital (“Capital
Contributions”) to Investor on the terms and subject to the conditions set
forth in the Stockholders Agreement with an Aggregate Capital Commitment of
$____________ (our “Capital Commitment”), which Capital Contributions are to be
contributed by Investor to Borrower pursuant to the terms of the Operating
Agreement.

          As of the
date hereof, our Remaining Capital Commitment is $____________, which may be
drawn upon the delivery of one or more Drawdown Notices pursuant to and in
accordance with the Stockholders Agreement.

          We hereby
agree that we shall deliver to Administrative Agent from time to time upon the
request of Managing Member, Investor, Administrative Agent or any Lender, a
certificate setting forth the amount of our Remaining Capital Commitment. [Add for Dupont Trust and Hewlett Trust: We hereby
further agree to deliver to Administrative Agent the financial statements as
and when required under Section 6.06(11) of the Credit Agreement.]

          We hereby
acknowledge and agree that under the terms of and subject to the conditions set
forth in the Stockholders Agreement, we are obligated to fund our undrawn
Aggregate Capital Commitment required on account of calls for Capital
Contributions duly made in accordance with the terms of the Stockholders
Agreement (including, without limitation, subsequent calls for Capital
Contributions made in connection with a shortfall in funds available to
Borrower as a result of the failure of any other Major Stockholder or Managing
Member to advance funds with respect to a call for Capital Contributions duly
made). In addition, we hereby acknowledge and confirm to Administrative Agent,
Lenders, Managing Member and Investor that we will make Capital Contributions
to the extent of our unfunded Aggregate Capital Commitment, to be applied to the
repayment of outstanding obligations under the Credit Agreement, whether such
Capital Contributions are called by Managing Member, Investor or Administrative
Agent for such purpose on behalf of Managing Member and Investor (whether or
not any Person is then acting as Managing Member for Borrower or Manager for
Investor) without defense, counterclaim or offset of any kind, all of which we
hereby waive. Notwithstanding anything to the contrary in the Stockholders
Agreement or Operating Agreement, we hereby acknowledge and agree that (i) our
obligation to fund our Aggregate Capital Commitment as and when requested by
Administrative Agent is unconditional and (ii) Administrative Agent shall not
be required to state any specific purpose or use of funds, deliver any
supporting documentation whatsoever or comply with any formalities when making
a Drawdown on our Aggregate Capital Commitment, except that such Drawdown must
be made in writing.

2

          We hereby
(i) acknowledge that Borrower, Managing Member and Investor, pursuant to the
terms of the Stockholders Agreement are making a collateral assignment to
Administrative Agent for the benefit of Lenders of the right to call all future
draws under the Stockholders Agreement to secure all loans and other extensions
of credit made under the Credit Facility and all other obligations of Borrower
under the Credit Agreement and the other Credit Documents (as defined in the
Credit Agreement), (ii) represent that as of the date hereof, (A) to the best
of our knowledge there is no default or circumstance which with the passage of
time and/or the giving of notice would constitute a default under the Operating
Agreement or the Stockholders Agreement, (B) the Stockholders Agreement has not
been modified or amended except for the amendment referred to above and is in
full force and effect and enforceable against the undersigned in accordance
with its terms and (C) we do not have any right of offset against, or reduction
to, our obligation to fund our undrawn Aggregate Capital Commitment, (iii)
acknowledge that for so long as the Credit Facility is in place we will not
amend, modify, supplement, cancel, terminate, reduce or suspend any of the
provisions of the Stockholders Agreement or the Operating Agreement relating to
the Aggregate Capital Commitments, the making of Capital Contributions or the
incurrence of indebtedness or any other provisions that would adversely affect
the rights of Administrative Agent or Lenders without your prior written
consent and (iv) acknowledge that until otherwise instructed by both Borrower
and you in writing, all future Capital Contributions made by us under the
Stockholders Agreement will be made by wire transfer to the following account
which Borrower has also pledged as security for the Obligations (as such term
is defined in the Credit Agreement):

	
  

 	
  

 
	
 Bank:

 	
 Bank of
 America, N.A.

 
	
 Bank
 Address:

 	
 One Bryant
 Park, 35th Floor

 
	
  

 	
 New York,
 New York 10036

 
	
 Account
 Number:

 	
 9489651466

 
	
 ABA Number:

 	
 021200339

 
	
 Account
 Name:

 	
 Acadia
 Strategic Opportunity Fund II, LLC

 
	
 Contact
 Person:

 	
 Mr. Gregory
 Egli

 
	
 Telephone:

 	
 646-855-2630

 

          [Add to Yale acknowledgment: The undersigned
represents, warrants and agrees to and with you that Yale University fully and
irrevocably guarantees payment by Gloster LLC of Gloster LLC’s Capital
Commitment to Investor. Alternatively, Yale to provide separate guaranty in
form acceptable to Lenders.]

3

          We
understand that Lenders and Administrative Agent will be relying upon the
statements and agreements made herein in connection with making the Credit
Facility available to Borrower and, accordingly, hereby acknowledge that
Capital Contributions we make under the Stockholders Agreement will not satisfy
our obligation to fund our undrawn Aggregate Capital Commitment unless such
Capital Contributions are paid into the above account (unless we are otherwise
instructed by Borrower and Administrative Agent as described above). We hereby
acknowledge that the terms of the Credit Agreement and of each other Credit
Document (as defined therein) can be modified without further notice to us or
our consent. In addition, we understand that the Credit Agreement and this
Investor Acknowledgment shall be for the benefit of Administrative Agent,
Lenders, and Lenders’ successors and assigns, and that this Investor
Acknowledgment will remain in effect until we are notified jointly by
Administrative Agent and Managing Member that the Credit Facility has been
terminated.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
 Title:

 	
  

 

4

EXHIBIT D

NOTE

	
  

 	
  

 
	
 $____________

 	
 New York, New York

 
	
  

 	
 ____________, 2010

 

          For value
received, ACADIA STRATEGIC OPPORTUNITY FUND II, LLC, a Delaware limited
liability company (“Maker”) hereby covenants and promises to pay to the order
of [NAME OF LENDER] or its successors or assigns (collectively, “Lender”), at
the principal office of BANK OF AMERICA, N.A. located at One Bryant Park, 35th
Floor, New York, New York 10036 (“Administrative Agent”) for the account of the
Applicable Lending Office of Lender, the principal sum of
_________________________ Dollars ($____________) or so much thereof as shall
be advanced and remain unpaid pursuant to the Loan Agreement (as defined
below), in lawful money of the United States and in immediately available funds,
in accordance with the terms set forth in the Loan Agreement. Maker also
covenants and promises to pay interest on the unpaid principal balance hereof,
for the period such balance is outstanding, in like money, at said office for
the account of said Applicable Lending Office, at the time and at a rate per
annum as provided in the Loan Agreement. Any amount of principal hereof which
is not paid when due, whether at stated maturity, by acceleration, or
otherwise, shall bear interest from the date when due until said principal
amount is paid in full, payable on demand, at the Default Rate.

          This Note
is one of the Notes referred to in the Fourth Amended and Restated Credit
Agreement dated as of the date hereof (as the same may be amended or supplemented
from time to time, the “Loan Agreement”) among Maker, as Borrower, Acadia
Realty Acquisition II, LLC, Acadia Investors II, Inc., the lenders named
therein (including Lender), as Lenders, and Administrative Agent, as
Administrative Agent for Lenders. All of the terms, conditions and provisions
of the Loan Agreement are hereby incorporated by reference. All capitalized
terms used herein and not defined herein shall have the meanings given to them
in the Loan Agreement.

          The Loan
Agreement contains, among other things, provisions for the prepayment of and
acceleration of this Note upon the happening of certain stated events.

          Should the
indebtedness represented by this Note or any part thereof be collected at law
or in equity, or in bankruptcy, receivership or any other court proceeding
(whether at the trial or appellate level), or should this Note be placed in the
hands of attorneys for collection upon default, Maker agrees to pay, in
addition to the principal, interest and other sums due and payable hereon, all
costs of collecting or attempting to collect this Note, including reasonable
attorneys’ fees and expenses.

          All parties
to this Note, whether principal, surety, guarantor or endorser, hereby waive
presentment for payment, demand, protest, notice of protest and notice of
dishonor. 

          This Note
shall be governed by the Laws of the State of New York (without giving effect
to New York’s principles of conflicts of law), provided that, as to the maximum
lawful rate of interest which may be charged or collected, if the Laws
applicable to Lender permit it to charge or collect a higher rate than the Laws
of the State of New York, then such Law applicable to Lender shall apply to
Lender under this Note.

          Anything herein
to the contrary notwithstanding, the obligations of Maker under this Note shall
be subject to the limitation that payments of interest shall not be required to
the extent that receipt of any such payment by Lender would be contrary to
provisions of Law applicable to Lender limiting the maximum rate of interest
that may be charged or collected by Lender.

          IN WITNESS
WHEREOF, Maker has executed and delivered this Note as of the date first above
written. 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ACADIA
 STRATEGIC OPPORTUNITY FUND II,

 LLC, a Delaware limited liability company

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Acadia
 Realty Acquisition II, LLC, a Delaware limited liability company, its
 managing member

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
 Acadia
 Realty Limited Partnership, its sole member

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By:

 	
 Acadia
 Realty Trust, its general partner

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Senior Vice
 President

 

2

EXHIBIT E

CLOSING CERTIFICATE

          Pursuant to
Section 4.01(c) of that certain Fourth Amended and Restated Credit Agreement,
dated as of the date hereof (the “Credit Agreement”; capitalized terms used
herein without definition are used as defined in the Credit Agreement), among
Acadia Strategic Opportunity Fund II, LLC, a Delaware liability company
(“Borrower”), as Borrower, Acadia Realty Acquisition II, LLC, Acadia Investors,
Inc., the lenders named therein and Administrative Agent, as Administrative
Agent for Lenders, the undersigned hereby certifies to Administrative Agent and
Lenders as follows:

	
  

 	
  

 
	
  

 	
           (a) The
 Certificate of Formation of Borrower previously delivered to Administrative
 Agent in connection with the execution and delivery of the Credit Agreement
 has not been amended or modified;

 
	
  

 	
  

 
	
  

 	
           (b) The
 Operating Agreement of Borrower dated as of October 15, 2004 (effective as of
 August 15, 2004) previously delivered to Administrative Agent in connection
 with the execution and delivery of the Credit Agreement has been amended by
 First Amendment to Amended and Restated Operating Agreement of Borrower dated
 as of August 15, 2004 by and among Managing Member and Acadia Investors II,
 Inc. dated as of August 15, 2004, as supplemented by that certain Pledge
 Agreement dated as of June 15, 2004 from Acadia Investors II, Inc. to
 Borrower, as amended by Second Amendment to Amended and Restated Operating
 Agreement of Borrower by and among Managing Member and Acadia Investors II
 dated as of January 1, 2006, and as amended by action of Managing Member with
 the written consent of the advisory committee of Borrower by required vote
 dated January 5, 2010, and the Operating Agreement, as so amended and
 supplemented, has not been further modified, amended or supplemented and is
 in full force and effect;

 
	
  

 	
  

 
	
  

 	
           (c)
 Attached hereto as “Exhibit A” is a certificate dated as of a recent
 date from the Secretary of State of Delaware evidencing the good standing of
 Borrower in such jurisdiction; and

 
	
  

 	
  

 
	
  

 	
           (d)
 Immediately prior to and immediately after the date hereof, no Default or
 Event of Default shall have occurred and will be continuing.

 

          IN WITNESS
WHEREOF, the undersigned has hereunto executed this Closing Certificate as of
this ______ day of ____________, 2010.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ACADIA
 STRATEGIC OPPORTUNITY FUND II, LLC, a Delaware limited liability company

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Acadia
 Realty Acquisition II, LLC, a Delaware limited liability company, its
 managing member

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
 Acadia
 Realty Limited Partnership, its sole member

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By:

 	
 Acadia
 Realty Trust, its general partner

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Senior Vice
 President

 

2

EXHIBIT F

RESERVED

EXHIBIT G

COMPLIANCE CERTIFICATE

                    Robert
Masters does hereby certify to Bank of America, N.A., as Administrative Agent
(“Agent”) and the Lenders referred to in the Credit Agreement referred to below
as follows:

                    1.
I am a Senior Vice President and General Counsel of Acadia Realty Trust, the
general partner of Acadia Realty Limited Partnership, the sole member of Acadia
Realty Acquisition II, LLC (“Managing Member”), which is the managing member of
Acadia Strategic Opportunity Fund II, LLC (“Borrower”).

                    2.
This certificate is the certificate regarding Capital Commitments referred to
in Section 4.01(c) of the Fourth Amended and Restated Credit Agreement (“Credit
Agreement”) dated as of December 22, 2010 (the “Closing Date”) among
Borrower, the Managing Member, Acadia Investors II, Inc., Agent and Lenders
named therein. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Credit Agreement. This certificate is being
delivered to the Administrative Agent and Lenders with the understanding that
Administrative Agent and Lenders will be relying on the accuracy hereof.

                    3.
As of the date hereof the aggregate Capital Commitments of the Investors is $____________
and the aggregate Unpaid Capital Commitments is $____________.

                    4.
Exhibit 1 annexed hereto contains a list of the Investors and sets forth their
respective interests in Borrower, Capital Commitments and Unpaid Capital Commitments,
all as of the date hereof.

                    5.
Borrower’s Liquidity as of the date hereof is $____________, a calculation of
which is set forth on Exhibit 2 annexed hereto.

                    6.
Borrower has not created, incurred, assumed or suffered to exist any
Indebtedness, other than trade payables due within sixty (60) days which are
not delinquent, of Borrower or any Guarantee Obligations of Borrower, other
than Indebtedness and Guarantee Obligations in existence on the Closing Date.
The cost basis of each Investment owned by Borrower as of the date hereof is
separately identified and quantified on Exhibit 3 annexed hereto and the
aggregate of such amounts is $____________ (the “Investment Amount”). Each
obligation which constitutes Indebtedness or Guaranteed Obligations of Borrower
and its Subsidiaries is separately identified and quantified on Exhibit 4
annexed hereto and the aggregate of such amounts is $____________ (the
“Indebtedness and Guaranteed Obligations Amount”). As of the date hereof, the
Indebtedness and Guaranteed Obligations Amount constitutes ______% of the
Investment Amount and therefore Borrower [is] [is not] in compliance with Section 7.01 of
the Credit Agreement.

                    7.
As of the date hereof, Borrower has observed or performed all of its covenants
and other agreements in all material respects, and satisfied every material
condition, contained in the Credit Agreement and the other Credit Documents to
be observed, performed or satisfied by it, and the undersigned officer knows of
no Default or Event of Default which has occurred and is continuing, except as
follows: [If
none, state “none”, otherwise specify the nature and period of existence of the
Default or Event of Default and what action Borrower has taken or proposes to
take with respect thereto.]

                    8.
As of the date hereof, Borrower has observed or performed all of its covenants
and other agreements in all material respects, and satisfied every material
condition, contained in the Credit Agreement and the other Credit Documents to
be observed, performed or satisfied by it, and that the undersigned knows of no
Default or Event of Default which has occurred and is continuing.

Dated: As of
____________, 2010

	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Robert
 Masters

 
	
  

 	
 Senior Vice
 President - General Counsel

 

2

Exhibit 1

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Investors

 	
  

 	
 Capital

 Commitment

 	
  

 	
 Percentage

 Interest

 	
  

 	
 Paid

 Capital

 Contributions

 	
  

 	
 Unpaid

 Capital

 Commitments

 	
  

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
 Yale University

 	
  

 	
 $

 	
 52,383,677

 	
  

 	
  

 	
 20.00

 	
 %

 	
  

 	
  

 	
  

 	
 $

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Dore LP1

 	
  

 	
  

 	
 8,730,611

 	
  

 	
  

 	
 3.33

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 The Board of Trustees of the Leland
 Stanford Junior University

 	
  

 	
  

 	
 43,653,064

 	
  

 	
  

 	
 16.67

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Gloster, LLC2

 	
  

 	
  

 	
 43,653,064

 	
  

 	
  

 	
 16.67

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Carnegie Corporation of New York

 	
  

 	
  

 	
 17,461,226

 	
  

 	
  

 	
 6.67

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 The William and Flora Hewlett Foundation

 	
  

 	
  

 	
 21,826,532

 	
  

 	
  

 	
 8.33

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 The Dupont Pension Trust

 	
  

 	
  

 	
 21,826,532

 	
  

 	
  

 	
 8.33

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Acadia Realty Acquisition II, LLC3

 	
  

 	
  

 	
 52,383,678

 	
  

 	
  

 	
 20.00

 	
 %

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Total

 	
  

 	
 $

 	
 261,918,384

 	
  

 	
  

 	
 100

 	
 %

 	
  

 	
  

 	
  

 	
 $

 	
  

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 

	
  

 	
  

 	
  

 
	

 

 	
  

 
	
 1

 	
 The
 Vanderbilt University is the Investor Guarantor of Dore Capital Real Estate,
 L.P.

 
	
 2

 	
 Yale
 University is the Investor Guarantor of Gloster LLC

 
	
 3

 	
 Guarantor is
 the Investor Guarantor of Acadia Realty Acquisition II, LLC

 

Exhibit 2

Liquidity

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Unencumbered
 Cash (excluding amounts in Deposit Account)

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Unpaid
 Capital Commitments

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Cash Equivalents (listed by category
 according to the clauses of the definition of “Cash Equivalents”:

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
 (a)

 	
 Short-term
 U.S. Government securities

 	
  

 	
 $

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (b)

 	
 CDs, etc.

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (c)

 	
 Commercial
 bank repo obligations

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (d)

 	
 Investment
 grade commercial paper

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (e) 

 	
 Investment
 grade short-term municipal bonds

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (f)

 	
 Commercial
 paper

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (g)

 	
 Permitted
 money market funds

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Subtotal:

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 TOTAL:

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 

EXHIBIT H

CAPITAL STOCK OF SUBSIDIARIES

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name

 	
  

 	
 Ownership

 	
  

 	
 Minimum
 Release Price

 	
  

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
  

 
	
 Acadia-P/A Holding
 Company, LLC (“P/A Holding”):

 	
  

 	
 90% owned by Borrower

 	
  

 	
  

 	
 N/A

 	
  

 
	
 Acadia-PA East Fordham Acquisitions, LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 19,158,000

 	
  

 
	
 P/A-Acadia Pelham Manor, LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 9,321,000

 	
  

 
	
 Acadia-PA Sherman Avenue, LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 0

 	
  

 
	
 Acadia-P/A Canarsie, LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 15,204,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Canarsie Plaza LLC

 	
  

 	
 80% owned by Acadia-P/A
 Canarsie, LLC

 	
  

 	
 $

 	
 15,204,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia-P/A Albee LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
  

 	
 *

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia-P/A/T Albee LLC

 	
  

 	
 95% owned by Acadia-P/A
 Albee LLC

 	
  

 	
  

 	
 *

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Albee Office Development
 LLC

 	
  

 	
 50% owned by Acadia-P/A/T
 Albee LLC

 	
  

 	
  

 	
 *

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Albee Retail Development
 LLC

 	
  

 	
 75% owned by Acadia-P/A/T
 Albee LLC

 	
  

 	
  

 	
 *

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Albee Development LLC

 	
  

 	
 1.5% owned by Albee Office
 Development LLC

 	
  

 	
  

 	
 *

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 32% owned by Albee Retail
 Development LLC

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Fordham Place Office LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 19,158,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 APA 216th
 Street LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 3,886,200

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia-P/A 161st
 Street LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 10,581,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia-P/A Liberty LLC

 	
  

 	
 100% owned by P/A Holdings

 	
  

 	
 $

 	
 3,399,600

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia Marsh Investors LLC

 	
  

 	
 100% owned by Borrower

 	
  

 	
 $

 	
 0

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia Shopko Investors
 LLC

 	
  

 	
 100% owned by Borrower

 	
  

 	
 $

 	
 0

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia Oakbrook LLC

 	
  

 	
 100% owned by Borrower

 	
  

 	
 $

 	
 5,400,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Acadia Atlantic Avenue LLC

 	
  

 	
 100% owned by Borrower

 	
  

 	
 $

 	
 4,080,600

 	
  

 

	
  

 	
  

 	
  

 
	

 

 	
  

 
	
 *

 	
 Site
 1A: $4,956,000

 
	
  

 	
 Balance of
 Investment: $0

 

EXHIBIT I

ASSIGNMENT AND ASSUMPTION AGREEMENT

          ASSIGNMENT
AND ASSUMPTION AGREEMENT, dated as of ____________, 200__, among [NAME OF
ASSIGNING BANK] (“Assignor”) and [NAME OF ASSIGNEE] (“Assignee”).

Preliminary Statement

          1. This
Assignment and Assumption Agreement (this “Agreement”) relates to the Fourth
Amended and Restated Credit Agreement (as the same may be amended from time to
time, the “Loan Agreement”) dated as of December 22, 2010 among Acadia
Strategic Opportunity Fund II, LLC (“Borrower”), Acadia Realty Acquisition II,
LLC, Acadia Investors II, Inc., the lender(s) party thereto (each a “Lender”
and, collectively, “Lenders”) and Bank of America, N.A., as administrative
agent (“Administrative Agent”). All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Loan Agreement.

          2. Subject
to the terms and conditions set forth in the Loan Agreement, Assignor has made
an Individual Commitment to Borrower in an aggregate principal amount of
$____________ (“Assignor’s Loan Commitment”).

          3. The
aggregate outstanding principal amount under Assignor’s Loan Commitment at the
commencement of business on the date hereof is $____________.

          4. Assignor
desires to assign to Assignee all of the rights of Assignor under the Loan
Agreement in respect of a portion of Assignor’s Loan Commitment and the Loans
and other extensions of credit made or participated in by Assignor pursuant
thereto, such portion being in an amount equal to $____________ (the “Assigned
Loan and Commitment”), of which $____________ is currently outstanding and
$____________ is still to be extended to Borrower pursuant to the Loan
Agreement; and Assignee desires to accept assignment of such rights and assume
the corresponding obligations from Assignor on such terms.

          NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

          SECTION
1. Assignment. Assignor hereby assigns and sells to Assignee all of the
rights of Assignor under the Loan Agreement in and to the Assigned Loan and
Commitment, and Assignee hereby accepts such assignment from Assignor and
assumes all of the obligations of Assignor under the Loan Agreement with
respect to the Assigned Loan and Commitment, including, without limitation,
Assignor’s obligations with respect to the undisbursed portion, if any,
thereof. Upon the execution and delivery hereof by Assignor, Assignee, and (if
applicable) Administrative Agent and the payment of the amount specified in
Section 2 hereof required to be paid on the date hereof, (1) Assignee

shall, as of the commencement of business on the date hereof, succeed
to the rights and obligations of a Lender under the Loan Agreement with an
Individual Commitment in an amount equal to the Assigned Loan and Commitment, and
(2) the Individual Commitment of Assignor shall, as of the commencement of
business on the date hereof, be reduced correspondingly and Assignor released
from its obligations under the Loan Agreement to the extent such obligations
have been assumed by Assignee. Assignor represents and warrants that it (x)
owns the Assigned Loan and Commitment free and clear of all liens and other
encumbrances created by Assignor and (y) is legally authorized to enter into
and perform this Agreement. Except as provided in the immediately preceding
sentence, the assignment provided for herein shall be without representation or
warranty by, or recourse to, Assignor.

          SECTION 2. Payments.
As consideration for the assignment and sale contemplated in Section 1 hereof, Assignee
shall pay to Assignor on the date hereof, in immediately available funds, an
amount equal to the outstanding principal amount under the Assigned Loan and
Commitment recited in paragraph 4 of the Preliminary Statement above. Each of
Assignor and Assignee hereby agrees that if it receives any amount under the
Loan Agreement which is for the account of the other party hereto, it shall
receive the same for the account of such other party to the extent of such
other party’s interest therein and shall promptly pay the same to such other
party.

          SECTION 3. Consent;
Execution and Delivery of Notes. [This Agreement is conditioned upon the
consent of Administrative Agent pursuant to Section 10.10 of the Loan
Agreement. The execution of this Agreement by Administrative Agent is evidence
of this consent.] [Consents not required for certain assignments to
entities related to a Lender.] Pursuant to Section 10.10 of the Loan
Agreement, Borrower has agreed to execute and deliver Notes payable to the
respective orders of Assignee and Assignor to evidence the assignment and
assumption provided for herein. Assignee has designated as its Applicable
Lending Office, and as its address for notices, the office identified as such
below.

          SECTION 4. Non-Reliance
on Assignor. Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the solvency, financial
condition, or statements of Borrower or any other party to any Credit Document,
or the validity and enforceability of the obligations of Borrower or any other
party to a Credit Document in respect of the Loan Agreement or any other Credit
Document. Assignee acknowledges that it has, independently and without reliance
on Assignor, any other Lender or Administrative Agent, and based on such
documents and information as it has deemed appropriate, made its own analysis
of the Collateral, credit analysis of Borrower and Guarantor and decision to
enter into this Agreement and will continue to be responsible for making its
own independent appraisal of the Collateral and of the business, affairs and
financial condition of Borrower and the other parties to the Credit Documents.

          SECTION 5. Governing
Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the Laws of the State of New York (without giving effect to
New York’s principles of conflicts of law).

2

          SECTION 6. Counterparts.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.

          SECTION 7. Certain
Representations and Agreements by Assignee. Assignee represents that it is
legally authorized to enter into and perform this Agreement. In addition,
Assignee hereby represents that it is entitled to receive any payments to be
made to it under the Loan Agreement or hereunder without the withholding of any
tax and agrees to furnish the evidence of such exemption as specified therein
and otherwise to comply with the provisions of Section 9.13 of the Loan
Agreement.

          IN WITNESS
WHEREOF, the parties have caused this Agreement to be executed and delivered by
their duly authorized officers as of the date first above written.

	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF
 ASSIGNOR]

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 
	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF
 ASSIGNEE]

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	

  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Assignee’s
 Applicable Lending Office and Address for Notices:

 
	
  

 	
  

 
	
  

 	
 [Assignee]

 	
  

 
	
  

 	
 [Address]

 	
  

 
	
  

 	
 Attention:

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Telephone:

 	
 (___) ________

 

	
  

 	
  

 	
  

 
	
  

 	
 BANK OF
 AMERICA, N.A.

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 

3

EXHIBIT J

RESERVED

EXHIBIT K

FORM OF INVESTOR REAFFIRMATIONS

[Attached]

[Investor
Reaffirmation -

Vanderbilt University to copy/print on letterhead]

	
  

 	
  

 
	
  

 	
 As of ____________, 2010

 

Bank of America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit
Facility (the “Credit Facility”) established pursuant to that certain Credit
Agreement dated as of March 9, 2005 (the “Original Credit Agreement”),
among Acadia Strategic Opportunity Fund II, LLC (“Borrower”), Acadia Realty
Acquisition II, LLC (“Managing Member”), Acadia Investors II, Inc. (“Acadia
Investor”) and Fleet National Bank (“Fleet”), as amended and restated by that
certain Amended and Restated Credit Agreement dated as of March 21, 2006
(the “First Restated Credit Agreement”) among Borrower, Managing Member, Acadia
Investor, Bank of America, N.A., as successor by merger to Fleet (in its
individual capacity, “BofA”), The Bank of New York, now known as The Bank of
New York Mellon (“BNYM”; BNYM, BofA and each other lender which may become a
lender pursuant to such agreement, collectively, “Lenders”) and Bank of
America, N.A., as administrative agent (“Administrative Agent”), as amended
by Modification of Amended and Restated Credit Agreement dated as of
February 29, 2008 among Borrower, Managing Member, Acadia Investor, BofA,
BNYM and Administrative Agent (the “First Modification Agreement”), as
amended and restated by Second Amended and Restated Credit Agreement dated as
of February 27, 2009 among Borrower, Managing Member, Acadia Investor,
BofA, BNYM and Administrative Agent (the “Second Restated Credit Agreement”)
and by Third Amended and Restated Credit Agreement dated as of March 3,
2010 (the “Third Restated Credit Agreement”; the Original Credit Agreement,
as restated by the First Restated Credit Agreement, modified by the First
Modification Agreement, amended and restated by the Second Restated Credit
Agreement and amended and restated by the Third Restated Credit Agreement and
as amended, supplemented or otherwise modified from time to time,
collectively, the “Credit Agreement”) 

 

Ladies and Gentlemen:

          In
connection with the Credit Agreement, The Vanderbilt University executed and
delivered to Administrative Agent for Lenders a letter agreement dated
contemporaneously with the Credit Agreement (the “Investor Acknowledgment”),
which was assumed by Dore Capital Real Estate, L.P., a Delaware limited
partnership (“Investor”). Investor has been advised that Borrower has requested
that Lenders modify

the Credit Agreement to,
among other things, extend the maturity date of the Credit Agreement (such
modifications, the “Extension Modification”).

          Pursuant
to the Investor Acknowledgment and in order to induce Lenders to enter into the
Extension Modification, the undersigned hereby acknowledges and agrees as
follows (capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Investor Acknowledgment):

          1.
That certain Stockholders Agreement by and among Gloster LLC, Yale University,
The Vanderbilt University, Carnegie Corporation of New York, The Board of
Trustees of the Leland Stanford Junior University, State Street Bank and Trust
Company as Trustee for the Dupont Pension Trust and The William and Flora
Hewlett Foundation dated as of October 15, 2004 (effective as of
August 15, 2004) as amended by First Amendment to Stockholders Agreement
dated as of August 15, 2004 (the “Stockholders Agreement”) remains in full
force and effect and has not been modified.

          2.
Investor hereby acknowledges that the Investor Acknowledgment remains
unmodified and in full force and effect. As of the date hereof, (i) Investor’s
Remaining Capital Commitment is $____________, which may be drawn upon the
delivery of one or more Drawdown Notices pursuant to and in accordance with the
Stockholders Agreement and/or the Investor Acknowledgment and (ii) Investor
does not have any right of offset against, or reduction to, Investor’s
obligation to fund Investor’s undrawn Aggregate Capital Commitment.

          3.
Investor understands that Lenders and Administrative Agent will be relying upon
the statements and agreements made herein in connection with making the
Extension Modification available to Borrower.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Very truly yours,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 DORE CAPITAL REAL ESTATE L.P., a Delaware limited
 liability partnership

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Dore Capital Real Estate, LLC, its general partner

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 Matthew W. Wright

 
	
  

 	
  

 	
  

 	
 President

 

2

          This
is to certify that this instrument was executed in my presence on the date
hereof by the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary Public

 
	
  

 	
  

 	
  

 
	
 My Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT K
(Continued)

[Investor
Acknowledgment Reaffirmation -

Gloster LLC to copy/print on letterhead]

	
  

 	
  

 
	
  

 	
 As of ____________, 2010

 

Bank of America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit
Facility (the “Credit Facility”) established pursuant to that certain Credit
Agreement dated as of March 9, 2005 (the “Original Credit Agreement”),
among Acadia Strategic Opportunity Fund II, LLC (“Borrower”), Acadia Realty
Acquisition II, LLC (“Managing Member”), Acadia Investors II, Inc. (“Acadia
Investor”) and Fleet National Bank (“Fleet”), as amended and restated by that
certain Amended and Restated Credit Agreement dated as of March 21, 2006
(the “First Restated Credit Agreement”) among Borrower, Managing Member,
Acadia Investor, Bank of America, N.A., as successor by merger to Fleet (in
its individual capacity, “BofA”), The Bank of New York, now known as The Bank
of New York Mellon (“BNYM”; BNYM, BofA and each other lender which may become
a lender pursuant to such agreement, collectively, “Lenders”) and Bank of
America, N.A., as administrative agent (“Administrative Agent”), as amended
by Modification of Amended and Restated Credit Agreement dated as of
February 29, 2008 among Borrower, Managing Member, Acadia Investor,
BofA, BNYM and Administrative Agent (the “First Modification Agreement”) and
as amended and restated by Second Amended and Restated Credit Agreement dated
as of February 27, 2009 among Borrower, Managing Member, Acadia
Investor, BofA, BNYM and Administrative Agent (the “Second Restated Credit
Agreement”) and by Third Amended and Restated Credit Agreement dated as of
March 3, 2010 (the “Third Restated Credit Agreement”; the Original
Credit Agreement, as restated by the First Restated Credit Agreement,
modified by the First Modification Agreement, amended and restated by the
Second Restated Credit Agreement and amended and restated by the Third
Restated Credit Agreement and as amended, supplemented or otherwise modified
from time to time, collectively, the “Credit Agreement”) 

 

Ladies and Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Investor”) executed and
delivered to Administrative Agent for Lenders a letter agreement dated
contemporaneously with the Credit Agreement (the “Investor Acknowledgment”).

Investor has been advised
that Borrower has requested that Lenders modify the Credit Agreement to, among
other things, extend the maturity date of the Credit Agreement (such
modifications, the “Extension Modification”).

          Pursuant
to the Investor Acknowledgment and in order to induce Lenders to enter into the
Extension Modification, the undersigned hereby acknowledges and agrees as
follows (capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Investor Acknowledgment):

          1.
That certain Stockholders Agreement by and among Gloster LLC, Yale University,
The Vanderbilt University, Carnegie Corporation of New York, The Board of
Trustees of the Leland Stanford Junior University, State Street Bank and Trust
Company as Trustee for the Dupont Pension Trust and The William and Flora
Hewlett Foundation dated as of October 15, 2004 (effective as of
August 15, 2004) as amended by First Amendment to Stockholders Agreement
dated as of August 15, 2004 (the “Stockholders Agreement”) remains in full
force and effect and has not been modified.

          2.
Investor hereby acknowledges that the Investor Acknowledgment remains
unmodified and in full force and effect. As of the date hereof, (i) Investor’s
Remaining Capital Commitment is $____________, which may be drawn upon the
delivery of one or more Drawdown Notices pursuant to and in accordance with the
Stockholders Agreement and/or the Investor Acknowledgment and (ii) Investor
does not have any right of offset against, or reduction to, Investor’s
obligation to fund Investor’s undrawn Aggregate Capital Commitment.

          3.
Investor understands that Lenders and Administrative Agent will be relying upon
the statements and agreements made herein in connection with making the
Extension Modification available to Borrower.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Very truly yours,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 GLOSTER, LLC

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Fourth Century, LLC, its managing member

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
 3C Corporation, its managing member

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
 David F. Swensen

 
	
  

 	
  

 	
  

 	
  

 	
 President

 

2

          This
is to certify that this instrument was executed in my presence on the date
hereof by the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary Public

 
	
  

 	
  

 	
  

 
	
 My Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT K
(Continued)

[Investor
Acknowledgment Reaffirmation -

Yale University to copy/print on letterhead]

	
  

 	
  

 
	
  

 	
 As of ____________, 2010

 

Bank of America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit
Facility (the “Credit Facility”) established pursuant to that certain Credit
Agreement dated as of March 9, 2005 (the “Original Credit Agreement”),
among Acadia Strategic Opportunity Fund II, LLC (“Borrower”), Acadia Realty
Acquisition II, LLC (“Managing Member”), Acadia Investors II, Inc. (“Acadia
Investor”) and Fleet National Bank (“Fleet”), as amended and restated by that
certain Amended and Restated Credit Agreement dated as of March 21, 2006
(the “First Restated Credit Agreement”) among Borrower, Managing Member,
Acadia Investor, Bank of America, N.A., as successor by merger to Fleet (in
its individual capacity, “BofA”), The Bank of New York, now known as The Bank
of New York Mellon (“BNYM”; BNYM, BofA and each other lender which may become
a lender pursuant to such agreement, collectively, “Lenders”) and Bank of America,
N.A., as administrative agent (“Administrative Agent”), as amended by
Modification of Amended and Restated Credit Agreement dated as of
February 29, 2008 among Borrower, Managing Member, Acadia Investor,
BofA, BNYM and Administrative Agent (the “First Modification Agreement”) and
as amended and restated by Second Amended and Restated Credit Agreement dated
as of February 27, 2009 among Borrower, Managing Member, Acadia
Investor, BofA, BNYM and Administrative Agent (the “Second Restated Credit
Agreement”) and by Third Amended and Restated Credit Agreement dated as of
March 3, 2010 (the “Third Restated Credit Agreement”; the Original
Credit Agreement, as restated by the First Restated Credit Agreement,
modified by the First Modification Agreement, amended and restated by the
Second Restated Credit Agreement and amended and restated by the Third
Restated Credit Agreement and as amended, supplemented or otherwise modified
from time to time, collectively, the “Credit Agreement”) 

 

Ladies and Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Investor”) executed and
delivered to Administrative Agent for Lenders a letter agreement dated
contemporaneously with the Credit Agreement (the “Investor Acknowledgment”).

Investor has been advised
that Borrower has requested that Lenders modify the Credit Agreement to, among
other things, extend the maturity date of the Credit Agreement (such
modifications, the “Extension Modification”).

          Pursuant
to the Investor Acknowledgment and in order to induce Lenders to enter into the
Extension Modification, the undersigned hereby acknowledges and agrees as
follows (capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Investor Acknowledgment):

          1.
That certain Stockholders Agreement by and among Gloster LLC, Yale University,
The Vanderbilt University, Carnegie Corporation of New York, The Board of
Trustees of the Leland Stanford Junior University, State Street Bank and Trust
Company as Trustee for the Dupont Pension Trust and The William and Flora
Hewlett Foundation dated as of October 15, 2004 (effective as of
August 15, 2004) as amended by First Amendment to Stockholders Agreement
dated as of August 15, 2004 (the “Stockholders Agreement”) remains in full
force and effect and has not been modified.

          2.
Investor hereby acknowledges that the Investor Acknowledgment remains
unmodified and in full force and effect. As of the date hereof, (i) Investor’s
Remaining Capital Commitment is $____________, which may be drawn upon the
delivery of one or more Drawdown Notices pursuant to and in accordance with the
Stockholders Agreement and/or the Investor Acknowledgment and (ii) Investor
does not have any right of offset against, or reduction to, Investor’s
obligation to fund Investor’s undrawn Aggregate Capital Commitment.

          3.
Investor understands that Lenders and Administrative Agent will be relying upon
the statements and agreements made herein in connection with making the Extension
Modification available to Borrower.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly yours,

 
	
  

 	
  

 	
  

 
	
  

 	
 YALE UNIVERSITY

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 David F. Swensen

 
	
  

 	
  

 	
 Chief Investment Officer

 

2

          This
is to certify that this instrument was executed in my presence on the date
hereof by the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary Public

 
	
  

 	
  

 	
  

 
	
 My Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT K
(Continued)

[Investor
Acknowledgment Reaffirmation -

Stanford to copy/print on letterhead]

	
  

 	
  

 
	
  

 	
 As of ____________, 2010

 

Bank of America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit
Facility (the “Credit Facility”) established pursuant to that certain Credit
Agreement dated as of March 9, 2005 (the “Original Credit Agreement”),
among Acadia Strategic Opportunity Fund II, LLC (“Borrower”), Acadia Realty
Acquisition II, LLC (“Managing Member”), Acadia Investors II, Inc. (“Acadia
Investor”) and Fleet National Bank (“Fleet”), as amended and restated by that
certain Amended and Restated Credit Agreement dated as of March 21, 2006
(the “First Restated Credit Agreement”) among Borrower, Managing Member,
Acadia Investor, Bank of America, N.A., as successor by merger to Fleet (in
its individual capacity, “BofA”), The Bank of New York, now known as The Bank
of New York Mellon (“BNYM”; BNYM, BofA and each other lender which may become
a lender pursuant to such agreement, collectively, “Lenders”) and Bank of
America, N.A., as administrative agent (“Administrative Agent”), as amended
by Modification of Amended and Restated Credit Agreement dated as of
February 29, 2008 among Borrower, Managing Member, Acadia Investor,
BofA, BNYM and Administrative Agent (the “First Modification Agreement”) and
as amended and restated by Second Amended and Restated Credit Agreement dated
as of February 27, 2009 among Borrower, Managing Member, Acadia
Investor, BofA, BNYM and Administrative Agent (the “Second Restated Credit
Agreement”) and by Third Amended and Restated Credit Agreement dated as of
March 3, 2010 (the “Third Restated Credit Agreement”; the Original
Credit Agreement, as restated by the First Restated Credit Agreement,
modified by the First Modification Agreement, amended and restated by the
Second Restated Credit Agreement and amended and restated by the Third
Restated Credit Agreement and as amended, supplemented or otherwise modified
from time to time, collectively, the “Credit Agreement”) 

 

Ladies and Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Investor”) executed and
delivered to Administrative Agent for Lenders a letter agreement dated
contemporaneously with the Credit Agreement (the “Investor Acknowledgment”).

Investor has been advised
that Borrower has requested that Lenders modify the Credit Agreement to, among
other things, extend the maturity date of the Credit Agreement (such
modifications, the “Extension Modification”).

          Pursuant
to the Investor Acknowledgment and in order to induce Lenders to enter into the
Extension Modification, the undersigned hereby acknowledges and agrees as
follows (capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Investor Acknowledgment):

          1.
That certain Stockholders Agreement by and among Gloster LLC, Yale University,
The Vanderbilt University, Carnegie Corporation of New York, The Board of
Trustees of the Leland Stanford Junior University, State Street Bank and Trust
Company as Trustee for the Dupont Pension Trust and The William and Flora
Hewlett Foundation dated as of October 15, 2004 (effective as of
August 15, 2004) as amended by First Amendment to Stockholders Agreement
dated as of August 15, 2004 (the “Stockholders Agreement”) remains in full
force and effect and has not been modified.

          2.
Investor hereby acknowledges that the Investor Acknowledgment remains
unmodified and in full force and effect. As of the date hereof, (i) Investor’s
Remaining Capital Commitment is $____________, which may be drawn upon the delivery
of one or more Drawdown Notices pursuant to and in accordance with the
Stockholders Agreement and/or the Investor Acknowledgment and (ii) Investor
does not have any right of offset against, or reduction to, Investor’s
obligation to fund Investor’s undrawn Aggregate Capital Commitment.

          3.
Investor understands that Lenders and Administrative Agent will be relying upon
the statements and agreements made herein in connection with making the
Extension Modification available to Borrower.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly yours,

 
	
  

 	
  

 	
  

 
	
  

 	
 THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR
 UNIVERSITY

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Laudan Nabizadeh

 
	
  

 	
  

 	
 Director, Real Estate & Natural Resources
 Investments

 

2

          This
is to certify that this instrument was executed in my presence on the date
hereof by the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary Public

 
	
  

 	
  

 	
  

 
	
 My Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT K
(Continued)

[Investor
Acknowledgment Reaffirmation -

State Street/Dupont to copy/print on letterhead]

	
  

 	
  

 
	
  

 	
 As of ____________, 2010

 

Bank of America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit
Facility (the “Credit Facility”) established pursuant to that certain Credit
Agreement dated as of March 9, 2005 (the “Original Credit Agreement”),
among Acadia Strategic Opportunity Fund II, LLC (“Borrower”), Acadia Realty
Acquisition II, LLC (“Managing Member”), Acadia Investors II, Inc. (“Acadia
Investor”) and Fleet National Bank (“Fleet”), as amended and restated by that
certain Amended and Restated Credit Agreement dated as of March 21, 2006
(the “First Restated Credit Agreement”) among Borrower, Managing Member,
Acadia Investor, Bank of America, N.A., as successor by merger to Fleet (in
its individual capacity, “BofA”), The Bank of New York, now known as The Bank
of New York Mellon (“BNYM”; BNYM, BofA and each other lender which may become
a lender pursuant to such agreement, collectively, “Lenders”) and Bank of
America, N.A., as administrative agent (“Administrative Agent”), as amended
by Modification of Amended and Restated Credit Agreement dated as of
February 29, 2008 among Borrower, Managing Member, Acadia Investor,
BofA, BNYM and Administrative Agent (the “First Modification Agreement”) and
as amended and restated by Second Amended and Restated Credit Agreement dated
as of February 27, 2009 among Borrower, Managing Member, Acadia
Investor, BofA, BNYM and Administrative Agent (the “Second Restated Credit
Agreement”) and by Third Amended and Restated Credit Agreement dated as of
March 3, 2010 (the “Third Restated Credit Agreement”; the Original
Credit Agreement, as restated by the First Restated Credit Agreement,
modified by the First Modification Agreement, amended and restated by the
Second Restated Credit Agreement and amended and restated by the Third
Restated Credit Agreement and as amended, supplemented or otherwise modified
from time to time, collectively, the “Credit Agreement”) 

 

Ladies and Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Investor”) executed and
delivered to Administrative Agent for Lenders a letter agreement dated
contemporaneously with the Credit Agreement (the “Investor Acknowledgment”).

Investor has been advised
that Borrower has requested that Lenders modify the Credit Agreement to, among
other things, extend the maturity date of the Credit Agreement (such
modifications, the “Extension Modification”).

          Pursuant
to the Investor Acknowledgment and in order to induce Lenders to enter into the
Extension Modification, the undersigned hereby acknowledges and agrees as
follows (capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Investor Acknowledgment):

          1.
That certain Stockholders Agreement by and among Gloster LLC, Yale University,
The Vanderbilt University, Carnegie Corporation of New York, The Board of
Trustees of the Leland Stanford Junior University, State Street Bank and Trust
Company as Trustee for the Dupont Pension Trust and The William and Flora
Hewlett Foundation dated as of October 15, 2004 (effective as of
August 15, 2004) as amended by First Amendment to Stockholders Agreement
dated as of August 15, 2004 (the “Stockholders Agreement”) remains in full
force and effect and has not been modified.

          2.
Investor hereby acknowledges that the Investor Acknowledgment remains
unmodified and in full force and effect. As of the date hereof, (i) Investor’s
Remaining Capital Commitment is $____________, which may be drawn upon the
delivery of one or more Drawdown Notices pursuant to and in accordance with the
Stockholders Agreement and/or the Investor Acknowledgment and (ii) Investor
does not have any right of offset against, or reduction to, Investor’s
obligation to fund Investor’s undrawn Aggregate Capital Commitment.

          3.
Investor understands that Lenders and Administrative Agent will be relying upon
the statements and agreements made herein in connection with making the
Extension Modification available to Borrower.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly yours,

 
	
  

 	
  

 	
  

 
	
  

 	
 STATE STREET BANK AND TRUST COMPANY, as Trustee for
 the DuPont Pension Trust

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 

2

          This
is to certify that this instrument was executed in my presence on the date
hereof by the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary Public

 
	
  

 	
  

 	
  

 
	
 My Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT K
(Continued)

[Investor Acknowledgment Reaffirmation -

Carnegie Corp. to copy/print on letterhead]

	
  

 	
  

 
	
  

 	
 As of
 ____________, 2010

 

Bank of
America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit Facility (the “Credit Facility”) established
pursuant to that certain Credit Agreement dated as of March 9, 2005 (the
“Original Credit Agreement”), among Acadia Strategic Opportunity Fund II, LLC
(“Borrower”), Acadia Realty Acquisition II, LLC (“Managing Member”), Acadia
Investors II, Inc. (“Acadia Investor”) and Fleet National Bank (“Fleet”), as
amended and restated by that certain Amended and Restated Credit Agreement
dated as of March 21, 2006 (the “First Restated Credit Agreement”) among
Borrower, Managing Member, Acadia Investor, Bank of America, N.A., as
successor by merger to Fleet (in its individual capacity, “BofA”), The Bank
of New York, now known as The Bank of New York Mellon (“BNYM”; BNYM, BofA and
each other lender which may become a lender pursuant to such agreement,
collectively, “Lenders”) and Bank of America, N.A., as administrative agent
(“Administrative Agent”), as amended by Modification of Amended and Restated
Credit Agreement dated as of February 29, 2008 among Borrower, Managing
Member, Acadia Investor, BofA, BNYM and Administrative Agent (the “First
Modification Agreement”) and as amended and restated by Second Amended and
Restated Credit Agreement dated as of February 27, 2009 among Borrower,
Managing Member, Acadia Investor, BofA, BNYM and Administrative Agent (the
“Second Restated Credit Agreement”) and by Third Amended and Restated Credit
Agreement dated as of March 3, 2010 (the “Third Restated Credit
Agreement”; the Original Credit Agreement, as restated by the First Restated
Credit Agreement, modified by the First Modification Agreement, amended and
restated by the Second Restated Credit Agreement and amended and restated by
the Third Restated Credit Agreement and as amended, supplemented or otherwise
modified from time to time, collectively, the “Credit Agreement”) 

 

Ladies and
Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Investor”) executed and
delivered to Administrative Agent for Lenders a letter agreement dated
contemporaneously with the Credit Agreement (the “Investor Acknowledgment”). 

Investor has been advised that Borrower has requested that Lenders
modify the Credit Agreement to, among other things, extend the maturity date of
the Credit Agreement (such modifications, the “Extension Modification”).

          Pursuant to
the Investor Acknowledgment and in order to induce Lenders to enter into the
Extension Modification, the undersigned hereby acknowledges and agrees as
follows (capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Investor Acknowledgment):

          1. That
certain Stockholders Agreement by and among Gloster LLC, Yale University, The
Vanderbilt University, Carnegie Corporation of New York, The Board of Trustees
of the Leland Stanford Junior University, State Street Bank and Trust Company
as Trustee for the Dupont Pension Trust and The William and Flora Hewlett
Foundation dated as of October 15, 2004 (effective as of August 15,
2004) as amended by First Amendment to Stockholders Agreement dated as of
August 15, 2004 (the “Stockholders Agreement”) remains in full force and
effect and has not been modified.

          2. Investor
hereby acknowledges that the Investor Acknowledgment remains unmodified and in
full force and effect. As of the date hereof, (i) Investor’s Remaining Capital
Commitment is $____________, which may be drawn upon the delivery of one or
more Drawdown Notices pursuant to and in accordance with the Stockholders
Agreement and/or the Investor Acknowledgment and (ii) Investor does not have
any right of offset against, or reduction to, Investor’s obligation to fund
Investor’s undrawn Aggregate Capital Commitment.

          3. Investor
understands that Lenders and Administrative Agent will be relying upon the
statements and agreements made herein in connection with making the Extension
Modification available to Borrower.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 
	
  

 	
 CARNEGIE
 CORPORATION OF NEW YORK

 
	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 D. Ellen
 Shuman

 
	
  

 	
  

 	
 Vice
 President and Chief Investment Officer

 

2

          This is to
certify that this instrument was executed in my presence on the date hereof by
the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT K (Continued)

[Investor Acknowledgment Reaffirmation -

Hewlett Foundation to copy/print on letterhead]

	
  

 	
  

 
	
  

 	
 As of
 ____________, 2010

 

Bank of
America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit Facility (the “Credit Facility”) established
pursuant to that certain Credit Agreement dated as of March 9, 2005 (the
“Original Credit Agreement”), among Acadia Strategic Opportunity Fund II, LLC
(“Borrower”), Acadia Realty Acquisition II, LLC (“Managing Member”), Acadia
Investors II, Inc. (“Acadia Investor”) and Fleet National Bank (“Fleet”), as
amended and restated by that certain Amended and Restated Credit Agreement
dated as of March 21, 2006 (the “First Restated Credit Agreement”) among
Borrower, Managing Member, Acadia Investor, Bank of America, N.A., as
successor by merger to Fleet (in its individual capacity, “BofA”), The Bank
of New York, now known as The Bank of New York Mellon (“BNYM”; BNYM, BofA and
each other lender which may become a lender pursuant to such agreement,
collectively, “Lenders”) and Bank of America, N.A., as administrative agent
(“Administrative Agent”), as amended by Modification of Amended and Restated
Credit Agreement dated as of February 29, 2008 among Borrower, Managing
Member, Acadia Investor, BofA, BNYM and Administrative Agent (the “First
Modification Agreement”) and as amended and restated by Second Amended and
Restated Credit Agreement dated as of February 27, 2009 among Borrower,
Managing Member, Acadia Investor, BofA, BNYM and Administrative Agent (the
“Second Restated Credit Agreement”) and by Third Amended and Restated Credit
Agreement dated as of March 3, 2010 (the “Third Restated Credit
Agreement”; the Original Credit Agreement, as restated by the First Restated
Credit Agreement, modified by the First Modification Agreement, amended and
restated by the Second Restated Credit Agreement and amended and restated by
the Third Restated Credit Agreement and as amended, supplemented or otherwise
modified from time to time, collectively, the “Credit Agreement”) 

 

Ladies and
Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Investor”) executed and
delivered to Administrative Agent for Lenders a letter agreement dated
contemporaneously with the Credit Agreement (the “Investor Acknowledgment”). 

Investor has been advised that Borrower has requested that Lenders
modify the Credit Agreement to, among other things, extend the maturity date of
the Credit Agreement. In connection with the extension, Borrower has agreed
that the maximum principal amount of the credit facility under the Credit
Agreement will be $40,000,000 and has agreed to increase the “Applicable
Margin” (as such quoted term is defined in the Credit Agreement) (such
modifications, the “Extension Modification”).

          Pursuant to
the Investor Acknowledgment and in order to induce Lenders to enter into the
Extension Modification, the undersigned hereby acknowledges and agrees as
follows (capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Investor Acknowledgment):

          1. That
certain Stockholders Agreement by and among Gloster LLC, Yale University, The
Vanderbilt University, Carnegie Corporation of New York, The Board of Trustees
of the Leland Stanford Junior University, State Street Bank and Trust Company
as Trustee for the Dupont Pension Trust and The William and Flora Hewlett
Foundation dated as of October 15, 2004 (effective as of August 15,
2004) as amended by First Amendment to Stockholders Agreement dated as of
August 15, 2004 (the “Stockholders Agreement”) remains in full force and
effect and has not been modified.

          2. Investor
hereby acknowledges that the Investor Acknowledgment remains unmodified and in
full force and effect. As of the date hereof, (i) Investor’s Remaining Capital
Commitment is $____________, which may be drawn upon the delivery of one or
more Drawdown Notices pursuant to and in accordance with the Stockholders
Agreement and/or the Investor Acknowledgment and (ii) Investor does not have
any right of offset against, or reduction to, Investor’s obligation to fund
Investor’s undrawn Aggregate Capital Commitment.

          3. Investor
understands that Lenders and Administrative Agent will be relying upon the
statements and agreements made herein in connection with making the Extension
Modification available to Borrower.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 
	
  

 	
 THE WILLIAM
 AND FLORA HEWLETT FOUNDATION

 
	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Laurance R.
 Hoagland, Jr.

 
	
  

 	
  

 	
 Vice
 President and Chief Investment Officer

 

2

          This
is to certify that this instrument was executed in my presence on the date
hereof by the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT L

FORM OF GLOSTER PRINCIPAL REAFFIRMATION

[Attached]

[Guaranty Reaffirmation - copy/print on Yale
letterhead]

	
  

 	
  

 
	
  

 	
 ____________,
 2010

 

Bank of
America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit Facility (the “Credit Facility”) established
pursuant to that certain Credit Agreement dated as of March 9, 2005 (the
“Original Credit Agreement”), among Acadia Strategic Opportunity Fund II, LLC
(“Borrower”), Acadia Realty Acquisition II, LLC (“Managing Member”), Acadia
Investors II, Inc. (“Acadia Investor”) and Fleet National Bank (“Fleet”), as
amended and restated by that certain Amended and Restated Credit Agreement
dated as of March 21, 2006 (the “First Restated Credit Agreement”) among
Borrower, Managing Member, Acadia Investor, Bank of America, N.A., as
successor by merger to Fleet (in its individual capacity, “BofA”), The Bank
of New York, now known as The Bank of New York Mellon (“BNYM”; BNYM, BofA and
each other lender which may become a lender pursuant to such agreement,
collectively, “Lenders”) and Bank of America, N.A., as administrative agent
(“Administrative Agent”), as amended by Modification of Amended and Restated
Credit Agreement dated as of February 29, 2008 among Borrower, Managing
Member, Acadia Investor, BofA, BNYM and Administrative Agent (the “First
Modification Agreement”) and as amended and restated by Second Amended and
Restated Credit Agreement dated as of February 27, 2009 among Borrower,
Managing Member, Acadia Investor, BofA, BNYM and Administrative Agent (the
“Second Restated Credit Agreement”) and by Third Amended and Restated Credit
Agreement dated as of March 3, 2010 (the “Third Restated Credit
Agreement”; the Original Credit Agreement, as restated by the First Restated
Credit Agreement, modified by the First Modification Agreement, amended and
restated by the Second Restated Credit Agreement and amended and restated by
the Third Restated Credit Agreement and as amended, supplemented or otherwise
modified from time to time, collectively, the “Credit Agreement”) 

 

Ladies and
Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Guarantor”) executed
and delivered to Administrative Agent for Lenders a Guaranty dated as of March 21,
2006 (the “Guaranty”). Guarantor has been advised that Borrower has requested
that 

Lenders modify the Credit Agreement to, among other things, extend the
Maturity Date of the Credit Agreement (such modifications, the “Extension
Modification”).

          In order to
induce Lenders to enter into the Extension Modification, the undersigned hereby
acknowledges and agrees as follows (capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Guaranty):

          1.
Guarantor hereby acknowledges that the Guaranty remains unmodified and in full
force and effect.

          2.
Guarantor understands that Lenders and Administrative Agent will be relying
upon the statements and agreements made herein in connection with making the
Extension Modification available to Borrower.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 
	
  

 	
 YALE
 UNIVERSITY

 
	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 David F.
 Swensen

 
	
  

 	
  

 	
 Chief
 Investment Officer

 

          This is to
certify that this instrument was executed in my presence on the date hereof by
the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

2

EXHIBIT L
(Continued)

[Comfort Letter Reaffirmation - copy/print on
Yale letterhead]

	
  

 	
  

 
	
  

 	
 As of
 ____________, 2010

 

Bank of
America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit Facility (the “Credit Facility”) established
pursuant to that certain Credit Agreement dated as of March 9, 2005 (the
“Original Credit Agreement”), among Acadia Strategic Opportunity Fund II, LLC
(“Borrower”), Acadia Realty Acquisition II, LLC (“Managing Member”), Acadia
Investors II, Inc. (“Acadia Investor”) and Fleet National Bank (“Fleet”), as
amended and restated by that certain Amended and Restated Credit Agreement
dated as of March 21, 2006 (the “First Restated Credit Agreement”) among
Borrower, Managing Member, Acadia Investor, Bank of America, N.A., as
successor by merger to Fleet (in its individual capacity, “BofA”), The Bank
of New York, now known as The Bank of New York Mellon (“BNYM”; BNYM, BofA and
each other lender which may become a lender pursuant to such agreement,
collectively, “Lenders”) and Bank of America, N.A., as administrative agent
(“Administrative Agent”), as amended by Modification of Amended and Restated
Credit Agreement dated as of February 29, 2008 among Borrower, Managing
Member, Acadia Investor, BofA, BNYM and Administrative Agent (the “First
Modification Agreement”) and as amended and restated by Second Amended and
Restated Credit Agreement dated as of February 27, 2009 among Borrower,
Managing Member, Acadia Investor, BofA, BNYM and Administrative Agent (the
“Second Restated Credit Agreement”) and by Third Amended and Restated Credit
Agreement dated as of March 3, 2010 (the “Third Restated Credit
Agreement”; the Original Credit Agreement, as restated by the First Restated
Credit Agreement, modified by the First Modification Agreement, amended and
restated by the Second Restated Credit Agreement and amended and restated by
the Third Restated Credit Agreement and as amended, supplemented or otherwise
modified from time to time, collectively, the “Credit Agreement”) 

 

Ladies and
Gentlemen:

          In
connection with the Credit Agreement, the undersigned (collectively, “Gloster
Affiliates”) executed and delivered to Administrative Agent for Lenders a
letter agreement dated contemporaneously with the Credit Agreement (the
“Comfort Letter”). The Gloster Affiliates have been advised that Borrower has
requested that Lenders modify the Credit Agreement to, among other things,
extend the Maturity Date of the Credit Agreement (such modifications, the
“Extension Modification”).

          In order to
induce Lenders to enter into the Extension Modification, the undersigned hereby
acknowledge and agree as follows (capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Comfort
Letter):

          1. The
Gloster Affiliates hereby acknowledge that the Comfort Letter remains
unmodified and in full force and effect.

          2. The
Gloster Affiliates understand that Lenders and Administrative Agent will be
relying upon the statements and agreements made herein in connection with
making the Extension Modification available to Borrower.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 FOURTH
 CENTURY, LLC

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 3C
 Corporation, as Manager

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 Dale F.
 Swensen

 
	
  

 	
  

 	
  

 	
 President

 
	
  

 	
  

 
	
  

 	
 YALE
 UNIVERSITY RETIREMENT PLAN FOR STAFF EMPLOYEES

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Yale
 University, as Administrator

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 Dale F.
 Swensen

 
	
  

 	
  

 	
  

 	
 Chief
 Investment Officer

 
	
  

 	
  

 
	
  

 	
 YALE
 UNIVERSITY RETIREE HEALTH BENEFITS COVERAGE TRUST

 
	
  

 	
  

 
	
  

 	
 By:

 	
 Yale
 University, as Trustee

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 Dale F.
 Swensen

 
	
  

 	
  

 	
  

 	
 Chief
 Investment Officer

 

2

          This is to
certify that this instrument was executed in my presence on the date hereof by
the parties whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

3

EXHIBIT M

FORM OF VANDERBILT PRINCIPAL REAFFIRMATION

[Guaranty Reaffirmation - copy/print on Vanderbilt
letterhead]

	
  

 	
  

 
	
  

 	
 ____________,
 2010

 

Bank of
America, N.A., as Administrative Agent

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 	
  

 
	
  

 	
 Re:

 	
 Revolving Credit Facility (the “Credit Facility”) established
pursuant to that certain Credit Agreement dated as of March 9, 2005 (the
“Original Credit Agreement”), among Acadia Strategic Opportunity Fund II, LLC
(“Borrower”), Acadia Realty Acquisition II, LLC (“Managing Member”), Acadia
Investors II, Inc. (“Acadia Investor”) and Fleet National Bank (“Fleet”), as
amended and restated by that certain Amended and Restated Credit Agreement
dated as of March 21, 2006 (the “First Restated Credit Agreement”) among
Borrower, Managing Member, Acadia Investor, Bank of America, N.A., as
successor by merger to Fleet (in its individual capacity, “BofA”), The Bank
of New York, now known as The Bank of New York Mellon (“BNYM”; BNYM, BofA and
each other lender which may become a lender pursuant to such agreement,
collectively, “Lenders”) and Bank of America, N.A., as administrative agent
(“Administrative Agent”), as amended by Modification of Amended and Restated
Credit Agreement dated as of February 29, 2008 among Borrower, Managing
Member, Acadia Investor, BofA, BNYM and Administrative Agent (the “First
Modification Agreement”) and as amended and restated by Second Amended and
Restated Credit Agreement dated as of February 27, 2009 among Borrower,
Managing Member, Acadia Investor, BofA, BNYM and Administrative Agent (the
“Second Restated Credit Agreement”) and by Third Amended and Restated Credit
Agreement dated as of March 3, 2010 (the “Third Restated Credit
Agreement”; the Original Credit Agreement, as restated by the First Restated
Credit Agreement, modified by the First Modification Agreement, amended and
restated by the Second Restated Credit Agreement and amended and restated by
the Third Restated Credit Agreement and as amended, supplemented or otherwise
modified from time to time, collectively, the “Credit Agreement”) 

 

Ladies and
Gentlemen:

          In
connection with the Credit Agreement, the undersigned (“Guarantor”) executed
and delivered to Administrative Agent for Lenders a Guaranty of Capital dated
as of March 3, 2010 (the “Guaranty”). Guarantor has been advised that
Borrower has requested that Lenders modify the Credit Agreement to, among other
things, extend the 

Maturity Date of the Credit Agreement (such modifications, the
“Extension Modification”).

          In order to
induce Lenders to enter into the Extension Modification, the undersigned hereby
acknowledges and agrees as follows (capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Guaranty):

          3.
Guarantor hereby acknowledges that the Guaranty remains unmodified and in full
force and effect.

          4.
Guarantor understands that Lenders and Administrative Agent will be relying
upon the statements and agreements made herein in connection with making the
Extension Modification available to Borrower.

	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 
	
  

 	
 VANDERBILT
 UNIVERSITY

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Matthew W.
 Wright

 
	
  

 	
  

 	
 Vice
 Chancellor for Investments

 

          This is to
certify that this instrument was executed in my presence on the date hereof by
the party whose signature appears above in the capacity indicated.

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	

 

 	
  

 	
  

 

2

EXHIBIT N

SOURCES AND USES STATEMENT

[Attached]

i

	
  

 
	
 Acadia Strategic Opportunity
 Fund II, LLC

 
	
 At September
 30, 2010

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Sources of Funds

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 161st Street, cash in escrow

 	
  

 	
 $

 	
 1,481,000

 	
  

 	
 $

 	
 1,481,000

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Canarsie, gross incremental proceeds (above $48M), original scope

 	
  

 	
 $

 	
 10,000,000

 	
  

 	
  

 	
  

 	
  

 
	
 Canarsie, $10M loan costs

 	
  

 	
 $

 	
 (330,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Canarsie, gross incremental proceeds (above $58M), PetSmart

 	
  

 	
 $

 	
 4,200,000

 	
  

 	
  

 	
  

 	
  

 
	
 Canarsie, $4.2M loan costs

 	
  

 	
 $

 	
 (153,000

 	
 )

 	
 $

 	
 13,717,000

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 City Point, cash in escrow (bond financing, etc.)

 	
  

 	
 $

 	
 21,222,000

 	
  

 	
  

 	
  

 	
  

 
	
 City Point, Phase 2 resi recapitalization (market rate housing)

 	
  

 	
 $

 	
 18,000,000

 	
  

 	
 $

 	
 39,222,000

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
  

 
	

 

 
	
 Oakbrook, net sale proceeds

 	
  

 	
 $

 	
 7,950,000

 	
  

 	
 $

 	
 7,950,000

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Pelham, cash in escrow

 	
  

 	
 $

 	
 1,216,000

 	
  

 	
  

 	
  

 	
  

 
	
 Pelham, incremental loan proceeds, existing debt

 	
  

 	
 $

 	
 2,446,000

 	
  

 	
 $

 	
 3,662,000

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Net cash flow (through 12.2010) 

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 161st Street

 	
  

 	
 $

 	
 2,294,000

 	
  

 	
  

 	
  

 	
  

 
	
 216th Street

 	
  

 	
 $

 	
 740,000

 	
  

 	
  

 	
  

 	
  

 
	
 Atlantic Avenue

 	
  

 	
 $

 	
 128,000

 	
  

 	
  

 	
  

 	
  

 
	
 Canarsie Plaza

 	
  

 	
 $

 	
 3,822,000

 	
  

 	
  

 	
  

 	
  

 
	
 City Point

 	
  

 	
 $

 	
 —

 	
  

 	
  

 	
  

 	
  

 
	
 Fordham Place (CF sweep)

 	
  

 	
 $

 	
 —

 	
  

 	
  

 	
  

 	
  

 
	
 Liberty Avenue

 	
  

 	
 $

 	
 1,833,000

 	
  

 	
  

 	
  

 	
  

 
	
 Pelham Manor

 	
  

 	
 $

 	
 2,772,000

 	
  

 	
  

 	
  

 	
  

 
	
 Sherman Plaza

 	
  

 	
 $

 	
 —

 	
  

 	
  

 	
  

 	
  

 
	
 Oakbrook Center Nieman Marcus (10.2010 thru 01.15.2011)

 	
  

 	
 $

 	
 241,000

 	
  

 	
  

 	
  

 	
  

 
	
 Contingency @ 5%

 	
  

 	
 $

 	
 (591,000

 	
 )

 	
 $

 	
 11,239,000

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Cash and cash equivalents

 	
  

 	
 $

 	
 2,643,000

 	
  

 	
  

 	
  

 	
  

 
	
 Unfunded capital commitments

 	
  

 	
 $

 	
 50,385,000

 	
  

 	
  

 	
  

 	
  

 
	
 Working capital requirement

 	
  

 	
 $

 	
 (10,000,000

 	
 )

 	
 $

 	
 43,028,000

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Total

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 120,299,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Net Source or (Use)

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (60,000

 	
 )

 
	
 Less: Loan Balance

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (40,000,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
 Funds required from other sources to repay Loan

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (40,060,000

 	
 )

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Uses of Funds

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 161st Street, construction, Einstein

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (1,349,000

 	
 )

 	
  

 	
  

 	
  

 
	
 161st Street, construction, Legal Aid

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (414,000

 	
 )

 	
  

 	
  

 	
  

 
	
 161st Street, construction, Walgreens

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (521,000

 	
 )

 	
  

 	
  

 	
  

 
	
 161st Street, construction, infrastructure

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (414,000

 	
 )

 	
  

 	
  

 	
  

 
	
 161st Street, construction, general conditions

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (1,521,000

 	
 )

 	
  

 	
  

 	
  

 
	
 161st Street, construction, City of New York

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (3,220,000

 	
 )

 	
  

 	
  

 	
  

 
	
 161st Street, construction, 15,132 SF on S-Level

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (1,211,000

 	
 )

 	
  

 	
  

 	
  

 
	
 161st Street, misc. soft costs

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (210,000

 	
 )

 	
 $

 	
 (8,860,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Canarsie, hard cost overrun on original $82.8M budget

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (5,712,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Canarsie, PetSmart building, TI, LC

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (4,023,000

 	
 )

 	
 $

 	
 (9,735,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 CityPoint, BofA land loan payoff

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (20,650,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, bonds payoff

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (20,000,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, equity requirement 

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Total estimated project costs

 	
  

 	
 $

 	
 (190,000,000

 	
 )

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Construction financing @ 60% LTC

 	
  

 	
 $

 	
 114,000,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 North Parcel Contribution

 	
  

 	
 $

 	
 10,800,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Purchase allocation & sunk costs

 	
  

 	
 $

 	
 56,479,000

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Remaining equity requirement

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (8,721,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, project administration fee (WSP)

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (1,744,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, P/A Associates

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (3,540,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, residential carry

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (2,163,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, parking liability

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (4,500,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, interim use

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (935,000

 	
 )

 	
 $

 	
 (62,253,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Fordham TI/LC - 100,000 SF @ $100 SF

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (10,000,000

 	
 )

 	
 $

 	
 (10,000,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Liberty Ave

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 —

 	
  

 	
 $

 	
 —

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Pelham, Petsmart TI/LC

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (1,811,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Pelman, Five Below TI/LC

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (737,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Pelham, Joyce Leslie TI/LC

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (268,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Pelman, T-Mobile TI/LC

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (97,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Pelham, other TI/LC

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (1,448,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Pelham, BofA refi costs

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (433,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Pelham, contingency / signage

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (296,000

 	
 )

 	
 $

 	
 (5,090,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Sherman Ave

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 —

 	
  

 	
 $

 	
 —

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Repay ARLP’s bridge financing to Fund II 

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 City Point, BofA land loan paydown, Phase 1

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (5,340,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, bond financing, interest reserve

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (4,000,000

 	
 )

 	
  

 	
  

 	
  

 
	
 City Point, past due PILOT

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (2,336,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Advance from ARLP

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (2,896,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Pelham, advance to fund loan escrow

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (793,000

 	
 )

 	
 $

 	
 (15,365,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Fund II, net payables

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (3,461,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Fund II, subscription line interest (avg annual rate = 3.54%)

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (3,182,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Fund II, subscription line commitment fee

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (350,000

 	
 )

 	
  

 	
  

 	
  

 
	
 Fund II, P/A Associates

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 (2,063,000

 	
 )

 	
 $

 	
 (9,056,000

 	
 )

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 	
  

 	
  

 	
  

 
	

  

 
	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 
	
 Total

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
  (120,359,000

 	
 )

 

iiExhibit 10.40

 
	
  

 
	

 
	
  

 
	
LOAN AGREEMENT

 
	
  

 
	
 among

 
	
  

 
	
 P/A-ACADIA PELHAM MANOR, LLC,

 
	
 as Borrower

 
	
  

 
	
 and

 
	
  

 
	
 BANK OF AMERICA, N.A.,

 
	
 a national banking association,

 
	
 as Administrative Agent

 
	
  

 
	
 and

 
	
  

 
	
 THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

 
	
  

 
	
 Dated as of December 1, 2010

 
	
  

 
	
 BANC OF AMERICA SECURITIES LLC,

 
	
 as Sole Arranger and Sole Book Manager

 

	
  

 	
  

 
	
 LOCATION:

 	
 2 Penn Place

 
	
 VILLAGE:

 	
 Pelham Manor

 
	
 TOWN:

 	
 Pelham

 
	
 COUNTY:

 	
 Westchester

 
	
 SECTION:

 	
 166.26

 
	
 BLOCK:

 	
 1

 
	
 LOTS:

 	
 8.1, 8.2 and
 8.3

 

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE 1

 	
  

 	
 THE LOAN

 	
 1

 	
  

 
	
  

 	
 1.1.

 	
  

 	
 General
 Information and Exhibits

 	
 1

 	
  

 
	
  

 	
 1.2.

 	
  

 	
 Purpose

 	
 1

 	
  

 
	
  

 	
 1.3.

 	
  

 	
 Commitment
 to Lend

 	
 2

 	
  

 
	
  

 	
 1.4.

 	
  

 	
 Intentionally
 Omitted

 	
 2

 	
  

 
	
  

 	
 1.5.

 	
  

 	
 Intentionally
 Omitted

 	
 2

 	
  

 
	
  

 	
 1.6.

 	
  

 	
 Evidence of
 Debt

 	
 2

 	
  

 
	
  

 	
 1.7.

 	
  

 	
 Interest Rates

 	
 2

 	
  

 
	
  

 	
 1.8.

 	
  

 	
 Prepayment

 	
 3

 	
  

 
	
  

 	
 1.9.

 	
  

 	
 Intentionally
 Omitted

 	
 3

 	
  

 
	
  

 	
 1.10.

 	
  

 	
 Late Charge

 	
 3

 	
  

 
	
  

 	
 1.11.

 	
  

 	
 Taxes

 	
 3

 	
  

 
	
  

 	
 1.12.

 	
  

 	
 Payment
 Schedule and Maturity Date

 	
 5

 	
  

 
	
  

 	
 1.13.

 	
  

 	
 Advances and
 Payments

 	
 5

 	
  

 
	
  

 	
 1.14.

 	
  

 	
 Administrative
 Agent Advances

 	
 7

 	
  

 
	
  

 	
 1.15.

 	
  

 	
 Defaulting
 Lender

 	
 8

 	
  

 
	
  

 	
 1.16.

 	
  

 	
 Several
 Obligations; No Liability, No Release

 	
 9

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE 2

 	
  

 	
 ADDITIONAL
 COVENANTS AND AGREEMENTS

 	
 10

 	
  

 
	
  

 	
 2.1.

 	
  

 	
 Bank
 Accounts

 	
 10

 	
  

 
	
  

 	
 2.2.

 	
  

 	
 Intentionally
 Omitted

 	
 10

 	
  

 
	
  

 	
 2.3.

 	
  

 	
 Contracts

 	
 10

 	
  

 
	
  

 	
 2.4.

 	
  

 	
 Assignment
 of Contracts and Plans

 	
 10

 	
  

 
	
  

 	
 2.5.

 	
  

 	
 Financial
 Covenants

 	
 11

 	
  

 
	
  

 	
 2.6.

 	
  

 	
 Limitation
 on Debt

 	
 12

 	
  

 
	
  

 	
 2.7.

 	
  

 	
 Inspection

 	
 12

 	
  

 
	
  

 	
 2.8.

 	
  

 	
 Notice to
 Lenders

 	
 13

 	
  

 
	
  

 	
 2.9.

 	
  

 	
 Financial
 Statements

 	
 13

 	
  

 
	
  

 	
 2.10.

 	
  

 	
 Other
 Information

 	
 13

 	
  

 
	
  

 	
 2.11.

 	
  

 	
 Intentionally
 Omitted

 	
 13

 	
  

 
	
  

 	
 2.12.

 	
  

 	
 Intentionally
 Omitted

 	
 13

 	
  

 
	
  

 	
 2.13.

 	
  

 	
 Appraisal

 	
 13

 	
  

 
	
  

 	
 2.14.

 	
  

 	
 Payment of
 Withholding Taxes

 	
 14

 	
  

 
	
  

 	
 2.15.

 	
  

 	
 ERISA and
 Prohibited Transaction Taxes

 	
 14

 	
  

 
	
  

 	
 2.16.

 	
  

 	
 Ground Lease

 	
 14

 	
  

 
	
  

 	
 2.17.

 	
  

 	
 Storage
 Facility Master Lease

 	
 17

 	
  

 
	
  

 	
 2.18.

 	
  

 	
 Condominium
 Provisions

 	
 18

 	
  

 
	
  

 	
 2.19.

 	
  

 	
 Transfer
 Taxes

 	
 21

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE 3

 	
  

 	
 REPRESENTATIONS
 AND WARRANTIES

 	
 22

 	
  

 
	
  

 	
 3.1.

 	
  

 	
 General
 Representations and Warranties

 	
 22

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.2.

 	
  

 	
 Ground Lease

 	
 23

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE 4

 	
  

 	
 DEFAULT AND
 REMEDIES

 	
 24

 	
  

 
	
  

 	
 4.1.

 	
  

 	
 Events of
 Default

 	
 24

 	
  

 
	
  

 	
 4.2.

 	
  

 	
 Remedies

 	
 25

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE 5

 	
  

 	
 ADMINISTRATIVE
 AGENT

 	
 27

 	
  

 
	
  

 	
 5.1.

 	
  

 	
 Appointment
 and Authorization of Administrative Agent

 	
 27

 	
  

 
	
  

 	
 5.2.

 	
  

 	
 Delegation
 of Duties

 	
 28

 	
  

 
	
  

 	
 5.3.

 	
  

 	
 Liability of
 Administrative Agent

 	
 28

 	
  

 
	
  

 	
 5.4.

 	
  

 	
 Reliance by
 Administrative Agent

 	
 29

 	
  

 
	
  

 	
 5.5.

 	
  

 	
 Notice of
 Default

 	
 29

 	
  

 
	
  

 	
 5.6.

 	
  

 	
 Credit
 Decision; Disclosure of Information by Administrative Agent

 	
 29

 	
  

 
	
  

 	
 5.7.

 	
  

 	
 Indemnification
 of Administrative Agent

 	
 30

 	
  

 
	
  

 	
 5.8.

 	
  

 	
 Administrative
 Agent in Individual Capacity

 	
 31

 	
  

 
	
  

 	
 5.9.

 	
  

 	
 Successor
 Administrative Agent

 	
 31

 	
  

 
	
  

 	
 5.10.

 	
  

 	
 Releases;
 Acquisition and Transfers of Collateral

 	
 31

 	
  

 
	
  

 	
 5.11.

 	
  

 	
 Application
 of Payments

 	
 33

 	
  

 
	
  

 	
 5.12.

 	
  

 	
 Benefit

 	
 34

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE 6

 	
  

 	
 GENERAL
 TERMS AND CONDITIONS

 	
 34

 	
  

 
	
  

 	
 6.1.

 	
  

 	
 Consents;
 Borrower’s Indemnity

 	
 34

 	
  

 
	
  

 	
 6.2.

 	
  

 	
 Miscellaneous

 	
 35

 	
  

 
	
  

 	
 6.3.

 	
  

 	
 Notices

 	
 36

 	
  

 
	
  

 	
 6.4.

 	
  

 	
 Payments Set
 Aside

 	
 37

 	
  

 
	
  

 	
 6.5.

 	
  

 	
 Successors
 and Assigns

 	
 37

 	
  

 
	
  

 	
 6.6.

 	
  

 	
 Confidentiality

 	
 40

 	
  

 
	
  

 	
 6.7.

 	
  

 	
 Set-off

 	
 40

 	
  

 
	
  

 	
 6.8.

 	
  

 	
 Sharing of
 Payments

 	
 41

 	
  

 
	
  

 	
 6.9.

 	
  

 	
 Amendments;
 Survival

 	
 41

 	
  

 
	
  

 	
 6.10.

 	
  

 	
 Costs and
 Expenses

 	
 43

 	
  

 
	
  

 	
 6.11.

 	
  

 	
 Tax Forms

 	
 43

 	
  

 
	
  

 	
 6.12.

 	
  

 	
 Further
 Assurances

 	
 45

 	
  

 
	
  

 	
 6.13.

 	
  

 	
 Inducement
 to Lenders

 	
 45

 	
  

 
	
  

 	
 6.14.

 	
  

 	
 Forum

 	
 45

 	
  

 
	
  

 	
 6.15.

 	
  

 	
 Interpretation

 	
 46

 	
  

 
	
  

 	
 6.16.

 	
  

 	
 No
 Partnership, etc

 	
 46

 	
  

 
	
  

 	
 6.17.

 	
  

 	
 Records

 	
 46

 	
  

 
	
  

 	
 6.18.

 	
  

 	
 Commercial
 Purpose

 	
 47

 	
  

 
	
  

 	
 6.19.

 	
  

 	
 Waiver of
 Jury Trial

 	
 47

 	
  

 
	
  

 	
 6.20.

 	
  

 	
 Service of
 Process

 	
 47

 	
  

 
	
  

 	
 6.21.

 	
  

 	
 USA Patriot
 Act Notice

 	
 47

 	
  

 
	
  

 	
 6.22.

 	
  

 	
 Entire
 Agreement

 	
 47

 	
  

 
	
  

 	
 6.23.

 	
  

 	
 Limitation
 on Liability

 	
 48

 	
  

 
	
  

 	
 6.24.

 	
  

 	
 Third
 Parties; Benefit

 	
 48

 	
  

 

3

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.25.

 	
  

 	
 Rules of
 Construction

 	
 48

 	
  

 
	
  

 	
 6.26.

 	
  

 	
 Cross-Default

 	
 49

 	
  

 
	
  

 	
 6.27.

 	
  

 	
 Lien Law

 	
 49

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 EXHIBITS

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 EXHIBIT “A”

 	
  

 	
 Legal
 Description of Land

 	
  

 	
  

 
	
 EXHIBIT “B”

 	
  

 	
 Definitions
 and Financial Statements

 	
  

 	
  

 
	
 EXHIBIT “C”

 	
  

 	
 Conditions
 Precedent to the Advance

 	
  

 	
  

 
	
 EXHIBIT
 “C-1”

 	
  

 	
 Conditions
 Precedent to Advances in Excess of the Initial Advance

 	
  

 	
  

 
	
 EXHIBIT “D”

 	
  

 	
 Monthly
 Amortization Schedule

 	
  

 	
  

 
	
 EXHIBIT “E”

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
  

 
	
 EXHIBIT “F”

 	
  

 	
 Advances

 	
  

 	
  

 
	
 EXHIBIT
 “F-1”

 	
  

 	
 Draw Request

 	
  

 	
  

 
	
 EXHIBIT “G”

 	
  

 	
 Survey
 Requirements

 	
  

 	
  

 
	
 EXHIBIT “H”

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
  

 
	
 EXHIBIT “I”

 	
  

 	
 Leasing and
 Tenant Matters

 	
  

 	
  

 
	
 EXHIBIT “J”

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
  

 
	
 EXHIBIT “K”

 	
  

 	
 Intentionally
 Omitted

 	
  

 	
  

 
	
 EXHIBIT “L”

 	
  

 	
 Assignment
 and Assumption

 	
  

 	
  

 
	
 EXHIBIT “M”

 	
  

 	
 Note

 	
  

 	
  

 
	
 EXHIBIT “N”

 	
  

 	
 Schedule of
 Lenders and Other Parties

 	
  

 	
  

 
	
 EXHIBIT “O”

 	
  

 	
 Swap
 Contracts

 	
  

 	
  

 

4

LOAN AGREEMENT

                    THIS
LOAN AGREEMENT (this “Agreement”) dated as of December 1, 2010 is made by and
among each lender from time to time a party hereto (individually, a “Lender”
and collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking
association as Administrative Agent, and P/A-ACADIA PELHAM MANOR, LLC, a
Delaware limited liability company (“Borrower”), who agree as follows:

ARTICLE 1

THE LOAN

                    1.1.
General Information and Exhibits. This Agreement includes the Exhibits
listed below which are marked by an “X”, all of which Exhibits are attached
hereto and made a part hereof for all purposes. Borrower and Lenders agree that
if any Exhibit to be attached to this Agreement contains blanks, the same shall
be completed correctly and in accordance with this Agreement prior to or at the
time of the execution and delivery thereof.

	
  

 	
  

 	
  

 	
  

 
	
 X               

 	
 Exhibit “A”

 	
 -

 	
 Legal
 Description of the Land

 
	
 X               

 	
 Exhibit “B”

 	
 -

 	
 Definitions
 and Financial Statements

 
	
 X               

 	
 Exhibit “C”

 	
 -

 	
 Conditions
 Precedent to the Initial Advance

 
	
                   

 	
 Exhibit
 “C-1”

 	
 -

 	
 Conditions
 Precedent to Advances in Excess of the Initial Advance

 
	
 X               

 	
 Exhibit “D”

 	
 -

 	
 Monthly
 Amortization Schedule

 
	
 X               

 	
 Exhibit “E”

 	
 -

 	
 Intentionally
 Omitted

 
	
                   

 	
 Exhibit “F”

 	
 -

 	
 Advances

 
	
                   

 	
 Exhibit “F-1”

 	
 -

 	
 Draw Request

 
	
 X               

 	
 Exhibit “G”

 	
 -

 	
 Survey
 Requirements

 
	
                   

 	
 Exhibit “H”

 	
 -

 	
 Intentionally
 Omitted

 
	
 X               

 	
 Exhibit “I”

 	
 -

 	
 Leasing and
 Tenant Matters

 
	
                   

 	
 Exhibit “J”

 	
 -

 	
 Intentionally
 Omitted

 
	
                   

 	
 Exhibit “K”

 	
 -

 	
 Intentionally
 Omitted

 
	
 X               

 	
 Exhibit “L”

 	
 -

 	
 Assignment
 and Assumption

 
	
 X               

 	
 Exhibit “M”

 	
 -

 	
 Loan Note

 
	
 X               

 	
 Exhibit “N”

 	
 -

 	
 Schedule of
 Lenders and Other Parties

 
	
 X               

 	
 Exhibit “O”

 	
 -

 	
 Swap
 Contracts

 

The Exhibits contain other terms, provisions and conditions applicable
to the Loan. Capitalized terms used in this Agreement shall have the meanings
assigned to them in Exhibit “B”. This Agreement and the other Loan
Documents, which must be in form, detail and substance satisfactory to Lenders,
evidence the agreements of Borrower and Lenders with respect to the Loan.
Borrower shall comply with all of the Loan Documents. 

                    1.2.
Purpose. The proceeds of the Loan shall only be used by Borrower to
reimburse Borrower for paid Tenant Improvement Costs and Leasing Commissions
with respect to leases of the Property in compliance with this Agreement and
the other Loan Documents.

                    1.3.
Commitment to Lend. Borrower agrees to borrow from each Lender, and each
Lender severally agrees to make advances of its Pro Rata Share of the Loan
proceeds to Borrower in amounts at any one time outstanding not to exceed such
Lender’s Pro Rata Share of the Loan and (except for Administrative Agent with
respect to Administrative Agent Advances), on the terms and subject to the
conditions set forth in this Agreement and Exhibit “C”, Exhibit “C-1” and
Exhibit “F” attached to this Agreement. Lender’s commitment to lend shall
expire and terminate automatically if the Loan is prepaid in full. The Loan is
not revolving. Any amount repaid may not be reborrowed. 

                    1.4.
Intentionally Omitted. 

                    1.5.
Intentionally Omitted. 

                    1.6.
Evidence of Debt. Amounts of the Loan made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
Administrative Agent in the ordinary course of business. The accounts or
records maintained by Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Loan made by Lenders to Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of
Borrower hereunder to pay any amount owing with respect to the Indebtedness. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of Administrative Agent in respect of such
matters, the accounts and records of Administrative Agent shall control in the
absence of manifest error. 

                    1.7.
Interest Rates. 

                  1.7.1.
Interest Rate. 

                    (a)
The unpaid principal balance of this Loan from day to day outstanding which is
not past due, shall bear interest at a fluctuating rate of interest equal to
the BBA LIBOR Daily Floating Rate plus the LIBOR Margin. The “BBA LIBOR Daily
Floating Rate” shall mean a fluctuating rate of interest equal to the British
Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as selected by
Administrative Agent from time to time) as determined for each Business Day at
approximately 11:00 a.m. London time two (2) London Banking Days prior to the
date in question, for U.S. Dollar deposits (for delivery on the first day of
such interest period) with a one month term, as adjusted from time to time in
Administrative Agent’s sole discretion for reserve requirements, deposit
insurance assessment rates and other regulatory costs. If such rate is not
available at such time for any reason, then the rate will be determined by such
alternative method as reasonably selected by Administrative Agent. A “London
Banking Day” is a day on which banks in London are open for business and
dealing in offshore dollars. Interest shall be computed for the actual number
of days which have elapsed, on the basis of a 360-day year. 

                    (b)
If Administrative Agent determines that no adequate basis exists for
determining the BBA LIBOR Daily Floating Rate or that the BBA LIBOR Daily
Floating Rate will not adequately and fairly reflect the cost to Lenders of
funding the Loan, or that any 

2

applicable
law or regulation or compliance therewith by any Lender prohibits or restricts
or makes impossible the charging of interest based on the BBA LIBOR Daily
Floating Rate and such Lender so notifies Administrative Agent and Borrower,
then until Administrative Agent notifies Borrower that the circumstances giving
rise to such suspension no longer exist, interest shall accrue and be payable
on the unpaid principal balance of this Loan from the date Administrative Agent
so notifies Borrower until the Maturity Date of this Loan (whether by
acceleration, declaration, extension or otherwise) at a fluctuating rate of
interest equal to the Base Rate. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender. 

                    1.7.2.
Default Rate. After the occurrence of a Default (including the expiration
of any applicable cure period), Administrative Agent, in Administrative Agent’s
sole discretion and without notice or demand, may raise the rate of interest
accruing on the Principal Debt a rate per annum (the “Default Rate”) equal to
the BBA LIBOR Daily Floating Rate (or, if unavailable pursuant to Section
1.7.1, the Prime Rate) plus 6.65%. 

                    1.8.
Prepayment. Borrower may prepay the principal balance of this Loan, in
full at any time or in part from time to time, without fee, premium or penalty,
provided that: (a) Administrative Agent shall have actually received from
Borrower prior written notice of (i) Borrower’s intent to prepay, (ii) the
amount of principal which will be prepaid (the “Prepaid Principal”), and (iii)
the date on which the prepayment will be made; (b) each prepayment shall be in
a minimum amount of $1,000 or more (unless the prepayment retires the
outstanding balance of this Loan in full); and (c) each prepayment shall be in
the amount of 100% of the Prepaid Principal, plus accrued unpaid interest
thereon to the date of prepayment, plus any other sums which have become due to
Administrative Agent and Lenders under the Loan Documents on or before the date
of prepayment but have not been paid. If this Loan is prepaid in full, any
commitment of Lenders for further advances shall automatically terminate. 

                    1.9.
Intentionally Omitted. 

                    1.10.
Late Charge. If Borrower shall fail to make any payment due hereunder or
under the terms of any Note within fifteen (15) days after the date such
payment is due, Borrower shall pay to the applicable Lender or Lenders on
demand a late charge equal to 4% of such payment. Such fifteen (15) day period
shall not be construed as in any way extending the due date of any payment. The
“late charge” is imposed for the purpose of defraying the expenses of a Lender
incident to handling such defaulting payment. This charge shall be in addition
to, and not in lieu of, any other remedy Lenders may have and is in addition to
any fees and charges of any agents or attorneys which Administrative Agent or
Lenders may employ upon the occurrence of a Default, whether authorized herein
or by Law. 

                    1.11.
Taxes. 

                    (a)
Any and all payments by Borrower to or for the account of Administrative Agent
or any Lender under any Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
all liabilities with respect thereto, excluding, in the 

3

case
of Administrative Agent and any Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which
Administrative Agent or such Lender, as the case may be, is organized or
maintains a lending office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as “Taxes”). If Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), Administrative Agent and such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, (iii) Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable Laws, and (iv) within thirty (30) days after the date of such
payment, Borrower shall furnish to Administrative Agent (which shall forward
the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof. 

                    (b)
In addition, Borrower agrees to pay any and all present or future stamp, court
or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or
from the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as “Other
Taxes”). 

                    (c)
If Borrower shall be required by the Laws of any jurisdiction outside the
United States to deduct any Taxes or Other Taxes from or in respect of any sum
payable under any Loan Document to Administrative Agent or any Lender, Borrower
shall also pay to Administrative Agent (for the account of such Lender) or to
such Lender, at the time interest is paid, such additional amount that such
Lender specifies is necessary to preserve the after-tax yield (after factoring
in United States (federal and state) taxes imposed on or measured by net
income) Lender would have received if such deductions (including deductions
applicable to additional sums payable under this Section) had not been made. 

                    (d)
Borrower agrees to indemnify Administrative Agent and each Lender for the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section) paid by
Administrative Agent and such Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, in each case
whether or not such Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Tribunal. Payment under this subsection (d) shall be
made within thirty (30) days after the date Lender or Administrative Agent
makes a demand therefor. 

                    (e)
Without prejudice to the survival of any other agreement of Borrower hereunder,
the agreements and obligations of Borrower contained in this Section shall
survive the termination of the Commitments and the payment in full of all the
other Indebtedness. 

4

                    1.12.
Payment Schedule and Maturity Date. 

                    (a)
Accrued unpaid interest shall be due and payable on the first day of the
calendar month after the date of this Agreement and on the same day of each
succeeding calendar month thereafter until all principal and accrued interest
owing on this Loan shall have been fully paid and satisfied. 

                    (b)
Commencing on the date (the “Amortization Date”) which is the first day of the
month commencing on or after the eighteenth month anniversary of the date
hereof, the principal of the Loan shall be due and payable in monthly
installments equal to the amount for the applicable month (by specific calendar
months) set forth on Exhibit “D”. Such principal amortization payments shall be
due and payable on the Amortization Date and on the first day of each
succeeding month thereafter until the Loan shall have been fully paid and
satisfied. 

                    1.13.
Advances and Payments. 

                    (a)
Following receipt of a Draw Request, Administrative Agent shall promptly
provide each Lender with a copy of the Draw Request. Administrative Agent shall
notify each Lender telephonically (with confirmation by facsimile) or by
facsimile (with confirmation by telephone) not later than 1:00 p.m.
Administrative Agent’s Time two (2) Business Days prior to the advance Funding
Date for LIBOR Rate Principal advances, and one (1) Business Day prior to the
advance Funding Date for all other advances, of its Pro Rata Share of the
amount Administrative Agent has determined shall be advanced in connection
therewith (“Advance Amount”). In the case of an advance of the Loan, each
Lender shall make the funds for its Pro Rata Share of the Advance Amount
available to Administrative Agent not later than 11:00 a.m. Administrative
Agent’s Time on the Funding Date thereof. After Administrative Agent’s receipt
of the Advance Amount from Lenders, Administrative Agent shall make proceeds of
the Loan in an amount equal to the Advance Amount (or, if less, such portion of
the Advance Amount that shall have been paid to Administrative Agent by Lenders
in accordance with the terms hereof) available to Borrower on the applicable
Funding Date by advancing such funds to Borrower in accordance with the provisions
of Exhibit “F”. 

                    (b)
All payments by Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by Borrower hereunder shall be made to
Administrative Agent not later than 12:00 p.m. (Administrative Agent’s Time) on
the date specified herein. Administrative Agent shall distribute to each Lender
such funds as such Lender may be entitled to receive hereunder (i) on or before
3:00 p.m. (Administrative Agent’s Time) on the day Administrative Agent
receives such funds, if Administrative Agent has received such funds on or
before 12:00 p.m. (Administrative Agent’s Time), or (ii) on or before 12:00
p.m. (Administrative Agent’s Time) on the Business Day following the day
Administrative Agent receives such funds, if Administrative Agent receives such
funds after 12:00 p.m. (Administrative Agent’s Time). If Administrative Agent
fails to timely pay any amount to any Lender in accordance with this
subsection, Administrative Agent shall pay to such Lender interest at the
Federal Funds Rate on such amount, for each day from the day such amount was to
be paid until it is paid to such Lender. 

5

                    (c)
Except as otherwise provided herein, all payments by Borrower or any Lender
shall be made to Administrative Agent at Administrative Agent’s Office not
later than the time for such type of payment specified in this Agreement. All
payments received after such time shall be deemed received on the next
succeeding Business Day. All payments shall be made in immediately available
funds in lawful money of the United States of America. Whenever any payment
falls due on a day which is not a Business Day, such payment may be made on the
next succeeding Business Day. 

                    (d)
Upon satisfaction of any applicable terms and conditions set forth herein,
Administrative Agent shall promptly make any amounts received in accordance
with the prior subsection available in like funds received as follows: (i) if
payable to Borrower, in accordance with Exhibit “F”, except as otherwise
specified herein, and (ii) if payable to any Lender, by wire transfer to such
Lender at the address specified in the Schedule of Lenders. 

                    (e)
Unless Borrower or any Lender has notified Administrative Agent, prior to the
date any payment is required to be made by it to Administrative Agent, that
Borrower or such Lender, as the case may be, will not make such payment, Administrative
Agent may assume that Borrower or such Lender, as the case may be, has timely
made such payment and may (but shall not be required to do so) in reliance
thereon, make available a corresponding amount to the person or entity entitled
thereto. If and to the extent that such payment was not in fact made to
Administrative Agent in immediately available funds, then: 

	
  

 	
  

 
	
  

 	
           (i)
 if Borrower failed to make such payment, each Lender shall forthwith on
 demand repay to Administrative Agent the portion of such assumed payment that
 was made available to such Lender in immediately available funds, together
 with interest thereon in respect of each day from and including the date such
 amount was made available by Administrative Agent to such Lender to the date
 such amount is repaid to Administrative Agent in immediately available funds
 at the Federal Funds Rate from time to time in effect; and 

 
	
  

 	
  

 
	
  

 	
           (ii)
 if any Lender failed to make such payment, such Lender or, if applicable,
 Electing Lender or Lenders shall forthwith on demand pay to Administrative
 Agent the amount thereof in immediately available funds, together with
 interest thereon for the period from the date such amount was made available
 by Administrative Agent to Borrower to the date such amount is recovered by
 Administrative Agent (the “Compensation Period”) at a rate per annum equal to
 the interest rate applicable to such amount under the Loan. If such Lender
 pays such amount to Administrative Agent, then such amount shall constitute
 such Lender’s Pro Rata Share, included in the applicable Loan advance. If
 such Lender does not pay such amount forthwith upon Administrative Agent’s
 demand therefor, Administrative Agent may make a demand therefor upon
 Borrower, and Borrower shall pay such amount to Administrative Agent,
 together with interest thereon for the Compensation Period at a rate per
 annum equal to the rate of interest applicable to such amount under the Loan.
 Nothing herein shall be deemed to relieve any Lender from its obligation to
 fulfill its Commitment or to prejudice any rights which Administrative Agent
 or Borrower may have against any Lender as a result of any default by such
 Lender hereunder. 

 

6

                    A
notice of Administrative Agent to any Lender or to Borrower with respect to any
amount owing under this subsection shall be conclusive, absent manifest error. 

                    (f)
If any Lender makes available to Administrative Agent funds for the Loan
advance to be made by such Lender as provided in the foregoing provisions of
this Section, and the funds are not advanced to Borrower or otherwise used to
satisfy any Obligations of such Lender hereunder, Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest. 

                    (g)
Nothing herein shall be deemed to obligate any Lender to obtain the funds for
the Loan advance in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
the Loan advance in any particular place or manner. 

                    1.14.
Administrative Agent Advances. 

                    (a)
Administrative Agent is authorized, from time to time, in Administrative
Agent’s sole discretion to make, authorize or determine advances of the Loan,
or otherwise expend funds, on behalf of Lenders (“Administrative Agent
Advances”), (i) to pay any costs, fees and expenses as described in Section
6.10 herein, (ii) when the applicable conditions precedent set forth in Exhibit
“C” and Exhibit “F” have been satisfied to the extent required by
Administrative Agent, and (iii) when Administrative Agent deems necessary or
desirable to preserve or protect the Loan collateral or any portion thereof
(including those with respect to property taxes, insurance premiums, completion
of construction, operation, management, improvements, maintenance, repair, sale
and disposition) (A) subject to Section 5.5, after the occurrence of a Default,
and (B) subject to Section 5.10, after acquisition of all or a portion of the
Loan collateral by foreclosure or otherwise. 

                    (b)
Administrative Agent Advances shall constitute obligatory advances of Lenders
under this Agreement, shall be repayable on demand and secured by the Loan
collateral, and if unpaid by Lenders as set forth below shall bear interest at
the rate applicable to such amount under the Loan or if no longer applicable,
at the Base Rate. Administrative Agent shall notify each Lender in writing of
each Administrative Agent Advance. Upon receipt of notice from Administrative
Agent of its making of an Administrative Agent Advance, each Lender shall make
the amount of such Lender’s Pro Rata Share of the outstanding principal amount
of Administrative Agent Advance available to Administrative Agent, in same day
funds, to such account of Administrative Agent as Administrative Agent may
designate, (i) on or before 3:00 p.m. (Administrative Agent’s Time) on the day
Administrative Agent provides Lenders with notice of the making of such Administrative
Agent Advance if Administrative Agent provides such notice on or before 12:00
p.m. (Administrative Agent’s Time), or (ii) on or before 12:00 p.m. on the
Business Day immediately following the day Administrative Agent provides
Lenders with notice of the making of such advance if Administrative Agent
provides notice after 12:00 p.m. (Administrative Agent’s Time). 

7

               1.15.
Defaulting Lender. 

               1.15.1.
Notice and Cure of Lender Default; Election Period; Electing Lenders.
Administrative Agent shall notify (such notice being referred to as the
“Default Notice”) Borrower (for Loan advances) and each non-Defaulting Lender
if any Lender is a Defaulting Lender. Each non-Defaulting Lender shall have the
right, but in no event or under any circumstance the obligation, to fund such
Defaulting Lender Amount, provided that within twenty (20) days after the date
of the Default Notice (the “Election Period”), such non-Defaulting Lender or
Lenders (each such Lender, an “Electing Lender”) irrevocably commit(s) by
notice in writing (an “Election Notice”) to Administrative Agent, the other
Lenders and Borrower to fund the Defaulting Lender Amount. If Administrative
Agent receives more than one Election Notice within the Election Period, then
the commitment to fund the Defaulting Lender Amount shall be apportioned pro
rata among the Electing Lenders in the proportion that the amount of each such
Electing Lender’s Commitment bears to the total Commitments of all Electing
Lenders. If the Defaulting Lender fails to pay the Defaulting Lender Payment
Amount within the Election Period, the Electing Lender or Lenders, as
applicable, shall be automatically obligated to fund the Defaulting Lender
Amount (and Defaulting Lender shall no longer be entitled to fund such
Defaulting Lender Amount) within three (3) Business Days following the
expiration of the Election Period to reimburse Administrative Agent or make
payment to Borrower, as applicable. Notwithstanding anything to the contrary
contained herein, if Administrative Agent has funded the Defaulting Lender
Amount, Administrative Agent shall be entitled to reimbursement for its portion
of the Defaulting Lender Payment Amount pursuant to Section 5.11. 

               1.15.2.
Removal of Rights; Indemnity. Administrative Agent shall not be
obligated to transfer to a Defaulting Lender any payments made by or on behalf
of Borrower to Administrative Agent for the Defaulting Lender’s benefit; nor
shall a Defaulting Lender be entitled to the sharing of any payments hereunder
or under any Note until all Defaulting Lender Payment Amounts are paid in full.
Amounts payable to a Defaulting Lender shall be paid by Administrative Agent to
reimburse Administrative Agent and any Electing Lender pro rata for all Defaulting
Lender Payment Amounts. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents, a Defaulting Lender shall be deemed
not to be a “Lender” and such Defaulting Lender’s Commitment shall be deemed to
be zero. A Defaulting Lender shall have no right to participate in any
discussions among and/or decisions by Lenders hereunder and/or under the other
Loan Documents. Further, any Defaulting Lender shall be bound by any amendment
to, or waiver of, any provision of, or any action taken or omitted to be taken
by Administrative Agent and/or the non-Defaulting Lenders under, any Loan
Document which is made subsequent to the Defaulting Lender’s becoming a
Defaulting Lender. This Section shall remain effective with respect to a Defaulting
Lender until such time as the Defaulting Lender shall no longer be in default
of any of its obligations under this Agreement by curing such default by
payment of all Defaulting Lender Payment Amounts (i) within the Election
Period, or (ii) after the Election Period with the consent of the
non-Defaulting Lenders. Such Defaulting Lender nonetheless shall be bound by
any amendment to or waiver of any provision of, or any action taken or omitted
to be taken by Administrative Agent and/or the non-Defaulting Lenders under any
Loan Document which is made subsequent to that Lender’s becoming a Defaulting
Lender and prior to such cure or waiver. The operation of this subsection or
the subsection above alone shall not be construed to increase or otherwise affect
the Commitment of any non-Defaulting Lender, or relieve or excuse the
performance by Borrower 

8

of
their duties and obligations hereunder or under any of the other Loan
Documents. Furthermore, nothing contained in this Section shall release or in any
way limit a Defaulting Lender’s obligations as a Lender hereunder and/or under
any other of the Loan Documents. Further, a Defaulting Lender shall indemnify
and hold harmless Administrative Agent and each of the non-Defaulting Lenders
from any claim, loss, or costs incurred by Administrative Agent and/or the
non-Defaulting Lenders as a result of a Defaulting Lender’s failure to comply
with the requirements of this Agreement, including, without limitation, any and
all additional losses, damages, costs and expenses (including, without
limitation, attorneys’ fees) incurred by Administrative Agent and any
non-Defaulting Lender as a result of and/or in connection with (i) a
non-Defaulting Lender’s acting as an Electing Lender, (ii) any enforcement
action brought by Administrative Agent against a Defaulting Lender, and (iii)
any action brought against Administrative Agent and/or Lenders. The
indemnification provided above shall survive any termination of this Agreement.

               1.15.3.
Commitment Adjustments. In connection with the adjustment of the amounts
of the Loan Commitments of the Defaulting Lender and Electing Lender(s) upon
the expiration of the Election Period as aforesaid, Borrower, Administrative
Agent and Lenders shall execute such modifications to the Loan Documents as
shall, in the reasonable judgment of Administrative Agent, be necessary or
desirable in connection with the adjustment of the amounts of Commitments in
accordance with the foregoing provisions of this Section. For the purpose of
voting or consenting to matters with respect to the Loan Documents such
modifications shall also reflect the removal of voting rights of the Defaulting
Lender and increase in voting rights of Electing Lenders to the extent an
Electing Lender has funded the Defaulting Lender Amount. In connection with
such adjustments, Defaulting Lenders shall execute and deliver an Assignment
and Assumption covering that Lender’s Commitment and otherwise comply with
Section 6.5. If a Lender refuses to execute and deliver such Assignment and
Assumption or otherwise comply with Section 6.5, such Lender hereby appoints
Administrative Agent to do so on such Lender’s behalf. Administrative Agent
shall distribute an amended Schedule of Lenders, which shall thereafter be
incorporated into this Agreement, to reflect such adjustments. However, all
such Defaulting Lender Amounts funded by Administrative Agent or Electing
Lenders shall continue to be Defaulting Lender Amounts of the Defaulting Lender
pursuant to its obligations under this Agreement. 

               1.15.4.
No Election. In the event that no Lender elects to commit to fund the
Defaulting Lender Amount within the Election Period, Administrative Agent
shall, upon the expiration of the Election Period, so notify Borrower and each
Lender. 

               1.16.
Several Obligations; No Liability, No Release. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be
executed only by or in favor of Administrative Agent in its capacity as such,
and not by or in favor of Lenders, any and all obligations on the part of
Administrative Agent (if any) to make any advances of the Loan or
reimbursements for other Payment Amounts shall constitute the several (and not
joint) obligations of the respective Lenders on a ratable basis, according to
their respective Pro Rata Shares. Except as may be specifically provided in
this Agreement, no Lender shall have any liability for the acts of any other
Lender. No Lender shall be responsible to Borrower or any other person for any
failure by any other Lender to fulfill its obligations to make advances of the
Loan or reimbursements for other Payment Amounts, nor to take any other action
on its behalf 

9

hereunder
or in connection with the financing contemplated herein. The failure of any
Lender to pay to Administrative Agent its Pro Rata Share of a Payment Amount
shall not relieve any other Lender of any obligation hereunder to pay to
Administrative Agent its Pro Rata Share of such Payment Amounts as and when
required herein, but no Lender shall be responsible for the failure of any
other Lender to so fund its Pro Rata Share of the Payment Amount. In
furtherance of the foregoing, Lenders shall comply with their obligation to pay
Administrative Agent their Pro Rata Share of such Payment Amounts regardless of
(i) the occurrence of any Default hereunder or under any Loan Document; (ii)
any failure of consideration, absence of consideration, misrepresentation,
fraud, or any other event, failure, deficiency, breach or irregularity of any
nature whatsoever in the Loan Documents; or (iii) any bankruptcy, insolvency or
other like event with regard to any Borrower or Guarantor. The obligation of
Lenders to pay to such Payment Amounts are in all regards independent of any
claims between Administrative Agent and any Lender. 

ARTICLE 2 

ADDITIONAL COVENANTS AND AGREEMENTS

                    2.1.
Bank Accounts. Borrower shall maintain all security deposits collected
from tenants or others with respect to the Property in one or more accounts
with Administrative Agent in accordance with all applicable legal requirements.
Borrower shall maintain all bank accounts used by Borrower in connection with
the operation of the Property with Administrative Agent. 

                    2.2.
Intentionally Omitted. 

                    2.3.
Contracts. Without Administrative Agent’s prior written approval as to
parties, terms, and all other matters, Borrower shall not (a) enter into any
Material Contract, (b) enter into any management, leasing, maintenance or other
contract pertaining to the Property not described in clause (a) that is not
unconditionally terminable by Borrower or any successor owner without penalty
or payment on not more than thirty (30) days’ notice to the other party thereunder,
or (c) modify, amend, or terminate any such contracts. All such contracts shall
provide that all rights and liens of the applicable contractor, architect,
engineer, supplier, surveyor or other party and any right to remove removable
Improvements are subordinate to Lender’s rights and liens, shall require all
subcontracts and purchase orders to contain a provision subordinating the
subcontractors’ and mechanics’ and materialmen’s liens and any right to remove
removable Improvements to Lender’s rights and liens. Borrower shall not default
under any contract, Borrower shall not permit any contract to terminate by
reason of any failure of Borrower to perform thereunder, and Borrower shall
promptly notify Administrative Agent of any default thereunder. Borrower will
deliver to Administrative Agent, upon request of Administrative Agent, the
names and addresses of all persons or entities with whom each contractor has
contracted or intends to contract for the construction of the Improvements or
for the furnishing of labor or materials therefor. 

                    2.4.
Assignment of Contracts and Plans. As additional security for the
Obligations, Borrower hereby transfers and assigns to Administrative Agent for
the ratable benefit of Administrative Agent and Lenders and grants a security
interest in all of Borrower’s 

10

right,
title and interest, but not its liability, in, under, and to all construction,
architectural and design contracts, and the Plans, and agrees that all of the
same are covered by the security agreement provisions of the Mortgage. Borrower
agrees to deliver to Administrative Agent from time to time upon Administrative
Agent’s request such consents to the foregoing assignment from parties
contracting with Borrower as Administrative Agent may reasonably require.
Neither this assignment nor any action by Administrative Agent or Lenders shall
constitute an assumption by Administrative Agent or Lenders of any obligation
under any contract or with respect to the Plans, Borrower hereby agrees to perform
all of its obligations under any contract, and Borrower shall continue to be
liable for all obligations of Borrower with respect thereto. Administrative
Agent shall have the right at any time (but shall have no obligation) to take
in its name or in the name of Borrower such action as Administrative Agent may
determine to be necessary to cure any default under any contract or with
respect to the Plans or to protect the rights of Borrower, Administrative Agent
or Lenders with respect thereto. Borrower irrevocably constitutes and appoints
Administrative Agent as Borrower’s attorney-in-fact, which power of attorney is
coupled with an interest and irrevocable, to enforce in Borrower’s name or in
Administrative Agent’s and Lender’s name all rights of Borrower under any
contract or with respect to the Plans. Administrative Agent shall incur no
liability if any action so taken by it or on its behalf shall prove to be
inadequate or invalid. Borrower indemnifies and holds Administrative Agent and
Lenders harmless against and from any loss, cost, liability or expense
(including, but not limited to, consultants’ fees and expenses and attorneys’
fees and expenses) incurred in connection with Borrower’s failure to perform
such contracts or any such action taken by Administrative Agent or Lenders.
Administrative Agent may use the Plans for any purpose relating to the
Improvements. Borrower represents and warrants to Administrative Agent and
Lenders that the copy of any contract furnished or to be furnished to Administrative
Agent is and shall be a true and complete copy thereof, that there have been no
modifications thereof which are not fully set forth in the copies delivered,
and that Borrower’s interest therein is not subject to any claim, setoff, or
encumbrance. 

                    2.5.
Financial Covenants. 

                    (a)
Loan to Value Ratio. The Property shall have a “Loan to Value Ratio” of
not greater than 70%, which Loan to Value Ratio shall be calculated, and
defined, as follows: the outstanding principal balance and accrued but unpaid
interest on the Loan as of the date of the determination of the ratio shall be
divided by the appraised “As-Is” value of the Property. The appraised “As-Is”
value of the Property shall be based upon the most recent appraisal performed
pursuant to Section 2.13, as reviewed, adjusted and approved by Administrative
Agent. The Loan to Value Ratio requirement shall be tested no more often than
once per calendar year, unless one or more events have occurred which have,
alone or in the aggregate, a Material Adverse Effect. In the event the Loan to
Value Ratio covenant is not met, Administrative Agent shall notify Borrower of
such condition and Borrower may satisfy the Loan to Value Ratio covenant by,
within thirty (30) days of such notice, either (A) making a principal
curtailment on the Loan (which shall not be credited towards future principal
amortization required under the Loan Documents) in an amount sufficient to
bring this Loan to Value Ratio into compliance and/or (B) provide additional
collateral acceptable to Administrative Agent, which shall have value (as
determined by Administrative Agent) which when added to the Property value is
sufficient to satisfy the Loan to Value Ratio covenant. If 

11

Borrower
fails to satisfy the Loan to Value Ratio covenant within such thirty (30) day
period, such condition shall constitute an immediate Default. 

                    (b)
Debt Service Coverage Ratio. Commencing on the earlier to occur of (i)
December 31, 2011 or (ii) the date which is six (6) months after the date which
at least 95% of the rentable space in the Property is leased pursuant to Leases
entered into in accordance with the terms hereof, as determined by
Administrative Agent, Borrower shall at all times have a Debt Service Coverage
Ratio of at least 1.25 to 1.00. In the event the Debt Service Coverage Ratio
covenant is not met, Administrative Agent shall notify Borrower of such
condition and Borrower may satisfy the Debt Service Coverage Ratio covenant by,
within thirty (30) days of such notice, either (A) making a principal
curtailment on the Loan (which shall not be credited towards future principal
amortization required under the Loan Documents) in an amount sufficient to
bring this Debt Service Coverage Ratio into compliance and/or (B) provide
additional collateral acceptable to Administrative Agent, which shall have
value (as determined by Administrative Agent) which would, assuming such
collateral were liquidated and applied to reduce the outstanding principal
amount of the Loan, be sufficient to satisfy the Debt Service Coverage Ratio
covenant. If Borrower fails to satisfy the Debt Service Coverage Ratio covenant
within such thirty (30) day period, such condition shall constitute an
immediate Default. 

                    2.6.
Limitation on Debt. Borrower will not incur, create, assume directly or
indirectly, or suffer to exist any Debt or encumber any of its assets nor form
or own any subsidiaries, nor acquire or hold a direct or indirect equity
investments in any other Person without in each such instance the prior written
consent of Administrative Agent, except for: 

                    (a)
Debt incurred pursuant to this Agreement and the other Loan Documents; 

                    (b)
Debt of Borrower under a Swap Contract; 

                    (c)
Debt constituting a trade payable which is payable in the ordinary course of
business and is not past due; 

                    (d)
obligations to pay brokerage commissions in connection with executed leases so
long as such commissions are at market rates; and 

          (e)
amounts payable under leases in connection with build-out allowances or tenant
improvement reimbursements (but only to the extent approved by Administrative
Agent in its reasonable discretion to the extent Administrative Agent’s consent
is required hereunder). 

                    2.7.
Inspection. Administrative Agent and its agents may enter upon the
Property to inspect the Property at any reasonable time, unless Administrative
Agent deems such inspection is of an emergency nature, in which event Borrower
shall provide Administrative Agent with immediate access to the Property.
Borrower will furnish to Administrative Agent and its agents for inspection and
copying, all Plans, shop drawings, specifications, books and records, and other
documents and information that Administrative Agent may reasonably request from
time to time. 

12

                    2.8.
Notice to Lenders. Borrower shall promptly within ten (10) days after
the occurrence of any of the following events, notify each Lender in writing
thereof, specifying in each case the action Borrower has taken or will take
with respect thereto: (a) any violation of any Law or governmental requirement;
(b) any litigation, arbitration or governmental investigation or proceeding
instituted or threatened against Borrower or any Guarantor or the Property, and
any material development therein; (c) any actual or threatened condemnation of
any portion of the Property, any negotiations with respect to any such taking,
or any loss of or substantial damage to the Property; (d) any labor controversy
pending or threatened against Borrower or any contractor, and any material
development in any labor controversy; (e) any notice received by Borrower with
respect to the cancellation, alteration or non-renewal of any insurance
coverage maintained with respect to the Property; (f) Borrower receiving notice
or otherwise having knowledge of any lien in excess of $50,000 filed against
the Property or any stop notice served on Borrower in connection with
construction of any alterations or renovations of the Improvements; or (g) any
required permit, license, certificate or approval with respect to the Property
lapses or ceases to be in full force and effect.

                    2.9.
Financial Statements. Borrower shall deliver to Administrative Agent
with sufficient copies for each Lender the Financial Statements and other
statements and information at the times and for the periods described in (a) Exhibit
“B” and (b) any other Loan Document, and Borrower shall deliver to
Administrative Agent with sufficient copies for each Lender from time to time
such additional financial statements and information as Administrative Agent
may at any time request. Borrower will make all of its books, records and
accounts available to Administrative Agent and its representatives at the
Property upon request and will permit them to review and copy the same.
Borrower shall promptly notify Administrative Agent of any event or condition
that could reasonably be expected to have a Material Adverse Effect in the
financial condition of Borrower and, if known by Borrower, Guarantor. Administrative
Agent shall provide a copy of such Financial Statements to each Lender upon
receipt.

                    2.10.
Other Information. Borrower shall furnish to Administrative Agent from
time to time upon Administrative Agent’s request budgets of Borrower and
revisions thereof showing the estimated costs and expenses to be incurred in
connection with the completion of construction of the Improvements; (v) current
or updated detailed Project schedules or construction schedules; and (vi) such
other information relating to Borrower, Guarantor, the Improvements, the
Property, or any indemnitor or other person or party connected with Borrower,
the Loan, the construction of the Improvements or any security for the Loan. 

                    2.11.
Intentionally Omitted. 

                    2.12.
Intentionally Omitted. 

                    2.13.
Appraisal. Administrative Agent may obtain from time to time, an
appraisal of all or any part of the Property prepared in accordance with
written instructions from Administrative Agent by a third-party appraiser
engaged directly by Administrative Agent. Each such appraiser and appraisal
shall be satisfactory to Administrative Agent (including satisfaction of
applicable regulatory requirements). The cost of any such appraisal shall be
borne by Borrower if such appraisal is the first appraisal in any calendar year
and in all events if Administrative Agent obtains such appraisal after the
occurrence of a Default, and such cost is 

13

due and payable by
Borrower on demand and shall be secured by the Loan Documents. Administrative
Agent shall provide a copy of such appraisal to each Lender upon receipt.
Provided no Default exists and Borrower has paid the cost of such appraisal as
aforesaid, Administrative Agent shall provide a copy of such appraisal to
Borrower upon request.

                    2.14.
Payment of Withholding Taxes. Borrower shall not use, or permit the
property manager of the Property to use, any portion of the proceeds of any
Loan advance to pay the wages of employees unless a portion of the proceeds or
other funds are also used to make timely payment to or deposit with (a) the
United States of all amounts of tax required to be deducted and withheld with
respect to such wages under the Code, and (b) any state and/or local Tribunal
or agency having jurisdiction of all amounts of tax required to be deducted and
withheld with respect to such wages under any applicable state and/or local
Laws.

                    2.15.
ERISA and Prohibited Transaction Taxes. As of the date hereof and
throughout the term of this Agreement, (a) Borrower is not and will not be (i)
an “employee benefit plan”, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”); or (ii) a “plan”
within the meaning of Section 4975(e) of the Internal Revenue Code of 1986, as
amended from time to time (the “Code”); (b) the assets of Borrower do not and
will not constitute “plan assets” within the meaning of the United States
Department of Labor Regulations set forth in 29 C.F.R. §2510.3-101; (c)
Borrower is not and will not be a “governmental plan” within the meaning of
Section 3(32) of ERISA; (d) transactions by or with Borrower are not and will
not be subject to state statutes applicable to Borrower regulating investments
of fiduciaries with respect to governmental plans; and (e) Borrower shall not
engage in any transaction which would cause any obligation, or action taken or
to be taken, hereunder (or the exercise by Administrative Agent of any of
Lender’s rights under this Agreement, any Note or the other Loan Documents) to
be a non-exempt (under a statutory or administrative class exemption)
prohibited transaction under ERISA or Section 4975 of the Code. Borrower
further agrees to deliver to Administrative Agent such certifications or other
evidence of compliance with the provisions of this Section 2.15 as
Administrative Agent may from time to time request.

                    2.16.
Ground Lease. 

                    (a)
Borrower shall, at its sole cost and expense, promptly and timely perform and
observe all the material terms, covenants and conditions required to be
performed and observed by Borrower as lessee under the Ground Lease (including,
but not limited to, the payment of all rent, additional rent, percentage rent
and other charges required to be paid under the Ground Lease).

                    (b)
If Borrower shall be in default under the Ground Lease, then, subject to the
terms of the Ground Lease, Borrower hereby grants Administrative Agent the
right (but not the obligation), to cause the default or defaults under the
Ground Lease to be remedied and otherwise exercise any and all rights of
Borrower under the Ground Lease, as may be necessary to prevent or cure any
default provided such actions are necessary to protect the interests of
Administrative Agent and Lenders under the Loan Documents, and Administrative
Agent and its agents shall have the right to enter all or any portion of the
Property subject to the Ground Lease

14

at such times and in such
manner as Administrative Agent deems necessary, to prevent or to cure any such
default.

                         (c)
The actions or payments of Administrative Agent to cure any default by Borrower
under the Ground Lease shall not remove or waive, as between Borrower,
Administrative Agent and Lenders, the default that occurred under this
Agreement by virtue of the default by Borrower under the Ground Lease. All sums
expended by Administrative Agent and Lenders to cure any such default shall be
paid by Borrower to Administrative Agent, upon demand, with interest on such
sum at the rate set forth in this Agreement from the date such sum is expended
to and including the date the reimbursement payment is made to Administrative
Agent. All such indebtedness shall be deemed to be secured by the Mortgage.

                         (d)
Borrower shall notify Administrative Agent promptly in writing of the
occurrence of any material default by Ground Lessor under the Ground Lease or
the occurrence of any event that, with the passage of time or service of
notice. or both, would constitute a material default by Ground Lessor under the
Ground Lease, and the receipt by Borrower of any notice (written or otherwise)
from Ground Lessor under the Ground Lease noting or claiming the occurrence of
any default by Borrower under the Ground Lease or the occurrence of any event
that, with the passage of time or service of notice, or both, would constitute
a default by Borrower under the Ground Lease. Borrower shall promptly deliver
to Lender a copy of any such written notice of default.

                         (e)
Within ten (10) days after receipt of written demand by Administrative Agent,
Borrower shall use reasonable efforts to obtain from Ground Lessor under the Ground
Lease and furnish to Lender the estoppel certificate of Ground Lessor stating
the date through which rent has been paid and whether or not there are any
defaults thereunder and specifying the nature of such claimed defaults, if any.

                         (f)
Borrower shall promptly execute, acknowledge and deliver to Administrative
Agent such instruments as may reasonably be required to permit Administrative
Agent to cure any default under the Ground Lease or permit Administrative Agent
to take such other action required to enable Administrative Agent to cure or
remedy the matter in default and preserve the security interest of
Administrative Agent under the Loan Documents with respect to the Ground Lease.
Borrower irrevocably appoints Administrative Agent as its true and lawful
attorney-in-fact to do, in its name or otherwise, any and all acts and to
execute any and all documents that are necessary to preserve any rights of
Borrower under or with respect to the Ground Lease, including, without limitation,
the right to effectuate any extension or renewal of the Ground Lease, or to
preserve any rights of Borrower whatsoever in respect of any part of the Ground
Lease (and the above powers granted to Lender are coupled with an interest and
shall be irrevocable).

                         (g)
Notwithstanding anything to the contrary contained in this Agreement with
respect to the Ground Lease:

	
  

 	
  

 
	
  

 	
                (i)
 The lien of the Mortgage attaches to all of Borrower’s rights and remedies at
 any time arising under or pursuant to Subsection 365(h) of the Bankruptcy
 Code,

 

15

	
  

 	
  

 
	
  

 	
 including, without
 limitation, all of Borrower’s rights, as debtor, to remain in possession of
 the related Property subject to the Ground Lease.

 
	
  

 	
  

 
	
  

 	
                (ii)
 Borrower shall not, without Administrative Agent’s written consent, elect to
 treat the Ground Lease as terminated under subsection 365(h)(l) of the
 Bankruptcy Code. Any such election made without Administrative Agent’s prior
 written consent shall be void.

 
	
  

 	
  

 
	
  

 	
                (iii)
 As security for the Indebtedness, Borrower unconditionally assigns, transfers
 and sets over to Lender all of Borrower’s claims and rights to the payment of
 damages arising from any rejection by Ground Lessor under the Ground Lease
 under the Bankruptcy Code. Lender and Borrower shall proceed jointly or in
 the name of Borrower in respect of any claim, suit, action or proceeding
 relating to the rejection of the Ground Lease, including, without limitation,
 the right to file and prosecute any proofs of claim, complaints, motions,
 applications, notices and other documents in any case in respect of Ground
 Lessor under the Bankruptcy Code. This assignment constitutes a present,
 in-evocable and unconditional assignment of the foregoing claims, rights and
 remedies, and shall continue in effect until all of the Indebtedness shall
 have been satisfied and discharged in full. Any amounts received by
 Administrative Agent or Borrower as damages arising out of the rejection of
 the Ground Lease as aforesaid shall be applied to all costs and expenses of
 Administrative Agent (including, without limitation, attorney’s fees and
 costs) incurred in connection with the exercise of any of its rights or
 remedies in accordance with the applicable provisions of this Agreement.

 
	
  

 	
  

 
	
  

 	
                (iv)
 If, pursuant to subsection 365(h) of the Bankruptcy Code, Borrower seeks to
 offset, against the rent reserved in the Ground Lease, the amount of any
 damages caused by the nonperformance by Ground Lessor of any of its
 obligations thereunder after the rejection by Ground Lessor of the Ground
 Lease under the Bankruptcy Code, then Borrower shall not effect any offset of
 the amounts so objected to by Administrative Agent. If Administrative Agent
 has failed to object as aforesaid within ten (10) days after notice from
 Borrower in accordance with the first sentence of this subsection, Borrower
 may proceed to offset the amounts set forth in Borrower’s notice.

 
	
  

 	
  

 
	
  

 	
                (v)
 If any action, proceeding, motion or notice shall be commenced or filed in
 respect of Ground Lessor of all or any part of the Property in correction
 with any case under the Bankruptcy Code, Administrative Agent and Borrower
 shall cooperatively conduct and control any such litigation with counsel
 agreed upon between Borrower and Administrative Agent in connection with such
 litigation. Borrower shall, upon demand, pay to Administrative Agent all
 costs and expenses (including reasonable attorneys’ fees and costs) actually
 paid or actually incurred by Administrative Agent in connection with the
 cooperative prosecution or conduct of any such proceedings. All such costs
 and expenses shall be secured by the lien of the related Mortgage.

 
	
  

 	
  

 
	
  

 	
                (vi)
 Borrower shall promptly, after obtaining knowledge of such filing notify
 Administrative Agent orally of any filing by or against Ground Lessor under
 the Ground Lease of a petition under the Bankruptcy Code. Borrower shall
 thereafter promptly give written notice of such filing to
 Administrative Agent, setting forth any information 

 

16

	
  

 	
  

 
	
  

 	
 available to Borrower
 as to the date of such filing, the court in which such petition was filed,
 and the relief sought in such filing. Borrower shall promptly deliver to
 Administrative Agent any and all notices, summonses, pleadings, applications
 and other documents received by Borrower in connection with any such petition
 and any proceedings relating to such petition.

 

                         (h)
Borrower shall not, without Lender’s prior written consent, fail to exercise
any option or right to renew or extend the term of the Ground Lease in
accordance with the terms of the Ground Lease, and shall give immediate written
notice to Administrative Agent of each exercise of any such option or right and
shall execute, acknowledge, deliver mid record any document requested by
Administrative Agent to evidence the Lien of the Mortgage on such extended or
renewed lease term; provided, however, Borrower shall not be required to
exercise any particular such option or right to renew or extend to the extent
Borrower shall have received the prior written consent of Administrative Agent
(which consent may be withheld by Administrative Agent in its sole and absolute
discretion) allowing Borrower to forego exercising such option or right to
renew or extend. If Borrower shall fail to exercise any such option or right
as aforesaid, Administrative Agent may exercise the option or right as
Borrower’s agent and attorney-in-fact as provided above in Administrative
Agent’s own name or in the name of and on behalf of a nominee offender, as
Administrative Agent may determine in the exercise of its sole and absolute
discretion.

                         (i)
Borrower shall not waive, excuse, condone or in any way release or discharge
Ground Lessor under the Ground Lease of or from Ground Lessor’s material
obligations, covenant and/or conditions under the Ground Lease without the
prior written consent of Administrative Agent.

                         (j)
Borrower shall not, without Administrative Agent’s prior written consent,
surrender, terminate, forfeit, or suffer or permit the surrender, termination
or forfeiture of, or change, supplement, modify, alter or amend the Ground
Lease, which consent, in the case of a change, supplement, modification,
alteration or amendment, shall not be unreasonably withheld or delayed. Consent
to one amendment, change, agreement or modification shall not be deemed to be a
waiver of the right to require consent to other, future or successive
amendments, changes, agreements or modifications. Any acquisition of lessor’s
interest in the Ground Lease by Borrower or any Affiliate of Borrower shall be
accomplished by Borrower in such a manner so as to avoid a merger of the
interests of lessor and lessee in Ground Lease, unless consent to such merger
is granted by Administrative Agent.

                    2.17.
Storage Facility Master Lease.

                         (a)
Borrower has entered into a Sublease Agreement dated December 10, 2007
(the “Storage Facility Master Lease”) with Acadia Strategic Opportunity Fund
II, LLC, a Delaware limited liability company (the “Storage Facility Tenant’’)
for the approximately 88,127 square foot self storage facility to be
constructed at the Property (the “Self Storage Facility”) which Storage
Facility Master Lease provides for the payment of an annual base rent of
$800,000 per annum (the “Storage Facility Rent”) (payable in equal monthly
installments) and has a term expiring no earlier than December 1, 2024.
Borrower hereby assigns to 

17

Administrative Agent all
of its right title and interest in the Storage Facility Master Lease and the
guaranty thereto as additional security for the Loan.

                         (b)
The Storage Facility Master Lease is in full force and effect and there are no
uncured defaults thereunder by either party and there are no conditions that,
with the passage of time or the giving of notice, or both, would constitute
defaults thereunder. The copy of the Storage Facility Master Lease delivered to
Administrative Agent is true and complete, and there are no oral agreements
with respect thereto.

                         (c)
Borrower shall give to Administrative Agent copies of all notices given to
Borrower or received by Borrower with respect to the Storage Facility Master
Lease. Borrower shall not (i) waive any rights under the Storage Facility
Master Lease, (ii) modify the rent or other amounts payable under the Storage
Facility Master Lease, or extend any period for the payment of rent or other
amounts under the Storage Facility Master Lease, or (iii) terminate, cancel
accept a surrender (except as specifically provided in Section 2.17(d) hereof)
of or otherwise amend or modify the Storage Facility Master Lease, without, in
each case, the prior written consent of Lender, which consent may be granted or
withheld by Administrative Agent in Administrative Agent’s sole discretion.

                         (d)
Administrative Agent will consent to a termination of the Storage Facility
Master Lease in the event that (i) the Self Storage Facility is open for
business and (ii) the Self Storage Facility yields an underwritten annual net
cash flow, as reasonably determined by Administrative Agent, of $800,000 or
more with no free rent, credit or right of offset.

                         (e)
Notwithstanding anything to the contrary in the organizational documents of
Storage Facility Tenant, Storage Facility Tenant shall not dissolve unless and
until each of the following conditions have been satisfied: (i) an appropriate
winding down of and disposition of its assets and liabilities, satisfaction of
all claims, creditors and liabilities, and retention of adequate reserves to
satisfy future contingent liabilities, including, without limitation, its
liabilities under the Storage Facility Master Lease; (ii) compliance with all
organizational and applicable Laws relating to dissolution and winding up of
Storage Facility Tenant, and (iii) the assignment of the Storage Facility
Master Lease to and the assumption thereof by a replacement storage facility
tenant acceptable to Administrative Agent in its sole discretion.

                    2.18.
Condominium Provisions.

                         (a)
Condominium Representations and Warranties. Borrower hereby makes the
following representations and warranties: (a) no unpaid Condominium Assessments
currently exist, or to the best of Borrower’s knowledge, are pending and to the
best of Borrower’s knowledge, no assessments or special assessments are
currently contemplated, (b) the Condominium Documents are in full force and
effect and Borrower is not in default of any obligation to the Condominium with
respect to any of the Condominium Documents and (c) to the best of Borrower’s
knowledge, the Condominium is in compliance with all state, local or federal
laws, rules and
regulation applicable to the condominium regime.

18

                         (b)
Condominium Covenants.

	
  

 	
  

 
	
  

 	
                (i)
 Borrower shall pay all Condominium Assessments, as and when the same become
 due and payable, subject to any right of Borrower to contest same in
 accordance with the provisions of the Condominium Documents and provided that
 Borrower shall exercise any such right if and only if: (i) such proceeding
 suspends the collection of such Condominium Assessments and the Property will
 not be in danger of being sold for such unpaid Condominium Assessments, or
 Borrower has paid all of such Condominium Assessments under protest, (ii)
 such proceeding is permitted under and is conducted in accordance with the
 provisions of the Condominium Documents, (iii) if Borrower has not paid the
 disputed amounts in full under protest, Borrower shall deposit with
 Administrative Agent cash (or other security as may be approved, in writing,
 by Administrative Agent) in an amount Administrative Agent deems sufficient
 to insure the payment of any such Condominium Assessments together with
 interest and penalties thereon, if any, (iv) Borrower furnishes to
 Administrative Agent all other items reasonably requested by Lender and (v)
 upon a final determination thereof, Borrower promptly pays the amount of any
 such Condominium Assessments, together with all costs, interest and penalties
 which may be payable in connection therewith.

 
	
  

 	
  

 
	
  

 	
                (ii)
 In addition to the financial reporting requirements of this Agreement
 Borrower shall furnish the following to Lender, each prepared in such detail
 as reasonably required by Administrative Agent and certified by an officer of
 Borrower to be true, complete and correct: as soon as available, but in any
 event within forty-five (45) days after the end of each fiscal quarter,
 evidence satisfactory to Administrative Agent that all Condominium
 Assessments for the immediately preceding quarter which are then due and
 payable for the Property, have been paid by Borrower (or are being duly and
 properly contested in accordance with Section (a)(l) above) which evidence
 shall include, without limitation, a true and correct photocopy of Borrower’s
 cancelled check(s) evidencing such payment(s) with respect thereto, provided,
 however, in lieu of furnishing such evidence to Administrative Agent,
 Borrower shall have the right to deposit cash with Lender in the full annual
 amount of such Condominium Assessments due with respect to the Property,
 which deposit shall be held by Administrative Agent as additional security
 for the Loan until such time as satisfactory evidence of such payment in
 accordance with this clause is accepted by Administrative Agent.

 
	
  

 	
  

 
	
  

 	
                (iii)
 Borrower shall observe and enforce all obligations imposed upon it under the
 Condominium Documents and shall enforce the terms, covenants and conditions
 contained in the Condominium Documents to be observed or performed upon the
 part of the other parties thereunder in a commercially reasonable manner.

 
	
  

 	
  

 
	
  

 	
                (iv)
 Borrower shall not alter, modify or change the material terms of, nor
 terminate, any of the Condominium Documents without Administrative Agent’s
 consent (which consent shall not be unreasonably withheld, conditioned or
 delayed).

 
	
  

 	
  

 
	
  

 	
                (v)
 Borrower shall comply with any Law applicable to the condominium regime at
 the Property, the Land or the sale or transfer of the Land, including but not

 

19

	
  

 	
  

 
	
  

 	
 limited to, the
 securities and condominium laws of the State where the Property is located
 and the rules and regulations pertaining thereto.

 
	
  

 	
  

 
	
  

 	
                (vi)
 Borrower shall take all actions as may be necessary from time to time to
 preserve and maintain the condominium regime at the Property in accordance
 with the laws of the State where the Property is located.

 
	
  

 	
  

 
	
  

 	
                (vii)
 Provided that the same was not included in any of the reports, statements,
 certificates or other documentation submitted to Administrative Agent,
 Borrower shall give Administrative Agent prompt notice of any special
 assessment relating to the condominium regime received by Borrower.

 
	
  

 	
  

 
	
  

 	
                (viii)
 Borrower shall provide Administrative Agent with notice of any proposed
 additions, alterations or improvements proposed by any Condominium Board
 costing in excess of $50,000 and provided that Borrower or its designee has
 consent rights under the Condominium Documents, Borrower shall not consent to
 same without Administrative Agent’s prior approval, not to be unreasonably
 withheld.

 
	
  

 	
  

 
	
  

 	
                (ix)
 Borrower shall promptly deliver to Administrative Agent a true and complete
 copy of each and every notice of default received or delivered by Borrower
 with respect to any obligation of Borrower or any other party under the
 Condominium Documents.

 
	
  

 	
  

 
	
  

 	
                (x)
 If a Default has occurred and is continuing, Borrower hereby acknowledges and
 agrees that, subject to the provisions of the Condominium Documents,
 Administrative Agent (or its nominee) shall be solely entitled to remove any
 Condominium Board members appointed by Borrower and/or to designate
 replacement or substitute members of the Condominium Board. If a Default has
 occurred and is continuing, Administrative Agent shall have the right to
 exercise the power of attorney granted pursuant to the Proxy (as hereinafter
 defined) to exercise all rights, powers and remedies of Borrower pursuant to
 the Condominium Documents. The rights granted to Lender under the Proxy shall
 automatically terminate upon the payment of the Loan in full or upon a
 defeasance of the Loan in accordance with the terms hereof.

 
	
  

 	
  

 
	
  

 	
                (xi)
 If a Default has occurred and is continuing, Administrative Agent may, at its
 option, and Borrower hereby grants and assigns to Administrative Agent, from
 and after the occurrence and during the continuation of a Default, the right,
 either by itself or by its nominee or designee, in the name of Borrower, to
 exercise the rights, powers and remedies of Borrower pursuant to the
 Condominium Documents. Such rights and remedies shall include, without
 limitation, the right to exercise all voting, consent, managerial and other
 rights relating to the Condominium, whether in Borrower’s name or otherwise,
 and the right to exercise Borrower’s rights in the Condominium, including,
 without limitation, voting to elect members of the Condominium Board and
 voting to amend the Condominium Documents.

 

                         (c)
Additional Event of Default. It shall be an immediate Default hereunder
if Borrower violates or does not comply with any of the material provisions of
Section 2.18(a) or

20

(b) above and/or the
Condominium shall become subject to an action for partition and said action has
been commenced and not dismissed within thirty (30) days after commencement
thereof, or if any provision of the applicable Condominium Act or any section,
sentence, clause, phrase or word or the application thereof in any
circumstances, is held invalid and such invalidity shall affect the lien of the
Security Instrument or the rights of Administrative Agent under the Loan
Documents.

                    2.19.
Transfer Taxes. 

                         (a)
In the event of any sale or transfer of Borrower’s interest in the Property, or
any part thereof, including any sale or transfer by reason of foreclosure of
the Mortgage or any prior or subordinate mortgage or by deed in lieu of any
such foreclosure, Borrower shall timely and duly complete, execute and deliver
to Administrative Agent all forms and supporting documentation required by any
taxing authority to estimate and fix any tax payable by reason of such sale or
transfer or recording of the deed evidencing such sale or transfer, including
any New York State Transfer Tax (individually, a “Transfer Tax”).

                         (b)
Borrower shall pay the Transfer Tax that may hereafter become due and payable
with respect to any sale or transfer of the property described in this Section,
and in the event of a default of such payment, Administrative Agent may pay the
same and the amount of such payment shall be added to the Indebtedness secured
hereby and, unless incurred in connection with a foreclosure of the Mortgage or
deed in lieu of such foreclosure, be secured by the Mortgage.

                         (c)
In the event that Borrower fails to execute the same and such failure continues
for more than ten (10) days after Administrative Agent requests Borrower to
execute the same, Borrower hereby irrevocably constitutes and appoints
Administrative Agent as its attorney-in-fact, coupled with an interest, to
prepare and deliver any questionnaire, statement, affidavit or tax return in
connection with any Transfer Tax applicable to any foreclosure or deed in lieu
of foreclosure described related to the Mortgage.

                         (d)
Borrower shall indemnify and hold harmless Administrative Agent and Lenders
against (i) any and all liability incurred by Administrative Agent and/or
Lenders for the payment of any Transfer Tax with respect to any transfer of
Borrower’s interest in the Property, and (ii) any and all expenses reasonably
incurred by Lender in connection therewith including, without limitation,
interest, penalties and reasonable attorneys’ fees.

                         (e)
The obligation to pay the taxes and indemnify Administrative Agent and Lenders
under this Section is a personal obligation of Borrower (excluding its
shareholders, directors and officers), whether or not Borrower is personally
obligated to pay the Indebtedness secured by the Mortgage and shall be binding
upon and enforceable against the distributees, successors and assigns of
Borrower with the same force and effect as though each of them had personally
executed and delivered the Mortgage, notwithstanding any exculpation provision
in favor of Borrower with respect to the payment of any other monetary
obligations under the Mortgage.

21

                         (f)
In the event that Borrower fails or refuses to pay a tax payable by Borrower
with respect to a sale or transfer by reason of a foreclosure of this Security
Instrument in accordance with this Section, the amount of the tax, any interest
or penalty applicable thereto and any other amount payable pursuant to
Borrower’s obligation to indemnify Administrative Agent and Lenders under this
Section may, at the sole option of Lender, be paid as an expense of the sale
out of the proceeds of the mortgage foreclosure sale.

                         (g)
The provisions of this Section shall survive any transfer and the delivery of
the deed affecting such transfer. Nothing in this Section shall be deemed to
grant to Borrower any greater rights to sell, assign or otherwise transfer the
premises than are expressly provided in the Mortgage nor to deprive
Administrative Agent of any right to refuse to consent to any transaction
referred to in this Section.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

                    3.1.
General Representations and Warranties. To induce Lenders to make the
Loan, Borrower hereby represents and warrants to Administrative Agent and
Lenders that except as otherwise disclosed to Administrative Agent in writing
(a) Borrower has complied with any and all Laws and regulations concerning its
organization, existence and the transaction of its business, and has the right
and power to own the Property and to develop the Improvements as contemplated
in this Agreement and the other Loan Documents; (b) Borrower is authorized to
execute, deliver and perform all of its obligations under the Loan Documents;
(c) the Loan Documents are valid and binding obligations of Borrower; (d)
Borrower is not in violation of any Law, regulation or ordinance, or any order
of any court or Tribunal, and no provision of the Loan Documents violates any
applicable Law, any covenants or restrictions affecting the Property, any order
of any court or Tribunal or any contract or agreement binding on Borrower or the
Property; (e) to the extent required by applicable Law, Borrower and Guarantor
have filed all necessary tax returns and reports and have paid all taxes and
governmental charges thereby shown to be owing; (f) the Land is not part of a
larger tract of land owned by Borrower or any of its affiliates or any
Guarantor, is not otherwise included under any unity of title or similar
covenant with other lands not encumbered by the Mortgage, and constitutes a
separate tax lot or lots with a separate tax assessment or assessments for the
Land and Improvements, independent of those for any other lands or
improvements; (g) the Land and Improvements comply with all Laws and
governmental requirements, including all subdivision and platting requirements,
without reliance on any adjoining or neighboring property; (h) the Improvements
comply with all legal requirements regarding access and facilities for
handicapped or disabled persons; (i) Borrower has not directly or indirectly
conveyed, assigned or otherwise disposed of or transferred (or agreed to do so)
any development rights, air rights or other similar rights, privileges or
attributes with respect to the Property, including those arising under any
zoning or land use ordinance or other Law or governmental requirement; (j) the
Financial Statements delivered to Administrative Agent are true, correct, and
complete in all material respects, and there has been no event or condition
that could reasonably be expected to have a Material Adverse Effect in
Borrower’s or Guarantor’s financial condition from the financial condition of
Borrower or Guarantor (as the case may be) indicated in such Financial
Statements; (k) all utility services necessary for operation of the
Improvements for their intended purpose are available at the boundaries of the
Land, including 

22

electric and natural gas facilities, telephone service, water supply,
storm and sanitary sewer facilities; (l) except as otherwise provided for in
the Loan Documents, Borrower has made no contract or arrangement of any kind
the performance of which by the other party thereto would give rise to a lien
on the Property; and (m) the current and anticipated use of the Property
complies with all applicable zoning ordinances, regulations and restrictive
covenants affecting the Land without the existence of any variance,
non-complying use, nonconforming use or other special exception, all use
restrictions of any Tribunal having jurisdiction have been satisfied, and no
violation of any Law or regulation exists with respect thereto.

                     3.2.
Ground Lease. Borrower hereby represents and warrants to Administrative
Agent and Lenders the following with respect to the Ground Lease:

	
  

 	
  

 
	
  

 	
                (a)
 Recording; Modification. A memorandum of the Ground Lease has been
 duly recorded. The Ground Lease permits the interest of Borrower to be
 encumbered by a mortgage or Ground Lessor has approved and consented to the
 encumbrance of the Property by the Mortgage. There have been no amendments or
 modifications to the terms of the Ground Lease since recordation of the
 Ground Lease (or a memoranda thereof), with the exception of written
 instruments which have been delivered to Lender. The Ground Lease may not be
 terminated, surrendered or amended without the prior written consent of
 Lender; provided that Ground Lessor shall not be prevented from exercising
 its remedies in accordance with. the Ground Lease if the obligations of
 Borrower under the Ground Lease are not performed as provided in the Ground
 Lease, subject to notice and cure rights provided to Lender in the Ground
 Lease.

 
	
  

 	
  

 
	
  

 	
                (b)
 No Liens. Except for the Permitted Encumbrances (as defined in the
 Mortgage) Borrower’s interest in the Ground Lease is not subject to any liens
 or encumbrances superior to, or of equal priority with, the Mortgage other
 than Ground Lessor’s related fee interest.

 
	
  

 	
  

 
	
  

 	
                (c)
 Ground Lease Assignable. Borrower’s interest in the Ground Lease is
 assignable without the consent of Ground Lessor to Lender, the purchaser at
 any foreclosure sale or the transferee under a deed or assignment in lieu of
 foreclosure in connection with the foreclosure of the Lien of the Mortgage or
 transfer of Borrower’s leasehold state by deed or assignment in lieu of
 foreclosure. In connection with the first assignment thereafter, the Ground
 Lease is further assignable by such transferee and its successors and assigns
 without the consent of Ground Lessor, subject to the provisions of Section
 11.1(b) of the Ground Lease.

 
	
  

 	
  

 
	
  

 	
                (d)
 Default. As of the date hereof, the Ground Lease is in full force and
 effect and no default has occurred under the Ground Lease and there is no
 existing condition which, but for the passage of time or the giving of
 notice, could result in a default under the terms of the Ground Lease.

 
	
  

 	
  

 
	
  

 	
                (e)
 Notice. The Ground Lease
 requires Ground Lessor to give notice of any default by Borrower to Lender
 prior to exercising its remedies thereunder.

 

23

	
  

 	
  

 
	
  

 	
                (f)
 Cure. Lender is permitted the opportunity (including, where necessary,
 sufficient time to gain possession of the interest of Borrower under the
 Ground Lease) to cure any default under the Ground Lease, which is curable
 after the receipt of notice of any of the default before Ground Lessor thereunder
 may terminate the Ground Lease as set forth in Section 11.8 thereof.

 
	
  

 	
  

 
	
  

 	
                (g)
 Term. The Ground Lease has a term which extends not less than ten (10)
 years beyond the Maturity Date.

 
	
  

 	
  

 
	
  

 	
                (h)
 New Lease. The Ground Lease requires Ground Lessor to enter into a new
 lease upon termination of the Ground Lease for any reason, including
 rejection or disaffirmation of the Ground Lease in a bankruptcy proceeding.

 
	
  

 	
  

 
	
  

 	
                (i)
 Insurance Proceeds. Under the terms of the Ground Lease and the
 Mortgage, taken together, any related insurance and condemnation proceeds
 that are paid or awarded with respect to the leasehold interest will be
 applied either to the repair or restoration of all or part of the Property,
 with Lender having the right, if the proceeds exceed $500,000, to hold and
 disburse the proceeds as the repair or restoration progresses, or to the
 payment of the outstanding principal balance of the Loan together with any
 accrued interest thereon.

 
	
  

 	
  

 
	
  

 	
                (j)
 Subleasing. Except as set forth in Article 11 of the Ground Lease, the
 Ground Lease does not impose any restrictions on subleasing.

 

ARTICLE 4

DEFAULT AND REMEDIES

                    4.1.
Events of Default. The occurrence of any one of the following shall be a
default under this Agreement (“Default”): (a) any of the Indebtedness is not
paid when due, whether on the scheduled due date or upon acceleration, maturity
or otherwise and such default shall have continued for a period of ten (10)
days; (b) any covenant, agreement, condition, representation or warranty in
this Agreement (other than covenants to pay the Indebtedness and other than
Defaults expressly listed in this Section) is not fully and timely performed,
observed or kept and, except with respect to provisions which are specified to
be immediate Defaults, such default shall have continued for a period of thirty
(30) days after notice thereof shall have been given to Borrower by
Administrative Agent (or such other grace period as may be specified elsewhere
in this Agreement with respect to specific provisions), provided, however, if
such default is not susceptible of being cured within such thirty (30) day
period and Borrower has commenced such cure within such thirty (30) day period
and is diligently pursuing such cure to Administrative Agent’s satisfaction,
such thirty (30) day cure period shall be extended, but in no event shall such
cure period exceed sixty (60) days, or, in the case of such other documents,
such shorter grace period, if any, as may be provided for therein; (c) the
occurrence of a Default under any other Loan Document (taking into account any
applicable notice and cure period set forth in such Loan Document); (d) any
required permit, license, certificate or approval with respect to the Property
lapses or ceases to be in full force and effect and Borrower fails to have such
required permit, license, certificate or approval renewed or reinstated within
thirty (30) days; (e) 

24

Borrower, Administrative Agent or any Lender is enjoined or prohibited
from performing any of its respective obligations under any of the Loan
Documents; (f) the owner of the Property enters into any lease of part or all
of the Property which does not comply with the Loan Documents; (g) a lien for
the performance of work or the supply of materials which is established against
the Property remains unsatisfied or unbonded for a period of twenty (20) days
after Borrower’s receipt of notice or otherwise obtaining knowledge of the date
of filing or service; (h) the entry of a judgment against Borrower or any
Guarantor for an amount in excess of $500,000 and Borrower shall not discharge
the same or cause it to be discharged within sixty (60) days from the entry
thereof, or shall not appeal therefrom or from the order, decree or process
upon which or pursuant to which said judgment was granted, based or entered,
and secure a stay of execution or bond over such judgment by a commercially
acceptable bonding company pending such appeal; (i) the issuance of any attachment,
sequestration, or similar writ levied upon any of Borrower’s or Guarantor’s
property which is not discharged within a period of ten (10) days; (j)
Administrative Agent determines that an event or condition that could
reasonably be expected to have a Material Adverse Effect has occurred in the
financial condition of Borrower or any Guarantor or in the condition of the
Property; (k) the death, incompetency, dissolution or insolvency of Borrower or
any Guarantor; (l) a Default as specified in Section 6.26; (m) a default occurs
under any other Loan Document which is not cured within any applicable notice
and cure period provided therein; (n) a Default occurs under the Other Loan
Agreement, Other Note and/or Other Mortgage; (o) any of the following: (i) a breach
or default by Borrower under any condition or obligation contained in the
Ground Lease shall occur, (ii) there occurs any event or condition that gives
Ground Lessor under the Ground Lease a right to terminate or cancel the Ground
Lease, (iii) the Ground Lease shall be surrendered or the Ground Lease shall be
terminated or cancelled for any reason or under any circumstances whatsoever or
(iv) any of the terms, covenants or conditions of the Ground Lease shall in any
manner be modified, changed, supplemented, altered or amended without the prior
written consent of Lenders; (p) any of the following: (i) a breach or default
by Borrower or Storage Facility Tenant under any condition or obligation
contained in the Storage Facility Master Lease shall occur, (ii) there occurs
any event or condition that gives Borrower or Storage Facility Tenant under the
Storage Facility Master Lease a right to terminate or cancel the Storage
Facility Master Lease, (iii) the Storage Facility Master Lease shall be
surrendered or the Storage Facility Master Lease shall be terminated or
cancelled for any reason or under any circumstances whatsoever, except as
specifically permitted herein or (iv) any of the terms, covenants or conditions
of the Storage Facility Master Lease shall in any manner be modified, changed,
supplemented, altered or amended without the prior written consent of
Administrative Agent; and (q) Storage Facility Tenant shall dissolve or cease
to exist during the term of the Loan, except in compliance with the provisions
of Section 2.17 hereof.

                    4.2.
Remedies. Upon a Default, Administrative Agent may with the consent of,
and shall at the direction of the Required Lenders, without notice, exercise
any and all rights and remedies afforded by this Agreement, the other Loan
Documents, Law, equity or otherwise, including (a) declaring any and all
Indebtedness immediately due and payable; (b) reducing any claim to judgment;
or (c) obtaining appointment of a receiver (to which Borrower hereby consents)
and/or judicial or nonjudicial foreclosure under the Mortgage; provided,
however, that upon a Default, Administrative Agent at its election may (but
shall not be obligated to) without the consent of and shall at the direction of
the Required Lenders, without notice, do any one or more of the following: (a)
terminate Lenders’ Commitment to lend; and (b) set-off and apply, to the extent
thereof and to the maximum extent permitted by Law, any and all deposits,
funds, or 

25

assets at any time held and any and all other indebtedness at any time
owing by Administrative Agent or any Lender to or for the credit or account of
Borrower against any Indebtedness.

                    Borrower
hereby appoints Administrative Agent as Borrower’s attorney-in-fact, which
power of attorney is irrevocable and coupled with an interest, with full power
of substitution if Administrative Agent so elects, to do any of the following
in Borrower’s name upon the occurrence of a Default: (i) use such sums as are
necessary, including any proceeds of the Loan and employ such architects,
engineers, and contractors as may be required, or as Lenders may otherwise
consider desirable, for the purpose of completing construction of the
Improvements substantially in accordance with the Plans, the Loan Documents,
and all applicable Laws, governmental requirements and restrictive covenants;
(ii) endorse the name of Borrower on any checks or drafts representing proceeds
of any insurance policies, or other checks or instruments payable to Borrower
with respect to the Property; (iii) do every act with respect to the
construction of the Tenant Improvements that Borrower may do; (iv) prosecute or
defend any action or proceeding incident to the Property, (v) pay, settle, or
compromise all bills and claims so as to clear title to the Property; and (vi)
take over and use all or any part of the labor, materials, supplies and
equipment contracted for, owned by, or under the control of Borrower, whether
or not previously incorporated into the Improvements. Any amounts expended by
Administrative Agent itself or on behalf of Lenders to construct or to complete
the Tenant Improvements in connection with the exercise of its remedies herein
shall be deemed to have been advanced to Borrower hereunder as a demand obligation
owing by Borrower to Administrative Agent or Lenders as applicable and shall
constitute a portion of the Indebtedness, regardless of whether such amounts
exceed any limits for Indebtedness otherwise set forth herein. Neither
Administrative Agent nor Lenders shall have any liability to Borrower for the
sufficiency or adequacy of any such actions taken by Administrative Agent.

                    No
delay or omission of Administrative Agent or Lenders to exercise any right,
power or remedy accruing upon the happening of a Default shall impair any such
right, power or remedy or shall be construed to be a waiver of any such Default
or any acquiescence therein. No delay or omission on the part of Administrative
Agent or Lenders to exercise any option for acceleration of the maturity of the
Indebtedness, or for foreclosure of the Mortgage following any Default as
aforesaid, or any other option granted to Administrative Agent and Lenders
hereunder in any one or more instances, or the acceptances by Administrative Agent
or Lenders of any partial payment on account of the Indebtedness, shall
constitute a waiver of any such Default, and each such option shall remain
continuously in full force and effect. No remedy herein conferred upon or
reserved to Administrative Agent and/or Lenders is intended to be exclusive of
any other remedies provided for in any Note or any of the other Loan Documents,
and each and every such remedy shall be cumulative, and shall be in addition to
every other remedy given hereunder, or under any Note or any of the other Loan
Documents, or now or hereafter existing at Law or in equity or by statute.
Every right, power and remedy given to Administrative Agent and Lenders by this
Agreement, any Note or any of the other Loan Documents shall be concurrent, and
may be pursued separately, successively or together against Borrower, or the
Property or any part thereof, or any personal property granted as security
under the Loan Documents, and every right, power and remedy given by this
Agreement, any Note or any of the other Loan Documents may be exercised from
time to time as often as may be deemed expedient by the Required Lenders.

26

                    Regardless
of how a Lender may treat payments received from the exercise of remedies under
the Loan Documents for the purpose of its own accounting, for the purpose of
computing the Indebtedness, payments shall be applied as elected by Lenders. No
application of payments will cure any event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the Loan
Documents, or prevent the exercise, or continued exercise, of rights or
remedies of Administrative Agent and Lenders hereunder or thereunder or at Law
or in equity.

ARTICLE 5

ADMINISTRATIVE AGENT

                      5.1.
Appointment and Authorization of Administrative Agent. 

                         (a)
Each Lender hereby irrevocably (subject to Section 5.9) appoints, designates
and authorizes Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Administrative
Agent. Without limiting the generality of the foregoing sentence, the use of
the term “agent” herein and in the other Loan Documents with reference to
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable Law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.

                         (b) No individual Lender or
group of Lenders shall have any right to amend or waive, or consent to the
departure of any party from any provision of any Loan Document, or secure or
enforce the obligations of Borrower or any other party pursuant to the Loan
Documents, or otherwise. All such rights, on behalf of Administrative Agent or
any Lender or Lenders, shall be held and exercised solely by and at the option
of Administrative Agent for the pro rata benefit of Lenders. Such rights,
however, are subject to the rights of a Lender or Lenders, as expressly set
forth in this Agreement, to approve matters or direct Administrative Agent to
take or refrain from taking action as set forth in this Agreement. Except as
expressly otherwise provided in this Agreement or the other Loan Documents,
Administrative Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights, or taking or
refraining from taking any actions which Administrative Agent is expressly
entitled to exercise or take under this Agreement and the other Loan Documents,
including, without limitation, (i) the determination if and to what extent
matters or items subject to Administrative Agent’s satisfaction are acceptable
or otherwise within its discretion, (ii) the making of Administrative Agent
Advances, and (iii) the exercise of remedies pursuant to, but

27

subject to, Article 4 or pursuant to any other Loan Document and any
action so taken or not taken shall be deemed consented to by Lenders.

                         (c)
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Borrower or Guarantor, no individual Lender or
group of Lenders shall have the right, and Administrative Agent (irrespective
of whether the principal of the Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Borrower) shall be
exclusively entitled and empowered on behalf of itself and Lenders, by
intervention in such proceeding or otherwise:

	
  

 	
  

 
	
  

 	
                (i)
 to file and prove a claim for the whole amount of the principal and interest
 owing and unpaid in respect of the Loan and all other Obligations that are
 owing and unpaid and to file such other documents as may be necessary or
 advisable in order to have the claims of Lenders and Administrative Agent
 (including any claim for the reasonable compensation, expenses, disbursements
 and advances of Lenders and Administrative Agent and their respective agents
 and counsel and all other amounts due Lenders and Administrative Agent under
 Section 6.10 and Exhibit “K” allowed in such judicial proceeding; and

 
	
  

 	
  

 
	
  

 	
                (ii)
 to collect and receive any monies or other property payable or deliverable on
 any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender to make such payments to Administrative Agent
and, in the event that Administrative Agent shall consent to the making of such
payments directly to Lenders, to pay to Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of
Administrative Agent and its agents and counsel, and any other amounts due
Administrative Agent under Section 6.10.

                    Nothing
contained herein shall be deemed to authorize Administrative Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of Lenders except as approved by Required Lenders or
to authorize Administrative Agent to vote in respect of the claims of Lenders
except as approved by Required Lenders in any such proceeding.

                    5.2.
Delegation of Duties. Administrative Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel and other
consultant experts concerning all matters pertaining to such duties.
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.

                    5.3.
Liability of Administrative Agent. No Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of 

28

Lenders for any recital, statement, representation or warranty made by
Borrower or any subsidiary or Affiliate of Borrower, or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of
Borrower, Guarantor or any of their Affiliates.

                    5.4.
Reliance by Administrative Agent. Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
person or persons, and upon advice and statements of legal counsel (including
counsel to any party to the Loan Documents), independent accountants and other
experts selected by Administrative Agent. Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders or all Lenders if required hereunder as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders or such greater
number of Lenders as may be expressly required hereby in any instance, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all Lenders. In the absence of written instructions from the
Required Lenders or such greater number of Lenders, as expressly required
hereunder, Administrative Agent may take or not take any action, at its
discretion, unless this Agreement specifically requires the consent of the
Required Lenders or such greater number of Lenders.

                    5.5.
Notice of Default. Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, unless Administrative
Agent shall have received written notice from a Lender or Borrower referring to
this Agreement, describing such Default that Administrative Agent determines
will have a Material Adverse Effect. Administrative Agent will notify Lenders
of its receipt of any such notice. Administrative Agent shall take such action
with respect to such Default as may be requested by the Required Lenders in accordance
with Article 4; provided, however, that unless and until Administrative Agent
has received any such request, Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable or in the best interest of
Lenders.

29

                    5.6.
Credit Decision; Disclosure of Information by Administrative Agent. 

                         (a)
Each Lender acknowledges that none of Agent-Related Persons has made any
representation or warranty to it, and that no act by Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of Borrower and Guarantor, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lenders as to
any matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to Administrative Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrower and Guarantor, and all applicable bank or other regulatory Laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to Borrower and Guarantor
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower and
Guarantor.

                         (b)
Administrative Agent upon its receipt shall provide each Lender such notices,
reports and other documents expressly required to be furnished to Lenders by
Administrative Agent herein. To the extent not already available to a Lender,
Administrative Agent shall also provide Lender and/or make available for
Lender’s inspection during reasonable business hours and at Lender’s expense,
upon Lender’s written request therefor: (i) copies of the Loan Documents; (ii)
such information as is then in Administrative Agent’s possession in respect of
the current status of principal and interest payments and accruals in respect
of the Loan; (iii) copies of all current financial statements in respect of
Borrower, any Guarantor or other person liable for payment or performance by
Borrower of any obligations under the Loan Documents, then in Administrative
Agent’s possession with respect to the Loan; and (iv) other current factual
information then in Administrative Agent’s possession with respect to the Loan
and bearing on the continuing creditworthiness of Borrower or any Guarantor, or
any of their respective Affiliates; provided that nothing contained in this
Section shall impose any liability upon Administrative Agent for its failure to
provide a Lender any of such Loan Documents, information, or financial
statements, unless such failure constitutes willful misconduct or gross
negligence on Administrative Agent’s part; and provided further that
Administrative Agent shall not be obligated to provide any Lender with any
information in violation of Law or any contractual restrictions on the
disclosure thereof (provided such contractual restrictions shall not apply to
distributing to a Lender factual and financial information expressly required
to be provided herein). Except as set forth above, Administrative Agent shall
not have any duty or responsibility to provide any Lenders with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of Borrower or Guarantor or
any of their respective Affiliates which may come into the possession of any of
Agent-Related Persons.

30

                    5.7.
Indemnification of Administrative Agent. Whether or not the transactions
contemplated hereby are consummated, Lenders shall indemnify upon demand each
Agent-Related Person (to the extent not reimbursed by or on behalf of Borrower
and without limiting the obligation of Borrower to do so), pro rata, and hold harmless
each Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person’s own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section. Without limitation of the foregoing, to the extent that
Administrative Agent is not reimbursed by or on behalf of Borrower, each Lender
shall reimburse Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including attorney fees) incurred by
Administrative Agent as described in Section 6.10. The undertaking in this
Section shall survive the payment of all Indebtedness hereunder and the
resignation or replacement of Administrative Agent.

                    5.8.
Administrative Agent in Individual Capacity. Administrative Agent, in
its individual capacity, and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with any party to the Loan Documents and their
respective Affiliates as though Administrative Agent were not Administrative
Agent hereunder and without notice to or consent of Lenders. Lenders
acknowledge that Borrower and Bank of America, N.A. or its Affiliate have
entered or may enter into Swap Transactions. A portion of the Loan may be
funded to honor Borrower’s payment obligations under the terms of such Swap
Transactions, and Lenders shall have no right to share in any portion of such
payments. Lenders acknowledge that, pursuant to such activities, Bank of
America, N.A. or its Affiliates may receive information regarding any party to
the Loan Documents, or their respective Affiliates (including information that
may be subject to confidentiality obligations in favor of such parties or such
parties’ Affiliates) and acknowledge that Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Pro Rata
Share of the Loan, Bank of America, N.A. shall have the same rights and powers
under this Agreement as any other Lenders and may exercise such rights and
powers as though it were not Administrative Agent or party to Swap
Transactions, and the terms “Lender” and “Lenders” include Bank of America,
N.A. in its individual capacity.

                    5.9.
Successor Administrative Agent. Administrative Agent may, and at the
request of the Required Lenders as a result of Administrative Agent’s gross
negligence or willful misconduct in performing its duties under this Agreement
shall, resign as Administrative Agent upon thirty (30) days’ notice to Lenders.
If Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among Lenders a successor administrative agent for Lenders,
which successor administrative agent shall be consented to by Borrower at all
times other than during the existence of a Default (which consent of Borrower
shall not be unreasonably withheld or delayed). If no successor administrative
agent is appointed prior to the effective date of the resignation of
Administrative Agent, Administrative Agent may appoint, after consulting with
Lenders and Borrower, a successor administrative agent from among Lenders. Upon
the acceptance of its appointment as successor administrative agent hereunder, 

31

such successor administrative agent shall succeed to all the rights,
powers and duties of the retiring Administrative Agent and the term
“Administrative Agent” shall mean such successor administrative agent, and the
retiring Administrative Agent’s appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent’s resignation hereunder as Administrative Agent, the provisions of this
Article and other applicable Sections of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor administrative agent
has accepted appointment as Administrative Agent by the date which is thirty
(30) days following a retiring Administrative Agent’s notice of resignation,
the retiring Administrative Agent’s resignation shall nevertheless thereupon
become effective and Lenders shall perform all of the duties of Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.

                    5.10.
Releases; Acquisition and Transfers of Collateral. 

                         (a)
Lenders hereby irrevocably authorize Administrative Agent to transfer or
release any lien on, or after foreclosure or other acquisition of title by
Administrative Agent on behalf of Lenders to transfer or sell, any Loan
collateral (i) upon the termination of the Commitments and payment and
satisfaction in full of all Indebtedness, (ii) constituting a release, transfer
or sale of a lien or Loan collateral if Borrower will certify to Administrative
Agent that the release, transfer or sale is permitted under this Agreement or
the other Loan Documents (and Administrative Agent may rely conclusively on any
such certificate, without further inquiry); or (iv) after foreclosure or other
acquisition of title (1) for a purchase price of at least 90% of the value
indicated in the most recent appraisal of the collateral obtained by
Administrative Agent made in accordance with regulations governing Administrative
Agent, less any reduction indicated in the appraisal estimated by experts in
such areas; or (2) if approved by the Required Lenders. 

                         (b)
If all or any portion of the Loan collateral is acquired by foreclosure or by deed
in lieu of foreclosure, Administrative Agent shall take title to the collateral
in its name or by an Affiliate of Administrative Agent, but for the benefit of
all Lenders in their Pro Rata Shares on the date of the foreclosure sale or
recordation of the deed in lieu of foreclosure (the “Acquisition Date”).
Administrative Agent and all Lenders hereby expressly waive and relinquish any
right of partition with respect to any collateral so acquired. After any
collateral is acquired, Administrative Agent shall appoint and retain one or
more persons (individually and collectively, “Property Manager”) experienced in
the management, leasing, sale and/or dispositions of similar properties.

                         After
consulting with the Property Manager, Administrative Agent shall prepare a
written plan for completion of construction (if required), operation,
management, improvement, maintenance, repair, sale and disposition of the Loan
collateral and a budget for the aforesaid, which may include a reasonable management
fee payable to Administrative Agent (the “Business Plan”). Administrative Agent
will deliver the Business Plan not later than the sixtieth (60th) day after the
Acquisition Date to each Lender with a written request for approval of the
Business Plan. If the Business Plan is approved by the Required Lenders,
Administrative Agent and the Property Manager shall adhere to the Business Plan
until a different Business Plan is approved by the Required Lenders.
Administrative Agent may propose an amendment to the 

32

Business Plan as it deems appropriate, which shall also be subject to
Required Lender approval. If the Business Plan (as may be amended) proposed by
Administrative Agent is not approved by the Required Lenders, (or if sixty (60)
days have elapsed following the Acquisition Date without a Business Plan being
proposed by Administrative Agent), any Lender may propose an alternative
Business Plan, which Administrative Agent shall submit to all Lenders for their
approval. If an alternative Business Plan is approved by the Required Lenders,
Administrative Agent may appoint one of the approving Lenders to implement the
alternative Business Plan. Notwithstanding any other provision of this
Agreement, unless in violation of an approved Business Plan or otherwise in an
emergency situation, Administrative Agent shall, subject to subsection (a) of
this Section, have the right but not the obligation to take any action in
connection with the Loan collateral (including those with respect to property
taxes, insurance premiums, completion of construction, operation, management,
improvement, maintenance, repair, sale and disposition), or any portion
thereof.

                         (c)
Upon request by Administrative Agent or Borrower at any time, Lenders will
confirm in writing Administrative Agent’s authority to sell, transfer or
release any such liens of particular types or items of Loan collateral pursuant
to this Section; provided, however, that (i) Administrative Agent shall not be
required to execute any document necessary to evidence such release, transfer
or sale on terms that, in Administrative Agent’s opinion, would expose
Administrative Agent to liability or create any obligation or entail any
consequence other than the transfer, release or sale without recourse,
representation or warranty, and (ii) such transfer, release or sale shall not
in any manner discharge, affect or impair the obligations of Borrower other
than those expressly being released.

                         (d)
If only two (2) Lenders exist at the time Administrative Agent receives a
purchase offer for Loan collateral for which one of Lenders does not consent
within ten (10) Business Days after notification from Administrative Agent, the
consenting Lender may offer (“Purchase Offer”) to purchase all of
non-consenting Lender’s right, title and interest in the collateral for a
purchase price equal to non-consenting Lender’s Pro Rata Share of the net
proceeds anticipated from such sale of such collateral (as reasonably
determined by Administrative Agent, including the undiscounted face principal
amount of any purchase money obligation not payable at closing) (“Net
Proceeds”). Within ten (10) Business Days thereafter the non-consenting Lender
shall be deemed to have accepted such Purchase Offer unless the non-consenting
Lender notifies Administrative Agent that it elects to purchase all of the
consenting Lender’s right, title and interest in the collateral for a purchase
price payable by the non-consenting Lender in an amount equal to the consenting
Lender’s Pro Rata Share of the Net Proceeds. Any amount payable hereunder by a
Lender shall be due on the earlier to occur of the closing of the sale of the
collateral or ninety (90) days after the Purchase Offer, regardless of whether
the collateral has been sold.

                    5.11.
Application of Payments. Except as otherwise provided below with respect
to Defaulting Lenders, aggregate principal and interest payments, payments for
Indemnified Liabilities and/or foreclosure or sale of the collateral, and net
operating income from the collateral during any period it is owned by
Administrative Agent on behalf of Lenders (“Payments”) shall be apportioned pro
rata among Lenders and payments of any fees (other than fees designated for
Administrative Agent’s separate account) shall, as applicable, be apportioned
pro rata among Lenders. Notwithstanding anything to the contrary in this
Agreement, all 

33

Payments due and payable to Defaulting Lenders shall be due and payable
to and be apportioned pro rata among Administrative Agent and Electing Lenders.
Such apportionment shall be in the proportion that the Defaulting Lender
Payment Amounts paid by them bears to the total Defaulting Lender Payment
Amounts of such Defaulting Lender. Such apportionment shall be made until
Administrative Agent and Lenders have been paid in full for the Defaulting
Lender Payment Amounts. All pro rata Payments shall be remitted to
Administrative Agent and all such payments not constituting payment of specific
fees, and all proceeds of the Loan collateral received by Administrative Agent,
shall be applied first, to pay any fees, indemnities, costs, expenses
(including those in Section 5.7) and reimbursements then due to Administrative
Agent from Borrower; second, to pay any fees, costs, expenses and
reimbursements then due to Lenders from Borrower; third, to pay pro rata
interest and late charges due in respect of the Indebtedness and Administrative
Agent Advances; fourth, to pay or prepay pro rata principal of the Indebtedness
and Administrative Agent Advances; fifth, to pay any indebtedness of Borrower
under Swap Transactions; and last, to Borrower, if required by law, or Lenders
in Pro Rata Share percentages equal to their percentages at the termination of
the Aggregate Commitments.

                    5.12.
Benefit. The terms and conditions of this Article are inserted for the
sole benefit of Administrative Agent and Lenders; the same may be waived in
whole or in part, with or without terms or conditions, without prejudicing
Administrative Agent’s or Lenders’ rights to later assert them in whole or in
part.

ARTICLE 6

GENERAL TERMS AND CONDITIONS

                    6.1.
Consents; Borrower’s Indemnity. Except where otherwise expressly
provided in the Loan Documents, in any instance where the approval, consent or
the exercise of Administrative Agent’s or Lenders’ judgment is required, the
granting or denial of such approval or consent and the exercise of such
judgment shall be (a) within the sole discretion of Administrative Agent or Lenders;
(b) deemed to have been given only by a specific writing intended for the
purpose given and executed by Administrative Agent or Lenders; and (c) free
from any limitation or requirement of reasonableness. Notwithstanding any
approvals or consents by Administrative Agent or Lenders, neither
Administrative Agent nor any Lender has any obligation or responsibility
whatsoever for the adequacy, form or content of any appraisal, any contract,
any lease, or any other matter incident to the Property. Administrative Agent’s
or Lenders’ acceptance of an assignment of the Plans for the benefit of
Administrative Agent and Lenders shall not constitute approval of the Plans.
Any inspection, appraisal or audit of the Property or the books and records of
Borrower, or the procuring of documents and financial and other information, by
or on behalf of Administrative Agent shall be for Administrative Agent’s and
Lenders’ protection only, and shall not constitute an assumption of
responsibility to Borrower or anyone else with regard to the condition, value,
construction, maintenance or operation of the Property, or relieve Borrower of
any of Borrower’s obligations. Borrower has selected all surveyors, architects,
engineers, contractors, materialmen and all other persons or entities
furnishing services or materials to the Project. Neither Administrative Agent
nor any Lender has any duty to supervise or to inspect the Property or the
construction of the Improvements nor any duty of care to Borrower or any other
person to protect against, or inform Borrower or any other person of the
existence of, negligent, faulty, inadequate or defective 

34

design or construction of the Improvements. Neither Administrative
Agent nor any Lender shall be liable or responsible for, and Borrower shall
indemnify each Agent-Related Person and each Lender and their respective
Affiliates, directors, officers, agents, attorneys and employees (collectively,
the “Indemnitees”) from and against: (a) any claim, action, loss or cost
(including attorney’s fees and costs) arising from or relating to (i) any
defect in the Property or the Improvements, (ii) the performance or default of
Borrower, Borrower’s surveyors, architects, engineers, contractors or any other
person, (iii) any failure to construct, complete, protect or insure the
Improvements, (iv) the payment of costs of labor, materials, or services
supplied for the construction, alteration or renovation of the Improvements,
including, without limitation, Tenant Improvements, (v) in connection with the protection
and preservation of the Loan collateral (including those with respect to
property taxes, insurance premiums, completion of construction, operation,
management, improvements, maintenance, repair, sale and disposition), or (vi)
the performance of any obligation of Borrower whatsoever; (b) any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including attorney fees
and costs) of any kind or nature whatsoever which may at any time be imposed
on, incurred by or asserted against any such Indemnitee in any way relating to
or arising out of or in connection with (i) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (ii) any Commitment or Loan, or (iii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto; (c) any and all claims, demands, actions or
causes of action arising out of or relating to the use of Information (as
defined in Section 6.6) or other materials obtained through internet,
Intralinks or other similar information transmission systems in connection with
this Agreement; and (d) any and all liabilities, losses, costs or expenses
(including attorney fees and costs) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action, cause of action
or proceeding, or as a result of the preparation of any defense in connection
with any foregoing claim, demand, action, cause of action or proceeding, in all
cases, whether or not an Indemnitee is a party to such claim, demand, action,
cause of action or proceeding and whether it is defeated, successful or
withdrawn, (all the foregoing, collectively, the “Indemnified Liabilities”);
provided, however, that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. Nothing, including any advance or acceptance of
any document or instrument, shall be construed as a representation or warranty,
express or implied, to any party by Administrative Agent or Lenders. Inspection
shall not constitute an acknowledgment or representation by Administrative
Agent or any Lender that there has been or will be compliance with the Plans,
the Loan Documents, or applicable Laws, governmental requirements and
restrictive covenants, or that the construction is free from defective
materials or workmanship. Inspection, whether or not followed by notice of
Default, shall not constitute a waiver of any Default then existing, or a
waiver of Administrative Agent’s and Lenders’ right thereafter to insist that
the Improvements be in compliance with the Plans, the 

35

Loan Documents, and all applicable Laws, governmental requirements and
restrictive covenants. Administrative Agent’s failure to inspect shall not
constitute a waiver of any of Administrative Agent’s or Lenders’ rights under
the Loan Documents or at Law or in equity. 

                         6.2.
Miscellaneous. This Agreement may be executed in several counterparts, all
of which are identical, and all of which counterparts together shall constitute
one and the same instrument. A determination that any provision of this
Agreement is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Agreement to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons, entities or circumstances. Time shall be of
the essence with respect to obligations under the Loan Documents. This
Agreement, and its validity, enforcement and interpretation, shall be governed
by New York law (without regard to any conflict of Laws principles) and
applicable United States federal Law. 

                         6.3.
Notices. 

                    6.3.1.
Modes of Delivery; Changes. Except as otherwise provided herein, all
notices, and other communications required or which any party desires to give
under this Agreement or any other Loan Document shall be in writing. Unless
otherwise specifically provided in such other Loan Document, all such notices
and other communications shall be deemed sufficiently given or furnished if
delivered by personal delivery, by courier (including overnight delivery
services such as FedEx), by registered or certified United States mail, postage
prepaid, or by facsimile (with, subject to Subsection 6.3.2 below, a
confirmatory duplicate copy sent by first class United States mail), addressed
to the party to whom directed or by (subject to Subsection 6.3.3 below)
electronic mail address to Borrower, at the addresses set forth at the end of
this Agreement or to Administrative Agent or Lenders at the addresses specified
for notices on the Schedule of Lenders (unless changed by similar notice in
writing given by the particular party whose address is to be changed). Any such
notice or communication shall be deemed to have been given and received either
at the time of personal delivery or, in the case of courier or mail, as of the
date of first attempted delivery at the address and in the manner provided
herein, or, in the case of facsimile, upon receipt; provided, however, that
service of a notice required by any applicable statute shall be considered
complete when the requirements of that statute are met. Notwithstanding the
foregoing, no notice of change of address shall be effective except upon actual
receipt. This Section shall not be construed in any way to affect or impair any
waiver of notice or demand provided in any Loan Document or to require giving
of notice or demand to or upon any person in any situation or for any reason. 

                    6.3.2.
Effectiveness of Facsimile Documents and Signatures. Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all parties to
the Loan Documents. Administrative Agent may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
provided, however, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature. 

36

                    6.3.3.
Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such
as financial statements and other information, and to distribute Loan Documents
for execution by the parties thereto, and may not be used for any other
purpose. 

                    6.3.4.
Reliance by Administrative Agent and Lenders. Administrative Agent and
Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan advance notices) purportedly given by or on behalf of Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such person on each notice
purportedly given by or on behalf of Borrower. All telephonic notices to and
other communications with Administrative Agent may be recorded by
Administrative Agent, and each of the parties hereto hereby consents to such
recording. If a Lender does not notify or inform Administrative Agent of
whether or not it consents to, or approves of or agrees to any matter of any
nature whatsoever with respect to which its consent, approval or agreement is
required under the express provisions of this Agreement or with respect to
which its consent, approval or agreement is otherwise requested by
Administrative Agent, in connection with the Loan or any matter pertaining to
the Loan, within ten (10) Business Days (or such longer period as may be
specified by Administrative Agent) after such consent, approval or agreement is
requested by Administrative Agent, Lender shall be deemed to have given its
consent, approval or agreement, as the case may be, with respect to the matter
in question. 

                    6.4.
Payments Set Aside. To the extent that any payment by or on behalf of
Borrower is made to Administrative Agent or any Lender, or Administrative Agent
or any Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law, to a depository
(including Administrative Agent, any Lender or its or their Affiliates) for
returned items or insufficient collected funds, or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect. 

                    6.5.
Successors and Assigns. 

                    (a)
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby, except that Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each
Lender, and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with 

37

the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this
Section, or (iii) by way of pledge or assignment of a security interest subject
to the restrictions of subsection (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Indemnitees)
any legal or equitable right, remedy or claim under or by reason of this
Agreement. 

                    (b)
Any Lender may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and Pro Rata Share of the Loan at the time owing to it); provided
that: 

	
  

 	
  

 
	
  

 	
           (i)
 so long as no Default has occurred and is continuing the assigning Lender’s
 Commitment after the assignment must be at least $10,000,000.00, and except
 in the case of an assignment of the entire remaining amount of the assigning
 Lender’s Commitment and Pro Rata Share of the Loan at the time owing to it or
 in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved
 Fund as defined in subsection (h) of this Section with respect to a Lender,
 the aggregate amount of the Commitment (which for this purpose includes its
 Pro Rata Share of the Loan outstanding) subject to each such assignment,
 determined as of the date the Assignment and Assumption with respect to such
 assignment is delivered to Administrative Agent, shall not be less than
 $10,000,000 unless each of Administrative Agent and, so long as no Default
 has occurred and is continuing, Borrower otherwise consents (each such
 consent not to be unreasonably withheld or delayed); 

 
	
  

 	
  

 
	
  

 	
           (ii)
 each partial assignment shall be made as an assignment of a proportionate
 part of all the assigning Lender’s rights and obligations under this
 Agreement with respect to its Pro Rata Share of the Loan and the Commitment
 assigned; 

 
	
  

 	
  

 
	
  

 	
           (iii)
 any assignment of a Commitment must be approved by Administrative Agent,
 unless the person that is the proposed assignee is itself a Lender (whether
 or not the proposed assignee would otherwise qualify as an Eligible
 Assignee); and 

 
	
  

 	
  

 
	
  

 	
           (iv) the
 parties to each assignment shall execute and deliver to Administrative Agent
 an Assignment and Assumption, together with a processing and recordation fee
 of $3,500. 

 

Subject to acceptance and recording thereof by Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of this Agreement with respect to Borrower’s obligations surviving 

38

termination of this Agreement). Upon request, Administrative Agent
shall prepare and Borrower shall execute and deliver a Note (“Replacement
Note”) to the assignee Lender. Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this subsection
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (d)
of this Section. 

                    (c)
Administrative Agent, acting solely for this purpose as an agent of Borrower
shall maintain at Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of Lenders, and the Commitments of, and principal amount of each
Lender’s Pro Rata Share of the Loan owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and Borrower, Administrative Agent and Lenders may treat each
person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by Borrower and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice. 

                    (d)
Any Lender may, without the consent of, but with prior notice to Administrative
Agent, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or its
Pro Rata Share of the Loan owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) Borrower, Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement, and (iv) except to
the extent consented to by Administrative Agent in its sole discretion with
respect to each participation, any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement. 

                    (e)
A Participant shall not be entitled to receive any greater payment under
Sections 1.7, 1.8 or 1.9 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant. 

                    (f)
Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Note, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. 

                    (g)
If the consent of Borrower to an assignment or to an assignee is required
hereunder (including a consent to an assignment which does not meet the minimum
assignment threshold specified in clause (i) of the provision to the first
sentence of subsection (b) above), Borrower shall be deemed to have given its
consent five (5) Business Days after the date notice 

39

thereof has been delivered by the assigning Lender (through
Administrative Agent) unless such consent is expressly refused by Borrower
prior to such fifth Business Day. 

                    (h)
As used herein, the following terms have the following meanings: 

          “Approved
Fund” means any Fund that is administered or managed by (a) a Lender, (b)
an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender. 

          “Eligible
Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund; and (d) any other person (other than a natural person) approved by
Administrative Agent, and, unless a Default has occurred and is continuing,
Borrower (each such approval not to be unreasonably withheld or delayed). 

          “Fund”
means any person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial real estate
loans and similar extensions of credit in the ordinary course of its business. 

                    6.6.
Confidentiality. Each of Administrative Agent and Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (b) to the extent requested by any
regulatory authority; (c) to the extent required by applicable Laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or participant in, or any prospective assignee of or participant in, any of
its rights or obligations under this Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty’s or prospective counterparty’s professional advisor) to any Swap
Transaction or credit derivative transaction relating to obligations of
Borrower and Guarantor; (g) with the consent of Borrower; or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to Administrative Agent or any
Lender on a nonconfidential basis from a source other than Borrower; or (i) to
the National Association of Insurance Commissioners or any other similar
organization. For the purposes of this Section, “Information” means all
information received from Borrower or Guarantor relating to Borrower or
Guarantor or their business, other than any such information that is available
to Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by Borrower or Guarantor; provided that in the case of information
received from Borrower or Guarantor after the date hereof, such information is
clearly identified in writing at the time of delivery as confidential. Any
person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such person has exercised the same degree of care to maintain the
confidentiality of such Information as such person would accord to its own
confidential information. Administrative Agent and Lenders may disclose the
existence of this Agreement and information about this Agreement to market data

40

collectors, similar service providers to the lending industry, and
service providers to Administrative Agent and Lenders in connection with the
administration and management of this Agreement, the Loan and Loan Documents. 

                    6.7.
Set-off. In addition to any rights and remedies of Administrative Agent
and Lenders provided by Law, upon the occurrence and during the continuance of
any Default, Administrative Agent and each Lender is authorized at any time and
from time to time, without prior notice to Borrower or any other party to the
Loan Documents, any such notice being waived by Borrower (on its own behalf and
on behalf of each party to the Loan Documents to the fullest extent permitted
by Law), to set-off and apply any and all deposits, general or special, time or
demand, provisional or final, any time owing by Administrative Agent or such
Lender hereunder or under any other Loan Document to or for the credit or the
account of such parties to the Loan Documents against any and all Indebtedness,
irrespective of whether or not Administrative Agent or such Lender shall have
made demand under this Agreement or any other Loan Document and although such
Indebtedness may be contingent or unmatured or denominated in a currency
different from that of the applicable depositor indebtedness. Each Lender
agrees promptly to notify Borrower and Administrative Agent after any such
set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. 

                    6.8.
Sharing of Payments. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the portions of the Loan advanced
by it, any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the portions of the Loan made by them as shall be necessary
to cause such purchasing Lender to share the excess payment in respect of such
portions of the Loan or such participations, as the case may be, pro rata with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Lender under any of the
circumstances described in Section 6.4 (including pursuant to any settlement
entered into by the purchasing Lender in its discretion), such purchase shall
to that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such
paying Lender’s ratable share (according to the proportion of (i) the amount of
such paying Lender’s required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered without
further interest thereon. Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by Law,
exercise all its rights of payment (including the right of set-off), but
subject to Section 6.7 with respect to such participation as fully as if such
Lender were the direct creditor of Borrower in the amount of such participation.
Administrative Agent will keep records (which shall be conclusive and binding
in the absence of manifest error) of participations purchased under this
Section and will in each case notify Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices,
requests, demands, directions and other communications under this Agreement
with respect to the portion of the Obligations purchased to the same extent as
though the purchasing Lender were the original owner of the Obligations
purchased. 

41

                    6.9.
Amendments; Survival. Administrative Agent and Lenders shall be entitled
to amend (whether pursuant to a separate intercreditor agreement or otherwise)
any of the terms, conditions or agreements set forth in Article 5 or as to any
other matter in the Loan Documents respecting payments to Administrative Agent
or Lenders or the required number of Lenders to approve or disapprove any
matter or to take or refrain from taking any action, without the consent of
Borrower or any other person or the execution by Borrower or any other person
of any such amendment or intercreditor agreement. Subject to the foregoing,
Administrative Agent may amend or waive any provision of this Agreement or any
other Loan Document, or consent to any departure by any party to the Loan
Documents therefrom which amendment, waiver or consent is intended to be within
Administrative Agent’s discretion or determination, or otherwise in
Administrative Agent’s reasonable determination shall not have a Material
Adverse Effect; provided, however, that otherwise no such amendment, waiver or
consent shall be effective unless in writing, signed by the Required Lenders
and Borrower or the applicable party to the Loan Documents, as the case may be,
and acknowledged by Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; and provided further that no such amendment, waiver or consent
shall: 

	
  

 	
  

 
	
  

 	
                (a)
 extend or increase the Commitment of any Lender (or reinstate any Commitment
 terminated pursuant to Section 4.2), without the written consent of such
 Lender (it being understood that a waiver of a Default shall not constitute
 an extension or increase in any Lender’s Commitment); 

 
	
  

 	
  

 
	
  

 	
                (b)
 postpone any date fixed by this Agreement or any other Loan Document for any
 payment of principal, interest, fees or other amounts due to Lenders (or any
 of them) hereunder or under any other Loan Document, without the written
 consent of each Lender directly affected thereby; 

 
	
  

 	
  

 
	
  

 	
                (c)
 reduce the principal of, or the rate of interest specified herein on, any
 portion of the Loan or any fees or other amounts payable hereunder or under
 any other Loan Document, without the written consent of each Lender directly
 affected thereby; provided, however, that Administrative Agent may waive any
 obligation of Borrower to pay interest at the Default Rate and/or late
 charges for periods of up to thirty (30) days, and only the consent of the
 Required Lenders shall be necessary to waive any obligation of Borrower to
 pay interest at the Default Rate or late charges thereafter, or to amend the
 definition of “Default Rate” or “late charges”; 

 
	
  

 	
  

 
	
  

 	
                (d)
 change the percentage of the combined Commitments or of the aggregate unpaid
 principal amount of the Loan which is required for Lenders or any of them to
 take any action hereunder, without the written consent of each Lender; 

 
	
  

 	
  

 
	
  

 	
                (e)
 change the definition of “Pro Rata Share” or “Required Lender” or any other
 provision hereof specifying the number or percentage of Lenders required to
 amend, waive or otherwise modify any rights hereunder or make any
 determination or grant any consent hereunder, without the written consent of
 each Lender; 

 
	
  

 	
  

 
	
  

 	
                (f) amend
 this Section, or Section 6.8, without the written consent of each Lender; 

 

42

	
  

 	
  

 
	
  

 	
                (g)
 release the liability of Borrower or any existing Guarantor without the
 written consent of each Lender; 

 
	
  

 	
  

 
	
  

 	
                (h)
 permit the sale, transfer, pledge, mortgage or assignment of any Loan
 collateral or any direct or indirect interest in Borrower, except as
 expressly permitted under the Loan Documents, without the written consent of
 each Lender; or 

 
	
  

 	
  

 
	
  

 	
                (i)
 transfer or release any lien on, or after foreclosure or other acquisition of
 title by Administrative Agent on behalf of Lenders transfer or sell, any Loan
 collateral except as permitted in Section 5.10, without the written consent
 of each Lender, 

 

and provided further that no amendment, waiver or consent shall, unless
in writing and signed by Administrative Agent in addition to Lenders required
above, affect the rights or duties of Administrative Agent under this Agreement
or any other Loan Document. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased without the consent of such Lender. 

                    This
Agreement shall continue in full force and effect until the Indebtedness is
paid in full and all of Administrative Agent’s and Lenders’ obligations under
this Agreement are terminated; and all representations and warranties and all
provisions herein for indemnity of the Indemnitees, Administrative Agent and
Lenders (and any other provisions herein specified to survive) shall survive
payment in full, satisfaction or discharge of the Indebtedness, the resignation
or removal of Administrative Agent or replacement of any Lender, and any
release or termination of this Agreement or of any other Loan Documents. 

                    6.10.
Costs and Expenses. Without limiting any Loan Document and to the extent not
prohibited by applicable Laws, Borrower shall pay when due, shall reimburse to
Administrative Agent for the benefit of itself and Lenders on demand and shall
indemnify Administrative Agent and Lenders from, all reasonable out-of-pocket
fees, costs, and expenses paid or incurred by Administrative Agent in
connection with the negotiation, preparation and execution of this Agreement
and the other Loan Documents (and any amendments, approvals, consents, waivers
and releases requested, required, proposed or done from time to time), or in
connection with the disbursement, administration or collection of the Loan or
the enforcement of the obligations of Borrower or the exercise of any right or
remedy of Administrative Agent, including (a) all reasonable fees and expenses
of Administrative Agent’s counsel; (b) reasonable fees and charges of each
inspector and engineer retained by Administrative Agent for purposes specified
in this Agreement; (c) appraisal, re-appraisal and survey costs; (d) title
insurance charges and premiums; (e) title search or examination costs,
including abstracts, abstractors’ certificates and uniform commercial code
searches; (f) judgment and tax lien searches for Borrower and each Guarantor;
(g) escrow fees; (h) fees and costs of environmental investigations, site
assessments and remediations; (i) recordation taxes, documentary taxes,
transfer taxes and mortgage taxes; (j) filing and recording fees; and (k) loan
brokerage fees. Borrower shall pay all costs and expenses incurred by
Administrative Agent, including attorneys’ fees, if the obligations or any part
thereof are sought to be collected by or through an attorney at law, whether or
not involving probate, appellate, administrative or bankruptcy proceedings.
Borrower shall pay all costs and expenses of complying with the Loan Documents,
whether or  

43

not such costs and expenses are included in any budget related to the
Property. Borrower’s obligations under this Section shall survive the delivery
of the Loan Documents, the making of advances, the payment in full of the
Indebtedness, the release or reconveyance of any of the Loan Documents, the
foreclosure of the Mortgage or conveyance in lieu of foreclosure, any
bankruptcy or other debtor relief proceeding, and any other event whatsoever. 

                    6.11.
Tax Forms.  

                         (a)
(i) Each Lender, and each holder of a participation interest herein, that is
not a “United States person” (a “Foreign Lender”) within the meaning of Section
7701(a)(30) of the Code shall deliver to Administrative Agent, prior to receipt
of any payment subject to withholding (or upon accepting an assignment or
receiving a participation interest herein), two duly signed completed copies of
either Form W-8BEN or any successor thereto (relating to such Foreign Lender
and entitling it to a complete exemption from withholding on all payments to be
made to such Foreign Lender by Borrower pursuant to this Agreement) or Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence satisfactory to Borrower and
Administrative Agent that such Foreign Lender is entitled to an exemption from
or reduction of, United States withholding tax, including any exemption
pursuant to Section 881(c) of the Code. Thereafter and from time to time, each
such Foreign Lender shall (A) promptly submit to Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States Laws and regulations to avoid, or such evidence as is satisfactory to
Borrower and Administrative Agent of any available exemption from or reduction
of, United States withholding taxes in respect of all payments to be made to such
Foreign Lender by Borrower pursuant to the Loan Documents, (B) promptly notify
Administrative Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction, and (C) take such steps as
shall not be materially disadvantageous to it, in the reasonable judgment of
such Lenders, and as may be reasonably necessary (including the re-designation
of its lending office, if any) to avoid any requirement of applicable Laws that
Borrower make any deduction or withholding for taxes from amounts payable to
such Foreign Lender. 

                             (ii)
Each Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Lender
under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to Administrative Agent on the
date when such Foreign Lender ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of Administrative Agent (in the reasonable
exercise of its discretion), (A) two duly signed completed copies of the forms
or statements required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S. withholding
tax, and (B) two duly signed completed copies of United States Internal Revenue
Service Form W-8IMY (or any successor thereto), together with any information
such Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under the Code, to establish that such Lender
is not acting for its own account with respect to a portion of any such sums
payable to such Lender. 

44

                          (iii)
Borrower shall not be required to pay any additional amount to any Foreign
Lender under Section 1.11, (A) with respect to any Taxes required to be deducted
or withheld on the basis of the information, certificates or statements of
exemption such Lender transmits with an United States Internal Revenue Service
Form W-8IMY pursuant to this subsection (a) of this Section, or (B) if such
Lender shall have failed to satisfy the foregoing provisions of this subsection
(a); provided that if such Lender shall have satisfied the requirement of this
subsection (a) on the date such Lender became a Lender or ceased to act for its
own account with respect to any payment under any of the Loan Documents,
nothing in this subsection (a) shall relieve Borrower of its obligation to pay
any amounts pursuant to Section 1.11 in the event that, as a result of any
change in any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms, certificates or
other evidence at a subsequent date establishing the fact that such Lender or
other person for the account of which such Lender receives any sums payable
under any of the Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate. 

                          (iv)
Administrative Agent may, without reduction, withhold any Taxes required to be
deducted and withheld from any payment under any of the Loan Documents with
respect to which Borrower is not required to pay additional amounts under this
subsection (a). 

                         (b)
Upon the request of Administrative Agent, each Lender that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code shall deliver to
Administrative Agent two duly signed completed copies of United States Internal
Revenue Service Form W-9. If such Lender fails to deliver such forms, then
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable backup withholding tax imposed by the Code,
without reduction. 

                         (c)
If any Tribunal asserts that Administrative Agent did not properly withhold or
backup withhold, as the case may be, any tax or other amount from payments made
to or for the account of any Lender, such Lender shall indemnify Administrative
Agent therefor, including all penalties and interest and costs and expenses
(including attorney fees) of Administrative Agent. The obligation of Lenders
under this subsection shall survive the removal or replacement of a Lender, the
payment of all Indebtedness and the resignation or replacement of
Administrative Agent. 

                    6.12.
Further Assurances. Borrower will, upon Administrative Agent’s request,
(a) promptly correct any defect, error or omission in any Loan Document; (b)
execute, acknowledge, deliver, procure, record or file such further instruments
and do such further acts as Administrative Agent deems reasonably necessary,
desirable or proper to carry out the purposes of the Loan Documents and to
identify and subject to the liens and security interest of the Loan Documents
any property intended to be covered thereby, including any renewals, additions,
substitutions, replacements, or appurtenances to the Property; (c) execute,
acknowledge, deliver, procure, file or record any document or instrument
Administrative Agent deems necessary, desirable, or proper to protect the liens
or the security interest under the Loan Documents against the rights or
interests of third persons; and (d) provide such certificates, documents,
reports, information, affidavits and other instruments and do such further acts
deemed necessary, desirable or proper by Administrative Agent to comply with
the requirements of any agency 

45

having jurisdiction over Administrative Agent. In addition, at any
time, and from time to time, upon request by Administrative Agent or any
Lender, Borrower will, at Borrower’s expense, provide any and all further
instruments, certificates and other documents as may, in the opinion of
Administrative Agent or such Lender, be necessary or desirable in order to
verify Borrower’s identity and background in a manner satisfactory to
Administrative Agent or such Lender. 

                    6.13.
Inducement to Lenders. The representations and warranties contained in
this Agreement and the other Loan Documents (a) are made to induce Lenders to
make the Loan and extend any other credit to or for the account of Borrower
pursuant hereto, and Administrative Agent and Lenders are relying thereon, and
will continue to rely thereon, and (b) shall survive any bankruptcy proceedings
involving Borrower, Guarantor or the Property, foreclosure, or conveyance in
lieu of foreclosure. 

                    6.14.
Forum. Each party to this Agreement hereby irrevocably submits generally
and unconditionally for itself and in respect of its property to the
jurisdiction of any state court, or any United States federal court, sitting in
the State specified in Section 6.2 of this Agreement and to the jurisdiction of
any state court or any United States federal court, sitting in the state in
which any of the Property is located, over any suit, action or proceeding
arising out of or relating to this Agreement or the Indebtedness. Each party to
this Agreement hereby irrevocably waives, to the fullest extent permitted by
Law, any objection that they may now or hereafter have to the laying of venue
in any such court and any claim that any such court is an inconvenient forum.
Each party to this Agreement hereby agrees and consents that, in addition to
any methods of service of process provided for under applicable Law, all
service of process in any such suit, action or proceeding in any state court,
or any United States federal court, sitting in the state specified in Section
6.2 may be made by certified or registered mail, return receipt requested,
directed to such party at its address for notice stated in the Loan Documents,
or at a subsequent address of which Administrative Agent received actual notice
from such party in accordance with the Loan Documents, and service so made
shall be complete five (5) days after the same shall have been so mailed.
Nothing herein shall affect the right of Administrative Agent to serve process
in any manner permitted by Law or limit the right of Administrative Agent to
bring proceedings against any party in any other court or jurisdiction. 

                    6.15.
Interpretation. References to “Dollars”, “$”, “money”, “payments” or
other similar financial or monetary terms are references to lawful money of the
United States of America. References to Articles, Sections, and Exhibits are,
unless specified otherwise, references to articles, sections and exhibits of
this Agreement. Words of any gender shall include each other gender. Words in
the singular shall include the plural and words in the plural shall include the
singular. References to Borrower or Guarantor shall mean, each person
comprising same, jointly and severally. References to “persons” shall include
both natural persons and any legal entities, including public or governmental
bodies, agencies or instrumentalities. The words “include” and “including”
shall be interpreted as if followed by the words “without limitation”. Captions
and headings in the Loan Documents are for convenience only and shall not
affect the construction of the Loan Documents. 

                    6.16.
No Partnership, etc. The relationship between Lenders (including
Administrative Agent) and Borrower is solely that of lender and borrower.
Neither Administrative Agent nor any Lender has any fiduciary or other special
relationship with or duty 

46

to Borrower and none is created by the Loan Documents. Nothing
contained in the Loan Documents, and no action taken or omitted pursuant to the
Loan Documents, is intended or shall be construed to create any partnership,
joint venture, association, or special relationship between Borrower and
Administrative Agent or any Lender or in any way make Administrative Agent or
any Lender a co-principal with Borrower with reference to the Project, the
Property or otherwise. In no event shall Administrative Agent’s or Lenders’
rights and interests under the Loan Documents be construed to give
Administrative Agent or any Lender the right to control, or be deemed to
indicate that Administrative Agent or any Lender is in control of, the
business, properties, management or operations of Borrower. 

                    6.17.
Records. The unpaid amount of the Loan and the amount of any other
credit extended by Administrative Agent or Lenders to or for the account of
Borrower set forth on the books and records of Administrative Agent shall be
presumptive evidence of the amount thereof owing and unpaid, but failure to
record any such amount on Administrative Agent’s books and records shall not
limit or affect the obligations of Borrower under the Loan Documents to make
payments on the Loan when due. 

                    6.18.
Commercial Purpose. Borrower warrants that the Loan is being made solely
to acquire or carry on a business or commercial enterprise, and/or Borrower is
a business or commercial organization. Borrower further warrants that all of
the proceeds of this Loan shall be used for commercial purposes and stipulates
that the Loan shall be construed for all purposes as a commercial loan, and is
made for other than personal, family, household or agricultural purposes. 

                    6.19.
WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO WHICH THEY MAY BE A PARTY, ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY PERTAINING TO, ANY NOTE, THE LOAN AGREEMENT, THE
MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT
THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO ANY NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
MADE BY EACH PARTY TO THIS AGREEMENT, AND THEY HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.
EACH PARTY FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE
EXECUTION OF THE LOAN DOCUMENTS AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL. 

                    6.20.
Service of Process. Borrower hereby consents to process being served in
any suit, action, or proceeding instituted in connection with this Loan by (a)
the mailing of a copy thereof by certified mail, postage prepaid, return
receipt requested, to Borrower and (b) serving a copy thereof upon Robert
Masters, the agent hereby designated and appointed by 

47

Borrower as Borrower’s agent for service of process. Borrower
irrevocably agrees that such service shall be deemed to be service of process
upon Borrower in any such suit, action, or proceeding. Nothing in any Note
shall affect the right of Administrative Agent to serve process in any manner
otherwise permitted by Law and nothing in any Note will limit the right of
Administrative Agent on behalf of Lenders otherwise to bring proceedings
against Borrower in the courts of any jurisdiction or jurisdictions. 

                    6.21.
USA Patriot Act Notice. Each Lender and Administrative Agent (for itself
and not on behalf of any Lender) hereby notifies Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies Borrower, which information includes the name and
address of Borrower and other information that will allow such Lender or
Administrative Agent, as applicable, to identify Borrower in accordance with
the Act. 

                    6.22.
Entire Agreement. The Loan Documents constitute the entire understanding
and agreement between Borrower, Administrative Agent and Lenders with respect
to the transactions arising in connection with the Loan, and supersede all
prior written or oral understandings and agreements between Borrower,
Administrative Agent and Lenders with respect to the matters addressed in the
Loan Documents. In particular, and without limitation, the terms of any
commitment letter, letter of intent or quote letter by Administrative Agent or
any Lender to make the Loan are merged into the Loan Documents. Neither
Administrative Agent nor any Lender has made any commitments to extend the term
of the Loan past its stated maturity date or to provide Borrower with financing
except as set forth in the Loan Documents. Except as incorporated in writing
into the Loan Documents, there are not, and were not, and no persons are or
were authorized by Administrative Agent or any Lender to make, any
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the matters addressed in the Loan Documents. 

                    BORROWER
FURTHER HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING
BROUGHT BY OR ON BEHALF OF ADMINISTRATIVE AGENT OR LENDERS WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR OTHERWISE IN RESPECT OF THE LOAN, ANY AND EVERY RIGHT
BORROWER MAY HAVE TO (X) INJUNCTIVE RELIEF, (Y) INTERPOSE ANY COUNTERCLAIM
THEREIN, OTHER THAN A COMPULSORY COUNTERCLAIM, AND (Z) HAVE THE SAME
CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING
CONTAINED IN THE IMMEDIATELY PRECEDING SENTENCE SHALL PREVENT OR PROHIBIT BORROWER
FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST LENDER WITH RESPECT
TO ANY ASSERTED CLAIM. 

                    6.23.
Limitation on Liability. Borrower waives any right to assert or make any
claim against Administrative Agent or any Lender (or to sue Administrative
Agent or any Lender upon any claim for) any special, indirect, incidental,
punitive or consequential damages in respect of any breach or wrongful conduct
(whether the claim is based on contract, tort or duty imposed by law) in connection
with, arising out of or in any way related to this Agreement, the other Loan
Documents or the transactions contemplated hereby and/or thereby, or any act,
omission or event in connection therewith. 

48

                    6.24.
Third Parties; Benefit. All conditions to the obligation of Lenders or
Administrative Agent to make advances hereunder are imposed solely and
exclusively for the benefit of Lenders, Administrative Agent and their assigns
and no other persons shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that Lenders
or Administrative Agent will refuse to make advances in the absence of strict
compliance with any or all thereof and no other person shall, under any circumstances,
be deemed to be the beneficiary of such conditions, any or all of which may be
freely waived in whole or in part by Lenders or Administrative Agent at any
time in the sole and absolute exercise of their discretion. The terms and
provisions of this Agreement and the other Loan Documents are for the benefit
of the parties hereto and, except as herein specifically provided, no other
person shall have any right or cause of action on account thereof. 

                    6.25.
Rules of Construction. The words “hereof”, “herein”, “hereunder”,
“hereto”, and other words of similar import refer to this Agreement in its
entirety. The terms “agree” and “agreements” mean and include “covenant” and
“covenants”. The words “include” and “including” shall be interpreted as if
followed by the words “without limitation”. The captions and headings contained
in this Agreement are included herein for convenience of reference only and
shall not be considered a part hereof and are not in any way intended to
define, limit or enlarge the terms hereof. All references (a) made in the
neuter, masculine or feminine gender shall be deemed to have been made in all
such genders, (b) made in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well, (c) to the
Loan Documents are to the same as extended, amended, restated, supplemented or
otherwise modified from time to time unless expressly indicated otherwise, (d)
to the Land, the Improvements or the Property shall mean all or any portion of
each of the foregoing, respectively, and (e) to Articles, Sections and
Schedules are to the respective Articles, Sections and Schedules contained in
this Agreement unless expressly indicated otherwise. 

                    6.26.
Cross-Default. This Loan shall be cross-defaulted with any and all other
loans which Borrower (or any entity included within Borrower shall have from
any Lender (or any subsidiary or affiliated entity of Lender) during the term
of this Loan, whether existing as of the date of this Agreement or subsequently
made. A default under any of the above-described loans or credit facilities
shall constitute a Default under this Loan; however, a Default under this Loan
shall not in itself constitute a Default under the above-described other loans
unless and to the extent expressly set forth in the agreements and instruments
governing such other loans. 

                    6.27.
Lien Law. This Agreement is subject to the trust fund provision of the
Lien Law including, without limitation, Section 13 thereof. 

[Remainder of page intentionally left blank]

49

          IN WITNESS
WHEREOF, this Agreement is EXECUTED and DELIVERED UNDER SEAL as of December 1,
2010. 

	
  

 	
  

 	
  

 
	
  

 	
 BORROWER:

 
	
  

 	
  

 	
  

 
	
  

 	
 P/A-ACADIA
 PELHAM MANOR, LLC, a

 
	
  

 	
 Delaware limited
 liability company

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Robert
 Masters

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
 Senior Vice
 President

 
	
  

 	
  

 	
  

 
	
  

 	
 Borrower’s
 Address for Notices:

 
	
  

 	
  

 	
  

 
	
  

 	
 c/o Acadia
 Realty Trust

 
	
  

 	
 1311
 Mamaroneck Avenue, Suite 260

 
	
  

 	
 White
 Plains, New York 10605

 
	
  

 	
 Telephone:          914-288-8100

 
	
  

 	
 Telefax:               914-428-3646

 
	
  

 	
 Email:                  rmasters@acadiarealty.com

 
	
  

 	
  

 	
  

 
	
  

 	
 Borrower’s
 Federal Tax Identification Number:

 
	
  

 	
 20-1783373

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 BANK OF
 AMERICA, N.A., a national banking

 
	
  

 	
 association,
 individually as Administrative Agent

 
	
  

 	
 and a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Gregory
 Egli

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Gregory Egli

 
	
  

 	
  

 	
 Senior Vice
 President

 
	
  

 	
  

 	
  

 
	
  

 	
 Lender’s
 Address for Notices:

 
	
  

 	
  

 	
  

 
	
  

 	
 Bank of
 America, N.A.

 
	
  

 	
 One Bryant
 Park, 35th Floor

 
	
  

 	
 New York,
 New York 10036

 

EXHIBIT “A” 

Legal Description of Land

PARCEL 1 - Fee Parcel (Lot 8.3)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 374.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 ALONG THE
 SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS
 EAST, A DISTANCE OF 80.00 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 ALONG THE
 DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1, SOUTH 26 DEGREES – 02
 MINUTES – 10 SECONDS EAST, A DISTANCE OF 100.00 FEET TO A POINT, THENCE;
 ALONG THE DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1, THE FOLLOWING
 THREE (3) COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 SOUTH 63
 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 100.00 FEET TO A POINT,
 THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 NORTH 26
 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00 FEET TO A POINT
 OF CURVATURE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 ALONG A
 CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A CENTRAL ANGLE OF
 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF 31.42 FEET, THE
 CHORD OF WHICH BEARS NORTH 18 DEGREES – 58 MINUTES – 11 SECONDS EAST, A CHORD
 DISTANCE OF 28.28 FEET TO THE POINT AND PLACE OF BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 2 - Ground Lease Parcel (Lot 8.1)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING AT THE NORTHEASTERLY TERMINUS OF A CURVE CONNECTING THE
SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF PELHAM PARKWAY (A.K.A.
C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF BEGINNING RUNNING THENCE; 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 374.53 FEET TO A POINT OF NON-TANGENT
 CURVATURE, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.3, BLOCK
 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF
 31.42 FEET, THE CHORD OF WHICH BEARS SOUTH 18 DEGREES – 58 MINUTES – 11
 SECONDS WEST, A CHORD DISTANCE OF 28.28 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00
 FEET TO A POINT, THENCE; 

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 100.00
 FEET TO A POINT, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.2,
 BLOCK 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 121.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS WEST, A DISTANCE OF 221.90
 FEET TO A POINT ON THE AFOREMENTIONED SOUTHERLY LINE OF SECOR LANE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 449.97 FEET TO A POINT OF CURVATURE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 9.

 	
 CONTINUING ALONG THE SOUTHERLY LINE OF SECOR LANE ON A CURVE TO THE
 RIGHT, HAVING A RADIUS OF 650.00 FEET, TURNING A CENTRAL ANGLE OF 11 DEGREES
 – 45 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF 133.30 FEET, THE CHORD OF
 WHICH BEARS NORTH 69 DEGREES – 50 MINUTES – 19 SECONDS EAST, A CHORD DISTANCE
 OF 133.06 FEET TO A POINT, THENCE; ALONG THE WESTERLY LINE OF HUTCHINSON
 RIVER PARKWAY (VARIABLE WIDTH) THE FOLLOWING SEVEN (7) COURSES:

 

2

	
  

 	
  

 
	
 10.

 	
 SOUTH 10 DEGREES – 37 MINUTES – 00 SECONDS EAST, A DISTANCE OF 406.03
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 11.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 152.58
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 12.

 	
 SOUTH 81 DEGREES – 55 MINUTES – 42 SECONDS WEST, A DISTANCE OF 125.00
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 13.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 350.40
 FEET TO A POINT OF NON-TANGENT CURVATURE, THENCE;

 
	
  

 	
  

 
	
 14.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 375.00 FEET, TURNING A
 CENTRAL ANGLE OF 15 DEGREES – 22 MINUTES – 08 SECONDS, WITH AN ARC LENGTH OF
 100.59 FEET, THE CHORD OF WHICH BEARS SOUTH 72 DEGREES – 19 MINUTES – 21
 SECONDS WEST, A CHORD DISTANCE OF 100.29 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 
	
 15.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 4.45
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 16.

 	
 SOUTH 26 DEGREES – 04 MINUTES – 30 SECONDS EAST, A DISTANCE OF 188.85
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 17.

 	
 ALONG THE COMMON DIVIDING LINE BETWEEN LOT 8.1 AND LOT 4, BLOCK 1 AND
 THE WESTERLY LINE OF HUTCHINSON RIVER PARKWAY, SOUTH 63 DEGREES – 55 MINUTES
 – 30 SECONDS WEST, A DISTANCE OF 156.73 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.1 AND LOT 3, BLOCK 1 THE FOLLOWING EIGHT (8)
 COURSES:

 
	
  

 	
  

 
	
 18.

 	
 NORTH 24 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 82.31
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 19.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 20.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 19.84
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 21.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 22.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 90.59
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 23.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 4.05
 FEET TO A POINT, THENCE;

 

3

	
  

 	
  

 
	
 24.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 9.55
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 25.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 227.32
 FEET TO A POINT ON THE AFOREMENTIONED EASTERLY LINE OF PELHAM PARKWAY,
 THENCE;

 
	
  

 	
  

 
	
 26.

 	
 ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 26 DEGREES – 04
 MINUTES – 30 SECONDS WEST, A DISTANCE OF 296.81 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 27.

 	
 CONTINUING ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 62
 DEGREES – 43 MINUTES – 40 SECONDS WEST, A DISTANCE OF 609.10 FEET TO A POINT
 OF CURVATURE, THENCE;

 
	
  

 	
  

 
	
 28.

 	
 ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 126 DEGREES – 41 MINUTES – 30 SECONDS, WITH AN ARC LENGTH OF
 44.22 FEET, THE CHORD OF WHICH BEARS NORTH 00 DEGREES – 37 MINUTES – 42
 SECONDS EAST, A CHORD DISTANCE OF 35.75 FEET TO THE POINT AND PLACE OF
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 3 - Ground Lease Parcel (Lot 8.2)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 454.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 60 SECONDS EAST, A DISTANCE OF 176.92 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.2 AND LOT 8.1, BLOCK 1 THE FOLLOWING TWO (2)
 COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 

4

	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 ALONG THE DIVIDING LINE BETWEEN LOT 8.2 AND LOTS 8.1 AND 8.3, BLOCK 1,
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90 FEET
 THE POINT AND PLACE OF BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON 11/18/10
BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

BLANKET DESCRIPTION - LOTS 8.1, 8.2 and 8.3:

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING at a rebar with cap set on the southerly line of Secor Lane
(50 foot wide), said point being at the northeasterly terminus of a curve
connecting the southerly line of Secor Lane with the easterly line of Pelham
Parkway (a/k/a C.R. 70) and from said beginning point, running thence

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Along the southerly line of Secor Lane, north 63 degrees 57 minutes
 50 seconds east, a distance of 1081.42 feet to a rebar with cap set at a
 point of curvature in the same, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 Continuing along the same, along a curve to the right, having a
 radius of 650.00 feet, turning a central angle of 11 degrees 45 minutes 00
 seconds with an arc length of 133.30 feet, the chord of which bears north 69
 degrees 50 minutes 19 seconds east, a chord distance of 133.06 feet to a
 rebar with cap set, thence the following seven (7) courses along the dividing
 line between Lot 8 Block 1 and the westerly line of the Hutchinson River
 Parkway;

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 South 10 degrees 37 minutes 00 seconds east, a distance of 406.03
 feet to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 152.58
 feet to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 South 81 degrees 55 minutes 42 seconds west, a distance of 125.00
 feet to a rabar with cap set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 350.40
 feet to a rebar with cap set at a point of non-tangent curvature, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Along a curve to the left, having a radius of 375.00 feet, turning a
 central angle of 15 degrees 22 minutes 08 seconds with an arc length of
 100.59 feet, the chord of which bears south 72 degrees 19 minutes 21 seconds
 west, a chord distance of 100.29 feet to a rebar with cap set at a point of
 tangency, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 South 63 degrees 57 minutes 50 seconds west, a distance of 4.45 feet
 to a rebar with cap set, thence

 

5

	
  

 	
  

 
	
  9.

 	
 South 26 degrees 04 minutes 30 seconds east, a distance of 188.85
 feet to a point, thence

 
	
  

 	
  

 
	
 10.

 	
 Along the common dividing line between Lot 8 and Lot 5, Block 1 and
 the westerly line of the Hutchinson River Parkway, south 63 degrees 55
 minutes 30 seconds west, a distance of 156.73 feet to a point; thence the
 following eight (8) courses along the dividing line between Lot 8 and Lot 3,
 Block 1.

 
	
  

 	
  

 
	
 11.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 82.31 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 12.

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 13.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 19.84 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 14.

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 15.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 90.59 feet
 to a rebar with cap set, thence

 
	
  

 	
  

 
	
 16.

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 4.05 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 17.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 9.55 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 18.

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 227.32
 feet to a pk nail set on the aforementioned easterly line of Pelham Parkway,
 thence

 
	
  

 	
  

 
	
 19.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 296.81
 feet to a pk nail, thence

 
	
  

 	
  

 
	
 20.

 	
 Continuing along the easterly line of Pelham Parkway, north 62
 degrees 43 minutes 40 seconds west, a distance of 609.10 feet to a pk nail
 set a point of curvature, thence

 
	
  

 	
  

 
	
 21.

 	
 Along a curve to the right, having a radius of 2.00 feet, turning a
 central angle of 126 degrees 41 minutes 30 seconds with an arc length of
 44.22 feet to a point, the chord of which bears north 00 degrees 37 minutes
 24 seconds east, a chord distance of 35.75 feet to the point and place of
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/12/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

6

SUCH REAL PROPERTY ALSO CONTAINS ALL OF THE CONDOMINIUM UNITS IN THE
P/A ACADIA CONDOMINIUM MADE BY P/A-ACADIA PELHAM MANOR, LLC DATED 9/17/07 AND
RECORDED 10/23/07 AS CONTROL NUMBER 472850497.

For information only: Said premises are known as 798-858 Pelham
Parkway, Pelham, NY and designated as Section 166.26 Block 1 Lots 8.1, 8.2 and
8.3 as shown on the Westchester County Land and Tax Map.

7

EXHIBIT “B”

Definitions and Financial Statements

                    1. Definitions: As used in this Agreement and the attached
exhibits, the following terms shall have the following meanings:

                    “Acadia
Realty Trust” means Acadia Realty Trust, a Maryland real estate investment
trust, which is an indirect principal in Borrower and Guarantor.

                    “Additional
Interest” means all payments required to be made by Borrower under a Swap
Contract.

                    “Adjusted
Net Operating Income” means Operating Income less the sum of (i) Adjusted
Operating Expenses plus (ii) the Vacancy and Credit Loss Factor.

                    “Adjusted
Operating Expenses” means the aggregate amount of all actual operating
expenses of the Property paid by Borrower in the most recently ended six (6)
month period for which Borrower has delivered financial statements to
Administrative Agent, annualized, provided that the amount of management fees
included in Adjusted Operating Expenses shall be equal to the greater of (x)
actual management fees paid by Borrower with respect to such period or (y) 3.0%
of the operating income received by Borrower during such period. Adjusted
Operating Expenses shall exclude from expenses payments of principal and
interest under the Loan Documents and other expenses payable to Administrative
Agent and Lenders pursuant to the Loan Documents, capital expenditures, Tenant
Improvement Costs, leasing commissions and extraordinary items of expense.

                    “Administrative
Agent” means Bank of America, N.A., in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.

                    “Administrative
Agent Advances” has the meaning set forth in Section 1.14 of this
Agreement.

                    “Administrative
Agent’s Office” means Administrative Agent’s address and, as appropriate,
account as set forth on the Schedule of Lenders, or such other address or
account as Administrative Agent hereafter may from time to time notify Borrower
and Lenders.

                    “Administrative
Agent’s Time” means the time of day observed in the city where
Administrative Agent’s Office is located.

                    “Advance
Amount” has the meaning set forth in Section 1.13 of this Agreement.

                    “Affiliate”
means any person directly or indirectly through one or more intermediaries
controlling, controlled by, or under direct or indirect common control with,
such person. A person shall be deemed to be “controlled by” any other person if
such other person possesses, directly or indirectly, power (a) to vote 10% or
more of the securities (on a fully diluted basis) having ordinary voting power
for the election of directors or managing general 

partners or the equivalent; or (b) to direct or cause the direction of
the management and policies of such person whether by contract or otherwise.

                    “Agent-Related
Persons” means Administrative Agent, together with its Affiliates
(including Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such persons and Affiliates.

                    “Aggregate
Commitments” means the Commitments of all Lenders.

                    “Agreement”
has the meaning set forth in the introductory paragraph of this Agreement, and
includes all exhibits attached hereto and referenced in Section 1.1.

                    “Amortization
Date” has the meaning set forth in Section 1.12 of this Agreement.

                    “Appraised
Value” means the value shown on the appraisal of the Property delivered to
Administrative Agent prior to the date hereof.

                    “Arranger”
means Banc of America Securities LLC, in its capacity as sole arranger and sole
book manager.

                    “Assignment
and Assumption” means an Assignment and Assumption substantially in the
form of Exhibit “L”.

                    “Association”
means the Condominium Association of the Property.

                    “Base
Rate” means, on any day, a simple rate per annum equal to the sum of the
Prime Rate for that day plus the Base Rate Margin. Without notice to Borrower
or anyone else, the Base Rate shall automatically fluctuate upward and downward
as and in the amount by which the Prime Rate fluctuates.

                    “Base
Rate Margin” means 2.75% per annum.

                    “Base
Rate Principal” means, at any time, the Principal Debt minus the portion,
if any, of such Principal Debt which is LIBOR Rate Principal.

                    “BBA
LIBOR Daily Floating Rate” has the meaning set forth in Section 1.7.1 of
this Agreement.

                    “Borrower”
has the meaning set forth in the introductory paragraph of this Agreement.

                    “Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where Administrative Agent’s Office is located.

                    “Closing
Checklist” means that certain Closing Requirements and Checklist setting
forth the conditions for closing the Loan and recording the Mortgage.

                    “Code”
has the meaning set forth in Section 2.15.

2

                    “Commitment”
means, as to each Lender, its obligation to advance its Pro Rata Share of the
Loan in an aggregate principal amount not exceeding the amount set forth
opposite such Lender’s name on the Schedule of Lenders at any one time
outstanding, as such amount may be adjusted from time to time in accordance
with this Agreement.

                    “Condominium”
means the P/A Acadia Pelham Manor Condominium established pursuant to the
Declaration.

                    “Condominium
Assessment” means all Assessments (as such term is defined in the
Declaration) and all other assessments for common charges against the Property.

                    “Condominium
Board” means the Board of Directors or the Association of an Individual
Property.

                    “Condominium
Documents” means, the Declaration, the by-laws attached thereto, and all
other constituent documents establishing or governing the condominium regime
governing the Property, and all filings with the office of the New York State
Attorney General related hereto, all as may be amended from time to time.

                    “Debt”
means, with respect to any Person, without duplication, (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person for the
deferred purchase price of property or services, (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (d)
all obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person as lessee under capital leases,
(f) all obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (g) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect of
any capital stock of or other ownership or profit interest in such Person or
any other Person or any warrants, rights or options to acquire such capital
stock, (h) all obligations of such Person in respect of interest rate hedge
agreements, (i) all debt of others referred to in clauses (a) through (h) above
or clause (j) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through
an agreement (i) to pay or purchase such debt or to fund or supply monies for
the payment or purchase of such debt, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such debt or to assure the
holder of such debt against loss, (iii) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, and (j) all debt
referred to in clauses (a) through (h) above of another Person secured by (or
for which the holder of such debt has an existing right, contingent or
otherwise, to be secured by) any lien on property (including, without
limitation, accounts, contract rights or inventory) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
debt.

3

                    “Debt
Service Coverage Ratio” means the ratio, as of any date of calculation, of
(a) the Adjusted Net Operating Income to (b) the annual Debt Service Payments.

                    “Debt
Service Payments” means the annual amount of principal and interest
payments that would be payable on the Total Loan based upon a thirty (30) year
self liquidating mortgage amortization schedule at an annual assumed interest
rate equal to the greatest of (i) 7.50%, (ii) the “Ten Year Treasury Rate
Obligation” (as hereinafter defined) as of any date of calculation plus 2.75%
and (iii) the actual interest applicable to the Loan as of any date of
calculation. The “Ten Year Treasury Rate Obligation” shall mean the rate
determined by Administrative Agent to be the week ending yield on United States
treasury securities, adjusted to a constant maturity of ten years, as published
by the United States Federal Reserve Board in the then most currently available
Statistical Release H.15 (519) (or, if not published at such time, such other
comparable statistical release then published by the United States Federal
Reserve Board) rounded to the next highest 1/8 of 1%.

                    “Debtor
Relief Laws” means the Bankruptcy Code of the United States of America, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights
of creditors generally.

                    “Declaration”
means that certain Declaration of P/A-Acadia Pelham Manor Condominium (the “Declaration”),
dated September 17, 2007, recorded October 23, 2007 as Document number
472850497 for the creation and establishment of the Condominium with respect to
the Property.

                    “Default”
has the meaning set forth in Section 4.1 of this Agreement.

                    “Defaulting
Lender” means a Lender that fails to pay its Pro Rata Share of a Payment
Amount within five (5) Business Days after notice from Administrative Agent,
until such Lender cures such failure as permitted in this Agreement.

                    “Defaulting
Lender Amount” means the Defaulting Lender’s Pro Rata Share of a Payment
Amount.

                    “Defaulting
Lender Payment Amounts” means a Defaulting Lender Amount plus interest from
the date such Defaulting Lender Amount was funded by Administrative Agent
and/or an Electing Lender, as applicable, to the date such amount is repaid to
Administrative Agent and/or such Electing Lender, as applicable, at the rate
per annum applicable to such Defaulting Lender Amount under the Loan or
otherwise at the Base Rate.

                    “Draw
Request” has the meaning set forth in Section 1 of Exhibit “F”.

                    “Eligible
Assignee” has the meaning set forth in Section 6.5.

                    “Environmental
Agreement” means the Environmental Indemnity Agreement of even date
herewith by and among Borrower, Guarantor and Administrative Agent for the
benefit of Lenders.

4

                    “Excusable
Delay” means a delay, not to exceed a total of thirty (30) days, caused by
unusually adverse weather conditions which have not been taken into account in
the construction schedule, fire, earthquake or other acts of God, strikes,
lockouts, acts of public enemy, riots or insurrections or any other unforeseen
circumstances or events beyond the control of Borrower (except financial
circumstances or events or matters which may be resolved by the payment of
money), and as to which Borrower notifies Administrative Agent in writing
within five (5) days after such occurrence; provided, however, no Excusable
Delay shall extend the Maturity Date or suspend or abate any obligation of
Borrower or any Guarantor or any other person to pay any money.

                    “Federal
Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upwards to the next
higher 1/100 of 1%) charged to Bank of America on such day on such transactions
as determined by Administrative Agent.

                    “Financial
Statements” means (i) for each reporting party other than an individual, a
balance sheet, income statement, statements of cash flow and amounts and
sources of contingent liabilities, a reconciliation of changes in equity and
liquidity verification, and unless Administrative Agent otherwise consents,
consolidated statements if the reporting party is a holding company or a parent
of a subsidiary entity; and (ii) for each reporting party who is an individual,
a balance sheet, statements of amount and sources of contingent liabilities,
sources and uses of cash and liquidity verification and, unless Administrative
Agent otherwise consents, Financial Statements for each entity owned or jointly
owned by the reporting party. For purposes of this definition and any covenant
requiring the delivery of Financial Statements, each party for whom Financial
Statements are required is a “reporting party” and a specified period to which
the required Financial Statements relate is a “reporting period”.

                    “Funding
Date” means the date on which an advance of Loan proceeds shall occur.

                    “Ground
Lease” means that certain Ground Lease dated October 1, 2004 between
Ground Lessor, as landlord, and Ground Lessor, as tenant, as to which a
Memorandum of Ground Lease dated October 1, 2004 between Ground Lessor and
Borrower was recorded in the office of the Clerk of the County of Westchester
on February 23, 2004 in Control No. 443010050, as modified by letter
agreement dated January 30, 2006 between Ground Lessor and Borrower, as
modified by First Amendment to Ground Lease dated June 28, 2006 between
Ground Lessor and Borrower, as modified by letter agreement dated
November 28, 2006 between Ground Lessor and Borrower and as modified by Second
Amendment to Ground Lease dated December 6, 2007 between Ground Lessor and
Borrower.

5

                    “Ground
Lessor” means, collectively, Rusciano & Son Corp. and Secor Lane Corp.
and their successors and assigns as owners of the fee interest in the Land.

                    “Guarantor”
means Acadia Realty Limited Partnership, a Delaware limited partnership,
whether one or more, and if more than one, each one individually or all
collectively.

                    “Improvements”
means all buildings and other improvements constructed on the Land, together
with all fixtures, tenant improvements, and appurtenances now or later to be
located on the Land and/or in such improvements.

                    “Indebtedness”
means any and all indebtedness to Administrative Agent or Lenders evidenced,
governed or secured by, or arising under, any of the Loan Documents, including
the Loan.

                    “Indemnified
Liabilities” has the meaning set forth in Section 6.1.

                    “Initial
Advance” means the first advance of proceeds of the Loan under this
Agreement.

                    “Land”
means the real property described in Exhibit “A”.

                    “Laws”
means all constitutions, treaties, statutes, laws, ordinances, regulations, rules,
orders, writs, injunctions, or decrees of the United States of America, any
state or commonwealth, any municipality, any foreign country, any territory or
possession, or any Tribunal.

                    “Leasing
Commissions” means any commissions payable by Borrower in connection with
any leases of space in the Improvements executed after the date hereof and/or
extensions or renewals of existing leases of space in the Improvements not to
exceed such commissions as are reasonable and customary for properties in
Westchester County, New York similar to the Property as determined by
Administrative Agent.

                    “Lender”
means each lender from time to time party to this Agreement.

                    “Lending
Office” means, as to any Lender, the office or offices of such Lender
described as such on the Schedule of Lenders, or such other office or offices
as such Lender may from time to time notify Borrower and Administrative Agent.

                    “LIBOR
Business Day” means a Business Day which is also a London Banking Day.

                    “LIBOR
Margin” means 2.75% per annum.

                    “LIBOR
Rate Principal” means any portion of the Principal Debt which bears
interest at an applicable BBA Daily Floating LIBOR Rate at the time in
question.

                    “Leases”
means any lease, sublease or subsublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect)
pursuant to 

6

which any Person is granted a possessory interest in, or right to use
or occupy all or any portion of any space in the Property, and every
modification, amendment or other agreement relating to such lease, sublease,
subsublease, or other agreement entered into in connection with such lease,
sublease, subsublease or other agreement and every guarantee of the performance
and observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto.

                    “Lien
Law” means the Lien Law of the State of New York.

                    “Loan”
means the loan by Lenders to Borrower, in the maximum amount of the Loan
Amount.

                    “Loan
Amount” means $2,446,298.11.

                    “Loan
Documents” means this Agreement (including all exhibits), the Mortgage, any
Note, the Environmental Agreement, any guaranty, financing statements and such
other documents evidencing, securing or pertaining to the Loan as shall, from
time to time, be executed and/or delivered by Borrower, Guarantor, or any other
party to Administrative Agent or any Lender pursuant to this Agreement, as they
may be amended, modified, restated, replaced and supplemented from time to
time.

                    “Loan
to Value Ratio” is defined in Section 2.5.

                    “London
Banking Day” means a day on which dealings in dollar deposits are conducted
by and between banks in the London interbank eurodollar market.

                    “Material
Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the Project, or the operations, business, properties,
liabilities (actual or contingent), condition (financial or otherwise) or
prospects of Borrower or Borrower and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of any party to the Loan Documents to
perform its obligations under any Loan Document to which it is a party; or (c)
a material adverse effect upon the legality, validity, binding effect or
enforceability against any party to the Loan Documents of any Loan Document to
which it is a party.

                    “Material
Contract” means any contract for the performance of any work or the
supplying of any labor, materials or services which exceeds $100,000 per annum.

                    “Maturity
Date” means December 1, 2013, as it may be earlier terminated or
extended in accordance with the terms hereof.

                    “Mortgage”
means that certain Fee and Leasehold Mortgage, Assignment of Leases and Rents
and Security Agreement in the Loan Amount dated as of the date hereof from
Borrower to Administrative Agent, securing repayment of the Indebtedness and
Borrower’s performance of its other obligations to Administrative Agent and
Lenders under the Loan Documents, as amended, modified, supplemented, restated
and replaced from time to time.

7

                    “Notes”
means, collectively, the Notes in the maximum principal amount of the Loan,
substantially in the form of Exhibit “M” as amended, modified, replaced,
restated, extended or renewed from time to time. 

                    “Obligations”
means all liabilities, obligations, covenants and duties (including, without
limitation, paying all Additional Interest) of, any party to a Loan Document
arising under or otherwise with respect to any Loan Document, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any party to a Loan
Document or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceedings.

                    “Operating
Income” means the sum of (x) the aggregate rentals and all other revenue
(unless excluded pursuant hereto) of the Property actually received from only
executed bona fide leases, licenses and other occupancy agreements of the
Property which are in full force and effect as to which the tenant thereunder
is not the subject of any bankruptcy proceeding and is not in default under its
lease, beyond any applicable notice or cure periods set forth therein for the
six (6) months preceding the date of calculation and (y) the aggregate rentals
and all other revenue (unless excluded pursuant hereto) of the Property as
projected by Borrower and approved by Administrative Agent from only executed
bona fide leases, licenses and other occupancy agreements of the Property which
are in full force and effect as to which the tenant thereunder is not the
subject of any bankruptcy proceeding and is not in default under its lease
(including tenants who have not commenced payment of full base rent but who are
obligated to do so within six (6) months), beyond any applicable notice or cure
periods set forth therein for the six (6) months following the date of
calculation as projected by Administrative Agent. Operating Income shall
exclude all extraordinary items of income, all amounts paid to Borrower for
tenant alterations in connection with the leasing of space at the Property, all
amounts payable to Borrower under leases with affiliates of Borrower, as
tenant, or with Borrower, as tenant (unless Administrative Agent otherwise
agrees) and, with respect to any lease providing for a reduction in the rentals
payable under such lease at any time during the term thereof, base rentals in
excess of the lowest base rentals payable under such lease (other than during
any period of rent concessions made with respect to consecutive monthly periods
commencing with the first month of the term of such lease), but notwithstanding
the preceding, including reimbursements for operating expenses and percentage
rent pursuant to executed leases, provided a sales report is provided by the
applicable tenant.

                    “Other
Loan” means the loan from Lenders to Borrower in the aggregate amount of
the Other Loan Amount.

                    “Other
Loan Agreement” means the Transfer Loan Agreement of even date herewith between
Lenders, Administrative Agent and Borrower setting forth certain terms and
conditions for advancing the Other Loan.

                    “Other
Loan Amount” means a loan in the amount of $31,553,701.89.

8

                    “Other
Loan Mortgage” means the mortgages referred to in, and consolidated and
modified by, that certain Mortgage Consolidation and Modification Agreement
dated the date hereof between Borrower and Administrative Agent for the benefit
of Lenders in the amount of the Other Loan.

                    “Other
Note” means, collectively, the notes dated the date hereof made by
Borrower, one to each Lender, evidencing the aggregate amount of the Other
Loan.

                    “Payment
Amount” means an advance of the Loan, an unreimbursed Administrative Agent
Advance, an unreimbursed Indemnified Liability or any other amount that a
Lender is required to fund under this Agreement.

                    “Person”
means an individual, partnership, limited liability company, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture or other entity of whatever nature.

                    “Plans”
means the plans and specifications related to any Tenant Improvements or the
Improvements.

                    “Potential
Default” means any condition or event which with the giving of notice or
lapse of time or both would, unless cured or waived, become a Default.

                    “Prime
Rate” means, on any day, the rate of interest per annum then most recently
established by Administrative Agent as its “prime rate”, it being understood
and agreed that such rate is set by Administrative Agent as a general reference
rate of interest, taking into account such factors as Administrative Agent may
deem appropriate, that it is not necessarily the lowest or best rate actually
charged to any customer or a favored rate, that it may not correspond with
future increases or decreases in interest rates charged by other lenders or
market rates in general, and that Administrative Agent may make various
business or other loans at rates of interest having no relationship to such
rate. If Administrative Agent (including any subsequent Administrative Agent)
ceases to exist or to establish or publish a prime rate from which the Prime Rate
is then determined, the applicable variable rate from which the Prime Rate is
determined thereafter shall be instead the prime rate reported in The Wall
Street Journal (or the average prime rate if a high and a low prime rate are
therein reported), and the Prime Rate shall change without notice with each
change in such prime rate as of the date such change is reported.

                    “Principal
Debt” means the aggregate unpaid principal balance of this Loan at the time
in question.

                    “Pro
Rata Share” means, with respect to each Lender at any time, a fraction
expressed as a percentage, the numerator of which is the amount of the
Commitment of such Lender at such time and the denominator of which is the
amount of the Aggregate Commitments at such time or, if the Aggregate
Commitments have been terminated, a fraction (expressed as a percentage,
carried out to the ninth decimal place), the numerator of which is the total
outstanding amount of all Indebtedness held by such Lender at such time and the
denominator of which is the total outstanding amount of all Indebtedness at
such time. The initial Pro Rata Share of each Lender named on the signature
pages hereto is set forth opposite the name of that Lender on the Schedule of
Lenders.

9

                    “Project”
means the acquisition of the Land, the construction of the Improvements, and if
applicable, the leasing and operation of the Improvements.

                    “Property”
means the Land, the Improvements and all other property constituting the
“Mortgage Property”, as described in the Mortgage, or subject to a right, lien
or security interest to secure the Loan pursuant to any other Loan Document.

                    “Proxy”
shall mean that certain Condominium Proxy, dated as of the date hereof, from
Borrower to Lender, pursuant to which Borrower granted Lender a proxy to vote
its interest with respect to all matters affecting the Condominium upon the
occurrence and during the continuance of a Default and which includes conditional
resignations of each of the representatives elected or appointed by Borrower to
the Condominium Board.

                    “Required
Lenders” means as of any date of determination at least two Lenders having
more than 50% of the Aggregate Commitments or, if the Aggregate Commitments
have been terminated, at least two Lenders holding in the aggregate more than
50% of the total outstanding amount of all Indebtedness; provided that the
Commitment of, and the portion of the total outstanding amount of all Indebtedness
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

                    “Schedule
of Lenders” means the schedule of Lenders party to this Agreement as set
forth on Exhibit “N”, as it may be modified from time to time in accordance
with this Agreement.

                    “Self
Storage Facility” has the meaning set forth in Section 2.17.

                    “Storage
Facility Master Lease” has the meaning set forth in Section 2.17.

                    “Storage
Facility Rent” has the meaning set forth in Section 2.17.

                    “Storage
Facility Tenant” has the meaning set forth in Section 2.17.

                    “Subsidiary”
means a corporation, partnership, joint venture, limited liability company or
other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by reason
of the happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries.

                    “Survey”
means a survey prepared in accordance with Exhibit “G” or as otherwise approved
by Administrative Agent in its sole discretion.

                    “Swap
Contract” means any agreement, whether or not in writing, relating to any
Swap Transaction, including, unless the context otherwise clearly requires, any
form of master agreement (the “Master Agreement”) published by the
International Swaps and Derivatives Association, Inc., or any other master
agreement, entered into prior to the date hereof or any time after the date
hereof, between Swap Counterparty and Borrower (or its Affiliate), together
with 

10

any related schedule and confirmation, as amended, supplemented,
superseded or replaced from time to time.

                    “Swap
Counterparty” means Lender or its Affiliate, in its capacity as
counterparty under any Swap Contract.

                    “Swap
Transaction” means any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap
or option, bond option, note or bill option, interest rate option, forward
foreign exchange transaction, cap transaction, collar transaction, floor
transaction, currency swap transaction, cross-currency rate swap transaction,
swap option, currency option, credit swap or default transaction, T-lock, or
any other similar transaction (including any option to enter into the
foregoing) or any combination of the foregoing, entered into prior to the date
hereof or anytime after the date hereof between Swap Counterparty and Borrower
(or its Affiliate) so long as a writing, such as a Swap Contract, evidences the
parties’ intent that such obligations shall be secured by the Mortgage.

                    “Taxes”
has the meaning set forth in Section 1.11.

                    “Tenant
Improvements” means all work to be completed by Borrower pursuant to any
Lease.

                    “Tenant
Improvement Costs” means the costs required to be paid by Borrower,
including tenant allowances paid to a tenant, under any Leases and/or
extensions or renewals of existing leases of space in the Improvements
(excluding any costs for which Borrower requisitioned funds prior to the date
hereof under the construction financing for the Property).

                    “Title
Company” means Stewart Title Insurance Company.

                    “Title
Insurance” means the loan policy or policies of title insurance issued to
Administrative Agent for the benefit of Lenders by the Title Company, in an
amount equal to the maximum principal amount of the Loan, insuring the validity
and priority of the Mortgage encumbering the Land and Improvements for the
benefit of Administrative Agent and Lenders.

                    “Transfer
Tax” has the meaning set forth in Section 2.19.

                    “Tribunal”
means any state, commonwealth, federal, foreign, territorial or other court or
governmental department, commission, board, bureau, district, authority,
agency, central bank, or instrumentality, or any arbitration authority.

                    “Vacancy
and Credit Loss Factor” means an amount (which amount can be $0 but cannot
be less than $0) determined by multiplying Operating Income by the lesser of
(i) 5% or (ii) the amount, stated as a percentage of total rentable retail
area, by which total rented retail area at the time of calculation exceeds 95%
of total rentable retail area.

11

                    2. Financial
Statements:

                    Borrower
shall provide or cause to be provided to Administrative Agent with a copy for
each Lender all of the following:

	
  

 	
  

 
	
  

 	
           (a)
 Financial Statements of Borrower,: (i) for each fiscal year of such reporting
 party, as soon as reasonably practicable and in any event within one hundred
 twenty (120) days after the close of each fiscal year; and (ii) for each
 fiscal quarter of such reporting party, as soon as reasonably practicable and
 in any event within one hundred twenty (120) days after the close of each
 fiscal quarter.

 
	
  

 	
  

 
	
  

 	
           (b)
 Financial Statements of each Guarantor: (i) for each fiscal year of such
 Guarantor, as soon as reasonably practicable and in any event within one
 hundred twenty (120) days after the close of each fiscal year, and for Acadia
 Realty Trust, as soon as reasonably practicable and in any event within one
 hundred twenty (120) days after the close of each such reporting period; or
 (ii) for each fiscal quarter of such Guarantor, as soon as reasonably
 practicable and in any event within one hundred twenty (120) days after the
 close of each fiscal quarter, and for Acadia Realty Trust, as soon as
 reasonably practicable and in any event within one hundred twenty (120) days
 after the close of each such reporting period; upon proper filing of the
 applicable annual form 10K and quarterly form 10Q by Guarantor with the
 Securities and Exchange Commission, such statements shall be deemed delivered
 to Administrative Agent and Lenders hereunder.

 
	
  

 	
  

 
	
  

 	
           (c) (i)
 Prior to the beginning of each fiscal year of Borrower, a capital and
 operating budget for the Property and (ii) for each calendar quarter (and for
 the fiscal year through the end of that month) (A) a statement of all income
 and expenses in connection with the Property and (B) a current leasing status
 report (including tenants’ names, occupied tenant space, lease terms, rents,
 vacant space and proposed rents), including in each case a comparison to the
 budget, as soon as reasonably practicable but in any event within fifteen
 (15) days after the end of each such quarter, certified in writing as true
 and correct by a representative of Borrower satisfactory to Administrative
 Agent. Items provided under this paragraph shall be in form and detail
 satisfactory to Administrative Agent.

 
	
  

 	
  

 
	
  

 	
           (d) At
 the time of submitting, and together with, Borrower’s quarterly financial
 statements, Borrower shall submit a certificate representing and warranting
 (i) that no Default or Potential Default exists, or specifying any and all
 Defaults or Potential Defaults which do exist at the time and (ii),
 commencing with the delivery of financial statements for the period in which
 the Debt Service Coverage Ratio Covenant in Section 2.5(b) applies, whether
 or not the financial covenants set forth in Section 2.5 are in compliance,
 including a reasonably detailed calculation of such compliance or
 non-compliance. At the time of submitting (or prior to the date due, in the
 case of deemed submission by virtue of filings with the Securities and
 Exchange Commission as set forth above), and together with, Guarantor’s
 quarterly financial statements, Guarantor shall submit a detailed certificate
 of the compliance of the financial covenants set forth in the Guaranty.

 

12

	
  

 	
  

 
	
  

 	
           (e) From
 time to time promptly after Administrative Agent’s request, such additional
 information, reports and statements respecting the Property and the
 Improvements, or the business operations and financial condition of each
 reporting party, as Administrative Agent may reasonably request.

 

All Financial Statements shall be in form and detail satisfactory to
Administrative Agent and shall contain or be attached to the signed and dated
written certification of the reporting party in form specified by
Administrative Agent to certify that the Financial Statements are furnished to
Administrative Agent in connection with the extension of credit by Lenders and
constitute a true and correct statement of the reporting party’s financial
position. All certifications and signatures on behalf of corporations,
partnerships or other entities shall be by a representative of the reporting
party satisfactory to Administrative Agent. All Financial Statements for a
reporting party who is an individual shall be on Administrative Agent’s
then-current personal financial statement form or in another form satisfactory
to Administrative Agent. All fiscal year-end Financial Statements of Borrower,
Guarantor and Acadia Realty Trust shall be audited and certified, without any
qualification or exception not acceptable to Administrative Agent, by
independent certified public accountants acceptable to Administrative Agent,
and shall contain all reports and disclosures required by generally accepted
accounting principles for a fair presentation. All quarterly Financial
Statements shall be compiled or reviewed by independent certified public
accountants acceptable to Administrative Agent, or may be prepared by the reporting
party.

13

EXHIBIT “C”

CONDITIONS PRECEDENT TO THE INITIAL ADVANCE

                    As
conditions precedent to the Initial Advance, if and to the extent required by
Administrative Agent, Administrative Agent shall have received and approved the
following:

                         1.
Fees and Expenses. Any and all required commitment and other fees, and
evidence satisfactory to Administrative Agent that Borrower has paid all other
fees, costs and expenses (including the fees and costs of Administrative Agent’s
counsel) then required to be paid pursuant to this Agreement and all other Loan
Documents, including, without limitation, all fees, costs and expenses that
Borrower is required to pay pursuant to any loan application or commitment.

                         2.
Financial Statements. The Financial Statements of Borrower and Guarantor
or any other party required by any loan application or commitment or otherwise
required by Administrative Agent.

                         3. Appraisal. A market value appraisal of the Property made within one hundred
eighty (180) days prior to the date of this Agreement, which appraises the
Property on a “completed value” basis at not less than the Appraised Value. The
appraiser and appraisal must be satisfactory to Administrative Agent (including
satisfaction of applicable regulatory requirements) and the appraiser must be
engaged directly by Administrative Agent.

                         4. Authorization. Evidence Administrative Agent requires of the existence,
good standing, authority and capacity of Borrower, each Guarantor, and their
respective constituent partners, members, managers and owners (however remote)
to execute, deliver and perform their respective obligations to Administrative
Agent and Lenders under the Loan Documents, including:

	
  

 	
  

 
	
  

 	
              (a) For
 each partnership (including a joint venture or limited partnership): (i) a
 true and complete copy of an executed partnership agreement or limited
 partnership agreement, and all amendments thereto; (ii) for each limited
 partnership, a copy of the certificate of limited partnership and all
 amendments thereto accompanied by a certificate issued by the appropriate
 governmental official of the jurisdiction of formation that the copy is true
 and complete, and evidence Administrative Agent requires of registration or
 qualification to do business in the state where Borrower’s principal place of
 business is located and the state where the Project is located, and (iii) a
 partnership affidavit certifying who will be authorized to execute or attest
 any of the Loan Documents, and a true and complete copy of the partnership
 resolutions approving the Loan Documents and authorizing the transactions
 contemplated in this Agreement and the other Loan Documents.

 
	
  

 	
  

 
	
  

 	
              (b) For
 each corporation: (i) a true and complete copy of its articles of
 incorporation and by-laws, and all amendments thereto, a certificate of
 incumbency of all of its officers who are authorized to execute or attest to
 any of the Loan Documents, and 

 

	
  

 	
  

 
	
  

 	
 a true and complete copy of resolutions approving the Loan Documents
 and authorizing the transactions contemplated in this Agreement and the other
 Loan Documents; and (ii) certificates of existence, good standing and
 qualification to do business issued by the appropriate governmental officials
 in the state of its formation and, if different, the state in which the
 Project is located.

 
	
  

 	
  

 
	
  

 	
           (c) For
 each limited liability company or limited liability partnership: (i) a true
 and complete copy of the articles of organization and operating agreement,
 and all amendments thereto, a certificate of incumbency of all of its members
 who are authorized to execute or attest to any of the Loan Documents, and a
 true and complete copy of resolutions approving the Loan Documents and
 authorizing the transactions contemplated in this Agreement and the other
 Loan Documents; and (ii) certificates of existence, good standing and
 qualification to do business issued by appropriate governmental officials in
 the state of its formation and, if different, the state in which the Property
 is located. 

 
	
  

 	
  

 
	
  

 	
           (d) For
 each entity or organization that is not a corporation, partnership, limited
 partnership, joint venture, limited liability company or limited liability
 partnership, a copy of each document creating it or governing the existence,
 operation, power or authority of it or its representatives.

 
	
  

 	
  

 
	
  

 	
           (e) All
 certificates, resolutions, and consents required by Administrative Agent
 applicable to the foregoing.

 

                    5.
Loan Documents. From Borrower, Guarantor and each other person required
by Administrative Agent, duly executed, acknowledged and/or sworn to as
required, and delivered to Administrative Agent (with a copy for each Lender)
all Loan Documents then required by Administrative Agent, dated the date of
this Agreement, each in form and content satisfactory to Administrative Agent,
and evidence Administrative Agent requires that the Mortgage has been recorded
in the official records of the city or county in which the Property is located
and UCC-1 financing statements have been filed in all filing offices that
Administrative Agent may require.

                    6.
Opinions. The written opinion of counsel satisfactory to Administrative
Agent for Borrower, each Guarantor, and any other persons or entities addressed
to Administrative Agent for the benefit of Lenders, dated the date of this
Agreement.

                    7.
Survey; No Special Flood Hazard. (a) two (2) prints of an original
survey (with a copy for each Lender) of the Land and improvements thereon dated
not more than sixty (60) days prior to the date of this Agreement (or dated
such earlier date, if any, as is satisfactory to the Title Company, but in any
event not more than one hundred eighty (180) days prior to the date of this
Agreement) satisfactory to Administrative Agent and the Title Company and
otherwise, to the extent required by Administrative Agent, complying with
Exhibit “G”, and (b) a flood insurance policy (with a copy for each Lender) in
an amount equal to the lesser of the maximum Loan amount or the maximum amount
of flood insurance available under the Flood Disaster Protection Act of 1973,
as amended, and otherwise in compliance with the requirements of the Loan
Documents, or evidence satisfactory to Administrative Agent that none of the
Land is located in a flood hazard area.

2

                    8.
Title Insurance. An ALTA title insurance policy, issued by the Title
Company (which shall be approved by Administrative Agent) in the maximum amount
of the Loan plus any other amount secured by the Mortgage, on a coinsurance
and/or reinsurance basis if and as required by Administrative Agent, insuring
without exclusion or exception for creditors’ rights that the Mortgage
constitutes a valid lien covering the Land and all Improvements thereon, having
the priority required by Administrative Agent and subject only to those
exceptions and encumbrances (regardless of rank or priority) Administrative
Agent approves, in a form acceptable to Administrative Agent, and with all
“standard” exceptions which can be deleted, including the exception for matters
which a current survey would show, deleted to the fullest extent authorized
under applicable title insurance rules, and Borrower shall satisfy all
requirements therefor permitted; containing no exception for standby fees or
real estate taxes or assessments other than those for the year in which the
closing occurs to the extent the same are not then due and payable and endorsed
“not yet due and payable” and no exception for subsequent assessments for prior
years; providing full coverage against mechanics’ and materialmen’s liens to
the extent authorized under applicable title insurance rules, and Borrower
shall satisfy all requirements therefor; insuring that no restrictive covenants
shown in the Title Insurance have been violated, and that no violation of the
restrictions will result in a reversion or forfeiture of title; insuring all
appurtenant easements; insuring that fee simple indefeasible or marketable (as
coverage is available) fee simple title to the Land and Improvements is vested
in Borrower; containing such affirmative coverage and endorsements (including
the standard New York endorsements) as Administrative Agent may require and are
available under applicable title insurance rules, and Borrower shall satisfy
all requirements therefor; insuring any easements, leasehold estates or other
matters appurtenant to or benefiting the Land and/or the Improvements as part
of the insured estate; insuring the right of access to the Land to the extent
authorized under applicable title insurance rules, and Borrower shall satisfy
all requirements therefor; and containing provisions acceptable to
Administrative Agent regarding advances and/or readvances of Loan funds after
closing. Borrower and Borrower’s counsel shall not have any interest, direct or
indirect, in the Title Company (or its agent) or any portion of the premium
paid for the Title Insurance. The policy shall contain a pending disbursement
clause in Lender’s standard form or such other form approved by Lender.

                    9.
Insurance Policies. The insurance policies initially required by
Administrative Agent, pursuant to the Loan Documents, together with evidence
satisfactory to Administrative Agent that all premiums therefor have been paid
for a period of not less than one (1) year from the date of this Agreement and
that the policies are in full force and effect.

                    10.
Leases. If Exhibit “I” is attached hereto, (i) true and correct copies
of all leases and subleases, and guarantees thereof; (ii) estoppel certificates
and subordination and attornment agreements (including nondisturbance
agreements if and to the extent agreed by Administrative Agent in its
discretion), dated within thirty (30) days prior to this Agreement and in the
respective forms attached as exhibits to the Closing Checklist, or otherwise in
form and content satisfactory to Administrative Agent, from the tenants and
subtenants as Administrative Agent requires; (iii) evidence satisfactory to
Administrative Agent of Borrower’s compliance with the leases; and (iv)
evidence satisfactory to Administrative Agent of the tenants’ approval of all
matters requiring their approval.

3

                    11.
Environmental Compliance/Report. Evidence satisfactory to Administrative
Agent that no portion of the Land is “wetlands” under any applicable Law and
that the Land does not contain and is not within or near any area designated as
a hazardous waste site by any Tribunal, that neither the Property nor any
adjoining property contains or has ever contained any substance classified as
hazardous or toxic (or otherwise regulated, such as, without limitation,
asbestos, radon and/or petroleum products) under any Law or governmental
requirement pertaining to health or the environment, and that neither the
Property nor any use or activity thereon violates or is or could be subject to
any response, remediation, clean-up or other obligation under any Law or
governmental requirement pertaining to health or the environment including
without limitation, a written report of an environmental assessment of the
Property, made within twelve (12) months prior to the date of this Agreement,
by an engineering firm, and of a scope and in form and content satisfactory to
Administrative Agent, complying with Administrative Agent’s established
guidelines, showing that there is no evidence of any such substance which has
been generated, treated, stored, released or disposed of in the Property, and
such additional evidence as may be required by Administrative Agent. All
reports, drafts of reports, and recommendations, whether written or oral, from
such engineering firm shall be made available and communicated to
Administrative Agent.

                    12.
Laws. (a) Evidence satisfactory to Administrative Agent that all
applicable zoning ordinances, restrictive covenants and governmental
requirements affecting the Property permit the use for which the Property is
intended and have been or will be complied with without the existence of any
variance, non-complying use, nonconforming use or other special exception; (b)
evidence satisfactory to Administrative Agent that the Land and Improvements
comply and will comply with all Laws and governmental requirements regarding
subdivision and platting and would so comply if the Land and the Improvements
thereon were conveyed as a separate parcel; (c) a true and correct copy of
valid certificates of occupancy for the Improvements, together with all other
consents, licenses, permits and approvals necessary for operation of the
Improvements, all in assignable form (to the extent appropriate) and in full
force and effect; (d) evidence satisfactory to Administrative Agent of
compliance by Borrower and the Property, use and occupancy of the Improvements,
with such other applicable Laws and governmental requirements as Administrative
Agent may request, including all Laws and governmental requirements regarding
access and facilities for handicapped or disabled persons including, without
limitation and to the extent applicable, The Federal Architectural Barriers Act
(42 U.S.C. § 4151 et seq.), The Fair Housing Amendments Act
of 1988 (42 U.S.C. § 3601 et seq.), The Americans With
Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.), The
Rehabilitation Act of 1973 (29 U.S.C. § 794), and any applicable state
requirements; and (e) written evidence satisfactory to Administrative Agent
that construction of the Improvements on the Land is permissible under all
federal, state and local statutes, regulations and rulings protecting tidal and
non-tidal wetlands and other environmentally protected areas.

                    13.
Priority. (a) evidence satisfactory to Administrative Agent that prior
to and as of the time the Mortgage was filed for record no mechanic’s or
materialman’s lien claim or notice, lis pendens, judgment, or other claim or
encumbrance against the Property has been filed for record in the county where
the Property is located or in any other public record which by Law provides
notice of claims or encumbrances regarding the Property; (b) a certificate or
certificates of a reporting service acceptable to Administrative Agent,
reflecting the results of searches made not earlier than ten (10) days prior to
the date of this Agreement, (i) of the central and local 

4

Uniform Commercial Code records, showing no filings against any of the
collateral for the Loan or against Borrower otherwise except as consented to by
Administrative Agent; and (ii) if required by Administrative Agent, of the
appropriate judgment and tax lien records, showing no outstanding judgment or
tax lien against Borrower or any Guarantor.

                    14.
Tax and Standby Fee Certificates. Evidence satisfactory to
Administrative Agent (a) of the identity of all taxing authorities and utility
districts (or similar authorities) having jurisdiction over the Property or any
portion thereof; (b) that all taxes, standby fees and any other similar charges
have been paid, including copies of receipts or statements marked “paid” by the
appropriate authority; and (c) that the Land is a separate tax lot or lots with
separate assessment or assessments of the Land and Improvements, independent of
any other land or improvements and that the Land is a separate legally
subdivided parcel.

                    15.
Ground Lease and Premises Documents. Certified copies of all documents
comprising the Ground Lease, the Storage Facility Master Lease and the
Condominium Documents, accompanied by, in the case of the Ground Lease, an
estoppel certificate from Ground Lessor and in the case of the Storage Facility
Master Lease, an estoppel from the tenant thereunder, estoppel certificates
from the other parties to the Condominium Documents, all in form and substance
satisfactory to Administrative Agent.

                    16.
Other Documents. Such other documents and certificates as Administrative
Agent may reasonably request from Borrower, any Guarantor, and any other person
or entity, in form and content satisfactory to Administrative Agent.

                    17.
Borrower Identification Due Diligence. Administrative Agent and each
Lender shall have received all due diligence materials they deem necessary with
respect to verifying Borrower’s identity and background information in a manner
satisfactory to each of them.

5

EXHIBIT “C-1”

CONDITIONS PRECEDENT TO ADVANCES IN EXCESS OF
THE INITIAL ADVANCE

As conditions precedent to any advance in excess of the Initial
Advance, if and to the extent required by Administrative Agent, Administrative
Agent shall have received and approved the items under Exhibit “C” and Exhibit
“F”.

EXHIBIT “D”

MONTHLY AMORTIZATION SCHEDULE

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Loan summary

 	
  

 
	

 

 	
  

 
	
 Loan amount

 	
  

 	
 $

 	
 2,446,298.11

 	
  

 
	
 Annual interest rate

 	
  

 	
  

 	
 7.50
 

 	
 %

 
	
 Amortization period in
 years

 	
  

 	
  

 	
 30
 

 	
  

 
	
 Number of payments per
 year

 	
  

 	
  

 	
 12
 

 	
  

 
	
 Start date of amortization

 	
  

 	
  

 	
 6/1/2012

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Principal

 Payment

 Number

 	
  

 	
 Principal

 Payment

 Date

 	
  

 	
 Beginning

 Balance

 	
  

 	
 Principal 

 Payment

 	
  

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1

 	
  

 	
  

 	
 6/1/2012

 	
  

 	
 $

 	
 2,446,298.11

 	
  

 	
 $

 	
 1,815.51
 

 	
  

 
	
 2

 	
  

 	
  

 	
 7/1/2012

 	
  

 	
  

 	
 2,444,482.60

 	
  

 	
  

 	
 1,826.86
 

 	
  

 
	
 3

 	
  

 	
  

 	
 8/1/2012

 	
  

 	
  

 	
 2,442,655.75

 	
  

 	
  

 	
 1,838.27
 

 	
  

 
	
 4

 	
  

 	
  

 	
 9/1/2012

 	
  

 	
  

 	
 2,440,817.47

 	
  

 	
  

 	
 1,849.76
 

 	
  

 
	
 5

 	
  

 	
  

 	
 10/1/2012

 	
  

 	
  

 	
 2,438,967.71

 	
  

 	
  

 	
 1,861.32
 

 	
  

 
	
 6

 	
  

 	
  

 	
 11/1/2012

 	
  

 	
  

 	
 2,437,106.39

 	
  

 	
  

 	
 1,872.96
 

 	
  

 
	
 7

 	
  

 	
  

 	
 12/1/2012

 	
  

 	
  

 	
 2,435,233.43

 	
  

 	
  

 	
 1,884.66
 

 	
  

 
	
 8

 	
  

 	
  

 	
 1/1/2013

 	
  

 	
  

 	
 2,433,348.77

 	
  

 	
  

 	
 1,896.44
 

 	
  

 
	
 9

 	
  

 	
  

 	
 2/1/2013

 	
  

 	
  

 	
 2,431,452.33

 	
  

 	
  

 	
 1,908.29
 

 	
  

 
	
 10

 	
  

 	
  

 	
 3/1/2013

 	
  

 	
  

 	
 2,429,544.03

 	
  

 	
  

 	
 1,920.22
 

 	
  

 
	
 11

 	
  

 	
  

 	
 4/1/2013

 	
  

 	
  

 	
 2,427,623.81

 	
  

 	
  

 	
 1,932.22
 

 	
  

 
	
 12

 	
  

 	
  

 	
 5/1/2013

 	
  

 	
  

 	
 2,425,691.59

 	
  

 	
  

 	
 1,944.30
 

 	
  

 
	
 13

 	
  

 	
  

 	
 6/1/2013

 	
  

 	
  

 	
 2,423,747.29

 	
  

 	
  

 	
 1,956.45
 

 	
  

 
	
 14

 	
  

 	
  

 	
 7/1/2013

 	
  

 	
  

 	
 2,421,790.84

 	
  

 	
  

 	
 1,968.68
 

 	
  

 
	
 15

 	
  

 	
  

 	
 8/1/2013

 	
  

 	
  

 	
 2,419,822.16

 	
  

 	
  

 	
 1,980.98
 

 	
  

 
	
 16

 	
  

 	
  

 	
 9/1/2013

 	
  

 	
  

 	
 2,417,841.18

 	
  

 	
  

 	
 1,993.36
 

 	
  

 
	
 17

 	
  

 	
  

 	
 10/1/2013

 	
  

 	
  

 	
 2,415,847.82

 	
  

 	
  

 	
 2,005.82
 

 	
  

 
	
 18

 	
  

 	
  

 	
 11/1/2013

 	
  

 	
  

 	
 2,413,841.99

 	
  

 	
  

 	
 2,018.36
 

 	
  

 

EXHIBIT “E”

INTENTIONALLY OMITTED

EXHIBIT “F”

ADVANCES

                    1.
Draw Request. A “Draw Request” means a properly completed and executed
written application by Borrower to Administrative Agent in the form of Exhibit
“F-1” (or in another form satisfactory to Administrative Agent) setting forth
the amount of Loan proceeds desired, together with the related AIA Document
G-702 and G-703 or such other forms approved by Administrative Agent and such
schedules, affidavits, releases, waivers, statements, paid invoices, paid
bills, and other documents, certificates and information satisfactory to
Administrative Agent, provided that, with respect to any item of Tenant
Improvement Costs for which the tenant, rather than Borrower, is performing the
work, the foregoing documents shall only be required to the extent that the
applicable lease requires such tenant to deliver same. Notwithstanding the
foregoing, with respect to any tenant of the Improvements who has accepted
occupancy and is paying rent, in lieu of the foregoing conditions in this
Section 1, Borrower may deliver to Administrative Agent the following: (i)
final lien waivers and proof of payment by Borrower and (ii) an executed
estoppel or rent commencement agreement from the tenant confirming that all of
Borrower’s tenant improvement obligations have been satisfied. At least five
(5) Business Days before the requested date of each advance made from the Loan,
Borrower shall deliver a Draw Request to Administrative Agent. Borrower shall
be entitled to an advance only in an amount approved by Administrative Agent in
accordance with the terms of this Agreement and the Loan Documents. Lenders
shall not be required to make advances more frequently than once each calendar
month. Lenders shall, only upon the satisfaction, as determined by
Administrative Agent in its sole discretion, of all applicable conditions of
this Agreement and the Loan Documents, be required to make the requested
advance to Borrower on a Funding Date which is a Business Day within five (5),
or if any portion of such advance is LIBOR Rate Principal, eight (8), Business
Days after such satisfaction. Each Draw Request, and Borrower’s acceptance of
any advance, shall be deemed to ratify and confirm, as of the date of the Draw
Request and the advance, respectively, that, except as specified in the Draw
Request, (a) all representations and warranties in the Loan Documents remain
true and correct, and all covenants and agreements in the Loan Documents remain
satisfied, (b) there is no uncured Default existing under the Loan Documents,
(c) all conditions to the advance, whether or not evidence thereof is required
by Administrative Agent, are satisfied, (d) the waivers, statements, paid
invoices, paid bills, and/or other documents, certificates and information
required as set forth above submitted for the Draw Request are complete and
correct, and in all respects what they purport and appear to be for the amount
and period applicable to the Draw Request, (e) all advances previously made to
Borrower were disbursed, and the proceeds of the advance requested in the Draw
Request will immediately be disbursed, for reimbursement to Borrower for, the
costs and expenses specified in the Draw Request for which the advances were
made, and for no other purpose, and (f) after the advance, all obligations for
work and other costs heretofore incurred by Borrower in connection with the
Project and which are due and payable will be fully paid and satisfied.

                    2.
Advances. Borrower shall disburse all advances, other than the Initial
Advance made to Borrower, for reimbursement of payments of the Tenant
Improvement Costs or Leasing Commissions only, specified in the Draw Request
for which the advances were made, 

and for no other purpose. Following receipt and approval of a Draw
Request, all supporting documentation and information required by
Administrative Agent, Administrative Agent will determine the amount of the
advance Lenders shall make in accordance with this Agreement, the Loan
Documents, and if and to the extent required by Administrative Agent, to
Administrative Agent’s satisfaction, the following standards:

                    For
tenant improvement work, advances on the basis of 100% of the Tenant
Improvement Costs paid by Borrower, provided that if required by Administrative Agent
(i) an application for payment may be submitted only after all applicable
tenant improvements have been completed, (ii) all provisions of the Loan
Documents, including, without limitation, Sections 3 and 4 of this Exhibit “F”,
have been satisfied, (iii) the term of the applicable lease has commenced, (iv)
Administrative Agent has received from the applicable tenant a tenant estoppel
certificate in the form attached as an exhibit to the Closing Checklist, or
otherwise in form and content satisfactory to Administrative Agent, (v)
Administrative Agent has received two (2) sets of as-built plans for the
applicable tenant improvements, and (vi) Administrative Agent has received
evidence of satisfaction of all applicable legal requirements, including but
not limited to applicable certificates of occupancy and evidence that the plans
comply with all legal requirements regarding access and facilities for
handicapped or disabled persons.

                    3.
Conditions to the Initial Advance. As conditions precedent to the
Initial Advance hereunder, if and to the extent required by Administrative
Agent, to Administrative Agent’s satisfaction, Borrower must have satisfied the
conditions required under this Agreement, including all of those conditions set
forth in Exhibit “C” and Section 4 below.

                    4.
Conditions to All Advances. As conditions precedent to each advance made
pursuant to a Draw Request, in addition to all other requirements contained in
this Agreement, if and to the extent required by Administrative Agent,
Administrative Agent shall have received and approved the following:

	
  

 	
  

 
	
  

 	
            (i)
 Evidence satisfactory to Administrative Agent of the continued satisfaction
 of all conditions to the Initial Advance and, as to advances after the
 Initial Advance, Exhibit “C-1”.

 
	
  

 	
  

 
	
  

 	
            (ii)
 A Draw Request.

 
	
  

 	
  

 
	
  

 	
           (iii)
 Evidence satisfactory to Administrative Agent that no Default or any event
 which, with the giving of notice or the lapse of time, or both, could become
 a Default, exists.

 
	
  

 	
  

 
	
  

 	
           (iv)
 Evidence satisfactory to Administrative Agent that the representations and
 warranties made in the Loan Documents must be true and correct on and as of
 the date of each advance and no event shall have occurred or condition or
 circumstance shall exist which, if known to Borrower, would render any such
 representation or warranty incorrect or misleading.

 
	
  

 	
  

 
	
  

 	
           (v) To
 the extent requested by Administrative Agent, a true and complete copy of
 each contract to which Borrower is a party, if applicable, for labor,
 materials, services and/or other work included in a Draw Request duly
 executed and delivered by all 

 

2

	
  

 	
  

 
	
  

 	
 parties thereto and effective, and a true and complete copy of a
 fully executed copy of each such subcontract or other contract as
 Administrative Agent may have requested.

 
	
  

 	
  

 
	
  

 	
             (vi)
 Evidence satisfactory to Administrative Agent that no mechanic’s or
 materialmen’s lien or other encumbrance has been filed and remain in effect
 against the Property, no stop notices shall have been served on Lenders that
 have not been bonded by Borrower in a manner and amount satisfactory to
 Administrative Agent, and releases or waivers of mechanics’ liens and
 receipted bills showing payment of all amounts due to all parties who have
 furnished materials or services or performed labor of any kind in connection
 with the Property.

 
	
  

 	
  

 
	
  

 	
            (vii)
 Evidence satisfactory to Administrative Agent that the Title Insurance has
 been endorsed and brought to date in a manner satisfactory to Administrative
 Agent to increase the coverage by the amount of each advance through the date
 of each such advance with no additional title change or exception not
 approved by Administrative Agent.

 
	
  

 	
  

 
	
  

 	
           (viii) A
 copy of the Lease to which any requested advance for Tenant Improvement Costs
 and/or Leasing Commissions has been requested, certified to be accurate,
 complete, unmodified and in full force and effect, which lease shall be in
 compliance with the terms of this Agreement and the other Loan Documents,
 including, without limitation, approved by Administrative Agent to the extent
 required herein or therein.

 
	
  

 	
  

 
	
  

 	
           (ix)
 Evidence satisfactory to Administrative Agent that the Improvements shall not
 have been damaged and not repaired and shall not be the subject of any
 pending or threatened condemnation or adverse zoning proceeding.

 

                    5.
Conditions and Waivers. All conditions precedent to the obligation of
Lenders to make any advance are imposed hereby solely for the benefit of
Administrative Agent and Lenders, and no other party may require satisfaction
of any such condition precedent or be entitled to assume that Lenders will
refuse to make any advance in the absence of strict compliance with such
conditions precedent. No advance shall constitute an approval or acceptance by
Administrative Agent of any construction work, or a waiver of any condition
precedent to any further advance, or preclude Administrative Agent from
thereafter declaring the failure of Borrower to satisfy such condition
precedent to be a Default. No waiver by Administrative Agent of any condition
precedent or obligation shall preclude Administrative Agent from requiring such
condition or obligation to be met prior to making any other advance or from
thereafter declaring the failure to satisfy such condition or obligation to be
a Default.

3

EXHIBIT “F-1”

DRAW REQUEST

[BORROWER’S LETTERHEAD]

DRAW REQUEST NO. _________

	
  

 	
  

 	
  

 
	
 TO:

 	
 BANK OF
 AMERICA, N.A. (“Administrative Agent”)

 
	
  

 	
  

 	
  

 
	
 LOAN NO.

 	
 ____________________

 	
 DATE:
 _______________

 
	
  

 	
  

 	
  

 
	
 PROJECT:

 	
 Pelham Manor
 Shopping Center

 	
  

 
	
  

 	
  

 	
  

 
	
 LOCATION:

 	
 Pelham Manor,
 New York

 	
  

 
	
  

 	
  

 	
  

 
	
 BORROWER:

 	
 P/A-Acadia
 Pelham Manor, LLC

 	
  

 

FOR PERIOD
ENDING:          _________________________

In accordance with the Loan Agreement in the amount of $____________
dated December 1 2010 between Borrower, Administrative Agent and Lenders,
Borrower requests that $____________ be advanced from Loan proceeds. The
proceeds should be credited to the account of _________________________,
Account No. ____________, at ______________________________.

	
  

 	
  

 	
  

 
	
 1.

 	
 CURRENT DRAW
 REQUEST FOR TENANT IMPROVEMENT COSTS

 	
 $_______________

 
	
  

 	
  

 	
  

 
	
 2.

 	
 TOTAL DRAW
 REQUEST

 	
 $_______________

 

	
  

 	
  

 
	
 AUTHORIZED
 SIGNER:

 	
  

 
	
  

 	
  

 
	
 ______________________________

 	
 Dated:
 _______________

 

EXHIBIT “G”

SURVEY REQUIREMENTS

                              1.
Requirements. The Survey shall be made in accordance with, and meet the
requirements of, the certification below by a registered professional engineer
or registered professional land surveyor. The description shall be a single
metes and bounds perimeter description of the entire Land, and a separate metes
and bounds description of the perimeter of each constituent tract or parcel out
of the Land. The total acreage and square footage of the Land and each
constituent tract or parcel of the Land shall be certified. If the Land has
been recorded on a map or plat as part of an abstract or subdivision, all
survey lines must be shown, and all lot and block lines (with distances and
bearings) and numbers, must be shown. The date of any revisions subsequent to
the initial survey prepared pursuant to these requirements must also be shown.

                              2.
Certification. The certification for the property description and the
map or plat shall be addressed to Administrative Agent for Lenders, Borrower
and the Title Company, signed by the surveyor (a registered professional land
surveyor or registered professional engineer), bearing current date,
registration number, and seal, and shall be in the following form or its
substantial equivalent:

	
  

 	
  

 
	
  

 	
 This is to certify to Bank of America, N.A., as Administrative Agent
 for certain Lenders, _________________________, as Borrower and,
 _________________________, as the Title Company that this map or plat and the
 survey on which it is based were made in accordance with the “Minimum
 Standard Detail Requirements for ALTA/ACSM Land Title Surveys” jointly
 established and adopted by ALTA and NSPS in 2005, and include optional items
 1, 2, 4 (in square feet or acres), 6, 8, 10, 11(b), 16, 17, 18, and if
 buildings are located on the land, optional items 7(a), 7(b)(1), 7(b)(2) and
 9 of Table A thereof. Pursuant to the Accuracy Standards as adopted by
 ALTA and NSPS and in effect on the date of this certification, the
 undersigned further certifies that in my professional opinion, as a land
 surveyor registered in the State of ____________, the maximum Relative
 Positional Accuracy resulting from the measurements made on the survey does
 not exceed the Allowable Relative Positional Accuracy for Measurements
 Controlling Land Boundaries on ALTA/ACSM Land Title Surveys (0.07 feet or
 20 mm + 50 ppm). The undersigned additionally certifies that (a) this
 survey was made on the ground under my supervision; (b) I have received and
 examined a copy of the Title Insurance Commitment No. _______________ issued
 by the Title Company as well as a copy of each instrument listed therein, and
 the subject land and each tract or parcel thereof described in this survey is
 the same land as described in the Title Commitment; (c) if the subject land
 consists of two or more tracts or parcels having common boundaries, those
 tracts and parcels are contiguous along the common boundaries; (d) the
 subject land and each tract or parcel thereof has a tax map designation
 separate and distinct from that of any other land and the subject land and
 each tract or parcel thereof is a separate, legally subdivided parcel; (e)
 this survey correctly shows all matters of record, (and to the extent they
 can be located, their location and dimensions) of which I have been advised
 affecting the subject land according to the legal description in such matters
 (with instrument, book,

 

	
  

 	
  

 
	
  

 	
 and page number indicated); (f) except as shown on this survey, no
 part of the subject land is located in a 100-year Flood Plain or in an
 identified “flood prone area”, as defined pursuant to the Flood Disaster
 Protection Act of 1973, as amended, as reflected by Flood Insurance Rate Map
 Panel #____________ dated _______________, which such map panel covers the
 area in which the Property is situated and this survey correctly indicates
 the zone designation of any area as being in the 100-year Flood Plain or
 “flood prone area”; (g) to the best of my knowledge, this survey shows the
 relation of and distance of all substantial, visible buildings, sidewalks and
 other improvements to easements and setback lines; and (h) to the best of my
 knowledge, except as shown on this survey, neither the subject land nor any
 tract or parcel thereof serves any adjoining land for drainage, utilities, or
 ingress or egress.

 

2

EXHIBIT “H”

INTENTIONALLY OMITTED

EXHIBIT “I”

LEASING AND TENANT MATTERS

                 Borrower
and Lenders agree as follows:

                    1.
Approved Leases. Borrower shall not enter into any tenant lease of space
in the Improvements unless satisfactory to or deemed satisfactory to
Administrative Agent prior to execution. Borrower’s standard form of tenant
lease, and any revisions thereto, must have the prior written approval of
Administrative Agent. Any tenant lease shall be “deemed” satisfactory to
Administrative Agent that (a) is on the standard form lease approved by
Administrative Agent, with no deviations except as satisfactory to
Administrative Agent; (b) is entered into in the ordinary course of business
with a bona fide unrelated third party tenant, and Borrower, acting in good
faith and exercising due diligence, has determined that the tenant is
financially capable of performing its obligations under the lease; (c) is
received by Administrative Agent (together with each guarantee thereof (if any)
and financial information regarding the tenant and each guarantor (if any)
received by Borrower) within fifteen (15) days after execution; (d) reflects an
arms-length transaction at then current market rate for comparable space; (e)
contains no right to purchase the Property, or any present or future interest
therein; (f) does not cover in excess of 25% of the aggregate net rentable area
of the Improvements; and (g) is expressly subordinate to the Mortgage. Borrower
shall provide to Administrative Agent a correct and complete copy of each
tenant lease, including any exhibits, and each guarantee thereof (if any),
prior to execution unless the lease in question is reasonably satisfactory to
Administrative Agent under the foregoing requirements. Borrower shall,
throughout the term of this Agreement, pay all reasonable costs incurred by
Administrative Agent in connection with Administrative Agent’s review and
approval of tenant leases and each guarantee thereof (if any), including
reasonable attorneys’ fees and costs.

                    2.
Effect of Lease Approval. No approval of any lease by Administrative
Agent shall be for any purpose other than to protect Lenders’ security, and to
preserve Lenders’ rights under the Loan Documents. No approval by
Administrative Agent shall result in a waiver of any default of Borrower. In no
event shall any approval by Administrative Agent of a lease be a representation
of any kind, with regard to the lease or its adequacy or enforceability, or the
financial capacity of any tenant or guarantor.

                    3.
Representations Concerning Leases. Borrower represents and warrants to
Administrative Agent and Lenders that Borrower has delivered to Administrative
Agent a true and correct copy of all tenant leases and each guarantee thereof
(if any), affecting any part of the Improvements, together with an accurate and
complete rent roll for the Project, and no such lease or guarantee contains any
option to purchase all or any portion of the Property or any interest therein
or contains any right of first refusal relating to any sale of the Property or
any portion thereof or interest therein.

                    4.
Delivery of Leasing Information and Documents. Borrower shall promptly
(a) deliver to Administrative Agent such quarterly rent rolls, leasing
schedules and reports, operating statements, financial statements for tenants
other than residential tenants with a 

lease term for less than one year and other information regarding
tenants and prospective tenants or other leasing information as Administrative
Agent from time to time may request, and (b) obtain and deliver to
Administrative Agent such estoppel certificates and subordination and
attornment agreements executed by such tenants (and guarantors, if any) in the
respective forms attached as exhibits to the Closing Checklist, or otherwise in
such forms as Administrative Agent from time to time may reasonably require.

                    5.
Income from the Property. Borrower shall first apply all income from
leases, and all other income derived from the Property, to pay costs and
expenses associated with the ownership, maintenance, development, operating,
and marketing of the Land and Improvements, including all amounts then required
to be paid under the Loan Documents, before using or applying such income for
any other purpose.

                    6.
Compliance and Default. As additional conditions to Lenders’ obligations
under this Agreement, all tenants having the right to do so must approve all
plans and all changes thereto, the construction of the Improvements, and all
other aspects of the Project requiring tenants’ approval. A default by Borrower
under or any failure by Borrower to satisfy any of the conditions of a lease
shall constitute a Default under this Agreement. Borrower shall promptly notify
Administrative Agent in writing of any failure by any party to perform any
material obligation under any lease, any event or condition which would permit
a tenant to terminate or cancel a lease, or any notice given by a tenant with
respect to the foregoing, specifying in each case the action Borrower has taken
or will take with respect thereto.

2

EXHIBIT “J”

INTENTIONALLY OMITTED

EXHIBIT “K”

INTENTIONALLY OMITTED

EXHIBIT “L”

ASSIGNMENT AND ASSUMPTION

                    This
Assignment and Assumption (this “Assignment”) is dated as of the Effective Date
set forth below and is entered into by and between _________________
(“Assignor”) and ____________________ (“Assignee”). Capitalized terms used but
not defined herein shall have the meanings given to them in the Loan Agreement
identified below (the “Loan Agreement”), receipt of a copy of which is hereby
acknowledged by Assignee. The Standard Terms and Conditions set forth in Annex
1 attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment as if set forth herein in full.

                    For
an agreed consideration, Assignor hereby irrevocably sells and assigns to
Assignee, and Assignee hereby irrevocably purchases and assumes from Assignor,
subject to and in accordance with the Standard Terms and Conditions and the
Loan Agreement, as of the Effective Date inserted by Administrative Agent as
contemplated below, (i) all of Assignor’s rights and obligations as a Lender
under the Loan Agreement and any other documents or instruments delivered
pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of Assignor
under the respective facilities identified below (including, without
limitation, [Letters of Credit and] Guarantees), and (ii) to the extent
permitted to be assigned under applicable Law, all claims, suits, causes of
action and any other right of Assignor (in its capacity as a Lender) against
any person, whether known or unknown, arising under or in connection with the
Loan Agreement, any other documents or instruments delivered pursuant thereto
or in any way based on or related to any of the foregoing, including, but not
limited to contract claims, tort claims, malpractice claims, statutory claims
and all other claims at Law or in equity, related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to Assignor and, except as expressly provided in this Assignment,
without representation or warranty by Assignor.

	
  

 	
  

 
	
 1.

 	
 Assignor: _________________________

 
	
  

 	
  

 
	
 2.

 	
 Assignee: _________________________[, an
 Affiliate/Approved Fund of _____________]

 
	
  

 	
  

 
	
 3.

 	
 Borrower(s): ______________________________

 
	
  

 	
  

 
	
 4.

 	
 Administrative Agent:
 _________________________, as administrative agent under the Loan Agreement

 
	
  

 	
  

 
	
 5.

 	
 Loan Agreement: The Loan Agreement, dated as
 of _______________, among _________________________, Lenders parties thereto,
 [and]
 Bank of America, N.A., as Administrative Agent [, and the other agents parties thereto]

 

	
  

 	
  

 
	
 6.

 	
 Assigned
 Interest:

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Aggregate Amount

 of Commitment/

 Loans for all Lenders

 	
  

 	
 Amount of

 Commitment/

 Loans Assigned

 	
  

 	
 Percentage Assigned

 of Commitment/Loans

 
	

 

 	
  

 	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 $____________

 	
  

 	
 $____________

 	
  

 	
 __________%

 

Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The terms set forth in this Assignment are hereby agreed to:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ASSIGNOR:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ASSIGNEE:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
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2

	
  

 	
  

 	
  

 	
  

 
	
 [CONSENTED
 TO AND] ACCEPTED:

 
	
  

 	
  

 	
  

 
	
 BANK OF
 AMERICA, N.A., as Administrative Agent

 
	
  

 	
  

 	
  

 	
  

 
	
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 Name:

 	
  

 	
  

 
	
  

 	
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 [CONSENTED
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3

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS

FOR ASSIGNMENT AND ASSUMPTION

                    1.
Representations and Warranties. 

                    1.1.
Assignor. Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby;
and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Loan Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents, or any
collateral thereunder, (iii) the financial condition of Borrower, any of its
Subsidiaries or Affiliates or any other person obligated in respect of any Loan
Document or (iv) the performance or observance by Borrower, any of its
Subsidiaries or Affiliates or any other person of any of their respective
obligations under any Loan Document. 

                    1.2.
Assignee. Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and to consummate the transactions contemplated hereby and to
become a Lender under the Loan Agreement, (ii) it meets all requirements of an
Eligible Assignee under the Loan Agreement (subject to receipt of such consents
as may be required under the Loan Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Loan Agreement as a
Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Loan
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section __ thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision independently and without reliance on Administrative
Agent or any other Lender to enter into this Assignment and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision,
and (v) if it is a Foreign Lender, attached hereto is any documentation
required to be delivered by it pursuant to the terms of the Loan Agreement,
duly completed and executed by Assignee; and (b) agrees that (i) it will,
independently and without reliance on Administrative Agent, Assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender. 

                    1.3
Assignee’s Address for Notices, etc. Attached hereto as Schedule 1 is
all contact information, address, account and other administrative information
relating to Assignee. 

                    2.
Payments. From and after the Effective Date, Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to Assignee whether such amounts
have accrued prior to or on or after 

the Effective Date. Assignor and Assignee shall make all appropriate
adjustments in payments by Administrative Agent for periods prior to the
Effective Date or with respect to the making of this Assignment directly
between themselves. 

                    
3. General Provisions. This Assignment shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.
This Assignment may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the Law of the State of
____________________ [confirm that choice of
law provision parallels the Loan Agreement]. 

2

SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION

ADMINISTRATIVE DETAILS

	
 

	
 

	
 

	
                    (Assignee
to list names of credit contacts, addresses, phone and facsimile numbers,
electronic mail addresses and account and payment information) 

	
 

	
 

	
 

	
(a)

	
LIBOR
Lending Office:

	
 

	
 

	
 

	
Assignee
name:

	
Bank of
America, N.A.

	
 

	
Address:

	
One Bryant
Park, 35th Floor

	
 

	
 

	
New York,
New York 10036

	
 

	
Attention:

	
Mr. Gregory
Egli

	
 

	
Telephone:

	
646-855-2630

	
 

	
Facsimile:

	
212-293-8197

	
 

	
Electronic
Mail:

	
gregory.w.egli@bankofamerica.com

	
 

	
 

	
(b)

	
Domestic
Lending Office:

	
 

	
 

	
 

	
 

	
Assignee
name:

	
Bank of
America, N.A.

	
 

	
Address:

	
One Bryant
Park, 35th Floor

	
 

	
 

	
New York,
New York 10036

	
 

	
Attention:

	
Mr. Gregory
Egli

	
 

	
Telephone:

	
646-855-2630

	
 

	
Facsimile:

	
212-293-8197

	
 

	
Electronic
Mail:

	
gregory.w.egli@bankofamerica.com

	
 

	
 

	
(c)

	
Notice
Address:

	
 

	
 

	
 

	
 

	
Assignee
name:

	
Bank of
America, N.A.

	
 

	
Address:

	
One Bryant
Park, 35th Floor

	
 

	
 

	
New York,
New York 10036

	
 

	
Attention:

	
Mr. Gregory
Egli

	
 

	
Telephone:

	
646-855-2630

	
 

	
Facsimile:

	
212-293-8197

	
 

	
Electronic
Mail:

	
gregory.w.egli@bankofamerica.com

	
 

	
 

	
(d)

	
Payment
Instructions:

	
 

	
 

	
 

	
 

	
 

	
Account No.

	
GL#-1366211723000

	
 

	
Attention:

	
Angela Kelly

	
 

	
Reference:

	
P/A Acadia
Pelham Manor LLC #01254436

EXHIBIT “M”

NOTE

	
 

	
 

	
$____________

	
____________, 20___ 

                    FOR
VALUE RECEIVED, _________________________ (“Borrower”, whether one or more)
hereby promises to pay to the order of [_________________________
(“Lender”) under that certain Loan Agreement (defined below) among Borrower,]
Bank of America N.A., a national banking association and administrative agent
(together with any and all of its successors and assigns, “Administrative
Agent”) for the benefit of Lenders from time to time a party to that certain
Loan Agreement (the “Loan Agreement”) [dated
____________, 20__] of even date herewith, without offset, in
immediately available funds in lawful money of the United States of America, at
Administrative Agent’s Office as defined in the Loan Agreement, the principal
sum of _________________________ DOLLARS ($____________) (or the unpaid balance
of all principal advanced against this Note, if that amount is less), together
with interest on the unpaid principal balance of this Note from day to day
outstanding as hereinafter provided. 

          1. Note;
Interest; Payment Schedule and Maturity Date. This Note is one of the Notes
referred to in Loan Agreement and is entitled to the benefits thereof. The
entire principal balance of this Note then unpaid shall be due and payable at
the times as set forth in the Loan Agreement. Accrued unpaid interest shall be
due and payable at the times and at the interest rate as set forth in the Loan
Agreement until all principal and accrued interest owing on this Note shall
have been fully paid and satisfied. Any amount not paid when due and payable
hereunder shall, to the extent permitted by applicable Law, bear interest and
if applicable a late charge as set forth in the Loan Agreement. 

          2. Security;
Loan Documents. The security for this Note includes a Mortgage, Assignment
of Leases and Rents and Security Agreement in the amount of $[____________]
(which, as it may have been or may be amended, restated, modified or
supplemented from time to time, is herein called the “Mortgage”) dated
____________, 20___ from Borrower to Administrative Agent covering certain
property in Pelham Manor, Westchester County, New York described therein (the
“Property”). This Note, the Mortgage, the Loan Agreement and all other
documents now or hereafter securing, guaranteeing or executed in connection
with the loan evidenced by this Note (the “Loan”), are, as the same have been
or may be amended, restated, modified or supplemented from time to time, herein
sometimes called individually a “Loan Document” and together the “Loan
Documents”. 

          3. Defaults.

                    (a)
It shall be a default (“Default”) under this Note and each of the other Loan
Documents if (i) any principal, interest or other amount of money due under
this Note is not paid in full when due, regardless of how such amount may have
become due; (ii) any covenant, agreement, condition, representation or warranty
herein or in any other Loan Documents is not fully and timely performed,
observed or kept; or (iii) there shall occur any default or event of default
under the Mortgage or any other Loan Document. Upon the occurrence of a
Default,

Administrative Agent on behalf of Lenders shall have the rights to
declare the unpaid principal balance and accrued but unpaid interest on this
Note, and all other amounts due hereunder and under the other Loan Documents,
at once due and payable (and upon such declaration, the same shall be at once
due and payable), to foreclose any liens and security interests securing
payment hereof and to exercise any of its other rights, powers and remedies
under this Note, under any other Loan Document, or at Law or in equity. 

                    (b)
All of the rights, remedies, powers and privileges (together, “Rights”) of
Administrative Agent on behalf of Lenders provided for in this Note and in any
other Loan Document are cumulative of each other and of any and all other
Rights at Law or in equity. The resort to any Right shall not prevent the
concurrent or subsequent employment of any other appropriate Right. No single
or partial exercise of any Right shall exhaust it, or preclude any other or
further exercise thereof, and every Right may be exercised at any time and from
time to time. No failure by Administrative Agent or Lenders to exercise, nor
delay in exercising any Right, including but not limited to the right to
accelerate the maturity of this Note, shall be construed as a waiver of any
Default or as a waiver of any Right. Without limiting the generality of the
foregoing provisions, the acceptance by Lender from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Administrative
Agent or Lenders to accelerate the maturity of this Note or to exercise any
other Right at the time or at any subsequent time, or nullify any prior
exercise of any such Right, or (ii) constitute a waiver of the requirement of
punctual payment and performance or a novation in any respect. 

                    (c)
If any holder of this Note retains an attorney in connection with any Default
or at maturity or to collect, enforce or defend this Note or any other Loan
Document in any lawsuit or in any probate, reorganization, bankruptcy,
arbitration or other proceeding, or if Borrower sues any holder in connection
with this Note or any other Loan Document and does not prevail, then Borrower
agrees to pay to each such holder, in addition to principal, interest and any
other sums owing to Lenders hereunder and under the other Loan Documents, all
costs and expenses incurred by such holder in trying to collect this Note or in
any such suit or proceeding, including, without limitation, attorneys’ fees and
expenses, investigation costs and all court costs, whether or not suit is filed
hereon, whether before or after the Maturity Date, or whether in connection
with bankruptcy, insolvency or appeal, or whether collection is made against
Borrower or any guarantor or endorser or any other person primarily or
secondarily liable hereunder. 

          4. Heirs,
Successors and Assigns. The terms of this Note and of the other Loan
Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties. The foregoing sentence
shall not be construed to permit Borrower to assign the Loan except as
otherwise permitted under the Loan Documents. As further provided in the Loan
Agreement, a Lender may, at any time, sell, transfer, or assign all or a
portion of its interest in this Note, the Mortgage and the other Loan
Documents, as set forth in the Loan Agreement. 

          5. General
Provisions. Time is of the essence with respect to Borrower’s obligations
under this Note. If more than one person or entity executes this Note as
Borrower, all of said 

2

parties shall be jointly and severally liable for payment of the
indebtedness evidenced hereby. Borrower and all sureties, endorsers, guarantors
and any other party now or hereafter liable for the payment of this Note in
whole or in part, hereby severally (a) waive demand, presentment for payment,
notice of dishonor and of nonpayment, protest, notice of protest, notice of
intent to accelerate, notice of acceleration and all other notices (except any
notices which are specifically required by this Note or any other Loan
Document), filing of suit and diligence in collecting this Note or enforcing
any of the security herefor; (b) agree to any substitution, subordination,
exchange or release of any such security or the release of any party primarily
or secondarily liable hereon; (c) agree that neither Administrative Agent nor
any Lender shall be required first to institute suit or exhaust its remedies
hereon against Borrower or others liable or to become liable hereon or to
perfect or enforce its rights against them or any security herefor; (d) consent
to any extensions or postponements of time of payment of this Note for any
period or periods of time and to any partial payments, before or after
maturity, and to any other indulgences with respect hereto, without notice
thereof to any of them; and (e) submit (and waive all rights to object) to
non-exclusive personal jurisdiction of any state or federal court sitting in
the city and county, and venue in the city or county, in which payment is to be
made as specified in the first paragraph of Page 1 of this Note, for the
enforcement of any and all obligations under this Note and the Loan Documents;
(f) waive the benefit of all homestead and similar exemptions as to this Note;
(g) agree that their liability under this Note shall not be affected or
impaired by any determination that any security interest or lien taken by
Lender to secure this Note is invalid or unperfected; and (h) hereby subordinate
any and all rights against Borrower and any of the security for the payment of
this Note, whether by subrogation, agreement or otherwise, until this Note is
paid in full. A determination that any provision of this Note is unenforceable
or invalid shall not affect the enforceability or validity of any other
provision and the determination that the application of any provision of this
Note to any person or circumstance is illegal or unenforceable shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances. This Note may not be amended except in a writing
specifically intended for such purpose and executed by the party against whom
enforcement of the amendment is sought. Captions and headings in this Note are
for convenience only and shall be disregarded in construing it. THIS NOTE, AND
ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY NEW YORK LAW
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED
STATES FEDERAL LAW. 

          6. Notices.
Any notice, request, or demand to or upon Borrower or Lender shall be deemed to
have been properly given or made when delivered in accordance with the Loan
Agreement. 

          7. No
Usury. It is expressly stipulated and agreed to be the intent of Borrower,
Administrative Agent and all Lenders at all times to comply with applicable
state Law or applicable United States federal Law (to the extent that it
permits a Lender to contract for, charge, take, reserve, or receive a greater
amount of interest than under state Law) and that this Section shall control
every other covenant and agreement in this Note and the other Loan Documents.
If applicable state or federal Law should at any time be judicially interpreted
so as to render usurious any amount called for under this Note or under any of
the other Loan Documents, or contracted for, charged, taken, reserved, or
received with respect to the Loan, or if Administrative Agent’s exercise of the
option to accelerate the Maturity Date, or if any 

3

prepayment by Borrower results in Borrower having paid any interest in
excess of that permitted by applicable Law, then it is Administrative Agent’s
and each Lender’s express intent that all excess amounts theretofore collected
by Administrative Agent or any Lender shall be credited on the principal
balance of this Note and all other indebtedness and the provisions of this Note
and the other Loan Documents shall immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new documents, so as to comply with the
applicable Law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder or thereunder. All sums paid or agreed to be
paid to Lenders for the use, forbearance, or detention of the Loan shall, to
the extent permitted by applicable Law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so
that the rate or amount of interest on account of the Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to the Loan for
so long as the Loan is outstanding. 

                    THE
LOAN DOCUMENTS 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 ORAL AGREEMENTS BETWEEN THE PARTIES.

[Remainder of page intentionally left blank]

4

                    IN
WITNESS WHEREOF, Borrower has duly executed this Note under seal as of the date
first above written. 

	
 

	
 

	
 

	
 

	
P/A-ACADIA
PELHAM MANOR, LLC, a

Delaware limited liability company

	
 

	
 

	
 

	
 

	
By

	
 

	
 

	
 

	

	
 

	
 

	
Robert Masters

	
 

	
 

	
Senior Vice President

5

EXHIBIT “N”

SCHEDULE OF LENDERS AND OTHER PARTIES

BANK OF AMERICA, N.A., as Administrative Agent: 

	
 

	
 

	
 

	
Notices:

	
 

	
 

	
 

	
Bank of
America, N.A.

	
One Bryant
Park, 35th Floor

	
New York,
New York 10036

	
Attention:

	
Mr. Gregory
Egli

	
 

	
Telephone:

	
646-855-2630

	
 

	
Facsimile:

	
212-293-8197

	
 

	
Email:

	
gregory.w.egli@bankofamerica.com

	
 

	
Payment
Instructions:

	
 

	
ABA No.:

	
026009593

	
Account No.:

	
GL#-1366211723000

	
Attention:

	
Angela Kelly

	
Reference:

	
P/A Acadia
Pelham Manor, LLC #01254436

	
 

	
 

	
 

	
BANK OF
AMERICA, N.A., as Lender:

	
 

	
 

	
 

	
 

	
Commitment
Amount:

	
$2,446,298.11

	
 

	
Pro Rata
Share:

	
100%

	
 

	
 

	
 

	
Domestic and
LIBOR Lending Office:

	
 

	
 

	
 

	
Bank of
America, N.A.

	
One Bryant
Park, 35th Floor

	
New York,
New York 10036

	
Attention:

	
Mr. Gregory
Egli

	
 

	
Telephone:

	
646-855-2630

	
 

	
Facsimile:

	
212-293-8197

	
 

	
Email:

	
gregory.w.egli@bankofamerica.com

	
 

	
 

	
 

	
Notices:

	
 

	
 

	
Bank of
America, N.A.

	
One Bryant
Park, 35th Floor

	
New York,
New York 10036

	
Attention:

	
Mr. Gregory
Egli

	
 

	
Telephone:

	
646-855-2630

	
 

	
Facsimile:

	
212-293-8197

	
 

	
Email:

	
gregory.w.egli@bankofamerica.com

	
 

	
 

	
Payment
Instructions:

	
 

	
 

	
ABA No.:

	
026009593

	
Account No.:

	
GL#-1366211723000

	
Attention:

	
Angela Kelly

	
Reference:

	
P/A Acadia Pelham Manor, LLC #01254436

2

EXHIBIT “O”

SWAP CONTRACTS

                    1.
Swap Documentation. Within the timeframes required by Lender and Swap
Counterparty, Borrower shall deliver to Swap Counterparty the following
documents and other items, executed and acknowledged as appropriate, all in
form and substance satisfactory to Lender and Swap Counterparty: (a) Master Agreement
in the form published by the International Swaps and Derivatives Association,
Inc. and related schedule in the form agreed upon between Borrower (or its
Affiliate) and Swap Counterparty; (b) a confirmation under the foregoing, if
applicable; (c) a Guaranty; (d) if Borrower (or its Affiliate) is anything
other than a natural person, evidence of due authorization to enter into
transactions under the foregoing Swap Contract with Swap Counterparty, together
with evidence of due authorization and execution of any Swap Contract; and such
other title endorsements, documents, instruments and agreements as Lender and
Swap Counterparty may require to evidence satisfaction of the conditions set
forth in this Section, including a swap endorsement to Lender’s title policy in
form and substance satisfactory to Lender. 

                    2.
Conveyance and Security Interest. To secure Borrower’s Obligations,
Borrower hereby transfers, assigns and transfers to Lender, and grants to
Lender a security interest in, all of Borrower’s right, title and interest, but
not its obligations, duties or liabilities for any breach, in, under and to the
Swap Contract, any and all amounts received by Borrower in connection therewith
or to which Borrower is entitled thereunder, and all proceeds of the foregoing.
All amounts payable to Borrower under the Swap Contract shall be paid to Lender
and shall be applied to pay interest or other amounts under the Loan. 

                    3. Intentionally
Omitted. 

                    4.
Cross-Default. It shall be a Default under this Agreement if any default
(beyond any applicable notice or cure periods) occurs as defined under any Swap
Contract as to which Borrower (or its Affiliate) is the Defaulting Party, or if
any Termination Event occurs under any Swap Contract as to which Borrower (or
its Affiliate) is an Affected Party. As used in this Section, the terms
“Defaulting Party”, “Termination Event” and “Affected Party” have the meanings
ascribed to them in the Swap Contract. 

                    5.
Remedies; Cure Rights. In addition to any and all other remedies to
which Lender and Swap Counterparty are entitled at law or in equity, Swap
Counterparty shall have the right, to the extent so provided in any Swap
Contract or any Master Agreement relating thereto, (a) to declare an event of
default, termination event or other similar event thereunder and to designate
an Early Termination Date as defined under the Master Agreement, and (b) to
determine net termination amounts in accordance with the Swap Contract and to
setoff amounts between Swap Contracts. Lender shall have the right at any time
(but shall have no obligation) to take in its name or in the name of Borrower
(or its Affiliate) such action as Lender may at any time determine to be
necessary or advisable to cure any default under any Swap Contract or to
protect the rights of Borrower (or its Affiliate) or Swap Counterparty
thereunder; provided, however, that before the occurrence of a Default under
this Agreement, Lender shall give prior 

i

written notice to Borrower before taking any such action. For this
purpose, Borrower hereby constitutes Lender its true and lawful
attorney-in-fact with full power of substitution, which power of attorney is
coupled with an interest and irrevocable, to exercise, at the election of
Lender, any and all rights and remedies of Borrower (or its Affiliate) under
the Swap Contract, including making any payments thereunder and consummating
any transactions contemplated thereby, and to take any action that Lender may
deem proper in order to collect, assert or enforce any claim, right or title,
in and to the Swap Contract hereby assigned and conveyed, and generally to take
any and all such action in relation thereto as Lender shall deem advisable.
Lender shall not incur any liability if any action so taken by Lender or on its
behalf shall prove to be inadequate or invalid. Borrower expressly understands
and agrees that Lender is not hereby assuming any duties or obligations of
Borrower (or its Affiliate) to make payments to Swap Counterparty under any
Swap Contract or under any other Loan Document. Such payment duties and
obligations remain the responsibility of Borrower (or its Affiliate)
notwithstanding any language in this Agreement. 

ii

NOTE

	
  

 	
  

 
	
 $2,446,298.11

 	
 December 1, 2010

 

               FOR
VALUE RECEIVED, P/A-ACADIA PELHAM MANOR LLC (“Borrower”, whether one or more)
hereby promises to pay to the order of Bank of America, N.A. (“Lender”) under
that certain Loan Agreement (defined below) among Borrower, Bank of America
N.A., a national banking association and administrative agent (together with
any and all of its successors and assigns, “Administrative Agent”) for the
benefit of Lenders from time to time a party to that certain Loan Agreement
(the “Loan Agreement”) dated of even date herewith, without offset, in
immediately available funds in lawful money of the United States of America, at
Administrative Agent’s Office as defined in the Loan Agreement, the principal
sum of Two Million Four Hundred Forty-Six Thousand Two Hundred Ninety-Eight and
11/100 Dollars ($2,446,298.11) (or the unpaid balance of all principal advanced
against this Note, if that amount is less), together with interest on the
unpaid principal balance of this Note from day to day outstanding as
hereinafter provided.

          1.
Note; Interest; Payment Schedule and Maturity Date. This Note is one of
the Notes referred to in Loan Agreement and is entitled to the benefits
thereof. The entire principal balance of this Note then unpaid shall be due and
payable at the times as set forth in the Loan Agreement. Accrued unpaid
interest shall be due and payable at the times and at the interest rate as set
forth in the Loan Agreement until all principal and accrued interest owing on
this Note shall have been fully paid and satisfied. Any amount not paid when
due and payable hereunder shall, to the extent permitted by applicable Law,
bear interest and if applicable a late charge as set forth in the Loan
Agreement.

          2.
Security; Loan Documents. The security for this Note includes a
Mortgage, Assignment of Leases and Rents and Security Agreement in the amount
of $2,446,298.11 (which, as it may have been or may be amended, restated,
modified or supplemented from time to time, is herein called the “Mortgage”)
dated as of the date hereof from Borrower to Administrative Agent covering
certain property in Pelham Manor, Westchester County, New York described
therein (the “Property”). This Note, the Mortgage, the Loan Agreement and all
other documents now or hereafter securing, guaranteeing or executed in
connection with the loan evidenced by this Note (the “Loan”), are, as the same
have been or may be amended, restated, modified or supplemented from time to
time, herein sometimes called individually a “Loan Document” and together the
“Loan Documents”.

          3.
Defaults.

               (a)
It shall be a default (“Default”) under this Note and each of the other Loan
Documents if (i) any principal, interest or other amount of money due under
this Note is not paid in full when due, regardless of how such amount may have
become due; (ii) any covenant, agreement, condition, representation or warranty
herein or in any other Loan Documents is not fully and timely performed,
observed or kept; or (iii) there shall occur any default or event of default
under the Mortgage or any other Loan Document. Upon the occurrence of a
Default, Administrative Agent on behalf of Lenders shall have the rights to
declare the unpaid principal 

balance and accrued but
unpaid interest on this Note, and all other amounts due hereunder and under the
other Loan Documents, at once due and payable (and upon such declaration, the
same shall be at once due and payable), to foreclose any liens and security
interests securing payment hereof and to exercise any of its other rights,
powers and remedies under this Note, under any other Loan Document, or at Law
or in equity.

               (b)
All of the rights, remedies, powers and privileges (together, “Rights”) of
Administrative Agent on behalf of Lenders provided for in this Note and in any
other Loan Document are cumulative of each other and of any and all other
Rights at Law or in equity. The resort to any Right shall not prevent the
concurrent or subsequent employment of any other appropriate Right. No single
or partial exercise of any Right shall exhaust it, or preclude any other or
further exercise thereof, and every Right may be exercised at any time and from
time to time. No failure by Administrative Agent or Lenders to exercise, nor
delay in exercising any Right, including but not limited to the right to
accelerate the maturity of this Note, shall be construed as a waiver of any
Default or as a waiver of any Right. Without limiting the generality of the
foregoing provisions, the acceptance by Lender from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Administrative
Agent or Lenders to accelerate the maturity of this Note or to exercise any
other Right at the time or at any subsequent time, or nullify any prior
exercise of any such Right, or (ii) constitute a waiver of the requirement of
punctual payment and performance or a novation in any respect.

               (c)
If any holder of this Note retains an attorney in connection with any Default
or at maturity or to collect, enforce or defend this Note or any other Loan
Document in any lawsuit or in any probate, reorganization, bankruptcy,
arbitration or other proceeding, or if Borrower sues any holder in connection
with this Note or any other Loan Document and does not prevail, then Borrower
agrees to pay to each such holder, in addition to principal, interest and any
other sums owing to Lenders hereunder and under the other Loan Documents, all
costs and expenses incurred by such holder in trying to collect this Note or in
any such suit or proceeding, including, without limitation, attorneys’ fees and
expenses, investigation costs and all court costs, whether or not suit is filed
hereon, whether before or after the Maturity Date, or whether in connection
with bankruptcy, insolvency or appeal, or whether collection is made against Borrower
or any guarantor or endorser or any other person primarily or secondarily
liable hereunder.

          4.
Heirs, Successors and Assigns. The terms of this Note and of the other
Loan Documents shall bind and inure to the benefit of the heirs, devisees, representatives,
successors and assigns of the parties. The foregoing sentence shall not be
construed to permit Borrower to assign the Loan except as otherwise permitted
under the Loan Documents. As further provided in the Loan Agreement, a Lender
may, at any time, sell, transfer, or assign all or a portion of its interest in
this Note, the Mortgage and the other Loan Documents, as set forth in the Loan
Agreement.

          5.
General Provisions. Time is of the essence with respect to Borrower’s
obligations under this Note. If more than one person or entity executes this
Note as Borrower, all of said parties shall be jointly and severally liable for
payment of the indebtedness evidenced hereby. 

2

Borrower and all
sureties, endorsers, guarantors and any other party now or hereafter liable for
the payment of this Note in whole or in part, hereby severally (a) waive
demand, presentment for payment, notice of dishonor and of nonpayment, protest,
notice of protest, notice of intent to accelerate, notice of acceleration and
all other notices (except any notices which are specifically required by this
Note or any other Loan Document), filing of suit and diligence in collecting
this Note or enforcing any of the security herefor; (b) agree to any
substitution, subordination, exchange or release of any such security or the
release of any party primarily or secondarily liable hereon; (c) agree that
neither Administrative Agent nor any Lender shall be required first to
institute suit or exhaust its remedies hereon against Borrower or others liable
or to become liable hereon or to perfect or enforce its rights against them or
any security herefor; (d) consent to any extensions or postponements of time of
payment of this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences with respect
hereto, without notice thereof to any of them; and (e) submit (and waive all
rights to object) to non-exclusive personal jurisdiction of any state or
federal court sitting in the city and county, and venue in the city or county,
in which payment is to be made as specified in the first paragraph of Page 1 of
this Note, for the enforcement of any and all obligations under this Note and
the Loan Documents; (f) waive the benefit of all homestead and similar
exemptions as to this Note; (g) agree that their liability under this Note
shall not be affected or impaired by any determination that any security
interest or lien taken by Lender to secure this Note is invalid or unperfected;
and (h) hereby subordinate any and all rights against Borrower and any of the
security for the payment of this Note, whether by subrogation, agreement or
otherwise, until this Note is paid in full. A determination that any provision
of this Note is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Note to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances. This Note may not be amended
except in a writing specifically intended for such purpose and executed by the
party against whom enforcement of the amendment is sought. Captions and
headings in this Note are for convenience only and shall be disregarded in
construing it. THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION,
SHALL BE GOVERNED BY NEW YORK LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS
PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

          6.
Notices. Any notice, request, or demand to or upon Borrower or Lender
shall be deemed to have been properly given or made when delivered in
accordance with the Loan Agreement.

          7.
No Usury. It is expressly stipulated and agreed to be the intent of
Borrower, Administrative Agent and all Lenders at all times to comply with
applicable state Law or applicable United States federal Law (to the extent
that it permits a Lender to contract for, charge, take, reserve, or receive a
greater amount of interest than under state Law) and that this Section shall
control every other covenant and agreement in this Note and the other Loan
Documents. If applicable state or federal Law should at any time be judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved, or received with respect to the Loan, or if Administrative Agent’s
exercise of the option to accelerate the Maturity Date, or if any prepayment by
Borrower results in Borrower having paid any interest in excess of that
permitted 

3

by applicable Law, then
it is Administrative Agent’s and each Lender’s express intent that all excess
amounts theretofore collected by Administrative Agent or any Lender shall be
credited on the principal balance of this Note and all other indebtedness and
the provisions of this Note and the other Loan Documents shall immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new documents, so as to
comply with the applicable Law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to
be paid to Lenders for the use, forbearance, or detention of the Loan shall, to
the extent permitted by applicable Law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so that
the rate or amount of interest on account of the Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to the Loan for
so long as the Loan is outstanding.

               THE
LOAN DOCUMENTS 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 ORAL
AGREEMENTS BETWEEN THE PARTIES.

[Remainder of page
intentionally left blank]

4

               IN
WITNESS WHEREOF, Borrower has duly executed this Note under seal as of the date
first above written.

	
  

 	
  

 	
  

 
	
  

 	
 P/A-ACADIA PELHAM MANOR, LLC, a

 
	
  

 	
 Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ Robert Masters

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Robert Masters

 
	
  

 	
  

 	
 Senior Vice President

 

NOTE

	
  

 	
  

 
	
 $31,553,701.89

 	
 December 1, 2010

 

               FOR
VALUE RECEIVED, P/A-ACADIA PELHAM MANOR LLC (“Borrower”, whether one or more)
hereby promises to pay to the order of Bank of America, N.A. (“Lender”) under
that certain Loan Agreement (defined below) among Borrower, Bank of America
N.A., a national banking association and administrative agent (together with
any and all of its successors and assigns, “Administrative Agent”) for the
benefit of Lenders from time to time a party to that certain Transfer Loan
Agreement (the “Loan Agreement”) dated of even date herewith, without offset,
in immediately available funds in lawful money of the United States of America,
at Administrative Agent’s Office as defined in the Loan Agreement, the
principal sum of Thirty-One Million Five Hundred Fifty-Three Thousand Seven
Hundred One and 89/100 Dollars ($31,553,701.89) (or the unpaid balance of all
principal advanced against this Note, if that amount is less), together with
interest on the unpaid principal balance of this Note from day to day
outstanding as hereinafter provided.

          1.
Note; Interest; Payment Schedule and Maturity Date. This Note is one of
the Notes referred to in Loan Agreement and is entitled to the benefits
thereof. The entire principal balance of this Note then unpaid shall be due and
payable at the times as set forth in the Loan Agreement. Accrued unpaid
interest shall be due and payable at the times and at the interest rate as set
forth in the Loan Agreement until all principal and accrued interest owing on
this Note shall have been fully paid and satisfied. Any amount not paid when
due and payable hereunder shall, to the extent permitted by applicable Law,
bear interest and if applicable a late charge as set forth in the Loan
Agreement.

          2.
Security; Loan Documents. The security for this Note includes a
consolidated mortgage in the amount of $31,553,701.89 (which, as it may have
been or may be amended, restated, modified or supplemented from time to time,
is herein called the “Mortgage”) dated as of the date hereof from Borrower to
Administrative Agent covering certain property in Pelham Manor, Westchester
County, New York described therein (the “Property”). This Note, the Mortgage,
the Loan Agreement and all other documents now or hereafter securing,
guaranteeing or executed in connection with the loan evidenced by this Note
(the “Loan”), are, as the same have been or may be amended, restated, modified
or supplemented from time to time, herein sometimes called individually a “Loan
Document” and together the “Loan Documents”.

          3.
Defaults.

               (a)
It shall be a default (“Default”) under this Note and each of the other Loan
Documents if (i) any principal, interest or other amount of money due under
this Note is not paid in full when due, regardless of how such amount may have
become due; (ii) any covenant, agreement, condition, representation or warranty
herein or in any other Loan Documents is not fully and timely performed,
observed or kept; or (iii) there shall occur any default or event of default
under the Mortgage or any other Loan Document. Upon the occurrence of a
Default, Administrative Agent on behalf of Lenders shall have the rights to
declare the unpaid principal balance and accrued but unpaid interest on this
Note, and all other amounts due hereunder and 

under the other Loan
Documents, at once due and payable (and upon such declaration, the same shall
be at once due and payable), to foreclose any liens and security interests
securing payment hereof and to exercise any of its other rights, powers and
remedies under this Note, under any other Loan Document, or at Law or in
equity.

               (b)
All of the rights, remedies, powers and privileges (together, “Rights”) of
Administrative Agent on behalf of Lenders provided for in this Note and in any
other Loan Document are cumulative of each other and of any and all other
Rights at Law or in equity. The resort to any Right shall not prevent the
concurrent or subsequent employment of any other appropriate Right. No single
or partial exercise of any Right shall exhaust it, or preclude any other or
further exercise thereof, and every Right may be exercised at any time and from
time to time. No failure by Administrative Agent or Lenders to exercise, nor
delay in exercising any Right, including but not limited to the right to
accelerate the maturity of this Note, shall be construed as a waiver of any
Default or as a waiver of any Right. Without limiting the generality of the
foregoing provisions, the acceptance by Lender from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Administrative
Agent or Lenders to accelerate the maturity of this Note or to exercise any
other Right at the time or at any subsequent time, or nullify any prior
exercise of any such Right, or (ii) constitute a waiver of the requirement of
punctual payment and performance or a novation in any respect.

               (c)
If any holder of this Note retains an attorney in connection with any Default
or at maturity or to collect, enforce or defend this Note or any other Loan
Document in any lawsuit or in any probate, reorganization, bankruptcy,
arbitration or other proceeding, or if Borrower sues any holder in connection
with this Note or any other Loan Document and does not prevail, then Borrower
agrees to pay to each such holder, in addition to principal, interest and any
other sums owing to Lenders hereunder and under the other Loan Documents, all
costs and expenses incurred by such holder in trying to collect this Note or in
any such suit or proceeding, including, without limitation, attorneys’ fees and
expenses, investigation costs and all court costs, whether or not suit is filed
hereon, whether before or after the Maturity Date, or whether in connection
with bankruptcy, insolvency or appeal, or whether collection is made against
Borrower or any guarantor or endorser or any other person primarily or
secondarily liable hereunder.

          4.
Heirs, Successors and Assigns. The terms of this Note and of the other
Loan Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties. The foregoing sentence
shall not be construed to permit Borrower to assign the Loan except as
otherwise permitted under the Loan Documents. As further provided in the Loan
Agreement, a Lender may, at any time, sell, transfer, or assign all or a
portion of its interest in this Note, the Mortgage and the other Loan
Documents, as set forth in the Loan Agreement.

          5.
General Provisions. Time is of the essence with respect to Borrower’s
obligations under this Note. If more than one person or entity executes this
Note as Borrower, all of said parties shall be jointly and severally liable for
payment of the indebtedness evidenced hereby. Borrower and all sureties,
endorsers, guarantors and any other party now or hereafter liable for 

2

the payment of this Note
in whole or in part, hereby severally (a) waive demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notices
(except any notices which are specifically required by this Note or any other
Loan Document), filing of suit and diligence in collecting this Note or
enforcing any of the security herefor; (b) agree to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; (c) agree that neither
Administrative Agent nor any Lender shall be required first to institute suit
or exhaust its remedies hereon against Borrower or others liable or to become
liable hereon or to perfect or enforce its rights against them or any security
herefor; (d) consent to any extensions or postponements of time of payment of
this Note for any period or periods of time and to any partial payments, before
or after maturity, and to any other indulgences with respect hereto, without
notice thereof to any of them; and (e) submit (and waive all rights to object)
to non-exclusive personal jurisdiction of any state or federal court sitting in
the city and county, and venue in the city or county, in which payment is to be
made as specified in the first paragraph of Page 1 of this Note, for the
enforcement of any and all obligations under this Note and the Loan Documents;
(f) waive the benefit of all homestead and similar exemptions as to this Note;
(g) agree that their liability under this Note shall not be affected or
impaired by any determination that any security interest or lien taken by
Lender to secure this Note is invalid or unperfected; and (h) hereby
subordinate any and all rights against Borrower and any of the security for the
payment of this Note, whether by subrogation, agreement or otherwise, until
this Note is paid in full. A determination that any provision of this Note is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision and the determination that the application of any provision of
this Note to any person or circumstance is illegal or unenforceable shall not
affect the enforceability or validity of such provision as it may apply to
other persons or circumstances. This Note may not be amended except in a
writing specifically intended for such purpose and executed by the party
against whom enforcement of the amendment is sought. Captions and headings in
this Note are for convenience only and shall be disregarded in construing it.
THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED
BY NEW YORK LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND
APPLICABLE UNITED STATES FEDERAL LAW.

          6.
Notices. Any notice, request, or demand to or upon Borrower or Lender
shall be deemed to have been properly given or made when delivered in
accordance with the Loan Agreement.

          7.
No Usury. It is expressly stipulated and agreed to be the intent of
Borrower, Administrative Agent and all Lenders at all times to comply with
applicable state Law or applicable United States federal Law (to the extent
that it permits a Lender to contract for, charge, take, reserve, or receive a
greater amount of interest than under state Law) and that this Section shall
control every other covenant and agreement in this Note and the other Loan
Documents. If applicable state or federal Law should at any time be judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved, or received with respect to the Loan, or if Administrative Agent’s
exercise of the option to accelerate the Maturity Date, or if any prepayment by
Borrower results in Borrower having paid any interest in excess of that
permitted by applicable Law, then it is Administrative Agent’s and each
Lender’s express intent that all 

3

excess amounts
theretofore collected by Administrative Agent or any Lender shall be credited
on the principal balance of this Note and all other indebtedness and the
provisions of this Note and the other Loan Documents shall immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new documents, so as to
comply with the applicable Law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to
be paid to Lenders for the use, forbearance, or detention of the Loan shall, to
the extent permitted by applicable Law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so
that the rate or amount of interest on account of the Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to the Loan for
so long as the Loan is outstanding.

               THE
LOAN DOCUMENTS 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 ORAL
AGREEMENTS BETWEEN THE PARTIES.

[Remainder of page
intentionally left blank]

4

               IN
WITNESS WHEREOF, Borrower has duly executed this Note under seal as of the date
first above written.

	
  

 	
  

 	
  

 
	
  

 	
 P/A-ACADIA PELHAM MANOR, LLC, a

 
	
  

 	
 Delaware limited liability company

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Robert Masters

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Robert Masters

 
	
  

 	
  

 	
 Senior Vice President

 

	
  

 
	
 NOTE CONSOLIDATION AND
 MODIFICATION AGREEMENT

 
	
 (Transfer Loan)

 

               NOTE
CONSOLIDATION AND MODIFICATION AGREEMENT made as of the 1st day of December,
2010 by and between BANK OF AMERICA, N.A., as Administrative Agent
(“Administrative Agent”), pursuant to the Loan Agreement defined below, having
an office at One Bryant Park, 35th Floor, New York, New York 10036 (“Lender”),
and P/A-ACADIA PELHAM MANOR, LLC, a Delaware limited liability company having
an address at c/o Acadia Realty Trust, 1311 Mamaroneck Avenue, Suite 260, White
Plains, New York 10605 (“Mortgagor”).

               Administrative
Agent, on behalf of Lenders (as defined below), is now the present owner and
holder of certain note(s) (as the same may have been modified, collectively the
“Notes”) secured by the mortgages more particularly described on Exhibit A hereto (collectively, the “Mortgages”). The Notes evidence an aggregate
outstanding principal indebtedness of $31,553,701.89.

               Administrative
Agent, on behalf of Lender, acquired the Notes pursuant to that certain
Transfer Loan Agreement dated as of the date hereof (the “Loan Agreement”) by
and between Administrative Agent, Borrower, Bank of America, N.A., as Lender
(“BofA”; BofA, together with each other entity which may become a Lender
pursuant to the Loan Agreement, collectively, “Lenders”).

               Administrative
Agent, on behalf of Lenders, the holder of the Notes, and Borrower, the owner
of the premises encumbered by the Mortgage, have agreed to consolidated, modify
and restate the terms of the Note in the manner hereinafter set forth.

               NOW,
THEREFORE, in consideration of mutual promises and agreements contained herein,
the parties hereto covenant and agree as follows:

                    1.
Borrower hereby acknowledges that on the date hereof the outstanding principal
balance of the Notes is $31,553,701.89 (the “Indebtedness”).

                    2.
All of the terms, covenants and conditions of the Notes are hereby
consolidated, modified and restated in their entirety on the terms and
conditions set forth in the Loan Agreement; and the Notes as consolidated,
modified and restated in their entirety shall be evidenced by one or more
replacement transfer loans note in the aggregate principal amount of
$31,553,701.89, issued as a “Note” under the Loan Agreement (collectively, the
“Replacement Note”).

                    3.
Borrower acknowledges that it is indebted to Lender in accordance with the
Replacement Note and assumes, covenants and agrees to pay the Indebtedness in
accordance with the terms, covenants and conditions of the Loan Agreement and
the Replacement Note.

                    4.
Borrower warrants and represents that as of the date hereof there exist no
counterclaims, offsets or defenses with respect to its obligations under the
Replacement Note.

                    5.
The terms and provisions hereof shall be binding upon and inure to the benefit
of the parties hereto, their heirs, representatives, successors and assigns.

                    6.
This Agreement and the rights and obligations of the parties hereto shall in
all respects be governed by, and construed and enforced in accordance with, the
laws of the State of New York.

2

                    7.
This Agreement may be executed in counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.

[Remainder of page
intentionally left blank]

3

               IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

	
  

 	
  

 	
  

 
	
  

 	
 BANK OF AMERICA, N.A.

 
	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Gregory Egli

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Gregory Egli

 
	
  

 	
  

 	
 Senior Vice President

 
	
  

 	
  

 	
  

 
	
  

 	
 P/A-ACADIA PELHAM MANOR, LLC, a 

 Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Robert Masters

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Robert Masters

 
	
  

 	
  

 	
 Senior Vice President

 

EXHIBIT A

Mortgage Schedule

	
  

 	
  

 
	
 1.

 	
 Building Loan Fee and
 Leasehold Loan Mortgage, Assignment of Leases and Rents and Security
 Agreement in the amount of $23,026,906.60 made by Mortgagor to Mortgage
 Electronic Registration Systems, Inc. (“MERS”) as nominee of Bear Stearns
 Commercial Mortgage, Inc. (“Bear Stearns”) dated December 10, 2007 and
 recorded in the office of the County Clerk of Westchester County, New York
 (the “Office”) on January 23, 2008 as Control No. 480160019 (the “Original
 BL Mortgage”) upon which a mortgage recording tax of $299,359.70 was duly paid,
 which Original BL Mortgage was assigned by MERS as a nominee of U.S. Bank
 National Association, not individually but solely as trustee for the Maiden
 Lane Commercial Mortgage-Backed Securities Trust 2008-1, as successor to Bear
 Stearns, to Mortgagee by Assignment of Building Loan Fee and Leasehold
 Mortgage and Security Agreement dated December 1, 2010 and to be
 recorded in the Office immediately prior hereto. Outstanding principal
 amount: $20,022,204.11

 
	
  

 	
  

 
	
 2.

 	
 Project Loan Mortgage,
 Assignment of Leases and Rents and Security Agreement in the amount of
 $12,637,093.40 made by Mortgagor to MERS as nominee of Bear Stearns dated
 December 10, 2007 and recorded in the Office on January 23, 2008 as
 Control No. 480160029 (the “Original PL Mortgage”) upon which a mortgage recording tax of
 $164,282.30 was duly paid, which Original PL Mortgage was assigned
 by MERS as a nominee of U.S. Bank National Association, not individually but
 solely as trustee for the Maiden Lane Commercial Mortgage-Backed Securities
 Trust 2008-1, as successor to Bear Stearns, to Mortgagee by Assignment of
 Project Loan Fee and Leasehold Mortgage and Security Agreement dated
 December 1, 2010 and to be recorded in the Office immediately prior
 hereto. Outstanding principal amount: $11,531,497.78

 

	
  

 	
  

 
	
 LOCATION:

 	
 2 Penn Place

 
	
 VILLAGE:

 	
 Pelham Manor

 
	
 TOWN:

 	
 Pelham

 
	
 COUNTY:

 	
 Westchester

 
	
 SECTION:

 	
 166.26

 
	
 BLOCK:

 	
 1

 
	
 LOTS:

 	
 8.1, 8.2 and 8.3

 
	
  

 	
  

 
	

 

 

Date: As of
December 1, 2010

FEE AND LEASEHOLD
MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT

(“this Mortgage”)

FROM

P/A-ACADIA PELHAM
MANOR, LLC,

a limited liability company organized and existing under the laws of Delaware

(“Mortgagor”)

	
  

 	
  

 
	
 Address and Chief

 	
  

 
	
 Executive Office of Mortgagor:

 	
 c/o Acadia Realty Trust

 
	
  

 	
 1311 Mamaroneck Avenue, Suite 260

 
	
  

 	
 White Plains, New York 10605

 

TO

BANK OF AMERICA,
N.A.,

a national banking association,

as Administrative Agent

(“Mortgagee”)

	
  

 	
  

 	
  

 
	
 Address of Mortgagee:

 	
 One Bryant Park, 35th
 Floor

 	
  

 
	
  

 	
 New York, New York
 10036

 	
  

 

Mortgage Amount:
$2,446,298.11

	
  

 
	

 

 

This instrument
prepared by, and after recording please return to:

Schiff Hardin LLP

900 Third Avenue, 23rd Floor

New York, New York 10022

Attention: Paul G. Mackey, Esq.

THE AMOUNT OF THIS
MORTGAGE IS $2,446,298.11.

FEE AND LEASEHOLD
MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT

          THIS
FEE AND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (this “Mortgage”) is made as of the 1st day of December, 2010, by
P/A-ACADIA PELHAM MANOR, LLC, a Delaware limited liability company,
(“Mortgagor”), in favor of and for the benefit of BANK OF AMERICA, N.A., a
national banking association, as Administrative Agent for itself and other
lenders pursuant to the Loan Agreement defined below (together with its
successors and assigns, “Mortgagee”).

ARTICLE 1

Definitions;
Granting Clauses; Secured Indebtedness

          Section
1.1. Principal Secured. This Mortgage secures the aggregate principal
amount of up to $2,446,298.11 plus such additional amounts as Mortgagee may
from time to time advance subsequent to a default by Mortgagor pursuant to the
terms and conditions of this Mortgage, with respect to an obligation secured by
a lien or encumbrance prior to the lien of this Mortgage or for the protection
of the lien of this Mortgage, together with interest thereon. In the event that
all or any part of the Premises is located in the State of New York, then,
notwithstanding the language in the Granting Clause and Section 2.2 or anything
else contained herein to the contrary, the maximum amount secured hereby at
execution or which under any contingency may become secured hereby at any time
hereafter is the Mortgage Amount and all interest, additional interest and late
payment and prepayment charges in respect thereof, plus all amounts expended by
Mortgagee following a default hereunder in respect of insurance premiums and
real estate taxes, and all legal costs or expenses of collection of the debt
secured hereby or of the defense or prosecution of the rights and lien created
hereby.

          Section
1.2. Definitions. 

               (a)
In addition to other terms defined herein, each of the following terms
shall have the meaning assigned to it, such definitions to be applicable
equally to the singular and the plural forms of such terms and to all genders:

               “Additional
Interest”: Additional Interest as defined in the Loan Agreement.

               “Fee
Parcel” means the portion of the Land identified on Exhibit A as
Parcel 1.

               “Ground
Lease” means that certain Ground Lease dated October 1, 2004 between
Ground Lessor, as landlord, and Ground Lessor, as tenant, as to which a
Memorandum of Ground Lease dated October 1, 2004 between Ground Lessor and
Borrower was recorded in the office of the Clerk of the County of Westchester
on February 23, 2004 in Control No. 443010050, as 

modified by letter
agreement dated January 30, 2006 between Ground Lessor and Borrower, as
modified by First Amendment to Ground Lease dated June 28, 2006 between
Ground Lessor and Borrower, as modified by letter agreement dated
November 28, 2006 between Ground Lessor and Borrower and as modified by
Second Amendment to Ground Lease dated December 6, 2007 between Ground
Lessor and Borrower.

               “Ground
Lease Parcels” means the portion of the Land identified on Exhibit A
as Parcels 2 and 3.

               “Ground
Lessor” means, collectively, Rusciano & Son Corp. and Secor Lane Corp.
and their successors and assigns as owners of the fee interest in the Land.

               “Loan
Agreement”: Loan Agreement dated of even date herewith between Mortgagor
and Mortgagee, as it may be from time to time amended, restated, modified,
extended or supplemented.

               “Mortgagor”:
P/A-Acadia Pelham Manor, LLC, a Delaware limited liability company, whose
address is c/o Acadia Realty Trust, 1311 Mamaroneck Avenue, Suite 260, White
Plains, New York 10605, and its permitted successors and assigns. 

               “Promissory
Note”: Collectively, the Notes, as defined in the Loan Agreement.

               Capitalized
terms used herein which are not otherwise defined but which are defined in the
Loan Agreement shall have the meaning ascribed to them in the Loan Agreement.

          Section
1.3. Granting Clause. In consideration of the provisions of this Mortgage
and of the sum of $10.00 cash in hand paid and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by
Mortgagor, Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER,
ASSIGN, MORTGAGE, HYPOTHECATE, PLEDGE, DEPOSIT and SET OVER to Mortgagee, with
all estate, right, title and interest of Mortgagor in and to the Property (as
hereinafter defined), whether now owned or held or hereafter acquired by
Mortgagor, to have and hold the Property unto Mortgagee, its successors and
assigns forever; and to hold the Property unto Mortgagee in fee simple forever
(except as to Mortgagor’s interest in the Ground Lease Parcels pursuant to the
Ground Lease, as to which such interest is a valid leasehold interest); provided
that Mortgagor may retain possession of the Property until the occurrence of an
Event of Default; (a) the real property described in Exhibit A which is
attached hereto and incorporated herein by reference (the “Land”) together
with: (i) any and all buildings, structures, improvements, alterations or
appurtenances now or hereafter situated or to be situated on the Land
(collectively, the “Improvements”); and (ii) all right, title and interest of
Mortgagor, now owned or hereafter acquired, in and to (1) all streets, roads,
alleys, easements, rights-of-way, licenses, rights of ingress and egress,
vehicle parking rights and public places, existing or proposed, abutting,
adjacent, used in connection with or pertaining to the Land or the
Improvements; (2) any strips or gores between the Land and abutting or adjacent
properties; (3) all options to purchase or lease the Land or the Improvements
or any portion thereof or interest therein, and any greater estate in the Land
or the Improvements; and (4) all water and water rights, timber, crops and
mineral interests on or pertaining to the Land (the Land, Improvements and
other rights, titles and interests referred to in this clause (a) being 

2

herein sometimes
collectively called the “Premises”); (b) all fixtures, equipment, systems,
machinery, furniture, furnishings, appliances, inventory, goods, building and
construction materials, supplies, and articles of personal property, of every
kind and character, tangible and intangible (including software embedded therein),
now owned or hereafter acquired by Mortgagor, which are now or hereafter
attached to or situated in, on or about the Land or the Improvements, or used
in or necessary to the complete and proper planning, development, use,
occupancy or operation thereof, or acquired (whether delivered to the Land or
stored elsewhere) for use or installation in or on the Land or the
Improvements, and all renewals and replacements of, substitutions for and
additions to the foregoing (the properties referred to in this clause (b) being
herein sometimes collectively called the “Accessories,” all of which are hereby
declared to be permanent accessions to the Land); (c) all (i) plans and
specifications for the Improvements; (ii) Mortgagor’s rights, but not liability
for any breach by Mortgagor, under all commitments (including any commitments
for financing to pay any of the Secured Indebtedness, as defined below),
insurance policies (or additional or supplemental coverage related thereto,
including from an insurance provider meeting the requirements of the Loan
Documents or from or through any state or federal government sponsored program
or entity), Swap Transactions (as hereinafter defined), contracts and
agreements for the design, construction, operation or inspection of the
Improvements and other contracts and general intangibles (including but not
limited to payment intangibles, trademarks, trade names, goodwill, software and
symbols) related to the Premises or the Accessories or the operation thereof;
(iii) deposits and deposit accounts arising from or related to any transactions
related to the Premises or the Accessories (including but not limited to
Mortgagor’s rights in tenants’ security deposits, deposits with respect to
utility services to the Premises, and any deposits, deposit accounts or
reserves hereunder or under any other Loan Documents (hereinafter defined) for
taxes, insurance or otherwise), rebates or refunds of impact fees or other
taxes, assessments or charges, money, accounts (including deposit accounts), instruments,
documents, promissory notes and chattel paper (whether tangible or electronic)
arising from or by virtue of any transactions related to the Premises or the
Accessories, and any account or deposit account from which Mortgagor may from
time to time authorize Mortgagee to debit and/or credit payments due with
respect to the Loan or any Swap Transaction, all rights to the payment of money
from Mortgagee under any Swap Transaction, and all accounts, deposit accounts
and general intangibles, including payment intangibles, described in any Swap
Transaction; (iv) permits, licenses, franchises, certificates, development
rights, commitments and rights for utilities, and other rights and privileges
obtained in connection with the Premises or the Accessories; (v) leases, rents,
royalties, bonuses, issues, profits, revenues and other benefits of the
Premises and the Accessories (without derogation of Article 3 hereof); (vi)
as-extracted collateral produced from or allocated to the Land including,
without limitation, oil, gas and other hydrocarbons and other minerals and all
products processed or obtained therefrom, and the proceeds thereof; and (vii)
engineering, accounting, title, legal, and other technical or business data
concerning the Property which are in the possession of Mortgagor or in which
Mortgagor can otherwise grant a security interest; and (d) all (i) accounts and
proceeds (cash or non-cash and including payment intangibles) of or arising
from the properties, rights, titles and interests referred to above in this
Section 1.3, including but not limited to proceeds of any sale, lease or other
disposition thereof, proceeds of each policy of insurance (or additional or
supplemental coverage related thereto, including from an insurance provider
meeting the requirements of the Loan Documents or from or through any state or
federal government sponsored program or entity) relating thereto (including
premium refunds), proceeds of the taking thereof or of any 

3

rights appurtenant
thereto, including change of grade of streets, curb cuts or other rights of
access, by condemnation, eminent domain or transfer in lieu thereof for public
or quasi-public use under any law, and proceeds arising out of any damage
thereto; (ii) all letter-of-credit rights (whether or not the letter of credit
is evidenced by a writing) Mortgagor now has or hereafter acquires relating to
the properties, rights, titles and interests referred to in this Section 1.3;
(iii) all commercial tort claims Mortgagor now has or hereafter acquires
relating to the properties, rights, titles and interests referred to in this
Section 1.3; and (iv) other interests of every kind and character which
Mortgagor now has or hereafter acquires in, to or for the benefit of the
properties, rights, titles and interests referred to above in this Section 1.3
and all property used or useful in connection therewith, including but not
limited to rights of ingress and egress and remainders, reversions and
reversionary rights or interests; and if the estate of Mortgagor in any of the
property referred to above in this Section 1.3 is a leasehold estate, this
conveyance shall include, and the lien and security interest created hereby
shall encumber and extend to, all other or additional title, estates, interests
or rights which are now owned or may hereafter be acquired by Mortgagor in or
to the property demised under the lease creating the leasehold estate; TO HAVE
AND TO HOLD the foregoing rights, interests and properties, and all rights,
estates, powers and privileges appurtenant thereto (herein collectively called
the “Property”), unto Mortgagee, its successors and assigns, in trust, in fee
simple forever, subject to the terms, provisions and conditions herein set
forth, to secure the obligations of Mortgagor under the Note and Loan Documents
(as hereinafter defined) and all other indebtedness and matters defined as
“Secured Indebtedness” in Section 1.5 of this Mortgage; PROVIDED, HOWEVER, that
if Mortgagor shall promptly pay or cause to be paid to Mortgagee (as hereinafter
defined) the principal sum, including all additional advances and all other
sums payable by Mortgagor to Mortgagee under the terms of the Loan Documents
and shall perform or cause to be performed all the other terms, conditions,
agreements and provisions contained in the Loan Documents, all without fraud or
delay or deduction or abatement of anything or for any reason, then this
Mortgage and the estate hereby granted shall cease, terminate and become void.

          Section
1.4. Security Interest. Mortgagor hereby grants to Mortgagee a security
interest in all of the Property which constitutes personal property or
fixtures, all proceeds and products thereof, and all supporting obligations
ancillary to or arising in any way in connection therewith (herein sometimes
collectively called the “Collateral”) to secure the obligations of Mortgagor
under the Note and Loan Documents and all other indebtedness and matters
defined as Secured Indebtedness in Section 1.5 of this Mortgage. In addition to
its rights hereunder or otherwise, Mortgagee shall have all of the rights of a
secured party under the New York Uniform Commercial Code, as in effect from
time to time, or under the Uniform Commercial Code in force, from time to time,
in any other state to the extent the same is applicable law.

          Section
1.5. Secured Indebtedness, Note, Loan Documents, Other Obligations. This
Mortgage is made to secure and enforce the payment and performance of the
following promissory notes, obligations, indebtedness, duties and liabilities
and all renewals, extensions, supplements, increases, and modifications thereof
in whole or in part from time to time (collectively the “Secured
Indebtedness”): (a) the Promissory Note and all other promissory notes given in
substitution therefor or in modification, supplement, increase, renewal or
extension thereof, in whole or 

4

in part (such promissory
note or promissory notes, whether one or more, as from time to time renewed,
extended, supplemented, increased or modified and all other notes given in
substitution therefor, or in modification, renewal or extension thereof, in
whole or in part, being hereinafter called the “Note”, and Mortgagee, or the
subsequent Mortgagee at the time in question of the Note or any of the Secured
Indebtedness, as hereinafter defined, such Mortgagee continuing to be defined
herein as “Mortgagee”); and (b) all interest, Additional Interest,
indebtedness, liabilities, duties, covenants, promises and other obligations
whether joint or several, direct or indirect, fixed or contingent, liquidated
or unliquidated, and the cost of collection of all such amounts, owed by
Mortgagor to Mortgagee now or hereafter incurred or arising pursuant to or
permitted by the provisions of the Note, this Mortgage, the Loan Agreement or
any other document now or hereafter evidencing, governing, guaranteeing,
securing or otherwise executed in connection with the loan evidenced by the
Note, including but not limited to any loan or credit agreement, letter of
credit or reimbursement agreement, tri-party financing agreement, Master
Agreement relating to any Swap Transactions or other agreement between
Mortgagor and Mortgagee, or among Mortgagor, Mortgagee and any other party or
parties, pertaining to the repayment or use of the proceeds of the loan
evidenced by the Note (the Note, the Mortgage, the Loan Agreement, any Master
Agreement relating to any Swap Transactions and any such documents as they or
any of them may have been or may be from time to time renewed, extended,
supplemented, increased or modified, being herein sometimes collectively called
the “Loan Documents”). “Swap Transaction” means any agreement, whether or not
in writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond, note or bill option, interest rate option, forward
foreign exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swap option currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any form of master agreement (the “Master Agreement”) published by
the International Swaps and Derivatives Association, Inc., or any other master
agreement, entered into between Mortgagee (or its affiliates) and Mortgagor (or
its affiliates), together with any related schedules, as amended, supplemented,
superseded or replaced from time to time, relating to or governing any or all
of the foregoing.

ARTICLE 2

Representations,
Warranties and Covenants

          Section
2.1. Mortgagor represents, warrants, and covenants as follows:

               (a)
Payment and Performance. Mortgagor will make due and punctual
payment of the Secured Indebtedness. Mortgagor will timely and properly perform
and comply with all of the covenants, agreements, and conditions imposed upon
it by this Mortgage and the other Loan Documents and will not permit a default
to occur hereunder or thereunder. Time shall be of the essence in this
Mortgage.

               (b)
Title and Permitted Encumbrances. Mortgagor has, in Mortgagor’s
own right, and Mortgagor covenants to maintain, lawful, good and marketable
title to the Property, is lawfully seized and possessed of the Property and
every part thereof, and has the right to convey the same, free and clear of all
liens, charges, claims, security interests, and encumbrances except for (i) the
matters, if any, set forth under the heading “Permitted Encumbrances” in Exhibit
B hereto, 

5

which are Permitted
Encumbrances only to the extent the same are valid and subsisting and affect
the Property, (ii) the liens and security interests evidenced by this Mortgage,
(iii) statutory liens for real estate taxes and assessments on the Property
which are not yet delinquent, and (iv) other liens and security interests (if
any) in favor of Mortgagee (the matters described in the foregoing clauses (i),
(ii), (iii) and (iv) being herein called the “Permitted Encumbrances”).
Mortgagor owns and holds the Fee Parcel in fee simple absolute. Mortgagor is
the owner of a valid and subsisting interest as tenant under the Ground Lease,
that the Ground Lease is in full force and effect, there are no defaults
thereunder and no event has occurred or is occurring which after notice or
passage of time or both will result in such a default, that the Ground Lease is
subject to no lien, charge or encumbrance of any kind and is prior to all
liens, charges and encumbrances whatsoever on the fee interest of the lessor
thereunder except such as are listed as exceptions to title in the title policy
insuring the lien hereof. Mortgagor, and Mortgagor’s successors and assigns,
will warrant generally and forever defend title to the Property, subject as
aforesaid, to Mortgagee and his successors or substitutes and assigns, against
the claims and demands of all persons claiming or to claim the same or any part
thereof. Mortgagor will preserve the leasehold estate created in it by the
Ground Lease, and will forever warrant and defend the same to Mortgagee and
will forever warrant and defend the validity and priority of the lien hereof
against the claims of all persons and parties whomsoever. Mortgagor will
perform or cause to be performed all of the covenants and conditions required
to be performed by it under the Ground Lease, will do all things necessary to
preserve unimpaired its rights thereunder, and will not enter into any
agreement modifying or amending the Ground Lease or releasing the lessor
thereunder from any obligations imposed upon it thereby. If Mortgagor receives
a notice of default under the Ground Lease, it shall immediately cause a copy
of such notice to be sent by registered United States mail to Mortgagee. Mortgagor
will punctually pay, perform, observe and keep all covenants, obligations and
conditions in or pursuant to any Permitted Encumbrance and will not modify or
permit modification of any Permitted Encumbrance without the prior written
consent of Mortgagee. Inclusion of any matter as a Permitted Encumbrance does
not constitute approval or waiver by Mortgagee of any existing or future
violation or other breach thereof by Mortgagor, by the Property or otherwise.
No part of the Property constitutes all or any part of the principal residence
of Mortgagor if Mortgagor is an individual. If any right or interest of
Mortgagee in the Property or any part thereof shall be endangered or questioned
or shall be attacked directly or indirectly, Mortgagee and Mortgagee, or either
of them (whether or not named as parties to legal proceedings with respect
thereto), are hereby authorized and empowered to take such steps as in their
discretion may be proper for the defense of any such legal proceedings or the
protection of such right or interest of Mortgagee, including but not limited to
the employment of independent counsel, the prosecution or defense of
litigation, and the compromise or discharge of adverse claims. All expenditures
so made of every kind and character shall be a demand obligation (which
obligation Mortgagor hereby promises to pay) owing by Mortgagor to Mortgagee or
Mortgagee (as the case may be), and the party (Mortgagee or Mortgagee, as the
case may be) making such expenditures shall be subrogated to all rights of the
person receiving such payment.

               (c)
Taxes and Other Impositions/Condominium Charges. Mortgagor will
pay, or cause to be paid, all taxes, assessments and other charges or levies
imposed upon or against or with respect to the Property or the ownership, use,
occupancy or enjoyment of any portion thereof, or any utility service thereto,
as the same become due and payable, including but not limited to all real
estate taxes assessed against the Property or any part thereof, and shall deliver

6

promptly to Mortgagee
such evidence of the payment thereof as Mortgagee may require. Any lien for
Condominium Assessments, whenever accruing, shall, pursuant to the Declaration,
be subordinate to the lien of this Mortgage.

               (d)
Insurance. Mortgagor shall obtain and maintain at Mortgagor’s
sole expense: (1) mortgagee title insurance issued to Mortgagee covering the
Premises as required by Mortgagee, without exception for mechanics’ liens; (2)
property insurance with respect to all insurable Property, against loss or
damage by fire, lightning, windstorm, explosion, hail, tornado and such
additional hazards as are presently included in “Special Form” (also known as
“all-risk”) coverage and against any and all acts of terrorism and such other
insurable hazards as Mortgagee may require, in an amount not less than 100% of
the full replacement cost, including the cost of debris removal, without
deduction for depreciation and sufficient to prevent Mortgagor and Mortgagee
from becoming a coinsurer, such insurance to be in “builder’s risk” completed
value (non-reporting) form during and with respect to any construction (other
than construction of customary tenant improvements in existing buildings) on
the Premises; (3) if and to the extent any portion of the Improvements is,
under the Flood Disaster Protection Act of 1973 (“FDPA”), as it may be amended
from time to time, in a Special Flood Hazard Area, within a Flood Zone
designated A or V in a participating community, a flood insurance policy in an amount
required by Mortgagee, but in no event less than the amount sufficient to meet
the requirements of applicable law and the FDPA, as such requirements may from
time to time be in effect; (4) general liability insurance, on an “occurrence”
basis, against claims for “personal injury” liability, including bodily injury,
death or property damage liability, for the benefit of Mortgagor as named
insured and Mortgagee as additional insured; (5) statutory workers’
compensation insurance with respect to any work on or about the Premises
(including employer’s liability insurance, if required by Mortgagee), covering
all employees of Mortgagor and any contractor; (6) if there is a general
contractor, during and with respect to any construction (other than construction
of customary tenant improvements in existing buildings) on the Premises,
commercial general liability insurance, including products and completed
operations coverage, and in other respects similar to that described in clause
(4) above, for the benefit of the general contractor as named insured and
Mortgagor and Mortgagee as additional insureds, in addition to statutory
workers’ compensation insurance with respect to any work on or about the
Premises (including employer’s liability insurance, if required by Mortgagee),
covering all employees of the general contractor any contractor; and (7) such
other insurance on the Property and endorsements as may from time to time be
required by Mortgagee (including but not limited to soft cost coverage,
automobile liability insurance, business interruption insurance or delayed
rental insurance, boiler and machinery insurance, earthquake insurance, wind
insurance, sinkhole coverage, and/or permit to occupy endorsement) and against
other insurable hazards or casualties which at the time are commonly insured
against in the case of premises similarly situated, due regard being given to
the height, type, construction, location, use and occupancy of buildings and
improvements. All insurance policies shall be issued and maintained by
insurers, in amounts, with deductibles, limits and retentions, and in forms
satisfactory to Mortgagee, and shall require not less than ten (10) days’ prior
written notice to Mortgagee of any cancellation for nonpayment of premiums, and
not less than thirty (30) days’ prior written notice to Mortgagee of any other
cancellation or any change of coverage. All insurance companies must be
licensed to do business in the state in which the Property is located and must
have an A.M. Best Company financial and performance ratings of A-:IX or better.
All insurance policies maintained, or caused to be maintained, by Mortgagor
with respect to the Property, except for general liability 

7

insurance, shall provide
that each such policy shall be primary without right of contribution from any
other insurance that may be carried by Mortgagor or Mortgagee and that all of
the provisions thereof, except the limits of liability, shall operate in the
same manner as if there were a separate policy covering each insured. If any
insurer which has issued a policy of title, hazard, liability or other
insurance required pursuant to this Mortgage or any other Loan Document becomes
insolvent or the subject of any petition, case, proceeding or other action
pursuant to any Debtor Relief Law, or if in Mortgagee’s reasonable opinion the
financial responsibility of such insurer is or becomes inadequate, Mortgagor
shall, in each instance promptly upon its discovery thereof or upon the request
of Mortgagee therefor, and at Mortgagor’s expense, promptly obtain and deliver
to Mortgagee a like policy (or, if and to the extent permitted by Mortgagee,
acceptable evidence of insurance) issued by another insurer, which insurer and
policy meet the requirements of this Mortgage or such other Loan Document, as
the case may be. Without limiting the discretion of Mortgagee with respect to
required endorsements to insurance policies, all such policies for loss of or
damage to the Property shall contain a standard mortgagee clause (without
contribution) naming Mortgagee as mortgagee with loss proceeds payable to
Mortgagee notwithstanding (i) any act, failure to act or negligence of or
violation of any warranty, declaration or condition contained in any such
policy by any named or additional insured; (ii) the occupation or use of the
Property for purposes more hazardous than permitted by the terms of any such
policy; (iii) any foreclosure or other action by Mortgagee under the Loan
Documents; or (iv) any change in title to or ownership of the Property or any
portion thereof, such proceeds to be held for application as provided in the
Loan Documents. The originals of each initial insurance policy (or to the
extent permitted by Mortgagee, a copy of the original policy and such evidence
of insurance acceptable to Mortgagee) shall be delivered to Mortgagee at the
time of execution of this Mortgage, with all premiums fully paid current, and
each renewal or substitute policy (or evidence of insurance) shall be delivered
to Mortgagee, with all premiums fully paid current, at least ten (10) days
before the termination of the policy it renews or replaces. Mortgagor shall pay
all premiums on policies required hereunder as they become due and payable and
promptly deliver to Mortgagee evidence satisfactory to Mortgagee of the timely
payment thereof. If any loss occurs at any time when Mortgagor has failed to
perform Mortgagor’s covenants and agreements in this paragraph with respect to
any insurance payable because of loss sustained to any part of the Property
whether or not such insurance is required by Mortgagee, Mortgagee shall
nevertheless be entitled to the benefit of all insurance covering the loss and
held by or for Mortgagor, to the same extent as if it had been made payable to
Mortgagee. Upon any foreclosure hereof or transfer of title to the Property in
extinguishment of the whole or any part of the Secured Indebtedness, all of
Mortgagor’s right, title and interest in and to the insurance policies referred
to in this Section (including unearned premiums) and all proceeds payable
thereunder shall thereupon vest in the purchaser at foreclosure or other such
transferee, to the extent permissible under such policies. Mortgagee shall have
the right (but not the obligation) to make proof of loss for, settle and adjust
any claim under, and receive the proceeds of, all insurance for loss of or
damage to the Property where the loss is estimated by Mortgagee to be
$1,000,000 or more, regardless of whether or not such insurance policies are
required by Mortgagee, and the expenses incurred by Mortgagee in the adjustment
and collection of insurance proceeds shall be a part of the Secured
Indebtedness and shall be due and payable to Mortgagee on demand. Mortgagee
shall not be, under any circumstances, liable or responsible for failure to
collect or exercise diligence in the collection of any of such proceeds or for
the obtaining, maintaining or adequacy of any insurance or for failure to see
to the proper application 

8

of any amount paid over
to Mortgagor. Any such proceeds received by Mortgagee shall, after deduction
therefrom of all reasonable expenses actually incurred by Mortgagee, including
attorneys’ fees, at Mortgagee’s option be (1) released to Mortgagor, or (2)
applied (upon compliance with such terms and conditions as may be required by
Mortgagee) to repair or restoration, either partly or entirely, of the Property
so damaged, or (3) applied to the payment of the Secured Indebtedness in such
order and manner as Mortgagee, in its sole discretion, may elect, whether or not
due. In any event, the unpaid portion of the Secured Indebtedness shall remain
in full force and effect and the payment thereof shall not be excused.
Mortgagor shall at all times comply with the requirements of the insurance
policies required hereunder and of the issuers of such policies and of any
board of fire underwriters or similar body as applicable to or affecting the
Property.

               (e)
Application of Insurance Proceeds. Notwithstanding anything to
the contrary set forth in the preceding Section 2.1(d), if the Property is
damaged or destroyed and Mortgagee determines that all of the conditions
specified hereinafter in this Section have been satisfied, then Mortgagee shall
apply the proceeds of insurance (i) first to reimbursing itself for all costs
incurred by it in the collection of such proceeds and (ii) second to
reimbursing Mortgagor for such actual costs as shall have been incurred by
Mortgagor in restoring the Property and shall be approved by Mortgagee.
Insurance proceeds shall be applied to such restoration solely if (A) Mortgagee
determines that: (i) the Property is capable of being suitably restored in
accordance with applicable Legal Requirements to the value, condition,
character and general utility existing prior to such damage or destruction,
and, in any event, to a Loan to Value Ratio of not greater than 70%, provided
that this clause (i) shall not apply to insurance proceeds relating to a
casualty for which the gross insurance proceeds do not exceed $1,000,000; (ii)
sufficient funds are unconditionally available (from proceeds of insurance
and/or from funds of Mortgagor) to enable Mortgagor promptly to commence, and
thereafter diligently to prosecute to completion, such restoration, provided
that this clause (ii) shall not apply to insurance proceeds relating to a
casualty for which the gross insurance proceeds do not exceed $1,000,000; (iii)
Mortgagor is not in default or in breach of any obligations under any Loan
Document, no uncured Default exists under any Loan Document and no facts or
circumstances exist that would constitute a Default with the passage of time or
the giving of notice or both; and (iv) neither the validity, enforceability nor
priority of the lien of this Mortgage shall be adversely affected; (B)
Mortgagor has entered into a written agreement, satisfactory in form and
substance to Mortgagee, containing such conditions to disbursements as are
employed at the time by Mortgagee for construction loans; (C) Mortgagor has
delivered to Mortgagee such security as Mortgagee might have reasonably
required to assure completion of restoration in accordance with the standards
specified above; and (D) Mortgagor has complied with such further reasonable
requirements as Mortgagee might have specified.

               (f)
Reserve for Insurance, Taxes and Assessments. Upon request of
Mortgagee, to secure the payment and performance of the Secured Indebtedness,
but not in lieu of such payment and performance, Mortgagor will deposit with
Mortgagee a sum equal to real estate taxes, assessments and charges (which
charges for the purposes of this paragraph shall include without limitation any
recurring charge which could result in a lien against the Property) against the
Property for the current year and the premiums for such policies of insurance
for the current year, all as estimated by Mortgagee and prorated to the end of
the calendar month following the month during which Mortgagee’s request is
made, and thereafter will deposit with Mortgagee, on 

9

each date when an
installment of principal and/or interest is due on the Note, sufficient funds
(as estimated from time to time by Mortgagee) to permit Mortgagee to pay at
least fifteen (15) days prior to the due date thereof, the next maturing real
estate taxes, assessments and charges and premiums for such policies of
insurance. Mortgagee shall have the right to rely upon tax information
furnished by applicable taxing authorities in the payment of such taxes or
assessments and shall have no obligation to make any protest of any such taxes
or assessments. Any excess over the amounts required for such purposes shall be
held by Mortgagee for future use, applied to any Secured Indebtedness or
refunded to Mortgagor, at Mortgagee’s option, and any deficiency in such funds
so deposited shall be made up by Mortgagor upon demand of Mortgagee. All such
funds so deposited shall bear no interest, may be commingled with the general
funds of Mortgagee and shall be applied by Mortgagee toward the payment of such
taxes, assessments, charges and premiums when statements therefor are presented
to Mortgagee by Mortgagor (which statements shall be presented by Mortgagor to
Mortgagee a reasonable time before the applicable amount is due); provided,
however, that, if a Default shall have occurred hereunder, such funds may at
Mortgagee’s option be applied to the payment of the Secured Indebtedness in the
order determined by Mortgagee in its sole discretion, and that Mortgagee may
(but shall have no obligation) at any time, in its discretion, apply all or any
part of such funds toward the payment of any such taxes, assessments, charges
or premiums which are past due, together with any penalties or late charges
with respect thereto. The conveyance or transfer of Mortgagor’s interest in the
Property for any reason (including without limitation the foreclosure of a
subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Mortgagor’s interest in and rights to
such funds held by Mortgagee under this paragraph but subject to the rights of
Mortgagee hereunder.

               (g)
Condemnation. Mortgagor shall notify Mortgagee immediately of any
threatened or pending proceeding for condemnation affecting the Property or
arising out of damage to the Property, and Mortgagor shall, at Mortgagor’s
expense, diligently prosecute any such proceedings. Mortgagee shall have the
right (but not the obligation) to participate in any such proceeding and to be
represented by counsel of its own choice. Mortgagee shall be entitled to
receive all sums which may be awarded or become payable to Mortgagor for the
condemnation of the Property, or any part thereof, for public or quasi-public
use, or by virtue of private sale in lieu thereof, and any sums which may be
awarded or become payable to Mortgagor for injury or damage to the Property.
Mortgagor shall, promptly upon request of Mortgagee, execute such additional
assignments and other documents as may be necessary from time to time to permit
such participation and to enable Mortgagee to collect and receipt for any such
sums. All such sums are hereby assigned to Mortgagee, and shall, after
deduction therefrom of all reasonable expenses actually incurred by Mortgagee,
including attorneys’ fees, at Mortgagee’s option be (1) released to Mortgagor,
or (2) applied (upon compliance with such terms and conditions as may be
required by Mortgagee) to repair or restoration of the Property so affected, or
(3) applied to the payment of the Secured Indebtedness in such order and manner
as Mortgagee, in its sole discretion, may elect, whether or not due. In any
event the unpaid portion of the Secured Indebtedness shall remain in full force
and effect and the payment thereof shall not be excused. Mortgagee shall not
be, under any circumstances, liable or responsible for failure to collect or to
exercise diligence in the collection of any such sum or for failure to see to
the proper application of any amount paid over to Mortgagor. Mortgagee is
hereby authorized, in the name of Mortgagor, to execute and deliver valid
acquittances for, and to appeal from, any such award, judgment or decree. All
costs and expenses (including but not limited to attorneys’ fees) incurred 

10

by Mortgagee in
connection with any condemnation shall be a demand obligation owing by
Mortgagor (which Mortgagor hereby promises to pay) to Mortgagee pursuant to
this Mortgage.

               (h)
Compliance with Legal Requirements. The Property and the use,
operation and maintenance thereof and all activities thereon do and shall at
all times comply with all applicable Legal Requirements (hereinafter defined).
The Property is not, and shall not be, dependent on any other property or
premises or any interest therein other than the Property to fulfill any
requirement of any Legal Requirement. Mortgagor shall not, by act or omission,
permit any building or other improvement not subject to the lien of this
Mortgage to rely on the Property or any interest therein to fulfill any
requirement of any Legal Requirement. No improvement upon or use of any part of
the Property constitutes a nonconforming use under any zoning law or similar
law or ordinance. Mortgagor has obtained and shall preserve in force all
requisite zoning, utility, building, health, environmental and operating
permits from the governmental authorities having jurisdiction over the
Property. 

          If
Mortgagor receives a notice or claim from any person that the Property, or any
use, activity, operation or maintenance thereof or thereon, is not in
compliance with any Legal Requirement, Mortgagor will promptly furnish a copy
of such notice or claim to Mortgagee. Mortgagor has received no notice and has
no knowledge of any such noncompliance. As used in this Mortgage: (i) the term
“Legal Requirement” means any Law (hereinafter defined), agreement, covenant,
restriction, easement or condition (including, without limitation of the
foregoing, any condition or requirement imposed by any insurance or surety
company), as any of the same now exists or may be changed or amended or come
into effect in the future; and (ii) the term “Law” means any federal, state or
local law, statute, ordinance, code, rule, regulation, license, permit,
authorization, decision, order, injunction or decree, domestic or foreign.

               (i)
Maintenance, Repair and Restoration. Mortgagor will keep the
Property in first class order, repair, operating condition and appearance,
causing all necessary repairs, renewals, replacements, additions and
improvements to be promptly made, and will not allow any of the Property to be
misused, abused or wasted or to deteriorate. Notwithstanding the foregoing,
Mortgagor will not, without the prior written consent of Mortgagee, (i) remove
from the Property any fixtures or personal property covered by this Mortgage
except such as is replaced by Mortgagor by an article of equal suitability and
value, owned by Mortgagor, free and clear of any lien or security interest
(except that created by this Mortgage), or (ii) make any structural alteration
to the Property or any other alteration thereto which impairs the value
thereof. If any act or occurrence of any kind or nature (including any
condemnation or any casualty for which insurance was not obtained or
obtainable) shall result in damage to or loss or destruction of the Property, Mortgagor
shall give prompt notice thereof to Mortgagee and Mortgagor shall promptly, at
Mortgagor’s sole cost and expense and regardless of whether insurance or
condemnation proceeds (if any) shall be available or sufficient for the
purpose, secure the Property as necessary and commence and continue diligently
to completion to restore, repair, replace and rebuild the Property as nearly as
possible to its value, condition and character immediately prior to the damage,
loss or destruction.

               (j)
No Other Liens. Mortgagor will not, without the prior written
consent of Mortgagee, create, place or permit to be created or placed, or
through any act or failure to act, acquiesce in the placing of, or allow to
remain, any mortgage, voluntary or involuntary lien, 

11

whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Property, or any part thereof, other than the Permitted Encumbrances, regardless
of whether the same are expressly or otherwise subordinate to the lien or
security interest created in this Mortgage, and should any of the foregoing
become attached hereafter in any manner to any part of the Property without the
prior written consent of Mortgagee, Mortgagor will cause the same to be
promptly discharged and released. Mortgagor will own all parts of the Property
and will not acquire any fixtures, equipment or other property (including
software embedded therein) forming a part of the Property pursuant to a lease,
license, security agreement or similar agreement, whereby any party has or may
obtain the right to repossess or remove same, without the prior written consent
of Mortgagee. If Mortgagee consents to the voluntary grant by Mortgagor of any
mortgage, lien, security interest, or other encumbrance (hereinafter called
“Subordinate Lien”) covering any of the Property or if the foregoing
prohibition is determined by a court of competent jurisdiction to be
unenforceable as to a Subordinate Lien, any such Subordinate Lien shall contain
express covenants to the effect that: (1) the Subordinate Lien is
unconditionally subordinate to this Mortgage and all Leases (hereinafter
defined); (2) if any action (whether judicial or pursuant to a power of sale)
shall be instituted to foreclose or otherwise enforce the Subordinate Lien, no
tenant of any of the Leases (hereinafter defined) shall be named as a party
defendant, and no action shall be taken that would terminate any occupancy or
tenancy without the prior written consent of Mortgagee; (3) Rents (hereinafter
defined), if collected by or for Mortgagee of the Subordinate Lien, shall be
applied first to the payment of the Secured Indebtedness then due and expenses
incurred in the ownership, operation and maintenance of the Property in such
order as Mortgagee may determine, prior to being applied to any indebtedness
secured by the Subordinate Lien; (4) written notice of default under the
Subordinate Lien and written notice of the commencement of any action (whether
judicial or pursuant to a power of sale) to foreclose or otherwise enforce the
Subordinate Lien or to seek the appointment of a receiver for all or any part
of the Property shall be given to Mortgagee with or immediately after the occurrence
of any such default or commencement; and (5) neither Mortgagee of the
Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Mortgagor’s
rights hereunder without the prior written consent of Mortgagee.

               (k)
Operation of Property. Mortgagor will operate the Property in a
good and workmanlike manner and in accordance with all Legal Requirements and
will pay all fees or charges of any kind in connection therewith. Mortgagor
will keep the Property occupied so as not to impair the insurance carried
thereon. Mortgagor will not use or occupy or conduct any activity on, or allow
the use or occupancy of or the conduct of any activity on, the Property in any
manner which violates any Legal Requirement or which constitutes a public or
private nuisance or which makes void, voidable or cancelable, or increases the
premium of, any insurance then in force with respect thereto. Mortgagor will
not initiate or permit any zoning reclassification of the Property or seek any
variance under existing zoning ordinances applicable to the Property or use or
permit the use of the Property in such a manner which would result in such use
becoming a nonconforming use under applicable zoning ordinances or other Legal
Requirement. Mortgagor will not impose any easement, restrictive covenant or
encumbrance upon the Property, execute or file any subdivision plat or
condominium declaration affecting the Property or consent to the annexation of the
Property to any municipality, without the prior written consent of Mortgagee.
Mortgagor will not do or suffer to be done any act whereby the value of any
part of the Property may be lessened. Mortgagor will preserve, protect, renew, 

12

extend and retain all
material rights and privileges granted for or applicable to the Property.
Without the prior written consent of Mortgagee, there shall be no drilling or
exploration for or extraction, removal or production of any mineral,
hydrocarbon, gas, natural element, compound or substance (including sand and
gravel) from the surface or subsurface of the Land regardless of the depth
thereof or the method of mining or extraction thereof. Mortgagor will cause all
debts and liabilities of any character (including without limitation all debts
and liabilities for labor, material and equipment (including software embedded
therein) and all debts and charges for utilities servicing the Property)
incurred in the construction, maintenance, operation and development of the
Property to be promptly paid.

               (l)
Financial Matters. Mortgagor is solvent after giving effect to
all borrowings contemplated by the Loan Documents and no proceeding under any
Debtor Relief Law (hereinafter defined) is pending (or, to Mortgagor’s
knowledge, threatened) by or against Mortgagor, or any affiliate of Mortgagor,
as a debtor. All reports, statements, plans, budgets, applications, agreements
and other data and information heretofore furnished or hereafter to be
furnished by or on behalf of Mortgagor to Mortgagee in connection with the loan
or loans evidenced by the Loan Documents (including, without limitation, all
financial statements and financial information) are and will be true, correct
and complete in all material respects as of their respective dates and do not
and will not omit to state any fact or circumstance necessary to make the
statements contained therein not misleading. No material adverse change has
occurred since the dates of such reports, statements and other data in the
financial condition of Mortgagor or, to Mortgagor’s knowledge, of any tenant
under any lease described therein. For the purposes of this paragraph,
“Mortgagor” shall also include any person liable directly or indirectly for the
Secured Indebtedness or any part thereof and any joint venturer or general
partner of Mortgagor.

               (m)
Status of Mortgagor; Suits and Claims; Loan Documents. If
Mortgagor is a corporation, partnership, limited liability company, or other
legal entity, Mortgagor is and will continue to be (i) duly organized, validly
existing and in good standing under the laws of its state of organization, (ii)
authorized to do business in, and in good standing in, each state in which the
Property is located, and (iii) possessed of all requisite power and authority
to carry on its business and to own and operate the Property. Each Loan
Document executed by Mortgagor has been duly authorized, executed and delivered
by Mortgagor, and the obligations thereunder and the performance thereof by
Mortgagor in accordance with their terms are and will continue to be within
Mortgagor’s power and authority (without the necessity of joinder or consent of
any other person), are not and will not be in contravention of any Legal
Requirement or any other document or agreement to which Mortgagor or the
Property is subject, and do not and will not result in the creation of any
encumbrance against any assets or properties of Mortgagor, or any other person
liable, directly or indirectly, for any of the Secured Indebtedness, except as
expressly contemplated by the Loan Documents. There is no suit, action, claim,
investigation, inquiry, proceeding or demand pending (or, to Mortgagor’s
knowledge, threatened) against Mortgagor (other than the lawsuit commenced by
The Omni Health & Fitness Complex of Pelham, Inc., et al. in
the Westchester County Supreme Court under index no. 24678/2008) or against any
other person liable directly or indirectly for the Secured Indebtedness or
which affects the Property (including, without limitation, any which challenges
or otherwise pertains to Mortgagor’s title to the Property) or the validity,
enforceability or priority of any of the Loan Documents. There is no judicial
or administrative action, suit or proceeding pending (or, to Mortgagor’s
knowledge, threatened) against Mortgagor, or against any other person liable 

13

directly or indirectly
for the Secured Indebtedness, except as has been disclosed in writing to
Mortgagee in connection with the loan evidenced by the Note. The Loan Documents
constitute legal, valid and binding obligations of Mortgagor enforceable in
accordance with their terms, except as the enforceability thereof may be
limited by Debtor Relief Laws (hereinafter defined) and except as the
availability of certain remedies may be limited by general principles of
equity. Mortgagor is not a “foreign person” within the meaning of the Internal
Revenue Code of 1986, as amended, Sections 1445 and 7701 (i.e. Mortgagor is not
a non-resident alien, foreign corporation, foreign partnership, foreign trust
or foreign estate as those terms are defined therein and in any regulations
promulgated thereunder). The loan evidenced by the Note is solely for business
and/or investment purposes, and is not intended for personal, family, household
or agricultural purposes. Mortgagor further warrants that the proceeds of the
Note shall be used for commercial purposes and stipulates that the loan
evidenced by the Note shall be construed for all purposes as a commercial loan.
Mortgagor’s exact legal name is correctly set forth at the end of this
Mortgage. If Mortgagor is not an individual, Mortgagor is an organization of
the type and (if not an unregistered entity) is incorporated in or organized
under the laws of the state specified in the introductory paragraph of this
Mortgage. If Mortgagor is an unregistered entity (including, without
limitation, a general partnership) it is organized under the laws of the state
specified in the introductory paragraph of this Mortgage. Mortgagor will not cause
or permit any change to be made in its name, identity (including its trade name
or names), or corporate or partnership structure, unless Mortgagor shall have
notified Mortgagee in writing of such change at least thirty (30) days prior to
the effective date of such change, and shall have first taken all action
required by Mortgagee for the purpose of further perfecting or protecting the
lien and security interest of Mortgagee in the Property. In addition, Mortgagor
shall not change its corporate or partnership structure without first obtaining
the prior written consent of Mortgagee. Mortgagor’s principal place of business
and chief executive office, and the place where Mortgagor keeps its books and
records, including recorded data of any kind or nature, regardless of the
medium of recording including, without limitation, software, writings, plans,
specifications and schematics concerning the Property, has for the preceding
four months (or, if less, the entire period of the existence of Mortgagor) been
and will continue to be (unless Mortgagor notifies Mortgagee of any change in
writing at least thirty (30) days prior to the date of such change) the address
of Mortgagor set forth at the end of this Mortgage. If Mortgagor is an
individual, Mortgagor’s principal residence has for the preceding four months
been and will continue to be (unless Mortgagor notifies Mortgagee of any change
in writing at least thirty (30) days prior to the date of such change) the
address of the principal residence of Mortgagor set forth at the end of this
Mortgage. Mortgagor’s organizational identification number, if any, assigned by
the state of incorporation or organization is correctly set forth on the first
page of this Mortgage. Mortgagor shall promptly notify Mortgagee (i) of any
change of its organizational identification number, or (ii) if Mortgagor does
not now have an organization identification number and later obtains one, of
such organizational identification number.

               (n)
Certain Environmental Matters. Mortgagor shall comply with the
terms and covenants of that certain Environmental Indemnity Agreement dated of
even date herewith (the “Environmental Agreement”).

               (o)
Further Assurances. Mortgagor will, promptly on request of
Mortgagee, (i) correct any defect, error or omission which may be discovered in
the contents, execution or acknowledgment of this Mortgage or any other Loan
Document; (ii) execute, acknowledge, 

14

deliver, procure and
record and/or file such further documents (including, without limitation,
further mortgages of trust, security agreements, and assignments of rents or
leases) and do such further acts as may be necessary, desirable or proper to
carry out more effectively the purposes of this Mortgage and the other Loan
Documents, to more fully identify and subject to the liens and security
interests hereof any property intended to be covered hereby (including
specifically, but without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Property) or as deemed advisable by
Mortgagee to protect the lien or the security interest hereunder against the
rights or interests of third persons; and (iii) provide such certificates,
documents, reports, information, affidavits and other instruments and do such
further acts as may be necessary, desirable or proper in the reasonable
determination of Mortgagee to enable Mortgagee to comply with the requirements
or requests of any agency having jurisdiction over Mortgagee or any examiners
of such agencies with respect to the indebtedness secured hereby, Mortgagor or
the Property. Mortgagor shall pay all costs connected with any of the
foregoing, which shall be a demand obligation owing by Mortgagor (which
Mortgagor hereby promises to pay) to Mortgagee pursuant to this Mortgage.

               (p)
Fees and Expenses. Without limitation of any other provision of
this Mortgage or of any other Loan Document and to the extent not prohibited by
applicable law, Mortgagor will pay, and will reimburse to Mortgagee and/or
Mortgagee on demand to the extent paid by Mortgagee and/or Mortgagee: (i) all
appraisal fees, filing, registration and recording fees, recordation, transfer
and other taxes, brokerage fees and commissions, abstract fees, title search or
examination fees, title policy and endorsement premiums and fees, uniform
commercial code search fees, judgment and tax lien search fees, escrow fees,
reasonable attorneys’ fees, reasonable architect fees, reasonable engineer
fees, reasonable construction consultant fees, reasonable environmental
inspection fees, survey fees, and all other reasonable costs and expenses of
every character incurred by Mortgagor or Mortgagee and/or Mortgagee in
connection with the preparation of the Loan Documents, the evaluation, closing
and funding of the loan evidenced by the Loan Documents, and any and all
amendments and supplements to this Mortgage, the Note or any other Loan
Documents or any approval, consent, waiver, release or other matter requested
or required hereunder or thereunder, or otherwise attributable or chargeable to
Mortgagor as owner of the Property; and (ii) all costs and expenses, including
reasonable attorneys’ fees and expenses, incurred or expended in connection
with the exercise of any right or remedy, or the defense of any right or remedy
or the enforcement of any obligation of Mortgagor, hereunder or under any other
Loan Document.

               (q)
Indemnification.

	
  

 	
  

 
	
  

 	
           (i)
 Mortgagor will indemnify and hold harmless Mortgagee from and against, and
 reimburse them on demand for, any and all Indemnified Matters (hereinafter
 defined). For purposes of this paragraph (p), the term “Mortgagee” shall
 include and any persons owned or controlled by, owning or controlling, or
 under common control or affiliated with Mortgagee. Without limitation, the
 foregoing indemnities shall apply to each indemnified person with respect to
 matters which in whole or in part are caused by or arise out of the
 negligence of such (and/or any other) indemnified person. However, such
 indemnities shall not apply to a particular indemnified person to the extent
 that the subject of the indemnification is caused by or arises out of the
 gross negligence or willful misconduct of that indemnified person. Any amount
 to be paid under this paragraph (p) 

 

15

	
  

 	
  

 
	
  

 	
 by Mortgagor to
 Mortgagee shall be a demand obligation owing by Mortgagor (which Mortgagor
 hereby promises to pay) to Mortgagee pursuant to this Mortgage. Nothing in
 this paragraph, elsewhere in this Mortgage or in any other Loan Document
 shall limit or impair any rights or remedies of Mortgagee (including without
 limitation any rights of contribution or indemnification) against Mortgagor
 or any other person under any other provision of this Mortgage, any other
 Loan Document, any other agreement or any applicable Legal Requirement.

 
	
  

 	
  

 
	
  

 	
           (ii)
 As used herein, the term “Indemnified Matters” means any and all claims,
 demands, liabilities (including strict liability), losses, damages (including
 consequential damages), causes of action, judgments, penalties, fines, costs
 and expenses (including without limitation, reasonable fees and expenses of
 attorneys and other professional consultants and experts, and of the
 investigation and defense of any claim, whether or not such claim is
 ultimately defeated, and the settlement of any claim or judgment including
 all value paid or given in settlement) of every kind, known or unknown,
 foreseeable or unforeseeable, which may be imposed upon, asserted against or
 incurred or paid by Mortgagee at any time and from time to time, whenever
 imposed, asserted or incurred, because of, resulting from, in connection
 with, or arising out of any transaction, act, omission, event or circumstance
 in any way connected with the Property or with this Mortgage or any other Loan
 Document, including but not limited to any bodily injury or death or property
 damage occurring in or upon or in the vicinity of the Property through any
 cause whatsoever at any time on or before the Release Date (hereinafter
 defined), any act performed or omitted to be performed hereunder or under any
 other Loan Document, any breach by Mortgagor of any representation, warranty,
 covenant, agreement or condition contained in this Mortgage or in any other
 Loan Document, any default as defined herein, any claim under or with respect
 to any Lease (hereinafter defined) or arising under the Environmental
 Agreement. The term “Release Date” as used herein means the earlier of the
 following two dates: (i) the date on which the indebtedness and obligations
 secured hereby have been paid and performed in full and this Mortgage has
 been released, or (ii) the date on which the lien of this Mortgage is fully
 and finally foreclosed or a conveyance by deed in lieu of such foreclosure is
 fully and finally effective, and possession of the Property has been given to
 the purchaser or grantee free of occupancy and claims to occupancy by
 Mortgagor and Mortgagor’s heirs, devisees, representatives, successors and
 assigns; provided, that if such payment, performance, release, foreclosure or
 conveyance is challenged, in bankruptcy proceedings or otherwise, the Release
 Date shall be deemed not to have occurred until such challenge is rejected,
 dismissed or withdrawn with prejudice. The indemnities in this paragraph (p)
 shall not terminate upon the Release Date or upon the release, foreclosure or
 other termination of this Mortgage but will survive the Release Date,
 foreclosure of this Mortgage or conveyance in lieu of foreclosure, the
 repayment of the Secured Indebtedness, the termination of any and all Swap
 Transactions, the discharge and release of this Mortgage and the other Loan
 Documents, any bankruptcy or other debtor relief proceeding, and any other
 event whatsoever.

 

               (r)
Records and Financial Reports. Mortgagor will keep accurate books
and records in accordance with sound accounting principles in which full, true
and correct entries shall be promptly made with respect to the Property and the
operation thereof, and will permit all such 

16

books and records, and
all recorded data of any kind or nature, regardless of the medium of recording
including, without limitation, all software, writings, plans, specifications
and schematics to be inspected and copied, and the Property to be inspected and
photographed, by Mortgagee and its representatives during normal business hours
and at any other reasonable times. Without limitation of other or additional
requirements in any of the other Loan Documents, Mortgagor will furnish to
Mortgagee the financial statements required under the Loan Agreement. Mortgagor
will furnish to Mortgagee at Mortgagor’s expense all evidence which Mortgagee
may from time to time reasonably request as to compliance with all provisions
of the Loan Documents. Any inspection or audit of the Property or the books and
records, including recorded data of any kind or nature, regardless of the
medium of recording including, without limitation, software, writings, plans,
specifications and schematics of Mortgagor, or the procuring of documents and
financial and other information, by or on behalf of Mortgagee shall be for
Mortgagee’s protection only, and shall not constitute any assumption of
responsibility to Mortgagor or anyone else with regard to the condition,
construction, maintenance or operation of the Property nor Mortgagee’s approval
of any certification given to Mortgagee nor relieve Mortgagor of any of
Mortgagor’s obligations. Mortgagee may from time to time assign or grant
participations in the Secured Indebtedness and Mortgagor consents to the delivery
by Mortgagee to any acquirer or prospective acquirer of any interest or
participation in or with respect to all or part of the Secured Indebtedness
such information as Mortgagee now or hereafter has relating to the Property,
Mortgagor, any party obligated for payment of any part of the Secured
Indebtedness, any tenant or guarantor under any lease affecting any part of the
Property and any agent or guarantor under any management agreement affecting
any part of the Property.

               (s)
Taxes on Note or Mortgage. Mortgagor will promptly pay all
income, franchise and other taxes owing by Mortgagor and any stamp,
documentary, recordation and transfer taxes or other taxes (unless such payment
by Mortgagor is prohibited by law) which may be required to be paid with
respect to the Note, this Mortgage or any other instrument evidencing or
securing any of the Secured Indebtedness. In the event of the enactment after
this date of any law of any governmental entity applicable to Mortgagee, the
Note, the Property or this Mortgage deducting from the value of property for
the purpose of taxation any lien or security interest thereon, or imposing upon
Mortgagee the payment of the whole or any part of the taxes or assessments or
charges or liens herein required to be paid by Mortgagor, or changing in any
way the laws relating to the taxation of deeds of trust or mortgages or
security agreements or debts secured by deeds of trust or mortgages or security
agreements or the interest of the mortgagee or secured party in the property
covered thereby, or the manner of collection of such taxes, so as to affect
this Mortgage or the Secured Indebtedness or Mortgagee, then, and in any such
event, Mortgagor, upon demand by Mortgagee, shall pay such taxes, assessments,
charges or liens, or reimburse Mortgagee therefor; provided, however, that if
in the opinion of counsel for Mortgagee (i) it might be unlawful to require
Mortgagor to make such payment or (ii) the making of such payment might result
in the imposition of interest beyond the maximum amount permitted by law, then
and in such event, Mortgagee may elect, by notice in writing given to
Mortgagor, to declare all of the Secured Indebtedness to be and become due and
payable sixty (60) days from the giving of such notice.

               (t)
Statement Concerning Note or Mortgage. Mortgagor shall at any
time and from time to time furnish within seven (7) days of request by
Mortgagee a written statement in such form as may be required by Mortgagee
stating that (i) the Note, this Mortgage and the other Loan 

17

Documents are valid and
binding obligations of Mortgagor, enforceable against Mortgagor in accordance
with their terms; (ii) the unpaid principal balance of the Note; (iii) the date
to which interest on the Note is paid; (iv) the Note, this Mortgage and the
other Loan Documents have not been released, subordinated or modified; and (v)
there are no offsets or defenses against the enforcement of the Note, this
Mortgage or any other Loan Document. If any of the foregoing statements are
untrue, Mortgagor shall, alternatively, specify the reasons therefor. Mortgagee
shall at any time and from time to time furnish within seven (7) days of
request by Mortgagor a written statement stating (i) the unpaid principal
balance of the Note and (ii) the date to which interest on the Note is paid.

               (u)
Trust Fund; Lien Laws. Mortgagor will receive the advances
secured hereby and will hold the right to receive such advances as a trust fund
to be applied first for the purpose of paying the “cost of improvement”, as
such quoted term is defined in the New York Lien Law) and will apply the same
first to the payment of such costs before using any part of the total of the
same for any other purpose and, will comply with Section 13 of the New York
Lien Law. Mortgagor will indemnify and hold Mortgagee harmless against any loss
or liability, cost or expense, including, without limitation, any judgments,
reasonable attorney’s fees, costs of appeal bonds and printing costs, arising
out of or relating to any proceeding instituted by any claimant alleging a
violation by Mortgagor of any applicable lien law including, without
limitation, any section of Article 3-A of the New York Lien Law.

          Section
2.2. Performance by Mortgagee on Mortgagor’s Behalf. Mortgagor agrees
that, if Mortgagor fails to perform any act or to take any action which under
any Loan Document Mortgagor is required to perform or take, or to pay any money
which under any Loan Document Mortgagor is required to pay, and whether or not
the failure then constitutes a default hereunder or thereunder, and whether or
not there has occurred any default or defaults hereunder or the Secured
Indebtedness has been accelerated, Mortgagee, in Mortgagor’s name or its own
name, may, but shall not be obligated to, perform or cause to be performed such
act or take such action or pay such money, and any expenses so incurred by
Mortgagee, with interest thereon at the Default Rate set forth in the Note, and
any money so paid by Mortgagee shall be a demand obligation owing by Mortgagor
to Mortgagee (which obligation Mortgagor hereby promises to pay), shall be a
part of the indebtedness secured hereby, and Mortgagee, upon making such
payment, shall be subrogated to all of the rights of the person, entity or body
politic receiving such payment. Mortgagee and its designees shall have the
right to enter upon the Property at any time and from time to time for any such
purposes. No such payment or performance by Mortgagee shall waive or cure any
default or waive any right, remedy or recourse of Mortgagee. Any such payment
may be made by Mortgagee in reliance on any statement, invoice or claim without
inquiry into the validity or accuracy thereof. Each amount due and owing by
Mortgagor to Mortgagee pursuant to this Mortgage shall bear interest, from the
date such amount becomes due until paid, at the rate per annum provided in the
Note for interest on past due principal owed on the Note but never in excess of
the maximum nonusurious amount permitted by applicable law, which interest
shall be payable to Mortgagee on demand; and all such amounts, together with
such interest thereon, shall automatically and without notice be a part of the
indebtedness secured hereby. The amount and nature of any expense by Mortgagee
hereunder and the time when paid shall be fully established by the certificate
of Mortgagee or any of Mortgagee’s officers or agents.

18

          Section
2.3. Absence of Obligations of Mortgagee with Respect to Property.
Notwithstanding anything in this Mortgage to the contrary, including, without
limitation, the definition of “Property” and/or the provisions of Article 3
hereof, (i) to the extent permitted by applicable law, the Property is composed
of Mortgagor’s rights, title and interests therein but not Mortgagor’s
obligations, duties or liabilities pertaining thereto, (ii) Mortgagee neither
assumes nor shall have any obligations, duties or liabilities in connection
with any portion of the items described in the definition of “Property” herein,
either prior to or after obtaining title to such Property, whether by
foreclosure sale, the granting of a deed in lieu of foreclosure or otherwise,
and (iii) Mortgagee may, at any time prior to or after the acquisition of title
to any portion of the Property as above described, advise any party in writing
as to the extent of Mortgagee’s interest therein and/or expressly disaffirm in
writing any rights, interests, obligations, duties and/or liabilities with
respect to such Property or matters related thereto. Without limiting the
generality of the foregoing, it is understood and agreed that Mortgagee shall
have no obligations, duties or liabilities prior to or after acquisition of
title to any portion of the Property, as lessee under any lease or purchaser or
seller under any contract or option unless Mortgagee elects otherwise by
written notification.

          Section
2.4. Authorization to File Financing Statements; Power of Attorney.
Mortgagor hereby authorizes Mortgagee at any time and from time to time to file
any initial financing statements, amendments thereto and continuation
statements as authorized by applicable law, required by Mortgagee to establish
or maintain the validity, perfection and priority of the security interests
granted in this Mortgage. For purposes of such filings, Mortgagor agrees to
furnish any information requested by Mortgagee promptly upon request by
Mortgagee. Mortgagor also ratifies its authorization for Mortgagee to have
filed any like initial financing statements, amendments thereto or continuation
statements if filed prior to the date of this Mortgage. Mortgagor hereby
irrevocably constitutes and appoints Mortgagee and any officer or agent of
Mortgagee, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Mortgagor or in Mortgagor’s own name to execute in Mortgagor’s name
any such documents and to otherwise carry out the purposes of this Section 2.4,
to the extent that Mortgagor’s authorization above is not sufficient. To the
extent permitted by law, Mortgagor hereby ratifies all acts said
attorney-in-fact shall lawfully do, have done in the past or cause to be done
in the future by virtue hereof. This power of attorney is a power coupled with
an interest and shall be irrevocable.

          Section
2.5. Ground Lease Covenant. Mortgagor shall (a) pay all rents,
additional rents and other sums required to be paid by Mortgagor, as tenant
under and pursuant to the provisions of the Ground Lease as and when such rent
or other charge is payable, (b) diligently perform and observe all of the
terms, covenants and conditions of the Ground Lease on the part of Mortgagor,
as tenant thereunder, to be performed and observed prior to the expiration of
any applicable grace period therein provided, and (c) promptly notify Mortgagee
of the giving of any notice by the Ground Lessor to Mortgagor of any default by
Mortgagor in the performance or observance of any of the terms, covenants or
conditions of the Ground Lease on the part of Mortgagor, as tenant thereunder,
to be performed or observed and deliver to Mortgagee a true copy of each such
notice. Mortgagor shall not, without the prior consent of Mortgagee, surrender
the leasehold estate created by the Ground Lease or terminate or cancel the
Ground Lease or, without the prior written consent of Mortgagee, which consent
shall not be unreasonably withheld, conditioned or delayed, modify, change,
supplement, alter or amend the Ground Lease, 

19

in any respect, either
orally or in writing, and Mortgagor hereby assigns to Mortgagee, as further
security for the payment of the Secured Indebtedness and for the performance
and observance of the terms, covenants and conditions of this Mortgage and the
Loan Agreement, all of the rights, privileges and prerogatives of Mortgagor,
which rights, privileges and prerogatives may be exercised by Mortgagee upon a
Default, as tenant under the Ground Lease, to surrender the leasehold estate
created by the Ground Lease or to terminate, cancel, modify, change,
supplement, alter or amend the Ground Lease, which consent, in the case of a
change, supplement, modification, alteration or amendment, shall not be
unreasonably withheld or delayed, and any such surrender of the leasehold
estate created by the Ground Lease or termination, cancellation, modification,
change, supplement, alteration or amendment of the Ground Lease without the
prior consent of Mortgagee shall be void and of no force and effect. If
Mortgagor shall default in the performance or observance of any term, covenant
or condition of the Ground Lease on the part of Mortgagor, as tenant
thereunder, to be performed or observed, and such default shall remain uncured
after the expiration of any applicable cure or grace period, then, without
limiting the generality of the other provisions of this Mortgage and the Loan
Agreement, and without waiving or releasing Mortgagor from any of its
obligations hereunder or thereunder, Mortgagee shall have the right, but shall
be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all of the terms, covenants and
conditions of the Ground Lease on the part of Mortgagor, as tenant thereunder,
to be performed or observed or to be promptly performed or observed on behalf
of Mortgagor, to the end that the rights of Mortgagor in, to and under the
Ground Lease shall be kept unimpaired and free from default. If Mortgagee shall
make any payment or perform any act or take action in accordance with the
preceding sentence, Mortgagee will notify Mortgagor of the making of any such
payment, the performance of any such act, or the taking of any such action. In
any such event, subject to the rights of tenants, subtenants and other
occupants under the Leases, Mortgagee and any person designated by Mortgagee
shall have, and are hereby granted, the right to enter upon the Property at any
time and from time to time after such default by Mortgagor, which remains
uncured after the expiration of any applicable cure or grace period, for the
purpose of taking any such action. Mortgagee may pay and expend such sums of
money as Mortgagee deems reasonably necessary for any such purpose and upon so
doing shall be subrogated to any and all rights of the Ground Lessor. Mortgagor
hereby agrees to pay to Mortgagee immediately upon demand therefor, all such
sums so paid and expended by Mortgagee, together with interest thereon from the
day of such demand at the Default Rate. All sums so paid and expended by
Mortgagee and the interest thereon shall be secured by the legal operation and
effect of this Mortgage. If the Ground Lessor shall deliver to Mortgagee a copy
of any notice of default sent by said Ground Lessor to Mortgagor, as tenant
under the Ground Lease, such notice shall constitute full protection to
Mortgagee for any action taken or omitted to be taken by Mortgagee, in good
faith, in reliance thereon. Mortgagor will not subordinate or consent to the
subordination of the Ground Lease to any mortgage, security deed, lease or
other interest on or in the Ground Lessor’s interest in all or any part of the
Property, unless, in each such case, the written consent of Mortgagee shall
have been first had and obtained..

          Section
2.6. No Merger of Fee and Leasehold Estates. So long as any portion of
the Secured Indebtedness shall remain unpaid, unless Mortgagee shall otherwise
consent, the fee title to the Ground Lease Parcels and the leasehold estate
therein created pursuant to the provisions of the Ground Lease shall not merge
but shall always be kept separate and distinct, notwithstanding the union of
such estates in Mortgagor, Mortgagee, or in any other person by purchase,
operation 

20

of law or otherwise.
Mortgagee reserves the right, at any time, to release portions of the Property,
including, but not limited to, all of any part of the leasehold estate created
by the Ground Lease, with or without consideration, at Mortgagee’s election,
without waiving or affecting any of its rights hereunder or under the Note or
the other Loan Documents and any such release shall not affect Mortgagee’s
rights in connection with the portion of the Property not so released.

          Section
2.7. Mortgagor’s Acquisition of Fee Estate. In the event that Mortgagor,
so long as any portion of the Secured Indebtedness remains unpaid, shall be the
owner and holder of the fee title to all or any portion of the Ground Lease
Parcels, the lien of the Mortgage shall be spread to cover Mortgagor’s fee
title to such of the Ground Lease Parcels and said fee title shall be deemed to
be included in the Property without any further action. Mortgagor agrees, at
its sole cost and expense, including without limitation Mortgagee’s reasonable
attorneys’ fees, to (a) execute any and all documents or instruments necessary
to subject its fee title to the Property to the lien of this Mortgage; and (b)
provide a title insurance policy which shall insure that the lien of the
Mortgage is a first lien on Mortgagor’s fee title to the Property.
Notwithstanding the foregoing, if the Ground Lease is for any reason whatsoever
terminated prior to the natural expiration of its term, and if, pursuant to any
provisions of the Ground Lease or otherwise, Mortgagee or its designee shall
acquire from the Ground Lessor thereunder another lease of the Property,
Mortgagor shall have no right, title or interest in or to such other lease or
the leasehold estate created thereby.

          Section
2.8. Rejection of the Ground Lease. 

               (a)
If the Ground Lease is terminated for any reason in the event of the
rejection or disaffirmance of the Ground Lease pursuant to the Bankruptcy Code,
or any other law affecting creditor’s rights, (i) Mortgagor, immediately after
obtaining notice thereof, shall give notice thereto to Mortgagee, (ii)
Mortgagor, without the prior written consent of Mortgagee, shall not elect to
treat the Ground Lease as terminated pursuant to Section 365(h) of the
Bankruptcy Code or any comparable federal or state statute or law, and any
election by Mortgagor made without such consent shall be void and (iii) this
Mortgage and the Loan Agreement and all the liens, terms, covenants and
conditions of this Mortgage and the Loan Agreement hereby extends to and covers
Mortgagor’s possessory rights under Section 365(h) of the Bankruptcy Code and
to any claim for damages due to the rejection of the Ground Lease or other
termination of the Ground Lease. In addition, Mortgagor hereby assigns
irrevocably to Mortgagee Mortgagor’s rights to treat the Ground Lease as
terminated pursuant to Section 365(h) of the Bankruptcy Code and to offset
rents under such Ground Lease in the event any case, proceeding or other action
is commenced by or against the Ground Lessor under the Bankruptcy Code or any
comparable federal” or state statute or law.

               (b)
Mortgagor hereby assigns to Mortgagee (i) Mortgagor’s right to reject
the Ground Lease under Section 365 of the Bankruptcy Code or any comparable
federal or state statute or law with respect to any case, proceeding or other
action commenced by or against Mortgagor under the Bankruptcy Code or
comparable federal or state statute or law and (ii) Mortgagor’s right to seek
an extension of the sixty (60)-day period within which Mortgagor must accept or
reject the Ground Lease under Section 365 of the Bankruptcy Code or any
comparable federal or state statute or law with respect to any case, proceeding
or other action commenced by or against 

21

Mortgagor under the
Bankruptcy Code or comparable federal or state statute or law. Further, if the
foregoing assignment is not effective under applicable law and Mortgagor shall
desire to so reject the Ground Lease, at Mortgagee’s request, Mortgagor shall
assign its interest in the Ground Lease to Mortgagee in lieu of rejecting the
Ground Lease, upon receipt by Mortgagor of notice from Mortgagee of such
request together with Mortgagee’s agreement to cure any existing defaults of
Mortgagor under the Ground Lease.

               (c)
Mortgagor hereby agrees that if the Ground Lease is terminated for any
reason in the event of the rejection or disaffirmance of the Ground Lease
pursuant to the Bankruptcy Code or any other law affecting creditor’s rights,
any property not removed by Mortgagor as permitted or required by the Ground
Lease, shall at the option of Mortgagee be deemed abandoned by Mortgagor,
provided that Mortgagee may remove any such property required to be removed by
Mortgagor pursuant to the Ground Lease and all costs and expenses associated
with such removal shall be paid by Mortgagor within five (5) days of receipt by
Mortgagor of an invoice for such removal costs and expenses.

ARTICLE 3 

Assignment of
Rents and Leases

          Section
3.1. Assignment. Mortgagor hereby assigns to Mortgagee all Rents
(hereinafter defined) and all of Mortgagor’s rights in and under all Leases
(hereinafter defined). So long as no Default (hereinafter defined) has
occurred, Mortgagor shall have a license (which license shall terminate
automatically and without further notice upon the occurrence of a Default) to
collect, but not prior to accrual, the Rents under the Leases and, where
applicable, subleases, such Rents to be held in trust for Mortgagee, and to
otherwise deal with all Leases as permitted by this Mortgage. Each month,
provided no Default has occurred, Mortgagor may retain such Rents as were
collected that month and held in trust for Mortgagee; provided, however, that
all Rents collected by Mortgagor shall be applied solely to the ordinary and
necessary expenses of owning and operating the Property or paid to Mortgagee.
Upon the revocation of such license, all Rents shall be paid directly to
Mortgagee and not through Mortgagor, all without the necessity of any further
action by Mortgagee, including, without limitation, any action to obtain
possession of the Land, Improvements or any other portion of the Property or
any action for the appointment of a receiver. Mortgagor hereby authorizes and
directs the tenants under the Leases to pay Rents to Mortgagee upon written
demand by Mortgagee, without further consent of Mortgagor, without any
obligation of such tenants to determine whether a Default has in fact occurred
and regardless of whether Mortgagee has taken possession of any portion of the
Property, and the tenants may rely upon any written statement delivered by
Mortgagee to the tenants. Any such payments to Mortgagee shall constitute
payments to Mortgagor under the Leases, and Mortgagor hereby irrevocably
appoints Mortgagee as its attorney-in-fact to do all things, after a Default,
which Mortgagor might otherwise do with respect to the Property and the Leases
thereon, including, without limitation, (i) collecting Rents with or without
suit and applying the same, less expenses of collection, to any of the
obligations secured hereunder or to expenses of operating and maintaining the
Property (including reasonable reserves for anticipated expenses), at the
option of Mortgagee, all in such manner as may be determined by Mortgagee, or
at the option of Mortgagee, holding the same as security for 

22

the payment of the
Secured Indebtedness, (ii) leasing, in the name of Mortgagor, the whole or any
part of the Property which may become vacant, and (iii) employing agents
therefor and paying such agents reasonable compensation for their services. The
curing of such Default, unless other Defaults also then exist, shall entitle
Mortgagor to recover its aforesaid license to do any such things which
Mortgagor might otherwise do with respect to the Property and the Leases
thereon and to again collect such Rents. The powers and rights granted in this
paragraph shall be in addition to the other remedies herein provided for upon
the occurrence of a Default and may be exercised independently of or
concurrently with any of said remedies. Nothing in the foregoing shall be
construed to impose any obligation upon Mortgagee to exercise any power or
right granted in this paragraph or to assume any liability under any Lease of
any part of the Property and no liability shall attach to Mortgagee for failure
or inability to collect any Rents under any such Lease. The assignment
contained in this Section shall become null and void upon the release of this
Mortgage. As used herein: (i) “Lease” means each existing or future lease,
sublease (to the extent of Mortgagor’s rights thereunder) or other agreement
under the terms of which any person has or acquires any right to occupy or use
the Property, or any part thereof, or interest therein, and each existing or
future guaranty of payment or performance thereunder, and all extensions,
renewals, modifications and replacements of each such lease, sublease,
agreement or guaranty; and (ii) “Rents” means all of the rents, revenue,
income, profits and proceeds derived and to be derived from the Property or
arising from the use or enjoyment of any portion thereof or from any Lease,
including but not limited to the proceeds from any negotiated lease termination
or buyout of such Lease, liquidated damages following default under any such
Lease, all proceeds payable under any policy of insurance covering loss of
rents resulting from untenantability caused by damage to any part of the
Property, all of Mortgagor’s rights to recover monetary amounts from any tenant
in bankruptcy including, without limitation, rights of recovery for use and
occupancy and damage claims arising out of Lease defaults, including
rejections, under any applicable Debtor Relief Law (hereinafter defined),
together with any sums of money that may now or at any time hereafter be or
become due and payable to Mortgagor by virtue of any and all royalties,
overriding royalties, bonuses, delay rentals and any other amount of any kind
or character arising under any and all present and all future oil, gas, mineral
and mining leases covering the Property or any part thereof, and all proceeds
and other amounts paid or owing to Mortgagor under or pursuant to any and all
contracts and bonds relating to the construction or renovation of the Property.

               Section
3.2. Covenants, Representations and Warranties Concerning Leases and Rents.
Mortgagor covenants, represents and warrants that: (a) Mortgagor has good title
to, and is the owner of the entire landlord’s interest in, the Leases and Rents
hereby assigned and authority to assign them; (b) all Leases are valid and
enforceable, and in full force and effect, and are unmodified except as stated
therein; (c) neither Mortgagor nor any tenant in the Property is in default
under its Lease (and no event has occurred which with the passage of time or
notice or both would result in a default under its Lease) or is the subject of
any bankruptcy, insolvency or similar proceeding; (d) unless otherwise stated
in a Permitted Encumbrance, no Rents or Leases have been or will be assigned,
mortgaged, pledged or otherwise encumbered and no other person has or will
acquire any right, title or interest in such Rents or Leases; (e) no Rents have
been waived, released, discounted, set off or compromised; (f) except as stated
in the Leases, Mortgagor has not received any funds or deposits from any tenant
for which credit has not already been made on account of accrued Rents; (g)
Mortgagor shall perform all of its obligations under the Leases and enforce the
tenants’ obligations under the Leases to the extent 

23

enforcement is prudent
under the circumstances; (h) Mortgagor will not without the prior written
consent of Mortgagee, enter into any Lease after the date hereof except in
accordance with the terms of Exhibit I to the Loan Agreement, or waive,
release, discount, set off, compromise, reduce or defer any Rent, receive or
collect Rents more than one (1) month in advance, grant any rent-free period to
any tenant (except in accordance with the terms of Exhibit I to the Loan
Agreement), reduce any Lease term or waive, release or otherwise modify any
other material obligation under any Lease, renew or extend any Lease except in
accordance with the terms of Exhibit I to the Loan Agreement or in accordance
with a right of the tenant thereto in such Lease, approve or consent to an
assignment of a Lease or a subletting of any part of the premises covered by a
Lease (except with respect to leases of 5,000 square feet of rentable space or
less), or settle or compromise any claim against a tenant under a Lease in
bankruptcy or otherwise (except with respect to leases of 5,000 square feet of
rentable space or less); (i) Mortgagor will not, without the prior written
consent of Mortgagee, terminate or consent to the cancellation or surrender of
any Lease having an unexpired term of one (1) year or more unless promptly
after the cancellation or surrender a new Lease of such premises is made with a
new tenant having a credit standing that is satisfactory to Mortgagee, in Mortgagee’s
judgment, on terms not materially less favorable to lessor than the terms of
the terminated or cancelled Lease; (j) Mortgagor will not execute any Lease
except in accordance with the Loan Documents and for actual occupancy by the
tenant thereunder; (k) Mortgagor shall give prompt notice to Mortgagee, as soon
as Mortgagor first obtains notice, of any claim, or the commencement of any
action, by any tenant or subtenant under or with respect to a Lease regarding
any claimed damage, default, diminution of or offset against Rent, cancellation
of the Lease, or constructive eviction, excluding, however, notices of default
under residential Leases, and Mortgagor shall defend, at Mortgagor’s expense,
any proceeding pertaining to any Lease, including, if Mortgagee so requests,
any such proceeding to which Mortgagee is a party; (l) Mortgagor shall as often
as requested by Mortgagee, within ten (10) days of each request, deliver to
Mortgagee a complete rent roll of the Property in such detail as Mortgagee may
require and financial statements of the tenants, subtenants and guarantors
under the Leases to the extent available to Mortgagor, and deliver to such of
the tenants and others obligated under the Leases specified by Mortgagee
written notice of the assignment in Section 3.1 hereof in form and content
satisfactory to Mortgagee; (m) promptly upon request by Mortgagee, Mortgagor
shall deliver to Mortgagee executed originals of all Leases and copies of all
records in its possession or control relating thereto; (n) there shall be no
merger of the leasehold estates, created by the Leases, with the fee estate of
the Land without the prior written consent of Mortgagee; and (o) Mortgagee may
at any time and from time to time by specific written instrument intended for the
purpose, unilaterally subordinate the lien of this Mortgage to any Lease,
without joinder or consent of, or notice to, Mortgagor, any tenant or any other
person, and notice is hereby given to each tenant under a Lease of such right
to subordinate. No such subordination shall constitute a subordination to any
lien or other encumbrance, whenever arising, or improve the right of any junior
lien Mortgagee; and nothing herein shall be construed as subordinating this
Mortgage to any Lease.

          Section
3.3. Estoppel Certificates. All Leases executed after the date hereof
shall require the tenant to execute and deliver to Mortgagee an estoppel
certificate in form and substance acceptable to Mortgagee not more than thirty
(30) days after notice from Mortgagee. 

          Section
3.4. No Liability of Mortgagee. Mortgagee’s acceptance of this
assignment shall not be deemed to constitute Mortgagee a “mortgagee in
possession,” nor obligate 

24

Mortgagee to appear in or
defend any proceeding relating to any Lease or to the Property, or to take any
action hereunder, expend any money, incur any expenses, or perform any
obligation or liability under any Lease, or assume any obligation for any
deposit delivered to Mortgagor by any tenant and not as such delivered to and
accepted by Mortgagee. Mortgagee shall not be liable for any injury or damage
to person or property in or about the Property, or for Mortgagee’s failure to
collect or to exercise diligence in collecting Rents, but shall be accountable
only for Rents that it shall actually receive. Neither the assignment of Leases
and Rents nor enforcement of Mortgagee’s rights regarding Leases and Rents
(including collection of Rents) nor possession of the Property by Mortgagee nor
Mortgagee’s consent to or approval of any Lease (nor all of the same), shall
render Mortgagee liable on any obligation under or with respect to any Lease or
constitute affirmation of, or any subordination to, any Lease, occupancy, use
or option. 

          If
Mortgagee seeks or obtains any judicial relief regarding Rents or Leases, the
same shall in no way prevent the concurrent or subsequent employment of any
other appropriate rights or remedies nor shall same constitute an election of
judicial relief for any foreclosure or any other purpose. Mortgagee neither has
nor assumes any obligations as lessor or landlord with respect to any Lease.
The rights of Mortgagee under this Article 3 shall be cumulative of all other
rights of Mortgagee under the Loan Documents or otherwise.

          Reference
is hereby made to Section 291-f of the Real Property Law of the State of New
York for the purpose of obtaining for Mortgagee the benefits of said Section in
connection herewith.

ARTICLE 4

Default

          Section
4.1. Events of Default. The occurrence of any one of the following shall
be a default under this Mortgage (“default” or “Default”):

               (a)
Failure to Pay Indebtedness. Any of the Secured Indebtedness or
any indebtedness evidenced by the other “Notes” (as defined in the Loan
Agreement) is not paid when due, regardless of how such amount may have become
due and such default shall have continued for a period of ten (10) days.

               (b)
Nonperformance of Covenants. Any covenant, agreement or condition
herein or in any other Loan Document (other than covenants otherwise addressed
in another paragraph of this Section, such as covenants to pay the Secured
Indebtedness) is not fully and timely performed, observed or kept and such
failure shall have continued for a period of thirty (30) days after notice
thereof shall have been given to Mortgagor by Mortgagee (or such other cure
period as may be specified elsewhere in this Mortgage or the other Loan
Documents with respect to specific provisions), provided, however, if such
default is not susceptible of being cured within such thirty (30) day period
and Mortgagor has commenced such cure within such thirty (30) day period and is
diligently pursuing such cure to Mortgagee’s satisfaction, such thirty (30) day
cure period shall be extended, but in no event shall such cure period exceed
sixty (60) days, or, in the case of such other documents, such shorter grace
period, if any, as may be provided for therein.

25

               (c)
Default under other Loan Documents. The occurrence of a Default
under any other Loan Document, including an Early Termination Event as defined
in any Master Agreement relating to any Swap Transaction. 

               (d)
Representations. Any statement, representation or warranty in any
of the Loan Documents, or in any financial statement or any other writing
heretofore or hereafter delivered to Mortgagee in connection with the Secured
Indebtedness is false, misleading or erroneous in any material respect on the
date hereof or on the date as of which such statement, representation or
warranty is made.

               (e)
Bankruptcy or Insolvency. The owner of the Property or any person
liable, directly or indirectly, for any of the Secured Indebtedness (or any
general partner or joint venturer of such owner or other person):

	
  

 	
  

 
	
  

 	
           (i)
 (A) Executes an assignment for the benefit of creditors, or takes any action
 in furtherance thereof; or (B) admits in writing its inability to pay, or
 fails to pay, its debts generally as they become due; or (C) as a debtor,
 files a petition, case, proceeding or other action pursuant to, or
 voluntarily seeks the benefit or benefits of, Title 11 of the United States
 Code as now or hereafter in effect or any other federal, state or local law,
 domestic or foreign, as now or hereafter in effect relating to bankruptcy,
 insolvency, liquidation, receivership, reorganization, arrangement,
 composition, extension or adjustment of debts, or similar laws affecting the
 rights of creditors (Title 11 of the United States Code and such other laws
 being herein called “Debtor Relief Laws”), or takes any action in furtherance
 thereof; or (D) seeks the appointment of a receiver, trustee, custodian or
 liquidator of the Property or any part thereof or of any significant portion
 of its other property; or

 
	
  

 	
  

 
	
  

 	
           (ii)
 Suffers the filing of a petition, case, proceeding or other action against it
 as a debtor under any Debtor Relief Law or seeking appointment of a receiver,
 trustee, custodian or liquidator of the Property or any part thereof or of
 any significant portion of its other property, and (A) admits, acquiesces in
 or fails to contest diligently the material allegations thereof, or (B) the
 petition, case, proceeding or other action results in entry of any order for
 relief or order granting relief sought against it, or (C) in a proceeding
 under Debtor Relief Laws, the case is converted from one chapter to another,
 or (D) fails to have the petition, case, proceeding or other action
 permanently dismissed or discharged on or before the earlier of trial thereon
 or ninety (90) days next following the date of its filing; or

 
	
  

 	
  

 
	
  

 	
           (iii)
 Conceals, removes, or permits to be concealed or removed, any part of its
 property, with intent to hinder, delay or defraud its creditors or any of
 them, or makes or suffers a transfer of any of its property which may be
 fraudulent under any bankruptcy, fraudulent conveyance or similar law; or
 makes any transfer of its property to or for the benefit of a creditor at a
 time when other creditors similarly situated have not been paid; or suffers
 or permits, while insolvent, any creditor to obtain a lien (other than as
 described in subparagraph (iv) below) upon any of its property through legal
 proceedings which are not vacated and such lien discharged prior to
 enforcement thereof and in any event within sixty (60) days from the date
 thereof; or

 

26

	
  

 	
  

 
	
  

 	
           (iv)
 Fails to have discharged within a period of thirty (30) days any attachment,
 sequestration, or similar writ levied upon any of its property; or

 
	
  

 	
  

 
	
  

 	
           (v)
 Fails to pay immediately any final money judgment against it.

 

               (f)
Transfer of the Property. Any sale, lease, conveyance,
assignment, pledge, encumbrance, or transfer of all or any part of the Property
or any interest therein, voluntarily or involuntarily, whether by operation of
law or otherwise, except: (i) sales or transfers of items of the Accessories
which have become obsolete or worn beyond practical use and which have been
replaced by adequate substitutes, owned by Mortgagor, having a value equal to
or greater than the replaced items when new; and (ii) the grant, in the
ordinary course of business, of a leasehold interest in a part of the
Improvements to a tenant for occupancy, not containing a right or option to
purchase and not in contravention of any provision of this Mortgage or of any
other Loan Document. Mortgagee may, in its sole discretion, waive a default
under this paragraph, but it shall have no obligation to do so, and any waiver
may be conditioned upon such one or more of the following (if any) which
Mortgagee may require: the grantee’s integrity, reputation, character,
creditworthiness and management ability being satisfactory to Mortgagee in its
sole judgment and grantee executing, prior to such sale or transfer, a written
assumption agreement containing such terms as Mortgagee may require, a
principal paydown on the Note, an increase in the rate of interest payable
under the Note, a transfer fee, a modification of the term of the Note, and any
other modification of the Loan Documents which Mortgagee may require. : NOTICE
- THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL AND ANY AND ALL SWAP
TRANSACTIONS ARE SUBJECT TO TERMINATION, OR THE TERMS THEREOF BEING MODIFIED IN
THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY CONVEYED.

               (g)
Transfer of Assets. Any sale, lease, conveyance, assignment,
pledge, encumbrance, or transfer of all or any part of the other assets of
Mortgagor, excluding the Property, voluntarily or involuntarily, whether by
operation of law or otherwise, except: (i) sales or transfers in the ordinary
course of Mortgagor’s business; and (ii) sales or transfers for which Mortgagor
receives consideration substantially equivalent to the fair market value of the
transferred asset. 

               (h)
Transfer of Ownership of Mortgagor. Any of the following:

	
  

 	
  

 
	
  

 	
           (i)
 the sale, pledge, encumbrance, assignment or transfer, voluntarily or
 involuntarily, whether by operation of law or otherwise, of any interest in
 Mortgagor (if Mortgagor is not a natural person but is a corporation,
 partnership, limited liability company, trust or other legal entity), without
 the prior written consent of Mortgagee (including, without limitation, if
 Mortgagor is a partnership or joint venture, the withdrawal from or admission
 into it of any general partner or joint venturer); or

 
	
  

 	
  

 
	
  

 	
           (ii)
 if Mortgagor or Guarantor (or a general partner, member or co-venturer of
 either of them) is a partnership, joint venture, limited liability company,
 trust or closely-held corporation, any sale, conveyance, transfer or other
 disposition of more than 10%, in the aggregate, of any class of the issued
 and outstanding capital stock of such closely-held corporation or of the
 beneficial interest of such partnership, venture, limited liability 

 

27

	
  

 	
  

 
	
  

 	
 company or trust, or a
 change of any general partner, joint venturer, member or beneficiary, as the
 case may be, or, in the event Mortgagor or Guarantor (or a general partner,
 co-venturer, member or beneficiary, as the case may be, of either of them) is
 a publicly-held corporation, the sale, conveyance, transfer or other
 disposition of more than 10%, in the aggregate, of the stock-holdings of any
 of the five (5) individuals or entities that own the greatest number of
 shares of each class of issued and outstanding stock, or effectuates or
 permits a reduction in the aggregate direct and indirect ownership interests
 of Guarantor in Mortgagor below 50.1%, or effectuates or causes Acadia Realty
 Trust to fail to control the management of Guarantor and Mortgagor.

 

               (i)
Grant of Easement, Etc. Without the prior written consent of
Mortgagee, Mortgagor grants any easement or dedication, files any plat,
condominium declaration, or restriction, or otherwise encumbers the Property,
or seeks or permits any zoning reclassification or variance, unless such action
is expressly permitted by the Loan Documents or does not affect the Property.

               (j)
Abandonment. The owner of the Property abandons any of the
Property.

               (k)
Default Under Other Lien. A default or event of default occurs
under any lien, security interest or assignment covering the Property or any
part thereof (whether or not Mortgagee has consented, and without hereby
implying Mortgagee’s consent, to any such lien, security interest or assignment
not created hereunder), or Mortgagee of any such lien, security interest or
assignment declares a default or institutes foreclosure or other proceedings
for the enforcement of its remedies thereunder.

               (l)
Destruction. The Property is so demolished, destroyed or damaged
that, in the reasonable opinion of Mortgagee, it cannot be restored or rebuilt
with available funds to a profitable condition within a reasonable period of
time and in any event, prior to the final maturity date of the Note.

               (m)
Condemnation. (i) Any governmental authority shall require, or
commence any proceeding for, the demolition of any building or structure
comprising a part of the Premises, or (ii) there is commenced any proceeding to
condemn or otherwise take pursuant to the power of eminent domain, or a
contract for sale or a conveyance in lieu of such a taking is executed which
provides for the transfer of, a material portion of the Premises, including but
not limited to the taking (or transfer in lieu thereof) of any portion which
would result in the blockage or substantial impairment of access or utility
service to the Improvements or which would cause the Premises to fail to comply
with any Legal Requirement.

               (n)
Liquidation, Etc. The liquidation, termination, dissolution,
merger, consolidation or failure to maintain good standing in the State of New
York and/or the state of incorporation or organization, if different (or in the
case of an individual, the death or legal incapacity) of Mortgagor, any owner
of the Property or any person obligated to pay any part of the Secured
Indebtedness.

               (o)
Material, Adverse Change. In Mortgagee’s reasonable opinion, the
prospect of payment of all or any part of the Secured Indebtedness has been
impaired because of a material, 

28

adverse change in the
financial condition, results of operations, business or properties of
Mortgagor, any owner of the Property or any person liable, directly or indirectly,
for any of the Secured Indebtedness, or of any general partner or joint
venturer thereof (if such owner or other person is a partnership or joint
venture).

               (p)
Enforceability; Priority. Any Loan Document shall for any reason
without Mortgagee’s specific written consent cease to be in full force and
effect, or shall be declared null and void or unenforceable in whole or in
part, or the validity or enforceability thereof, in whole or in part, shall be
challenged or denied by any party thereto other than Mortgagee; or the liens,
mortgages or security interests of Mortgagee in any of the Property become
unenforceable in whole or in part, or cease to be of the priority herein
required, or the validity or enforceability thereof, in whole or in part, shall
be challenged or denied by Mortgagor or any person obligated to pay any part of
the Secured Indebtedness.

               (q)
Other Indebtedness. A default or event of default occurs under
any document executed and delivered in connection with any other indebtedness
(to Mortgagee or any other person or entity) of Mortgagor, the owner of the
Property, any person obligated to pay any part of the Secured Indebtedness, or
any person or entity which guarantees such other indebtedness.

               (r)
Ground Lease. (A) A breach or default by Mortgagor under any
condition or obligation contained in the Ground Lease shall occur, (B) there
occurs any event or condition that gives Ground Lessor under the Ground Lease a
right to terminate or cancel the Ground Lease, (C) the Ground Lease shall be
surrendered or the Ground Lease shall be terminated or cancelled for any reason
or under any circumstances whatsoever or (D) any of the terms, covenants or
conditions of the Ground Lease shall in any manner be modified, changed or
conditions of the Ground Lease shall in any manner be modified, changed,
supplemented, altered or amended without the prior written consent of
Mortgagee.

               (s)
Fee Interest. This Mortgage shall fail to encumber the fee interest
of the landlord under the Ground Lease if Mortgagor, Guarantor or any affiliate
thereof shall become the owner of such fee interest.

               (t)
Certain Other Agreements. (A) A breach or default by Mortgagor or
Storage Facility Tenant under any condition or obligation contained in the
Storage Facility Master Lease shall occur, (B) there occurs any event or
condition that gives Mortgagor or Storage Facility Tenant under the Storage
Facility Master Lease a right to terminate or cancel the Storage Facility
Master Lease, (C) the Storage Facility Master Lease shall be surrendered or the
Storage Facility Master Lease shall be terminated or cancelled for any reason
or under any circumstances whatsoever, except as specifically permitted herein,
or (D) any of the terms, covenants or conditions of the Storage Facility Master
Lease shall in any manner be modified, changed, supplemented, altered or
amended without the prior written consent of Mortgagee.

               (u)
Storage Facility Tenant. Storage Facility Tenant shall dissolve
or cease to exist during the term of the Loan, except in compliance with the
provisions of the Loan Agreement.

               (v)
Condominium Assessments. The Condominum Association shall file a
lien against any of the Property for unpaid Condominium Assessments.

29

          Section
4.2. Notice and Cure. If any provision of this Mortgage or any other
Loan Document provides for Mortgagee to give to Mortgagor any notice regarding
a default or incipient default, then if Mortgagee shall fail to give such
notice to Mortgagor as provided, the sole and exclusive remedy of Mortgagor for
such failure shall be to seek appropriate equitable relief to enforce the
agreement to give such notice and to have any acceleration of the maturity of
the Note and the Secured Indebtedness postponed or revoked and foreclosure
proceedings in connection therewith delayed or terminated pending or upon the
curing of such default in the manner and during the period of time permitted by
such agreement, if any, and Mortgagor shall have no right to damages or any
other type of relief not herein specifically set out against Mortgagee, all of
which damages or other relief are hereby waived by Mortgagor. Nothing herein or
in any other Loan Document shall operate or be construed to add on or make
cumulative any cure or grace periods specified in any of the Loan Documents.

ARTICLE 5

Remedies

          Section
5.1. Certain Remedies. If a Default shall occur, Mortgagee may (but
shall have no obligation to) exercise any one or more of the following
remedies, without notice (unless notice is required by applicable statute):

               (a)
Acceleration. Mortgagee may at any time and from time to time
declare any or all of the Secured Indebtedness immediately due and payable and
may terminate any and all Swap Transactions. Upon any such declaration, such
Secured Indebtedness shall thereupon be immediately due and payable, and such
Swap Transactions shall immediately terminate, without presentment, demand,
protest, notice of protest, notice of acceleration or of intention to
accelerate or any other notice or declaration of any kind, all of which are
hereby expressly waived by Mortgagor. Without limitation of the foregoing, upon
the occurrence of a default described in clauses (A), (C) or (D) of
subparagraph (i) of paragraph (d) of Section 4.1, hereof, all of the Secured
Indebtedness shall thereupon be immediately due and payable, without
presentment, demand, protest, notice of protest, declaration or notice of
acceleration or intention to accelerate, or any other notice, declaration or
act of any kind, all of which are hereby expressly waived by Mortgagor.

               (b)
Enforcement of Assignment of Rents. In addition to the rights of
Mortgagee under Article 3 hereof, prior or subsequent to taking possession of
any portion of the Property or taking any action with respect to such
possession, Mortgagee may: (1) collect and/or sue for the Rents in Mortgagee’s
own name, give receipts and releases therefor, and after deducting all expenses
of collection, including attorneys’ fees and expenses, apply the net proceeds
thereof to the Secured Indebtedness in such manner and order as Mortgagee may
elect and/or to the operation and management of the Property, including the
payment of management, brokerage and attorney’s fees and expenses; and (2)
require Mortgagor to transfer all security deposits and records thereof to
Mortgagee together with original counterparts of the Leases.

30

               (c)
Mortgagee’s Right to Enter and Take Possession, Operate and Apply
Income. 

	
  

 	
  

 
	
  

 	
           (i)
 Mortgagee may demand that Mortgagor surrender the actual possession of the
 Property and upon such demand, Mortgagor shall forthwith surrender same to
 Mortgagee and, to the extent permitted by law, Mortgagee itself, or by such
 officers or agents as it may appoint, may enter and take possession of all of
 the Property and may exclude Mortgagor and its agents and employees wholly
 therefrom.

 
	
  

 	
  

 
	
  

 	
           (ii)
 If Mortgagor shall for any reason fail to surrender or deliver the Property
 or any part thereof after Mortgagee’s demand, Mortgagee may obtain a judgment
 or order conferring on Mortgagee the right to immediate possession or
 requiring Mortgagor to deliver immediate possession to Mortgagee, to the
 entry of which judgment or decree Mortgagor hereby specifically consents.

 
	
  

 	
  

 
	
  

 	
           (iii)
 Mortgagee may from time to time: (A) continue and complete construction of,
 hold, store, use, operate, manage and control the Property and conduct the
 business thereof; (B) make all reasonably necessary maintenance,
 repairs, renewals, replacements, additions, betterments and improvements
 thereto and thereon and purchase or otherwise acquire additional personal
 property; (C) insure or keep the Property insured; (D) exercise all
 the rights and powers of Mortgagor in its name or otherwise with respect to
 the same; and (E) enter into agreements with others (including, without
 limitation, new Leases or amendments, extensions, or cancellations to
 existing Leases) all as Mortgagee from time to time may determine in its sole
 discretion. Mortgagor hereby constitutes and irrevocably appoints Mortgagee
 its true and lawful attorney-in-fact, which appointment is coupled with an
 interest, with full power of substitution, and empowers said attorney or
 attorneys in the name of Mortgagor, but at the option of said
 attorney-in-fact, to do any and all acts and execute any and all agreements
 that Mortgagee may deem necessary or proper to implement and perform any and
 all of the foregoing.

 

               (d)
Uniform Commercial Code. Mortgagee may exercise any or all of its
rights and remedies under the Uniform Commercial Code as adopted by the State
of New York as in effect from time to time, (or under the Uniform Commercial
Code in force from time to time in any other state to the extent the same is
applicable law) or other applicable law as well as all other rights and
remedies possessed by Mortgagee, all of which shall be cumulative. Mortgagee is
hereby authorized and empowered to enter the Property or other place where the
collateral may be located without legal process, and to take possession of such
personal property without notice or demand, which hereby are waived to the
maximum extent permitted by the laws of the State of New York. Upon demand by
Mortgagee, Mortgagor shall make such personal property available to Mortgagee
at a place reasonably convenient to Mortgagee. Mortgagee may proceed under the
Uniform Commercial Code as to all or any part of such personal property, and in
conjunction therewith may exercise all of the rights, remedies and powers of a
secured creditor under the Uniform Commercial Code. Any notification required
by the Uniform Commercial Code shall be deemed reasonably and properly given if
sent in accordance with the Notice provisions of this Mortgage at least ten
(10) days before any sale or other disposition of such personal property.
Mortgagee may choose to dispose of some or all of the property, in any
combination consisting of both personal property and Property, in one or more
public or private sales to be held in accordance with the Law and procedures
applicable to real property, as 

31

permitted by Article 9 of
the Uniform Commercial Code. Mortgagor agrees that such a sale of such personal
property together with Property constitutes a commercially reasonable sale of
such personal property.

               (e)
Lawsuits. Mortgagee may proceed by a suit or suits in equity or
at law, whether for collection of the indebtedness secured hereby, the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for any foreclosure hereunder or for
the sale of the Property under the judgment or decree of any court or courts of
competent jurisdiction. Mortgagor hereby assents to the passage of a decree for
the sale of the Property by any equity court having jurisdiction.

               (f)
Foreclosure. Mortgagee may:

	
  

 	
  

 
	
  

 	
           (1)
 sell the Mortgaged Property to the extent permitted and pursuant to the
 procedures provided by law (including, without limitation, in accordance with
 Article 14 of the New York Real Property Actions and Proceedings Law,
 regarding which Mortgagor hereby consents and agrees that notices thereunder
 (including notices of sale) may be given to Mortgagor in any of the manners
 specified for the giving of notices set forth in Section 6.13, and all
 estate, right, title and interest, claim and demand thereof, at one (1) or
 more sales as an entity or in parcels or parts, and at such time and place
 upon such terms and after such notice thereof as may be required or permitted
 by law; or

 
	
  

 	
  

 
	
  

 	
           (2)
 institute proceedings for the complete or partial foreclosure hereof; or

 
	
  

 	
  

 
	
  

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

 

          Any
sale made hereunder may be as an entirety or in such parcels as Mortgagee may
request. To the extent permitted by applicable law, any sale may be adjourned
by announcement at the time and place appointed for such sale without further
notice except as may be required by law. If the proceeds of such sale of less
than the whole of the Property shall be less than the aggregate of the Secured
Indebtedness, this Mortgage and the lien hereof shall remain in full force and
effect as to the unsold portion of the Property just as though no sale had been
made and the rights of Mortgagee to foreclose hereunder shall also apply to any
future sales. A sale may cover not only the Property but also personal property
and other interests which are a part of the Property, or any part thereof, as a
unit and as a part of a single sale, or the sale may be of any part of the
Property separately from the remainder of the Property. After each sale,
Mortgagee shall make to the purchaser or purchasers at such sale good and
sufficient conveyances, conveying the property so sold to the purchaser or
purchasers in fee simple, subject to the Permitted Encumbrances (and to such
leases and other matters, if any), and shall receive the proceeds of said sale
or sales and apply the same as herein provided. In the event any sale hereunder
is not completed or is defective in the opinion of Mortgagee, such sale shall
not exhaust the rights hereunder and Mortgagee shall have the right to cause a
subsequent sale or sales to be made hereunder. Any and all statements of fact
or other recitals made in any deed or 

32

deeds or other
conveyances given by Mortgagee as to nonpayment of the Secured Indebtedness or
as to the occurrence of any default, or as to Mortgagee’s having declared all
of said indebtedness to be due and payable, or as to the request to sell, or as
to notice of time, place and terms of sale and the properties to be sold having
been duly given, or as to any other act or thing having been duly done by
Mortgagee shall be taken as prima facie evidence of the truth of the facts so
stated and recited.

               (g)
Receiver. Mortgagee may apply to any court of competent
jurisdiction to have a receiver appointed to enter upon and take possession of
the Property, collect the Rents therefrom and apply the same as the court may
direct, such receiver to have all of the rights and powers permitted under the laws
of the State of New York. To the extent permitted by law, the right of the
appointment of such receiver shall be a matter of strict right without regard
to the value or the occupancy of the Property or the solvency or insolvency of
Mortgagor. The expenses, including receiver’s fees, attorneys’ fees, costs and
agent’s commission incurred pursuant to the powers herein contained, together
with interest thereon at the default rate under the Note, shall be secured
hereby and shall be due and payable by Mortgagor immediately without notice or
demand. Notwithstanding the appointment of any receiver or other custodian,
Mortgagee shall be entitled as pledgee to the possession and control of any
cash or deposits at the time held by, payable, or deliverable under the terms
of this Mortgage to Mortgagee, and Mortgagee shall have the right to offset the
unpaid Secured Indebtedness against any such cash or deposits in such order as
Mortgagee may elect.

               (h)
Termination of Commitment to Lend. Mortgagee may terminate any
commitment or obligation to lend or disburse funds under any Loan Document or
enter into any other credit arrangement to or for the benefit of Mortgagor.

               (i)
Other Rights and Remedies. Mortgagee may exercise any and all
other rights and remedies which Mortgagee may have under the Loan Documents, or
at law or in equity or otherwise.

          Section
5.2. Application of Proceeds. Unless otherwise provided by applicable
Law, all proceeds from the sale of the Property or any part thereof pursuant to
the rights and remedies set forth in this Article 5 and any other proceeds
received by Mortgagee from the exercise of any of its other rights and remedies
hereunder or under the other Loan Documents shall be applied first to pay all
Expenses and next in reduction of the other Secured Indebtedness, in such
manner and order as Mortgagee may elect.

          Section
5.3. Remedies Cumulative and Concurrent. No right, power or remedy of
Mortgagee as provided in the Note, this Mortgage, or the other Loan Documents
is intended to be exclusive of any other right, power, or remedy of Mortgagee,
but each and every such right, power and remedy shall be cumulative and
concurrent and in addition to any other right, power or remedy available to
Mortgagee now or hereafter existing at law or in equity and may be pursued
separately, successively or together against Mortgagor, or any endorser,
co-maker, surety or guarantor of the Secured Indebtedness, or the Property or
any part thereof, or any one or more of them, at the sole discretion of
Mortgagee. The failure of Mortgagee to exercise any such right, power or remedy
shall in no event be construed as a waiver or release thereof.

33

          Section
5.4. Waiver, Delay or Omission. No waiver of any Default hereunder shall
extend to or affect any subsequent or any other Default then existing, or
impair any rights, powers or remedies consequent thereon, and no delay or
omission of Mortgagee to exercise any right, power or remedy shall be construed
to waive any such Default or to constitute acquiescence therein.

          Section
5.5. Credit of Mortgagee. To the maximum extent permitted by the laws of
the State of New York, upon any sale made under or by virtue of this Article,
Mortgagee may bid for and acquire the Property, or any part thereof, and in
lieu of paying cash therefor may apply to the purchase price, any portion of or
all of the unpaid Secured Indebtedness in such order as Mortgagee may elect.

          Section
5.6. Sale. Any sale or sales made under or by virtue of this Article
shall operate to divest all the estate, right, title, interest, claim and
demand whatsoever at law or in equity, of Mortgagor and all persons, except
tenants pursuant to Leases approved by Mortgagee, claiming by, through or under
Mortgagor in and to the properties and rights so sold, whether sold to
Mortgagee or to others.

          Section
5.7. Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition, seizure of
the Property by any Governmental Authority, or other judicial proceedings
affecting Mortgagor, any endorser, co-maker, surety, or guarantor of the
Secured Indebtedness, or any of their respective properties, Mortgagee, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have its claim
allowed in such proceedings for the entire unpaid Secured Indebtedness at the
date of the institution of such proceedings, and for any additional amounts
which may become due and payable after such date.

          Section
5.8. Waiver of Redemption, Notice, Marshalling, Etc. Mortgagor hereby
waives and releases, for itself and anyone claiming through, by, or under it,
to the maximum extent permitted by the laws of the State of New York:

	
  

 	
  

 
	
  

 	
           (i)
 all benefit that might accrue to Mortgagor by virtue of any present or future
 law exempting the Property, or any part of the proceeds arising from any sale
 thereof, from attachment, levy or sale on execution, or providing for any
 appraisement, valuation, stay of execution, exemption from civil process,
 redemption or extension of time for payment,

 
	
  

 	
  

 
	
  

 	
           (ii)
 unless specifically required herein, all notices of default, or Mortgagee’s
 actual exercise of any option or remedy under the Loan Documents, or
 otherwise, and

 
	
  

 	
  

 
	
  

 	
           (iii)
 any right to have the Property marshaled.

 

          Section
5.9. Discontinuance of Proceedings. If Mortgagee shall have proceeded to
enforce any right under any Loan Document and such proceedings shall have been
discontinued or abandoned for any reason, then except as may be provided in any
written agreement between Mortgagor and Mortgagee providing for the
discontinuance or abandonment of such proceedings, Mortgagor and Mortgagee
shall be restored to their former positions and the rights, remedies and powers
of Mortgagee shall continue as if no such proceedings had been instituted.

34

          Section
5.10. Mortgagee’s Actions. Mortgagee may, at any time without notice to
any person and without consideration, do or refrain from doing any or all of
the following actions, and neither Mortgagor, any endorser, co-maker, surety or
guarantor of the Secured Indebtedness, nor any other person (hereinafter in
this Section collectively referred to as the “Obligor”) now or hereafter
liable for the payment and performance of the Secured Indebtedness shall be
relieved from the payment and performance thereof, unless specifically released
in writing by Mortgagee: (a) renew, extend or modify the terms of the
Note, this Mortgage and the other Loan Documents, or any of them;
(b) forbear or extend the time for the payment or performance of any or
all of the Secured Indebtedness; (c) apply payments by any Obligor to the
reduction of the unpaid Secured Indebtedness in such manner, in such amounts,
and at such times and in such order and priority as Mortgagee may see fit;
(d) release any Obligor; (e) substitute or release in whole or in
part the Property or any other collateral or any portion thereof now or
hereafter held as security for the Secured Indebtedness without affecting,
disturbing or impairing in any manner whatsoever the validity and priority of
the lien of this Mortgage upon the Property which is not released or
substituted, or the validity and priority of any security interest of Mortgagee
in such other collateral which is not released or substituted;
(f) subordinate the lien of this Mortgage or the lien of any other
security interest in any other collateral now or hereafter held as security for
the Secured Indebtedness; (g) join in the execution of a plat or replat of
the Land (provided, however, notwithstanding the foregoing, Mortgagee will join
in such plat or replat of the Land so long as such plat or replat is acceptable
to Mortgagee); (h) join in and consent to the filing of a declaration of
condominium or declaration of restrictive covenants regarding all or any part
of the Land; (i) consent to the granting of any easement on the Land; and
(j) generally deal with any obligor or any other party as Mortgagee may
see fit.

          Section
5.11. Other Remedies. Mortgagee shall have the right from time to time
to protect, exercise and enforce any legal or equitable remedy against
Mortgagor provided under the Loan Documents or by applicable Laws.

ARTICLE 6

Miscellaneous

          Section
6.1. Scope of Mortgage. This Mortgage is a Mortgage of both real and
personal property, a security agreement, an assignment of rents and leases, a
financing statement and fixture filing and a collateral assignment, and also
covers proceeds and fixtures.

          Section
6.2. Effective as a Financing Statement. This Mortgage shall be
effective as a financing statement filed as a fixture filing with respect to
all fixtures included within the Property and is to be filed for record in the
real estate records of each county where any part of the Property (including
said fixtures) is situated. This Mortgage shall also be effective as a
financing statement covering as-extracted collateral (including oil and gas),
accounts and general intangibles under the New York Uniform Commercial Code, as
in effect from time to time, and the Uniform Commercial Code, as in effect from
time to time, in any other state where the Property is situated which will be
financed at the wellhead or minehead of the wells or mines located on the
Property and is to be filed for record in the real estate records of each
county where any part of the Property is situated. This Mortgage shall also be
effective as a financing 

35

statement covering any
other Property and may be filed in any other appropriate filing or recording
office. The mailing address of Mortgagor and Mortgagee are set forth in the
preamble of this Mortgage and the address of Mortgagee from which information
concerning the security interests hereunder may be obtained is the address of
Mortgagee set forth at the end of this Mortgage. A carbon, photographic or
other reproduction of this Mortgage or of any financing statement relating to
this Mortgage shall be sufficient as a financing statement for any of the
purposes referred to in this Section.

          Section
6.3. Notice to Account Debtors. In addition to the rights granted
elsewhere in this Mortgage, Mortgagee may at any time notify the account
debtors or obligors of any accounts, chattel paper, general intangibles,
negotiable instruments or other evidences of indebtedness included in the
Collateral to pay Mortgagee directly.

          Section
6.4. Waiver by Mortgagee. Mortgagee may at any time and from time to
time by a specific writing intended for the purpose: (a) waive compliance by
Mortgagor with any covenant herein made by Mortgagor to the extent and in the
manner specified in such writing; (b) consent to Mortgagor’s doing any act
which hereunder Mortgagor is prohibited from doing, or to Mortgagor’s failing
to do any act which hereunder Mortgagor is required to do, to the extent and in
the manner specified in such writing; (c) release any part of the Property or
any interest therein from the lien and security interest of this Mortgage,
without the joinder of Mortgagee; or (d) release any party liable, either
directly or indirectly, for the Secured Indebtedness or for any covenant herein
or in any other Loan Document, without impairing or releasing the liability of
any other party. No such act shall in any way affect the rights or powers of
Mortgagee or Mortgagee hereunder except to the extent specifically agreed to by
Mortgagee in such writing.

          Section
6.5. No Impairment of Security. The lien, security interest and other
security rights of Mortgagee hereunder or under any other Loan Document shall
not be impaired by any indulgence, moratorium or release granted by Mortgagee
including, but not limited to, any renewal, extension or modification which
Mortgagee may grant with respect to any Secured Indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which
Mortgagee may grant in respect of the Property, or any part thereof or any
interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any Secured Indebtedness. The taking of additional
security by Mortgagee shall not release or impair the lien, security interest
or other security rights of Mortgagee hereunder or affect the liability of
Mortgagor or of any endorser, guarantor or surety, or improve the right of any
junior lien Mortgagee in the Property (without implying hereby Mortgagee’s
consent to any junior lien).

          Section
6.6. Acts Not Constituting Waiver by Mortgagee. Mortgagee may waive any
default without waiving any other prior or subsequent default. Mortgagee may
remedy any default without waiving the default remedied. Neither failure by
Mortgagee to exercise, nor delay by Mortgagee in exercising, nor discontinuance
of the exercise of any right, power or remedy (including but not limited to the
right to accelerate the maturity of the Secured Indebtedness or any part
thereof) upon or after any default shall be construed as a waiver of such default
or as a waiver of the right to exercise any such right, power or remedy at a
later date. No single or partial exercise by Mortgagee of any right, power or
remedy hereunder shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy hereunder may be
exercised at any time and from time to time. No modification or 

36

waiver of any provision
hereof nor consent to any departure by Mortgagor therefrom shall in any event
be effective unless the same shall be in writing and signed by Mortgagee and
then such waiver or consent shall be effective only in the specific instance,
for the purpose for which given and to the extent therein specified. No notice
to nor demand on Mortgagor in any case shall of itself entitle Mortgagor to any
other or further notice or demand in similar or other circumstances.
Remittances in payment of any part of the Secured Indebtedness other than in
the required amount in immediately available U.S. funds shall not, regardless of
any receipt or credit issued therefor, constitute payment until the required
amount is actually received by Mortgagee in immediately available U.S. funds
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 on any Secured Indebtedness shall be deemed an acceptance
on account only and shall not in any way excuse the existence of a default
hereunder notwithstanding any notation on or accompanying such partial payment
to the contrary.

          Section
6.7. Mortgagor’s Successors. If the ownership of the Property or any
part thereof becomes vested in a person other than Mortgagor, Mortgagee may,
without notice to Mortgagor, deal with such successor or successors in interest
with reference to this Mortgage and to the Secured Indebtedness in the same
manner as with Mortgagor, without in any way vitiating or discharging
Mortgagor’s liability hereunder or for the payment of the indebtedness or
performance of the obligations secured hereby. No transfer of the Property, no
forbearance on the part of Mortgagee, and no extension of the time for the
payment of the Secured Indebtedness given by Mortgagee shall operate to
release, discharge, modify, change or affect, in whole or in part, the
liability of Mortgagor hereunder for the payment of the indebtedness or
performance of the obligations secured hereby or the liability of any other
person hereunder for the payment of the indebtedness secured hereby. Each
Mortgagor agrees that it shall be bound by any modification of this Mortgage or
any of the other Loan Documents made by Mortgagee and any subsequent owner of
the Property, with or without notice to such Mortgagor, and no such
modifications shall impair the obligations of such Mortgagor under this
Mortgage or any other Loan Document. Nothing in this Section or elsewhere in
this Mortgage shall be construed to imply Mortgagee’s consent to any transfer
of the Property.

          Section
6.8. Place of Payment. All Secured Indebtedness which may be owing
hereunder at any time by Mortgagor shall be payable at the place designated in
the Note (or if no such designation is made, at the address of Mortgagee
indicated at the end of this Mortgage). 

          Section
6.9. Subrogation to Existing Liens; Vendor’s Lien. To the extent that
proceeds of the Note are used to pay indebtedness secured by any outstanding
lien, security interest, charge or prior encumbrance against the Property, such
proceeds have been advanced by Mortgagee at Mortgagor’s request, and Mortgagee
shall be subrogated to any and all rights, security interests and liens owned
by any owner or Mortgagee of such outstanding liens, security interests,
charges or encumbrances, however remote, irrespective of whether said liens,
security interests, charges or encumbrances are released, and all of the same
are recognized as valid and subsisting and are renewed and continued and merged
herein to secure the Secured Indebtedness, but the terms and provisions of this
Mortgage shall govern and control the manner and terms of enforcement of the
liens, security interests, charges and encumbrances to which Mortgagee is
subrogated hereunder. It is expressly understood that, in consideration of the
payment of such 

37

indebtedness by
Mortgagee, Mortgagor hereby waives and releases all demands and causes of
action for offsets and payments in connection with the said indebtedness. If
all or any portion of the proceeds of the loan evidenced by the Note or of any
other secured indebtedness has been advanced for the purpose of paying the
purchase price for all or a part of the Property, no vendor’s lien is waived;
and Mortgagee shall have, and is hereby granted, a vendor’s lien on the
Property as cumulative additional security for the secured indebtedness.
Mortgagee may foreclose under this Mortgage or under the vendor’s lien without
waiving the other or may foreclose under both.

          Section
6.10. Application of Payments to Certain Indebtedness. If any part of
the Secured Indebtedness cannot be lawfully secured by this Mortgage or if any
part of the Property cannot be lawfully subject to the lien and security
interest hereof to the full extent of such indebtedness, then all payments made
shall be applied on said indebtedness first in discharge of that portion
thereof which is not secured by this Mortgage.

          Section
6.11. Nature of Loan; Compliance with Usury Laws. The loan evidenced by
the Note is being made solely for the purpose of carrying on or acquiring a
business or commercial enterprise. It is the intent of Mortgagor and Mortgagee
and all other parties to the Loan Documents to conform to and contract in
strict compliance with applicable usury law from time to time in effect. All
agreements between Mortgagee and Mortgagor (or any other party liable with
respect to any indebtedness under the Loan Documents) are hereby limited by the
provisions of this Section which shall override and control all such
agreements, whether now existing or hereafter arising. In no way, nor in any
event or contingency (including but not limited to prepayment, default, demand
for payment, or acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, chargeable, or received under this
Mortgage, the Note or any other Loan Document or otherwise, exceed the maximum
nonusurious amount permitted by applicable law (the “Maximum Amount”). If, from
any possible construction of any document, interest would otherwise be payable
in excess of the Maximum Amount, any such construction shall be subject to the
provisions of this Section and such document shall ipso facto be automatically
reformed and the interest payable shall be automatically reduced to the Maximum
Amount, without the necessity of execution of any amendment or new document. If
Mortgagee shall ever receive anything of value which is characterized as
interest under applicable law and which would apart from this provision be in
excess of the Maximum Amount, an amount equal to the amount which would have
been excessive interest shall, without penalty, be applied to the reduction of
the principal amount owing on the Secured Indebtedness in the inverse order of
its maturity and not to the payment of interest, or refunded to Mortgagor or
the other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal. The right to accelerate maturity of
the Note or any other Secured Indebtedness does not include the right to
accelerate any interest which has not otherwise accrued on the date of such
acceleration, and Mortgagee does not intend to charge or receive any unearned
interest in the event of acceleration. All interest paid or agreed to be paid
to Mortgagee shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full stated term (including any
renewal or extension) of such indebtedness so that the amount of interest on
account of such indebtedness does not exceed the Maximum Amount. As used in
this Section, the term “applicable law” shall mean the laws of the State of New
York or the federal laws of the United 

38

States applicable to this
transaction, whichever laws allow the greater interest, as such laws now exist
or may be changed or amended or come into effect in the future.

          Section
6.12. Releases.

               (a)
Release of Mortgage. If all of the Secured Indebtedness is paid
as the same becomes due and payable and all of the covenants, warranties,
undertakings and agreements made in this Mortgage are kept and performed, and
all Swap Transactions and all other obligations, if any, of Mortgagee for
further advances have been terminated, then, and in that event only, all rights
under this Mortgage shall terminate (except to the extent expressly provided
herein with respect to indemnifications, representations and warranties and
other rights which are to continue following the release hereof) and the Property
shall become wholly clear of the liens, security interests, conveyances and
assignments evidenced hereby, and such liens and security interests shall be
released by Mortgagee in due form at Mortgagor’s cost. Without limitation, all
provisions herein for indemnity of Mortgagee or Mortgagee shall survive
discharge of the Secured Indebtedness, the termination of any and all Swap
Transactions and any foreclosure, release or termination of this Mortgage.

               (b)
Partial Releases; No Release in Default. Partial releases of the
lien of this Mortgage shall be made in accordance with the terms and provisions
of Exhibit C attached hereto and by this reference made a part hereof,
or in accordance with such other terms and conditions as may subsequently be
agreed to by Mortgagee. If no such Exhibit C is attached hereto, then
there are no terms and provisions for partial releases, to which Mortgagee and
Mortgagor have agreed at this time. In any event, no partial release shall be
sought, requested or required if any Default has occurred which has not been
cured.

               (c)
Effect of Partial Release. Mortgagee may, regardless of
consideration, cause the release of any part of the Property from the lien of
this Mortgage without in any manner affecting or impairing the lien or priority
of this Mortgage as to the remainder of the Property.

               (d)
Release Fee. If permitted by applicable law Mortgagor shall pay
to Mortgagee, at the time of each partial or complete release of the lien of
this Mortgage, a release fee in the amount of $25.00 if the release instrument
is delivered to Mortgagee for execution or $50.00, if Mortgagee is required to
prepare the release instrument. In addition, Mortgagor shall pay to Mortgagee a
fee in the amount of $25.00 for each other document or instrument which
Mortgagor requires Mortgagee to execute.

          Section
6.13. Notices. All notices, requests, consents, demands and other
communications required or which any party desires to give hereunder or under
any other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service, or by registered or certified United States mail, postage
prepaid, addressed to the party to whom directed at the addresses specified in
this Mortgage (unless changed by similar notice in writing given by the
particular party whose address is to be changed) or by facsimile. Any such
notice or communication shall be deemed to have been given either at the time
of personal delivery or, in the case of courier or mail, as of the date of
first attempted delivery at the address and in the manner provided herein, or,
in the case 

39

of facsimile, upon receipt; provided that, service of a notice required
by any applicable statute shall be considered complete when the requirements of
that statute are met. Notwithstanding the foregoing, no notice of change of
address shall be effective except upon receipt. This Section shall not be
construed in any way to affect or impair any waiver of notice or demand
provided in any Loan Document or to require giving of notice or demand to or
upon any person in any situation or for any reason.

          Section
6.14. Invalidity of Certain Provisions. A determination that any
provision of this Mortgage is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination that
the application of any provision of this Mortgage to any person or circumstance
is illegal or unenforceable shall not affect the enforceability or validity of
such provision as it may apply to other persons or circumstances.

          Section
6.15. Gender; Titles; Construction. Within this Mortgage, words of any
gender shall be held and construed to include any other gender, and words in
the singular number shall be held and construed to include the plural, unless
the context otherwise requires. Titles appearing at the beginning of any
subdivisions hereof are for convenience only, do not constitute any part of
such subdivisions, and shall be disregarded in construing the language
contained in such subdivisions. The use of the words “herein,” “hereof,”
“hereunder” and other similar compounds of the word “here” shall refer to this
entire Mortgage and not to any particular Article, Section, paragraph or
provision. The term “person” and words importing persons as used in this
Mortgage shall include firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations, limited liability
companies and other legal entities, including public or governmental bodies,
agencies or instrumentalities, as well as natural persons.

          Section
6.16. Reporting Compliance. Mortgagor agrees to comply with any and all
reporting requirements applicable to the transaction evidenced by the Note and
secured by this Mortgage which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any governmental authority,
including but not limited to The International Investment Survey Act of 1976,
The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Mortgagee to furnish Mortgagee with evidence of
such compliance.

          Section
6.17. Mortgagee’s Consent. Except where otherwise expressly provided
herein, in any instance hereunder where the approval, consent or the exercise
of judgment of Mortgagee is required or requested, (a) the granting or denial
of such approval or consent and the exercise of such judgment shall be within
the sole discretion of Mortgagee, and Mortgagee shall not, for any reason or to
any extent, be required to grant such approval or consent or exercise such
judgment in any particular manner, regardless of the reasonableness of either
the request or Mortgagee’s judgment, and (b) no approval or consent of
Mortgagee shall be deemed to have been given except by a specific writing
intended for the purpose and executed by an authorized representative of
Mortgagee.

          Section
6.18. Mortgagor. Unless the context clearly indicates otherwise, as used
in this Mortgage, “Mortgagor” means Mortgagors named in Section 1.1 hereof or
any of them. The

40

obligations of Mortgagor hereunder shall be joint and several. If any
Mortgagor, or any signatory who signs on behalf of any Mortgagor, is a
corporation, partnership or other legal entity, Mortgagor and any such signatory,
and the person or persons signing for it, represent and warrant to Mortgagee
that this instrument is executed, acknowledged and delivered by Mortgagor’s
duly authorized representatives. If Mortgagor is an individual, no power of
attorney granted by Mortgagor herein shall terminate on Mortgagor’s disability.

          Section
6.19. Execution; Recording. This Mortgage has been executed in several
counterparts, all of which are identical, and all of which counterparts
together shall constitute one and the same instrument. The date or dates
reflected in the acknowledgments hereto indicate the date or dates of actual
execution of this Mortgage, but such execution is as of the date shown on the
first page hereof, and for purposes of identification and reference the date of
this Mortgage shall be deemed to be the date reflected on the first page
hereof. Mortgagor will cause this Mortgage and all amendments and supplements
thereto and substitutions therefor and all financing statements and
continuation statements relating thereto to be recorded, filed, re-recorded and
refiled in such manner and in such places as or Mortgagee shall reasonably
request and will pay all such recording, filing, re-recording and refiling
taxes, fees and other charges.

          Section
6.20. Successors and Assigns. The terms, provisions, covenants and
conditions hereof shall be binding upon Mortgagor, and the heirs, devisees,
representatives, successors and assigns of Mortgagor, and shall inure to the
benefit of Mortgagee and shall constitute covenants running with the Land. All
references in this Mortgage to Mortgagor shall be deemed to include all such
heirs, devisees, representatives, successors and assigns of Mortgagor.

          Section
6.21. Modification or Termination. The Loan Documents may only be
modified or terminated by a written instrument or instruments intended for that
purpose and executed by the party against which enforcement of the modification
or termination is asserted. Any alleged modification or termination which is
not so documented shall not be effective as to any party.

          Section
6.22. No Partnership, Etc. The relationship between Mortgagee and
Mortgagor is solely that of mortgagee and mortgagor. Mortgagee has no fiduciary
or other special relationship with Mortgagor. Nothing contained in the Loan
Documents is intended to create any partnership, joint venture, association or
special relationship between Mortgagor and Mortgagee or in any way make
Mortgagee a co-principal with Mortgagor with reference to the Property. All
agreed contractual duties between or among Mortgagee and Mortgagor and are set
forth herein and in the other Loan Documents and any additional implied
covenants or duties are hereby disclaimed. Any inferences to the contrary of
any of the foregoing are hereby expressly negated.

          Section
6.23. Priority of Lien. This Mortgage shall be, and shall at all times
remain, subject and subordinate to the mortgages described in, and consolidated
and modified by, that certain Fee and Leasehold Mortgage Consolidation and
Modification Agreement by and between Mortgagor and Mortgagee in the amount of
$31,553,701.89 dated as of the date hereof, as the same may be modified,
amended and/or restated from time to time, and the lien imposed by such mortgage.

41

          Section
6.24. Applicable Law. THIS MORTGAGE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY NEW YORK LAW AND CONSTRUED, INTERPRETED
AND ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED
STATES FEDERAL LAW, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW
AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY THE LAWS OF SUCH OTHER
JURISDICTION.

          Section
6.25. Entire Agreement. The Loan Documents constitute the entire
understanding and agreement between Mortgagor and Mortgagee with respect to the
transactions arising in connection with the Secured Indebtedness and supersede
all prior written or oral understandings and agreements between Mortgagor and
Mortgagee with respect to the matters addressed in the Loan Documents.
Mortgagor hereby acknowledges that, except as incorporated in writing in the
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
matters addressed in the Loan Documents.

          Section
6.26. Forum. Mortgagor hereby irrevocably submits generally and
unconditionally for itself and in respect of its property to the jurisdiction
of any state court or any United States federal court sitting in the State of
New York and to the jurisdiction of any state court or any United States
federal court sitting in the state in which any of the Property is located,
over any Dispute. Mortgagor hereby irrevocably waives, to the fullest extent
permitted by Law, any objection that Mortgagor may now or hereafter have to the
laying of venue in any such court and any claim that any such court is an
inconvenient forum. Mortgagor hereby agrees and consents that, in addition to
any methods of service of process provided for under applicable law, all
service of process in any such suit, action or proceeding in any state court or
any United States federal court sitting in the State of New York may be made by
certified or registered mail, return receipt requested, directed to Mortgagor
at its address for notice set forth in this Mortgage, or at a subsequent
address of which Mortgagee received actual notice from Mortgagor in accordance
with the notice section of this Mortgage, and service so made shall be complete
five (5) days after the same shall have been so mailed. Nothing herein shall
affect the right of Mortgagee to serve process in any manner permitted by Law
or limit the right of Mortgagee to bring proceedings against Mortgagor in any
other court or jurisdiction.

          Section
6.27. WAIVER
OF JURY TRIAL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’
AGREEMENT TO ARBITRATE ANY DISPUTE AS SET FORTH IN THIS MORTGAGE, TO THE EXTENT
ANY DISPUTE IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR
BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE
ARBITRATED, MORTGAGOR AND MORTGAGEE WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH
DISPUTE AND ANY ACTION ON SUCH DISPUTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY MORTGAGOR AND MORTGAGEE, AND MORTGAGOR AND MORTGAGEE
HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY
ANY PERSON 

42

OR
ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES
ENTERING INTO THE LOAN DOCUMENTS. MORTGAGOR AND MORTGAGEE ARE EACH HEREBY
AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER OF JURY TRIAL. MORTGAGOR FURTHER REPRESENTS AND WARRANTS
THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS MORTGAGE AND IN THE MAKING
OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND
THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

          Section
6.28. Cross-Default. The Loan shall be cross-defaulted with all other
loans which Mortgagor shall have from Lenders during the term of the Loan,
whether existing as of the date of this Agreement subsequently made. A default
under any of the above-described loans shall constitute a Default under the
Loan. A Default under the Loan shall constitute a Default under the
above-described other loans. To the extent not prohibited by applicable law, if
Mortgagee, at its option, avails itself of this cross-default provision,
Mortgagee shall have the option to pursue its remedies in any combinations and
against any or all of Mortgagee’s security for the aforesaid loans, whether
successively, concurrently or otherwise.

          Section
6.29. Substitute Mortgages. Mortgagor and Mortgagee shall, upon their
mutual agreement to do so, execute such documents as may be necessary in order
to effectuate the modification hereof, including the execution of substitute
mortgages, so as to create two (2) or more liens on the Mortgaged Property in
such amounts as may be mutually agreed upon but in no event to exceed, in the
aggregate, the Mortgage Amount; in such event, Mortgagor covenants and agrees
to pay the reasonable fees and expenses of Mortgagee and its counsel in
connection with any such modification.

          Section
6.30. Satisfaction or Assignment of Mortgage. Upon payment in full of
all sums, and the performance of all obligations, secured hereby in accordance
with the terms and conditions of this Mortgage and the other Loan documents,
Mortgagee shall deliver a satisfaction or release of this Mortgage or, at
Mortgagor’s option to be exercised in writing, an assignment hereof, in either
case in proper form of recording. As a condition to any such satisfaction or
assignment, Mortgagor covenants and agrees to pay Mortgagee’s reasonable fees
and expenses (including attorneys’ fees and expenses) in connection therewith.
Upon any such satisfaction or assignment, Mortgagee shall, automatically and
without the need for any other further documentation, be absolutely and
unconditionally released from any and all claims or liabilities in connection
with the Loan. In addition, Mortgagor hereby indemnifies and agrees to hold
Mortgagee harmless from and against any and all claims and liabilities arising
out of the satisfaction or assignment hereof, such indemnification to survive
any such satisfaction or assignment.

          Section
6.31. New York Provisions. (a) Mortgagor hereby makes the following
statement: “This Mortgage does not cover real property principally improved or
to be improved by one (1) or more structures containing in the aggregate not
more than six (6) residential

43

dwelling, each having its own separate cooking facilities.” and (b) the
covenants and conditions contained herein, other than those included in the New
York Statutory Short Form of Mortgage, shall be construed as affording to
Mortgagee rights additional to, and not exclusive of, the rights conferred
under the provisions of Section 254 of the Real Property Law of the State of
New York.

          Section
6.32. Ground Lease Required Provision. This Mortgage is executed upon
the condition that no purchaser at any foreclosure sale shall acquire any
right, title or interest in and to the lease hereby mortgaged (the Ground
Lease), unless the said purchaser, or the person, firm or corporation to whom
or to which such purchaser’s right has been assigned, assumes and agrees to
perform all of the terms, covenants and conditions of said lease (the Ground
Lease) thereafter to be observed or performed on the part of tenant thereunder,
and that a duplicate original of said instrument containing such assumption
agreement, duly executed and acknowledged of such purchaser or such assignee
and in recordable form, is delivered to Ground Lessor under said lease within
seven (7) days after the consummation of such sale and, in any event, prior to
taking possession of the Premises demised thereby. No further or additional
mortgage or assignment of said lease shall be made except in accordance with
the provisions in Article Eleven of said lease (the Ground Lease).

[Remainder of page intentionally left blank]

44

          IN WITNESS
WHEREOF, Mortgagor has executed this Mortgage as an instrument under seal as of
the date first written on page 1 hereof.

	
  

 	
  

 	
  

 
	
  

 	
 P/A-ACADIA
 PELHAM MANOR, LLC, a Delaware limited liability company

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Robert
 Masters

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
 Senior Vice
 President

 

	
  

 	
  

 
	
 STATE OF NEW
 YORK

 	
 )

 
	
  

 	
 :     ss.:

 
	
 COUNTY OF
 WESTCHESTER

 	
 )

 

          On the 22nd
day of November in the year 2010, before me, the undersigned, a notary public
in and for said state, personally appeared Robert Masters, personally known to
me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 /s/ Debra
 Leibler-Jones

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
 Debra
 Leibler-Jones

 
	
  

 	
  

 	
 State of New
 York

 
	
     4/20/14

 	
  

 	
 No.
 01LE6005995

 
	
 

 	
  

 	
 Qualified in
 Dutchess County

 

EXHIBIT A

Land

PARCEL 1 - Fee Parcel (Lot 8.3)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 374.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

	
  

 	
  

 
	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 80.00 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 2.

 	
 ALONG THE DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1, SOUTH
 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 100.00 FEET TO A
 POINT, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1,
 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 
	
 3.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 100.00
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 4.

 	
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00
 FEET TO A POINT OF CURVATURE, THENCE;

 
	
  

 	
  

 
	
 5.

 	
 ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF
 31.42 FEET, THE CHORD OF WHICH BEARS NORTH 18 DEGREES – 58 MINUTES – 11
 SECONDS EAST, A CHORD DISTANCE OF 28.28 FEET TO THE POINT AND PLACE OF
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON 11/18/10
BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 2 - Ground Lease Parcel (Lot 8.1)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING AT THE NORTHEASTERLY TERMINUS OF A CURVE CONNECTING THE
SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF PELHAM PARKWAY (A.K.A.
C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF BEGINNING RUNNING THENCE; 

	
  

 	
  

 
	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 374.53 FEET TO A POINT OF NON-TANGENT
 CURVATURE, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.3, BLOCK
 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 
	
 2.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF
 31.42 FEET, THE CHORD OF WHICH BEARS SOUTH 18 DEGREES – 58 MINUTES – 11
 SECONDS WEST, A CHORD DISTANCE OF 28.28 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 
	
 3.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00
 FEET TO A POINT, THENCE; 

 
	
  

 	
  

 
	
 4.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 100.00
 FEET TO A POINT, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.2,
 BLOCK 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 
	
 5.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 121.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 6.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 7.

 	
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS WEST, A DISTANCE OF 221.90
 FEET TO A POINT ON THE AFOREMENTIONED SOUTHERLY LINE OF SECOR LANE, THENCE;

 
	
  

 	
  

 
	
 8.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 449.97 FEET TO A POINT OF CURVATURE, THENCE;

 
	
  

 	
  

 
	
 9.

 	
 CONTINUING ALONG THE SOUTHERLY LINE OF SECOR LANE ON A CURVE TO THE
 RIGHT, HAVING A RADIUS OF 650.00 FEET, TURNING A CENTRAL ANGLE OF 11 DEGREES
 – 45 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF 133.30 FEET, THE CHORD OF
 WHICH BEARS NORTH 69 DEGREES – 50 MINUTES – 19 SECONDS EAST, A CHORD DISTANCE
 OF 133.06 FEET TO A POINT, THENCE; ALONG THE WESTERLY LINE OF HUTCHINSON
 RIVER PARKWAY (VARIABLE WIDTH) THE FOLLOWING SEVEN (7) COURSES:

 

2

	
  

 	
  

 
	
 10.

 	
 SOUTH 10 DEGREES – 37 MINUTES – 00 SECONDS EAST, A DISTANCE OF 406.03
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 11.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 152.58
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 12.

 	
 SOUTH 81 DEGREES – 55 MINUTES – 42 SECONDS WEST, A DISTANCE OF 125.00
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 13.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 350.40
 FEET TO A POINT OF NON-TANGENT CURVATURE, THENCE;

 
	
  

 	
  

 
	
 14.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 375.00 FEET, TURNING A
 CENTRAL ANGLE OF 15 DEGREES – 22 MINUTES – 08 SECONDS, WITH AN ARC LENGTH OF
 100.59 FEET, THE CHORD OF WHICH BEARS SOUTH 72 DEGREES – 19 MINUTES – 21
 SECONDS WEST, A CHORD DISTANCE OF 100.29 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 
	
 15.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 4.45
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 16.

 	
 SOUTH 26 DEGREES – 04 MINUTES – 30 SECONDS EAST, A DISTANCE OF 188.85
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 17.

 	
 ALONG THE COMMON DIVIDING LINE BETWEEN LOT 8.1 AND LOT 4, BLOCK 1 AND
 THE WESTERLY LINE OF HUTCHINSON RIVER PARKWAY, SOUTH 63 DEGREES – 55 MINUTES
 – 30 SECONDS WEST, A DISTANCE OF 156.73 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.1 AND LOT 3, BLOCK 1 THE FOLLOWING EIGHT (8)
 COURSES:

 
	
  

 	
  

 
	
 18.

 	
 NORTH 24 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 82.31
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 19.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 20.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 19.84
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 21.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 22.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 90.59
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 23.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 4.05
 FEET TO A POINT, THENCE;

 

3

	
  

 	
  

 
	
 24.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 9.55
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 25.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 227.32
 FEET TO A POINT ON THE AFOREMENTIONED EASTERLY LINE OF PELHAM PARKWAY,
 THENCE;

 
	
  

 	
  

 
	
 26.

 	
 ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 26 DEGREES – 04
 MINUTES – 30 SECONDS WEST, A DISTANCE OF 296.81 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 27.

 	
 CONTINUING ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 62
 DEGREES – 43 MINUTES – 40 SECONDS WEST, A DISTANCE OF 609.10 FEET TO A POINT
 OF CURVATURE, THENCE;

 
	
  

 	
  

 
	
 28.

 	
 ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 126 DEGREES – 41 MINUTES – 30 SECONDS, WITH AN ARC LENGTH OF
 44.22 FEET, THE CHORD OF WHICH BEARS NORTH 00 DEGREES – 37 MINUTES – 42
 SECONDS EAST, A CHORD DISTANCE OF 35.75 FEET TO THE POINT AND PLACE OF
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 3 - Ground Lease Parcel (Lot 8.2)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 454.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

	
  

 	
  

 
	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 60 SECONDS EAST, A DISTANCE OF 176.92 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.2 AND LOT 8.1, BLOCK 1 THE FOLLOWING TWO (2)
 COURSES:

 
	
  

 	
  

 
	
 2.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 3.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 

4

	
  

 	
  

 
	
 4.

 	
 ALONG THE DIVIDING LINE BETWEEN LOT 8.2 AND LOTS 8.1 AND 8.3, BLOCK
 1, NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90 FEET
 THE POINT AND PLACE OF BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

BLANKET DESCRIPTION - LOTS 8.1, 8.2 and 8.3:

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING at a rebar with cap set on the southerly line of Secor Lane
(50 foot wide), said point being at the northeasterly terminus of a curve
connecting the southerly line of Secor Lane with the easterly line of Pelham
Parkway (a/k/a C.R. 70) and from said beginning point, running thence

	
  

 	
  

 	
  

 
	
 1.

 	
  

 	
 Along the southerly line of Secor Lane, north 63 degrees 57 minutes
 50 seconds east, a distance of 1081.42 feet to a rebar with cap set at a
 point of curvature in the same, thence

 
	
  

 	
  

 	
  

 
	
 2.

 	
  

 	
 Continuing along the same, along a curve to the right, having a
 radius of 650.00 feet, turning a central angle of 11 degrees 45 minutes 00
 seconds with an arc length of 133.30 feet, the chord of which bears north 69
 degrees 50 minutes 19 seconds east, a chord distance of 133.06 feet to a
 rebar with cap set, thence the following seven (7) courses along the dividing
 line between Lot 8 Block 1 and the westerly line of the Hutchinson River
 Parkway;

 
	
  

 	
  

 	
  

 
	
 3.

 	
  

 	
 South 10 degrees 37 minutes 00 seconds east, a distance of 406.03
 feet to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
 4.

 	
  

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 152.58
 feet to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
 5.

 	
  

 	
 South 81 degrees 55 minutes 42 seconds west, a distance of 125.00
 feet to a rabar with cap set, thence

 
	
  

 	
  

 	
  

 
	
 6.

 	
  

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 350.40
 feet to a rebar with cap set at a point of non-tangent curvature, thence

 
	
  

 	
  

 	
  

 
	
 7.

 	
  

 	
 Along a curve to the left, having a radius of 375.00 feet, turning a
 central angle of 15 degrees 22 minutes 08 seconds with an arc length of
 100.59 feet, the chord of which bears south 72 degrees 19 minutes 21 seconds
 west, a chord distance of 100.29 feet to a rebar with cap set at a point of
 tangency, thence

 
	
  

 	
  

 	
  

 
	
 8.

 	
  

 	
 South 63 degrees 57 minutes 50 seconds west, a distance of 4.45 feet
 to a rebar with cap set, thence

 

5

	
  

 	
  

 	
  

 
	
 9.

 	
  

 	
 South 26 degrees 04 minutes 30 seconds east, a distance of 188.85
 feet to a point, thence

 
	
  

 	
  

 	
  

 
	
 10.

 	
  

 	
 Along the common dividing line between Lot 8 and Lot 5, Block 1 and
 the westerly line of the Hutchinson River Parkway, south 63 degrees 55
 minutes 30 seconds west, a distance of 156.73 feet to a point; thence the
 following eight (8) courses along the dividing line between Lot 8 and Lot 3,
 Block 1.

 
	
  

 	
  

 	
  

 
	
 11.

 	
  

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 82.31 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
 12.

 	
  

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
 13.

 	
  

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 19.84 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
 14.

 	
  

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
 15.

 	
  

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 90.59 feet
 to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
 16.

 	
  

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 4.05 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
 17.

 	
  

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 9.55 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
 18.

 	
  

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 227.32
 feet to a pk nail set on the aforementioned easterly line of Pelham Parkway,
 thence

 
	
  

 	
  

 	
  

 
	
 19.

 	
  

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 296.81
 feet to a pk nail, thence

 
	
  

 	
  

 	
  

 
	
 20.

 	
  

 	
 Continuing along the easterly line of Pelham Parkway, north 62
 degrees 43 minutes 40 seconds west, a distance of 609.10 feet to a pk nail
 set a point of curvature, thence

 
	
  

 	
  

 	
  

 
	
 21.

 	
  

 	
 Along a curve to the right, having a radius of 2.00 feet, turning a
 central angle of 126 degrees 41 minutes 30 seconds with an arc length of
 44.22 feet to a point, the chord of which bears north 00 degrees 37 minutes
 24 seconds east, a chord distance of 35.75 feet to the point and place of
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/12/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

6

SUCH REAL PROPERTY ALSO CONTAINS ALL OF THE CONDOMINIUM UNITS IN THE
P/A ACADIA CONDOMINIUM MADE BY P/A-ACADIA PELHAM MANOR, LLC DATED 9/17/07 AND
RECORDED 10/23/07 AS CONTROL NUMBER 472850497.

For information only: Said premises are known as 798-858 Pelham
Parkway, Pelham, NY and designated as Section 166.26 Block 1 Lots 8.1, 8.2 and
8.3 as shown on the Westchester County Land and Tax Map.

7

EXHIBIT B

Permitted Encumbrances

Those exceptions set forth in Schedule B of that certain title
insurance policy issued by Stewart Title Insurance Company through their agent,
Royal Abstract of New York LLC, under their title no. 832899 insuring the lien
of this Mortgage.

EXHIBIT C

Partial Release

NONE

	
  

 	
  

 
	
 LOCATION:

 	
 2 Penn Place

 
	
 VILLAGE:

 	
 Pelham Manor

 
	
 TOWN:

 	
 Pelham

 
	
 COUNTY:

 	
 Westchester

 
	
 SECTION:

 	
 166.26

 
	
 BLOCK:

 	
 1

 
	
 LOTS:

 	
 8.1, 8.2 and
 8.3

 

	
  

 
	

 

 
	
  

 
	
 As of December 1, 2010

 
	
  

 
	
 FEE AND LEASEHOLD

 
	
 MORTGAGE CONSOLIDATION AND MODIFICATION AGREEMENT

 
	
 (Transfer Mortgage)

 
	
  

 
	
 by and between

 
	
  

 
	
 P/A-ACADIA PELHAM MANOR, LLC,

 
	
 as Mortgagor

 
	
  

 
	
 and

 
	
  

 
	
 BANK OF AMERICA, N.A.,

 
	
 a
 national banking association, as Administrative Agent for Lenders,

 
	
 as Mortgagee

 
	
  

 
	

 

 
	
  

 
	
 This instrument prepared by, and after recording please return to:

 
	
  

 
	
 Schiff Hardin LLP

 
	
 900 Third Avenue, 23rd Floor

 
	
 New York, New York 10022

 
	
 Attention: Paul G. Mackey, Esq.

 

FEE AND LEASEHOLD

MORTGAGE CONSOLIDATION AND MODIFICATION AGREEMENT

                    FEE
AND LEASEHOLD MORTGAGE CONSOLIDATION AND MODIFICATION AGREEMENT (this
“Agreement”) made as of the 1st day of December, 2010 by and between BANK OF
AMERICA, N.A., as Administrative Agent, having an office at One Bryant Park,
35th Floor, New York, New York 10036 (“Mortgagee”), and P/A-ACADIA PELHAM MANOR,
LLC, a Delaware limited liability company having an address c/o Acadia Realty
Trust, 1311 Mamaroneck Avenue, Suite 260, White Plains, New York 10605
(“Mortgagor”).

WITNESSETH: 

                    WHEREAS,
Mortgagee is now the lawful owner and holder of the mortgages (collectively,
the “Mortgage”) more particularly described in Exhibit A attached hereto
and made a part hereof, and of the notes (collectively, the “Note”) and other
obligations secured thereby;

                    WHEREAS,
the maximum outstanding principal amount which is or under any contingency may
be secured by the Mortgage is $31,553,701.89 (the “Indebtedness”), plus
interest thereon and all additional interest and late payment and prepayment
charges in respect thereof, plus all amounts expended by Mortgagee following a
default thereunder in respect of insurance premiums and real estate taxes, and
all legal costs or expenses of collection of the note(s) secured thereby or of
the defense or prosecution of the rights and lien created thereby;

                    WHEREAS,
the Mortgage is presently a valid lien on all of the real property described in
Schedule A attached hereto and made a part hereof (the “Premises”);

                    WHEREAS,
Mortgagor is the lawful owner of the Premises; and

                    WHEREAS,
Mortgagee and Mortgagor have agreed to consolidate, modify, amend and restated
the Mortgage as a single first lien on the entire Premises and to modify the
terms of the Mortgage in the manner hereinafter set forth;

                    NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
expressed, the parties hereto covenant and agree as follows:

                    1.
Mortgagor hereby assumes the payment and performance of all obligations,
conditions and covenants under, and agrees to be bound by all of the terms of,
the Mortgage, as herein modified. The lien of the Mortgage is hereby
consolidated and modified to encumber all of the “Mortgaged Property” (as such
term is defined in the Mortgage, as modified hereby), so that together they
shall hereafter constitute in law but one first mortgage, a valid and enforceable single lien upon the
Premises, securing the Indebtedness, together with interest accrued and to
accrue thereon and all other sums secured thereby.

                    2.
Mortgagor hereby assumes and agrees to pay the Indebtedness and interest
thereon at the rate(s) of interest and on the terms provided for the payment of
principal and interest in the Note, as consolidated and modified by that
certain note consolidation and modification agreement, dated the date hereof,
between Mortgagee and Mortgagor (the “Note Agreement”).

                    3.
The Mortgage is hereby consolidated, amended and restated in its entirety by Exhibit
B attached hereto and made a part hereof including any exculpatory provisions contained in said Exhibit B,
and Mortgagor hereby agrees to comply with and be bound by all of the terms,
covenants and conditions set forth in said Exhibit B.

2

                    4.
Mortgagor hereby certifies that this Agreement secures the same indebtedness
evidenced by the Note, as consolidated and modified by the Note Agreement, and
secured by the Mortgage, as consolidated and modified hereby, and secures no
new or further indebtedness or obligation.

                    5.
Mortgagor represents and warrants that there exist no defenses, offsets or
counterclaims with respect to its obligations under the Mortgage, as
consolidated and modified hereby, or under the Note, as consolidated and
modified by the Note Agreement, including its obligation for the payment of the
Indebtedness.

                    6.
The terms and provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their heirs, representatives, successors and assigns.

                    7.
This Agreement and the rights and obligations of the parties hereto shall in
all respects be governed by, and construed and enforced in accordance with, the
laws of the State of New York (without giving effect to New York’s choice of
law principles).

                    8.
This Agreement may be executed in multiple counterparts, each of which shall
constitute an original and together which shall constitute but one and the same
instrument.

                    9.
The information set forth on the cover hereof is incorporated herein.

[Remainder of page intentionally left blank.]

3

                    IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by each of
the parties hereto as of the day and year first above written.

	
  

 	
  

 	
  

 
	
  

 	
 BANK OF
 AMERICA, N.A.

 
	
  

 	
 (as a Lender
 and as Administrative Agent)

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Gregory
 Egli

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Gregory Egli

 
	
  

 	
  

 	
 Senior Vice
 President

 
	
  

 	
  

 	
  

 
	
  

 	
 P/A-ACADIA
 PELHAM MANOR, LLC, a

 Delaware limited liability company

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
 /s/ Robert
 Masters

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
 Senior Vice
 President

 

	
  

 	
  

 
	
 STATE OF NEW
 YORK

 	
 )

 
	
  

 	
 : ss.:

 
	
 COUNTY OF
 WESTCHESTER

 	
 )

 

                    On
the 22nd day of November in the year 2010, before me, the
undersigned, a notary public in and for said state, personally appeared Gregory
Egli, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 /s/ Debra
 Leibler-Jones

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Notary Public

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Debra
 Leibler-Jones

 
	
 My
 Commission Expires:

 	
  

 	
 State of New
 York

 
	
  

 	
  

 	
 No.
 01LE6005995

 
	
           4/20/14

 	
  

 	
 Qualified in
 Dutchess County

 
	

 

 	
  

 	
  

 

	
  

 	
  

 
	
 STATE OF NEW
 YORK

 	
 )

 
	
  

 	
 : ss.:

 
	
 COUNTY OF
 NASSAU

 	
 )

 

                    On
the 30th day of November in the year 2010, before me, the
undersigned, a notary public in and for said state, personally appeared Robert
Masters, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 /s/
 Elizabeth R. Cava

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Elizabeth R.
 Cava

 
	
 My
 Commission Expires:

 	
  

 	
  

 	
 Notary
 Public, State of New York

 
	
  

 	
  

 	
  

 	
 No.
 30-01CA4712233

 
	

 

 	
  

 	
  

 	
 Qualified in
 Nassau County

 
	
  

 	
  

 	
 Certificate
 File in New York County

 
	
  

 	
  

 	
 Commission
 Expires February 28, 2011

 

SCHEDULE A

Property Description

PARCEL 1 - Fee Parcel (Lot 8.3)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 374.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

	
  

 	
  

 
	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 80.00 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 2.

 	
 ALONG THE DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1, SOUTH
 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 100.00 FEET TO A POINT,
 THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1, THE
 FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 
	
 3.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 100.00
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 4.

 	
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00
 FEET TO A POINT OF CURVATURE, THENCE;

 
	
  

 	
  

 
	
 5.

 	
 ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF
 31.42 FEET, THE CHORD OF WHICH BEARS NORTH 18 DEGREES – 58 MINUTES – 11
 SECONDS EAST, A CHORD DISTANCE OF 28.28 FEET TO THE POINT AND PLACE OF
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 2 - Ground Lease Parcel (Lot 8.1)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of Westchester
and State of New York, being more particularly bounded and described as
follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING AT THE NORTHEASTERLY TERMINUS OF A CURVE CONNECTING THE
SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF PELHAM PARKWAY (A.K.A.
C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF BEGINNING RUNNING THENCE; 

	
  

 	
  

 
	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 374.53 FEET TO A POINT OF NON-TANGENT
 CURVATURE, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.3, BLOCK
 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 
	
 2.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF
 31.42 FEET, THE CHORD OF WHICH BEARS SOUTH 18 DEGREES – 58 MINUTES – 11
 SECONDS WEST, A CHORD DISTANCE OF 28.28 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 
	
 3.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00
 FEET TO A POINT, THENCE; 

 
	
  

 	
  

 
	
 4.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 100.00
 FEET TO A POINT, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.2,
 BLOCK 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 
	
 5.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 121.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 6.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 7.

 	
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS WEST, A DISTANCE OF 221.90
 FEET TO A POINT ON THE AFOREMENTIONED SOUTHERLY LINE OF SECOR LANE, THENCE;

 
	
  

 	
  

 
	
 8.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 449.97 FEET TO A POINT OF CURVATURE, THENCE;

 
	
  

 	
  

 
	
 9.

 	
 CONTINUING ALONG THE SOUTHERLY LINE OF SECOR LANE ON A CURVE TO THE
 RIGHT, HAVING A RADIUS OF 650.00 FEET, TURNING A 

 

2

	
  

 	
  

 
	
  

 	
 CENTRAL ANGLE OF 11 DEGREES – 45 MINUTES – 00 SECONDS, WITH AN ARC
 LENGTH OF 133.30 FEET, THE CHORD OF WHICH BEARS NORTH 69 DEGREES – 50 MINUTES
 – 19 SECONDS EAST, A CHORD DISTANCE OF 133.06 FEET TO A POINT, THENCE; ALONG
 THE WESTERLY LINE OF HUTCHINSON RIVER PARKWAY (VARIABLE WIDTH) THE FOLLOWING
 SEVEN (7) COURSES:

 
	
  

 	
  

 
	
 10.

 	
 SOUTH 10 DEGREES – 37 MINUTES – 00 SECONDS EAST, A DISTANCE OF 406.03
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 11.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 152.58
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 12.

 	
 SOUTH 81 DEGREES – 55 MINUTES – 42 SECONDS WEST, A DISTANCE OF 125.00
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 13.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 350.40
 FEET TO A POINT OF NON-TANGENT CURVATURE, THENCE;

 
	
  

 	
  

 
	
 14.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 375.00 FEET, TURNING A
 CENTRAL ANGLE OF 15 DEGREES – 22 MINUTES – 08 SECONDS, WITH AN ARC LENGTH OF
 100.59 FEET, THE CHORD OF WHICH BEARS SOUTH 72 DEGREES – 19 MINUTES – 21
 SECONDS WEST, A CHORD DISTANCE OF 100.29 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 
	
 15.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 4.45
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 16.

 	
 SOUTH 26 DEGREES – 04 MINUTES – 30 SECONDS EAST, A DISTANCE OF 188.85
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 17.

 	
 ALONG THE COMMON DIVIDING LINE BETWEEN LOT 8.1 AND LOT 4, BLOCK 1 AND
 THE WESTERLY LINE OF HUTCHINSON RIVER PARKWAY, SOUTH 63 DEGREES – 55 MINUTES
 – 30 SECONDS WEST, A DISTANCE OF 156.73 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.1 AND LOT 3, BLOCK 1 THE FOLLOWING EIGHT (8)
 COURSES:

 
	
  

 	
  

 
	
 18.

 	
 NORTH 24 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 82.31
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 19.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 20.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 19.84
 FEET TO A POINT, THENCE;

 

3

	
  

 	
  

 
	
 21.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 22.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 90.59
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 23.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 4.05
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 24.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 9.55
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 25.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 227.32
 FEET TO A POINT ON THE AFOREMENTIONED EASTERLY LINE OF PELHAM PARKWAY,
 THENCE;

 
	
  

 	
  

 
	
 26.

 	
 ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 26 DEGREES – 04
 MINUTES – 30 SECONDS WEST, A DISTANCE OF 296.81 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 27.

 	
 CONTINUING ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 62
 DEGREES – 43 MINUTES – 40 SECONDS WEST, A DISTANCE OF 609.10 FEET TO A POINT
 OF CURVATURE, THENCE;

 
	
  

 	
  

 
	
 28.

 	
 ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 126 DEGREES – 41 MINUTES – 30 SECONDS, WITH AN ARC LENGTH OF
 44.22 FEET, THE CHORD OF WHICH BEARS NORTH 00 DEGREES – 37 MINUTES – 42
 SECONDS EAST, A CHORD DISTANCE OF 35.75 FEET TO THE POINT AND PLACE OF
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON 11/18/10
BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 3 - Ground Lease Parcel (Lot 8.2)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 454.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

4

	
  

 	
  

 
	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 60 SECONDS EAST, A DISTANCE OF 176.92 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.2 AND LOT 8.1, BLOCK 1 THE FOLLOWING TWO (2)
 COURSES:

 
	
  

 	
  

 
	
 2.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 3.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 
	
 4.

 	
 ALONG THE DIVIDING LINE BETWEEN LOT 8.2 AND LOTS 8.1 AND 8.3, BLOCK
 1, NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90 FEET
 THE POINT AND PLACE OF BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

BLANKET DESCRIPTION - LOTS 8.1, 8.2 and 8.3:

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING at a rebar with cap set on the southerly line of Secor Lane
(50 foot wide), said point being at the northeasterly terminus of a curve
connecting the southerly line of Secor Lane with the easterly line of Pelham
Parkway (a/k/a C.R. 70) and from said beginning point, running thence

	
  

 	
  

 
	
 1.

 	
 Along the southerly line of Secor Lane, north 63 degrees 57 minutes
 50 seconds east, a distance of 1081.42 feet to a rebar with cap set at a
 point of curvature in the same, thence

 
	
  

 	
  

 
	
 2.

 	
 Continuing along the same, along a curve to the right, having a
 radius of 650.00 feet, turning a central angle of 11 degrees 45 minutes 00
 seconds with an arc length of 133.30 feet, the chord of which bears north 69
 degrees 50 minutes 19 seconds east, a chord distance of 133.06 feet to a
 rebar with cap set, thence the following seven (7) courses along the dividing
 line between Lot 8 Block 1 and the westerly line of the Hutchinson River
 Parkway;

 
	
  

 	
  

 
	
 3.

 	
 South 10 degrees 37 minutes 00 seconds east, a distance of 406.03
 feet to a rebar with cap set, thence

 
	
  

 	
  

 
	
 4.

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 152.58
 feet to a rebar with cap set, thence

 

5

	
  

 	
  

 
	
 5.

 	
 South 81 degrees 55 minutes 42 seconds west, a distance of 125.00
 feet to a rabar with cap set, thence

 
	
  

 	
  

 
	
 6.

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 350.40
 feet to a rebar with cap set at a point of non-tangent curvature, thence

 
	
  

 	
  

 
	
 7.

 	
 Along a curve to the left, having a radius of 375.00 feet, turning a
 central angle of 15 degrees 22 minutes 08 seconds with an arc length of
 100.59 feet, the chord of which bears south 72 degrees 19 minutes 21 seconds
 west, a chord distance of 100.29 feet to a rebar with cap set at a point of
 tangency, thence

 
	
  

 	
  

 
	
 8.

 	
 South 63 degrees 57 minutes 50 seconds west, a distance of 4.45 feet
 to a rebar with cap set, thence

 
	
  

 	
  

 
	
 9.

 	
 South 26 degrees 04 minutes 30 seconds east, a distance of 188.85
 feet to a point, thence

 
	
  

 	
  

 
	
 10.

 	
 Along the common dividing line between Lot 8 and Lot 5, Block 1 and
 the westerly line of the Hutchinson River Parkway, south 63 degrees 55
 minutes 30 seconds west, a distance of 156.73 feet to a point; thence the
 following eight (8) courses along the dividing line between Lot 8 and Lot 3,
 Block 1.

 
	
  

 	
  

 
	
 11.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 82.31 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 12.

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 13.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 19.84 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 14.

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 15.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 90.59 feet
 to a rebar with cap set, thence

 
	
  

 	
  

 
	
 16.

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 4.05 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 17.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 9.55 feet
 to a pk nail set, thence

 
	
  

 	
  

 
	
 18.

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 227.32
 feet to a pk nail set on the aforementioned easterly line of Pelham Parkway,
 thence

 
	
  

 	
  

 
	
 19.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 296.81
 feet to a pk nail, thence

 

6

	
  

 	
  

 
	
 20.

 	
 Continuing along the easterly line of Pelham Parkway, north 62
 degrees 43 minutes 40 seconds west, a distance of 609.10 feet to a pk nail
 set a point of curvature, thence

 
	
  

 	
  

 
	
 21.

 	
 Along a curve to the right, having a radius of 2.00 feet, turning a
 central angle of 126 degrees 41 minutes 30 seconds with an arc length of
 44.22 feet to a point, the chord of which bears north 00 degrees 37 minutes
 24 seconds east, a chord distance of 35.75 feet to the point and place of
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/12/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

SUCH REAL PROPERTY ALSO CONTAINS ALL OF THE CONDOMINIUM UNITS IN THE
P/A ACADIA CONDOMINIUM MADE BY P/A-ACADIA PELHAM MANOR, LLC DATED 9/17/07 AND
RECORDED 10/23/07 AS CONTROL NUMBER 472850497.

For information only: Said premises are known as 798-858 Pelham
Parkway, Pelham, NY and designated as Section 166.26 Block 1 Lots 8.1, 8.2 and
8.3 as shown on the Westchester County Land and Tax Map.

7

EXHIBIT A

Mortgage

	
  

 	
  

 
	
 1.

 	
 Building Loan Fee and Leasehold Loan Mortgage, Assignment of Leases
 and Rents and Security Agreement in the amount of $23,026,906.60 made by
 Mortgagor to Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee
 of Bear Stearns Commercial Mortgage, Inc. (“Bear Stearns”) dated
 December 10, 2007 and recorded in the office of the County Clerk of
 Westchester County, New York (the “Office”) on January 23, 2008 as
 Control No. 480160019 (the “Original BL Mortgage”) upon which a mortgage recording tax of
 $299,359.70 was duly paid, which Original BL Mortgage was assigned
 by MERS as a nominee of U.S. Bank National Association, not individually but
 solely as trustee for the Maiden Lane Commercial Mortgage-Backed Securities
 Trust 2008-1, as successor to Bear Stearns, to Mortgagee by Assignment of
 Building Loan Fee and Leasehold Mortgage and Security Agreement dated
 December 1, 2010 and to be recorded in the Office immediately prior
 hereto. Outstanding principal amount: $20,022,204.11

 
	
  

 	
  

 
	
 2.

 	
 Project Loan Mortgage, Assignment of Leases and Rents and Security
 Agreement in the amount of $12,637,093.40 made by Mortgagor to MERS as
 nominee of Bear Stearns dated December 10, 2007 and recorded in the
 Office on January 23, 2008 as Control No. 480160029 (the “Original PL
 Mortgage”) upon which a mortgage recording tax of $164,282.30 was duly paid,
 which Original PL Mortgage was assigned by MERS as a nominee of U.S. Bank
 National Association, not individually but solely as trustee for the Maiden
 Lane Commercial Mortgage-Backed Securities Trust 2008-1, as successor to Bear
 Stearns, to Mortgagee by Assignment of Project Loan Fee and Leasehold
 Mortgage and Security Agreement dated December 1, 2010 and to be
 recorded in the Office immediately prior hereto. Outstanding principal
 amount: $11,531,497.78

 

EXHIBIT B

Form of Amended and Restated Consolidated Mortgage

EXHIBIT B

	
  

 	
  

 
	
 LOCATION:

 	
 2 Penn Place

 
	
 VILLAGE:

 	
 Pelham Manor

 
	
 TOWN:

 	
 Pelham

 
	
 COUNTY:

 	
 Westchester

 
	
 SECTION:

 	
 166.26

 
	
 BLOCK:

 	
 1

 
	
 LOTS:

 	
 8.1, 8.2 and 8.3

 
	
  

 	
  

 
	

 

 	

 

 

Date: As of
December 1, 2010

FEE AND LEASEHOLD
MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT

(“this Mortgage”)

FROM

P/A-ACADIA PELHAM
MANOR, LLC,

a limited liability company organized and existing under the laws of Delaware

(“Mortgagor”)

	
  

 	
  

 
	
 Address and Chief

 	
  

 
	
 Executive Office of Mortgagor:

 	
 c/o Acadia Realty Trust

 
	
  

 	
 1311 Mamaroneck Avenue, Suite 260

 
	
  

 	
 White Plains, New York 10605

 

TO

BANK OF AMERICA,
N.A.,

a national banking association,

as Administrative Agent

(“Mortgagee”)

	
  

 	
  

 
	
 Address of Mortgagee:

 	
 One Bryant Park, 35th Floor

 
	
  

 	
 New York, New York 10036

 

Mortgage Amount:
$31,553,701.89

	
  

 
	

 

 

This instrument
prepared by, and after recording please return to:

Schiff Hardin LLP

900 Third Avenue, 23rd Floor

New York, New York 10022

Attention: Paul G. Mackey, Esq.

THE AMOUNT OF THIS
MORTGAGE IS $31,553,701.89.

FEE AND LEASEHOLD
MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT

          THIS
FEE AND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (this “Mortgage”) is made as of the 1st day of December, 2010, by
P/A-ACADIA PELHAM MANOR, LLC, a Delaware limited liability company,
(“Mortgagor”), in favor of and for the benefit of BANK OF AMERICA, N.A., a
national banking association, as Administrative Agent for itself and other
lenders pursuant to the Loan Agreement defined below (together with its
successors and assigns, “Mortgagee”).

ARTICLE 1

Definitions;
Granting Clauses; Secured Indebtedness

          Section
1.1. Principal Secured. This Mortgage secures the aggregate principal
amount of up to $31,553,701.89 plus such additional amounts as Mortgagee may from
time to time advance subsequent to a default by Mortgagor pursuant to the terms
and conditions of this Mortgage, with respect to an obligation secured by a
lien or encumbrance prior to the lien of this Mortgage or for the protection of
the lien of this Mortgage, together with interest thereon. In the event that
all or any part of the Premises is located in the State of New York, then,
notwithstanding the language in the Granting Clause and Section 2.2 or anything
else contained herein to the contrary, the maximum amount secured hereby at
execution or which under any contingency may become secured hereby at any time
hereafter is the Mortgage Amount and all interest, additional interest and late
payment and prepayment charges in respect thereof, plus all amounts expended by
Mortgagee following a default hereunder in respect of insurance premiums and
real estate taxes, and all legal costs or expenses of collection of the debt
secured hereby or of the defense or prosecution of the rights and lien created
hereby.

          Section
1.2. Definitions. 

               (a)
In addition to other terms defined herein, each of the following terms
shall have the meaning assigned to it, such definitions to be applicable
equally to the singular and the plural forms of such terms and to all genders:

               “Additional
Interest”: Additional Interest as defined in the Loan Agreement.

               “Fee
Parcel” means the portion of the Land identified on Exhibit A as Parcel 1.

               “Ground
Lease” means that certain Ground Lease dated October 1, 2004 between Ground
Lessor, as landlord, and Ground Lessor, as tenant, as to which a Memorandum of
Ground Lease dated October 1, 2004 between Ground Lessor and Borrower was
recorded in the office of the Clerk of the County of Westchester on February
23, 2004 in Control No. 443010050, as

modified by letter
agreement dated January 30, 2006 between Ground Lessor and Borrower, as
modified by First Amendment to Ground Lease dated June 28, 2006 between Ground
Lessor and Borrower, as modified by letter agreement dated November 28,
2006 between Ground Lessor and Borrower and as modified by Second Amendment to
Ground Lease dated December 6, 2007 between Ground Lessor and Borrower.

               “Ground
Lease Parcels” means the portion of the Land identified on Exhibit A as
Parcels 2 and 3.

               “Ground
Lessor” means, collectively, Rusciano & Son Corp. and Secor Lane Corp.
and their successors and assigns as owners of the fee interest in the Land.

               “Loan
Agreement”: Transfer Loan Agreement dated of even date herewith between
Mortgagor and Mortgagee, as it may be from time to time amended, restated,
modified, extended or supplemented.

               “Mortgagor”:
P/A-Acadia Pelham Manor, LLC, a Delaware limited liability company, whose
address is c/o Acadia Realty Trust, 1311 Mamaroneck Avenue, Suite 260, White
Plains, New York 10605, and its permitted successors and assigns. 

               “Promissory
Note”: Collectively, the Notes, as defined in the Loan Agreement.

               Capitalized
terms used herein which are not otherwise defined but which are defined in the
Loan Agreement shall have the meaning ascribed to them in the Loan Agreement.

          Section
1.3. Granting Clause. In consideration of the provisions of this
Mortgage and of the sum of $10.00 cash in hand paid and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by
Mortgagor, Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN,
MORTGAGE, HYPOTHECATE, PLEDGE, DEPOSIT and SET OVER to Mortgagee, with all
estate, right, title and interest of Mortgagor in and to the Property (as
hereinafter defined), whether now owned or held or hereafter acquired by
Mortgagor, to have and hold the Property unto Mortgagee, its successors and
assigns forever; and to hold the Property unto Mortgagee in fee simple forever
(except as to Mortgagor’s interest in the Ground Lease Parcels pursuant to the
Ground Lease, as to which such interest is a valid leasehold interest);
provided that Mortgagor may retain possession of the Property until the
occurrence of an Event of Default; (a) the real property described in Exhibit
A which is attached hereto and incorporated herein by reference (the
“Land”) together with: (i) any and all buildings, structures, improvements,
alterations or appurtenances now or hereafter situated or to be situated on the
Land (collectively, the “Improvements”); and (ii) all right, title and interest
of Mortgagor, now owned or hereafter acquired, in and to (1) all streets,
roads, alleys, easements, rights-of-way, licenses, rights of ingress and
egress, vehicle parking rights and public places, existing or proposed,
abutting, adjacent, used in connection with or pertaining to the Land or the
Improvements; (2) any strips or gores between the Land and abutting or adjacent
properties; (3) all options to purchase or lease the Land or the Improvements
or any portion thereof or interest therein, and any greater estate in the Land
or the Improvements; and (4) all water and water rights, timber, crops and
mineral interests on or pertaining to the Land (the Land, Improvements and
other rights, titles and interests referred to in this clause (a) being

2

herein sometimes
collectively called the “Premises”); (b) all fixtures, equipment, systems,
machinery, furniture, furnishings, appliances, inventory, goods, building and
construction materials, supplies, and articles of personal property, of every
kind and character, tangible and intangible (including software embedded
therein), now owned or hereafter acquired by Mortgagor, which are now or
hereafter attached to or situated in, on or about the Land or the Improvements,
or used in or necessary to the complete and proper planning, development, use,
occupancy or operation thereof, or acquired (whether delivered to the Land or
stored elsewhere) for use or installation in or on the Land or the
Improvements, and all renewals and replacements of, substitutions for and
additions to the foregoing (the properties referred to in this clause (b) being
herein sometimes collectively called the “Accessories,” all of which are hereby
declared to be permanent accessions to the Land); (c) all (i) plans and
specifications for the Improvements; (ii) Mortgagor’s rights, but not liability
for any breach by Mortgagor, under all commitments (including any commitments
for financing to pay any of the Secured Indebtedness, as defined below),
insurance policies (or additional or supplemental coverage related thereto,
including from an insurance provider meeting the requirements of the Loan
Documents or from or through any state or federal government sponsored program
or entity), Swap Transactions (as hereinafter defined), contracts and
agreements for the design, construction, operation or inspection of the
Improvements and other contracts and general intangibles (including but not
limited to payment intangibles, trademarks, trade names, goodwill, software and
symbols) related to the Premises or the Accessories or the operation thereof; (iii)
deposits and deposit accounts arising from or related to any transactions
related to the Premises or the Accessories (including but not limited to
Mortgagor’s rights in tenants’ security deposits, deposits with respect to
utility services to the Premises, and any deposits, deposit accounts or
reserves hereunder or under any other Loan Documents (hereinafter defined) for
taxes, insurance or otherwise), rebates or refunds of impact fees or other
taxes, assessments or charges, money, accounts (including deposit accounts),
instruments, documents, promissory notes and chattel paper (whether tangible or
electronic) arising from or by virtue of any transactions related to the
Premises or the Accessories, and any account or deposit account from which
Mortgagor may from time to time authorize Mortgagee to debit and/or credit
payments due with respect to the Loan or any Swap Transaction, all rights to
the payment of money from Mortgagee under any Swap Transaction, and all
accounts, deposit accounts and general intangibles, including payment
intangibles, described in any Swap Transaction; (iv) permits, licenses,
franchises, certificates, development rights, commitments and rights for
utilities, and other rights and privileges obtained in connection with the
Premises or the Accessories; (v) leases, rents, royalties, bonuses, issues,
profits, revenues and other benefits of the Premises and the Accessories
(without derogation of Article 3 hereof); (vi) as-extracted collateral produced
from or allocated to the Land including, without limitation, oil, gas and other
hydrocarbons and other minerals and all products processed or obtained
therefrom, and the proceeds thereof; and (vii) engineering, accounting, title,
legal, and other technical or business data concerning the Property which are
in the possession of Mortgagor or in which Mortgagor can otherwise grant a
security interest; and (d) all (i) accounts and proceeds (cash or non-cash and
including payment intangibles) of or arising from the properties, rights,
titles and interests referred to above in this Section 1.3, including but not
limited to proceeds of any sale, lease or other disposition thereof, proceeds
of each policy of insurance (or additional or supplemental coverage related
thereto, including from an insurance provider meeting the requirements of the
Loan Documents or from or through any state or federal government sponsored
program or entity) relating thereto (including premium refunds), proceeds of
the taking thereof or of any

3

rights appurtenant
thereto, including change of grade of streets, curb cuts or other rights of
access, by condemnation, eminent domain or transfer in lieu thereof for public
or quasi-public use under any law, and proceeds arising out of any damage
thereto; (ii) all letter-of-credit rights (whether or not the letter of credit
is evidenced by a writing) Mortgagor now has or hereafter acquires relating to
the properties, rights, titles and interests referred to in this Section 1.3;
(iii) all commercial tort claims Mortgagor now has or hereafter acquires
relating to the properties, rights, titles and interests referred to in this
Section 1.3; and (iv) other interests of every kind and character which
Mortgagor now has or hereafter acquires in, to or for the benefit of the
properties, rights, titles and interests referred to above in this Section 1.3
and all property used or useful in connection therewith, including but not
limited to rights of ingress and egress and remainders, reversions and
reversionary rights or interests; and if the estate of Mortgagor in any of the
property referred to above in this Section 1.3 is a leasehold estate, this
conveyance shall include, and the lien and security interest created hereby
shall encumber and extend to, all other or additional title, estates, interests
or rights which are now owned or may hereafter be acquired by Mortgagor in or
to the property demised under the lease creating the leasehold estate; TO HAVE
AND TO HOLD the foregoing rights, interests and properties, and all rights,
estates, powers and privileges appurtenant thereto (herein collectively called
the “Property”), unto Mortgagee, its successors and assigns, in trust, in fee
simple forever, subject to the terms, provisions and conditions herein set
forth, to secure the obligations of Mortgagor under the Note and Loan Documents
(as hereinafter defined) and all other indebtedness and matters defined as
“Secured Indebtedness” in Section 1.5 of this Mortgage; PROVIDED, HOWEVER, that
if Mortgagor shall promptly pay or cause to be paid to Mortgagee (as
hereinafter defined) the principal sum, including all additional advances and
all other sums payable by Mortgagor to Mortgagee under the terms of the Loan
Documents and shall perform or cause to be performed all the other terms,
conditions, agreements and provisions contained in the Loan Documents, all
without fraud or delay or deduction or abatement of anything or for any reason,
then this Mortgage and the estate hereby granted shall cease, terminate and
become void.

          Section
1.4. Security Interest. Mortgagor hereby grants to Mortgagee a security
interest in all of the Property which constitutes personal property or
fixtures, all proceeds and products thereof, and all supporting obligations
ancillary to or arising in any way in connection therewith (herein sometimes
collectively called the “Collateral”) to secure the obligations of Mortgagor
under the Note and Loan Documents and all other indebtedness and matters
defined as Secured Indebtedness in Section 1.5 of this Mortgage. In addition to
its rights hereunder or otherwise, Mortgagee shall have all of the rights of a
secured party under the New York Uniform Commercial Code, as in effect from
time to time, or under the Uniform Commercial Code in force, from time to time,
in any other state to the extent the same is applicable law.

          Section
1.5. Secured Indebtedness, Note, Loan Documents, Other Obligations. This
Mortgage is made to secure and enforce the payment and performance of the
following promissory notes, obligations, indebtedness, duties and liabilities
and all renewals, extensions, supplements, increases, and modifications thereof
in whole or in part from time to time (collectively the “Secured
Indebtedness”): (a) the Promissory Note and all other promissory notes given in
substitution therefor or in modification, supplement, increase, renewal or
extension thereof, in whole or in part (such promissory note or promissory
notes, whether one or more, as from time to time renewed, extended,
supplemented, increased or modified and all other notes given in substitution
therefor, or in modification, renewal or extension thereof, in whole or

4

in part, being
hereinafter called the “Note”, and Mortgagee, or the subsequent Mortgagee at
the time in question of the Note or any of the Secured Indebtedness, as
hereinafter defined, such Mortgagee continuing to be defined herein as
“Mortgagee”); and (b) all interest, Additional Interest, indebtedness,
liabilities, duties, covenants, promises and other obligations whether joint or
several, direct or indirect, fixed or contingent, liquidated or unliquidated,
and the cost of collection of all such amounts, owed by Mortgagor to Mortgagee
now or hereafter incurred or arising pursuant to or permitted by the provisions
of the Note, this Mortgage, the Loan Agreement or any other document now or
hereafter evidencing, governing, guaranteeing, securing or otherwise executed
in connection with the loan evidenced by the Note, including but not limited to
any loan or credit agreement, letter of credit or reimbursement agreement,
tri-party financing agreement, Master Agreement relating to any Swap
Transactions or other agreement between Mortgagor and Mortgagee, or among
Mortgagor, Mortgagee and any other party or parties, pertaining to the
repayment or use of the proceeds of the loan evidenced by the Note (the Note,
the Mortgage, the Loan Agreement, any Master Agreement relating to any Swap
Transactions and any such documents as they or any of them may have been or may
be from time to time renewed, extended, supplemented, increased or modified,
being herein sometimes collectively called the “Loan Documents”). “Swap
Transaction” means any agreement, whether or not in writing, relating to any
transaction that is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap or option, bond, note or
bill option, interest rate option, forward foreign exchange transaction, cap,
collar or floor transaction, currency swap, cross-currency rate swap, swap
option currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the foregoing, and,
unless the context otherwise clearly requires, any form of master agreement
(the “Master Agreement”) published by the International Swaps and Derivatives
Association, Inc., or any other master agreement, entered into between
Mortgagee (or its affiliates) and Mortgagor (or its affiliates), together with
any related schedules, as amended, supplemented, superseded or replaced from
time to time, relating to or governing any or all of the foregoing.

ARTICLE 2

Representations,
Warranties and Covenants

          Section
2.1. Mortgagor represents, warrants, and covenants as follows:

               (a)
Payment and Performance. Mortgagor will make due and punctual
payment of the Secured Indebtedness. Mortgagor will timely and properly perform
and comply with all of the covenants, agreements, and conditions imposed upon
it by this Mortgage and the other Loan Documents and will not permit a default
to occur hereunder or thereunder. Time shall be of the essence in this
Mortgage.

               (b)
Title and Permitted Encumbrances. Mortgagor has, in Mortgagor’s
own right, and Mortgagor covenants to maintain, lawful, good and marketable title
to the Property, is lawfully seized and possessed of the Property and every
part thereof, and has the right to convey the same, free and clear of all
liens, charges, claims, security interests, and encumbrances except for (i) the
matters, if any, set forth under the heading “Permitted Encumbrances” in Exhibit
B hereto,

5

which are Permitted
Encumbrances only to the extent the same are valid and subsisting and affect
the Property, (ii) the liens and security interests evidenced by this Mortgage,
(iii) statutory liens for real estate taxes and assessments on the Property
which are not yet delinquent, and (iv) other liens and security interests (if
any) in favor of Mortgagee (the matters described in the foregoing clauses (i),
(ii), (iii) and (iv) being herein called the “Permitted Encumbrances”).
Mortgagor owns and holds the Fee Parcel in fee simple absolute. Mortgagor is
the owner of a valid and subsisting interest as tenant under the Ground Lease,
that the Ground Lease is in full force and effect, there are no defaults
thereunder and no event has occurred or is occurring which after notice or
passage of time or both will result in such a default, that the Ground Lease is
subject to no lien, charge or encumbrance of any kind and is prior to all
liens, charges and encumbrances whatsoever on the fee interest of the lessor
thereunder except such as are listed as exceptions to title in the title policy
insuring the lien hereof. Mortgagor, and Mortgagor’s successors and assigns,
will warrant generally and forever defend title to the Property, subject as
aforesaid, to Mortgagee and his successors or substitutes and assigns, against
the claims and demands of all persons claiming or to claim the same or any part
thereof. Mortgagor will preserve the leasehold estate created in it by the
Ground Lease, and will forever warrant and defend the same to Mortgagee and
will forever warrant and defend the validity and priority of the lien hereof
against the claims of all persons and parties whomsoever. Mortgagor will perform
or cause to be performed all of the covenants and conditions required to be
performed by it under the Ground Lease, will do all things necessary to
preserve unimpaired its rights thereunder, and will not enter into any
agreement modifying or amending the Ground Lease or releasing the lessor
thereunder from any obligations imposed upon it thereby. If Mortgagor receives
a notice of default under the Ground Lease, it shall immediately cause a copy
of such notice to be sent by registered United States mail to Mortgagee.
Mortgagor will punctually pay, perform, observe and keep all covenants,
obligations and conditions in or pursuant to any Permitted Encumbrance and will
not modify or permit modification of any Permitted Encumbrance without the
prior written consent of Mortgagee. Inclusion of any matter as a Permitted
Encumbrance does not constitute approval or waiver by Mortgagee of any existing
or future violation or other breach thereof by Mortgagor, by the Property or
otherwise. No part of the Property constitutes all or any part of the principal
residence of Mortgagor if Mortgagor is an individual. If any right or interest
of Mortgagee in the Property or any part thereof shall be endangered or
questioned or shall be attacked directly or indirectly, Mortgagee and
Mortgagee, or either of them (whether or not named as parties to legal
proceedings with respect thereto), are hereby authorized and empowered to take
such steps as in their discretion may be proper for the defense of any such
legal proceedings or the protection of such right or interest of Mortgagee,
including but not limited to the employment of independent counsel, the
prosecution or defense of litigation, and the compromise or discharge of
adverse claims. All expenditures so made of every kind and character shall be a
demand obligation (which obligation Mortgagor hereby promises to pay) owing by
Mortgagor to Mortgagee or Mortgagee (as the case may be), and the party
(Mortgagee or Mortgagee, as the case may be) making such expenditures shall be
subrogated to all rights of the person receiving such payment.

               (c)
Taxes and Other Impositions/Condominum Charges. Mortgagor will
pay, or cause to be paid, all taxes, assessments and other charges or levies
imposed upon or against or with respect to the Property or the ownership, use,
occupancy or enjoyment of any portion thereof, or any utility service thereto,
as the same become due and payable, including but not limited to all real
estate taxes assessed against the Property or any part thereof, and shall
deliver

6

promptly to Mortgagee
such evidence of the payment thereof as Mortgagee may require. Any lien for
Condominium Assessments, whenever accruing, shall, pursuant to the Declaration,
be subordinate to the lien of this Mortgage.

               (d)
Insurance. Mortgagor shall obtain and maintain at Mortgagor’s
sole expense: (1) mortgagee title insurance issued to Mortgagee covering the
Premises as required by Mortgagee, without exception for mechanics’ liens; (2)
property insurance with respect to all insurable Property, against loss or
damage by fire, lightning, windstorm, explosion, hail, tornado and such
additional hazards as are presently included in “Special Form” (also known as
“all-risk”) coverage and against any and all acts of terrorism and such other
insurable hazards as Mortgagee may require, in an amount not less than 100% of
the full replacement cost, including the cost of debris removal, without
deduction for depreciation and sufficient to prevent Mortgagor and Mortgagee
from becoming a coinsurer, such insurance to be in “builder’s risk” completed
value (non-reporting) form during and with respect to any construction (other
than construction of customary tenant improvements in existing buildings) on
the Premises; (3) if and to the extent any portion of the Improvements is,
under the Flood Disaster Protection Act of 1973 (“FDPA”), as it may be amended
from time to time, in a Special Flood Hazard Area, within a Flood Zone
designated A or V in a participating community, a flood insurance policy in an
amount required by Mortgagee, but in no event less than the amount sufficient
to meet the requirements of applicable law and the FDPA, as such requirements
may from time to time be in effect; (4) general liability insurance, on an
“occurrence” basis, against claims for “personal injury” liability, including
bodily injury, death or property damage liability, for the benefit of Mortgagor
as named insured and Mortgagee as additional insured; (5) statutory workers’
compensation insurance with respect to any work on or about the Premises
(including employer’s liability insurance, if required by Mortgagee), covering
all employees of Mortgagor and any contractor; (6) if there is a general
contractor, during and with respect to any construction (other than
construction of customary tenant improvements in existing buildings) on the
Premises, commercial general liability insurance, including products and
completed operations coverage, and in other respects similar to that described
in clause (4) above, for the benefit of the general contractor as named insured
and Mortgagor and Mortgagee as additional insureds, in addition to statutory
workers’ compensation insurance with respect to any work on or about the
Premises (including employer’s liability insurance, if required by Mortgagee),
covering all employees of the general contractor any contractor; and (7) such
other insurance on the Property and endorsements as may from time to time be
required by Mortgagee (including but not limited to soft cost coverage,
automobile liability insurance, business interruption insurance or delayed
rental insurance, boiler and machinery insurance, earthquake insurance, wind
insurance, sinkhole coverage, and/or permit to occupy endorsement) and against
other insurable hazards or casualties which at the time are commonly insured
against in the case of premises similarly situated, due regard being given to
the height, type, construction, location, use and occupancy of buildings and
improvements. All insurance policies shall be issued and maintained by
insurers, in amounts, with deductibles, limits and retentions, and in forms
satisfactory to Mortgagee, and shall require not less than ten (10) days’ prior
written notice to Mortgagee of any cancellation for nonpayment of premiums, and
not less than thirty (30) days’ prior written notice to Mortgagee of any other
cancellation or any change of coverage. All insurance companies must be
licensed to do business in the state in which the Property is located and must
have an A.M. Best Company financial and performance ratings of A-:IX or better.
All insurance policies maintained, or caused to be maintained, by Mortgagor
with respect to the Property, except for general liability

7

insurance, shall provide
that each such policy shall be primary without right of contribution from any
other insurance that may be carried by Mortgagor or Mortgagee and that all of
the provisions thereof, except the limits of liability, shall operate in the
same manner as if there were a separate policy covering each insured. If any
insurer which has issued a policy of title, hazard, liability or other
insurance required pursuant to this Mortgage or any other Loan Document becomes
insolvent or the subject of any petition, case, proceeding or other action
pursuant to any Debtor Relief Law, or if in Mortgagee’s reasonable opinion the
financial responsibility of such insurer is or becomes inadequate, Mortgagor
shall, in each instance promptly upon its discovery thereof or upon the request
of Mortgagee therefor, and at Mortgagor’s expense, promptly obtain and deliver
to Mortgagee a like policy (or, if and to the extent permitted by Mortgagee,
acceptable evidence of insurance) issued by another insurer, which insurer and
policy meet the requirements of this Mortgage or such other Loan Document, as
the case may be. Without limiting the discretion of Mortgagee with respect to
required endorsements to insurance policies, all such policies for loss of or
damage to the Property shall contain a standard mortgagee clause (without contribution)
naming Mortgagee as mortgagee with loss proceeds payable to Mortgagee
notwithstanding (i) any act, failure to act or negligence of or violation of
any warranty, declaration or condition contained in any such policy by any
named or additional insured; (ii) the occupation or use of the Property for
purposes more hazardous than permitted by the terms of any such policy; (iii)
any foreclosure or other action by Mortgagee under the Loan Documents; or (iv)
any change in title to or ownership of the Property or any portion thereof,
such proceeds to be held for application as provided in the Loan Documents. The
originals of each initial insurance policy (or to the extent permitted by
Mortgagee, a copy of the original policy and such evidence of insurance
acceptable to Mortgagee) shall be delivered to Mortgagee at the time of
execution of this Mortgage, with all premiums fully paid current, and each
renewal or substitute policy (or evidence of insurance) shall be delivered to
Mortgagee, with all premiums fully paid current, at least ten (10) days before
the termination of the policy it renews or replaces. Mortgagor shall pay all
premiums on policies required hereunder as they become due and payable and
promptly deliver to Mortgagee evidence satisfactory to Mortgagee of the timely
payment thereof. If any loss occurs at any time when Mortgagor has failed to
perform Mortgagor’s covenants and agreements in this paragraph with respect to
any insurance payable because of loss sustained to any part of the Property
whether or not such insurance is required by Mortgagee, Mortgagee shall
nevertheless be entitled to the benefit of all insurance covering the loss and
held by or for Mortgagor, to the same extent as if it had been made payable to
Mortgagee. Upon any foreclosure hereof or transfer of title to the Property in
extinguishment of the whole or any part of the Secured Indebtedness, all of
Mortgagor’s right, title and interest in and to the insurance policies referred
to in this Section (including unearned premiums) and all proceeds payable
thereunder shall thereupon vest in the purchaser at foreclosure or other such
transferee, to the extent permissible under such policies. Mortgagee shall have
the right (but not the obligation) to make proof of loss for, settle and adjust
any claim under, and receive the proceeds of, all insurance for loss of or
damage to the Property where the loss is estimated by Mortgagee to be
$1,000,000 or more, regardless of whether or not such insurance policies are
required by Mortgagee, and the expenses incurred by Mortgagee in the adjustment
and collection of insurance proceeds shall be a part of the Secured
Indebtedness and shall be due and payable to Mortgagee on demand. Mortgagee
shall not be, under any circumstances, liable or responsible for failure to
collect or exercise diligence in the collection of any of such proceeds or for
the obtaining, maintaining or adequacy of any insurance or for failure to see
to the proper application

8

of any amount paid over
to Mortgagor. Any such proceeds received by Mortgagee shall, after deduction
therefrom of all reasonable expenses actually incurred by Mortgagee, including
attorneys’ fees, at Mortgagee’s option be (1) released to Mortgagor, or (2)
applied (upon compliance with such terms and conditions as may be required by
Mortgagee) to repair or restoration, either partly or entirely, of the Property
so damaged, or (3) applied to the payment of the Secured Indebtedness in such
order and manner as Mortgagee, in its sole discretion, may elect, whether or
not due. In any event, the unpaid portion of the Secured Indebtedness shall
remain in full force and effect and the payment thereof shall not be excused.
Mortgagor shall at all times comply with the requirements of the insurance
policies required hereunder and of the issuers of such policies and of any
board of fire underwriters or similar body as applicable to or affecting the
Property.

               (e)
Application of Insurance Proceeds. Notwithstanding anything to
the contrary set forth in the preceding Section 2.1(d), if the Property is
damaged or destroyed and Mortgagee determines that all of the conditions
specified hereinafter in this Section have been satisfied, then Mortgagee shall
apply the proceeds of insurance (i) first to reimbursing itself for all costs
incurred by it in the collection of such proceeds and (ii) second to
reimbursing Mortgagor for such actual costs as shall have been incurred by
Mortgagor in restoring the Property and shall be approved by Mortgagee.
Insurance proceeds shall be applied to such restoration solely if (A) Mortgagee
determines that: (i) the Property is capable of being suitably restored in
accordance with applicable Legal Requirements to the value, condition,
character and general utility existing prior to such damage or destruction,
and, in any event, to a Loan to Value Ratio of not greater than 70%, provided
that this clause (i) shall not apply to insurance proceeds relating to a
casualty for which the gross insurance proceeds do not exceed $1,000,000; (ii) sufficient
funds are unconditionally available (from proceeds of insurance and/or from
funds of Mortgagor) to enable Mortgagor promptly to commence, and thereafter
diligently to prosecute to completion, such restoration, provided that this
clause (ii) shall not apply to insurance proceeds relating to a casualty for
which the gross insurance proceeds do not exceed $1,000,000; (iii) Mortgagor is
not in default or in breach of any obligations under any Loan Document, no
uncured Default exists under any Loan Document and no facts or circumstances
exist that would constitute a Default with the passage of time or the giving of
notice or both; and (iv) neither the validity, enforceability nor priority of
the lien of this Mortgage shall be adversely affected; (B) Mortgagor has
entered into a written agreement, satisfactory in form and substance to
Mortgagee, containing such conditions to disbursements as are employed at the
time by Mortgagee for construction loans; (C) Mortgagor has delivered to
Mortgagee such security as Mortgagee might have reasonably required to assure
completion of restoration in accordance with the standards specified above; and
(D) Mortgagor has complied with such further reasonable requirements as
Mortgagee might have specified.

               (f)
Reserve for Insurance, Taxes and Assessments. Upon request of
Mortgagee, to secure the payment and performance of the Secured Indebtedness,
but not in lieu of such payment and performance, Mortgagor will deposit with
Mortgagee a sum equal to real estate taxes, assessments and charges (which
charges for the purposes of this paragraph shall include without limitation any
recurring charge which could result in a lien against the Property) against the
Property for the current year and the premiums for such policies of insurance
for the current year, all as estimated by Mortgagee and prorated to the end of
the calendar month following the month during which Mortgagee’s request is
made, and thereafter will deposit with Mortgagee, on

9

each date when an installment
of principal and/or interest is due on the Note, sufficient funds (as estimated
from time to time by Mortgagee) to permit Mortgagee to pay at least fifteen
(15) days prior to the due date thereof, the next maturing real estate taxes,
assessments and charges and premiums for such policies of insurance. Mortgagee
shall have the right to rely upon tax information furnished by applicable
taxing authorities in the payment of such taxes or assessments and shall have
no obligation to make any protest of any such taxes or assessments. Any excess
over the amounts required for such purposes shall be held by Mortgagee for
future use, applied to any Secured Indebtedness or refunded to Mortgagor, at
Mortgagee’s option, and any deficiency in such funds so deposited shall be made
up by Mortgagor upon demand of Mortgagee. All such funds so deposited shall
bear no interest, may be commingled with the general funds of Mortgagee and
shall be applied by Mortgagee toward the payment of such taxes, assessments,
charges and premiums when statements therefor are presented to Mortgagee by
Mortgagor (which statements shall be presented by Mortgagor to Mortgagee a
reasonable time before the applicable amount is due); provided, however, that,
if a Default shall have occurred hereunder, such funds may at Mortgagee’s
option be applied to the payment of the Secured Indebtedness in the order
determined by Mortgagee in its sole discretion, and that Mortgagee may (but
shall have no obligation) at any time, in its discretion, apply all or any part
of such funds toward the payment of any such taxes, assessments, charges or
premiums which are past due, together with any penalties or late charges with
respect thereto. The conveyance or transfer of Mortgagor’s interest in the
Property for any reason (including without limitation the foreclosure of a
subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Mortgagor’s interest in and rights to
such funds held by Mortgagee under this paragraph but subject to the rights of
Mortgagee hereunder.

               (g)
Condemnation. Mortgagor shall notify Mortgagee immediately of any
threatened or pending proceeding for condemnation affecting the Property or
arising out of damage to the Property, and Mortgagor shall, at Mortgagor’s
expense, diligently prosecute any such proceedings. Mortgagee shall have the
right (but not the obligation) to participate in any such proceeding and to be
represented by counsel of its own choice. Mortgagee shall be entitled to
receive all sums which may be awarded or become payable to Mortgagor for the
condemnation of the Property, or any part thereof, for public or quasi-public
use, or by virtue of private sale in lieu thereof, and any sums which may be
awarded or become payable to Mortgagor for injury or damage to the Property.
Mortgagor shall, promptly upon request of Mortgagee, execute such additional
assignments and other documents as may be necessary from time to time to permit
such participation and to enable Mortgagee to collect and receipt for any such
sums. All such sums are hereby assigned to Mortgagee, and shall, after
deduction therefrom of all reasonable expenses actually incurred by Mortgagee,
including attorneys’ fees, at Mortgagee’s option be (1) released to Mortgagor,
or (2) applied (upon compliance with such terms and conditions as may be
required by Mortgagee) to repair or restoration of the Property so affected, or
(3) applied to the payment of the Secured Indebtedness in such order and manner
as Mortgagee, in its sole discretion, may elect, whether or not due. In any
event the unpaid portion of the Secured Indebtedness shall remain in full force
and effect and the payment thereof shall not be excused. Mortgagee shall not
be, under any circumstances, liable or responsible for failure to collect or to
exercise diligence in the collection of any such sum or for failure to see to
the proper application of any amount paid over to Mortgagor. Mortgagee is
hereby authorized, in the name of Mortgagor, to execute and deliver valid
acquittances for, and to appeal from, any such award, judgment or decree. All
costs and expenses (including but not limited to attorneys’ fees) incurred

10

by Mortgagee in
connection with any condemnation shall be a demand obligation owing by
Mortgagor (which Mortgagor hereby promises to pay) to Mortgagee pursuant to
this Mortgage.

               (h)
Compliance with Legal Requirements. The Property and the use,
operation and maintenance thereof and all activities thereon do and shall at
all times comply with all applicable Legal Requirements (hereinafter defined).
The Property is not, and shall not be, dependent on any other property or
premises or any interest therein other than the Property to fulfill any
requirement of any Legal Requirement. Mortgagor shall not, by act or omission,
permit any building or other improvement not subject to the lien of this
Mortgage to rely on the Property or any interest therein to fulfill any
requirement of any Legal Requirement. No improvement upon or use of any part of
the Property constitutes a nonconforming use under any zoning law or similar
law or ordinance. Mortgagor has obtained and shall preserve in force all
requisite zoning, utility, building, health, environmental and operating
permits from the governmental authorities having jurisdiction over the
Property. 

          If
Mortgagor receives a notice or claim from any person that the Property, or any
use, activity, operation or maintenance thereof or thereon, is not in
compliance with any Legal Requirement, Mortgagor will promptly furnish a copy
of such notice or claim to Mortgagee. Mortgagor has received no notice and has
no knowledge of any such noncompliance. As used in this Mortgage: (i) the term
“Legal Requirement” means any Law (hereinafter defined), agreement, covenant,
restriction, easement or condition (including, without limitation of the
foregoing, any condition or requirement imposed by any insurance or surety
company), as any of the same now exists or may be changed or amended or come
into effect in the future; and (ii) the term “Law” means any federal, state or
local law, statute, ordinance, code, rule, regulation, license, permit,
authorization, decision, order, injunction or decree, domestic or foreign.

               (i)
Maintenance, Repair and Restoration. Mortgagor will keep the
Property in first class order, repair, operating condition and appearance,
causing all necessary repairs, renewals, replacements, additions and
improvements to be promptly made, and will not allow any of the Property to be
misused, abused or wasted or to deteriorate. Notwithstanding the foregoing,
Mortgagor will not, without the prior written consent of Mortgagee, (i) remove
from the Property any fixtures or personal property covered by this Mortgage
except such as is replaced by Mortgagor by an article of equal suitability and
value, owned by Mortgagor, free and clear of any lien or security interest
(except that created by this Mortgage), or (ii) make any structural alteration
to the Property or any other alteration thereto which impairs the value
thereof. If any act or occurrence of any kind or nature (including any
condemnation or any casualty for which insurance was not obtained or
obtainable) shall result in damage to or loss or destruction of the Property,
Mortgagor shall give prompt notice thereof to Mortgagee and Mortgagor shall
promptly, at Mortgagor’s sole cost and expense and regardless of whether
insurance or condemnation proceeds (if any) shall be available or sufficient
for the purpose, secure the Property as necessary and commence and continue
diligently to completion to restore, repair, replace and rebuild the Property
as nearly as possible to its value, condition and character immediately prior
to the damage, loss or destruction.

               (j)
No Other Liens. Mortgagor will not, without the prior written
consent of Mortgagee, create, place or permit to be created or placed, or
through any act or failure to act, acquiesce in the placing of, or allow to
remain, any mortgage, voluntary or involuntary lien,

11

whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Property, or any part thereof, other than the Permitted Encumbrances, regardless
of whether the same are expressly or otherwise subordinate to the lien or
security interest created in this Mortgage, and should any of the foregoing
become attached hereafter in any manner to any part of the Property without the
prior written consent of Mortgagee, Mortgagor will cause the same to be
promptly discharged and released. Mortgagor will own all parts of the Property
and will not acquire any fixtures, equipment or other property (including
software embedded therein) forming a part of the Property pursuant to a lease,
license, security agreement or similar agreement, whereby any party has or may
obtain the right to repossess or remove same, without the prior written consent
of Mortgagee. If Mortgagee consents to the voluntary grant by Mortgagor of any
mortgage, lien, security interest, or other encumbrance (hereinafter called
“Subordinate Lien”) covering any of the Property or if the foregoing
prohibition is determined by a court of competent jurisdiction to be
unenforceable as to a Subordinate Lien, any such Subordinate Lien shall contain
express covenants to the effect that: (1) the Subordinate Lien is
unconditionally subordinate to this Mortgage and all Leases (hereinafter
defined); (2) if any action (whether judicial or pursuant to a power of sale)
shall be instituted to foreclose or otherwise enforce the Subordinate Lien, no
tenant of any of the Leases (hereinafter defined) shall be named as a party
defendant, and no action shall be taken that would terminate any occupancy or
tenancy without the prior written consent of Mortgagee; (3) Rents (hereinafter
defined), if collected by or for Mortgagee of the Subordinate Lien, shall be
applied first to the payment of the Secured Indebtedness then due and expenses
incurred in the ownership, operation and maintenance of the Property in such
order as Mortgagee may determine, prior to being applied to any indebtedness
secured by the Subordinate Lien; (4) written notice of default under the
Subordinate Lien and written notice of the commencement of any action (whether
judicial or pursuant to a power of sale) to foreclose or otherwise enforce the
Subordinate Lien or to seek the appointment of a receiver for all or any part
of the Property shall be given to Mortgagee with or immediately after the
occurrence of any such default or commencement; and (5) neither Mortgagee of
the Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Mortgagor’s
rights hereunder without the prior written consent of Mortgagee.

               (k)
Operation of Property. Mortgagor will operate the Property in a
good and workmanlike manner and in accordance with all Legal Requirements and
will pay all fees or charges of any kind in connection therewith. Mortgagor
will keep the Property occupied so as not to impair the insurance carried
thereon. Mortgagor will not use or occupy or conduct any activity on, or allow
the use or occupancy of or the conduct of any activity on, the Property in any
manner which violates any Legal Requirement or which constitutes a public or
private nuisance or which makes void, voidable or cancelable, or increases the
premium of, any insurance then in force with respect thereto. Mortgagor will
not initiate or permit any zoning reclassification of the Property or seek any
variance under existing zoning ordinances applicable to the Property or use or
permit the use of the Property in such a manner which would result in such use
becoming a nonconforming use under applicable zoning ordinances or other Legal
Requirement. Mortgagor will not impose any easement, restrictive covenant or
encumbrance upon the Property, execute or file any subdivision plat or
condominium declaration affecting the Property or consent to the annexation of
the Property to any municipality, without the prior written consent of
Mortgagee. Mortgagor will not do or suffer to be done any act whereby the value
of any part of the Property may be lessened. Mortgagor will preserve, protect,
renew,

12

extend and retain all
material rights and privileges granted for or applicable to the Property.
Without the prior written consent of Mortgagee, there shall be no drilling or
exploration for or extraction, removal or production of any mineral,
hydrocarbon, gas, natural element, compound or substance (including sand and
gravel) from the surface or subsurface of the Land regardless of the depth
thereof or the method of mining or extraction thereof. Mortgagor will cause all
debts and liabilities of any character (including without limitation all debts
and liabilities for labor, material and equipment (including software embedded
therein) and all debts and charges for utilities servicing the Property)
incurred in the construction, maintenance, operation and development of the Property
to be promptly paid.

               (l)
Financial Matters. Mortgagor is solvent after giving effect to
all borrowings contemplated by the Loan Documents and no proceeding under any
Debtor Relief Law (hereinafter defined) is pending (or, to Mortgagor’s
knowledge, threatened) by or against Mortgagor, or any affiliate of Mortgagor,
as a debtor. All reports, statements, plans, budgets, applications, agreements
and other data and information heretofore furnished or hereafter to be
furnished by or on behalf of Mortgagor to Mortgagee in connection with the loan
or loans evidenced by the Loan Documents (including, without limitation, all
financial statements and financial information) are and will be true, correct
and complete in all material respects as of their respective dates and do not
and will not omit to state any fact or circumstance necessary to make the
statements contained therein not misleading. No material adverse change has
occurred since the dates of such reports, statements and other data in the
financial condition of Mortgagor or, to Mortgagor’s knowledge, of any tenant
under any lease described therein. For the purposes of this paragraph,
“Mortgagor” shall also include any person liable directly or indirectly for the
Secured Indebtedness or any part thereof and any joint venturer or general
partner of Mortgagor.

               (m)
Status of Mortgagor; Suits and Claims; Loan Documents. If
Mortgagor is a corporation, partnership, limited liability company, or other
legal entity, Mortgagor is and will continue to be (i) duly organized, validly
existing and in good standing under the laws of its state of organization, (ii)
authorized to do business in, and in good standing in, each state in which the
Property is located, and (iii) possessed of all requisite power and authority
to carry on its business and to own and operate the Property. Each Loan
Document executed by Mortgagor has been duly authorized, executed and delivered
by Mortgagor, and the obligations thereunder and the performance thereof by
Mortgagor in accordance with their terms are and will continue to be within
Mortgagor’s power and authority (without the necessity of joinder or consent of
any other person), are not and will not be in contravention of any Legal
Requirement or any other document or agreement to which Mortgagor or the
Property is subject, and do not and will not result in the creation of any
encumbrance against any assets or properties of Mortgagor, or any other person
liable, directly or indirectly, for any of the Secured Indebtedness, except as
expressly contemplated by the Loan Documents. There is no suit, action, claim,
investigation, inquiry, proceeding or demand pending (or, to Mortgagor’s
knowledge, threatened) against Mortgagor (other than the lawsuit commenced by The
Omni Health & Fitness Complex of Pelham, Inc., et al. in the Westchester
County Supreme Court under index no. 24678/2008) or against any other person
liable directly or indirectly for the Secured Indebtedness or which affects the
Property (including, without limitation, any which challenges or otherwise
pertains to Mortgagor’s title to the Property) or the validity, enforceability
or priority of any of the Loan Documents. There is no judicial or
administrative action, suit or proceeding pending (or, to Mortgagor’s
knowledge, threatened) against Mortgagor, or against any other person liable 

13

directly or indirectly
for the Secured Indebtedness, except as has been disclosed in writing to
Mortgagee in connection with the loan evidenced by the Note. The Loan Documents
constitute legal, valid and binding obligations of Mortgagor enforceable in
accordance with their terms, except as the enforceability thereof may be
limited by Debtor Relief Laws (hereinafter defined) and except as the
availability of certain remedies may be limited by general principles of
equity. Mortgagor is not a “foreign person” within the meaning of the Internal
Revenue Code of 1986, as amended, Sections 1445 and 7701 (i.e. Mortgagor is not
a non-resident alien, foreign corporation, foreign partnership, foreign trust
or foreign estate as those terms are defined therein and in any regulations
promulgated thereunder). The loan evidenced by the Note is solely for business
and/or investment purposes, and is not intended for personal, family, household
or agricultural purposes. Mortgagor further warrants that the proceeds of the
Note shall be used for commercial purposes and stipulates that the loan
evidenced by the Note shall be construed for all purposes as a commercial loan.
Mortgagor’s exact legal name is correctly set forth at the end of this
Mortgage. If Mortgagor is not an individual, Mortgagor is an organization of
the type and (if not an unregistered entity) is incorporated in or organized
under the laws of the state specified in the introductory paragraph of this
Mortgage. If Mortgagor is an unregistered entity (including, without
limitation, a general partnership) it is organized under the laws of the state
specified in the introductory paragraph of this Mortgage. Mortgagor will not cause
or permit any change to be made in its name, identity (including its trade name
or names), or corporate or partnership structure, unless Mortgagor shall have
notified Mortgagee in writing of such change at least thirty (30) days prior to
the effective date of such change, and shall have first taken all action
required by Mortgagee for the purpose of further perfecting or protecting the
lien and security interest of Mortgagee in the Property. In addition, Mortgagor
shall not change its corporate or partnership structure without first obtaining
the prior written consent of Mortgagee. Mortgagor’s principal place of business
and chief executive office, and the place where Mortgagor keeps its books and
records, including recorded data of any kind or nature, regardless of the
medium of recording including, without limitation, software, writings, plans,
specifications and schematics concerning the Property, has for the preceding
four months (or, if less, the entire period of the existence of Mortgagor) been
and will continue to be (unless Mortgagor notifies Mortgagee of any change in
writing at least thirty (30) days prior to the date of such change) the address
of Mortgagor set forth at the end of this Mortgage. If Mortgagor is an
individual, Mortgagor’s principal residence has for the preceding four months
been and will continue to be (unless Mortgagor notifies Mortgagee of any change
in writing at least thirty (30) days prior to the date of such change) the
address of the principal residence of Mortgagor set forth at the end of this
Mortgage. Mortgagor’s organizational identification number, if any, assigned by
the state of incorporation or organization is correctly set forth on the first
page of this Mortgage. Mortgagor shall promptly notify Mortgagee (i) of any
change of its organizational identification number, or (ii) if Mortgagor does
not now have an organization identification number and later obtains one, of
such organizational identification number.

               (n)
Certain Environmental Matters. Mortgagor shall comply with the terms and
covenants of that certain Environmental Indemnity Agreement dated of even date
herewith (the “Environmental Agreement”). 

               (o)
Further Assurances. Mortgagor will, promptly on request of Mortgagee,
(i) correct any defect, error or omission which may be discovered in the
contents, execution or acknowledgment of this Mortgage or any other Loan
Document; (ii) execute, acknowledge, 

14

deliver, procure and
record and/or file such further documents (including, without limitation,
further mortgages of trust, security agreements, and assignments of rents or
leases) and do such further acts as may be necessary, desirable or proper to
carry out more effectively the purposes of this Mortgage and the other Loan
Documents, to more fully identify and subject to the liens and security
interests hereof any property intended to be covered hereby (including
specifically, but without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Property) or as deemed advisable by
Mortgagee to protect the lien or the security interest hereunder against the
rights or interests of third persons; and (iii) provide such certificates,
documents, reports, information, affidavits and other instruments and do such
further acts as may be necessary, desirable or proper in the reasonable
determination of Mortgagee to enable Mortgagee to comply with the requirements
or requests of any agency having jurisdiction over Mortgagee or any examiners
of such agencies with respect to the indebtedness secured hereby, Mortgagor or
the Property. Mortgagor shall pay all costs connected with any of the
foregoing, which shall be a demand obligation owing by Mortgagor (which
Mortgagor hereby promises to pay) to Mortgagee pursuant to this Mortgage.

               (p)
Fees and Expenses. Without limitation of any other provision of this
Mortgage or of any other Loan Document and to the extent not prohibited by
applicable law, Mortgagor will pay, and will reimburse to Mortgagee and/or Mortgagee
on demand to the extent paid by Mortgagee and/or Mortgagee: (i) all appraisal
fees, filing, registration and recording fees, recordation, transfer and other
taxes, brokerage fees and commissions, abstract fees, title search or
examination fees, title policy and endorsement premiums and fees, uniform
commercial code search fees, judgment and tax lien search fees, escrow fees,
reasonable attorneys’ fees, reasonable architect fees, reasonable engineer
fees, reasonable construction consultant fees, reasonable environmental
inspection fees, survey fees, and all other reasonable costs and expenses of
every character incurred by Mortgagor or Mortgagee and/or Mortgagee in
connection with the preparation of the Loan Documents, the evaluation, closing
and funding of the loan evidenced by the Loan Documents, and any and all
amendments and supplements to this Mortgage, the Note or any other Loan
Documents or any approval, consent, waiver, release or other matter requested
or required hereunder or thereunder, or otherwise attributable or chargeable to
Mortgagor as owner of the Property; and (ii) all costs and expenses, including
reasonable attorneys’ fees and expenses, incurred or expended in connection
with the exercise of any right or remedy, or the defense of any right or remedy
or the enforcement of any obligation of Mortgagor, hereunder or under any other
Loan Document. 

               (q)
Indemnification.

	
  

 	
  

 
	
  

 	
           (i)
 Mortgagor will indemnify and hold harmless Mortgagee from and against, and
 reimburse them on demand for, any and all Indemnified Matters (hereinafter
 defined). For purposes of this paragraph (p), the term “Mortgagee” shall
 include and any persons owned or controlled by, owning or controlling, or
 under common control or affiliated with Mortgagee. Without limitation, the
 foregoing indemnities shall apply to each indemnified person with respect to
 matters which in whole or in part are caused by or arise out of the
 negligence of such (and/or any other) indemnified person. However, such
 indemnities shall not apply to a particular indemnified person to the extent
 that the subject of the indemnification is caused by or arises out of the
 gross negligence or willful misconduct of that indemnified person. Any amount
 to be paid under this paragraph (p) 

 

15

	
  

 	
  

 
	
  

 	
 by Mortgagor to
 Mortgagee shall be a demand obligation owing by Mortgagor (which Mortgagor
 hereby promises to pay) to Mortgagee pursuant to this Mortgage. Nothing in
 this paragraph, elsewhere in this Mortgage or in any other Loan Document
 shall limit or impair any rights or remedies of Mortgagee (including without
 limitation any rights of contribution or indemnification) against Mortgagor
 or any other person under any other provision of this Mortgage, any other
 Loan Document, any other agreement or any applicable Legal Requirement.

 
	
  

 	
  

 
	
  

 	
           (ii)
 As used herein, the term “Indemnified Matters” means any and all claims,
 demands, liabilities (including strict liability), losses, damages (including
 consequential damages), causes of action, judgments, penalties, fines, costs
 and expenses (including without limitation, reasonable fees and expenses of
 attorneys and other professional consultants and experts, and of the
 investigation and defense of any claim, whether or not such claim is
 ultimately defeated, and the settlement of any claim or judgment including
 all value paid or given in settlement) of every kind, known or unknown,
 foreseeable or unforeseeable, which may be imposed upon, asserted against or
 incurred or paid by Mortgagee at any time and from time to time, whenever
 imposed, asserted or incurred, because of, resulting from, in connection
 with, or arising out of any transaction, act, omission, event or circumstance
 in any way connected with the Property or with this Mortgage or any other
 Loan Document, including but not limited to any bodily injury or death or
 property damage occurring in or upon or in the vicinity of the Property
 through any cause whatsoever at any time on or before the Release Date
 (hereinafter defined), any act performed or omitted to be performed hereunder
 or under any other Loan Document, any breach by Mortgagor of any
 representation, warranty, covenant, agreement or condition contained in this
 Mortgage or in any other Loan Document, any default as defined herein, any
 claim under or with respect to any Lease (hereinafter defined) or arising
 under the Environmental Agreement. The term “Release Date” as used herein
 means the earlier of the following two dates: (i) the date on which the
 indebtedness and obligations secured hereby have been paid and performed in
 full and this Mortgage has been released, or (ii) the date on which the lien
 of this Mortgage is fully and finally foreclosed or a conveyance by deed in
 lieu of such foreclosure is fully and finally effective, and possession of
 the Property has been given to the purchaser or grantee free of occupancy and
 claims to occupancy by Mortgagor and Mortgagor’s heirs, devisees,
 representatives, successors and assigns; provided, that if such payment,
 performance, release, foreclosure or conveyance is challenged, in bankruptcy
 proceedings or otherwise, the Release Date shall be deemed not to have
 occurred until such challenge is rejected, dismissed or withdrawn with
 prejudice. The indemnities in this paragraph (p) shall not terminate upon the
 Release Date or upon the release, foreclosure or other termination of this
 Mortgage but will survive the Release Date, foreclosure of this Mortgage or
 conveyance in lieu of foreclosure, the repayment of the Secured Indebtedness,
 the termination of any and all Swap Transactions, the discharge and release
 of this Mortgage and the other Loan Documents, any bankruptcy or other debtor
 relief proceeding, and any other event whatsoever.

 

               (r)
Records and Financial Reports. Mortgagor will keep accurate books
and records in accordance with sound accounting principles in which full, true
and correct entries shall be promptly made with respect to the Property and the
operation thereof, and will permit all such

16

books and records, and
all recorded data of any kind or nature, regardless of the medium of recording
including, without limitation, all software, writings, plans, specifications
and schematics to be inspected and copied, and the Property to be inspected and
photographed, by Mortgagee and its representatives during normal business hours
and at any other reasonable times. Without limitation of other or additional
requirements in any of the other Loan Documents, Mortgagor will furnish to
Mortgagee the financial statements required under the Loan Agreement. Mortgagor
will furnish to Mortgagee at Mortgagor’s expense all evidence which Mortgagee
may from time to time reasonably request as to compliance with all provisions
of the Loan Documents. Any inspection or audit of the Property or the books and
records, including recorded data of any kind or nature, regardless of the
medium of recording including, without limitation, software, writings, plans,
specifications and schematics of Mortgagor, or the procuring of documents and
financial and other information, by or on behalf of Mortgagee shall be for
Mortgagee’s protection only, and shall not constitute any assumption of
responsibility to Mortgagor or anyone else with regard to the condition,
construction, maintenance or operation of the Property nor Mortgagee’s approval
of any certification given to Mortgagee nor relieve Mortgagor of any of
Mortgagor’s obligations. Mortgagee may from time to time assign or grant
participations in the Secured Indebtedness and Mortgagor consents to the
delivery by Mortgagee to any acquirer or prospective acquirer of any interest
or participation in or with respect to all or part of the Secured Indebtedness
such information as Mortgagee now or hereafter has relating to the Property,
Mortgagor, any party obligated for payment of any part of the Secured
Indebtedness, any tenant or guarantor under any lease affecting any part of the
Property and any agent or guarantor under any management agreement affecting
any part of the Property.

               (s)
Taxes on Note or Mortgage. Mortgagor will promptly pay all
income, franchise and other taxes owing by Mortgagor and any stamp,
documentary, recordation and transfer taxes or other taxes (unless such payment
by Mortgagor is prohibited by law) which may be required to be paid with
respect to the Note, this Mortgage or any other instrument evidencing or
securing any of the Secured Indebtedness. In the event of the enactment after
this date of any law of any governmental entity applicable to Mortgagee, the
Note, the Property or this Mortgage deducting from the value of property for
the purpose of taxation any lien or security interest thereon, or imposing upon
Mortgagee the payment of the whole or any part of the taxes or assessments or
charges or liens herein required to be paid by Mortgagor, or changing in any
way the laws relating to the taxation of deeds of trust or mortgages or
security agreements or debts secured by deeds of trust or mortgages or security
agreements or the interest of the mortgagee or secured party in the property
covered thereby, or the manner of collection of such taxes, so as to affect
this Mortgage or the Secured Indebtedness or Mortgagee, then, and in any such
event, Mortgagor, upon demand by Mortgagee, shall pay such taxes, assessments,
charges or liens, or reimburse Mortgagee therefor; provided, however, that if
in the opinion of counsel for Mortgagee (i) it might be unlawful to require
Mortgagor to make such payment or (ii) the making of such payment might result
in the imposition of interest beyond the maximum amount permitted by law, then
and in such event, Mortgagee may elect, by notice in writing given to
Mortgagor, to declare all of the Secured Indebtedness to be and become due and
payable sixty (60) days from the giving of such notice.

               (t)
Statement Concerning Note or Mortgage. Mortgagor shall at any
time and from time to time furnish within seven (7) days of request by
Mortgagee a written statement in such form as may be required by Mortgagee
stating that (i) the Note, this Mortgage and the other Loan

17

Documents are valid and
binding obligations of Mortgagor, enforceable against Mortgagor in accordance
with their terms; (ii) the unpaid principal balance of the Note; (iii) the date
to which interest on the Note is paid; (iv) the Note, this Mortgage and the
other Loan Documents have not been released, subordinated or modified; and (v)
there are no offsets or defenses against the enforcement of the Note, this
Mortgage or any other Loan Document. If any of the foregoing statements are untrue,
Mortgagor shall, alternatively, specify the reasons therefor. Mortgagee shall
at any time and from time to time furnish within seven (7) days of request by
Mortgagor a written statement stating (i) the unpaid principal balance of the
Note and (ii) the date to which interest on the Note is paid.

               (u)
Trust Fund; Lien Laws. Mortgagor will receive the advances
secured hereby and will hold the right to receive such advances as a trust fund
to be applied first for the purpose of paying the “cost of improvement”, as
such quoted term is defined in the New York Lien Law) and will apply the same
first to the payment of such costs before using any part of the total of the
same for any other purpose and, will comply with Section 13 of the New York
Lien Law. Mortgagor will indemnify and hold Mortgagee harmless against any loss
or liability, cost or expense, including, without limitation, any judgments,
reasonable attorney’s fees, costs of appeal bonds and printing costs, arising
out of or relating to any proceeding instituted by any claimant alleging a
violation by Mortgagor of any applicable lien law including, without
limitation, any section of Article 3-A of the New York Lien Law.

          Section
2.2. Performance by Mortgagee on Mortgagor’s Behalf. Mortgagor agrees
that, if Mortgagor fails to perform any act or to take any action which under
any Loan Document Mortgagor is required to perform or take, or to pay any money
which under any Loan Document Mortgagor is required to pay, and whether or not
the failure then constitutes a default hereunder or thereunder, and whether or
not there has occurred any default or defaults hereunder or the Secured
Indebtedness has been accelerated, Mortgagee, in Mortgagor’s name or its own
name, may, but shall not be obligated to, perform or cause to be performed such
act or take such action or pay such money, and any expenses so incurred by
Mortgagee, with interest thereon at the Default Rate set forth in the Note, and
any money so paid by Mortgagee shall be a demand obligation owing by Mortgagor
to Mortgagee (which obligation Mortgagor hereby promises to pay), shall be a
part of the indebtedness secured hereby, and Mortgagee, upon making such
payment, shall be subrogated to all of the rights of the person, entity or body
politic receiving such payment. Mortgagee and its designees shall have the
right to enter upon the Property at any time and from time to time for any such
purposes. No such payment or performance by Mortgagee shall waive or cure any
default or waive any right, remedy or recourse of Mortgagee. Any such payment
may be made by Mortgagee in reliance on any statement, invoice or claim without
inquiry into the validity or accuracy thereof. Each amount due and owing by
Mortgagor to Mortgagee pursuant to this Mortgage shall bear interest, from the
date such amount becomes due until paid, at the rate per annum provided in the
Note for interest on past due principal owed on the Note but never in excess of
the maximum nonusurious amount permitted by applicable law, which interest
shall be payable to Mortgagee on demand; and all such amounts, together with
such interest thereon, shall automatically and without notice be a part of the
indebtedness secured hereby. The amount and nature of any expense by Mortgagee
hereunder and the time when paid shall be fully established by the certificate
of Mortgagee or any of Mortgagee’s officers or agents.

18

          Section
2.3. Absence of Obligations of Mortgagee with Respect to Property.
Notwithstanding anything in this Mortgage to the contrary, including, without
limitation, the definition of “Property” and/or the provisions of Article 3
hereof, (i) to the extent permitted by applicable law, the Property is composed
of Mortgagor’s rights, title and interests therein but not Mortgagor’s
obligations, duties or liabilities pertaining thereto, (ii) Mortgagee neither
assumes nor shall have any obligations, duties or liabilities in connection
with any portion of the items described in the definition of “Property” herein,
either prior to or after obtaining title to such Property, whether by
foreclosure sale, the granting of a deed in lieu of foreclosure or otherwise,
and (iii) Mortgagee may, at any time prior to or after the acquisition of title
to any portion of the Property as above described, advise any party in writing
as to the extent of Mortgagee’s interest therein and/or expressly disaffirm in
writing any rights, interests, obligations, duties and/or liabilities with
respect to such Property or matters related thereto. Without limiting the
generality of the foregoing, it is understood and agreed that Mortgagee shall
have no obligations, duties or liabilities prior to or after acquisition of
title to any portion of the Property, as lessee under any lease or purchaser or
seller under any contract or option unless Mortgagee elects otherwise by
written notification.

          Section
2.4. Authorization to File Financing Statements; Power of Attorney.
Mortgagor hereby authorizes Mortgagee at any time and from time to time to file
any initial financing statements, amendments thereto and continuation
statements as authorized by applicable law, required by Mortgagee to establish
or maintain the validity, perfection and priority of the security interests
granted in this Mortgage. For purposes of such filings, Mortgagor agrees to
furnish any information requested by Mortgagee promptly upon request by
Mortgagee. Mortgagor also ratifies its authorization for Mortgagee to have
filed any like initial financing statements, amendments thereto or continuation
statements if filed prior to the date of this Mortgage. Mortgagor hereby
irrevocably constitutes and appoints Mortgagee and any officer or agent of
Mortgagee, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Mortgagor or in Mortgagor’s own name to execute in Mortgagor’s name
any such documents and to otherwise carry out the purposes of this Section 2.4,
to the extent that Mortgagor’s authorization above is not sufficient. To the
extent permitted by law, Mortgagor hereby ratifies all acts said
attorney-in-fact shall lawfully do, have done in the past or cause to be done
in the future by virtue hereof. This power of attorney is a power coupled with
an interest and shall be irrevocable.

          Section
2.5. Ground Lease Covenant. Mortgagor shall (a) pay all rents,
additional rents and other sums required to be paid by Mortgagor, as tenant
under and pursuant to the provisions of the Ground Lease as and when such rent
or other charge is payable, (b) diligently perform and observe all of the
terms, covenants and conditions of the Ground Lease on the part of Mortgagor,
as tenant thereunder, to be performed and observed prior to the expiration of
any applicable grace period therein provided, and (c) promptly notify Mortgagee
of the giving of any notice by the Ground Lessor to Mortgagor of any default by
Mortgagor in the performance or observance of any of the terms, covenants or
conditions of the Ground Lease on the part of Mortgagor, as tenant thereunder,
to be performed or observed and deliver to Mortgagee a true copy of each such
notice. Mortgagor shall not, without the prior consent of Mortgagee, surrender
the leasehold estate created by the Ground Lease or terminate or cancel the
Ground Lease or, without the prior written consent of Mortgagee, which consent
shall not be unreasonably withheld, conditioned or delayed, modify, change,
supplement, alter or amend the Ground Lease, 

19

in any respect, either
orally or in writing, and Mortgagor hereby assigns to Mortgagee, as further
security for the payment of the Secured Indebtedness and for the performance
and observance of the terms, covenants and conditions of this Mortgage and the
Loan Agreement, all of the rights, privileges and prerogatives of Mortgagor,
which rights, privileges and prerogatives may be exercised by Mortgagee upon a
Default, as tenant under the Ground Lease, to surrender the leasehold estate
created by the Ground Lease or to terminate, cancel, modify, change,
supplement, alter or amend the Ground Lease, which consent, in the case of a
change, supplement, modification, alteration or amendment, shall not be
unreasonably withheld or delayed, and any such surrender of the leasehold
estate created by the Ground Lease or termination, cancellation, modification,
change, supplement, alteration or amendment of the Ground Lease without the
prior consent of Mortgagee shall be void and of no force and effect. If
Mortgagor shall default in the performance or observance of any term, covenant
or condition of the Ground Lease on the part of Mortgagor, as tenant
thereunder, to be performed or observed, and such default shall remain uncured
after the expiration of any applicable cure or grace period, then, without
limiting the generality of the other provisions of this Mortgage and the Loan
Agreement, and without waiving or releasing Mortgagor from any of its
obligations hereunder or thereunder, Mortgagee shall have the right, but shall
be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all of the terms, covenants and
conditions of the Ground Lease on the part of Mortgagor, as tenant thereunder,
to be performed or observed or to be promptly performed or observed on behalf
of Mortgagor, to the end that the rights of Mortgagor in, to and under the
Ground Lease shall be kept unimpaired and free from default. If Mortgagee shall
make any payment or perform any act or take action in accordance with the
preceding sentence, Mortgagee will notify Mortgagor of the making of any such
payment, the performance of any such act, or the taking of any such action. In
any such event, subject to the rights of tenants, subtenants and other
occupants under the Leases, Mortgagee and any person designated by Mortgagee
shall have, and are hereby granted, the right to enter upon the Property at any
time and from time to time after such default by Mortgagor, which remains
uncured after the expiration of any applicable cure or grace period, for the
purpose of taking any such action. Mortgagee may pay and expend such sums of
money as Mortgagee deems reasonably necessary for any such purpose and upon so
doing shall be subrogated to any and all rights of the Ground Lessor. Mortgagor
hereby agrees to pay to Mortgagee immediately upon demand therefor, all such
sums so paid and expended by Mortgagee, together with interest thereon from the
day of such demand at the Default Rate. All sums so paid and expended by
Mortgagee and the interest thereon shall be secured by the legal operation and
effect of this Mortgage. If the Ground Lessor shall deliver to Mortgagee a copy
of any notice of default sent by said Ground Lessor to Mortgagor, as tenant
under the Ground Lease, such notice shall constitute full protection to
Mortgagee for any action taken or omitted to be taken by Mortgagee, in good
faith, in reliance thereon. Mortgagor will not subordinate or consent to the
subordination of the Ground Lease to any mortgage, security deed, lease or
other interest on or in the Ground Lessor’s interest in all or any part of the
Property, unless, in each such case, the written consent of Mortgagee shall
have been first had and obtained..

          Section
2.6. No Merger of Fee and Leasehold Estates. So long as any portion of
the Secured Indebtedness shall remain unpaid, unless Mortgagee shall otherwise
consent, the fee title to the Ground Lease Parcels and the leasehold estate
therein created pursuant to the provisions of the Ground Lease shall not merge
but shall always be kept separate and distinct, notwithstanding the union of
such estates in Mortgagor, Mortgagee, or in any other person by purchase,
operation 

20

of law or otherwise.
Mortgagee reserves the right, at any time, to release portions of the Property,
including, but not limited to, all of any part of the leasehold estate created
by the Ground Lease, with or without consideration, at Mortgagee’s election,
without waiving or affecting any of its rights hereunder or under the Note or
the other Loan Documents and any such release shall not affect Mortgagee’s
rights in connection with the portion of the Property not so released.

          Section
2.7. Mortgagor’s Acquisition of Fee Estate. In the event that Mortgagor,
so long as any portion of the Secured Indebtedness remains unpaid, shall be the
owner and holder of the fee title to all or any portion of the Ground Lease
Parcels, the lien of the Mortgage shall be spread to cover Mortgagor’s fee
title to such of the Ground Lease Parcels and said fee title shall be deemed to
be included in the Property without any further action. Mortgagor agrees, at
its sole cost and expense, including without limitation Mortgagee’s reasonable
attorneys’ fees, to (a) execute any and all documents or instruments necessary
to subject its fee title to the Property to the lien of this Mortgage; and (b)
provide a title insurance policy which shall insure that the lien of the
Mortgage is a first lien on Mortgagor’s fee title to the Property.
Notwithstanding the foregoing, if the Ground Lease is for any reason whatsoever
terminated prior to the natural expiration of its term, and if, pursuant to any
provisions of the Ground Lease or otherwise, Mortgagee or its designee shall
acquire from the Ground Lessor thereunder another lease of the Property,
Mortgagor shall have no right, title or interest in or to such other lease or
the leasehold estate created thereby.

          Section
2.8. Rejection of the Ground Lease. 

               (a)
If the Ground Lease is terminated for any reason in the event of the
rejection or disaffirmance of the Ground Lease pursuant to the Bankruptcy Code,
or any other law affecting creditor’s rights, (i) Mortgagor, immediately after
obtaining notice thereof, shall give notice thereto to Mortgagee, (ii)
Mortgagor, without the prior written consent of Mortgagee, shall not elect to
treat the Ground Lease as terminated pursuant to Section 365(h) of the
Bankruptcy Code or any comparable federal or state statute or law, and any
election by Mortgagor made without such consent shall be void and (iii) this
Mortgage and the Loan Agreement and all the liens, terms, covenants and
conditions of this Mortgage and the Loan Agreement hereby extends to and covers
Mortgagor’s possessory rights under Section 365(h) of the Bankruptcy Code and
to any claim for damages due to the rejection of the Ground Lease or other
termination of the Ground Lease. In addition, Mortgagor hereby assigns
irrevocably to Mortgagee Mortgagor’s rights to treat the Ground Lease as
terminated pursuant to Section 365(h) of the Bankruptcy Code and to offset
rents under such Ground Lease in the event any case, proceeding or other action
is commenced by or against the Ground Lessor under the Bankruptcy Code or any
comparable federal” or state statute or law.

               (b)
Mortgagor hereby assigns to Mortgagee (i) Mortgagor’s right to reject
the Ground Lease under Section 365 of the Bankruptcy Code or any comparable
federal or state statute or law with respect to any case, proceeding or other
action commenced by or against Mortgagor under the Bankruptcy Code or
comparable federal or state statute or law and (ii) Mortgagor’s right to seek
an extension of the sixty (60)-day period within which Mortgagor must accept or
reject the Ground Lease under Section 365 of the Bankruptcy Code or any
comparable federal or state statute or law with respect to any case, proceeding
or other action commenced by or against 

21

Mortgagor under the
Bankruptcy Code or comparable federal or state statute or law. Further, if the
foregoing assignment is not effective under applicable law and Mortgagor shall
desire to so reject the Ground Lease, at Mortgagee’s request, Mortgagor shall
assign its interest in the Ground Lease to Mortgagee in lieu of rejecting the
Ground Lease, upon receipt by Mortgagor of notice from Mortgagee of such
request together with Mortgagee’s agreement to cure any existing defaults of
Mortgagor under the Ground Lease.

               (c)
Mortgagor hereby agrees that if the Ground Lease is terminated for any
reason in the event of the rejection or disaffirmance of the Ground Lease
pursuant to the Bankruptcy Code or any other law affecting creditor’s rights,
any property not removed by Mortgagor as permitted or required by the Ground
Lease, shall at the option of Mortgagee be deemed abandoned by Mortgagor,
provided that Mortgagee may remove any such property required to be removed by
Mortgagor pursuant to the Ground Lease and all costs and expenses associated
with such removal shall be paid by Mortgagor within five (5) days of receipt by
Mortgagor of an invoice for such removal costs and expenses.

ARTICLE 3

Assignment of Rents and Leases

          Section
3.1. Assignment. Mortgagor hereby assigns to Mortgagee all Rents
(hereinafter defined) and all of Mortgagor’s rights in and under all Leases
(hereinafter defined). So long as no Default (hereinafter defined) has
occurred, Mortgagor shall have a license (which license shall terminate
automatically and without further notice upon the occurrence of a Default) to
collect, but not prior to accrual, the Rents under the Leases and, where
applicable, subleases, such Rents to be held in trust for Mortgagee, and to
otherwise deal with all Leases as permitted by this Mortgage. Each month,
provided no Default has occurred, Mortgagor may retain such Rents as were
collected that month and held in trust for Mortgagee; provided, however, that
all Rents collected by Mortgagor shall be applied solely to the ordinary and
necessary expenses of owning and operating the Property or paid to Mortgagee.
Upon the revocation of such license, all Rents shall be paid directly to
Mortgagee and not through Mortgagor, all without the necessity of any further
action by Mortgagee, including, without limitation, any action to obtain
possession of the Land, Improvements or any other portion of the Property or
any action for the appointment of a receiver. Mortgagor hereby authorizes and
directs the tenants under the Leases to pay Rents to Mortgagee upon written
demand by Mortgagee, without further consent of Mortgagor, without any
obligation of such tenants to determine whether a Default has in fact occurred
and regardless of whether Mortgagee has taken possession of any portion of the
Property, and the tenants may rely upon any written statement delivered by
Mortgagee to the tenants. Any such payments to Mortgagee shall constitute
payments to Mortgagor under the Leases, and Mortgagor hereby irrevocably
appoints Mortgagee as its attorney-in-fact to do all things, after a Default,
which Mortgagor might otherwise do with respect to the Property and the Leases
thereon, including, without limitation, (i) collecting Rents with or without
suit and applying the same, less expenses of collection, to any of the
obligations secured hereunder or to expenses of operating and maintaining the
Property (including reasonable reserves for anticipated expenses), at the
option of Mortgagee, all in such manner as may be determined by Mortgagee, or
at the option of Mortgagee, holding the same as security for 

22

the payment of the
Secured Indebtedness, (ii) leasing, in the name of Mortgagor, the whole or any
part of the Property which may become vacant, and (iii) employing agents
therefor and paying such agents reasonable compensation for their services. The
curing of such Default, unless other Defaults also then exist, shall entitle
Mortgagor to recover its aforesaid license to do any such things which
Mortgagor might otherwise do with respect to the Property and the Leases
thereon and to again collect such Rents. The powers and rights granted in this
paragraph shall be in addition to the other remedies herein provided for upon
the occurrence of a Default and may be exercised independently of or
concurrently with any of said remedies. Nothing in the foregoing shall be
construed to impose any obligation upon Mortgagee to exercise any power or
right granted in this paragraph or to assume any liability under any Lease of
any part of the Property and no liability shall attach to Mortgagee for failure
or inability to collect any Rents under any such Lease. The assignment
contained in this Section shall become null and void upon the release of this
Mortgage. As used herein: (i) “Lease” means each existing or future lease,
sublease (to the extent of Mortgagor’s rights thereunder) or other agreement
under the terms of which any person has or acquires any right to occupy or use
the Property, or any part thereof, or interest therein, and each existing or
future guaranty of payment or performance thereunder, and all extensions,
renewals, modifications and replacements of each such lease, sublease,
agreement or guaranty; and (ii) “Rents” means all of the rents, revenue,
income, profits and proceeds derived and to be derived from the Property or
arising from the use or enjoyment of any portion thereof or from any Lease,
including but not limited to the proceeds from any negotiated lease termination
or buyout of such Lease, liquidated damages following default under any such
Lease, all proceeds payable under any policy of insurance covering loss of
rents resulting from untenantability caused by damage to any part of the
Property, all of Mortgagor’s rights to recover monetary amounts from any tenant
in bankruptcy including, without limitation, rights of recovery for use and
occupancy and damage claims arising out of Lease defaults, including
rejections, under any applicable Debtor Relief Law (hereinafter defined),
together with any sums of money that may now or at any time hereafter be or
become due and payable to Mortgagor by virtue of any and all royalties,
overriding royalties, bonuses, delay rentals and any other amount of any kind
or character arising under any and all present and all future oil, gas, mineral
and mining leases covering the Property or any part thereof, and all proceeds
and other amounts paid or owing to Mortgagor under or pursuant to any and all
contracts and bonds relating to the construction or renovation of the Property.

          Section
3.2. Covenants, Representations and Warranties Concerning Leases and Rents.
Mortgagor covenants, represents and warrants that: (a) Mortgagor has good title
to, and is the owner of the entire landlord’s interest in, the Leases and Rents
hereby assigned and authority to assign them; (b) all Leases are valid and
enforceable, and in full force and effect, and are unmodified except as stated
therein; (c) neither Mortgagor nor any tenant in the Property is in default
under its Lease (and no event has occurred which with the passage of time or
notice or both would result in a default under its Lease) or is the subject of
any bankruptcy, insolvency or similar proceeding; (d) unless otherwise stated
in a Permitted Encumbrance, no Rents or Leases have been or will be assigned,
mortgaged, pledged or otherwise encumbered and no other person has or will
acquire any right, title or interest in such Rents or Leases; (e) no Rents have
been waived, released, discounted, set off or compromised; (f) except as stated
in the Leases, Mortgagor has not received any funds or deposits from any tenant
for which credit has not already been made on account of accrued Rents; (g)
Mortgagor shall perform all of its obligations under the Leases and enforce the
tenants’ obligations under the Leases to the extent 

23

enforcement is prudent
under the circumstances; (h) Mortgagor will not without the prior written
consent of Mortgagee, enter into any Lease after the date hereof except in
accordance with the terms of Exhibit I to the Loan Agreement, or waive,
release, discount, set off, compromise, reduce or defer any Rent, receive or
collect Rents more than one (1) month in advance, grant any rent-free period to
any tenant (except in accordance with the terms of Exhibit I to the Loan
Agreement), reduce any Lease term or waive, release or otherwise modify any
other material obligation under any Lease, renew or extend any Lease except in
accordance with the terms of Exhibit I to the Loan Agreement or in accordance
with a right of the tenant thereto in such Lease, approve or consent to an
assignment of a Lease or a subletting of any part of the premises covered by a
Lease (except with respect to leases of 5,000 square feet of rentable space or
less), or settle or compromise any claim against a tenant under a Lease in
bankruptcy or otherwise (except with respect to leases of 5,000 square feet of
rentable space or less); (i) Mortgagor will not, without the prior written
consent of Mortgagee, terminate or consent to the cancellation or surrender of
any Lease having an unexpired term of one (1) year or more unless promptly
after the cancellation or surrender a new Lease of such premises is made with a
new tenant having a credit standing that is satisfactory to Mortgagee, in Mortgagee’s
judgment, on terms not materially less favorable to lessor than the terms of
the terminated or cancelled Lease; (j) Mortgagor will not execute any Lease
except in accordance with the Loan Documents and for actual occupancy by the
tenant thereunder; (k) Mortgagor shall give prompt notice to Mortgagee, as soon
as Mortgagor first obtains notice, of any claim, or the commencement of any
action, by any tenant or subtenant under or with respect to a Lease regarding
any claimed damage, default, diminution of or offset against Rent, cancellation
of the Lease, or constructive eviction, excluding, however, notices of default
under residential Leases, and Mortgagor shall defend, at Mortgagor’s expense,
any proceeding pertaining to any Lease, including, if Mortgagee so requests,
any such proceeding to which Mortgagee is a party; (l) Mortgagor shall as often
as requested by Mortgagee, within ten (10) days of each request, deliver to
Mortgagee a complete rent roll of the Property in such detail as Mortgagee may
require and financial statements of the tenants, subtenants and guarantors
under the Leases to the extent available to Mortgagor, and deliver to such of
the tenants and others obligated under the Leases specified by Mortgagee
written notice of the assignment in Section 3.1 hereof in form and content
satisfactory to Mortgagee; (m) promptly upon request by Mortgagee, Mortgagor
shall deliver to Mortgagee executed originals of all Leases and copies of all
records in its possession or control relating thereto; (n) there shall be no
merger of the leasehold estates, created by the Leases, with the fee estate of
the Land without the prior written consent of Mortgagee; and (o) Mortgagee may
at any time and from time to time by specific written instrument intended for
the purpose, unilaterally subordinate the lien of this Mortgage to any Lease,
without joinder or consent of, or notice to, Mortgagor, any tenant or any other
person, and notice is hereby given to each tenant under a Lease of such right
to subordinate. No such subordination shall constitute a subordination to any
lien or other encumbrance, whenever arising, or improve the right of any junior
lien Mortgagee; and nothing herein shall be construed as subordinating this
Mortgage to any Lease.

          Section
3.3. Estoppel Certificates. All Leases executed after the date hereof
shall require the tenant to execute and deliver to Mortgagee an estoppel
certificate in form and substance acceptable to Mortgagee not more than thirty
(30) days after notice from Mortgagee. 

          Section
3.4. No Liability of Mortgagee. Mortgagee’s acceptance of this
assignment shall not be deemed to constitute Mortgagee a “mortgagee in
possession,” nor obligate 

24

Mortgagee to appear in or
defend any proceeding relating to any Lease or to the Property, or to take any
action hereunder, expend any money, incur any expenses, or perform any
obligation or liability under any Lease, or assume any obligation for any
deposit delivered to Mortgagor by any tenant and not as such delivered to and accepted
by Mortgagee. Mortgagee shall not be liable for any injury or damage to person
or property in or about the Property, or for Mortgagee’s failure to collect or
to exercise diligence in collecting Rents, but shall be accountable only for
Rents that it shall actually receive. Neither the assignment of Leases and
Rents nor enforcement of Mortgagee’s rights regarding Leases and Rents
(including collection of Rents) nor possession of the Property by Mortgagee nor
Mortgagee’s consent to or approval of any Lease (nor all of the same), shall
render Mortgagee liable on any obligation under or with respect to any Lease or
constitute affirmation of, or any subordination to, any Lease, occupancy, use
or option. 

          If
Mortgagee seeks or obtains any judicial relief regarding Rents or Leases, the
same shall in no way prevent the concurrent or subsequent employment of any
other appropriate rights or remedies nor shall same constitute an election of
judicial relief for any foreclosure or any other purpose. Mortgagee neither has
nor assumes any obligations as lessor or landlord with respect to any Lease.
The rights of Mortgagee under this Article 3 shall be cumulative of all other
rights of Mortgagee under the Loan Documents or otherwise.

          Reference
is hereby made to Section 291-f of the Real Property Law of the State of New
York for the purpose of obtaining for Mortgagee the benefits of said Section in
connection herewith.

ARTICLE 4

Default

          Section
4.1. Events of Default. The occurrence of any one of the following shall
be a default under this Mortgage (“default” or “Default”):

               (a)
Failure to Pay Indebtedness. Any of the Secured Indebtedness or
any indebtedness evidenced by the other “Notes” (as defined in the Loan
Agreement) is not paid when due, regardless of how such amount may have become
due and such default shall have continued for a period of ten (10) days.

               (b)
Nonperformance of Covenants. Any covenant, agreement or condition
herein or in any other Loan Document (other than covenants otherwise addressed
in another paragraph of this Section, such as covenants to pay the Secured
Indebtedness) is not fully and timely performed, observed or kept and such
failure shall have continued for a period of thirty (30) days after notice
thereof shall have been given to Mortgagor by Mortgagee (or such other cure
period as may be specified elsewhere in this Mortgage or the other Loan
Documents with respect to specific provisions), provided, however, if such
default is not susceptible of being cured within such thirty (30) day period
and Mortgagor has commenced such cure within such thirty (30) day period and is
diligently pursuing such cure to Mortgagee’s satisfaction, such thirty (30) day
cure period shall be extended, but in no event shall such cure period exceed
sixty (60) days, or, in the case of such other documents, such shorter grace
period, if any, as may be provided for therein.

25

               (c)
Default under other Loan Documents. The occurrence of a Default
under any other Loan Document, including an Early Termination Event as defined
in any Master Agreement relating to any Swap Transaction. 

               (d)
Representations. Any statement, representation or warranty in any
of the Loan Documents, or in any financial statement or any other writing
heretofore or hereafter delivered to Mortgagee in connection with the Secured
Indebtedness is false, misleading or erroneous in any material respect on the
date hereof or on the date as of which such statement, representation or
warranty is made.

               (e)
Bankruptcy or Insolvency. The owner of the Property or any person
liable, directly or indirectly, for any of the Secured Indebtedness (or any
general partner or joint venturer of such owner or other person):

	
  

 	
  

 
	
  

 	
           (i)
 (A) Executes an assignment for the benefit of creditors, or takes any action
 in furtherance thereof; or (B) admits in writing its inability to pay, or
 fails to pay, its debts generally as they become due; or (C) as a debtor,
 files a petition, case, proceeding or other action pursuant to, or
 voluntarily seeks the benefit or benefits of, Title 11 of the United States
 Code as now or hereafter in effect or any other federal, state or local law,
 domestic or foreign, as now or hereafter in effect relating to bankruptcy,
 insolvency, liquidation, receivership, reorganization, arrangement,
 composition, extension or adjustment of debts, or similar laws affecting the
 rights of creditors (Title 11 of the United States Code and such other laws
 being herein called “Debtor Relief Laws”), or takes any action in furtherance
 thereof; or (D) seeks the appointment of a receiver, trustee, custodian or
 liquidator of the Property or any part thereof or of any significant portion
 of its other property; or

 
	
  

 	
  

 
	
  

 	
           (ii)
 Suffers the filing of a petition, case, proceeding or other action against it
 as a debtor under any Debtor Relief Law or seeking appointment of a receiver,
 trustee, custodian or liquidator of the Property or any part thereof or of
 any significant portion of its other property, and (A) admits, acquiesces in
 or fails to contest diligently the material allegations thereof, or (B) the
 petition, case, proceeding or other action results in entry of any order for
 relief or order granting relief sought against it, or (C) in a proceeding
 under Debtor Relief Laws, the case is converted from one chapter to another,
 or (D) fails to have the petition, case, proceeding or other action
 permanently dismissed or discharged on or before the earlier of trial thereon
 or ninety (90) days next following the date of its filing; or

 
	
  

 	
  

 
	
  

 	
           (iii)
 Conceals, removes, or permits to be concealed or removed, any part of its
 property, with intent to hinder, delay or defraud its creditors or any of
 them, or makes or suffers a transfer of any of its property which may be
 fraudulent under any bankruptcy, fraudulent conveyance or similar law; or
 makes any transfer of its property to or for the benefit of a creditor at a
 time when other creditors similarly situated have not been paid; or suffers
 or permits, while insolvent, any creditor to obtain a lien (other than as
 described in subparagraph (iv) below) upon any of its property through legal
 proceedings which are not vacated and such lien discharged prior to
 enforcement thereof and in any event within sixty (60) days from the date
 thereof; or

 

26

	
  

 	
  

 
	
  

 	
           (iv)
 Fails to have discharged within a period of thirty (30) days any attachment,
 sequestration, or similar writ levied upon any of its property; or

 
	
  

 	
  

 
	
  

 	
           (v)
 Fails to pay immediately any final money judgment against it.

 

          (f)
Transfer of the Property. Any sale, lease, conveyance,
assignment, pledge, encumbrance, or transfer of all or any part of the Property
or any interest therein, voluntarily or involuntarily, whether by operation of
law or otherwise, except: (i) sales or transfers of items of the Accessories
which have become obsolete or worn beyond practical use and which have been
replaced by adequate substitutes, owned by Mortgagor, having a value equal to
or greater than the replaced items when new; and (ii) the grant, in the
ordinary course of business, of a leasehold interest in a part of the
Improvements to a tenant for occupancy, not containing a right or option to
purchase and not in contravention of any provision of this Mortgage or of any
other Loan Document. Mortgagee may, in its sole discretion, waive a default
under this paragraph, but it shall have no obligation to do so, and any waiver
may be conditioned upon such one or more of the following (if any) which
Mortgagee may require: the grantee’s integrity, reputation, character,
creditworthiness and management ability being satisfactory to Mortgagee in its
sole judgment and grantee executing, prior to such sale or transfer, a written
assumption agreement containing such terms as Mortgagee may require, a
principal paydown on the Note, an increase in the rate of interest payable
under the Note, a transfer fee, a modification of the term of the Note, and any
other modification of the Loan Documents which Mortgagee may require. : NOTICE
- THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL AND ANY AND ALL SWAP
TRANSACTIONS ARE SUBJECT TO TERMINATION, OR THE TERMS THEREOF BEING MODIFIED IN
THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY CONVEYED.

          (g)
Transfer of Assets. Any sale, lease, conveyance, assignment,
pledge, encumbrance, or transfer of all or any part of the other assets of
Mortgagor, excluding the Property, voluntarily or involuntarily, whether by
operation of law or otherwise, except: (i) sales or transfers in the ordinary
course of Mortgagor’s business; and (ii) sales or transfers for which Mortgagor
receives consideration substantially equivalent to the fair market value of the
transferred asset. 

          (h)
Transfer of Ownership of Mortgagor. Any of the following:

	
  

 	
  

 
	
  

 	
           (i) the sale, pledge,
 encumbrance, assignment or transfer, voluntarily or involuntarily, whether by
 operation of law or otherwise, of any interest in Mortgagor (if Mortgagor is
 not a natural person but is a corporation, partnership, limited liability
 company, trust or other legal entity), without the prior written consent of
 Mortgagee (including, without limitation, if Mortgagor is a partnership or
 joint venture, the withdrawal from or admission into it of any general
 partner or joint venturer); or

 
	
  

 	
  

 
	
  

 	
           (ii) if Mortgagor or
 Guarantor (or a general partner, member or co-venturer of either of them) is
 a partnership, joint venture, limited liability company, trust or
 closely-held corporation, any sale, conveyance, transfer or other disposition
 of more than 10%, in the aggregate, of any class of the issued and
 outstanding capital stock of such closely-held corporation or of the
 beneficial interest of such partnership, venture, limited liability 

 

27

	
  

 	
  

 
	
  

 	
 company or trust, or a
 change of any general partner, joint venturer, member or beneficiary, as the
 case may be, or, in the event Mortgagor or Guarantor (or a general partner,
 co-venturer, member or beneficiary, as the case may be, of either of them) is
 a publicly-held corporation, the sale, conveyance, transfer or other
 disposition of more than 10%, in the aggregate, of the stock-holdings of any
 of the five (5) individuals or entities that own the greatest number of
 shares of each class of issued and outstanding stock, or effectuates or
 permits a reduction in the aggregate direct and indirect ownership interests
 of Guarantor in Mortgagor below 50.1%, or effectuates or causes Acadia Realty
 Trust to fail to control the management of Guarantor and Mortgagor.

 

          (i)
Grant of Easement, Etc. Without the prior written consent of
Mortgagee, Mortgagor grants any easement or dedication, files any plat,
condominium declaration, or restriction, or otherwise encumbers the Property,
or seeks or permits any zoning reclassification or variance, unless such action
is expressly permitted by the Loan Documents or does not affect the Property.

          (j)
Abandonment. The owner of the Property abandons any of the
Property.

          (k)
Default Under Other Lien. A default or event of default occurs
under any lien, security interest or assignment covering the Property or any
part thereof (whether or not Mortgagee has consented, and without hereby
implying Mortgagee’s consent, to any such lien, security interest or assignment
not created hereunder), or Mortgagee of any such lien, security interest or
assignment declares a default or institutes foreclosure or other proceedings
for the enforcement of its remedies thereunder.

          (l)
Destruction. The Property is so demolished, destroyed or damaged
that, in the reasonable opinion of Mortgagee, it cannot be restored or rebuilt
with available funds to a profitable condition within a reasonable period of
time and in any event, prior to the final maturity date of the Note.

          (m)
Condemnation. (i) Any governmental authority shall require, or
commence any proceeding for, the demolition of any building or structure
comprising a part of the Premises, or (ii) there is commenced any proceeding to
condemn or otherwise take pursuant to the power of eminent domain, or a
contract for sale or a conveyance in lieu of such a taking is executed which
provides for the transfer of, a material portion of the Premises, including but
not limited to the taking (or transfer in lieu thereof) of any portion which
would result in the blockage or substantial impairment of access or utility
service to the Improvements or which would cause the Premises to fail to comply
with any Legal Requirement.

          (n)
Liquidation, Etc. The liquidation, termination, dissolution,
merger, consolidation or failure to maintain good standing in the State of New
York and/or the state of incorporation or organization, if different (or in the
case of an individual, the death or legal incapacity) of Mortgagor, any owner
of the Property or any person obligated to pay any part of the Secured
Indebtedness.

          (o)
Material, Adverse Change. In Mortgagee’s reasonable opinion, the
prospect of payment of all or any part of the Secured Indebtedness has been
impaired because of a material, 

28

adverse change in the
financial condition, results of operations, business or properties of
Mortgagor, any owner of the Property or any person liable, directly or
indirectly, for any of the Secured Indebtedness, or of any general partner or
joint venturer thereof (if such owner or other person is a partnership or joint
venture).

          (p)
Enforceability; Priority. Any Loan Document shall for any reason
without Mortgagee’s specific written consent cease to be in full force and
effect, or shall be declared null and void or unenforceable in whole or in
part, or the validity or enforceability thereof, in whole or in part, shall be
challenged or denied by any party thereto other than Mortgagee; or the liens,
mortgages or security interests of Mortgagee in any of the Property become
unenforceable in whole or in part, or cease to be of the priority herein
required, or the validity or enforceability thereof, in whole or in part, shall
be challenged or denied by Mortgagor or any person obligated to pay any part of
the Secured Indebtedness.

          (q)
Other Indebtedness. A default or event of default occurs under
any document executed and delivered in connection with any other indebtedness
(to Mortgagee or any other person or entity) of Mortgagor, the owner of the
Property, any person obligated to pay any part of the Secured Indebtedness, or
any person or entity which guarantees such other indebtedness.

          (r)
Ground Lease. (A) A breach or default by Mortgagor under any
condition or obligation contained in the Ground Lease shall occur, (B) there
occurs any event or condition that gives Ground Lessor under the Ground Lease a
right to terminate or cancel the Ground Lease, (C) the Ground Lease shall be
surrendered or the Ground Lease shall be terminated or cancelled for any reason
or under any circumstances whatsoever or (D) any of the terms, covenants or
conditions of the Ground Lease shall in any manner be modified, changed or
conditions of the Ground Lease shall in any manner be modified, changed,
supplemented, altered or amended without the prior written consent of
Mortgagee.

          (s)
Fee Interest. This Mortgage shall fail to encumber the fee
interest of the landlord under the Ground Lease if Mortgagor, Guarantor or any
affiliate thereof shall become the owner of such fee interest.

          (t)
Certain Other Agreements. (A) A breach or default by Mortgagor or
Storage Facility Tenant under any condition or obligation contained in the
Storage Facility Master Lease shall occur, (B) there occurs any event or
condition that gives Mortgagor or Storage Facility Tenant under the Storage
Facility Master Lease a right to terminate or cancel the Storage Facility
Master Lease, (C) the Storage Facility Master Lease shall be surrendered or the
Storage Facility Master Lease shall be terminated or cancelled for any reason
or under any circumstances whatsoever, except as specifically permitted herein,
or (D) any of the terms, covenants or conditions of the Storage Facility Master
Lease shall in any manner be modified, changed, supplemented, altered or
amended without the prior written consent of Mortgagee.

          (u)
Storage Facility Tenant. Storage Facility Tenant shall dissolve
or cease to exist during the term of the Loan, except in compliance with the
provisions of the Loan Agreement.

          (v)
Condominium Assessments. The Condominum Association shall file a
lien against any of the Property for unpaid Condominium Assessments.

29

          Section
4.2. Notice and Cure. If any
provision of this Mortgage or any other Loan Document provides for Mortgagee to
give to Mortgagor any notice regarding a default or incipient default, then if
Mortgagee shall fail to give such notice to Mortgagor as provided, the sole and
exclusive remedy of Mortgagor for such failure shall be to seek appropriate
equitable relief to enforce the agreement to give such notice and to have any
acceleration of the maturity of the Note and the Secured Indebtedness postponed
or revoked and foreclosure proceedings in connection therewith delayed or
terminated pending or upon the curing of such default in the manner and during
the period of time permitted by such agreement, if any, and Mortgagor shall
have no right to damages or any other type of relief not herein specifically
set out against Mortgagee, all of which damages or other relief are hereby
waived by Mortgagor. Nothing herein or in any other Loan Document shall operate
or be construed to add on or make cumulative any cure or grace periods
specified in any of the Loan Documents.

ARTICLE 5

Remedies

          Section
5.1. Certain Remedies. If a Default shall occur, Mortgagee may (but
shall have no obligation to) exercise any one or more of the following
remedies, without notice (unless notice is required by applicable statute):

               (a)
Acceleration. Mortgagee may at any time and from time to time
declare any or all of the Secured Indebtedness immediately due and payable and
may terminate any and all Swap Transactions. Upon any such declaration, such
Secured Indebtedness shall thereupon be immediately due and payable, and such
Swap Transactions shall immediately terminate, without presentment, demand,
protest, notice of protest, notice of acceleration or of intention to
accelerate or any other notice or declaration of any kind, all of which are
hereby expressly waived by Mortgagor. Without limitation of the foregoing, upon
the occurrence of a default described in clauses (A), (C) or (D) of
subparagraph (i) of paragraph (d) of Section 4.1, hereof, all of the Secured
Indebtedness shall thereupon be immediately due and payable, without
presentment, demand, protest, notice of protest, declaration or notice of
acceleration or intention to accelerate, or any other notice, declaration or
act of any kind, all of which are hereby expressly waived by Mortgagor.

               (b)
Enforcement of Assignment of Rents. In addition to the rights of
Mortgagee under Article 3 hereof, prior or subsequent to taking possession of
any portion of the Property or taking any action with respect to such
possession, Mortgagee may: (1) collect and/or sue for the Rents in Mortgagee’s
own name, give receipts and releases therefor, and after deducting all expenses
of collection, including attorneys’ fees and expenses, apply the net proceeds
thereof to the Secured Indebtedness in such manner and order as Mortgagee may
elect and/or to the operation and management of the Property, including the
payment of management, brokerage and attorney’s fees and expenses; and (2)
require Mortgagor to transfer all security deposits and records thereof to
Mortgagee together with original counterparts of the Leases.

30

               (c)
Mortgagee’s Right to Enter and Take Possession, Operate and Apply
Income. 

	
  

 	
  

 
	
  

 	
           (i)
 Mortgagee may demand that Mortgagor surrender the actual possession of the
 Property and upon such demand, Mortgagor shall forthwith surrender same to
 Mortgagee and, to the extent permitted by law, Mortgagee itself, or by such
 officers or agents as it may appoint, may enter and take possession of all of
 the Property and may exclude Mortgagor and its agents and employees wholly
 therefrom.

 
	
  

 	
  

 
	
  

 	
           (ii)
 If Mortgagor shall for any reason fail to surrender or deliver the Property
 or any part thereof after Mortgagee’s demand, Mortgagee may obtain a judgment
 or order conferring on Mortgagee the right to immediate possession or
 requiring Mortgagor to deliver immediate possession to Mortgagee, to the
 entry of which judgment or decree Mortgagor hereby specifically consents.

 
	
  

 	
  

 
	
  

 	
           (iii)
 Mortgagee may from time to time: (A) continue and complete construction of,
 hold, store, use, operate, manage and control the Property and conduct the
 business thereof; (B) make all reasonably necessary maintenance,
 repairs, renewals, replacements, additions, betterments and improvements
 thereto and thereon and purchase or otherwise acquire additional personal
 property; (C) insure or keep the Property insured; (D) exercise all
 the rights and powers of Mortgagor in its name or otherwise with respect to
 the same; and (E) enter into agreements with others (including, without
 limitation, new Leases or amendments, extensions, or cancellations to
 existing Leases) all as Mortgagee from time to time may determine in its sole
 discretion. Mortgagor hereby constitutes and irrevocably appoints Mortgagee
 its true and lawful attorney-in-fact, which appointment is coupled with an
 interest, with full power of substitution, and empowers said attorney or
 attorneys in the name of Mortgagor, but at the option of said
 attorney-in-fact, to do any and all acts and execute any and all agreements
 that Mortgagee may deem necessary or proper to implement and perform any and
 all of the foregoing.

 

               (d)
Uniform Commercial Code. Mortgagee may exercise any or all of its
rights and remedies under the Uniform Commercial Code as adopted by the State
of New York as in effect from time to time, (or under the Uniform Commercial
Code in force from time to time in any other state to the extent the same is
applicable law) or other applicable law as well as all other rights and
remedies possessed by Mortgagee, all of which shall be cumulative. Mortgagee is
hereby authorized and empowered to enter the Property or other place where the
collateral may be located without legal process, and to take possession of such
personal property without notice or demand, which hereby are waived to the
maximum extent permitted by the laws of the State of New York. Upon demand by
Mortgagee, Mortgagor shall make such personal property available to Mortgagee
at a place reasonably convenient to Mortgagee. Mortgagee may proceed under the
Uniform Commercial Code as to all or any part of such personal property, and in
conjunction therewith may exercise all of the rights, remedies and powers of a
secured creditor under the Uniform Commercial Code. Any notification required
by the Uniform Commercial Code shall be deemed reasonably and properly given if
sent in accordance with the Notice provisions of this Mortgage at least ten
(10) days before any sale or other disposition of such personal property.
Mortgagee may choose to dispose of some or all of the property, in any
combination consisting of both personal property and Property, in one or more
public or private sales to be held in accordance with the Law and procedures
applicable to real property, as 

31

permitted by Article 9 of
the Uniform Commercial Code. Mortgagor agrees that such a sale of such personal
property together with Property constitutes a commercially reasonable sale of
such personal property.

               (e)
Lawsuits. Mortgagee may proceed by a suit or suits in equity or
at law, whether for collection of the indebtedness secured hereby, the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for any foreclosure hereunder or for
the sale of the Property under the judgment or decree of any court or courts of
competent jurisdiction. Mortgagor hereby assents to the passage of a decree for
the sale of the Property by any equity court having jurisdiction.

               (f)
Foreclosure. Mortgagee may:

	
  

 	
  

 
	
  

 	
           (1)
 sell the Mortgaged Property to the extent permitted and pursuant to the
 procedures provided by law (including, without limitation, in accordance with
 Article 14 of the New York Real Property Actions and Proceedings Law,
 regarding which Mortgagor hereby consents and agrees that notices thereunder
 (including notices of sale) may be given to Mortgagor in any of the manners
 specified for the giving of notices set forth in Section 6.13, and all estate,
 right, title and interest, claim and demand thereof, at one (1) or more sales
 as an entity or in parcels or parts, and at such time and place upon such
 terms and after such notice thereof as may be required or permitted by law;
 or

 
	
  

 	
  

 
	
  

 	
           (2)
 institute proceedings for the complete or partial foreclosure hereof; or

 
	
  

 	
  

 
	
  

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

 

          Any
sale made hereunder may be as an entirety or in such parcels as Mortgagee may
request. To the extent permitted by applicable law, any sale may be adjourned
by announcement at the time and place appointed for such sale without further
notice except as may be required by law. If the proceeds of such sale of less
than the whole of the Property shall be less than the aggregate of the Secured
Indebtedness, this Mortgage and the lien hereof shall remain in full force and
effect as to the unsold portion of the Property just as though no sale had been
made and the rights of Mortgagee to foreclose hereunder shall also apply to any
future sales. A sale may cover not only the Property but also personal property
and other interests which are a part of the Property, or any part thereof, as a
unit and as a part of a single sale, or the sale may be of any part of the
Property separately from the remainder of the Property. After each sale,
Mortgagee shall make to the purchaser or purchasers at such sale good and
sufficient conveyances, conveying the property so sold to the purchaser or
purchasers in fee simple, subject to the Permitted Encumbrances (and to such
leases and other matters, if any), and shall receive the proceeds of said sale
or sales and apply the same as herein provided. In the event any sale hereunder
is not completed or is defective in the opinion of Mortgagee, such sale shall
not exhaust the rights hereunder and Mortgagee shall have the right to cause a
subsequent sale or sales to be made hereunder. Any and all statements of fact
or other recitals made in any deed or 

32

deeds or other
conveyances given by Mortgagee as to nonpayment of the Secured Indebtedness or
as to the occurrence of any default, or as to Mortgagee’s having declared all of
said indebtedness to be due and payable, or as to the request to sell, or as to
notice of time, place and terms of sale and the properties to be sold having
been duly given, or as to any other act or thing having been duly done by
Mortgagee shall be taken as prima facie evidence of the truth of the facts so
stated and recited.

               (g)
Receiver. Mortgagee may apply to any court of competent
jurisdiction to have a receiver appointed to enter upon and take possession of
the Property, collect the Rents therefrom and apply the same as the court may
direct, such receiver to have all of the rights and powers permitted under the
laws of the State of New York. To the extent permitted by law, the right of the
appointment of such receiver shall be a matter of strict right without regard
to the value or the occupancy of the Property or the solvency or insolvency of
Mortgagor. The expenses, including receiver’s fees, attorneys’ fees, costs and
agent’s commission incurred pursuant to the powers herein contained, together
with interest thereon at the default rate under the Note, shall be secured
hereby and shall be due and payable by Mortgagor immediately without notice or
demand. Notwithstanding the appointment of any receiver or other custodian,
Mortgagee shall be entitled as pledgee to the possession and control of any
cash or deposits at the time held by, payable, or deliverable under the terms
of this Mortgage to Mortgagee, and Mortgagee shall have the right to offset the
unpaid Secured Indebtedness against any such cash or deposits in such order as
Mortgagee may elect.

               (h)
Termination of Commitment to Lend. Mortgagee may terminate any
commitment or obligation to lend or disburse funds under any Loan Document or
enter into any other credit arrangement to or for the benefit of Mortgagor.

               (i)
Other Rights and Remedies. Mortgagee may exercise any and all
other rights and remedies which Mortgagee may have under the Loan Documents, or
at law or in equity or otherwise.

          Section
5.2.  Application of Proceeds.
Unless otherwise provided by applicable Law, all proceeds from the sale of the
Property or any part thereof pursuant to the rights and remedies set forth in
this Article 5 and any other proceeds received by Mortgagee from the exercise
of any of its other rights and remedies hereunder or under the other Loan
Documents shall be applied first to pay all Expenses and next in reduction of
the other Secured Indebtedness, in such manner and order as Mortgagee may
elect.

          Section
5.3. Remedies Cumulative and Concurrent. No right, power or remedy of
Mortgagee as provided in the Note, this Mortgage, or the other Loan Documents
is intended to be exclusive of any other right, power, or remedy of Mortgagee,
but each and every such right, power and remedy shall be cumulative and
concurrent and in addition to any other right, power or remedy available to
Mortgagee now or hereafter existing at law or in equity and may be pursued
separately, successively or together against Mortgagor, or any endorser,
co-maker, surety or guarantor of the Secured Indebtedness, or the Property or
any part thereof, or any one or more of them, at the sole discretion of
Mortgagee. The failure of Mortgagee to exercise any such right, power or remedy
shall in no event be construed as a waiver or release thereof.

33

          Section
5.4. Waiver, Delay or Omission. No waiver of any Default hereunder shall
extend to or affect any subsequent or any other Default then existing, or
impair any rights, powers or remedies consequent thereon, and no delay or
omission of Mortgagee to exercise any right, power or remedy shall be construed
to waive any such Default or to constitute acquiescence therein.

          Section
5.5. Credit of Mortgagee. To the maximum extent permitted by the laws of
the State of New York, upon any sale made under or by virtue of this Article,
Mortgagee may bid for and acquire the Property, or any part thereof, and in
lieu of paying cash therefor may apply to the purchase price, any portion of or
all of the unpaid Secured Indebtedness in such order as Mortgagee may elect.

          Section
5.6. Sale. Any sale or sales made under or by virtue of this Article
shall operate to divest all the estate, right, title, interest, claim and
demand whatsoever at law or in equity, of Mortgagor and all persons, except
tenants pursuant to Leases approved by Mortgagee, claiming by, through or under
Mortgagor in and to the properties and rights so sold, whether sold to
Mortgagee or to others.

          Section
5.7. Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition, seizure of
the Property by any Governmental Authority, or other judicial proceedings
affecting Mortgagor, any endorser, co-maker, surety, or guarantor of the
Secured Indebtedness, or any of their respective properties, Mortgagee, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have its claim
allowed in such proceedings for the entire unpaid Secured Indebtedness at the
date of the institution of such proceedings, and for any additional amounts
which may become due and payable after such date.

          Section
5.8. Waiver of Redemption, Notice, Marshalling, Etc. Mortgagor hereby
waives and releases, for itself and anyone claiming through, by, or under it,
to the maximum extent permitted by the laws of the State of New York:

	
  

 	
  

 
	
  

 	
           (i) all benefit that
 might accrue to Mortgagor by virtue of any present or future law exempting
 the Property, or any part of the proceeds arising from any sale thereof, from
 attachment, levy or sale on execution, or providing for any appraisement,
 valuation, stay of execution, exemption from civil process, redemption or
 extension of time for payment,

 
	
  

 	
  

 
	
  

 	
           (ii) unless
 specifically required herein, all notices of default, or Mortgagee’s actual
 exercise of any option or remedy under the Loan Documents, or otherwise, and

 
	
  

 	
  

 
	
  

 	
           (iii) any right to have
 the Property marshaled.

 

          Section
5.9. Discontinuance of Proceedings. If Mortgagee shall have proceeded to
enforce any right under any Loan Document and such proceedings shall have been
discontinued or abandoned for any reason, then except as may be provided in any
written agreement between Mortgagor and Mortgagee providing for the
discontinuance or abandonment of such proceedings, Mortgagor and Mortgagee
shall be restored to their former positions and the rights, remedies and powers
of Mortgagee shall continue as if no such proceedings had been instituted.

34

          Section
5.10. Mortgagee’s Actions. Mortgagee may, at any time without notice to
any person and without consideration, do or refrain from doing any or all of
the following actions, and neither Mortgagor, any endorser, co-maker, surety or
guarantor of the Secured Indebtedness, nor any other person (hereinafter in
this Section collectively referred to as the “Obligor”) now or hereafter
liable for the payment and performance of the Secured Indebtedness shall be
relieved from the payment and performance thereof, unless specifically released
in writing by Mortgagee: (a) renew, extend or modify the terms of the
Note, this Mortgage and the other Loan Documents, or any of them;
(b) forbear or extend the time for the payment or performance of any or
all of the Secured Indebtedness; (c) apply payments by any Obligor to the
reduction of the unpaid Secured Indebtedness in such manner, in such amounts,
and at such times and in such order and priority as Mortgagee may see fit;
(d) release any Obligor; (e) substitute or release in whole or in
part the Property or any other collateral or any portion thereof now or
hereafter held as security for the Secured Indebtedness without affecting,
disturbing or impairing in any manner whatsoever the validity and priority of
the lien of this Mortgage upon the Property which is not released or
substituted, or the validity and priority of any security interest of Mortgagee
in such other collateral which is not released or substituted; (f) subordinate
the lien of this Mortgage or the lien of any other security interest in any
other collateral now or hereafter held as security for the Secured
Indebtedness; (g) join in the execution of a plat or replat of the Land
(provided, however, notwithstanding the foregoing, Mortgagee will join in such
plat or replat of the Land so long as such plat or replat is acceptable to
Mortgagee); (h) join in and consent to the filing of a declaration of
condominium or declaration of restrictive covenants regarding all or any part
of the Land; (i) consent to the granting of any easement on the Land; and
(j) generally deal with any obligor or any other party as Mortgagee may
see fit.

          Section
5.11. Other Remedies. Mortgagee shall have the right from time to time
to protect, exercise and enforce any legal or equitable remedy against
Mortgagor provided under the Loan Documents or by applicable Laws.

ARTICLE 6

Miscellaneous

          Section
6.1. Scope of Mortgage. This Mortgage is a Mortgage of both real and personal
property, a security agreement, an assignment of rents and leases, a financing
statement and fixture filing and a collateral assignment, and also covers
proceeds and fixtures.

          Section
6.2. Effective as a Financing Statement. This Mortgage shall be
effective as a financing statement filed as a fixture filing with respect to
all fixtures included within the Property and is to be filed for record in the
real estate records of each county where any part of the Property (including
said fixtures) is situated. This Mortgage shall also be effective as a
financing statement covering as-extracted collateral (including oil and gas),
accounts and general intangibles under the New York Uniform Commercial Code, as
in effect from time to time, and the Uniform Commercial Code, as in effect from
time to time, in any other state where the Property is situated which will be
financed at the wellhead or minehead of the wells or mines located on the
Property and is to be filed for record in the real estate records of each
county where any part of the Property is situated. This Mortgage shall also be
effective as a financing 

35

statement covering any
other Property and may be filed in any other appropriate filing or recording
office. The mailing address of Mortgagor and Mortgagee are set forth in the
preamble of this Mortgage and the address of Mortgagee from which information
concerning the security interests hereunder may be obtained is the address of
Mortgagee set forth at the end of this Mortgage. A carbon, photographic or
other reproduction of this Mortgage or of any financing statement relating to
this Mortgage shall be sufficient as a financing statement for any of the
purposes referred to in this Section.

          Section
6.3. Notice to Account Debtors. In addition to the rights granted
elsewhere in this Mortgage, Mortgagee may at any time notify the account
debtors or obligors of any accounts, chattel paper, general intangibles,
negotiable instruments or other evidences of indebtedness included in the Collateral
to pay Mortgagee directly.

          Section
6.4. Waiver by Mortgagee. Mortgagee may at any time and from time to
time by a specific writing intended for the purpose: (a) waive compliance by
Mortgagor with any covenant herein made by Mortgagor to the extent and in the
manner specified in such writing; (b) consent to Mortgagor’s doing any act
which hereunder Mortgagor is prohibited from doing, or to Mortgagor’s failing
to do any act which hereunder Mortgagor is required to do, to the extent and in
the manner specified in such writing; (c) release any part of the Property or
any interest therein from the lien and security interest of this Mortgage,
without the joinder of Mortgagee; or (d) release any party liable, either
directly or indirectly, for the Secured Indebtedness or for any covenant herein
or in any other Loan Document, without impairing or releasing the liability of
any other party. No such act shall in any way affect the rights or powers of
Mortgagee or Mortgagee hereunder except to the extent specifically agreed to by
Mortgagee in such writing.

          Section
6.5. No Impairment of Security. The lien, security interest and other
security rights of Mortgagee hereunder or under any other Loan Document shall
not be impaired by any indulgence, moratorium or release granted by Mortgagee
including, but not limited to, any renewal, extension or modification which
Mortgagee may grant with respect to any Secured Indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which
Mortgagee may grant in respect of the Property, or any part thereof or any
interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any Secured Indebtedness. The taking of additional
security by Mortgagee shall not release or impair the lien, security interest
or other security rights of Mortgagee hereunder or affect the liability of
Mortgagor or of any endorser, guarantor or surety, or improve the right of any
junior lien Mortgagee in the Property (without implying hereby Mortgagee’s
consent to any junior lien).

          Section
6.6. Acts Not Constituting Waiver by Mortgagee. Mortgagee may waive any
default without waiving any other prior or subsequent default. Mortgagee may
remedy any default without waiving the default remedied. Neither failure by
Mortgagee to exercise, nor delay by Mortgagee in exercising, nor discontinuance
of the exercise of any right, power or remedy (including but not limited to the
right to accelerate the maturity of the Secured Indebtedness or any part
thereof) upon or after any default shall be construed as a waiver of such
default or as a waiver of the right to exercise any such right, power or remedy
at a later date. No single or partial exercise by Mortgagee of any right, power
or remedy hereunder shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right, power or remedy hereunder may
be exercised at any time and from time to time. No modification or 

36

waiver of any provision
hereof nor consent to any departure by Mortgagor therefrom shall in any event
be effective unless the same shall be in writing and signed by Mortgagee and
then such waiver or consent shall be effective only in the specific instance,
for the purpose for which given and to the extent therein specified. No notice
to nor demand on Mortgagor in any case shall of itself entitle Mortgagor to any
other or further notice or demand in similar or other circumstances.
Remittances in payment of any part of the Secured Indebtedness other than in
the required amount in immediately available U.S. funds shall not, regardless
of any receipt or credit issued therefor, constitute payment until the required
amount is actually received by Mortgagee in immediately available U.S. funds
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 on any Secured Indebtedness shall be deemed an acceptance
on account only and shall not in any way excuse the existence of a default
hereunder notwithstanding any notation on or accompanying such partial payment
to the contrary.

          Section
6.7. Mortgagor’s Successors. If the ownership of the Property or any
part thereof becomes vested in a person other than Mortgagor, Mortgagee may,
without notice to Mortgagor, deal with such successor or successors in interest
with reference to this Mortgage and to the Secured Indebtedness in the same
manner as with Mortgagor, without in any way vitiating or discharging
Mortgagor’s liability hereunder or for the payment of the indebtedness or
performance of the obligations secured hereby. No transfer of the Property, no
forbearance on the part of Mortgagee, and no extension of the time for the
payment of the Secured Indebtedness given by Mortgagee shall operate to
release, discharge, modify, change or affect, in whole or in part, the
liability of Mortgagor hereunder for the payment of the indebtedness or
performance of the obligations secured hereby or the liability of any other
person hereunder for the payment of the indebtedness secured hereby. Each
Mortgagor agrees that it shall be bound by any modification of this Mortgage or
any of the other Loan Documents made by Mortgagee and any subsequent owner of
the Property, with or without notice to such Mortgagor, and no such
modifications shall impair the obligations of such Mortgagor under this
Mortgage or any other Loan Document. Nothing in this Section or elsewhere in
this Mortgage shall be construed to imply Mortgagee’s consent to any transfer
of the Property.

          Section
6.8. Place of Payment. All Secured Indebtedness which may be owing
hereunder at any time by Mortgagor shall be payable at the place designated in
the Note (or if no such designation is made, at the address of Mortgagee
indicated at the end of this Mortgage). 

          Section 6.9. Subrogation
to Existing Liens; Vendor’s Lien. To the extent that proceeds of the Note
are used to pay indebtedness secured by any outstanding lien, security
interest, charge or prior encumbrance against the Property, such proceeds have
been advanced by Mortgagee at Mortgagor’s request, and Mortgagee shall be
subrogated to any and all rights, security interests and liens owned by any
owner or Mortgagee of such outstanding liens, security interests, charges or
encumbrances, however remote, irrespective of whether said liens, security
interests, charges or encumbrances are released, and all of the same are
recognized as valid and subsisting and are renewed and continued and merged
herein to secure the Secured Indebtedness, but the terms and provisions of this
Mortgage shall govern and control the manner and terms of enforcement of the
liens, security interests, charges and encumbrances to which Mortgagee is
subrogated hereunder. It is expressly understood that, in consideration of the
payment of such 

37

indebtedness by
Mortgagee, Mortgagor hereby waives and releases all demands and causes of
action for offsets and payments in connection with the said indebtedness. If
all or any portion of the proceeds of the loan evidenced by the Note or of any
other secured indebtedness has been advanced for the purpose of paying the
purchase price for all or a part of the Property, no vendor’s lien is waived;
and Mortgagee shall have, and is hereby granted, a vendor’s lien on the
Property as cumulative additional security for the secured indebtedness.
Mortgagee may foreclose under this Mortgage or under the vendor’s lien without
waiving the other or may foreclose under both.

          Section
6.10. Application of Payments to Certain Indebtedness. If any part of
the Secured Indebtedness cannot be lawfully secured by this Mortgage or if any
part of the Property cannot be lawfully subject to the lien and security
interest hereof to the full extent of such indebtedness, then all payments made
shall be applied on said indebtedness first in discharge of that portion
thereof which is not secured by this Mortgage.

          Section
6.11. Nature of Loan; Compliance with Usury Laws. The loan evidenced by
the Note is being made solely for the purpose of carrying on or acquiring a
business or commercial enterprise. It is the intent of Mortgagor and Mortgagee
and all other parties to the Loan Documents to conform to and contract in
strict compliance with applicable usury law from time to time in effect. All
agreements between Mortgagee and Mortgagor (or any other party liable with
respect to any indebtedness under the Loan Documents) are hereby limited by the
provisions of this Section which shall override and control all such
agreements, whether now existing or hereafter arising. In no way, nor in any
event or contingency (including but not limited to prepayment, default, demand
for payment, or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, chargeable, or received
under this Mortgage, the Note or any other Loan Document or otherwise, exceed
the maximum nonusurious amount permitted by applicable law (the “Maximum
Amount”). If, from any possible construction of any document, interest would
otherwise be payable in excess of the Maximum Amount, any such construction
shall be subject to the provisions of this Section and such document shall ipso
facto be automatically reformed and the interest payable shall be automatically
reduced to the Maximum Amount, without the necessity of execution of any
amendment or new document. If Mortgagee shall ever receive anything of value
which is characterized as interest under applicable law and which would apart
from this provision be in excess of the Maximum Amount, an amount equal to the
amount which would have been excessive interest shall, without penalty, be
applied to the reduction of the principal amount owing on the Secured
Indebtedness in the inverse order of its maturity and not to the payment of
interest, or refunded to Mortgagor or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such unpaid
principal. The right to accelerate maturity of the Note or any other Secured
Indebtedness does not include the right to accelerate any interest which has
not otherwise accrued on the date of such acceleration, and Mortgagee does not
intend to charge or receive any unearned interest in the event of acceleration.
All interest paid or agreed to be paid to Mortgagee shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of interest on account of such indebtedness
does not exceed the Maximum Amount. As used in this Section, the term
“applicable law” shall mean the laws of the State of New York or the federal
laws of the United 

38

States applicable to this
transaction, whichever laws allow the greater interest, as such laws now exist
or may be changed or amended or come into effect in the future.

          Section
6.12. Releases.

               (a)
Release of Mortgage. If all of the Secured Indebtedness is paid
as the same becomes due and payable and all of the covenants, warranties,
undertakings and agreements made in this Mortgage are kept and performed, and
all Swap Transactions and all other obligations, if any, of Mortgagee for
further advances have been terminated, then, and in that event only, all rights
under this Mortgage shall terminate (except to the extent expressly provided
herein with respect to indemnifications, representations and warranties and
other rights which are to continue following the release hereof) and the
Property shall become wholly clear of the liens, security interests,
conveyances and assignments evidenced hereby, and such liens and security
interests shall be released by Mortgagee in due form at Mortgagor’s cost.
Without limitation, all provisions herein for indemnity of Mortgagee or
Mortgagee shall survive discharge of the Secured Indebtedness, the termination
of any and all Swap Transactions and any foreclosure, release or termination of
this Mortgage.

               (b)
Partial Releases; No Release in Default. Partial releases of the
lien of this Mortgage shall be made in accordance with the terms and provisions
of Exhibit C attached hereto and by this reference made a part hereof,
or in accordance with such other terms and conditions as may subsequently be
agreed to by Mortgagee. If no such Exhibit C is attached hereto, then
there are no terms and provisions for partial releases, to which Mortgagee and
Mortgagor have agreed at this time. In any event, no partial release shall be
sought, requested or required if any Default has occurred which has not been
cured.

               (c)
Effect of Partial Release. Mortgagee may, regardless of
consideration, cause the release of any part of the Property from the lien of
this Mortgage without in any manner affecting or impairing the lien or priority
of this Mortgage as to the remainder of the Property.

               (d)
Release Fee. If permitted by applicable law Mortgagor shall pay
to Mortgagee, at the time of each partial or complete release of the lien of
this Mortgage, a release fee in the amount of $25.00 if the release instrument
is delivered to Mortgagee for execution or $50.00, if Mortgagee is required to
prepare the release instrument. In addition, Mortgagor shall pay to Mortgagee a
fee in the amount of $25.00 for each other document or instrument which
Mortgagor requires Mortgagee to execute.

          Section
6.13. Notices. All notices, requests, consents, demands and other
communications required or which any party desires to give hereunder or under
any other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service, or by registered or certified United States mail, postage
prepaid, addressed to the party to whom directed at the addresses specified in
this Mortgage (unless changed by similar notice in writing given by the
particular party whose address is to be changed) or by facsimile. Any such
notice or communication shall be deemed to have been given either at the time
of personal delivery or, in the case of courier or mail, as of the date of
first attempted delivery at the address and in the manner provided herein, or,
in the case 

39

of facsimile, upon
receipt; provided that, service of a notice required by any applicable statute
shall be considered complete when the requirements of that statute are met.
Notwithstanding the foregoing, no notice of change of address shall be
effective except upon receipt. This Section shall not be construed in any way
to affect or impair any waiver of notice or demand provided in any Loan Document
or to require giving of notice or demand to or upon any person in any situation
or for any reason.

          Section
6.14. Invalidity of Certain Provisions. A determination that any
provision of this Mortgage is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination that
the application of any provision of this Mortgage to any person or circumstance
is illegal or unenforceable shall not affect the enforceability or validity of
such provision as it may apply to other persons or circumstances.

          Section
6.15. Gender; Titles; Construction. Within this Mortgage, words of any
gender shall be held and construed to include any other gender, and words in
the singular number shall be held and construed to include the plural, unless
the context otherwise requires. Titles appearing at the beginning of any
subdivisions hereof are for convenience only, do not constitute any part of
such subdivisions, and shall be disregarded in construing the language
contained in such subdivisions. The use of the words “herein,” “hereof,”
“hereunder” and other similar compounds of the word “here” shall refer to this
entire Mortgage and not to any particular Article, Section, paragraph or
provision. The term “person” and words importing persons as used in this
Mortgage shall include firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations, limited liability
companies and other legal entities, including public or governmental bodies,
agencies or instrumentalities, as well as natural persons.

          Section
6.16. Reporting Compliance. Mortgagor agrees to comply with any and all
reporting requirements applicable to the transaction evidenced by the Note and
secured by this Mortgage which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any governmental authority,
including but not limited to The International Investment Survey Act of 1976,
The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Mortgagee to furnish Mortgagee with evidence of
such compliance.

          Section
6.17. Mortgagee’s Consent. Except where otherwise expressly provided
herein, in any instance hereunder where the approval, consent or the exercise
of judgment of Mortgagee is required or requested, (a) the granting or denial
of such approval or consent and the exercise of such judgment shall be within
the sole discretion of Mortgagee, and Mortgagee shall not, for any reason or to
any extent, be required to grant such approval or consent or exercise such
judgment in any particular manner, regardless of the reasonableness of either
the request or Mortgagee’s judgment, and (b) no approval or consent of
Mortgagee shall be deemed to have been given except by a specific writing
intended for the purpose and executed by an authorized representative of
Mortgagee.

          Section
6.18. Mortgagor. Unless the context clearly indicates otherwise, as used
in this Mortgage, “Mortgagor” means Mortgagors named in Section 1.1 hereof or
any of them. The 

40

obligations of Mortgagor
hereunder shall be joint and several. If any Mortgagor, or any signatory who signs
on behalf of any Mortgagor, is a corporation, partnership or other legal
entity, Mortgagor and any such signatory, and the person or persons signing for
it, represent and warrant to Mortgagee that this instrument is executed,
acknowledged and delivered by Mortgagor’s duly authorized representatives. If
Mortgagor is an individual, no power of attorney granted by Mortgagor herein
shall terminate on Mortgagor’s disability.

          Section
6.19. Execution; Recording. This Mortgage has been executed in several
counterparts, all of which are identical, and all of which counterparts
together shall constitute one and the same instrument. The date or dates
reflected in the acknowledgments hereto indicate the date or dates of actual
execution of this Mortgage, but such execution is as of the date shown on the
first page hereof, and for purposes of identification and reference the date of
this Mortgage shall be deemed to be the date reflected on the first page
hereof. Mortgagor will cause this Mortgage and all amendments and supplements
thereto and substitutions therefor and all financing statements and
continuation statements relating thereto to be recorded, filed, re-recorded and
refiled in such manner and in such places as or Mortgagee shall reasonably
request and will pay all such recording, filing, re-recording and refiling
taxes, fees and other charges.

          Section
6.20. Successors and Assigns. The terms, provisions, covenants and
conditions hereof shall be binding upon Mortgagor, and the heirs, devisees,
representatives, successors and assigns of Mortgagor, and shall inure to the
benefit of Mortgagee and shall constitute covenants running with the Land. All
references in this Mortgage to Mortgagor shall be deemed to include all such
heirs, devisees, representatives, successors and assigns of Mortgagor.

          Section
6.21. Modification or Termination. The Loan Documents may only be
modified or terminated by a written instrument or instruments intended for that
purpose and executed by the party against which enforcement of the modification
or termination is asserted. Any alleged modification or termination which is
not so documented shall not be effective as to any party.

          Section
6.22. No Partnership, Etc. The relationship between Mortgagee and
Mortgagor is solely that of mortgagee and mortgagor. Mortgagee has no fiduciary
or other special relationship with Mortgagor. Nothing contained in the Loan
Documents is intended to create any partnership, joint venture, association or
special relationship between Mortgagor and Mortgagee or in any way make
Mortgagee a co-principal with Mortgagor with reference to the Property. All
agreed contractual duties between or among Mortgagee and Mortgagor and are set
forth herein and in the other Loan Documents and any additional implied
covenants or duties are hereby disclaimed. Any inferences to the contrary of
any of the foregoing are hereby expressly negated.

          Section
6.23. Intentionally Omitted. 

          Section
6.24. Applicable Law. THIS MORTGAGE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY NEW YORK LAW AND CONSTRUED, INTERPRETED
AND ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED
STATES 

41

FEDERAL LAW, EXCEPT AS
OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT
REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK ARE GOVERNED BY THE LAWS OF SUCH OTHER JURISDICTION.

          Section
6.25. Entire Agreement. The Loan Documents constitute the entire
understanding and agreement between Mortgagor and Mortgagee with respect to the
transactions arising in connection with the Secured Indebtedness and supersede
all prior written or oral understandings and agreements between Mortgagor and
Mortgagee with respect to the matters addressed in the Loan Documents.
Mortgagor hereby acknowledges that, except as incorporated in writing in the
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
matters addressed in the Loan Documents.

          Section
6.26. Forum. Mortgagor hereby irrevocably submits generally and
unconditionally for itself and in respect of its property to the jurisdiction
of any state court or any United States federal court sitting in the State of
New York and to the jurisdiction of any state court or any United States
federal court sitting in the state in which any of the Property is located,
over any Dispute. Mortgagor hereby irrevocably waives, to the fullest extent
permitted by Law, any objection that Mortgagor may now or hereafter have to the
laying of venue in any such court and any claim that any such court is an
inconvenient forum. Mortgagor hereby agrees and consents that, in addition to
any methods of service of process provided for under applicable law, all
service of process in any such suit, action or proceeding in any state court or
any United States federal court sitting in the State of New York may be made by
certified or registered mail, return receipt requested, directed to Mortgagor
at its address for notice set forth in this Mortgage, or at a subsequent
address of which Mortgagee received actual notice from Mortgagor in accordance
with the notice section of this Mortgage, and service so made shall be complete
five (5) days after the same shall have been so mailed. Nothing herein shall affect
the right of Mortgagee to serve process in any manner permitted by Law or limit
the right of Mortgagee to bring proceedings against Mortgagor in any other
court or jurisdiction.

          Section
6.27. WAIVER OF JURY TRIAL.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY
DISPUTE AS SET FORTH IN THIS MORTGAGE, TO THE EXTENT ANY DISPUTE IS NOT
SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH
JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, MORTGAGOR
AND MORTGAGEE WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH DISPUTE AND ANY ACTION
ON SUCH DISPUTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY
MORTGAGOR AND MORTGAGEE, AND MORTGAGOR AND MORTGAGEE HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THE LOAN DOCUMENTS. MORTGAGOR AND MORTGAGEE ARE EACH HEREBY AUTHORIZED TO FILE
A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF 

42

THIS WAIVER OF JURY TRIAL. MORTGAGOR FURTHER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
MORTGAGE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS
HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF
ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL.

          Section
6.28. Cross-Default. The Loan shall be cross-defaulted with all other
loans which Mortgagor shall have from Lenders during the term of the Loan,
whether existing as of the date of this Agreement subsequently made. A default
under any of the above-described loans shall constitute a Default under the
Loan. A Default under the Loan shall constitute a Default under the above-described
other loans. To the extent not prohibited by applicable law, if Mortgagee, at
its option, avails itself of this cross-default provision, Mortgagee shall have
the option to pursue its remedies in any combinations and against any or all of
Mortgagee’s security for the aforesaid loans, whether successively,
concurrently or otherwise.

          Section
6.29. Substitute Mortgages. Mortgagor and Mortgagee shall, upon their
mutual agreement to do so, execute such documents as may be necessary in order
to effectuate the modification hereof, including the execution of substitute
mortgages, so as to create two (2) or more liens on the Mortgaged Property in
such amounts as may be mutually agreed upon but in no event to exceed, in the
aggregate, the Mortgage Amount; in such event, Mortgagor covenants and agrees
to pay the reasonable fees and expenses of Mortgagee and its counsel in
connection with any such modification.

          Section
6.30. Satisfaction or Assignment of Mortgage. Upon payment in full of
all sums, and the performance of all obligations, secured hereby in accordance
with the terms and conditions of this Mortgage and the other Loan documents,
Mortgagee shall deliver a satisfaction or release of this Mortgage or, at
Mortgagor’s option to be exercised in writing, an assignment hereof, in either
case in proper form of recording. As a condition to any such satisfaction or
assignment, Mortgagor covenants and agrees to pay Mortgagee’s reasonable fees
and expenses (including attorneys’ fees and expenses) in connection therewith.
Upon any such satisfaction or assignment, Mortgagee shall, automatically and
without the need for any other further documentation, be absolutely and
unconditionally released from any and all claims or liabilities in connection
with the Loan. In addition, Mortgagor hereby indemnifies and agrees to hold
Mortgagee harmless from and against any and all claims and liabilities arising
out of the satisfaction or assignment hereof, such indemnification to survive
any such satisfaction or assignment.

          Section
6.31. New York Provisions. (a) Mortgagor hereby makes the following
statement: “This Mortgage does not cover real property principally improved or
to be improved by one (1) or more structures containing in the aggregate not
more than six (6) residential dwelling, each having its own separate cooking
facilities.” and (b) the covenants and conditions contained herein, other than
those included in the New York Statutory Short Form of Mortgage, shall be
construed as affording to Mortgagee rights additional to, and not exclusive of,
the rights conferred under the provisions of Section 254 of the Real Property
Law of the State of New York.

43

          Section
6.32. Ground Lease Required Provision. This Mortgage is executed upon
the condition that no purchaser at any foreclosure sale shall acquire any
right, title or interest in and to the lease hereby mortgaged (the Ground
Lease), unless the said purchaser, or the person, firm or corporation to whom
or to which such purchaser’s right has been assigned, assumes and agrees to
perform all of the terms, covenants and conditions of said lease (the Ground
Lease) thereafter to be observed or performed on the part of tenant thereunder,
and that a duplicate original of said instrument containing such assumption
agreement, duly executed and acknowledged of such purchaser or such assignee
and in recordable form, is delivered to Ground Lessor under said lease within
seven (7) days after the consummation of such sale and, in any event, prior to
taking possession of the Premises demised thereby. No further or additional
mortgage or assignment of said lease shall be made except in accordance with
the provisions in Article Eleven of said lease (the Ground Lease).

[Remainder of page intentionally left blank]

44

          IN WITNESS
WHEREOF, Mortgagor has executed this Mortgage as an instrument under seal as of
the date first written on page 1 hereof.

	
  

 	
  

 	
  

 
	
  

 	
 P/A-ACADIA
 PELHAM MANOR, LLC, 

 a Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
 Senior Vice
 President

 

	
  

 
	
 STATE OF NEW
 YORK                )

 
	
                                                          :
 ss.:

 
	
 COUNTY
 OF                                  )

 

          On the
______ day of ____________ in the year 2010, before me, the undersigned, a
notary public in and for said state, personally appeared Robert Masters,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Notary Public

 
	
  

 	
  

 

	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 
	
  

 	
  

 
	

 

 	
  

 

EXHIBIT A

Land

PARCEL 1 - Fee Parcel (Lot 8.3)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 374.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 80.00 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 ALONG THE DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1, SOUTH
 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 100.00 FEET TO A POINT,
 THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.3 AND LOT 8.1, BLOCK 1, THE
 FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 100.00
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00
 FEET TO A POINT OF CURVATURE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF
 31.42 FEET, THE CHORD OF WHICH BEARS NORTH 18 DEGREES – 58 MINUTES – 11
 SECONDS EAST, A CHORD DISTANCE OF 28.28 FEET TO THE POINT AND PLACE OF
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 2 - Ground Lease Parcel (Lot 8.1)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of Westchester
and State of New York, being more particularly bounded and described as
follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING AT THE NORTHEASTERLY TERMINUS OF A CURVE CONNECTING THE
SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF PELHAM PARKWAY (A.K.A.
C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF BEGINNING RUNNING THENCE; 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 374.53 FEET TO A POINT OF NON-TANGENT
 CURVATURE, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.3, BLOCK
 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 90 DEGREES – 00 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF
 31.42 FEET, THE CHORD OF WHICH BEARS SOUTH 18 DEGREES – 58 MINUTES – 11
 SECONDS WEST, A CHORD DISTANCE OF 28.28 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 80.00
 FEET TO A POINT, THENCE; 

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 100.00
 FEET TO A POINT, THENCE; ALONG THE DIVIDING LINE BETWEEN LOT 8.1 AND LOT 8.2,
 BLOCK 1 THE FOLLOWING THREE (3) COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 121.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 NORTH 63 DEGREES – 57 MINUTES – 50 SECONDS EAST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS WEST, A DISTANCE OF 221.90
 FEET TO A POINT ON THE AFOREMENTIONED SOUTHERLY LINE OF SECOR LANE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 50 SECONDS EAST, A DISTANCE OF 449.97 FEET TO A POINT OF CURVATURE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 9.

 	
 CONTINUING ALONG THE SOUTHERLY LINE OF SECOR LANE ON A CURVE TO THE
 RIGHT, HAVING A RADIUS OF 650.00 FEET, TURNING A CENTRAL ANGLE OF 11 DEGREES
 – 45 MINUTES – 00 SECONDS, WITH AN ARC LENGTH OF 133.30 FEET, THE CHORD OF
 WHICH BEARS NORTH 69 DEGREES – 50 MINUTES – 19 SECONDS EAST, A CHORD DISTANCE
 OF 133.06 FEET TO A POINT, THENCE; ALONG THE WESTERLY LINE OF HUTCHINSON
 RIVER PARKWAY (VARIABLE WIDTH) THE FOLLOWING SEVEN (7) COURSES:

 

2

	
  

 	
  

 	
  

 
	
  

 	
 10.

 	
 SOUTH 10 DEGREES – 37 MINUTES – 00 SECONDS EAST, A DISTANCE OF 406.03
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 11.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 152.58
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 12.

 	
 SOUTH 81 DEGREES – 55 MINUTES – 42 SECONDS WEST, A DISTANCE OF 125.00
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 13.

 	
 SOUTH 08 DEGREES – 04 MINUTES – 18 SECONDS EAST, A DISTANCE OF 350.40
 FEET TO A POINT OF NON-TANGENT CURVATURE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 14.

 	
 ALONG A CURVE TO THE LEFT, HAVING A RADIUS OF 375.00 FEET, TURNING A
 CENTRAL ANGLE OF 15 DEGREES – 22 MINUTES – 08 SECONDS, WITH AN ARC LENGTH OF
 100.59 FEET, THE CHORD OF WHICH BEARS SOUTH 72 DEGREES – 19 MINUTES – 21
 SECONDS WEST, A CHORD DISTANCE OF 100.29 FEET TO A POINT OF TANGENCY, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 15.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 4.45
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 16.

 	
 SOUTH 26 DEGREES – 04 MINUTES – 30 SECONDS EAST, A DISTANCE OF 188.85
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 17.

 	
 ALONG THE COMMON DIVIDING LINE BETWEEN LOT 8.1 AND LOT 4, BLOCK 1 AND
 THE WESTERLY LINE OF HUTCHINSON RIVER PARKWAY, SOUTH 63 DEGREES – 55 MINUTES
 – 30 SECONDS WEST, A DISTANCE OF 156.73 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.1 AND LOT 3, BLOCK 1 THE FOLLOWING EIGHT (8)
 COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 18.

 	
 NORTH 24 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 82.31
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 19.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 20.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 19.84
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 21.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 10.33
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 22.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 90.59
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 23.

 	
 NORTH 63 DEGREES – 55 MINUTES – 30 SECONDS EAST, A DISTANCE OF 4.05
 FEET TO A POINT, THENCE;

 

3

	
  

 	
  

 	
  

 
	
  

 	
 24.

 	
 NORTH 26 DEGREES – 04 MINUTES – 30 SECONDS WEST, A DISTANCE OF 9.55
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 25.

 	
 SOUTH 63 DEGREES – 55 MINUTES – 30 SECONDS WEST, A DISTANCE OF 227.32
 FEET TO A POINT ON THE AFOREMENTIONED EASTERLY LINE OF PELHAM PARKWAY,
 THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 26.

 	
 ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 26 DEGREES – 04
 MINUTES – 30 SECONDS WEST, A DISTANCE OF 296.81 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 27.

 	
 CONTINUING ALONG THE EASTERLY LINE OF PELHAM PARKWAY, NORTH 62
 DEGREES – 43 MINUTES – 40 SECONDS WEST, A DISTANCE OF 609.10 FEET TO A POINT
 OF CURVATURE, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 28.

 	
 ALONG A CURVE TO THE RIGHT, HAVING A RADIUS OF 20.00 FEET, TURNING A
 CENTRAL ANGLE OF 126 DEGREES – 41 MINUTES – 30 SECONDS, WITH AN ARC LENGTH OF
 44.22 FEET, THE CHORD OF WHICH BEARS NORTH 00 DEGREES – 37 MINUTES – 42
 SECONDS EAST, A CHORD DISTANCE OF 35.75 FEET TO THE POINT AND PLACE OF
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

PARCEL 3 - Ground Lease Parcel (Lot 8.2)

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING AT A POINT ON THE SOUTHERLY LINE OF SECOR LANE (50 FOOT
WIDE), SAID POINT BEING DISTANT 454.53 FEET ON A COURSE OF NORTH 63 DEGREES –
57 MINUTES – 50 SECONDS EAST FROM A POINT AT THE NORTHEASTERLY TERMINUS OF A
CURVE CONNECTING THE SOUTHERLY LINE OF SECOR LANE WITH THE EASTERLY LINE OF
PELHAM PARKWAY (A.K.A. C.R. 70 – VARIABLE WIDTH), AND FROM SAID POINT OF
BEGINNING RUNNING THENCE; 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 ALONG THE SOUTHERLY LINE OF SECOR LANE, NORTH 63 DEGREES – 57 MINUTES
 – 60 SECONDS EAST, A DISTANCE OF 176.92 FEET TO A POINT, THENCE; ALONG THE
 DIVIDING LINE BETWEEN LOT 8.2 AND LOT 8.1, BLOCK 1 THE FOLLOWING TWO (2)
 COURSES:

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 SOUTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90
 FEET TO A POINT, THENCE;

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 SOUTH 63 DEGREES – 57 MINUTES – 50 SECONDS WEST, A DISTANCE OF 176.92
 FEET TO A POINT, THENCE;

 

4

	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 ALONG THE DIVIDING LINE BETWEEN LOT 8.2 AND LOTS 8.1 AND 8.3, BLOCK
 1, NORTH 26 DEGREES – 02 MINUTES – 10 SECONDS EAST, A DISTANCE OF 221.90 FEET
 THE POINT AND PLACE OF BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTION IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/18/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

BLANKET DESCRIPTION - LOTS 8.1, 8.2 and 8.3:

ALL THAT CERTAIN plot, piece or parcel of land, situate, lying and
being in the Village of Pelham Manor, Town of Pelham, Westchester County of
Westchester and State of New York, being more particularly bounded and
described as follows:

BEGINNING at a rebar with cap set on the southerly line of Secor Lane
(50 foot wide), said point being at the northeasterly terminus of a curve
connecting the southerly line of Secor Lane with the easterly line of Pelham
Parkway (a/k/a C.R. 70) and from said beginning point, running thence

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Along the southerly line of Secor Lane, north 63 degrees 57 minutes
 50 seconds east, a distance of 1081.42 feet to a rebar with cap set at a
 point of curvature in the same, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 Continuing along the same, along a curve to the right, having a
 radius of 650.00 feet, turning a central angle of 11 degrees 45 minutes 00
 seconds with an arc length of 133.30 feet, the chord of which bears north 69
 degrees 50 minutes 19 seconds east, a chord distance of 133.06 feet to a
 rebar with cap set, thence the following seven (7) courses along the dividing
 line between Lot 8 Block 1 and the westerly line of the Hutchinson River
 Parkway;

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 South 10 degrees 37 minutes 00 seconds east, a distance of 406.03
 feet to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 152.58
 feet to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 South 81 degrees 55 minutes 42 seconds west, a distance of 125.00
 feet to a rabar with cap set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 South 08 degrees 04 minutes 18 seconds east, a distance of 350.40
 feet to a rebar with cap set at a point of non-tangent curvature, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Along a curve to the left, having a radius of 375.00 feet, turning a
 central angle of 15 degrees 22 minutes 08 seconds with an arc length of
 100.59 feet, the chord of which bears south 72 degrees 19 minutes 21 seconds
 west, a chord distance of 100.29 feet to a rebar with cap set at a point of
 tangency, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 South 63 degrees 57 minutes 50 seconds west, a distance of 4.45 feet
 to a rebar with cap set, thence

 

5

	
  

 	
  

 	
  

 
	
  

 	
 9.

 	
 South 26 degrees 04 minutes 30 seconds east, a distance of 188.85
 feet to a point, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 10.

 	
 Along the common dividing line between Lot 8 and Lot 5, Block 1 and
 the westerly line of the Hutchinson River Parkway, south 63 degrees 55
 minutes 30 seconds west, a distance of 156.73 feet to a point; thence the
 following eight (8) courses along the dividing line between Lot 8 and Lot 3,
 Block 1.

 
	
  

 	
  

 	
  

 
	
  

 	
 11.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 82.31 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 12.

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 13.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 19.84 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 14.

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 10.33 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 15.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 90.59 feet
 to a rebar with cap set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 16.

 	
 North 63 degrees 55 minutes 30 seconds east, a distance of 4.05 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 17.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 9.55 feet
 to a pk nail set, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 18.

 	
 South 63 degrees 55 minutes 30 seconds west, a distance of 227.32
 feet to a pk nail set on the aforementioned easterly line of Pelham Parkway,
 thence

 
	
  

 	
  

 	
  

 
	
  

 	
 19.

 	
 North 26 degrees 04 minutes 30 seconds west, a distance of 296.81
 feet to a pk nail, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 20.

 	
 Continuing along the easterly line of Pelham Parkway, north 62
 degrees 43 minutes 40 seconds west, a distance of 609.10 feet to a pk nail
 set a point of curvature, thence

 
	
  

 	
  

 	
  

 
	
  

 	
 21.

 	
 Along a curve to the right, having a radius of 2.00 feet, turning a
 central angle of 126 degrees 41 minutes 30 seconds with an arc length of
 44.22 feet to a point, the chord of which bears north 00 degrees 37 minutes
 24 seconds east, a chord distance of 35.75 feet to the point and place of
 BEGINNING.

 

THE ABOVE METES AND BOUNDS DESCRIPTIONS IS BASED UPON A SURVEY MADE BY
CONTROL POINT ASSOCIATES, INC. DATED 7/7/10 AND AS FURTHER CERTIFIED ON
11/12/10 BY JOHN P. LYNCH (CONTROL POINT ASSOCIATES, INC.)

6

SUCH REAL PROPERTY ALSO CONTAINS ALL OF THE CONDOMINIUM UNITS IN THE
P/A ACADIA CONDOMINIUM MADE BY P/A-ACADIA PELHAM MANOR, LLC DATED 9/17/07 AND
RECORDED 10/23/07 AS CONTROL NUMBER 472850497.

For information only: Said premises are known as 798-858 Pelham
Parkway, Pelham, NY and designated as Section 166.26 Block 1 Lots 8.1, 8.2 and
8.3 as shown on the Westchester County Land and Tax Map.

7

EXHIBIT B

Permitted Encumbrances

Those exceptions set forth in Schedule B of that certain title
insurance policy issued by Stewart Title Insurance Company through their agent,
Royal Abstract of New York LLC, under their title no. 832899 insuring the lien
of this Mortgage.

EXHIBIT C

Partial Release

NONE

GUARANTY AGREEMENT 

                    THIS
GUARANTY AGREEMENT (this “Guaranty”) is made as of the 1st day of December,
2010, by ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
(“Guarantor”), in favor of BANK OF AMERICA, N.A., a national banking
association (in its individual capacity and not as administrative agent,
“BofA”), as Administrative Agent (in such capacity and together with its
successors and assigns in such capacity, “Administrative Agent”) for Lenders
(as defined below). 

Preliminary Statements

                    BofA
and P/A-Acadia Pelham Manor, LLC, a Delaware limited liability company
(“Borrower”), have entered into, are entering into concurrently herewith, or
contemplate entering into, that certain Loan Agreement dated as of the date
hereof (herein called, as it may hereafter be modified, supplemented, restated,
extended, or renewed and in effect from time to time, the “TI Loan Agreement”)
and that certain Transfer Loan Agreement dated as of the date hereof (herein
called, as it may hereafter be modified, supplemented, restated, extended, or
renewed and in effect from time to time, the “Other Loan Agreement”; and,
together with the TI Loan Agreement, collectively, the “Loan Agreement”), which
Loan Agreement sets forth the terms and conditions of certain loans
(collectively, the “Loan”) by BofA and certain other lenders (BofA and such
other entities as may become lenders in accordance with the terms of the Loan
Agreement, collectively, “Lenders”) to Borrower for with respect to land
located in the Town of Pelham Manor, Westchester County, New York as more
particularly described in the Loan Agreement and identified therein as the Land
and the Improvements thereon. 

                    A
condition precedent to Lenders’ obligation to make the Loan to Borrower is
Guarantor’s execution and delivery to Administrative Agent of this Guaranty. 

                    The
Loan is, or will be, evidenced by one or more notes executed by Borrower
pursuant to the Loan Agreement and payable to the order of Lenders in the
aggregate principal face amount of up to $34,000,000 (such note, as it may
hereafter be renewed, extended, supplemented, increased or modified and in
effect from time to time, and all other notes given in substitution therefor, or
in modification, renewal, or extension thereof, in whole or in part, is herein
called the “Note”). 

                    Borrower
and BofA may from time to time enter into one or more “Swap Contracts” as
defined in the Loan Agreement. 

                    Any
capitalized term used and not defined in this Guaranty shall have the meaning
given to such term in the Loan Agreement. This Guaranty is one of the Loan
Documents described in the Loan Agreement. 

Statement of Agreements

                    For
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and as a material inducement to Lenders to extend credit to
Borrower, 

Guarantor hereby guarantees to Administrative Agent and Lenders the
prompt and full payment and performance of the indebtedness and obligations
described below in this Guaranty (collectively called the “Guaranteed
Obligations”), this Guaranty being upon the following terms and conditions: 

                    1.
Guaranty of Payment. Guarantor hereby jointly and severally,
unconditionally and irrevocably guarantees to Administrative Agent and Lenders
the punctual payment when due, whether by lapse of time, by acceleration of
maturity, or otherwise, of (a) all principal, interest (including interest accruing
after the commencement of any bankruptcy or insolvency proceeding by or against
Borrower, whether or not allowed in such proceeding), fees, late charges,
costs, expenses, indemnification indebtedness, and other sums of money now or
hereafter due and owing, or which Borrower is obligated to pay, pursuant to the
terms of the Note, the Loan Agreement, the Mortgage, the Environmental
Agreement, any application, agreement, note or other document executed and
delivered in connection with any Swap Contract or any other Loan Documents,
including any indemnifications contained in the Loan Documents, now or
hereafter existing, and all renewals, extensions, refinancings, modifications,
supplements or amendments of such indebtedness, or any of the Loan Documents, or
any part thereof, (b) payment by Borrower of all customary or necessary costs
and expenses actually incurred by Borrower, Administrative Agent or Lenders in
connection with the operation, maintenance and management of the Land and the
Improvements, including, without limitation, condominium common charges and
assessments, insurance premiums, taxes and assessments, payments in lieu of
taxes, utilities, repair, replacement and all other maintenance costs and
expenses, equipment lease payments, management fees, professional fees,
accounting fees, salaries, fringe and other benefits due to all employees
engaged in the operation, maintenance or management of the Land and the
Improvements, payroll and related taxes and any and all other customary or
necessary operating expenses, (c) any and all transfer taxes which may be due
in connection with the foreclosure of the Mortgage or delivery of a
deed-in-lieu of foreclosure of the Mortgage, (d) all legal and other costs or
expenses paid or incurred by or on behalf of Administrative Agent and/or
Lenders in the enforcement thereof or hereof, (e) all leasing commissions,
tenant allowances and/or other amounts which Borrower is obligated to pay as
landlord under any and all existing leases of the Property and under any and
all future leases at the Property executed while Borrower owns the Property and
(f) any loss, cost, damage or expense paid or incurred by or on behalf of
Administrative Agent and Lenders by reason of (i) any fraud or material
misrepresentation, (ii) taxes of any kind (whether characterized as transfer,
gains or other taxes) payable in connection with the foreclosure sale of the
Property, irrespective of who pays such taxes, (iii) application of any
proceeds of the Loan to any purpose other than as provided in the Loan
Documents (provided that Guarantor’s liability under this clause (iii) shall
not apply to distributions made by Borrower more than thirty (30) days prior to
a Default provided that such distributions are in the ordinary course of
business and Borrower is solvent at the time of such distributions); (iv) the
application of any insurance or condemnation proceeds or other funds or
payments other than strictly in accordance with the Loan Documents, (v) the
misapplication of any security deposits, (vi) rents, sales proceeds, or other
sums received after default under the Loan Documents which are not applied to
expenses of operating the Property or paid to Administrative Agent or a duly
appointed receiver of the Property, (vii) any failure to deliver to
Administrative Agent, after demand therefor, any agreements relating to the
operation, management, leasing, use, occupancy or construction of the Property,
(viii) any intentional physical waste in respect of the Property, (ix) any
failure to pay or discharge any real estate tax, 

2

other tax, assessment, fine, penalty or lien against the Property to
the extent revenue from leases of the Property was available to pay same, (x)
liability as landlord under any lease(s) relating to the Property which liability
accrued prior to Administrative Agent’s or Lenders’ succeeding to such interest
of Borrower, which Administrative Agent or Lenders is or becomes obligated for
by virtue of Administrative Agent or Lenders succeeding to the interests of
Borrower, (xi) any Insolvency Event (as hereinafter defined), (xii) any state
of facts or circumstances which are contrary to the representations and
warranties set forth in Section 31, (xiii) termination of the Ground Lease as a
result of the exercise of any remedies by the holder of any present or future
mortgage encumbering the fee interest on the property demised by the Ground
Lease or (xiv) Lenders being required by any agreement entered into with a
tenant of the Property to release any insurance and/or condemnation award
proceeds as to which Borrower is not entitled to have applied to restoration of
the Property pursuant to Sections 2.1(d), 2.1(e) and/or 2.1(g), as applicable
of each Mortgage (the indebtedness described above in this Section 1 is herein
collectively called the “Indebtedness”). Notwithstanding the foregoing, (A)
Guarantor’s aggregate liability in respect of the principal amount of the Loan
(the “Principal Liability”) shall be limited to the PL Amount as defined below
(the limitation in this proviso being herein referred to as the “Principal
Liability Limitation”) and (B) Guarantor’s liability in respect of interest,
fees, penalties and late charges and in respect of clause (b) above shall be
equal to the aggregate amount of all such amounts accrued and unpaid as of the
Determination Date (as hereinafter defined), provided that (x) in no event
shall the Principal Liability Limitation in the foregoing proviso affect
Guarantor’s liability hereunder as to all interest, fees, penalties, late
charges and any other amounts (other than principal) due under the Loan
Documents and any amounts due and owing pursuant to clauses (b), (c), (d), (e)
and (f) above (collectively, “Guarantor’s Non-Principal Liability”) and (y) the
effectiveness or continuing effectiveness of the Principal Liability Limitation
shall be conditioned on the absence of any Insolvency Event, it being
understood and agreed that if said condition is not continuously satisfied
Guarantor’s liability hereunder in respect of the entire principal amount of
the Loan and all other amounts due under the Loan Documents shall be in full
force and effect and the Principal Liability Limitation shall be void and of no
force or effect. As used herein, the term “PL Amount” shall mean the sum of the
Initial PL Amount (as hereinafter defined) and the Additional PL Amount (as
hereinafter defined). The “Initial PL Amount” shall mean an amount equal to 25%
of the outstanding principal balance of the Note on the date of demand for
payment hereunder (which demand may not be made prior to the existence of an
Default), provided, however, that if Administrative Agent reasonably determines
that, as of the first day of any month, the Property has a Debt Service
Coverage Ratio (as hereinafter defined) of at least 1.43 to 1.0, then, on the
further condition that no Default then exists, the Initial PL Amount shall be
reduced to zero. As used herein, the term “Additional PL Amount” shall mean an
amount equal to the positive difference, if any, between (x) the Outstanding
Principal Balance of the Note on the date of demand less (y) $31,700,000, but
in no event less than zero. 

                    As
used herein, the term “Determination Date” shall mean the date which is the
last to occur of: 

                    (A)
the date of payment in full of Guarantor’s Principal Liability and all other
amounts due hereunder at the time of such payment, or 

3

	
  

 	
  

 
	
  

 	
           (B)
 the date which is the earliest to occur of (1) the acceptance by
 Administrative Agent or Administrative Agent’s designee of the conveyance of
 the premises encumbered by the Mortgage by deed or assignment in lieu of
 foreclosure, or (2) the date upon which a sale (whether made under a power of
 sale, by virtue of a judicial proceeding or judgment or decree of foreclosure
 or sale or otherwise) of such mortgaged premises occurs as a result of
 enforcement of the Mortgage or (3) payment in full of Borrower’s obligations
 under the Note, Mortgage and Loan Agreement. 

 

                    As
used herein, the term “Insolvency Event” shall mean any voluntary or collusive
involuntary filing of any bankruptcy, insolvency or similar proceeding by or
against Borrower or Guarantor. As used herein, the term “Debt Service Coverage
Ratio” means the ratio, as of any date of calculation, of (a) the Projected Net
Operating Income to (b) the annual Debt Service Payments (as defined in the
Loan Agreement). As used herein, the term “Projected Net Operating Income”
means Projected Operating Income less the sum of (i) Adjusted Operating
Expenses (as defined in the Loan Agreement) plus (ii) the Vacancy Loss Factor
(as defined in the Loan Agreement). As used herein, the term “Projected
Operating Income” means the aggregate rentals and all other revenue (unless
excluded pursuant hereto) of the Property as projected by Administrative Agent
for the ensuing twelve (12) month period from only executed bona fide leases,
licenses and other occupancy agreements of the Property which are in full force
and effect as to which the tenant thereunder is in occupancy and paying full
base rent, is not the subject of any bankruptcy proceeding and is not in
default under its lease, beyond any applicable notice or cure periods set forth
therein. Projected Operating Income shall exclude all extraordinary items of
income, all amounts paid to Borrower for tenant alterations in connection with
the leasing of space at the Property, all amounts payable to Borrower under
leases with affiliates of Borrower, as tenant, or with Borrower, as tenant
(unless Administrative Agent otherwise agrees) and, with respect to any lease
providing for a reduction in the rentals payable under such lease at any time
during the term thereof, base rentals in excess of the lowest base rentals
payable under such lease (other than during any period of rent concessions made
with respect to consecutive monthly periods commencing with the first month of
the term of such lease), but notwithstanding the preceding, including
reimbursements for operating expenses and percentage rent pursuant to executed
leases, provided a sales report is provided by the applicable tenant. 

                    In the event of a foreclosure sale, Guarantor agrees that Guarantor’s
Non-Principal Liability obligation hereunder shall not be reduced out of the
proceeds of such sale except to the extent that such proceeds exceed the sum of
(x) the unpaid principal amount of the Loan, (y) costs and expenses of such
sale and (z) the amount of any taxes or assessments or any similar charges paid
out of the proceeds of such sale or subject to which the Property has been
sold. Nothing herein is intended to require Administrative Agent to proceed
against Borrower or any security for the Loan before proceeding against
Guarantor at any time or limit Administrative Agent’s right to proceed against
Guarantor at any time or from time to time for principal, interest, default
interest and late charges guaranteed hereby which are not paid as and when the
same become due in accordance with the terms of the Note, Loan Agreement and
Mortgage whether or not Administrative Agent shall have declared the principal
of the Note and accrued and unpaid interest, default interest and late charges
payable thereunder or under the Mortgage or the Loan Agreement to be
immediately due and payable. 

4

                    This
Guaranty covers the Indebtedness, whether presently outstanding or arising
subsequent to the date hereof, including all amounts advanced by Lenders in
stages or installments. The guaranty of Guarantor as set forth in this Section
1 is a continuing guaranty of payment and not a guaranty of collection. 

                    2.
Guaranty of Performance. Guarantor additionally hereby unconditionally
and irrevocably guarantees to Administrative Agent and Lenders the timely
performance of all other obligations of Borrower under all of the Loan
Documents, including, without limiting the generality of the foregoing: 

	
  

 	
  

 
	
  

 	
           (a)
 that the tenant improvement work required to be performed by the landlord
 under any and all leases, both existing and future, of space in the Improvements
 (the “TI Work”) will be constructed in accordance with such leases and the
 Loan Agreement; and 

 
	
  

 	
  

 
	
  

 	
           (b)
 that the TI Work will be completed, lien free, and ready for occupancy,
 including delivery of any permits, certificates or governmental approvals
 required by law or the applicable lease, on or before the date required in
 such lease. 

 

If any of such obligations of Borrower are not complied with, in any
respect whatsoever, and without the necessity of any notice from Administrative
Agent or Lenders to Guarantor, Guarantor agrees to (i) assume all
responsibility for the completion of the TI Work and, at Guarantor’s own cost
and expense, cause the TI Work to be fully completed in accordance with the
leases of the Property and the Loan Documents; (ii) pay all bills in connection
with the construction of the TI Work; and (iii) indemnify and hold
Administrative Agent and Lenders harmless from any and all loss, cost,
liability or expense that Administrative Agent and Lenders may suffer by reason
of any such non-compliance. So long as all of such obligations are being
performed by Borrower or Guarantor and no Default exists, Lenders will make the
Loan proceeds, if any, available under and subject to the terms of the Loan
Agreement. If after the occurrence of a Default, and without limiting the
rights and remedies of Administrative Agent and Lenders, Administrative Agent,
in its sole and absolute discretion, is dissatisfied with the progress of
construction by Borrower and/or Guarantor, Administrative Agent may, at its
option, without notice to Guarantor or anyone else, complete the TI Work either
before or after commencement of foreclosure proceedings or before or after
exercise of any other right or remedy of Administrative Agent against Borrower
or Guarantor and expend such sums as Administrative Agent, in its sole and
absolute discretion, deems necessary or advisable to complete the TI Work, and
Guarantor hereby waives any right to contest any such expenditures by
Administrative Agent and/or Lenders. The amount of any and all expenditures
made by Administrative Agent for the foregoing purposes shall bear interest
from the date made until repaid to Administrative Agent, at a rate per annum
equal to the interest rate provided for in the Note and, together with such
interest, shall be due and payable by Guarantor to Administrative Agent upon
demand. Neither Lenders nor Administrative Agent have nor shall they ever have
any obligation to complete the TI Work or take any such action. The obligations
and liability of Guarantor under this Section 2 shall not be limited or
restricted by the existence of (or any terms of) the guaranty of payment under
Section 1. 

5

                    3. Primary Liability of Guarantor.

                    (a)
This Guaranty is an absolute, irrevocable and unconditional guaranty of payment
and performance. Guarantor shall be liable for the payment and performance of
the Guaranteed Obligations as a primary obligor. This Guaranty shall be
effective as a waiver of, and Guarantor hereby expressly waives, any and all
rights to which Guarantor may otherwise have been entitled under any suretyship
laws in effect from time to time, including any right or privilege, whether
existing under statute, at law or in equity, to require Administrative Agent or
Lenders to take prior recourse or proceedings against any collateral, security
or Person (hereinafter defined) whatsoever. 

                    (b)
Guarantor hereby agrees that in the event of (i) default by Borrower in payment
or performance of the Guaranteed Obligations, or any part thereof, when such
indebtedness or performance becomes due, either by its terms or as the result
of the exercise of any power to accelerate; (ii) the failure of Guarantor to
perform completely and satisfactorily the covenants, terms and conditions of
any of the Guaranteed Obligations; (iii) the death, incompetency, dissolution
or insolvency of Guarantor, provided, however, that the death of a Guarantor
shall not be an Event of Default if a new guarantor satisfactory to
Administrative Agent in its sole discretion assumes the deceased Guarantor’s
obligations within sixty (60) days of the death of such Guarantor; (iv) the
inability of Guarantor to pay debts as they mature; (v) an assignment by
Guarantor for the benefit of creditors; (vi) the institution of any proceeding
by or against Guarantor in bankruptcy or for a reorganization or an arrangement
with creditors, or for the appointment of a receiver, trustee or custodian for
any of them or for any of their respective properties; (vii) the breach of any
of the covenants set forth in Sections 18 or 19; (viii) the entry of a judgment
against Guarantor for an amount in excess of $1,000,000 and Guarantor shall not
discharge the same or cause it to be discharged within sixty (60) days from the
entry thereof, or shall not appeal therefrom or from the order, decree or
process upon which or pursuant to which said judgment was granted, based or
entered, and secure a stay of execution pending such appeal; (ix) a writ or order
of attachment, levy or garnishment is issued against Guarantor; (x) the falsity
in any material respect of, or any material omission in, any representation
made to Administrative Agent and/or Lenders by Guarantor; or (xi) any transfer
of assets of any Guarantor, without Administrative Agent’s prior consent
(except for transfers in the ordinary course of Guarantor’s business provided
that any such transfer is in compliance with applicable Laws and all covenants
and agreements by which Guarantor is bound, customary political and charitable
contributions, and transfers for which Guarantor receives consideration
substantially equivalent to the fair market value of the transferred asset)
(individually and collectively an “Event of Default”); then upon the occurrence
of such Event of Default, the Guaranteed Obligations, for purposes of this
Guaranty, shall be deemed immediately due and payable at the election of
Administrative Agent, and Guarantor shall, on demand and without presentment,
protest, notice of protest, further notice of nonpayment or of dishonor,
default or nonperformance, or notice of acceleration or of intent to
accelerate, or any other notice whatsoever, without any notice having been
given to Guarantor previous to such demand of the acceptance by Administrative
Agent and/or Lenders of this Guaranty, and without any notice having been given
to Guarantor previous to such demand of the creating or incurring of such
indebtedness or of such obligation to perform, all such notices being hereby
waived by Guarantor, pay the amount due to Administrative Agent or perform or
observe the agreement, covenant, term or condition, as the case may be, and pay
all damages and all costs and expenses 

6

that may arise
in consequence of such Event of Default (including, without limitation, all
attorneys’ fees and expenses, investigation costs, court costs, and any and all
other costs and expenses incurred by Administrative Agent in connection with
the collection and enforcement of the Note, this Guaranty or any other Loan
Document), whether or not suit is filed thereon, or whether at maturity or by
acceleration, or whether before or after maturity, or whether in connection
with bankruptcy, insolvency or appeal. It shall not be necessary for
Administrative Agent, in order to enforce such payment or performance by
Guarantor, first to institute suit or pursue or exhaust any rights or remedies
against Borrower or others liable on such indebtedness or for such performance,
or to enforce any rights against any security that shall ever have been given
to secure such indebtedness or performance, or to join Borrower or any others
liable for the payment or performance of the Guaranteed Obligations or any part
thereof in any action to enforce this Guaranty, or to resort to any other means
of obtaining payment or performance of the Guaranteed Obligations; provided,
however, that nothing herein contained shall prevent Administrative Agent from
suing on the Note or foreclosing the Mortgage or from exercising any other
rights thereunder, and if such foreclosure or other remedy is availed of, only
the net proceeds therefrom, after deduction of all charges and expenses of
every kind and nature whatsoever, shall be applied in reduction of the amount
due on the Note and Mortgage, and Administrative Agent shall not be required to
institute or prosecute proceedings to recover any deficiency as a condition of
payment hereunder or enforcement hereof. At any sale of the Property or other
collateral given for the Indebtedness or any part thereof, whether by
foreclosure or otherwise, Administrative Agent may at its discretion purchase
all or any part of the Property or collateral so sold or offered for sale for
its own account and may, in payment of the amount bid therefor, deduct such
amount from the balance due it pursuant to the terms of the Note, Mortgage and
other Loan Documents. 

                    (c)
Suit may be brought or demand may be made against Borrower or against all
parties who have signed this Guaranty or any other guaranty covering all or any
part of the Guaranteed Obligations, or against any one or more of them,
separately or together, without impairing the rights of Administrative Agent
and/or Lenders against any party hereto. Any time that Administrative Agent is
entitled to exercise its rights or remedies hereunder, it may in its discretion
elect to demand payment and/or performance. If Administrative Agent elects to
demand performance, it shall at all times thereafter have the right to demand
payment until all of the Guaranteed Obligations have been paid and performed in
full. If Administrative Agent elects to demand payment, it shall at all times
thereafter have the right to demand performance until all of the Guaranteed
Obligations have been paid and performed in full. 

                    4. Certain Agreements and Waivers by Guarantor. 

                    (a)
Guarantor hereby agrees that neither the rights or remedies of Administrative
Agent and Lenders nor Guarantor’s obligations under the terms of this Guaranty
shall be released, diminished, impaired, reduced or affected by any one or more
of the following events, actions, facts, or circumstances, and the liability of
Guarantor under this Guaranty shall be absolute and unconditional irrespective
of: 

	
  

 	
  

 
	
  

 	
           (1)
 any limitation of liability or recourse in any other Loan Document or arising
 under any law; 

 

7

	
  

 	
  

 
	
  

 	
                (2)
 any claim or defense that this Guaranty was made without consideration or is
 not supported by adequate consideration; 

 
	
  

 	
  

 
	
  

 	
                (3) the taking or accepting of any other security or guaranty for, or
 right of recourse with respect to, any or all of the Guaranteed Obligations;
 

 
	
  

 	
  

 
	
  

 	
                (4)
 any homestead exemption or any other exemption that is waivable under
 applicable law; 

 
	
  

 	
  

 
	
  

 	
                (5)
 any release, surrender, abandonment, exchange, alteration, sale or other
 disposition, subordination, deterioration, waste, failure to protect or
 preserve, impairment, or loss of, or any failure to create or perfect any
 lien or security interest with respect to, or any other dealings with, any
 collateral or security at any time existing or purported, believed or
 expected to exist in connection with any or all of the Guaranteed
 Obligations, including any impairment of Guarantor’s recourse against any
 Person or collateral; 

 
	
  

 	
  

 
	
  

 	
                (6)
 whether express or by operation of law, any partial release of the liability
 of Guarantor hereunder, or if one or more other guaranties are now or
 hereafter obtained by Administrative Agent and/or Lenders covering all or any
 part of the Guaranteed Obligations, any complete or partial release of any
 one or more of such guarantors under any such other guaranty, or any complete
 or partial release of Borrower or any other party liable, directly or
 indirectly, for the payment or performance of any or all of the Guaranteed
 Obligations; 

 
	
  

 	
  

 
	
  

 	
                (7)
 the death, insolvency, bankruptcy, disability, dissolution, liquidation,
 termination, receivership, reorganization, merger, consolidation, change of
 form, structure or ownership, sale of all assets, or lack of corporate,
 partnership or other power of Borrower or any other party at any time liable
 for the payment or performance of any or all of the Guaranteed Obligations; 

 
	
  

 	
  

 
	
  

 	
                (8)
 either with or without notice to or consent of Guarantor: any renewal,
 extension, modification, supplement, subordination or rearrangement of the
 terms of any or all of the Guaranteed Obligations and/or any of the Loan
 Documents, including, without limitation, material alterations of the terms
 of payment (including changes in maturity date(s) and interest rate(s)) or
 performance or any other terms thereof, or any waiver, termination, or
 release of, or consent to departure from, any of the Loan Documents or any
 other guaranty of any or all of the Guaranteed Obligations, or any
 adjustment, indulgence, forbearance, or compromise that may be granted from
 time to time by Administrative Agent and/or Lenders to Borrower, Guarantor,
 and/or any other Person at any time liable for the payment or performance of
 any or all of the Guaranteed Obligations; 

 
	
  

 	
  

 
	
  

 	
                (9)
 any neglect, lack of diligence, delay, omission, failure, or refusal of
 Administrative Agent and/or Lenders to take or prosecute (or in taking or
 prosecuting) any action for the collection or enforcement of any of the
 Guaranteed Obligations, or to foreclose or take or prosecute any action to
 foreclose (or in foreclosing or taking or 

 
	
  

 	
  

 

8

	
  

 	
  

 
	
  

 	
 prosecuting any action to foreclose) upon any security therefor, or to
 exercise (or in exercising) any other right or power with respect to any
 security therefor, or to take or prosecute (or in taking or prosecuting) any
 action in connection with any Loan Document, or any failure to sell or otherwise
 dispose of in a commercially reasonable manner any collateral securing any or
 all of the Guaranteed Obligations; 

 
	
  

 	
  

 
	
  

 	
                (10)
 any failure of Administrative Agent and/or Lenders to notify Guarantor of any
 creation, renewal, extension, rearrangement, modification, supplement,
 subordination, or assignment of the Guaranteed Obligations or any part
 thereof, or of any Loan Document, or of any release of or change in any
 security, or of any other action taken or refrained from being taken by Administrative
 Agent and/or Lenders against Borrower or any security or other recourse, or
 of any new agreement between Administrative Agent and/or Lenders and
 Borrower, it being understood that Administrative Agent and/or Lenders shall
 not be required to give Guarantor any notice of any kind under any
 circumstances with respect to or in connection with the Guaranteed
 Obligations, any and all rights to notice Guarantor may have otherwise had
 being hereby waived by Guarantor, and Guarantor shall be responsible for
 obtaining for itself information regarding Borrower, including, but not
 limited to, any changes in the business or financial condition of Borrower,
 and Guarantor acknowledges and agrees that Administrative Agent and/or
 Lenders shall have no duty to notify Guarantor of any information which
 Administrative Agent and/or Lenders may have concerning Borrower; 

 
	
  

 	
  

 
	
  

 	
                (11)
 if for any reason Administrative Agent and/or Lenders is required to refund
 any payment by Borrower to any other party liable for the payment or
 performance of any or all of the Guaranteed Obligations or pay the amount
 thereof to someone else; 

 
	
  

 	
  

 
	
  

 	
                (12)
 the making of advances by Administrative Agent and/or Lenders to protect
 their interest in the Property, preserve the value of the Property or for the
 purpose of performing any term or covenant contained in any of the Loan
 Documents; 

 
	
  

 	
  

 
	
  

 	
                (13)
 the existence of any claim, counterclaim, set-off or other right that
 Guarantor may at any time have against Borrower, Administrative Agent, any
 Lender, or any other Person, whether or not arising in connection with this
 Guaranty, the Note, the Loan Agreement, or any other Loan Document; 

 
	
  

 	
  

 
	
  

 	
                (14)
 the unenforceability of all or any part of the Guaranteed Obligations against
 Borrower, whether because the Guaranteed Obligations exceed the amount
 permitted by law or violate any usury law, or because the act of creating the
 Guaranteed Obligations, or any part thereof, is ultra vires, or because the officers
 or Persons creating the Guaranteed Obligations acted in excess of their
 authority, or because of a lack of validity or enforceability of or defect or
 deficiency in any of the Loan Documents, or because Borrower has any valid
 defense, claim or offset with respect thereto, or because Borrower’s
 obligation ceases to exist by operation of law, or because of any other
 reason or circumstance, it being agreed that Guarantor shall remain liable
 hereon regardless of whether Borrower or any other Person be found not liable
 on the Guaranteed Obligations, or any part thereof, for any reason (and
 regardless of any joinder of Borrower or any 

 

9

	
  

 	
  

 
	
  

 	
 other party in any action to obtain payment or performance of any or
 all of the Guaranteed Obligations); 

 
	
  

 	
  

 
	
  

 	
                (15)
 any order, ruling or plan of reorganization emanating from proceedings under
 Title 11 of the United States Code with respect to Borrower or any other
 Person, including any extension, reduction, composition, or other alteration
 of the Guaranteed Obligations, whether or not consented to by Lender; or 

 
	
  

 	
  

 
	
  

 	
                (16)
 any other condition, event, omission, action or inaction that would in the
 absence of this paragraph result in the release or discharge of the Guarantor
 from the performance or observance of any obligation, covenant or agreement
 contained in this Guaranty or any other agreement. 

 
	
  

 	
  

 
	
  

 	
                (17)
 any early termination of any of the Guaranteed Obligations; 

 
	
  

 	
  

 
	
  

 	
                (18)
 Administrative Agent’s and/or Lenders’ enforcement or forbearance from
 enforcement of the Guaranteed Obligations on a net or gross basis; or 

 
	
  

 	
  

 
	
  

 	
                (19)
 any invalidity, irregularity or unenforceability in whole or in part
 (including with respect to any netting provision) of any Swap Contract or any
 confirmation, instrument or agreement required thereunder or related thereto,
 or any transaction entered into thereunder, or any limitation on the
 liability of Borrower thereunder or any limitation on the method or terms of
 payment thereunder which may now or hereafter be caused or imposed in any
 manner whatsoever. 

 

                         (b)
In the event any payment by Borrower or any other Person to Administrative
Agent and/or Lenders is held to constitute a preference, fraudulent transfer or
other voidable payment under any bankruptcy, insolvency or similar law, or if
for any other reason Administrative Agent and/or Lenders is required to refund
such payment or pay the amount thereof to any other party, such payment by
Borrower or any other party to Administrative Agent and/or Lenders shall not
constitute a release of Guarantor from any liability hereunder, and this
Guaranty shall continue to be effective or shall be reinstated (notwithstanding
any prior release, surrender or discharge by Administrative Agent and/or
Lenders of this Guaranty or of Guarantor), as the case may be, with respect to,
and this Guaranty shall apply to, any and all amounts so refunded by
Administrative Agent and/or Lenders or paid by Administrative Agent and/or
Lenders to another Person (which amounts shall constitute part of the
Guaranteed Obligations), and any interest paid by Administrative Agent and/or
Lenders and any attorneys’ fees, costs and expenses paid or incurred by
Administrative Agent and/or Lenders in connection with any such event. It is
the intent of Guarantor, Administrative Agent and Lenders that the obligations
and liabilities of Guarantor hereunder are absolute and unconditional under any
and all circumstances and that until the Guaranteed Obligations are fully and
finally paid and performed, and not subject to refund or disgorgement, the
obligations and liabilities of Guarantor hereunder shall not be discharged or
released, in whole or in part, by any act or occurrence that might, but for the
provisions of this Guaranty, be deemed a legal or equitable discharge or
release of a guarantor. Administrative Agent and/or Lenders shall be entitled
to continue to hold this Guaranty in its possession for the longer of (i) the
period after which any performance of obligations under the Environmental
Agreement shall accrue, or (ii) a 

10

period of one year from the date the Guaranteed Obligations are paid
and performed in full and for so long thereafter as may be necessary to enforce
any obligation of Guarantor hereunder and/or to exercise any right or remedy of
Administrative Agent and/or Lenders hereunder. 

                    (c)
If acceleration of the time for payment of any amount payable by Borrower under
the Note, the Loan Agreement, any Swap Contract or any other Loan Document is
stayed or delayed by any law or tribunal, all such amounts shall nonetheless be
payable by Guarantor on demand by Administrative Agent and/or Lenders. 

                    5.
Subordination. If, for any reason whatsoever, Borrower is now or
hereafter becomes indebted to Guarantor: 

	
  

 	
  

 
	
  

 	
           (a)
 such indebtedness and all interest thereon and all liens, security interests
 and rights now or hereafter existing with respect to property of Borrower
 securing such indebtedness shall, at all times, be subordinate in all
 respects to the Guaranteed Obligations and to all liens, security interests
 and rights now or hereafter existing to secure the Guaranteed Obligations; 

 
	
  

 	
  

 
	
  

 	
           (b)
 Guarantor shall not be entitled to enforce or receive payment, directly or
 indirectly, of any such indebtedness of Borrower to Guarantor until the
 Guaranteed Obligations have been fully and finally paid and performed; 

 
	
  

 	
  

 
	
  

 	
           (c)
 Guarantor hereby assigns and grants to Administrative Agent for the benefit
 of Lenders a security interest in all such indebtedness and security
 therefor, if any, of Borrower to Guarantor now existing or hereafter arising,
 including any dividends and payments pursuant to debtor relief or insolvency
 proceedings referred to below. In the event of receivership, bankruptcy,
 reorganization, arrangement or other debtor relief or insolvency proceedings
 involving Borrower as debtor, Administrative Agent shall have the right to
 prove the claim of Administrative Agent and/or Lenders in any such proceeding
 so as to establish their rights hereunder and shall have the right to receive
 directly from the receiver, trustee or other custodian (whether or not a
 Default shall have occurred or be continuing under any of the Loan
 Documents), dividends and payments that are payable upon any obligation of
 Borrower to Guarantor now existing or hereafter arising, and to have all
 benefits of any security therefor, until the Guaranteed Obligations have been
 fully and finally paid and performed. If, notwithstanding the foregoing
 provisions, Guarantor should receive any payment, claim or distribution that
 is prohibited as provided above in this Section 5, Guarantor shall pay the
 same to Administrative Agent immediately, Guarantor hereby agreeing that it
 shall receive the payment, claim or distribution in trust for Administrative
 Agent and Lenders and shall have absolutely no dominion over the same except
 to pay it immediately to Administrative Agent; and 

 
	
  

 	
  

 
	
  

 	
           (d)
 Guarantor shall promptly upon request of Administrative Agent from time to
 time execute such documents and perform such acts as Administrative Agent may
 require to evidence and perfect its interest and to permit or facilitate
 exercise of its rights under this Section 5, including, but not limited to,
 execution and delivery of financing statements, proofs of claim, further
 assignments and security agreements, and delivery to Administrative Agent of
 any promissory notes or other instruments evidencing 

 

11

	
  

 	
 indebtedness
 of Borrower to Guarantor. All promissory notes, accounts receivable ledgers
 or other evidences, now or hereafter held by Guarantor, of obligations of
 Borrower to Guarantor shall contain a specific written notice thereon that
 the indebtedness evidenced thereby is subordinated under and is subject to
 the terms of this Guaranty. 

 

                         6.
Other Liability of Guarantor or Borrower. If Guarantor is or becomes
liable, by endorsement or otherwise, for any indebtedness owing by Borrower to
Administrative Agent and/or Lenders other than under this Guaranty, such
liability shall not be in any manner impaired or affected hereby, and the
rights of Administrative Agent and/or Lenders hereunder shall be cumulative of
any and all other rights that Administrative Agent and/or Lenders may have
against Guarantor. This Guaranty is independent of (and shall not be limited
by) any other guaranty now existing or hereafter given. Further, Guarantor’s
liability under this Guaranty is in addition to any and all other liability
Guarantor may have in any other capacity, including without limitation, its
capacity as a general partner. 

                         7. Lender Assigns. This Guaranty is for the benefit of Administrative Agent
and Lenders and their successors and assigns, subject to the terms of the Loan
Agreement, and in the event of an assignment of the Guaranteed Obligations, or
any part thereof, the rights and benefits hereunder, to the extent applicable
to the Guaranteed Obligations so assigned, may be transferred with such
Guaranteed Obligations. Guarantor waives notice of any transfer or assignment
of the Guaranteed Obligations, or any part thereof, and agrees that failure to
give notice of any such transfer or assignment will not affect the liabilities
of Guarantor hereunder. 

                         8.
Binding Effect. This Guaranty is binding not only on Guarantor, but also
on Guarantor’s heirs, personal representatives, successors and assigns. Upon
the death of Guarantor, if Guarantor is a natural person, this Guaranty shall
continue against Guarantor’s estate as to all of the Guaranteed Obligations,
including that portion incurred or arising after the death of Guarantor and
shall be provable in full against Guarantor’s estate, whether or not the Guaranteed
Obligations are then due and payable. If this Guaranty is signed by more than
one Person, then all of the obligations of Guarantor arising hereunder shall be
jointly and severally binding on each of the undersigned, and their respective
heirs, personal representatives, successors and assigns, and the term
“Guarantor” shall mean all of such Persons and each of them individually. 

                         9.
Governing Law; Forum; Consent to Jurisdiction. This Guaranty is an
agreement executed under seal. The validity, enforcement, and interpretation of
this Guaranty, shall for all purposes be governed by and construed in
accordance with the laws of the State of New York and applicable United States
federal law, and is intended to be performed in accordance with, and only to
the extent permitted by, such laws. If any Guarantor is a corporation, the
designation “(SEAL)” on this Guaranty shall be effective as the affixing of
such Guarantor’s corporate seal physically to this Guaranty. All obligations of
Guarantor hereunder are payable and performable at the place or places where
the Guaranteed Obligations are payable and performable. Guarantor hereby
irrevocably submits generally and unconditionally for Guarantor and in respect
of Guarantor’s property to the nonexclusive jurisdiction of any state court, or
any United States federal court, sitting in the state specified in the first
sentence of this Section and to the jurisdiction of any state or United States
federal court sitting in the state in 

12

which any of
the Land is located, over any suit, action or proceeding arising out of or
relating to this Guaranty or the Guaranteed Obligations. Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, any objection that
Guarantor may now or hereafter have to the laying of venue in any such court
and any claim that any such court is an inconvenient forum. Final judgment in
any such suit, action or proceeding brought in any such court shall be
conclusive and binding upon Guarantor and may be enforced in any court in which
Guarantor is subject to jurisdiction. Guarantor hereby agrees and consents
that, in addition to any methods of service of process provided for under
applicable law, all service of process in any such suit, action or proceeding in
any state court, or any United States federal court, sitting in the state
specified in the first sentence of this Section may be made by certified or
registered mail, return receipt requested, directed to Guarantor at the address
set forth at the end of this Guaranty, or at a subsequent address of which
Administrative Agent receives actual notice from Guarantor in accordance with
the notice provisions hereof, and service so made shall be complete five (5)
days after the same shall have been so mailed. Nothing herein shall affect the
right of Administrative Agent to serve process in any manner permitted by law
or limit the right of Administrative Agent to bring proceedings against
Guarantor in any other court or jurisdiction. Guarantor hereby releases, to the
extent permitted by applicable law, all errors and all rights of exemption,
appeal, stay of execution, inquisition, and other rights to which Guarantor may
otherwise be entitled under the laws of the United States of America or any
State or possession of the United States of America now in force or which may
hereinafter be enacted. The authority and power to appear for and enter
judgment against the Guarantor shall not be exhausted by one or more exercises
thereof or by any imperfect exercise thereof and shall not be extinguished by
any judgment entered pursuant thereto. Such authority may be exercised on one
or more occasions or from time to time in the same or different jurisdiction as
often as the Administrative Agent shall deem necessary and desirable. 

                    10.
Invalidity of Certain Provisions. If any provision of this Guaranty or
the application thereof to any Person or circumstance shall, for any reason and
to any extent, be declared to be invalid or unenforceable, neither the remaining
provisions of this Guaranty nor the application of such provision to any other
Person or circumstance shall be affected thereby, and the remaining provisions
of this Guaranty, or the applicability of such provision to other Persons or
circumstances, as applicable, shall remain in effect and be enforceable to the
maximum extent permitted by applicable law. 

                    11.
Attorneys’ Fees and Costs of Collection. Guarantor shall pay on demand
all attorneys’ fees and all other costs and expenses incurred by Administrative
Agent and/or Lenders in the enforcement of or preservation of Administrative
Agent’s and/or Lenders’ rights under this Guaranty including, without
limitation, all attorneys’ fees and expenses, investigation costs, and all
court costs, whether or not suit is filed hereon, or whether at maturity or by
acceleration, or whether before or after maturity, or whether in connection
with bankruptcy, insolvency or appeal, or whether in connection with the
collection and enforcement of this Guaranty against any other Guarantor, if
there be more than one. Guarantor agrees to pay interest on any expenses or
other sums due to Administrative Agent and/or Lenders under this Section 11
that are not paid when due, at a rate per annum equal to the interest rate
provided for in the Note. Guarantor’s obligations and liabilities under this
Section 11 shall survive any payment or discharge in full of the Guaranteed
Obligations. 

13

                    12.
Payments. All sums payable under this Guaranty shall be paid in lawful
money of the United States of America that at the time of payment is legal
tender for the payment of public and private debts.

                    13.
Controlling Agreement. It is not the intention of Administrative Agent,
Lenders or Guarantor to obligate Guarantor to pay interest in excess of that
lawfully permitted to be paid by Guarantor under applicable law. Should it be
determined that any portion of the Guaranteed Obligations or any other amount
payable by Guarantor under this Guaranty constitutes interest in excess of the
maximum amount of interest that Guarantor, in Guarantor’s capacity as
guarantor, may lawfully be required to pay under applicable law, the obligation
of Guarantor to pay such interest shall automatically be limited to the payment
thereof in the maximum amount so permitted under applicable law. The provisions
of this Section 13 shall override and control all other provisions of this
Guaranty and of any other agreement between Guarantor, Administrative Agent and
Lenders.

                    14.
Representations, Warranties, and Covenants of Guarantor. Guarantor
hereby represents, warrants, and covenants that: (a) Guarantor has a financial
interest in Borrower and will derive a material and substantial benefit,
directly or indirectly, from the making of the Loan to Borrower and from the
making of this Guaranty by Guarantor; (b) this Guaranty is duly authorized and
valid, and is binding upon and enforceable against Guarantor; (c) Guarantor is
not, and the execution, delivery and performance by Guarantor of this Guaranty
will not cause Guarantor to be, in violation of or in default with respect to
any law or in default (or at risk of acceleration of indebtedness) under any
agreement or restriction by which Guarantor is bound or affected; (d) Guarantor
is duly organized, validly existing, and in good standing under the laws of the
state of its organization and under Delaware laws, is lawfully doing business
in New York, and has full power and authority to enter into and perform this
Guaranty; (e) Guarantor will indemnify Administrative Agent and Lenders from
any loss, cost or expense as a result of any representation or warranty of the
Guarantor being false, incorrect, incomplete or misleading in any material
respect; (f) there is no litigation pending or, to the knowledge of Guarantor,
threatened before or by any tribunal against or affecting Guarantor other than
litigation which, if adversely determined, would not have a material adverse
effect on the operations, business, properties, liabilities (actual or
contingent), condition (financial or otherwise) of Guarantor; (g) all financial
statements and information heretofore furnished to Administrative Agent and
Lenders by Guarantor do, and all financial statements and information hereafter
furnished to Administrative Agent and Lenders by Guarantor will, fully and
accurately present the condition (financial or otherwise) of Guarantor as of
their dates and the results of Guarantor’s operations for the periods therein
specified, and, since the date of the most recent financial statements of
Guarantor heretofore furnished to Administrative Agent, no material adverse
change has occurred in the financial condition of Guarantor, nor, except as
heretofore disclosed in writing to Administrative Agent, has Guarantor incurred
any material liability, direct or indirect, fixed or contingent; (h) after
giving effect to this Guaranty, Guarantor is solvent, is not engaged or about
to engage in business or a transaction for which the property of Guarantor is
an unreasonably small capital, and does not intend to incur or believe that it
will incur debts that will be beyond its ability to pay as such debts mature;
(i) Administrative Agent and Lenders have no duty at any time to investigate or
inform Guarantor of the financial or business condition or affairs of Borrower
or any change therein, and Guarantor will keep fully apprised of Borrower’s
financial and business condition; (j) Guarantor acknowledges and agrees that

14

Guarantor may be required to pay and perform the Guaranteed Obligations
in full without assistance or support from Borrower or any other Person; and
(k) Guarantor has read and fully understands the provisions contained in the
Note, the Loan Agreement, the Mortgage, the Environmental Agreement, and the
other Loan Documents. Guarantor’s representations, warranties and covenants are
a material inducement to Administrative Agent and Lenders to enter into the other
Loan Documents and shall survive the execution hereof and any bankruptcy,
foreclosure, transfer of security or other event affecting Borrower, Guarantor,
any other party, or any security for all or any part of the Guaranteed
Obligations.

                    Guarantor
further represents, warrants and covenants that if any Swap Contract shall at
any time be in effect, (x) Guarantor has received and examined copies of each
such Swap Contract, the observance and performance of which by Borrower is
hereby guaranteed; (y) Guarantor will benefit from Administrative Agent’s
and/or any Lender’s entering into each such Swap Contract and any transaction
thereunder with Borrower, and Guarantor has determined that the execution and
delivery by Guarantor of this Guaranty are necessary and convenient to the
conduct, promotion and attainment of the business of Guarantor; and (z)
Administrative Agent and Lenders have no duty to determine whether any Swap
Contract, or any other transaction relating to or arising under any Swap
Contract, will be or has been entered into by Borrower for purposes of hedging
interest rate, currency exchange rate, or other risks arising in its businesses
or affairs and not for purposes of speculation or is otherwise inappropriate
for Borrower. Guarantor’s representations, warranties and covenants are a
material inducement to Administrative Agent to enter into the other Loan
Documents and any Swap Contract shall survive the execution hereof and any
bankruptcy, foreclosure, transfer of security or other event affecting
Borrower, Guarantor, any other party, or any security for all or any part of
the Guaranteed Obligations.

                    15.
Notices. All notices, requests, consents, demands and other
communications required or which any party desires to give hereunder or under
any other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service, or by registered or certified United States mail, postage
prepaid, addressed to the party to whom directed at the addresses specified in
this Guaranty (unless changed by similar notice in writing given by the
particular party whose address is to be changed) or by telegram, telex, or
facsimile. Any such notice or communication shall be deemed to have been given
either at the time of personal delivery or, in the case of courier or mail, as
of the date of first attempted delivery at the address and in the manner
provided herein, or, in the case of telegram, telex or facsimile, upon receipt;
provided that, service of a notice required by any applicable statute shall be
considered complete when the requirements of that statute are met. Notwithstanding
the foregoing, no notice of change of address shall be effective except upon
actual receipt. This Section shall not be construed in any way to affect or
impair any waiver of notice or demand provided in this Guaranty or in any Loan
Document or to require giving of notice or demand to or upon any Person in any
situation or for any reason.

                    16.
Cumulative Rights. The exercise by Administrative Agent and/or Lenders
of any right or remedy hereunder or under any other Loan Document, or at law or
in equity, shall not preclude the concurrent or subsequent exercise of any
other right or remedy. Administrative

15

Agent and Lenders shall have all rights, remedies and recourses
afforded to Administrative Agent and Lenders by reason of this Guaranty or any
other Loan Document or by law or equity or otherwise, and the same (a) shall be
cumulative and concurrent, (b) may be pursued separately, successively or
concurrently against Guarantor or others obligated for the Guaranteed Obligations,
or any part thereof, or against any one or more of them, or against any
security or otherwise, at the sole and absolute discretion of Administrative
Agent, (c) may be exercised as often as occasion therefor shall arise, it being
agreed by Guarantor that the exercise of, discontinuance of the exercise of or
failure to exercise any of such rights, remedies, or recourses shall in no
event be construed as a waiver or release thereof or of any other right,
remedy, or recourse, and (d) are intended to be, and shall be, nonexclusive. No
waiver of any default on the part of Guarantor or of any breach of any of the
provisions of this Guaranty or of any other document shall be considered a
waiver of any other or subsequent default or breach, and no delay or omission
in exercising or enforcing the rights and powers granted herein or in any other
document shall be construed as a waiver of such rights and powers, and no
exercise or enforcement of any rights or powers hereunder or under any other
document shall be held to exhaust such rights and powers, and every such right
and power may be exercised from time to time. The granting of any consent,
approval or waiver by Administrative Agent and/or Lenders shall be limited to
the specific instance and purpose therefor and shall not constitute consent or
approval in any other instance or for any other purpose. No notice to or demand
on Guarantor in any case shall of itself entitle Guarantor to any other or
further notice or demand in similar or other circumstances. No provision of
this Guaranty or any right, remedy or recourse of Administrative Agent and/or
Lenders with respect hereto, or any default or breach, can be waived, nor can
this Guaranty or Guarantor be released or discharged in any way or to any
extent, except specifically in each case by a writing intended for that purpose
(and which refers specifically to this Guaranty) executed, and delivered to
Guarantor, by Administrative Agent.

                    17.
Term of Guaranty. This Guaranty shall continue in effect until all the
Guaranteed Obligations are fully and finally paid, performed and discharged,
except that, and notwithstanding any return of this Guaranty to Guarantor, this
Guaranty shall continue in effect (i) with respect to any of the Guaranteed
Obligations that survive the full and final payment of the indebtedness
evidenced by the Note, (ii) with respect to all obligations and liabilities of
Guarantor under Section 11 and (iii) as provided in Section 4(b).

                    18.
Financial Statements. As used in this Section, “Financial Statements”
means (i) for each reporting party other than an individual, a balance sheet,
income statement, statements of cash flow and amount and sources of contingent
liabilities, a reconciliation of changes in equity and liquidity verification,
and, unless Administrative Agent otherwise consents, consolidated and
consolidating statements if the reporting party is a holding company or a
parent of a subsidiary entity; and (ii) for each reporting party who is an
individual, a balance sheet, statements of amount and sources of contingent
liabilities, sources and uses of cash and liquidity verification, and, unless
Administrative Agent otherwise consents, Financial Statements for each entity
owned or jointly owned by the reporting party. Each party for whom Financial
Statements are required is a “reporting party” and a specified period to which
the required Financial Statements relate is a “reporting period”. Guarantor
shall provide or cause to be provided to Administrative Agent the following:

16

	
  

 	
  

 
	
  

 	
           (a)
 Financial Statements of Parent, and copies of filed federal and state income
 tax returns of Guarantor and its Parent as and when required under the Loan
 Agreement;

 
	
  

 	
  

 
	
  

 	
           (b) As
 soon as available and in any event within thirty (30) days of the end of each
 fiscal quarter of Parent a certificate of the principal financial or
 accounting officer of Guarantor or Parent in the form attached hereto as Exhibit
 A setting forth the detailed calculations of compliance or non-compliance
 with each of the covenants set forth in Section 19;

 
	
  

 	
  

 
	
  

 	
           (c) As
 soon as available and in any event within thirty (30) days of the end of each
 fiscal quarter of Parent the Quarterly Reporting Supplement (as hereinafter
 defined) of Parent and Guarantor, prepared and presented in a manner
 consistent with the current practices of Parent and Guarantor; and

 
	
  

 	
  

 
	
  

 	
           (d) From
 time to time promptly after Administrative Agent’s request, such additional
 information, reports and statements regarding the business operations and
 financial condition of each reporting party as Administrative Agent may
 reasonably request.

 

All Financial Statements shall be in form and detail satisfactory to
Administrative Agent and shall contain or be attached to the signed and dated
written certification of the reporting party in form satisfactory to
Administrative Agent to certify that the Financial Statements are furnished to
Administrative Agent in connection with the extension of credit by Lenders and constitute
a true and correct statement of the reporting party’s financial position. All
certifications and signatures on behalf of corporations, partnerships or other
entities shall be by a representative of the entity satisfactory to
Administrative Agent. All Financial Statements for a reporting party who is an
individual shall be on Administrative Agent’s then-current personal financial
statement form or in another form satisfactory to Administrative Agent. All
fiscal year-end Financial Statements shall be audited or certified, as required
by Administrative Agent, without any qualification or exception not acceptable
to Administrative Agent, by independent certified public accountants acceptable
to Administrative Agent, and shall contain all reports and disclosures required
by generally accepted accounting principles for a fair presentation. All fiscal
year-end Financial Statements of the following reporting parties shall be
compiled or reviewed by independent certified public accountants acceptable to
Administrative Agent.

                    Guarantor
represents and warrants to Administrative Agent and Lenders that the financial
information in the current and future Quarterly Reporting Supplements shall
accurately reflect the financial condition of Guarantor. All assets shown on
the Financial Statements provided by Guarantor and/or its Parent, unless
clearly designated to the contrary shall, be conclusively deemed to be free and
clear of any exemption or any claim of exemption of Guarantor and/or its Parent
at the date of the Financial Statements and at all times thereafter. Acceptance
of any Financial Statement by Administrative Agent and/or Lenders, whether or
not in the form prescribed herein, shall be relied upon by Administrative Agent
and Lenders in the administration, enforcement, and extension of the Guaranteed
Obligations.

17

                    19.
Financial Covenants. 

                    (a)
Defined Terms. As used herein, the following terms shall have the
following meanings:

                    “Adjusted
Net Income” means, for any period, as to Guarantor and the Consolidated
Entities, Consolidated Net Income; provided that there shall be excluded the
income (or deficit) of any Person other than Guarantor accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with Guarantor
or any of its Subsidiaries.

                    “Adjusted
Tangible Net Worth” means, for any Person as of any date of determination,
the sum of (x) consolidated stockholders’ equity of such Person determined in
accordance with GAAP, less (without duplication), the sum of all intangibles
determined in accordance with GAAP (including, without limitation, goodwill and
deferred or capitalized acquisition costs) and less the equity in
non-controlled subsidiaries plus (y) accumulated depreciation determined in
accordance with GAAP. For Guarantor, the components of Adjusted Tangible Net
Worth shall be taken from the Quarterly Reporting Supplement.

                    “Adjusted
Total Asset Value” means as of any date the Total Asset Value recalculated
by reducing the amount of the aggregate of (a) the book value of construction
in progress owned by Guarantor and its Consolidated Entities plus (b) the net
value of real estate under development of Guarantor and its Consolidated
Entities plus (c) 50% of the book value of notes receivable of Guarantor and
its Consolidated Entities plus (d) 50% of the book value of preferred equity
investments of Guarantor and its Consolidated Entities, to the extent necessary
so that such aggregate amount of the amounts in the preceding clauses (a)
through (d) does not exceed 50% of the Total Asset Value as of such date.

                    “Consolidated
Entities” means, as of any date of determination, any entities whose
financial results are consolidated with those of Guarantor in accordance with
GAAP.

                    “Consolidated
Net Income” means, for any period, net income (or loss) of Parent and the
Consolidated Entities for such period determined on a consolidated basis in
accordance with GAAP.

                    “Consolidated
Adjusted Tangible Net Worth” means, as of any date of determination,
Adjusted Tangible Net Worth of Guarantor and its Consolidated Entities, on a
consolidated basis determined in accordance with GAAP

                    “Debt”
means, of any Person at any date, without duplication, (a) all indebtedness of
such Person for borrowed money, (b) all obligations of such Person for the
deferred purchase price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness
for the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under any lease of property, real or personal, the obligations
of the lessee in respect of which are required in accordance with GAAP to be
capitalized on a balance sheet of such lessee, (e) all obligations of such
Person in respect of acceptances issued or created for the account of such
Person, (f) all Guaranty Obligations of such Person, (g) all reimbursement
obligations for

18

letters of credit and other contingent liabilities, (h) all liabilities
secured by any Lien on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof, and
(i) the net obligations (contingent or otherwise) of such Person at such date
under interest rate hedging agreements.

                    “Equity
Issuance” means the issuance or sale by Guarantor, Parent or any Subsidiary
of Parent of any Stock.

                    “GAAP”
means generally accepted accounting principles in the United States of America.

                    “Guaranty
Obligation” means, as to any Person (the “guaranteeing person”), any
obligation (determined without duplication) of (a) the guaranteeing person or
(b) another Person (including any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counter-indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Debt, leases, dividends or other obligations (the
“primary obligations”) of any other third Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of
any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided that the term
“Guaranty Obligation” shall not include (A) endorsements of instruments for
deposit or collection in the ordinary course of business or (B) indemnities
regarding liability for environmental concerns or compliance with particular
laws, indemnities covering actions of Guarantors and its officers, employees
and agents and similar indemnities in the ordinary course of business which do not
relate to repayment of debt. The amount of any Guaranty Obligation of any
guaranteeing person shall be deemed to be the maximum stated amount of the
primary obligation relating to such Guaranty Obligation (or, if less, the
maximum stated liability set forth in the instrument embodying such Guaranty
Obligation).

                    “Leverage
Ratio” means, as of any date of determination thereof, the ratio of (a)
Total Indebtedness outstanding on such date to (b) the Adjusted Total Asset
Value as of such date determined in accordance with GAAP.

                    “Lien”
means any mortgage, pledge, hypothecation, assignment (including any collateral
assignment but excluding any assignment of an asset made in lieu of a sale
thereof where the assignor is paid the fair market value of such asset by the
assignee and the assignee assumes all of the rights and obligations
attributable to ownership of such asset), deposit arrangement, encumbrance,
lien (statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement and any financing lease having substantially the same economic effect
as any of the foregoing).

19

                    “Net
Proceeds” means, with respect to any Equity Issuance, the amount of cash
received by Guarantor, Parent or any Subsidiary of Parent in connection with
such transaction after deducting therefrom the aggregate, without duplication,
of the following amounts to the extent properly attributable to such
transaction: (a) reasonable brokerage commissions, attorneys’ fees, finder’s
fees, financial advisory fees, accounting fees, underwriting fees, investment
banking fees, and other similar commissions and fees (and expenses and
disbursements of any of the foregoing), in each case, to the extent paid or
payable by Guarantor, Parent or any Subsidiary of Parent; (b) printing and
related expenses and filing, recording, or registration fees or charges or
similar fees or charges paid by Guarantor, Parent or any Subsidiary of Parent;
and (c) taxes paid or payable by Guarantor, Parent or any Subsidiary of Parent
to any governmental authority as a direct result of such transaction.

                    “Parent”
means Acadia Realty Trust, a Maryland business trust and the parent company of
Guarantor.

                    “Person”
means an individual, partnership, limited liability company, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.

                    “Quarterly
Reporting Supplement” means the quarterly Reporting Supplement prepared and
published by Parent to supplement the information filed quarterly with the
Securities and Exchange Commission.

                    “Stock”
means all shares, options, warrants, general or limited partnership interests,
membership interests, or other ownership interests (regardless of how designated)
of or in a corporation, partnership, limited liability company, trust, or other
entity, whether voting or nonvoting, including common stock, preferred stock,
or any other similar “equity security” (as such term is defined in Rule 3a11-1
of the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended).

                    “Subsidiary”
means, as to any Person, a corporation, limited liability company, partnership
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
limited liability company, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person.

                    “Test
Period” means each fiscal quarter of Parent and Guarantor.

                    “Total
Adjusted EBITDA” means, for any Test Period, Total EBITDA for such period
minus replacement reserves of $0.20 per square foot of gross leasable area in
all improved real estate owned by Parent, Guarantor and the Consolidated
Entities (adjusted, in the case of Acadia Strategic Opportunity Fund, L.P.,
Acadia Strategic Opportunity Fund II LLC and Acadia Strategic Opportunity Fund
III LLC to reflect only Guarantor’s percentage interest in each such entity
times the total gross leaseable area in all improvements owned by each such
fund and its 

20

Subsidiaries) per annum, pro-rated for the applicable period. For
Guarantor, the components of Total Adjusted EBITDA shall be taken from the
Quarterly Reporting Supplement.

                    “Total
Asset Value” means as of any date the sum (without duplication) of (a)
unencumbered cash and cash equivalents of Guarantor and its Consolidated
Entities, (b) net operating income of Guarantor and its Consolidated Entities
for the most recent Test Period, determined annualized and capitalized at
8.00%, (c) the income from fees of Guarantor and its Consolidated Entities for
the most recent Test Period (excluding any provision for income taxes),
annualized and capitalized at 20% per annum, (d) the net value of real estate
under development of Guarantor and its Consolidated Entities, (e) the book
value of construction in progress owned by Guarantor and its Consolidated Entities,
(f) notes receivable of Guarantor and its Consolidated Entities discounted at
50% plus, (g) preferred equity investments of Guarantor and its Consolidated
Entities discounted at 50%.

                    “Total
Debt Service” means, in respect of any Test Period, interest expense plus
scheduled principal debt amortization for Guarantor and the Consolidated
Entities on the aggregate principal amount of their respective Debt, plus
preferred stock dividends and/or distributions to preferred operating partnership
units in Guarantor paid during such Test Period. For Guarantor, the components
of Total Debt Service shall be taken from the Quarterly Reporting Supplement.

                    “Total
EBITDA” means, for any period, Adjusted Net Income of Guarantor and the
Consolidated Entities before income taxes, interest, depreciation,
amortization, gains or losses on sales of operating real estate and marketable
securities, any provision or benefit for income taxes, noncash impairment
charges, and gains or losses on extraordinary items in accordance with GAAP and
gains or losses on early extinguishment of debt.

                    “Total
Indebtedness” means, as of any date of determination, all Debt of
Guarantor, Parent and its Consolidated Entities outstanding at such date. The
components of Total Indebtedness, other than contingent liabilities, shall be
taken from the Quarterly Reporting Supplement.

                    (b)
Minimum Tangible Net Worth. Guarantor shall not permit the Consolidated
Adjusted Tangible Net Worth of Guarantor, as of the last day of any fiscal
quarter of Parent, commencing with the fiscal quarter ending September 30,
2010, to be less than (i) $350,000,000 plus (ii) 80% of the amount of Net
Proceeds from any Equity Issuance subsequent to September 30, 2010.

                    (c)
Leverage Ratio. Guarantor shall not permit the Leverage Ratio of
Guarantor (expressed as a percent), as of the last day of any fiscal quarter of
Guarantor, to be greater than 65%.

                    (d)
Fixed Charge Coverage Ratio. Guarantor shall not permit, for any Test
Period, the ratio of Total Adjusted EBITDA of Parent for such period to Total
Debt Service of Parent for such period to be less than 1.50 to 1.00.

                    (e)
Notifications. Guarantor shall notify Administrative Agent:

21

	
  

 	
  

 
	
  

 	
           (i) Notice
 of Litigation. Promptly after the commencement and knowledge thereof,
 notice of all material actions, suits and proceedings before any court or
 arbitrator or any governmental authorities, affecting Guarantor or Parent;

 
	
  

 	
  

 
	
  

 	
           (ii) Notices
 of Defaults. After Guarantor becomes aware of the occurrence of a
 Default, providing to Administrative Agent a written notice setting forth the
 details of such Default; and

 
	
  

 	
  

 
	
  

 	
           (iii) Contractual
 Obligations. Promptly of (i) any matter that has resulted or would
 reasonably be expected to result in a material change to Guarantors’ ability
 to fulfill its obligations hereunder (a “Material Change”; in the event that
 the parties hereto are in dispute as to whether a change is a “material
 change” for the purposes of this definition, the materiality of such change
 shall be in Administrative Agent’s reasonable discretion), including, to the
 extent so applicable, (ii) any breach or non-performance of, or any default
 under, a contractual obligation of Guarantor; (iii) any dispute, litigation,
 investigation, proceeding or suspension between Guarantor and any court,
 arbitrator or Governmental Authority; or (iv) the commencement of, or any
 material development in, any litigation, proceeding or investigation
 affecting Guarantor.

 

                    (f)
Conduct of Business and Maintenance of Existence. Guarantor will
continue (i) to be a majority owned subsidiary of Parent through whom Parent
conducts substantially all of its activities, (ii) engage in business of the
same general type as now conducted by Guarantor on the date hereof, and
preserve, renew and keep in full force and effect its legal existence and (iii)
to comply with all contractual obligations and Laws, except to the extent that
failure to comply therewith would not in the aggregate constitute a Material
Change.

                    (g)
Compliance with Laws. Guarantor shall comply, and shall cause each of
its subsidiaries, if any, to comply, with all Laws, except to the extent that
failure to comply therewith would not in the aggregate constitutes a Material
Change.

                    20.
Disclosure of Information. In accordance with the Loan Agreement Lenders
may sell or offer to sell the Loan or interests in the Loan to one or more
assignees or participants and may disclose to any such assignee or participant
or prospective assignee or participant, to Lenders’ affiliates, including
without limitation Banc of America Securities LLC, to any regulatory body
having jurisdiction over Administrative Agent or any Lender and to any other
parties as necessary or appropriate in Lenders’ reasonable judgment, any
information Lenders now have or hereafter obtain pertaining to the Guaranteed
Obligations, this Guaranty, or Guarantor, including, without limitation,
information regarding any security for the Guaranteed Obligations or for this
Guaranty, credit or other information on Guarantor, Borrower, and/or any other
party liable, directly or indirectly, for any part of the Guaranteed
Obligations. 

                    21.
Right of Set-Off. Upon the occurrence and during the continuance of any
Default, however defined, in the payment or performance when due of any of the
Guaranteed Obligations, Lenders are hereby authorized at any time and from time
to time, to the fullest extent permitted by applicable law, without notice to
any Person (any such notice being expressly waived by Guarantor to the fullest
extent permitted by applicable law), to set off and apply any and all deposits,
funds, or assets at any time held and other indebtedness at any time 

22

owing by any Lender to or for the credit or the account of Guarantor
against any and all of the obligations of Guarantor now or hereafter existing
under this Guaranty, whether or not any such Lender or Administrative Agent
shall have made any demand under this Guaranty or exercised any other right or
remedy hereunder. Lenders will promptly notify Administrative Agent, the other
Lenders and Guarantor after any such set-off and application made by any such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Lenders under this
Section 21 are in addition to the other rights and remedies (including other
rights of set-off) that Administrative Agent and Lenders may have and every
right of setoff and lien shall continue in full force and effect until such
right of setoff or lien is specifically waived or released by an instrument in
writing executed by Administrative Agent.

                    22.
Subrogation. Notwithstanding anything to the contrary contained herein,
Guarantor shall not have any right of subrogation in or under any of the Loan
Documents or to participate in any way therein, or in any right, title or
interest in and to any security or right of recourse for the Indebtedness or
any right to reimbursement, exoneration, contribution, indemnification or any
similar rights, until the Indebtedness has been fully and finally paid. This waiver
is given to induce Administrative Agent and Lenders to make the Loan to
Borrower.

                    23.
Further Assurances. Guarantor at Guarantor’s expense will promptly
execute and deliver to Administrative Agent upon Administrative Agent’s request
all such other and further documents, agreements, and instruments in compliance
with or accomplishment of the agreements of Guarantor under this Guaranty.

                    24.
No Fiduciary Relationship. The relationship between Administrative
Agent, Lenders and Guarantor is solely that of lenders (acting through
Administrative Agent) and guarantor. Administrative Agent and Lenders have no
fiduciary or other special relationship with or duty to Guarantor and none is
created hereby or may be inferred from any course of dealing or act or omission
of Administrative Agent and/or Lenders.

                    25.
Interpretation. If this Guaranty is signed by more than one Person as
“Guarantor”, then the term “Guarantor” as used in this Guaranty shall refer to
all such Persons, jointly and severally, and all promises, agreements,
covenants, waivers, consents, representations, warranties and other provisions
in this Guaranty are made by and shall be binding upon each and every such
Person, jointly and severally and Administrative Agent may pursue any Guarantor
hereunder without being required (i) to pursue any other Guarantor hereunder or
(ii) pursue rights and remedies under the Mortgage and/or applicable law with
respect to the Property or any other Loan Documents. Whenever the context of
any provisions hereof shall require it, words in the singular shall include the
plural, words in the plural shall include the singular, and pronouns of any
gender shall include the other gender. Captions and headings in the Loan
Documents are for convenience only and shall not affect the construction of the
Loan Documents. All references in this Guaranty to Schedules, Articles,
Sections, Subsections, paragraphs and subparagraphs refer to the respective
subdivisions of this Guaranty, unless such reference specifically identifies
another document. The terms “herein”, “hereof”, “hereto”, “hereunder” and
similar terms refer to this Guaranty and not to any particular Section or
subsection of this Guaranty. The terms “include” and “including” shall be
interpreted as if followed by the words “without limitation”. All references in
this Guaranty to sums

23

denominated in dollars or with the symbol “$” refer to the lawful
currency of the United States of America, unless such reference specifically
identifies another currency. For purposes of this Guaranty, “Person” or
“Persons” shall include firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations, limited liability
companies, and other legal entities, including governmental bodies, agencies,
or instrumentalities, as well as natural persons.

                    26.
Time of Essence. Time shall be of the essence in this Guaranty with
respect to all of Guarantor’s obligations hereunder.

                    27.
Counterparts. This Guaranty may be executed in multiple counterparts,
each of which, for all purposes, shall be deemed an original, and all of which
taken together shall constitute but one and the same agreement.

                    28.
Entire Agreement. This Guaranty embodies the entire agreement between
Administrative Agent, Lenders and Guarantor with respect to the guaranty by
Guarantor of the Guaranteed Obligations. This Guaranty supersedes all prior
agreements and understandings, if any, with respect to the guaranty by
Guarantor of the Guaranteed Obligations. No condition or conditions precedent
to the effectiveness of this Guaranty exist. This Guaranty shall be effective
upon execution by Guarantor and delivery to Administrative Agent. This Guaranty
may not be modified, amended or superseded except in a writing signed by
Administrative Agent and Guarantor referencing this Guaranty by its date and
specifically identifying the portions hereof that are to be modified, amended
or superseded.

                    29.
WAIVER
OF JURY TRIAL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’
AGREEMENT TO ARBITRATE ANY “DISPUTE” (FOR PURPOSES OF THIS SECTION, AS DEFINED
BELOW) AS SET FORTH IN THIS GUARANTY, TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED
TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION
TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, GUARANTOR,
ADMINISTRATIVE AGENT AND LENDERS WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH
“DISPUTE” AND ANY ACTION ON SUCH “DISPUTE.” THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY MADE BY GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS, AND
GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THE LOAN DOCUMENTS. GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS ARE EACH HEREBY
AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER OF JURY TRIAL. GUARANTOR FURTHER REPRESENTS AND
WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS GUARANTY AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.

24

                    30.
Credit Verification. Each legal entity and individual obligated on this
Guaranty, whether as a Guarantor, a general partner of a Guarantor or in any
other capacity, hereby authorizes Administrative Agent and Lenders to check any
credit references, verify his/her employment and obtain credit reports from
credit reporting agencies of Administrative Agent’s and Lenders’ choice in
connection with any monitoring, collection or future transaction concerning the
Loan, including any modification, extension or renewal of the Loan. Also in
connection with any such monitoring, collection or future transaction,
Administrative Agent and Lender are hereby authorized to check credit
references, verify employment and obtain a third party credit report for the
spouse of any married person obligated on this Guaranty, if such person lives
in a community property state.

                    31.
Special Representation and Warranty as to Leases. Guarantor hereby
represents and warrants to Administrative Agent and Lenders that all of the
statements contained in any and all estoppels regarding the leases from
Borrower to Lenders (the “Borrower Estoppels”) are true and correct as of the
date hereof, including, without limitation, that all tenants are not in default
in the payment of rent as of the date hereof, there is no default by landlord
or tenant under any of the leases at the Property as of the date hereof and no
amounts due by Borrower to any tenant at the Property (except as may be
expressly set forth in the Borrower Estoppels).

                    THE
LOAN DOCUMENTS 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.

[Remainder of page intentionally left blank]

25

                    IN
WITNESS WHEREOF, Guarantor has duly executed this Guaranty as an instrument under seal
as of the date first written above.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 GUARANTOR:

 
	
  

 	
  

 
	
  

 	
 ACADIA
 REALTY LIMITED PARTNERSHIP, a Delaware limited partnership

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Acadia
 Realty Trust, a Maryland real estate

 investment trust, its general partner

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
 /s/ Robert
 Masters

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 Robert
 Masters

 
	
  

 	
  

 	
  

 	
 Senior Vice
 President

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Address of
 Guarantor:

 
	
  

 	
  

 
	
  

 	
 c/o Acadia
 Realty Trust

 
	
  

 	
 1311
 Mamaroneck Avenue, Suite 260

 
	
  

 	
 White
 Plains, New York 10605

 

                    This
is to certify that this Guaranty was executed in my presence on the date hereof
by the party whose signature appears above in the capacity indicated.

	
  

 	
  

 
	
  

 	
 /s/ Debra
 Leibler-Jones

 
	
  

 	

 

 
	
  

 	
 Notary
 Public

 
	
  

 
	
  

 	
 Debra
 Leibler-Jones

 
	
  

 	
 State of New
 York

 
	
  

 	
 No.
 01LE6005994

 
	
  

 	
 Qualified in
 Dutchess County

 

	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 
	
  

 	
  

 
	
 4/20/14

 	
  

 
	

 

 	
  

 

Address of
Lender:

Bank of
America, N.A.

One Bryant Park, 35th Floor

New York, New York 10036

	
  

 	
  

 
	
 Attention:

 	
 Mr. Gregory
 Egli

 
	
 Telefax:

 	
 212-293-8197

 

EXHIBIT A

Form of Compliance Certificate

[For the Fiscal Quarter ended
_______________]

[For the Fiscal Year ended _______________]

                    This
Compliance Certificate is furnished pursuant to Section 18(b) of the Guaranty
Agreement dated as of November ___, 2010 from Acadia Realty Limited
Partnership (“ARLP”) to Bank of America, N.A., as Administrative Agent. Unless
otherwise defined herein, the terms used in this Compliance Certificate have
the meanings ascribed thereto in the Guaranty Agreement.

                    The
undersigned officer of Acadia Realty Trust hereby certifies as follows:

                         1.
The financial statements referred to in Sections 18(a) and 18(c), as the case
may be, of the Guaranty Agreement which are delivered concurrently with the
delivery of this Compliance Certificate are complete and correct in all
material respects and have been prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein and
with prior periods.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Quarterly

 Reporting

 Supplement Page(s)

 	
  

 	
 Quarterly

 Compliance

 
	
  

 	
  

 	
  

 	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 Minimum
 Tangible Net Worth (Section 19(b))

 	
  

 	
  

 	
  

 	
 As of __________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Shareholders’
 equity

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 +
 Accumulated Depreciation

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 -
 Intangibles

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 Adjusted
 Shareholders’ Equity

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Covenant
 Requirement

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 *+ 80% of
 net proceeds from equity insurances

 	
  

 	
  

 	
  

 	
 $350,000,000*

 
	
  

 	
 Excess or <Shortfall>

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
 Maximum
 Leverage Ratio (Section 19(c))

 	
  

 	
  

 	
  

 	
 As of __________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Unencumbered
 Cash and Cash Equivalents

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Net
 Operating Income

 	
  

 	
 5

 	
  

 	
 $__________

 
	
  

 	
 annualized

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 / cap rate

 	
  

 	
  

 	
  

 	
 8%

 
	
  

 	
 Value of
 Income Producing Properties

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Fee Income
 (excluding any provision for income taxes)

 	
  

 	
 5

 	
  

 	
 $__________

 
	
  

 	
 annualized

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 x multiple

 	
  

 	
  

 	
  

 	
 5

 
	
  

 	
 Value of Fee
 Income

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Construction
 in Progress

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 Net Real
 Estate under Development

 	
  

 	
 15

 	
  

 	
 $__________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Quarterly

 Reporting

 Supplement Page(s)

 	
  

 	
 Quarterly

 Compliance

 
	
  

 	
  

 	
  

 	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Book Value of Non-Income Producing
 Properties (footnote (1))

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Notes Receivable

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 Preferred Equity Investment

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 Book Value of Real Estate Loans (sum of
 Notes Rec. and Preferred Equity Inv.)

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 adjust for 50% discount

 	
  

 	
  

 	
  

 	
 50%

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Adjusted Book Value of Real Estate Loans (footnote (1))

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Total Asset Value

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Mortgage Notes Payable

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 Notes Payable

 	
  

 	
 15

 	
  

 	
 $__________

 
	
  

 	
 Contingent Liabilities (footnote (2))

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Adjusted Total Liabilities

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Leverage Ratio

 	
  

 	
  

 	
  

 	
 ______%

 
	
  

 	
 Covenant Requirement

 	
  

 	
  

 	
  

 	
 65%

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.

 	
 Minimum Fixed Charge Coverage (Section
 19(d))

 	
  

 	
  

 	
  

 	
 As of __________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 EBITDA

 	
  

 	
 10

 	
  

 	
 $__________

 
	
  

 	
 annualized

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Adjustment for Capital Expenditure Reserve

 (footnote (3))

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Adjusted EBITDA

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Interest Expense

 	
  

 	
 5 10

 	
  

 	
 $__________

 
	
  

 	
 Scheduled Principal Repayments

 	
  

 	
 9

 	
  

 	
 $__________

 
	
  

 	
 Preferred Dividends (Distributions on
 Preferred OP Units)

 	
  

 	
 9 23

 	
  

 	
 $__________

 
	
  

 	
 Fixed Charges

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 annualized

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Fixed Charge Coverage Ratio

 	
  

 	
  

 	
  

 	
 ______

 
	
  

 	
 Covenant Requirement (no less than 1.15 to
 1.00)

 	
  

 	
  

 	
  

 	
 1.50

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Footnotes:

 	
  

 	
  

 	
  

 	
  

 
	
 (1)

 	
 Combined value of Non-Income Producing
 Properties and Real Estate Loans not to exceed 50% of Total Asset Value

 	
  

 	
  

 	
  

 	
 As of __________

 
	
  

 	
 Book Value of Non-Income Producing
 Properties

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Adjusted Book Value of Real Estate Loans

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Total Asset Value

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 % of Total Asset Value

 	
  

 	
  

 	
  

 	
 ______%

 

2

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Quarterly

 Reporting

 Supplement Page(s)

 	
  

 	
 Quarterly

 Compliance

 
	
  

 	
  

 	
  

 	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (2)

 	
 Contingent Liabilities

 	
  

 	
  

 	
  

 	
 As of __________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Letters of Credit

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Guaranty of Derivatives

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Guaranty of Fund II Loan*

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Guaranty of Pelham Manor Loan

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 *Fund II Loan Outstanding

 	
  

 	
 19

 	
  

 	
 $__________

 
	
  

 	
 Parent’s Share (included in Mortgage Notes
 Payable)

 	
  

 	
 19

 	
  

 	
 $__________

 
	
  

 	
 Net Additional Contingency

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (3)

 	
 Capital Expenditure Reserve

 	
  

 	
  

 	
  

 	
 As of __________

 
	
  

 
	
  

 	
 Total Core Operating Properties, SF

 	
  

 	
 30

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Fund I Operating Properties, SF

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 Less, Kroger Safeway (NNN)

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 Less, Sterling Heights third party

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 Fund II Operating Properties, SF

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 Less, Oakbrook (NNN)

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 Less, third party

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 Fund III Operating Expenses, SF

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 Total Opportunity Fund Operating
 Properties, SF

 	
  

 	
 36

 	
  

 	
 $__________

 
	
  

 	
 ARLP Ownership %**

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Total Operating Properties, SF

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
 Capital Expenditure Reserve ($0.20 p.s.f.)

 	
  

 	
  

 	
  

 	
 $__________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 **Fund I - 37.78%

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
     Fund II - 20%

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
     Fund III - 19.905%

 	
  

 	
  

 	
  

 	
  

 

                    2.
To the best of such officer’s knowledge, each of Parent, Guarantor and Borrower
has, during the period referred to above, observed or performed all of its
covenants and other agreements, and satisfied every condition contained in the
Guaranty Agreement and the Credit Agreement and the other Credit Documents to
which it is a party to be observed, performed or satisfied by it, and as of the
date hereof such officer has obtained no knowledge of any Default or Event of
Default except as follows: NONE.

                    IN
WITNESS WHEREOF, I have hereto set my name.

	
  

 	
  

 	
  

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Name:

 	
  

 	
  

 
	
  

 	
 Title:

 	
 [Chief
 Financial Officer]

 	
  

 
	
  

 	
  

 	
 [Chief
 Account Officer]

 	
  

 

3

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